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Taking unproven routes can lead to exciting new possibilities. However, it could also lead to potential failure. That's what makes life interesting, isn't it?
Optimistic thinking has led to groundbreaking achievements, like the moon landing in the 1960s. However, it's important to strike a balance between hope and realism.
In today's episode, we explore the concept of optimism bias and how it plays a role in the "AI Hype Cycle." We discuss the pros and cons of optimism and why it can be risky and rewarding.
For those of you who don't watch MBA videos as a hobby, this video summarizes the Hype Cycle's importance and how it relates to the recent trend toward leveraging Big Data.
So, what is this hype cycle we keep referring to?
The Gartner Hype Cycle maps out the lifecycle of new technologies, including artificial intelligence (AI). Starting with initial media excitement, the Hype Cycle often leads to inflated expectations, followed by disillusionment as challenges arise. However, innovation doesn't stop there. As understanding improves, we reach a more balanced "slope of enlightenment," eventually leading to the "plateau of productivity," where technology adoption becomes more widespread and realistic.
The discussion touches on AI's current status in the Hype Cycle, questioning whether we are at a turning point where initial optimism is waning. Some organizations overestimate the short-term benefits of AI, hoping it will be the silver bullet to solve all their problems, only to face disappointment when things don't work out as expected.
Like many other innovations, AI is more complex to implement than initially imagined, and optimism can sometimes blind organizations to its true limitations. Managing expectations is key: while optimism is necessary to drive change and innovation, one must temper it with caution and realistic planning.
Ultimately, this episode encourages listeners to temper optimism with practicality regarding new technologies like AI. Small, calculated risks are encouraged, but organizations should avoid placing all their bets on one solution. Balance is key to navigating the Hype Cycle successfully.
More Key Points Discussed in This Episode:
Understanding the pros and cons of optimism bias in business decision-making.
An overview of the Gartner Hype Cycle and how it applies to AI.
Why the initial excitement around AI may not meet short-term expectations.
The risk of overhyping new technologies and the consequences of inflated expectations.
The importance of balancing optimism with realism in the implementation of AI.
Strategies for navigating the Hype Cycle without falling victim to disillusionment.
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Over the course of three years, Maersk Line improved its Net Promoter Score (NPS) by an impressive 40 points, resulting in a 10% increase in shipping volumes. Even more remarkable, this growth occurred during a global shipping decline.
But can other companies replicate Maersk’s success? Or are case studies like this more cautionary tales than roadmaps?
We explore the value of case studies in business, particularly how they can be used to highlight the application of concepts and theories in real-world situations.
The Power and Pitfalls of Case Studies
Case studies are powerful. People love stories, and case studies tap into this by offering relatable and engaging narratives that illustrate both challenges and solutions. For businesses, they’re a great way to demonstrate bona fides to clients and showcase what can be achieved through strategic change.
However, case studies have their pitfalls, too. Maersk’s results were exceptional, but not every company is positioned to follow the same path.
In the Maersk example, the company was at a unique juncture—facing market pressures and a history of mergers that led to a decline in Customer Experience. Their leadership was open to new ideas, and they had the right project manager in place to lead a global CX transformation.
The pitfall is many companies believe they are the same and will get the same results because they too are having a problem in Customer Experience. However, the specifics of one company’s success may not translate to another unless the conditions, challenges, and resources are aligned.
In this episode, we discuss why case studies are best used for inspiration and education, not as one-size-fits-all solutions. It’s crucial to extract the underlying principles—like customer focus and strategic leadership—rather than overgeneralizing from one company's experience.
In this episode, we also explore:
The origins of using case studies as a teaching tool in business schools.
How benchmarks are created and why they can be risky when generalized.
The role of mental models in simplifying business decision-making.
Risk aversion in organizations and the desire for examples to follow.
The "silver bullet" mentality and why people seek easy solutions.
The dangers of using case studies as the sole resource for business strategy.
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If there is one thing that academics know how to do, it’s publish new research. It seems that umpteen studies are published every hour. It can be overwhelming to keep up with it all.
So, we undertook it to help you with this week’s episode.
We explore three fascinating studies in the realm of consumer behavior with insights from Dr. Morgan Ward, a Professor of Consumer Behavior at Emory University. From the influence of sound on social status to the role of streaks in motivating behavior and even how firms should use AI to deliver news to customers, this episode provides a wealth of information for businesses looking to understand and serve their customers better than they do today.
Social Status and Product Sound
Dr. Ward’s research delves into how consumers choose products based on the sounds they emit, linking these choices to social status. The study finds that people often seek status through two main channels—dominance and prestige. Some customers buy noisy products, like a Harley Davidson, to assert dominance, while others opt for quiet, high-end products, such as Dyson fans, to signify prestige. Ward emphasizes that understanding the status-seeking motivations of your target audience can help businesses design products that appeal to specific social power desires.
Key Takeaway:
Customizing product sounds can signal social power, appealing to customers' status-seeking behavior.
