These posts are duplicated from LinkedIn, where they’re seen by tens of thousands of people each week. They often spark lively, valuable debate and your voice would be welcome. Visit my profile to connect with me.
Did you feel the presence of my absence? Or even the absence of my presence? I've been away from the browser by and large for a couple of weeks, but not idle. Instead I've got two great projects underway, alongside the responsibilities of the day job.
First, I've started work on the manuscript for book three. I'm one and a half chapters in and settling into a steady rhythm. The trials and tribulations feel familiar having been here twice before. It's exciting, nerve-wracking and generally bloody good fun to be writing long-form prose again.
Speaking of exciting, nerve-wracking and generally bloody good fun, I've also started building a custom bike. The donor arrived a couple of weeks ago and I've half stripped it already. It's a great counterbalance to the sedentary abstract writing process, to work on something messy and physical.
I wonder which I'll finish first...
In other news, I'm also heading to Denmark for a few weeks. So if you're in the vicinity and want to get together drop me a line.
The usual service of value-added content will resume shortly :)
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Matt Watkinson, author of "The Grid" and "The Ten Principles Behind Great Customer Experience" and CEO/Co-founder of Methodical is the guest on today's Fireside Chats Without The Fires Podcast. Matt talks with great detail about his take on CX and which companies, such as Patagonia, have got it right and why they have got it right.
Matt's rare talent and expert insights allow him to look at opportunities for companies to improve in a slightly different way than the norm. Charming and down-to-earth, Matt has the ability to peel back the layers of the onion and then to pinpoint areas of improvement in simplistic terms.
(podcast link: https://bit.ly/3lv1AIw)
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𝗠𝗮𝘁𝘁'𝘀 𝗖𝗫 𝗤𝘂𝗼𝘁𝗲𝘀:
"𝘖𝘧𝘵 𝘦𝘹𝘱𝘦𝘤𝘵𝘢𝘵𝘪𝘰𝘯 𝘧𝘢𝘪𝘭𝘴, 𝘢𝘯𝘥 𝘮𝘰𝘴𝘵 𝘰𝘧𝘵 𝘵𝘩𝘦𝘳𝘦 𝘸𝘩𝘦𝘳𝘦 𝘮𝘰𝘴𝘵 𝘪𝘵 𝘱𝘳𝘰𝘮𝘪𝘴𝘦𝘴.” 𝘞𝘪𝘭𝘭𝘪𝘢𝘮 𝘚𝘩𝘢𝘬𝘦𝘴𝘱𝘦𝘢𝘳𝘦, 𝘈𝘭𝘭’𝘴 𝘞𝘦𝘭𝘭 𝘛𝘩𝘢𝘵 𝘌𝘯𝘥𝘴 𝘞𝘦𝘭𝘭
"𝘛𝘢𝘭𝘬 𝘭𝘦𝘴𝘴, 𝘥𝘰 𝘮𝘰𝘳𝘦.” 𝘈𝘯𝘰𝘯.
𝗠𝗮𝘁𝘁'𝘀 𝗖𝗫 𝗛𝗲𝗿𝗼𝗲𝘀
Ben Smith
Beverly Hills Hotel Team
Furniture brand Vitsoe
Patagonia
Groundwork Coffee Shop
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There’s two kinds of friction in any experience — the good kind and the bad kind.
The bad kind is quite obvious and well understood. When interactions are onerous, time-consuming, error-prone, or inconvenient we tend to put them off, avoid them entirely, or find the experience unpleasant, especially if it’s not something we want to do in the first place.
We can improve an experience quite dramatically by stripping this effort out, and it’s quite easy if you have a structured approach. You can re-sequence tasks, eliminate unnecessary steps, apply defaults, use simple clear language, improve the choice architecture, etc. But taken too far we end up with no experience at all, and this is where the good kind of friction comes in.
