The Customer is the Process

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Speaker key

ST Steve Towers

ST Customer process tends to fit within a department within the boundaries of our organisation, and so customer process is looked at really from the point of view of what is the aim of the department? So if we think about customer accounts or customer service, and the motivation of those departments isn’t necessarily always the successful customer outcome for the customer, the motivation is often how quickly can we clear down the accounts, how rapidly can we answer the telephone, what are our abandon rates? Whereas if we’re thinking about the customer experience, we’re actually extending the scope of the process and the process is very much aimed at delivering a successful customer outcome.

Okay, when we talk about where the customer experience starts, what we’re really thinking about is what are we responsible for as the actions and activities that engage with the customer, so at a theoretical level the customer experience is everything you cause the customer to have to do. Well, clearly for most of us that’s beyond our brief, we live in departments, we live within divisions, so the customer experience for ourselves starts at the boundaries of our department of our divisions. However, by looking at the customer experience as the process, we begin to redefine those boundaries, so that old idea that we had of knocking down the silo walls, and things like that, they actually evaporate because as we extend ourselves out through the customer experience, we begin to see more of the process we need to control.

Indeed if you’re thinking about the customer experience and where the boundaries really lie, is if you were an airline, for instance, you might actually start thinking well, where does the process start, does it start when somebody buys a ticket, and then does it end when they get their bags off the carousel? An outside-in organisation would say no, the customer experience actually starts when you’re thinking about the need for a trip and it only ends when you’re back at home having a cup of coffee, so that’s the extent of the customer experience. Now, of course within that there’s a whole gambit of things for an airline in terms of getting to and from the airport, getting the bags checked in, all the standard stuff, but then at the other end of the trip getting back home again, making arrangements to actually travel from A to B, whether it’s car hire rental, taxis or whatever. The outside-in organisations will specifically look at those processes and seek to get control of them, not in an autocratic way, but in a way that adds benefit to the customer and to the organisation.

I mentioned airlines, a terrific example would be perhaps the sort of thing that Southwest Airlines are doing, and traditionally we would have thought of them as being in the business of flying aeroplanes, that would be the classic inside-out way of thinking of the industrial age thinking of a normal airline, if you want to put it like that. However, Southwest said no, it’s about the customer experience, and so we’re really in the business of moving people. Our processes start when people need to move and they only end when people are getting back home.

So let’s just take one component of that, for instance what a lot of us do is travel a lot, so we stay in hotels and typically one of the moments of truth we experience is when we’re checking out of the hotel. You might think what’s that got to do with an airline? Well, in Southwest’s thinking that has everything to do with the airline because as you check out, the usual questions – did you have anything from the minibar? Yes, just a couple of things, that sort of thing. As you check out and then the clerk says to you thanks very much, have a nice day, bye bye, what do you do with your bags for the day? Do you leave them with the concierge; do you take them with you to your place of business and then collect them in the evening for the airport? Well, either way it’s inconvenient, so Southwest said we could fix that moment of truth, what we could do is, in collaboration with a hotel chain – in this instance Marriott – as you check out from the hotel they’ll actually let you check in for your evening flight, and you go, great, that’s fantastic from a customer service point of view because now I can arrive at the airport, ticket in pocket, I’ve no need to join the longest queue in the airport, which is now always the fast bag drop queue, I can go straight through security. So that’s great from a customer service point of view.

It’s even better for Southwest because it significantly reduces the cost. How does it reduce the cost? Well, a big component in the airline industry is processing bags, and as we all know as customers of airlines, they lose bags, and so what Southwest have got already is the best record for non-bag loss in the US. How do they do that? Quite simply put, if you’ve checked in for your flight as you’re checking out of the hotel, they come and collect the bags from the hotel, get them into the airport service way, way earlier than anybody else, so the bags are all ready for loading on the aeroplane way before anybody else so they don’t get lost on the carousel, they don’t get lost on the conveyor belts, they’re actually ready for boarding the aeroplane. So in doing that Southwest have reduced the cost of baggage handling because they can negotiate a rate with the airports to pay a lower cost because they get the bags at a quiet time. So costs come down and service improves, and ultimately if you and I are making a choice, do we have fly Southwest, in which case I’m going to stay at that hotel because we know we can check our bags in, it produces revenue and wins that fabled triple crown – reducing costs, growing revenues and enhancing service simultaneously.