The Gamification of Behavior Through Streaks
Ward also discusses the role of streaks in consumer behavior, particularly how brands use streak-based incentives to encourage continued engagement. Apps like Duolingo, Snapchat, and Headspace all capitalize on the idea of maintaining streaks to motivate daily usage. However, there are tradeoffs. Extrinsic motivators like streaks can sometimes overshadow intrinsic motivators, leading to a decrease in overall enjoyment and, ultimately, participation. Ward warns businesses to consider when streaks are appropriate carefully and to balance the motivations that drive consumer behavior.
Key Takeaway:
Streak-based gamification can motivate, but businesses should carefully balance extrinsic and intrinsic motivations.
AI vs. Human Interaction:
Finally, Ward shares research on when companies should use AI versus humans for customer interactions, particularly around delivering good or bad news. Interestingly, the research suggests that AI should handle bad news because customers perceive it as more impartial. In contrast, a human best delivers good news to create a personal connection. These findings affect how businesses structure customer service strategies and use AI.
Key Takeaway:
AI is better suited for delivering bad news, while human interaction is more impactful for delivering good news.
Additional things you’ll learn in this episode:
How cultural differences affect consumer status-seeking behavior.
The psychological impact of losing a streak and how it influences future behavior.
Why some products benefit more from gamification than others.
The future implications of AI-human interaction in customer service.
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Colin doesn’t sit in aisle 13 when he flies on an airline. It’s silly but true. He also fancies his red knickers on days when he is speaking in front of large crowds.
While this errs on the side of too much information, it also foretells the topic of this week’s episode: superstitions and how they influence our decisions as customers and otherwise.
Many of us hold on to irrational beliefs that are common sense, even when they defy logic. Airlines, for instance, often skip row 13 because of widespread discomfort with the number, including Colin’s, despite no real reason to avoid it.
But how do these seemingly irrational habits affect customer behavior, and what can businesses learn from them?
Customers often engage in superstitious practices, particularly when they feel powerless over a situation. Colin recounts a story of Asian customers choosing construction equipment based on serial numbers they considered lucky. In this case, selecting a machine wasn’t just about quality or functionality but also about seeking control over the unknown.
Humans are pattern-seeking creatures. Our minds are hardwired to find connections between things, even when none exist. Superstitions help people feel like they have some control, which influences customer behavior.
While some superstitions, like avoiding row 13, are passed down culturally, others are more personal. For example, the host tells a story about football fans ordering fries at a pub, believing it would help England score a goal. While everyone knew it wasn’t logical, the collective belief became a fun ritual.
Superstitions also manifest in business. Companies sometimes hold onto outdated practices with no rational basis. The host shares an example of an advertising agency insisting on a six-word phrase at the end of ads, not because of any research but simply because "that's how it was always done." These business practices, like customer superstitions, can become embedded over time without questioning their effectiveness.
In this episode, we discuss why businesses should understand and acknowledge that customers and companies aren’t always logical. We also explore how accommodating these irrational beliefs can lead to better customer experiences. Rather than dismissing superstitions, companies can work with them to create a more comfortable and personalized environment for their customers.
Additional things you’ll learn in this episode:
How mental models shape customer behaviors
The connection between biases and superstition in decision-making
Why businesses often cling to irrational processes
How to spot and eliminate unnecessary "superstitious" practices in your company
Ways to accommodate and even leverage customer superstitions for a better experience
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Hurricane Debbie dumped 17 inches of water in Colin's home.
It was a traumatic experience, from wading through the murky water to the neighbor’s house—hoping not to encounter the alligators that usually hang out nearby—to watching a team of 12 recovery professionals sweeping through and gutting what remained inside after the water subsided. The experience has been emotionally draining, especially since they didn't have flood insurance, making the cost of repairs overwhelming.
It exposed the emotional nature of these circumstances and reminded us of what is important when treating a distressed customer. This episode explores the Customer Experience lessons learned along the way.
The story begins with the frantic search for help after the flood. With no time to gather multiple quotes, a friend recommended Servpro, a disaster recovery company. While Servpro did a great job, one small misstep—using the term "demolition"—upset the host's wife, highlighting the importance of language and empathy in high-stress situations. Despite the upsetting circumstances, Colin and his wife appreciated the team's professionalism and sympathy.
We also touch on a less positive customer service experience with the cable company. While their technician was helpful and empathetic, the initial process during the phone call didn't consider the host's extreme situation. The rigid, unempathetic procedure highlighted how companies, like the cable provider, can improve by empowering their employees to handle unique circumstances flexibly.
While getting coffee, the lack of empathy from a cheerful barista served as another example of how businesses can fail to acknowledge customers going through difficult times. While we recognize that coffee chains do not specialize in disaster recovery, it was still a missed opportunity for them to show empathy in a moment requiring more than routine friendliness.
A frustrating visit to a self-storage facility was another eye-opener. The company had implemented a tablet/virtual receptionist system, which lacked the human touch, particularly during hurricane season when people needed help the most. Companies should be prepared to offer a more hands-on, empathetic approach to meet heightened demands during extraordinary times.
The episode is a call to action for companies to build flexibility and empathy into their Customer Experience strategies, especially during times of crisis. Businesses that show genuine concern for their distressed customers during challenging times will create loyal customers for life, while those who don't may lose them.