Interactions that are inefficient, or not strictly speaking necessary add value if they create a positive emotional response, are pleasurable, reassure the customer of safety or quality, or make the experience more enjoyable in some other way. This is the right kind of friction. The time it takes to pour a Guinness, signing with your finger on Square, an extra layer of security when executing a high value banking transaction — examples are legion.
We need a little friction to create memories. Occasional, distinctive flourishes go a long way.
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The more credit you give your team, the more they value your leadership.
The more you admit you were lucky, the more people respect your skill.
The more you consider yourself a student, the closer you get to mastery.
The more you accept that you don’t know, the more you can learn.
The more you acknowledge your weaknesses, the more you can benefit from others strengths.
The more open you are about your mistakes, the more faith people put in you.
The more you listen, the better a conversationalist people think you are.
The more willing you are to change your mind, the more people trust your judgement.
The more you focus on others, the more you prosper.
Nothing destroys more value in business than fragile egos. If people need to be right, can’t accept criticism, or have to be the center of attention, it’s not if they’ll create problems, it’s when, and how bad.
By contrast, when we approach our work with confidence but open mindedness; see disagreements as a chance to learn, criticisms as a shortcut to improvement, and failures as opportunities to grow; when we focus on what makes the work better not who gets the credit, we can achieve so much more, in much less time, with far less waste, stress and heartache.
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It's widely believed that data and metrics improve performance — that if we can’t measure it, we can’t manage it. Often however, the more we measure, the less we innovate. Why?
1. When we’re judged on metrics we focus on the measured tasks at the expense of others. This can narrow our focus to familiar methods that yield incremental improvements, rather than trying fresh new ideas.
2. Metrics can encourage short-termism by leading us to focus on activities that yield immediate results. True innovation is messy, time consuming and often doesn’t show results straight away, so gets discouraged by proxy.
3. Metrics can discourage risk-taking. When we fetishise measurement we’re more likely to play it safe than do something bold that risks failure.
4. Implementing and interpreting metrics absorbs time and energy, distracting people from more creative activities.
5. Since metrics can be gamed, businesses impose tighter rules to stop this happening. The net result is less and less freedom to try things out.
Measurement done well undoubtedly creates insights that improve performance. But done badly it achieves the opposite, stifling the activities it hopes to promote.
Tread carefully. The relationship between measurement and performance is surprisingly tricky to get right.
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I used to believe that the value in creating and learning about models, principles or frameworks was using them. You take the concept or theory, then systematically apply it to a given context.
But while there’s benefits to applying a rigorous, structured approach when the situation demands it, this is only half the story, and the smaller half at that. To understand why, we must appreciate how our skills develop.
There are many paths to mastery of a given field, but the destination tends to be the same — a highly informed and finely honed sense of intuition which expresses the totality of an individual’s life experience, learnings and personality.
As such, the purpose of learning principles, frameworks or models is not merely to apply them, but to mold our personal intuition. Each learning becomes an ingredient that marinades and mingles with others, combining with our individual experience and persona to create a unique working practice. With this refined intuition we can make rapid, effective judgements that create inimitable value.
Cultivating such unique mastery is what ultimately matters, so when you learn something, don't get hung up on technicalities, make it your own. The value you create will be much greater if it’s yours alone.
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To succeed in competitive markets we must create a perception of value in the customer’s mind. There are four ways we can influence this perception:
1. The benefits and pricing of the product or service
2. The distinctiveness and appeal of the brand
3. The level of awareness among prospects and customers
4. The quality of the end-to-end customer experience
These deceptively simple statements should trigger important questions within your organization:
What are our strengths and weaknesses?
Are we putting the right attention on each element?
Where must we outperform rivals?
Are we coordinating our efforts in these areas well enough?
After my book on CX principles came out I had many enquiries to work on projects where people had never considered these basic questions, or whether improving the customer experience would fix the organization’s problems or deliver their ambitions. CX was the hammer, everything was a nail. It surprised me that people couldn't see the bigger picture — an insight that led me to write The Grid.
