My friend and colleague Frank Capek has just summarized his 25 years of learnings from his work on Customer Experience Design. I think so much of Frank’s work, and believe this is so important, I thought I’d point you all to the post.

As a related aside, I’d like to share a couple of “wow” experiences I’ve had in the last week. The first was delivered by Moen, the faucet company. My kitchen faucet was getting a little hard to turn. I went to the Moen web site and got my first small “wow.” It is beautifully laid out. I was quickly able to get a description of the problem, the recommended solution, and a real bonus - a nicely animated lesson in how to replace the cartridge in the faucet. The site helped me find and order the right cartridge. All well and good.The replacement part arrived a few days later, and I was able to replace the part in about 20 minutes - a painless process thanks to the animation and clear directions that came with the part.

While I was replacingthe cartridge I noticed that the lever was loose (the faucet is a single lever type, with an integrated spray attachment). Anyway, replacing thepart solved the “stickiness” in the handle, and all was well. However, a couple of days later,I noticed that the lever was again loose. I removed the Allen screw, applied a good dollop (an engineering term!) of Loctite thread compound. A couple of days later, it was loose again. I went back to the web site, but could not see any particular reference to the loose screw phenomenon, soI wrote a support request (again, easily done) describing the problem. The next day, I got an email telling me that theparts I needed were being shipped to me post haste.

A couple of days later,a replacement Allen screw,plus several other parts associated with securing the lever, turned up in the mail - again with clear instructions. No cost - no hassle. Just exceptional customer service. I replace the screw and related parts, and that solved the problem. I was absolutely delighted about every aspect of my interaction with Moen. In Frank’s words, I was ‘wowed!’

In the same week, I had reada review by the wonderful Walter Mossberg on Photo Books. These are a fun way to assemble photos into a hard back or soft bound book. He pointed out that Apple’s iPhoto had a gizmo built in, and that you could easily assemble a book (or calendar) and send it to Apple for processing and printing. I’m already an enthusiastic iPhoto user, but had never tried the photo book feature. So I did - quickly assembling a surprise book for my wife. The process was easy and fun. I ordered the book from Apple and was delighted when the finished product arrived through the mail about 10 days later. Unfortunately, within minutes the pages separated from the hard back binding. Bummer!

I got onto Apple’s web site, quickly found the place to register the problem - again, a beautifully designed site that made the whole process easy. I got an immediate acknowledgment (nothing new there!) but a day later received a personal email from a support representative (named!) expressing deep regret that this had happened, and letting me know that a replacement would be shipped immediately. The “wow” came 2 days later - while the original order was shipped by mail (my request, being a cheapskate) the replacement came by FedEx. Once again, Apple proved it really is a class act. of course, I’ve gone on to assemble and order several other items!

It’s experiences such as those delivered by Moen and Apple that go well above what we’ve come to expect - that differentiate them in the market place and keep us customers going back time and time again. And, to one of Frank’s points, these were not “accidents.” I know from years of experience, that Apple engineers the “wow” into virtually everything it does. Similarly, as I’ve told friends about my Moen experience, they tell me of similar experiences they’ve had with the company - consistently exceptional customer experiences.

As an IT organization, how have you “designed” an exceptional customer experience? How could you create more “wows” for your business partners and customers? Check in on Frank’s blog to get some pointers on what it takes and how to achieve it. It will be well worth your time!

Over the past year, I’ve had the chance to post a wide range of thoughts on the ways that organization’s can leverage a deep understanding of their customers in order to design and engage customers in experiences that drive the growth of their business. I recently took the opportunity to step back and reflect on the most important things I’ve learned over the past 25 years. This post summarizes those most important things. I’ve tried to make this concise… but will provide links to other posts that provide more insight.

Designing Influential Experiences

Wow Experiences exert a powerful influence on how people think, feel, decide, and act… because they’re designed from the mental model of the experiencer not the mental model of the provider. Wow experiences create a high level of commitment, energy, and “word of mouth” by improving peoples’ lives.

