optimizing customer experience tutorial

PROPRIETARY

By Michael Million

Tutorial: Optimizing the customer experience

2014 Annual Conference Inspired Marketing

Brand-Driven Growth Strategy

SUBSECTION TITLE

2AMA 2014 Annual Conference - Tutorial

You’ve got to start with the customer experience and work back toward the technology – not the other way around

Steve Jobs

SUBSECTION TITLE


We see our customers as invited guests to a party, and we are the hosts

It’s our job everyday to make every important aspect of the customer experience a little bit better

Jeff Bezos

SUBSECTION TITLE


Starbucks spent less than $10MM on advertising from 1987 to 1998 yet added over 2,000 new stores to accommodate growing sales

Starbucks' popularity is based on the experience that drove its customers to highly recommend their store to friends and family

Howard Shcultz

SUBSECTION TITLE


A trio of anthropologists recently published an article based on observations at three independently owned coffee shops and three Starbucks locations around Boston.

Their intention was to determine how effectively Starbucks are able to provide the same community-based social environment associated with traditional coffee shops.

How Starbuck’s drives loyalty - a study in customer experience

SUBSECTION TITLE


The biggest surprise was that Starbucks actually provided a more welcoming environment than any of the three local coffee houses.

They credited one Starbucks with having the most vibrant sense of community, and observed that the baristas there knew many patrons by name and could anticipate their orders.

The anthropologists also noted that the Starbucks baristas were friendlier to new customers than the bespoke hipsters behind the counter at the local places.

Same everywhere, but we still make you feel special

SUBSECTION TITLE


Agenda

• Warm up Exercise 15

• Foundational Terms & Focus for Today 15

• Inspirations & Examples 15

• Methodology Applied to a Case 30

• Break-outs & Report-backs 45

• Conclusions

SUBSECTION TITLE


What are some of examples of great customer experiences?

SUBSECTION TITLE


What makes them so great?

SUBSECTION TITLE


Where does customer experience sit in your company?

How much of a priority is it?

How is it viewed in the organization?

SUBSECTION TITLE


Where does customer experience sit in your company?

Who’s responsibility is it?

How is it managed?

SUBSECTION TITLE


Agenda






• Conclusions

SUBSECTION TITLE


What is customer experience?

Cumulative Impact Definition

Multiple touchpoints over time, which result in a real relationship feeling, or lack of it.

- Wikipedia

A set of expressions, impressions, and interactions between a customer and company that result in certain perceptions of that company that, in turn, drive some type of action in the near or long long-term

- M. Million

SUBSECTION TITLE



Distinct Economic Offer Definition

A personal and memorable experience that creates a distinct economic offer different from the goods sold and services delivered

A company's ability to deliver an experience that sets it apart in the eyes of its customers serves to increase the amount of consumer spending with the company and, optimally, inspire loyalty to its brand

- Pine and Gilmore, Experience Economy

SUBSECTION TITLE



Psychological Underpinning Definition

An interaction between an organization and a customer as perceived through the customer’s conscious and subconscious

A blend of an organization’s rational performance, the senses stimulated and the emotions evoked and intuitively measured against customer expectations across all moments of contact• Not just about the rational ”what” but also

about the emotional “how”

• More than 50% is subconscious, or how a customer feels

• Factors such as the emotional, cultural, social, and physical aspects are often over-looked

SUBSECTION TITLE


Different approaches toward customer experience

Like segmentation, the right approach depends on knowing specifically what the business challenges are and objectives you seek

• Financial – how do we squeeze costs out of the system, get customers to pay more (e.g. airlines charging for pillows), or expedite transactions (path to purchase)?

• Operational – how do we streamline operations to make it more efficient from end to end (e.g. process reengineering)?

• Technical – how do we enable the system to be more productive, manageable, and interconnected (digital enablement)?

Internally Oriented

Externally Oriented

• Functional path – how do we make customers’ journeys easy, informative, and helpful throughout?

• Emotional path – how do we address customers’ changing psychological or emotional needs as their decision-making evolves (e.g. decision anxiety, confusion, frustration, boredom)?