It frustrates me that CX is sometimes sold as a panacea, but the tide is turning as companies demand results and tighten their belts. CX practitioners who thrive will stop the hard sell and focus on creating value in context. The rest will be out!
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One of the most fascinating concepts in system dynamics is the “drift to low performance”.
The drift begins when standards are allowed to go unmet, often with a single exception caused by unique circumstances.
The problem is that each exception makes the next easier to justify. And slowly but surely, every expectation, effort and quality standard degrades as targets are lowered to meet performance.
Software becomes buggier and slower. Design becomes less and less user-friendly. The firm hires A players, then B’s, C’s and D’s. The occasional discount becomes a constant price cut. Before you know it, excellence becomes mediocrity.
We can all be lazy, take shortcuts, and come up with excuses for our shortcomings. But performance must go up, not down, if we're to stay competitive. A single lapse can set off a downward trend.
The only solution is to set clear standards and principles and allow no exceptions. If each version of the product must be faster, weigh less, whatever, you must enforce it every time. As Clay Christensen wrote, "Decide what you stand for. And then stand for it all the time."
This is easier than you think because you don't have to think. When standards are immovable, you can devote all your energy to meeting them, not deciding if it's ok that you haven't.
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Have you ever stopped to think about how destructive goals can be?
About how upset we get when we don’t achieve them, even if they're arbitrary? About all the times people are so determined to achieve a goal they do something stupid that sets them back? People die from summit fever every year on mountains — so determined to reach the top, they never make it back down.
How many times have you seen goals ruin a business or project?
GM bankrupted themselves trying to achieve 29% market share. Wells Fargo insisted every customer should have eight products even if they didn’t want them. Products that don’t work get shipped to a fixed deadline because that’s the goal, only to fail in spectacular fashion.
What do we do when the world turns but our goals stay the same? How about when one goal comes into conflict with another? What if in the pursuit of one goal we end up ignoring a far bigger opportunity? We suffer, come unglued, or miss out.
But commitment to continual learning, to finding a better way, to deeper craft, to the next logical step, to responsiveness to change and to open mindedness...well...they don’t appear to do much harm at all, and seem to achieve better results.
I think about this a lot.
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All business decision-makers must strive to master three intellectual modalities — principles, systems and probabilities — the Deathly Hallows of commercial wizardry.
Using principles leads to more consistent, efficient decision-making. You can often get to 80% of the solution with 20% of the effort if you understand the underlying theory. Principles also help you avoid imitating others.
Systems thinking allows you to anticipate the broader consequences of your actions, spot the root causes of issues, and the intervention points that offer the greatest leverage. Without a sense of the whole you expose yourself to unforeseen risks and limit your effectiveness.
Thinking probabilistically allows you to thrive in an uncertain world. It increases the likelihood of serendipitous events and non-linear payoffs, while allowing you to hedge against risk. Everything in business is a numbers game because the future is unknowable. If you want more princes you have to kiss more frogs.
I spent 15 years focused on the first two, only to learn what the best investors, entrepreneurs and leaders have known for decades: the third — probabilistic thinking — is the Elder Wand that wields the greatest power.
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The art of creating a brilliant customer experience often involves deciding when to be extremely efficient, and when to be gratuitously inefficient. Let’s use communications as an example.
A text message might be the best solution for one situation because it’s instant, easily digestible, cheap and convenient. Hyper-efficient interactions can be very valuable because they save time and effort.
However, a hand-written thank-you note on high-quality paper, FedEx’ed overnight from the other side of the world is way more effective than an email because of the discretionary effort and expense involved.
Any signal that imposes costs on the sender is more trustworthy, and anything that creates that, “You really didn’t have to do that!” feeling in the customer is worth its weight in gold.
Both approaches can be spectacularly successful and can even work very well together depending on the context. But most improvements end up in the middle ground — they are neither efficient enough to be noticeably more effortless than alternatives, not inefficient in a way that conveys discretionary effort, thoughtfulness or attention to detail. They’re just kind of half-assed, combining the worst of both worlds.