In this episode, we also dive into:
The emotional toll of disaster recovery and its impact on Customer Experiences.
How language choice can impact a customer's emotional state.
The importance of empowering employees to handle unique customer situations.
Why self-service solutions may fail in high-stress scenarios.
The critical role empathy plays in building customer loyalty, especially during crises.
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Customer feedback is critical to managing and improving your customer experience but it isn’t easy to get. Worse, it isn’t always useful and enlightening on what you are doing well, or perhaps more importantly, not so well.
In this episode, we tackle a common problem many businesses face: how to get more actionable customer feedback. Our guest, Tim Waterton, Chief Revenue Officer of HappyOrNot®, brings over 20 years of experience in helping companies gather and analyze customer insights. Waterton shares valuable tips on making the feedback process seamless, efficient, and impactful.
One of the main insights Waterton offers is the importance of capturing feedback at the right moment—immediately after the Customer Experience. According to him, this approach ensures that businesses collect more accurate feedback as people's recollections of their experiences fade quickly. He suggests that feedback should be short and simple to encourage participation, using tools like micro-surveys (e.g., quick emoji selections).
Waterton also explains the difference between feedback and reviews. Feedback is company-initiated, where you ask the customer directly, while reviews are customer-initiated and usually more detailed. Both have value but serve different purposes in understanding the customer experience.
A key takeaway is the balance between positive and negative feedback. While many companies receive mostly positive feedback, focusing only on the negatives or positives can skew your understanding. You need both to find areas of improvement and highlight what's working well.
We also warn about the dangers of over-automating customer experiences. Colin shares an example of a milkman who improved efficiency but lost personal connection with customers, ultimately losing Colin’s wife's business. This cautionary tale is a crucial reminder that companies must balance efficiency with the human touch, especially in the age of AI and automation.
We wrap up with practical tips on gathering meaningful feedback, including choosing the right channels, keeping surveys relevant and concise, and acting on the feedback you receive.
In this episode, you'll also learn:
The difference between feedback and reviews and why both matter
How to avoid "survey fatigue" and keep customers engaged
The role of micro-surveys in capturing real-time feedback
The importance of balancing automation with personal interaction
Why acting on feedback is crucial to improving Customer Experience
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One of the benefits of being in business and academia for years is that we have a lot of experience running workshops. This episode is a brain dump of all the stuff you won’t learn in a book but is critical to the successful outcome of your program.
The first and perhaps most critical step is breaking the ice. By setting a relaxed and open tone, you ease participants into the session, ensuring they’re ready to engage. A simple question at the start can do wonders—something as quirky as asking attendees to share something strange about themselves. This activity breaks down barriers and injects some fun into the proceedings, setting the stage for a lively and productive workshop.
As a facilitator, it's vital to approach the workshop without a predefined answer or outcome in mind. Your role is to guide participants in finding solutions, ensuring participants take ownership of the results. This approach fosters a deeper connection to the material and encourages lasting change.
For instance, when working with a client like Maersk Line, the world's largest shipping company, it’s important to ask the right questions and provide tools rather than answers. This method leads to better results and enhances the participants’ sense of accomplishment.
Also, flexibility is key when it comes to planning your workshop. While having an agenda is important, adjust it as discussions evolve, allowing for deeper exploration of ideas and ensuring that everyone is on the same page.
Similarly, consider the group dynamics when dividing attendees into smaller teams. Mixing personalities and ensuring a balance of perspectives can prevent dominant voices from stifling creativity and lead to more innovative solutions.
In this episode, we dive into these essential strategies for leading a workshop that leaves a lasting impact. Drawing from years of experience, we explore practical tips to ensure your workshops are engaging, effective, and memorable for all participants.
If you listen, you will also learn the following:
Ryan wrote a script for Broadway, and Colin is married to his stepsister. No, really.
How to effectively manage group dynamics by balancing personality types and seniority levels.
The importance of having a clear goal for the workshop and aligning all activities towards achieving it.
Why off-site workshops can prevent distractions and boost creativity.
The significance of determining the ideal team size for different workshop activities.
Techniques to ensure follow-through on workshop outcomes back in the workplace.
The impact of physical space on group energy and interaction during the workshop.
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Claire Dunwood has a pickle. She wants to know how to manage rising customer expectations with fewer resources than she used to have. This episode seeks to help her—and you—do exactly that.
It’s pretty common to hear problems like this today. Responding to rising expectations is easy when there is no limit to the resources you can throw at it. Doing that same thing on a budget is a different kettle of fish.
We kick off by exploring how expectations form. Expectations for experiences, even for those we've never had, are often built from adjacent or similar experiences, drawing on memories, media, or past interactions. Therefore, customers have preconceived notions about how their interactions with your brand will unfold, even before they’ve engaged with you.
Claire noted that customer expectations seem to be constantly rising. Effective management of rising expectations requires identifying which aspect of the expectations is rising—rational, emotional, or sensory—and whether it aligns with your business goals. We discuss the importance of focusing on the aspects that drive the most value for customers rather than trying to meet every rising expectation.
