This article was originally published on Eglobalis.
Companies are shooting themselves in the foot consistently around their customer experience. What are they doing, and how do we help them to make it better?
In the past 18 months, we’ve seen several major brands back pedal from serious customer experience mistakes. Three that come to mind immediately are:
- The Samsung Galaxy S7 Note exploding phone
- The passenger dragged off a United flight
- Volkswagen’s “diesel dupe,” which is not finished yet — and may be catching up with Daimler now too
This problem has global implications. In the US, you’ve seen Wells Fargo’s fake accounts issue, but in France, according to Forrester research, not a single brand surveyed received a “good” rating on customer experience. German customer experience has long been considered very bad. Bad customer experience in Singapore is costing brands $26B per year.
When we talk about improving Customer Experience, we focus on strategy, culture, and nit-pick the journey, but we need to shift our thinking and begin from a different place.
What is the most important aspect of the customer experience?
Quality. It’s the quality of the product or service you are offering to the marketplace.
Quality is the main pillar of any product or service — and definitely the main pillar of customer experience.
Take away the quality and the experience is going to suffer. This applies to all sectors. If you remove the quality of a car, the experience of driving it and transporting your family in it will suffer, and people won’t want to buy it.
Any of these failures mentioned above — Samsung, Volkswagen, United Airlines — are ultimately failures of quality, which arise from failings of the company culture at different levels. (More on that later in the article.)
So, above everything else, there is this: whatever you are producing or selling, it must be quality. No experience, however well-designed, can make up for a lack of quality.
But what do customer experience thought leaders say?
There are many thought leaders in the customer experience discipline, and they all approach it a little bit differently.
Mike Wittenstein has defined the “human prototype.” In short: understand the customer.
I respect those leaders a lot, so I try to think of customer experience this way:
Quality is the Imperative of Successful Customer Experience
- Quality is the essential pillar for excellence.
- Design is a concept for both the product and the experience.
- Culture refers to the basics of how people work together to make decisions and how quality is maintained.
- Strategy is how a quality product gets into the market and becomes known globally.
Any product road map needs to amaze and exceptionalize. Some questions you need to ask about the quality of the end product (and definitely that the C-Suite needs to ask) are:
- Did we include the enhancements in our new product or services?
- How is it designed?
- How it is tested?
- What are the processes and specs?
- Who are the partners and suppliers? Are we checking their quality in details?
- How is quality and testing assurance being measured?
- What we are missing to make our quality bulletproof?
The quality of the product or service is then reinforced by the culture:
- Are people cutting costs and corners to have better margins?
- Is it okay to reduce quality for profits?
- Or is quality protected in every situation?
Only after the quality is assured and the culture protects the quality of the product can you think about the strategy. The strategy is means nothing if:
- The product is not quality or lacks good design
- The product is quality but the culture reduces its quality to increase revenue
In either of those two situations, you could have the best strategy in the world — and it would not be executed properly. Either the product would lack quality, the design would lack quality, or the culture would prevent it from reaching market in the most effective way possible.
This is why I don’t lead with strategy when thinking about customer experience. You need to lead from a place of quality in all details and then strategy.
The Samsung example: What went wrong
Samsung themselves blamed the Galaxy S7 Note issues on bad batteries and, probably more accurately, a rushed manufacturing schedule. In fact, as Fast Company has noted, it truly was a crisis of leadership: their mobile silo head was aware of battery issues and rushed ahead with production anyway, likely to hit a KPI number.
This is important to remember, however: phones use lithium ion battery packs for their power. (Virtually all phones do.) The liquid within lithium ion batteries is highly flammable, which explains other phone explosions and issues over time, including Nokia issues in 2009 and an iPhone giving someone third-degree burns in 2015.
The point is: the phone manufacturing industry knows about the potential problems with phone batteries. They continue to use lithium ion because they are smaller and lighter than less-destructive chemicals.
Because the potential problems are known, there is a huge responsibility on the phone manufacturer to triple-check their product. Instead, Samsung suppliers “placed pressure on plates contained within battery cells,” according to a memo, which “brought negative and positive poles into contact.”
This created variations of tension and exposed electrodes, which caused the phone to explode/catch fire.
This is what it looks like when the poles’ contact creates the fire:
You cannot leave quality as a risk factor in these processes, even more when third parties are involved. That’s a cornerstone of trust.
So this could have happened to anyone, from Apple to Android to any other manufacturer. But it happened to Samsung.
The open market impact was disastrous in brand value, perception, customer experience and trust.
And now we come to an important point: tying these problems to the bottom line and revenue.
What was Samsung’s revenue hit, in all likelihood?
I will be blunt here: in companies where customer experience still doesn’t resonate with the top executives, the only way to get that “seat at the table” is to explain to them how customer experience ties to the bottom line.
If you want to make a company executive understand and pay attention to something, tie it to revenue or KPIs connected with his responsibilities. It is that simple.
Time to think about how bad customer experience impacts the revenue, then.
William Stofega from the International Data Corporation noted that Galaxy Note sales typically represent about 10% of total Samsung phone sales, and that half of those customers may defect to Apple.
Samsung has many business units worldwide, of course — but this is still a loss in the multiple millions of dollars.
To kill off the Galaxy S7 Note — the messy situation in the fall of 2016 — they eliminated $17 billion in market value from their company in one big and historical mistake.
