This blog is provided by Dave Cherry, as a companion to his interview on Innovating Leadership, Co-creating Our Future. This interview Boring Retail is Dead. Long Live the Customer Experience Industry aired on 10/15/19. Photo by Clem Onojeghuo.

Like many of us, I took Algebra in school. My daughters, now in high school and middle school, are now doing the same. And they’ve asked me the same question that I asked many years before: “When will I ever need to solve a linear equation or calculate the slope of a line in real life?” The answer, for many of us, (with apologies to Mrs. Curry – my 9th grade math teacher), is never.

But today I’ll share 3 simple equations that are critical to success in the customer experience industry:

CONTENT + CONTEXT = CONNECTION

IDEATION x EXECUTION = VALUE

INSIGHT + INTUITION = IMPROVED DECISIONS

First, let me define this new industry, which actually isn’t new at all. It is a singular composition of all B2C and B2B companies that have customers. The hard lines between different segments (e.g. retail, banking, insurance, energy, etc.) have become blurred as customers (that includes all of us) engage with providers across this spectrum. As we do so, we use both the excellent and poor experiences that we have with each provider to influence our future expectations from the next one. So, companies like Starbucks, Uber, Target, Marriott, Southwest Airlines, Nordstrom, Walmart, Nationwide Insurance, Chase and more are all competing against one another in delivering customer experiences that are meaningful and memorable.

Amid constantly rising customer expectations, companies must develop a Customer Experience Strategy that is Enabled by Innovation and Informed by Analytics to stay competitive in today’s customer experience industry. Below I’ll discuss the critical equation for each element:

The Customer Experience Equation: Content + Context = Connection

A great customer experience starts with a relevant product or service that you offer. This is Content. Content comes in many forms, both tangible (e.g. a reliable, stylish watch) and intangible (e.g. insurance coverage that provides confidence and security). It also comes with a minimum level of quality as a baseline. Using the watch example, if it is not accurate, then the content of that product becomes irrelevant – it does not serve it’s intended purpose.

But content is not enough. It requires the addition of Context. You must provide the product or service to the customer in the right setting at the right time. The richest, most delicious cup of hand-crafted artisan hot chocolate isn’t that appealing on a 100-degree day in the summer. Even though the content in this example is exceptional, offering it in the wrong context diminishes the customer experience.

But when Content and Context combine in a relevant and meaningful way, you create a Connection with your customer that delivers on their experience expectation. When Uber delivers a comfortable and clean ride, combined with the convenience of a frictionless checkout when you are in a rush to get to the airport on time for your flight, the combination of Content + Context delivers a Connection between company and customer. It generates affinity, loyalty and ultimately profitability.

The Innovation Equation: Ideation x Execution = Value

Once you understand the goal state customer experience, there are bound to be gaps for two reasons. First, no company is perfect. So, whether due to legacy systems, suboptimal prior decisions or tactics, or some other reason, most have some gaps in capabilities. Second, even if you by chance have no gaps today, customer expectations are constantly rising and gaps will appear soon enough.

To close these gaps, we start with the relatively easy and fun task of Ideation. Brainstorming, thinking, riffing and imagining the future are fun activities. And more often than not, result in large numbers of possibilities (usually depicted by 100s of post-it notes covering conference room walls). Following ideation comes some sort of prioritization (e.g. dot voting) that results in a roadmap.

Now comes that hard part…Execution. Delivering on the promise of the future is a challenge because it requires changing the present while at the same time operating in the present. And when obstacles arise (which they will), many lack the resilience and confidence in their convictions to keep pressing forward. It is only through successful Execution on top of Ideation that significant Value (hence the multiplication) can be delivered.

Back in 1993, AT&T delivered some amazing Ideation. In their “You Will…” campaign, they asked these questions:

  • “Have you ever borrowed a book from 100 miles away from the library?”
  • “Have you ever crossed the country without stopping to ask for directions?”
  • “Have you ever sent someone a fax…from the beach?”
  • “Have you ever paid a toll without slowing down? “
  • “Have you ever tucked your baby in from a phone booth?”
  • “Have you ever opened doors with the sound of your voice?”
  • “Have you ever carried your medical history in your wallet?”
  • “Have you ever attended a meeting in your bare feet?”
  • “Have you ever watched the movie you wanted to the minute you wanted to?”

Each of these items have two things in common. First, we all utilize and enjoy all of them almost daily. Second, none of them were delivered by AT&T. They had great Ideation, but their Execution was flawed, incomplete or too slow. Hence the Value that we all derive from these experiences were ultimately delivered by others.

The Analytics Equation: Insight + Intuition = Improved Decisions

The primary purpose of analytics is to deliver Improved Decisions by increasing the decision makers confidence. This is achieved through identifying patterns in data to uncover anomalies or Insights that were previously unknown.

Insights must be both timely and relevant to the decision at hand. Yet even when this is achieved, we don’t yet get to optimal decision-making confidence. We must add Intuition, or as it is also known, experience or gut. There is value in experience. There is also value in gut, which brings elements of context, risk and strategy into the analytical equation. Given identical data, a more aggressive or conservative risk posture could lead you to different decisions – take the blackjack player who “feels lucky” and takes a hit on 16 when the dealer shows a 5 as an example. The player may have confidence in pulling a 5, though most analytical models would recommend staying. And regardless if the player wins the hand, they made a better decision by knowing the odds (data) and incorporating their feeling (gut) and risk posture (context).

So, when will we actually use these equations? Potentially daily, and often, multiple times each day. Consider the “Decision Modeling” approach described below, that can be leveraged for both large scale strategic decisions as well as daily important operational decisions.

Start by identifying an Action (or Decision) that may help improve the customer experience, creating a Connection. Then acquire the data/information to uncover the Insights that will improve your decision-making confidence. Combine those with your Intuition to make a decision and set the course of action. Finally execute well, and you’ll realize the Value desired by your organization and required by your Customer.

 So, in the end, there’s a fourth and final equation:

(Content + Context = Connection) +

(Ideation x Execution = Value) +

(Insight + Intuition = Improved Decisions)

——————————————————————–

= Customer Experience Success.

 

To become a more innovative leader, you can begin by taking our free leadership assessments and then enrolling in our online leadership development program.

About the Author

Dave brings over 20 years of strategic consulting experience focused on strategy (digital, customer experience, innovation) and advanced analytics. He has worked with and for leading organizations such as LBrands, Polo Ralph Lauren, ascena Retail Group, Journeys, DSW, Disney, Alliance Data, Nationwide Insurance, AEP, Huntington Bank, Cardinal Health, OhioHealth, Deloitte Consulting and Price Waterhouse. He holds a BS in Economics from The Wharton School at the University of Pennsylvania, serves on the International Institute of Analytics Expert Panel and also as an Advisory Board member for the Women in Analytics Conference and CbusRetail.

Contact Dave on LinkedIn at https://www.linkedin.com/in/cherrydave/ , Twitter @davecherry or check out his website: www.cherryadvisory.com.

Check out this and past episodes of Innovating Leadership, Co-creating Our Future, via iTunes, Google Play, TuneIn, Stitcher, Spotify and iHeartRADIO. Stay up-to-date on new shows airing by following the Innovative Leadership Institute LinkedIn.

 


There are currently no comments.

five × three =

Enjoy this blog? Please spread the word :)

RSS
Follow by Email
Facebook
Twitter