SUBSECTION TITLE


An argument for a “Brand Experience” Approach

The world is growing increasingly complex and fast-paced

We are inundated by more and more marketing messages (and yet, we don’t trust them any more than we used to)

Technology improvements are enabling more and more companies to get the basics right (e.g. convenience, reduced wait times)

Copying is becoming increasingly easy – “sameness” of more and more products and services / making differentiation ever more difficultBrand experiences will drive tomorrow’s success and allow companies to stand out (products, services, and even “good” experiences aren’t enough anymore)

We look for and value what is personally meaningful to us - experiences we have with companies seem to matter more

SUBSECTION TITLE


So, what is a “Brand Experience”?

Interactions so impactful and uniquely identifiable to a particular company, that they define the brand in customers’ minds, distinguish the company far and away from its competitors, and have a high influence on future behaviors

• Nordstrom's sales representatives going above and beyond

• Tumi’s lifelong repair policy

• Apple’s Genius Bar

• Uber’s payment system

• Others????

SUBSECTION TITLE


Benefits of a “Brand Experience”

According to studies by McKinsey, brand experiences are the most powerful form of word of mouth driving activity - accounting for 50 to 80 percent in any given product category.

Brand experience is inherently social, it's built on ideas that people want to spend time with and that people want to share.

50% to 80% of word of mouth - driven by brand

experience

SUBSECTION TITLE



70% of consumers trust brand recommendations from friends, but only 10% trust advertising.

UK Energy supplier, E.ON developed EON Open House, a store in Nottingham, UK that educates local customers about smart meters, which are being fitted for free across Nottingham.

The project proves the power of brand experience by delivering positive advocacy when traditional methods had previously failed the brand; Net Promoter Scores of +88% vs. E.ON Customers control of -17.7%.

- The Guardian

70% trust brand

recommendations from friends

SUBSECTION TITLE



The Keller Fay Group research shows that good brand experiences are three times more likely to spark conversations than an ad.

Furthermore, over 50% of conversations triggered by an in-person experience account for pass along and purchase.

>50%Account for pass

along and purchase

3X More likely to spark conversations than

advertising

SUBSECTION TITLE


I don’t want to be sold to when I walk into a store.

The job is to be a brilliant brand ambassador. Don’t sell! No! Because that’s a turn-off.

Build an amazing brand experience, and then it will just naturally happen. Angela Ahrendt

SUBSECTION TITLE


A great brand experience is about knowing and interpreting

Know thyself(inside-out)

• Who you are

• Where you’re going

• What your brand stands for

Know thy customer(outside-in)

• Who they are

• What’s most important to them

• What their journey is like

InterpretInterpret Brand Experience

• WHAT can we do for customers that makes their journey better

• HOW can we do it in a way that is uniquely us

SUBSECTION TITLE


Great brand experiences have six things in common

1. Brand first, transact second

2. Distinguishes customer types

3. Focuses on what matters most

4. Makes people feel special in some way, at some point

5. Designs for continuity and intent (across channels, platforms, and path to purchase)

6. Measures, manages, and continuously improves

SUBSECTION TITLE


Agenda






• Conclusions

SUBSECTION TITLE


SUBSECTION TITLE


https://www.youtube.com/watch?v=Y1nzWY3JFJQ

SUBSECTION TITLE


?How would you characterize the Virgin America experience?

SUBSECTION TITLE


Grab a pillow, take a nap

The Swedish manufacturer of hand-made luxury beds, strives to make consumers’ experience transformative, from the first time they lay on the bed until the bed arrives in their bedroom.Guests are encouraged to take off their shoes, pick their own personal pillow, and even take a private nap on the bed of their choice.

This simulation coupled with the highest level of hospitality distinguishes Hästens and burnishes the brand like no other form of marketing can.

Winner of Sweden’s prestigious Signum award for quality of long-term branding in 2013

SUBSECTION TITLE


I’m here to take care of you

Each customer service representative is available around the clock and empowered to act on customer issues.

They are assigned to customers, stay with them throughout their problem resolution process, and get to know them as individuals.

They often provide a personal touch, like occasionally sending flowers to a customer or their partner to mark a birthday.

These gestures turn a faceless and cold experience into something more special, and give the brand a real heart and soul.

SUBSECTION TITLE


Non-stop coffee

Through remote diagnostics each Nespresso machine is technologically enabled to feed up-to-the-minute information of its status including rate of consumption, water temperature, pressure, extraction, etc., so local Nespresso service offices get warning to proactively address issues vs. waiting for a service call.