A key takeaway is the importance of focusing on what matters most to your customers, as highlighted by the Blue Ocean Strategy. This approach suggests excelling in the most important areas to your customers and letting go of everything else. Knowing your customers well is essential, as it helps you decide which expectations to meet and which to disregard, ensuring that you spend your resources wisely.
In this episode, we share practical strategies for managing customer expectations, including understanding customer needs, proactive communication, setting clear boundaries, maintaining consistency, and leveraging technology. These strategies help balance the demands of rising expectations with the reality of limited resources.
In this episode, we also talk about:
The formation of customer expectations from adjacent experiences
The categorization of expectations into rational, emotional, and sensory
The concept of outcome-based prioritization when resources are limited
The role of transparency and proactive communication in managing expectations
How to decide whether certain customers are worth the effort based on their expectations and profitability
Examples of businesses effectively setting and exceeding customer expectations
The importance of staying agile and responsive to customer feedback
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Personalization is a developing area in Customer Experiences. With AI driving what could be possible, many of you might be wondering how you can best leverage its capability in yours. To that end, we invited our special guest, Graham Hill, Ph.D., to explore the rapidly evolving field of Personalization in Customer Experiences.
With decades of experience in customer relationship management (CRM) and Customer Experience, Hill shares valuable insights into how personalization, particularly with the help of AI, is reshaping customer interactions and driving business results.
Hill explains that personalization operates on a continuum, ranging from broad, branded communications to highly individualized content tailored to a single customer’s needs.
He also emphasizes balancing mass and personalized communication within a marketing strategy. While mass communication builds general brand awareness, personalized and individualized content can significantly enhance customer engagement and drive sales.
Hill discusses the impressive impact of personalized communications, noting that customized content can be up to nine times more effective and individualized content up to 44 times more effective at eliciting customer responses than generic communications.
However, he warns against over-personalization, advising businesses to consider their goals and the specific problems personalization can solve before investing heavily in these technologies.
Hill also critiques traditional segmentation methods, advocating for outcome-based segmentation instead. By understanding what customers are trying to achieve and how they measure success, businesses can design more effective personalized communications that resonate with customers at different stages of their journey.
The episode also features a case study from Hill’s work with Toyota Financial Services, where implementing personalized communication in the repurchase management program led to a significant increase in response rates—from 10% to 35%. Hill’s approach underscores the importance of clear goals, continuous improvement, and a customer-centric focus in personalization efforts.
In this episode, we also explore:The balance between mass communication and personalization in marketing strategies.
The significant impact of personalized and individualized content on customer engagement.
The importance of outcome-based segmentation for effective personalization.
The dangers of over-investing in new technologies without clear goals.
Practical steps for understanding customer needs and enhancing key interactions through personalization.
The role of AI tools in supporting but not overshadowing simple, effective personalization efforts.
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Fair Warning: this episode regarding excuses was prompted by recent experiences with tradespeople during Colin’s kitchen renovation.
No one likes excuses, least of all your customers. Lately, Colin has been hearing many amazing excuses about why something can or cannot be done in his kitchen project. It got him thinking about excuses and why people make them. Today’s episode explores the ideas of excuses and what they tell us about human behavior.
Consider examples like long call center wait times blamed on “high call volume” or companies deflecting responsibility for faulty products or order issues by passing the buck to manufacturers. These situations highlight the commonality of excuses in everyday interactions.
It is important to understand the difference between an excuse, which is used to avoid blame, and a reason, which acknowledges the cause of a problem and usually is followed by steps to make it right. Additionally, we explore the psychological motivations behind excuse-making, including our innate desire to see ourselves as right, and how this plays into consumer behavior and decision-making.
One important concept that supports our behavior around blame is Confirmation Bias. When avoiding blame, we tend to favor information that supports our existing beliefs (i.e., that it is not our fault), even in trivial matters.
Additionally, we delve into the concept of Fundamental Attribution Error, where we are more likely to attribute others’ mistakes to their character while excusing our own based on external circumstances. This human tendency to avoid blame and protect our ego is universal. However, the consequences bear a sharp contrast to the benefits of taking responsibility, especially in leadership roles.
A case study from the UK’s Post Office scandal illustrates the severe consequences of excuses on a larger scale, where avoiding responsibility led to widespread harm and even imprisonment. From this, we draw lessons on the importance of honesty and accountability in both personal and professional contexts.
In this episode, we explore the fine line between a reason and an excuse and examine how they function in various Customer Experiences.
In this episode we also discuss:
The psychological need for self-preservation and its impact on excuse-making.
How Confirmation Bias affects our decisions and perceptions in everyday life.
The difference between taking responsibility and deflecting blame in customer service.
Real-world examples of excuses versus reasons in customer experience.
The potential long-term damage of excuses to trust and relationships.
Strategies for handling mistakes and building stronger customer relationships by owning up to errors.
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In this episode, we tackle a thought-provoking question from one of our listeners: Is it ethical to use urgency as a marketing tactic?
This question sparked a deep conversation about the ethics of digital marketing, particularly the use of scarcity to drive sales.
We feature insights from Daniel Bisett, partner and CXO at WeRock DM, and Marketing Professor at UT McCombs, who shares his thoughts after watching "The Social Dilemma" and wrestling with the impact of digital marketing on mental health.