This just in: half-assed is not a winning strategy in competitive markets.
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A common assumption behind customer experience initiatives is that there’s a strong connection between loyalty and advocacy: if we deeply satisfy our customers they'll become loyal and recommend us more. Not quite.
First, customers who're neither particularly satisfied / dissatisfied generate only slightly less word of mouth than those at the extremes, because word of mouth is mostly driven by novelty not satisfaction. We share the news, not the olds.
Recommendation rates tend to decline the longer we’ve used a brand because it becomes routine. Contrary to popular belief then, loyal, long-standing customers do relatively little promoting. That’s not all.
Positive word of mouth vastly outweighs negative because it’s more helpful — telling people what not to buy isn’t that useful. Since we talk more about brands we use, the more customers we have the more positive word of mouth we get.
This leads us to a counter-intuitive conclusion: since positive word of mouth depends on the size of our customer base, and growing our base relies on attracting more customers, if we want more advocacy, improving satisfaction and loyalty might not help as much as we think.
Instead a greater focus on customer acquisition and creating more novel, remarkable interactions might be what we need!
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One concept that fascinates me is the distinction between competence problems and coordination problems.
It fascinates me is because solving competence problems — a skills gap — often produces linear gains, but solving coordination problems — improving how things work together — can unblock an entire system, creating non-linear payoffs. With competence improvements we get 1+1+1 = 3. With coordination improvements we can get 1+1+1 = 42.
This theory sits behind a lot of my content because I believe that marketing — by which I mean activities that create value for customers — suffers tremendous coordination problems.
However, when brand management, advertising, product development and customer experience work together as a mutually reinforcing system — rather than discrete, insular disciplines — the results can be spectacular.
This is why I’m trying to encourage CX practitioners to learn about and value other marketing activities — so they can make their work superadditive.
This is the direction I think we need to go in to flourish and I’m going to keep banging the drum and hope people notice. I welcome your comments, critique or insights on the theory — it is after all, just an idea — let’s see if we can move forward together.
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There are two modalities we can use to launch, grow or improve a business. Let’s call Mode A “inventive” and Mode B “derivative”.
In Mode A we pursue bold, risky ideas. We have no idea whether they'll take off, so we work from the basis of affordable loss, not ROI. We tinker and experiment, keep what works and kill what doesn’t. It's an inefficient, exploratory process.
By contrast, Mode B is efficient and exploitative. We strategize, analyze, test, refine, calculate returns and optimize.
Those who favor Mode B — the 99% — think Mode A is a wasteful aberration. It seems stupid. Yet, Mode A is essential to the world’s greatest entrepreneurs and leaders, who cycle through both approaches. Why? Because the payoffs from Mode A can be massive, whereas the returns from Mode B are usually incremental.
Amazon’s Fire phone failed, yet Echo — a Mode A product built on the same tech — became a massive hit.
IAC (the owners of match) put $6m into a startup incubator. Everything failed except Tinder, which is worth billions in it’s own right — a result they’d never achieve from Mode B improvements to match.
Ironically Mode B thinkers take the greatest risks of all. Their solutions are too logical and predictable. A single Mode A hit from a rival can sink their whole business.
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To continue circulating the concepts comprising my catalogue of contrarian convictions, consider this corollary: the brand should dictate what the customer experience is like, not the customer.
Distinctiveness matters a great deal in competitive markets. We want our brand to stand out. Where does that distinctiveness come from? Not just our logo, color palette, adverts, or products but from the way people interact with us.
The problem is, relying on the voice of the customer to guide us — without a clear sense of the brand — undermines our quest for distinctiveness because our customers are the same as our competitors' and typically aren’t very imaginative. The whole category gets very similar customer insights.
To avoid swimming in the sea of sameness we must execute on these insights — or ideas of our own — in a distinctive way. This means a clear sense of the brand must come first, and be the final authority on what the experience must be like. Think of companies that are often lauded as experience led — Apple, Ritz Carlton, Disney, etc. — and you'll find they all have a very clear sense of their brand which guides them.