This preventative maintenance has significantly increased the uptime of its machines and allows Nespresso to more continuously brew great coffee for discriminating guests.

SUBSECTION TITLE


Agenda






• Conclusions

SUBSECTION TITLE


Roadmap to build a brand experience

DIAGNOSE (customer, journey, brand)• Know thy customer, their journey, and their contexts• Know thy customer pain points / improvement opportunities throughout the journey• Know thy brand, what makes it special, and what type of experiences it should

provide

CREATE & BUILD (messy innovation, front-end design, engineering)• Interpret what you know about the target customer and your brand• Envision the impression and interaction / look, feel, etc.• Build out how things fit together to turn the vision into a reality

STRATEGIZE (business, brand, prioritization, plan)• Clarify business objectives and growth strategy• Determine brand intent / role of brand in driving business objectives• Pinpoint interactions that matter most (what, when, and where you should spend

efforts on)• Determine “your” CE principles

EXECUTE & OPERATIONALIZE (systematize / routinize, manage, monitor)

SUBSECTION TITLE


Decimated by the financial crisis, a miracle was needed

In 2005, the US power boating industry was 307K units …. by 2011 it was 139K units – a decline of 55%

24’-36’ Sport Cruisers (Sea Ray’s core) was down even more – the hardest hit

The 50’-70’ yacht class ($3M boats - custom homes that float) represented the best opportunity for Sea Ray to begin growing again, as it was expected to recover the fastest, but ….

Sea Ray had very little presence or product in the category, and …..

SUBSECTION TITLE


Opportunity in the small yacht class, but so much was unknown

…. the organization knew very little about the market from a consumer perspective:

• Who were the consumers for these products?

• How did they perceive Sea Ray?

• What kind of experience did they expect and weren’t receiving from strong competitors?

SUBSECTION TITLE


Approach

DIAGNOSE (consumer, journey, brand)

STRATEGIZE (business, brand, prioritization, plan)

CREATE & BUILD (messy innovation, front-end design, engineering)


SUBSECTION TITLE


In-depth research with target consumers around the world

• Industry reports

• Boating life social media

• Competitor websites

• Executive interviews

• Product development plans

• Ethnographic interviews at the world’s largest Marina’s

• Dealer / broker interviews

SUBSECTION TITLE


Know thy customer

Observations

Traits What they Value Expectations

Buyers are surprisingly grounded

Wealthy people Who also Work hard

In it for the long haul

Sharp, quick studies who understand customer service. Those who keep them from wasting their time will earn credit.

Responsive

Buyers are restless and driven

Self-madeWho alsoRespect their roots

What has been earned

They’re not famous and they’re not blue-bloods. They’re searching for ‘superior’ things have true merit.

Real

Cruisers are emotional amplifiers

Stretched thin Who also Crave relationships

Their time, above all else

Boating gives them a meaningful way to connect with who they are, with those they love, and with the natural world.

Connected

Every buyer is unique in personality and expectations

CharactersWho also Appreciate details

Cultivating rapport through graciousness

Treating them with same thoughtfulness and attention to detail that they strive to uphold matters to them a great deal.

Personal

Genuinely rooting for Sea Ray

Nostalgic Who also have Discriminating tastes

Familiar things reinvented Evolutionary

SUBSECTION TITLE


Know thy customer journey

Service Area

Pain

Prep & Strike

• People just want to get out on the water—prep tasks take up valuable time for owners and their guests

• Even the smallest issue discovered during prep can spark frustration when people are waiting to leave the dock

Maintenance

• Owners have little faith in the quality of maintenance and suspect corners are cut

Repair • The repair process feels opaque and lacks responsiveness

• Owners don’t know who they are supposed to call when certain boat parts fail

Enhancement

• Pricing for a post-production change is often a negotiation that feels like being “nickel and dimed”

• There is very little support from the manufacturer, most of the load is on the owner

Hospitality • Taking a boat out isn’t a spontaneous adventure—it requires significant planning to account for things out of a boater’s control (e.g., weather)

• People want to enjoy themselves on the boat with food, drinks, and various other provisions, but it requires a lot of time

Crewing • The responsibility of operating a boat isn’t something people want to take on all the time—there are many ways to enjoy a boat, and some owners feel locked into one