Bisett discusses the ethical concerns of creating false urgency in marketing, comparing it to the stress and pressure felt by consumers during high-stakes purchases, like a kitchen remodel. He argues that manipulating customers with "FOMO" (Fear of Missing Out) can lead to hasty, anxiety-driven decisions, which ultimately harm the customer and the brand’s reputation.
Instead, Bisett advocates for building trust and long-term relationships by offering genuine value rather than pressure-filled transactions.
Bisett’s message and our subsequent discussion challenge marketers to reflect on their tactics and consider the long-term implications of their strategies, not just for their business, but for their customers' well-being.
In this episode, we further explore whether using behavioral science in marketing crosses ethical lines, especially when marketers understand more about customer behavior than the customers themselves. We also delve into the nuances of ethical intent, the role of empathy, and the importance of transparency in marketing practices. We also discuss how companies can ensure they are not just making sales but also treating customers with dignity and respect.
In this episode you will also learn:
The ethical implications of using behavioral science in marketing.
The difference between needs-based selling and manipulative sales tactics.
The role of empathy in ethical marketing decisions.
How intent and transparency can help marketers stay on the ethical side of business.
Real-life examples of ethical and unethical marketing practices.
Strategies for building long-term customer relationships based on trust and value.
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In this episode, we dive deep into the concept of empathy and its significance in Customer Experience Management. We challenge common perceptions of empathy, explore its connection to emotional intelligence, and examine how both concepts can enhance your experience management efforts.
We begin with a discussion on the importance of Emotional Intelligence (EQ), referencing some compelling statistics:
Emotional intelligence influences 58% of job performance.
90% of top performers at work have a high EQ score.
The demand for EQ skills is projected to grow six-fold in the next three to five years.
Employees with empathetic leaders report a 76% increase in engagement and a 61% boost in creativity.
Restaurants managed by individuals with high EQ see a 22% annual profit growth.
EQ interventions in the workplace can reduce employee turnover by 63%.
75% of Fortune 500 companies have utilized EQ training tools.
Our guest, Sandra Thompson, an emotional intelligence coach from Ei Evolution, shares her insights on empathy within the context of EQ. She emphasizes the necessity of using empathy skills, which involve asking questions and truly listening to understand another person’s feelings and interpretations, rather than projecting our own emotions onto their experiences.
We also explore the idea that traditional empathy might be too contextual, as emotions are personal and can lead to misunderstandings if the emotional context differs. Thompson’s concept of “walking in the customer's shoes” is dissected, with the notion that while some shared experiences can foster empathy, unique contexts might still cause disconnects.
We break down empathy in emotional intelligence into three approaches: bad (not caring), good (walking the experience as if you were a customer), and better (experiencing as a customer and asking questions to understand their feelings). This layered approach is essential for effective experience management and creating genuine connections with customers.
In this episode we also explore:
The impact of empathy on job performance and employee engagement.
How empathy and emotional intelligence can reduce employee turnover and increase profitability.
The role of emotional intelligence in leadership and its effect on creativity.
Strategies for developing and implementing emotional intelligence skills in the workplace.
Real-life examples of how empathy and EQ improve customer experiences.
The importance of self-awareness in emotional intelligence and managing personal emotions.
Practical tips for enhancing empathy skills through active listening and inquiry.
Sandra Thompson Contact Details. Website: www.eievolution.com LinkedIn: https://www.linkedin.com/in/cxeisandra/ -
In this episode, we challenge the conventional wisdom of customer-centricity and discuss why firing a customer is sometimes necessary. While it may seem counterintuitive, knowing when to let go of a customer can benefit your business in the long run.
We outline five critical rules to help you determine when it's time to part ways with a customer:
Rule #1: Fire customers if they cost too much. Some customers drain more resources than they generate in revenue. It's crucial to track these costs accurately and address the imbalance. If you can't rectify the situation, it's time to let them go.
Rule #2: Fire customers if they don't align with your brand. Your brand's values should resonate with your customer base. If a customer's values conflict with yours, maintaining the relationship can harm your brand's integrity and alienate your core audience.
Rule #3: Fire customers if they don't fit with your future. As your business grows, some customers might no longer fit your strategic goals. Prioritize resources for future growth by letting go of customers who don't align with your long-term plans.
Rule #4: Fire customers if they are too risky. If a customer's business model or payment practices pose a significant risk, it's safer to part ways. Overcommitting to one client or taking the undue risk can jeopardize your business stability.
Rule #5: Fire customers if they abuse your employees. Support and protect your employees from abusive customers. Ensuring a respectful work environment is critical for employee morale and long-term success.
Understanding these rules will help you make informed decisions about maintaining customer relationships that align with your business goals and values. Sometimes, the best way to move forward is to let go.
In this episode, we also explore:
The importance of knowing your customer cost metrics and tracking them accurately.
How to handle awkward conversations with customers about cost imbalances.
Examples of brand alignment, including the Colin Kaepernick and Nike story.
Strategies for soft-firing customers without abrupt severance.
Recognizing when your growth trajectory requires pruning your customer base.
Identifying and mitigating business risks associated with certain customers.