1. Wow Experiences change how people feel and are designed from a deep understanding of what people desire. People don’t buy products or services, they buy Desired States. What Emotional Outcomes should the experience generate?
2. Wow Experiences deliver Innovative Solutions to people’s underlying, end-to-end problems. Finding these solutions requires getting below-the-surface of existing touch points.
3. Wow Experiences generate viral stories. Prime the story people will tell around an influential Experience Storyline.
4. Wow Experiences resonate with the seemingly irrational ways people decide. Design experiences that shape Preference Construction and overcome Behavioral Barriers.
5. Wow Experiences are pleasantly surprising. Design a small set of highly differentiated Signature Experience Elements.
6. Wow Experiences are engaging and personal. Enable people to Co-create and Personalize the experience, as well as, Influence and Collaborate with others.
7. Wow Experiences recognize everything communicates!Eliminate negative cues and align positive cues to influence the story and how you make people feel.

Delivering Influential Experiences

Customers’ experiences with any organization result from the behavior of a self-reinforcing, deeply entrenched organizational system. Traditional approaches to defining and implementing a new experience fail because they underestimate limits imposed by legacy mindsets, processes, systems, and culture.

1. Wow Experiences start with clear description of the intended experience - from the customers’ perspective. Align on an Experience Specification that describes the customers’ emotional & rational outcomes.
2. Wow Experiences rely on Experience Value Management to focus improvements on fundamentally shifting the economics of customer relationships.
3. Wow Experiences require shifting organizational behavior. Surface the Unwritten Rules that predispose the organization to deliver the current experience.
4. Wow Experiences require specific employee experiences not just “engagement.” Diagnose how employee experiences reinforce Unwritten Rules and design specific Employee Experience Interventions to shift those Unwritten Rules.
5. Wow Experiences require the holistic design of enabling Processes, Structures, and Management Systems.
6. Wow Experiences have a limited shelf-life. Continually Refresh and Preserve a differentiated experience.
7. Remember that, no matter what business you’re in… You’re in the Hospitality Business!

Here are a selection of links that provide some more insight into the points summarized above:

Why Customer Experience Initiatives Fail?

The Customer Experience Does Not Happen at Your Touchpoints

Cognitive Ergonomics: Designing Experiences that Fit the Customers' Mental Model

Personae-Driven Customer Experience Design

Optimizing the Most Critical Elements of the Customer Experience: CustomerChoices

Cognitive Ergonomics: Customer Experience and Our Search for Meaning

No Matter What Business You're In, You're In the Hospitality Business

Helping Customers LoseWait

How Employee Experiences Drive Organizational Behavior

Let me start this important topic with a few points that should be intuitively obvious:

• The benefits associated with delivering an outstanding customer experience accrue from influencing customer behavior
• Customers either deliberately or incidentally change what they do when they experience something that makes them feel or think differently
• In most competitive markets, there are straightforward financial benefits associated with changing customer behavior. These positive changes in customer behavior lead to increased retention, wallet share, referral rates, etc…
• The levers for changing customer behavior generally involve finding ways to understand and influence customers’ perceptions of the value they receive

Moving beyond these obvious points, things get much more interesting when the objective is design experiences that influence behavior towards more altruistic ends. For example, many regulated utilities are launching energy conservation and demand response programs. The objective of these programs is to shift customer behavior related to energy consumption and conservation. While there might be marginal direct benefits (e.g., reduced rates, etc…) experienced by the customer as a result of changing their behavior, there are also environmental and social benefits the customer may not easily perceive.

As we’ve been engaged with clients working on this problem, it’s become clear that there’s a lot that any company can learn from this more challenging experience design problem. For example, the airlines have done a good job of influencing customer behavior regarding online check-in and the use of kiosks rather than agents, despite initial customer tentativeness and resistance.

What Comes First: Attitudes or Behavior?