SUBSECTION TITLE


Know thy brand

PARENTAGE

“Who” is behind the business

PURCHASER

“Who” buys it

PURPOSE

What it’s designed for

PROCESS

Custom vs. Production

PLACE

Where it’s built

draws heavily from parent LMVH to give the brand a “luxe hotel” feel

long-standing association with 007 solidifies position in the market - British quality with polarizing attitude

the romantic side of old Italy

the modern, flashy, sexy side of Italy

draws heavily upon its roots in fishing / known for tank-like construction and sports car-like muscle

Opportunity for Sea Ray

SUBSECTION TITLE


Roadmap toward brand experience

DIAGNOSE (customer, journey, brand)




SUBSECTION TITLE


Know thy brand intent

Purpose• To re-energize the business by establishing a strong foothold in the luxury

yacht class

• Drive $X in revenues at %Y margins over the next three years

• Engage consumers who historically wouldn’t have considered Sea Ray for a purchase in the class level

Positioning• For those who have earned it along the way and are never satisfied

• Sea Ray L-Class provides both the style and substance they seek in a 50’–70’ yacht class

• By being responsive, real, connected, personal, and authentically Sea Ray

Persona• ARCHETYPE: The Warrior King

• Relentless progress

• Confident outlook

• Passionate about craft

• Connected to what’s important

• “Bring it on” attitude

• Respectful and respected

SUBSECTION TITLE


Know thy brand intent

Grit & Grace

Here’s to those who started small. To the

ones who made it to the top without

putting people below them. The ones

who climbed the corporate ladder, or just

built their own. Here’s to the best of us,

who never think themselves better than

anyone. To ones who put class in the

working class. The ones who started

small. But have gone big. This is the

yacht for people who’ll simply call it a

boat.

Essence

SUBSECTION TITLE


Determine “your” Customer Experience principles

Service Area

Promise

Prep & Strike EasyArrive at the dock, get in your boat and go. When you’re finished, throw your keys to the valet, and they will take care of the rest. It’s that simple.

Maintenance DependableOwners can trust their maintenance crew to keep the boat safe, pristine and ready for use.

Repair ResponsiveOwners experience no hesitation around how to get something fixed. Repairs are as fast as possible, very transparent, and resolve every issue entirely.

Enhancement AdaptableDirect manufacturer support to make sure owners are confident in their ability to make changes without negatively impacting the quality of the boat.

Hospitality InformativeThe boat isn’t just ready for operation, it’s ready for enjoyment and comfort. Owners step on to the boat understanding the most pertinent information about their trip before they leave and know there’s someone they can trust.

Crewing LiberatingOwners, particularly operators, can easily hire a trustworthy captain, first mate or any other support person to fill in when operation feels like a burden.

SUBSECTION TITLE


Determine “your” overarching Brand Experience principle

From To

SCALED PERSONALIZED

This guided the entire customer experience including awareness, web site, events, manufacturing plant, customer care & service, delivery, personal touches, ongoing management

SUBSECTION TITLE


Examples of how “scaled” to “personalized” will play out

AWARENESS

Special interactions vs. a broad campaign / let the new boat be discovered by targets vs. blasted to the masses

WEB SITE Concierge service that put prospects directly in touch with a Sea Ray representatives to do a proper job of introducing the new yacht and inviting users into a dealer where both would meet with them

EVENTS Intimate, luxury-filled settings of ~100 attendees at unique locations along the coast.

DELIVERY Sea Ray captain to come with boat / walking customers through vessel in detail, dealer training

PLANT Turning it into a design / experience center where prospects can tour the site / hands-on selection of materials (vs. picking out of a catalogue – getting the “feel” of the material)

BUILDING PROCESS

VIP parties, emailed pictures of progress, extending into a bound book, construction manager attention

PERSONAL TOUCHES

• Anniversary of purchase celebration• Scaled models• Stocking refrigerator

SUBSECTION TITLE







SUBSECTION TITLE


The Coastal Tour

Events that let boaters experience these boats in a personal, familiar setting to paint a picture of the brand and how it will fit in with their lives.

A variety of casual cocktail parties on the back of a boat to larger gatherings at yacht clubs and posh private residence.

Hosted in a way that highlights each region through food and culture but offers a hint of signature Sea Ray style (Maine lobster in Montauk, stone crab in Miami).