The impact of customer behavior on employee well-being and company policy.
Insights on post-pandemic changes in customer behavior and their effect on businesses.
The balance between customer-centricity and business sustainability.
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In this episode, we explore the role of AI in customer experiences and whether it will replace human interaction. Ali Cudby, CEO of Alignment Growth Strategies, shares insights on leveraging AI to build customer relationships effectively. We discuss practical AI tools that enhance customer experiences and streamline efficiency.
There are a couple of helpful AI tools Cudby mentions. For example, Synthesia generates AI voiceovers for video scripts, making updates easy and translating content for global audiences. Also, Absorb uses AI to create prompts-based presentations, reducing time and effort. Cudby describes how these tools allow for more accurate customer communication while freeing up time for personalized interactions where it matters most.
Cudby (alicudby, Alignment Growth Strategies), the author of Keep Your Customers, emphasizes that while AI is a valuable tool, it cannot replace genuine, personalized experiences delivered by empathetic humans. Customers must feel seen, heard, and valued to build trust and loyalty.
The episode also highlights the importance of context in customer experiences and how AI can assist without overshadowing human value. We also touch on the potential risks of AI, such as the creation of fake videos, and the importance of verifying authenticity, especially during critical times like elections. Schema matching helps us identify inconsistencies in AI-generated content, ensuring we make better judgments.
The discussion includes the concept of Blue Ocean Strategy, which advises focusing efforts on what drives the most value for customers. By maximizing resources in areas that matter most, businesses can avoid spreading themselves too thin and achieve greatness.
In this episode, we also discuss:
The significance of AI tools in customer education and training.
The balance between AI efficiency and human empathy in customer interactions.
The impact of AI on content accuracy and time management.
Real-life examples of AI and human synergy in customer service.
The role of schema matching in identifying AI-generated fakes.
Strategies for optimizing customer experiences using the Blue Ocean concept.
The importance of context in understanding customer emotions and needs.
How to determine the value AI brings to your customer experience efforts.
The potential pitfalls of over-relying on AI in areas where human touch is crucial.
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Friction occurs when a customer has to work or think hard during an experience. Many times, friction is accidental or the result of organizational apathy. In these instances, friction is a bad thing.
Friction is rarely a good thing in a Customer Experience. However, there are times when it can be beneficial.
For example, when your bank uses two-factor authentication to ensure you are who you say you are. This friction enhances customers’ feelings about an experience.
So, how do you know the difference? It depends on the context.
For example, Disney and Apple have annoyed Colin. Typically, he sings these two brand’s praises, so this friction surprised him.
Both require Colin to make appointments for his experience, which bugs him. Disney has a new program where you book appointments before you arrive to ride an attraction at a certain time. They charge for it, too. Apple requires you to book an appointment in one of their locations rather than turn up with your questions. (But Apple doesn’t charge for this service.)
While Colin is still determining if the Disney program will improve the experience, he is sure this new process will be more hassle than the previous one. Time will tell whether it will be worth it.
Regarding Apple, the friction of booking an appointment has benefited Colin. He isn’t turned away because everyone is “too busy” to deal with him when he arrives at his appointed time.
So, while Colin would rather Apple was always available when he shows up at a retail location, making the appointment—and the friction it introduced—has provided value for him.
In this episode, we delve into friction in Customer Experiences, exploring when it's beneficial and detrimental. We provide examples illustrating how friction can enhance or hinder customer interactions, shedding light on its nuanced role in shaping perceptions and behaviors. By understanding the multifaceted nature of friction, businesses can unlock new opportunities for customer engagement and loyalty.
You will also learn the following:
The advantages of removing friction and making things easier for customers.
The prevalence of accidental friction stems from neglect or apathy rather than deliberate strategy.
Examples of deliberate friction in various industries, from amusement parks to luxury restaurants, and the underlying psychological mechanisms at play.
The importance of finding the right balance between security measures and customer convenience, avoiding excessive friction that may deter or frustrate customers.
Strategies for strategically managing friction to align with broader business goals while prioritizing customer satisfaction and ease of interaction.
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Colin has a bone to pick. No, it's not with cable providers this time. It's with the tradespeople involved in his latest home reno project. They are living up to the poor reputation that precedes them, and he has a list of complaints.
Key problems included inaccurate pricing, disdain for previous workers' efforts, lack of collaboration, excessive use of jargon, and poor time management. The disconnect between different trades, reminiscent of organizational siloes in corporate environments, often exacerbates problems.
These issues often leave customers frustrated and distrustful. Drawing from personal experience with Colin's kitchen renovation, we highlight common problems that contribute to the negative perception of tradespeople and discuss ways to enhance their Customer Experience.
It is important to note that many tradespeople excel in their work and customer service, proving that good practices do exist. It's just that none of those lot are currently working on Colin's project.
A significant issue is information asymmetry—customers often lack the knowledge to assess the necessity of additional work, creating a sense of vulnerability and distrust. Other industries, like customized software solutions, face similar challenges where the contractors' expertise far exceeds that of the clients.