This all comes from a lack of quality. That’s it. That’s the basis for all these losses.
In fact, overall, companies are losing about $62 billion per year on poor services and customer experience — in 2013, that number was around $40 billion/year, so it’s growing rapidly.
Why does this happen?
There are many reasons. Most of them come back to a fundamental misunderstanding of quality within products, services and customer experience.
First, there is a “making numbers” culture that we see at Samsung above. They were aware of problems with batteries and pushed ahead to make a number and please people up the chain. The results were awful.
Second, there is a silo problem in how companies are organized. Information does not flow from Person A to Person B easily. This creates many ineffective processes. Those ineffective processes are passed onto the customer in the form of unclear regulations and inconsistent experience/service and most important quality failures or successes.
Third, as noted in this research, many current executives of S&P 1500 companies do not know how to value customers for anything other than their eventual payment. They haven’t developed systems to effectively get feedback from them, involve them in decisions, gauge their reactions, etc. Mostly they know how to operate internally and then hire a PR firm if something doesn’t work externally.
How can we improve the landscape?
In any sector, you need a focus on quality. I see this as happening via a 15-step process:
- Establish a culture of quality — and this means bringing in a leader focused on delivering quality of products and services. He/she leads with that and understands its impact on customer experience.
- Make sure you hire quality only — and lead with quality delivery and customer experience in mind. (This is easier said than done, as hiring is tough for most departments, but the process can definitely be improved as opposed to “So, walk me through your resume…”) Ask the question that no one wants to answer.
- Implement quality assurance standard and methodologies: These should work with your sector and connect with leadership KPI’s. Quality is a great way to decrease costs in customer services, reactive responses and damaging the overall customer experience.
- Learn from the mistakes of others: Samsung would be one example.
- Use the 3 Ps of Planning, Prevention, and Proactivity: Reaction costs a lot more than prevention, so it’s important to focus your processes around prevention initially.
- Educate all people in your organization constantly and preach and give tools to ensure quality control: We speak often of “The Knowledge Economy” and then … don’t provide any training/education. Invest in Quality, Design, Customer Experience and Services Excellence.
- Avoid short cuts for quality: As you see with Samsung, they can be very costly.
- Do not preach quality without delivering a clear pathway… for quality testing, calendar, stress tests, and more. This applies in any sector. You need all detailed parts of a testing plan to ensure your products and services are your quality best face.
- Reduce communication issues across silos: These lead to inconsistent experiences for both customers and internal employees.
- Involve everyone who needs to be involved: This means transparency of information. You don’t want to restrict information to only certain levels. This usually happens when people are concerned about certain data being proprietary. That’s a concern. But in general, restricting information at the top levels causes a lot of problems — increased stress on those levels, unclear decision-making, etc.
- Usability testing matters: Reduce complexity of what you produce, and don’t drop features or functionalities without legitimate testing to back it up. Make easy even in the complex parts of your digital or physical products.
- Involve customers, partners, and employees in the testing process: Add this to roadmap and delivery. Improve your product/service via feedback from multiple channels including detractors, and neutrals to understand some of your pitfalls. This would mean customers (i.e. voice of customer), partners, and employees.
- Analyze potential risks, and for each, create a clear mitigation plan: Samsung did not do this and the results were catastrophic.
- Design the services and customer experience both digitally and physically in parallel with all above.
- Don’t give excuses and immediately enter reactive mode when your company makes mistakes. Rather, try to prevent mistakes — and when they occur, try to learn from them. A mistake learned from is less of a failure. Some even believe FAIL stands for “First Attempt In Learning.”
The new metric we’re moving towards
With apologies to Ted Rubin and #RonR (return on relationship), we need a ROQ metric.
This would be return on quality, which is an imperative for your #CX.
Simply put, look at the difference between your revenue and customer acquisition when you’re making quality products and integrated decisions. For easy math, let’s say that’s $100 million. Now look at your fiscal numbers when decisions are rooted in speed or quantity, as opposed to quality. Let’s say that number is $70 million. You just left $30 million on the table because you down-shifted the focus on quality experiences.
Quality and design beats all.
We need a better metric to measure it. Standard customer experience metrics are good (and getting better), but we need a way to directly speak to the quality (and design) of the product and experience.
If we had a metric like that, and decision-makers were judged on it, it would strengthen the culture you need for quality products. Less people would cut corners on cost and other factors. Because their incentives would be connected to product quality, they would prioritize quality and design over cost measures.
We’d see less issues like Samsung’s exploding phones.
What holds together the entire customer experience chain is quality.
When you swap out quality for anything else, you lose.
Samsung lost in 2016.
It’s rebounding worldwide now, but with the Galaxy 8 this year, they need to spend millions upon millions rebuilding customer trust. That’s a line item they never wanted to have, and it could have prevented with a greater focus on quality, detailed design and avoiding such larger costs to recapture their customers’ trust.
They’ve actually brought on three major independent quality agencies to enhance their work and prevent future similar cases. The focus should be returning to quality.
Here’s my question for you: the Galaxy Note 8 is already available in some countries — with supposedly awesome features — so, knowing what you know about the flaws with some of Samsung’s processes, would you still buy it? How Samsung could regain your trust?
Like the author’s ideas? Learn more about Ricardo Saltz Gulko, his passions and charitable causes on LinkedIn or Eglobalis or Facebook or Twitter.
This article was originally published for Eglobalis.