Sotheby’s to coordinate parties at multi-million dollar homes one the coast; other partners included Aston Martin, and Merril Lynch to make events about luxury, not only Sea Ray

SUBSECTION TITLE


Tours of the Design Center (annex of the manufacturing plant)

Reception

Grab a drink and get to know each other

Current Models/ Options Gallery

A seasonal and customized approach for

each customer visit and model they are

interested in

The Lab

Give customers an inside

look at customization

possibilities or new ideas

that the design team is

experimenting

Test Drive

Give them an in- person at

how it all comes together

SUBSECTION TITLE


The Design Center – Getting There

Make the entire experience surrounding the factory tour as seamless and enjoyable as possible, while maintaining ‘our version’ of luxury. It should feel more like a courtship and less like a traditional sales experience.

Arrange for all the travel to and from the facility. Treat them to the kinds of privileges they are used to receiving in when they make other purchases at this scale.

Entertain them beyond the facility. The relationships built will create meaningful connections that Sea Ray needs with this group.

SUBSECTION TITLE


Pop-up Showroom

Creating a portable showroom is an efficient way to bring the best of Sea Ray (and this new sub-brand) on the road in an impactful and immersive way.

Mobile pop-up container can be quickly setup at marinas, dealer events or anywhere else SR has opportunity to connect.

Coffee, wifi and iPads available to view and/or download SR app.

Build a brand gallery that echoes the platform of Determined Spirit: product, lifestyle, innovation, etc

SUBSECTION TITLE


Boat Shows

Approach boat shows from a more conceptual standpoint. Certainly the boats themselves are on stage, but we are selling the Sea Ray lifestyle too.

This is not just an opportunity to show a huge inventory of boats and short period of time. This is a time to tell the story of Sea Ray’s future.

Consider a genius bar approach where customers interact with Sea Ray experts in a controlled environment and explore the boat of their dreams.

General rules of authentic hospitality go a long way at crowded places like this. Consider unexpected drinks and refreshments.

SUBSECTION TITLE


Digital

Leverage digital as much as possible during this time. Put off publishing print material until the full fleet is launched in 2014. Leverage digital now in order to get out ahead and spread your message farther faster.

1. A dream app built for bragging

2. An owner’s app built for use

SUBSECTION TITLE


Yacht Delivery

A Sea Ray expert/captain should meet the owner at their slip and deliver the boat, complete with stocked fridge and snacks. Every boat should be delivered with a tablet featuring an interactive owner’s manual.

The captain should stay with the owner and take them for an expansive test drive making sure that they are comfortable with every aspect of their new yacht at the helm, below deck and in the engine room.

SUBSECTION TITLE







SUBSECTION TITLE


Execute & Operationalize

CUSTOMER CARE

• Best in class warranties, prioritization of issues – rise to the top of first handled

• Sea Ray individual assigned to resolving issue / seeing it through - accountability

ONGOING MANAGEMENT

• Dealer certification

• Elaborate customer surveys

SUBSECTION TITLE


Results, so far

• Launch at the 2014 Fort Lauderdale International Boat Show (FLIB) was extremely successful

• Sales have exceeded goals by +25% to date

• Business is sold out until next year

• Interest generated for next new models carrying the L-Class brand and experience

SUBSECTION TITLE


Agenda






• Conclusions

SUBSECTION TITLE


Break-out Exercise (30 minutes to discuss / 15 minutes to report)

1. Pick one of your session mate’s company

2. Flip chart what the company’s brand stands for / what makes it special

3. Flip chart a profile of the company’s target customer

4. Flip chart the primary phases in the customer journey

5. Select 1 – 2 touchpoints that provide good opportunities to improve the experiences and inject the brand

6. Brainstorm ideas for making the touchpoint a brand experience

SUBSECTION TITLE


Agenda






• Conclusions

SUBSECTION TITLE


Three things to remember from today’s session

1

2

3

Brand experiences will become increasingly important in driving business outcomes

You must know your customers from the outside in, know yourself from the inside out, and interpret both to build an effective brand experience

Establishing ”your” customer experience principles that stem from a brand-driven business strategy is key in guiding developments and operational change

optimizing customer experience tutorial

Marketing

subsection title

starbucks baristas

starbucks locations

starbucks drives loyalty

new customers

inspirations examples

foundational terms

owned coffee shops