Some tradespeople and firms have addressed these issues effectively. For example, an electrician's memorable and self-aware tagline, "No Malarkey with Mr. Sparky," engaged Colin enough to hire them to fix his electrical mishap. He liked the acknowledgment that sometimes contractors do provide more than their share of malarkey. This example underscores the importance of clear communication and reliability in building customer trust.
In this episode, we not only humor Colin's need to rant, but we also explore why tradespeople have the reputation they do and what they should do about it.
We also look at what you can learn from their mistakes to benefit your organization.
In this episode, you will also learn how to avoid these mistakes with tips like:
Use Effective Communication Strategies: How tradespeople can improve customer interactions by avoiding jargon and clearly explaining their work
Set Realistic Expectations: The importance of accurate initial quotes and timelines to build trust and prevent customer frustration
Employ Collaboration: Strategies for enhancing coordination between different trades (or organizational siloes) to ensure smoother project completion
Develop Customer Education Tactics: Methods for educating customers about the work undertaken to reduce information asymmetry and build confidence
Implement Customer Experience Systems: The value of structured approaches to ensure consistent and positive customer experiences across the trades
Learn from Other Industries: Insights from how software firms handle project management and customer relations to avoid cost and time overages
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Did you ever have an imaginary friend? If so, you already have a leg up on this week’s episode. Chances are you created a mental model of your imaginary friend and could predict with 100 percent accuracy how they might react to a given situation.
A mental model is a detailed creation of an imaginary customer that helps you determine how a real-life customer might react to a given situation. However, unlike the imaginary friend, science and data develop the imaginary customer, not creativity.
As we conclude the Masterclass Series about the intricate world of Customer Experiences and the myriad factors that shape customer behavior from a behavioral science perspective, today’s episode pulls everything together. We discuss why you should create mental models of imaginary customers to understand why your real-life customers do what they do.
Traditionally, advertising professionals crafted detailed fictional personas, like an imaginary friend from childhood. Then, they targeted their messages to these fictional customers to hone their brand messages. Today, marketers continue this practice by segmenting customers into groups with specific characteristics, creating a persona that represents the group, and tailoring messages for each persona.
AI presents an intriguing opportunity to enhance this approach, enabling AI to predict customer responses by accurately simulating real-world behavior. This practical application holds immense promise.
However, relying solely on intuition is inadequate for constructing precise mental models. A wealth of data is necessary to uncover the underlying motivations and psychological triggers of customer behavior.
Understanding the context in which customers make decisions is another critical element of creating effective mental models. Factors such as current emotions, memories of past experiences, and the situational context can significantly influence decision-making. Also, we discuss how Daniel Kahneman’s two-system model from "Thinking, Fast and Slow" explains the interplay between rational and intuitive decision-making processes.
This final installment of our Masterclass Series underscores the significance of customer personas or mental models in comprehending and anticipating customer reactions to diverse marketing strategies. Our discussion emphasizes the criticality of incorporating comprehensive data into these models to ensure accurate predictions of customer reactions, particularly in the context of incentives. The discussion also highlights the challenges of integrating such data into AI models.
In this episode, you will also learn:
The historical development of customer personas in advertising
The potential future role of AI in creating and predicting customer personas
The limitations of relying solely on intuition for customer behavior predictions
The significance of memories and emotional drivers in customer decision-making
Why nutrition labels did little to encourage obese people to make better food choices
The impact of situational context on customer choices
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You know that friction in a Customer Experience is a problem that needs fixing. However, do you have that same perception of workplace friction?
If you feel the friction at work, you probably do. But if you don't, you likely think little of it, if at all. Doing work for money requires a certain amount of friction, right?
However, if the friction impacts employees and decreases employee morale, it can be a significant problem. One might even say it is a problem worth fixing.
In this episode, we delve into workplace friction and its impact on employee productivity and morale with Christophe Martel, founder and CEO of FOUNT. Martel, an expert in eliminating workplace friction, shares his insights on how reducing friction can transform employee experience, leading to happier and more productive teams.
We define workplace friction as anything that makes it harder for employees to do their jobs. This friction manifests in various ways, such as messy interactions, poor intra-company team collaboration, lack of established rules, and inadequate systems for settling disagreements. While most companies recognize friction in Customer Experience is detrimental, many organizations overlook its impact on employees.
Martel explains that workplace friction is an evolving concept that varies from person to person. Unlike organizational friction, which slows down processes company-wide, work friction is more acute and usually affects frontline employees. It often arises unintentionally from policies or changes designed to meet departmental goals, complicating interactions for customer-facing staff.
FOUNT addresses structural friction by identifying and resolving issues through data collection and analysis. By understanding employees' specific tasks, FOUNT helps organizations implement solutions that improve productivity and morale. Martel emphasizes that solving work friction leads to happier employees and yields operational benefits, making the company more efficient and profitable.
One key takeaway is that productive employees are long-term employees. Contrary to the popular belief that people leave managers, Martel argues that they leave because of work friction. Managers often absorb friction for their teams but lack the authority to make systemic changes. As a result, friction becomes ingrained in company processes, persisting even when everyone acknowledges it doesn't work.
Martel advocates for open communication between frontline employees and senior managers to identify and address work friction. He also highlights the potential role of AI in reducing friction, though its effectiveness depends on user adoption. AI tools can help when properly deployed based on insights from work friction data.