The point of thinking about the customer experience is that you might say, oh it’s got massive scope, it’s too far for us to go too quickly, but if you start with the area that you’re responsible for, the projects you’re working on, the departments, the divisions that are managed, you can actually define very clearly who is your customer. So, in the first instance it’s more than likely going to be an internal customer, so have you really clearly identified who that is? And most of us say, oh yes, of course we have, we know we deliver… but have you actually figured out what the measures of success around a successful customer outcome look like? And I’ll give you one example, frequently we’ll go and ask our internal customers what do you want? And if we’re in IT we’ll then go and build a system, we’ve signed off the business requirements, having signed it then we deliver it and the customer says actually it’s okay, but it’s not really what I needed. The point there is that if you start thinking of the customer experience and you start thinking of it in that context, if you clearly define what the successful customer outcome looks like, you can attach metrics to it. And the discovery there, and I think it goes back to the discussion that Henry Ford once said, which is if we go and ask customers what they wanted, they would have said faster horses, so we have a responsibility in terms of owning the customer experience to actually define the customer need, even when the customer doesn’t know that themselves. So you would start within your department, within your division, within your organisation, who is the customer and what is their successful customer outcome?

The question about whether you’re focussing on the right customer or not is a very important one because sometimes people will say it’s a given, we’ve got the customers we’ve got, we just have to process them. And that’s not always the case, so even if you’re in a public sector organisation – say you’re the IRS or some such service as that, you have a choice about how you process customers and it’s not the same for everybody. That’s the first thing to notice about categorisation, and I draw a distinction though when I say categorising customers as opposed to segmenting them. Segmenting them is an inside-out view of a marketing way that we go out to our market. Categorisation is really saying which are the categories of customer that we want to do business with and making that choice. For organisations that can make that choice, you can very deliberately target certain categories of customer, you don’t have to treat everybody in the same way. And there are good examples of organisations that have done precisely that, and of course we have to drop in the conversation the Apple and the Googles, because that’s what they do, they target specific customers. So if you think about the Apple experience – now I love an Apple, I’ve got every Apple device under the sun. However there are some of us who would say I don’t like Apple because it locks you into iTunes, and so on. Well, they don’t fall within the category of customer that Apple’s pitching to, so by definition your experience isn’t going to be one that is as satisfactory as somebody who actually fits in within that profile. Again, going back to the departmental level, who is the customer, what is their SCO, and is everything we’re doing within our department, within our division, contributing to that success? If it isn’t, that’s potentially dumb stuff and you can stop doing it.

The challenge of getting everybody to think about the customer experience and the process is an interesting one because if you come from a dynamic of inside-out where we’ve rewarded people for effectively turning up and acquiring skills and competencies, that’s not necessarily aligned with the successful customer outcome. So outside-in companies have taken that step eventually, and it’s a level of maturity that you get to which says how do we truly reward people for achieving the SCO, how do we link the success of what they’re doing at a day-to-day level with that customer success? And of course by definition, that will potentially change the reward structures. The development of an SCO map, for instance, includes the development of some key performance indicators, which are measures of process success. I don’t mean they’re traditional measures of process success in lapsed time, touch time, and those things, I’m talking about are we truly delivering what the customer needs. If we reward people for doing that, in other words have you got optimised moments of truth, so any interactions you have with your customer, are they moments of magic or are they moments of misery? We want to eradicate the moments of misery, we want to get rid of those, we want to get them out of the game. In doing that, of course, the process itself becomes much leaner, becomes much tighter, becomes much more focussed, so the reward structure can change to represent that, if you like, mechanism.