While it seems natural to assume that customers’ beliefs and attitudes are precursors to their behavior, practical experience supported by numerous academic studies have demonstrated that the linkage is highly complex. For example, many people have attitudes and beliefs consistent with environmental conservation yet do not exhibit any significant conservative behavior. A person’s expressed beliefs and attitudes about environmental issues are not a strong indicator of how that person will act relative to those issues. In fact, you can’t even assume that a person who identifies themselves as an environmentalist will necessarily have either a solid understanding of the issues or be any more willing to modify their behavior to make it more environmentally friendly.

As discussed in Doug McKenzie-Mohr’s and William Smith’s book, “Fostering Sustainable Behavior,”a few illustrative examples include:

• “Participants in an intensive 3 hour energy conservation workshop indicated greater awareness of energy issues, more appreciation for what could be done in their homes to reduce energy use, and a willingness to implement changes. However, based on follow up visits, actual behavior did not change. The only difference in behavior between participants and non-participants is that eight of the forty participants had installed the low-flow shower head they were given for free at the workshop.” Geller, E.S. “Evaluating Energy Conservation Programs: Is Verbal Report Enough?” Journal of Consumer Research, 8, 331-335
• “Individuals who hold attitudes that are strongly supportive of energy conservation were found to be no more likely to conserve energy.” Archer, D., Pettigrew, T., Constanzo, M., Iritani, B., Walker, I. & White, L. “Energy Conservation and Public Policy: The Mediation of Individual Behavior” Energy Efficiency: Perspectives on Individual Behavior, 69-92.
• “500 people were interviewed and asked about personal responsibility for picking up litter, 94% indicated that individuals have a responsibility for picking up litter. However, when leaving the interview, only 2% actually picked up the litter that had been “planted” by the researcher.” Bickman, L “Environmental Attitudes and Actions” Journal of Social Pscyhology, 87, 323-324.
• “An investigation of the differences between recyclers and non-recyclers found that they did not differ in their attitudes towards recycling.” DeYoung, R. “Exploring the Difference Between Recyclers and Non-Recyclers: The Role of Information” Journal of Environmental Systems, 18, 341-351.

There are several factors that contribute to a disconnect between a person’s attitudes and their behavior. Each of the following reasons influence whether or not a person engages in any new behavior, despite their attitudes towards that behavior:

1. Lack of Knowledge. Inconsistency between a person’s expressed attitudes and their behavior might be partially attributable to a lack of understanding of what to do or a lack of understand the implications of their actions. While numerous studies show that information or education alone has little or no effect on behavior, it is still a critical enabler.

2. Perceived Barriers. External barriers and constraints set limits on what can be accomplished by just changing a person’s attitudes. The higher the barriers, including expense, inconvenience, and technical difficulties, the less the effect attitudes will have on a person’s behavior.

3. Perceived Benefits. A person may have to incur immediate and well-defined inconvenience, uncertainty, and monetary costs in exchange for longer term benefits experienced by the broader population rather than the individual themselves. This is related to Hardin’s metaphor of the Tragedy of the Commons.

In general, behavior competes with behavior. People consciously or automatically make choices between alternative behaviors. When they do, people naturally gravitate to behaviors that have high perceived benefits and few perceived barriers or costs. In general, people also naturally pay the most attention to short-term benefits and costs. While perceived benefits and barriers / costs vary dramatically by individual, there are usually common elements shared by customers within a given customer “personae.”

As a result, a behavioral engineering approach is often most effective. It is generally more cost effective to try to change behavior directly than to do so via a change in attitudes across a large population. We have found that attitudes are just as likely to be a consequence of behavior than the cause of behavior. Or, as we like to say, you often “act your way into a new way of thinking, rather than thinking your way into a new way of acting.”