We discuss why addressing work friction requires a clear understanding of its causes and a commitment to making systemic changes. We also hear about how Martel's approach with FOUNT demonstrates that reducing friction can significantly improve employee satisfaction, productivity, and overall company performance.
Listeners will also learn:
How to identify different types of workplace friction
The importance of data in understanding and resolving friction
Examples of structural friction and how to address them
The role of managers in mitigating or exacerbating friction
The potential impact of AI tools on workplace productivity
Practical steps for fostering open communication and gathering actionable insights from employees
The financial benefits of reducing work friction in large organizations
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Customers can tell you why they do something, But they might be wrong.
It's not that customers are stupid. No, it is quite the contrary. Customers' thinking and decision-making are complicated; multiple things happen simultaneously.
Sometimes, the reason customers do things is hidden, even from the customers themselves. In our penultimate masterclass episode, we explore how you can get at these hidden motivations when designing a Customer Experience that surprises and delights customers.
In this episode, we delve into the hidden motivations of customers, particularly focusing on Confirmation Bias. This bias is a psychological tendency in which people seek information confirming their beliefs and discount contradicting them. It plays a crucial role in customer decisions, often without them even realizing it.
For example, one significant influence is the desire to be right, to see oneself as competent and knowledgeable. Confirmation Bias stems from this need, as people seek information that validates their opinions and disregards contrary evidence.
This bias manifests in various ways. One is brand loyalty.
For example, Apple enthusiasts might blame themselves for device issues rather than consider a fault with the product. This self-blame reinforces their loyalty, even if the product doesn't work perfectly. Similarly, loyal users of the social media platform X (formerly Twitter) overlook its problems to maintain their positive view of the service.
Confirmation Bias is also evident in political beliefs. Studies show that exposure to opposing viewpoints makes individuals more extreme in their views rather than moderating them. This reaction occurs because engaging with opposing views requires more cognitive effort and emotional resilience, as it threatens one's sense of being right.
In business, Confirmation Bias occurs when companies resist new findings that contradict their existing strategies. For instance, in our Emotional Signature® research, organizations often find that the real drivers of customer satisfaction differ from the assumptions. While these insights are valuable, accepting them is challenging because it feels like the organization must admit to past mistakes.
Recognizing and addressing hidden motivations is essential for businesses, so tune in to gain insights into the complex world of customer motivations and how to leverage these understandings for better business outcomes. We will explain why it is crucial to go beyond surface-level feedback and analyze customer behavior to uncover these deeper drivers.
In this episode, we also discuss:
The role of evolutionary psychology in understanding customer motivations.
Techniques for uncovering hidden customer needs.
How Confirmation Bias affects brand loyalty and customer satisfaction.
The impact of cognitive effort and emotional resilience in accepting opposing views.
Strategies for supporting customers in justifying their purchases.
The importance of being open to new information and challenging one's own biases.
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Sanjay Patel faces a challenge many of us can relate to: how to get senior executives to buy into your program.
Dealing with senior management can be nerve-wracking, as I learned twenty years ago when my heart rate spiked during a presentation to the CEO and C-suite. Today, I've mastered strategies for these situations.
In this episode, we discuss how to deal with them effectively and get what you want.
For example, it starts by being confident in your knowledge. Senior executives are usually clever and ambitious, knowing a lot about various topics but often not much about Customer Experience (CX). When discussing CX or any program you are knowledgeable about, remember they can learn from you. They wouldn’t talk to you otherwise. Respect your expertise and believe in yourself. If you don’t believe in your ideas, why should they?
So, yes, confidence is key, but avoid being overly technical or jargon-heavy. Overcomplicating your message can make you seem like you’re covering for something. Instead, align your message with what the CEO cares about most. For example, if the CEO is focused on cost-cutting, explain how your CX program can save costs. Understanding and addressing their needs will help you get through to them.
You should also keep your questions simple. Surprisingly, the higher you go in the management chain, the simpler the questions should be. Simple questions like "What experience do we want to deliver?" engage the senior team effectively. Avoid complex questions that convolute your message. Being clear and relevant is more important than appearing clever.
Additionally, using examples from within the organization or from customers helps illustrate your points effectively. Personal stories make your message digestible and relatable. For instance, Colin always asks his clients to think about a good or bad experience they had recently. By asking your audience about their own good or bad customer experiences, you can help them understand the importance of emotions in CX.
Finally, senior management values opinions. When asked, state your opinion clearly and respectfully. And be straightforward; senior management can easily detect dishonesty.
Today’s episode explores how to convince senior management to support your program. . Ultimately, persuading senior management is a sales job. So, we talk about how to sell your idea by meeting their needs.
In this episode, you will also discover:
How to frame your expertise in a way that resonates with senior executives' priorities.
Techniques for simplifying complex ideas to ensure clarity in communication.
The importance of aligning your proposals with the company's strategic goals.
Methods for using storytelling to make your case compelling and memorable.
Strategies for addressing tough questions with confidence and transparency.
Ways to gather and present evidence that supports your proposals effectively.
- Se mer