A simple conclusion: the CX community has it wrong. It's not customer first or employee first. If something must come first, it's the brand.
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Plenty of customer experience thought leaders know the ugly truth about advertising — it’s a “tax you pay for being unremarkable” or a punishment for not having the best customer experience. Here’s a great example:
Honda’s cog advert was two minutes long and only ran ten times in ten days. Overnight Honda’s website became the second most popular car site in the UK. Millions of people also watched the advert online.
Sales in the UK rose 28 percent, despite spending less on marketing and PR than rivals, AND increasing their prices. Dealership visits and conversion rates went up, and the campaign added about £400m to Honda’s revenue.
No no no. Wait a second, that’s a terrible example. Err...
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Knowledge is power. Data is the new oil. Or so we're told. But there’s a crucial point that often gets lost in our zeal for information: it’s not the amount or quality of your insights that matters most. It’s whether other people have them too.
There's no advantage in common knowledge, only disadvantage to not having it. And by extension there's no advantage in following the consensus. You can’t outperform others by believing and doing exactly the same things as them, regardless of the field you’re in.
The only way to outperform the majority is to be wilfully contrarian, to actively cultivate idiosyncrasies, and consciously adopt oblique perspectives.
The goal should always be to see what others can’t, try what others won’t and question what others daren’t. As Schopenhauer remarked, “Talent hits a target nobody else can hit; genius hits a target nobody else can see.”
As such, if everyone agrees with you, your idea is probably obvious and unlikely to add much value. And If the mainstream think you’re nuts be encouraged — it’s a sign that you’re thinking for yourself.
Finally, do not be afraid to look silly or weird. Instead, take this wonderful observation from Albert Camus to heart:
“All great deeds and all great thoughts,” he wrote, “have ridiculous beginnings.”
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Continuing my streak of blasphemous remarks about customer experience, I believe that customer satisfaction scores (and their sibling NPS) are rarely the right metrics for evaluating CX initiatives. There are two simple reasons why.
First, our satisfaction / likelihood to recommend emerges from an unfathomable array of factors: price, product, service, brand, advertising, competitive action, etc.
Unless you have control over these factors, you're volunteering to be measured on something that's beyond your influence. The only person who can be evaluated on these metrics is the CEO.
A CX program that tried to manipulate all the inputs would be so massive and unwieldy it would deliver nothing.
Second, revenue, CSAT and NPS often move independently, and we can't easily tell which of the factors affecting them has the most impact at any give time. As such relying on them to prove returns is fraught with risk.
Instead I favor project-specific metrics that relate directly to the business goal I’m trying to achieve, and where the impact of interventions is much clearer — task completion rates, traffic volumes, conversion, product returns, complaints, etc.
This approach leads to smaller, more effective projects that deliver real returns in less time. Who doesn’t want that?
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Another big difference between my heretical philosophy on customer experience and the norm: I typically emphasize expanding the customer base over loyalty, and acquiring new customers over retention. Why?
First, the evidence shows that brands grow through broadening the base not deepening loyalty, plus the Law of Double Jeopardy means bigger brands have more loyal customers anyway.
But why not expand the base by focusing on retention? Surely only idiots pour water into a leaky bucket? Isn't retention way more cheaperer?
While retention is important these arguments skip some crucial points:
1. Retention is often beyond our control. Loyal, happy customers can still stop buying. They might relocate, get fired, die, etc. They also don’t buy more than they need. Counterintuitively, a focus on loyalty be very high risk.
2. Acquisition is usually a bigger opportunity. If you have 2% market share and half your customers leave each year, if you retain them ALL they only represent 1% market share. But if that’s an industry wide pattern, that means 50% market share is up for grabs through acquisition. The opportunity is 50x bigger!
3. New customers drive word of mouth not long-term loyalists because we share the news, not the olds!
#customerexperience #cx #marketing
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