As McKenzie-Mohr and Smith summarize, much of the practice involves influencing behavior in specific ways by:

• Increasing the customers’ perceived benefits of the desired behavior
• Decreasing the customers’ perceived barriers to the desired behavior
• Decreasing the customers’ perceived benefits of the current or competing behavior(s)
• Increasing the customers’ perceived barriers of the current or competing behaviors(s)

The high level steps include:

1. Identifying Specific Perceived Barriers and Benefits. This requires field-based observation and elicitation research (See: Observation and Elicitation: We Like to Watch!) focused on surfacing: What makes the desired behavior difficult/easy? What are the perceived positives and negatives?Who wants you to do it and who doesn’t care? This qualitative research is used to clearly identify the ways that customers experience the barriers and benefits.
2. Clustering Perceived Barriers and Benefits by Personae. The initial observation and elicitation research is generally followed by a more quantitative study that clusters and prioritizes barriers and benefits for different customer personae. (See: Personae-Driven Customer Experience Design)
3. Designing Behavior Change Programs by Personae. In general, program design starts by targeting the most “influencable” personae first. Characteristics of effective program design typically include the following elements (See: Influential Experiences and the Psychology of Escalating Commitment):
   • “Easy to get started” initiating actions and reinforcement
   • Gaining visible commitment (e.g. written commitments)
   • Creating meaningful incentives and penalties
   • Emphasizing personal contact
   • Encouraging development social norms and leveraging social pressure
   • Designing prompts / reminders for new behaviors. Helping people remember - making it difficult for them to forget.
   • Measuring and reporting progress against individual and community goals.
4. Piloting and Refining Behavior Change Programs. It is very important that any programs be tested and refined in the field. This can be done with a sample or segment of customers. The purpose of this pilot is not just to evaluate the design but to improve it with observation and feedback gained from the participating customers.
5. Rollout and Evaluate Results.

Here are a few situation-specific lessons learned:

• Efforts to encourage people to conserve energy must provide information that can help them understand what the effects of specific changes in behavior will be. For example, the information on a typical electric bill is not detailed enough. These bills typically summarize overall usages. This doesn’t give consumers any clue as to the relative effect of various resource-conserving actions. As a result, misconceptions about the impact of various actions persist despite educational efforts to change them (e.g., the impact of turning off lights vs. making less frequent use of the clothes dryer).
• Providing incentives can be effective. However, if incentives are significant, many people come to believe they are acting only for the incentives. They may begin to require larger incentives to do things that they might previously have done only with small incentives. In these situations, the behaviors often stop as soon as the incentives are removed. In general, people tend to sustain changes in behavior when they have chosen those behaviors without the influence of significant incentives or penalties.
• Attitudes about specific threats are more predictive of behavior related to those threats than general concerns about the environment are predictive of general environmentally friendly behavior. For example, attitudes towards recycling are more predictive of recycling behavior than are general concern about the environment.
• Stronger commitments yield more persistent behavior. A commitment accompanied by an agreement to promote target behavior among neighbors has more behavioral influence than just the expression of commitment by itself. Encouraging customers to commit to a more specific goal is more effective than more general goals to conserve energy.
• Aligning consequences to behavior is critical. For example, having customers pay for trash pickup based on the amount of trash they produce is more effective than impassioned pleas to reduce trash.
• While publishing typical customer behaviors can generate peer pressure, it is a double edged sword. It can encourage people who are already doing both better and worse than average regress to the norm. Publishing exemplary behavior is an alternative to publishing average behavior.

This is a topic we’ll continue to explore as we progress in our work with utilities on the design of more influential programs and experiences.

I’d like to emphasize a point I’ve made in earlier posts. Your company does not have a customer experience… only your customers do. Although it might seem like this is splitting hairs, we’ve come to realize that the distinction is critical. The moment you start talking about “our company’s customer experience” attention gets focused on what we do rather than how customers experience things.

Our working definition of experience is: How people think and feel as they follow an end-to-end process intended to accomplish goals and satisfy needs that are important to them.

There are a couple of very important implications of this definition:

• Understanding the customer experience requires an understanding of how customers conceive of what they’re trying to accomplish and what’s important to them. There is almost always a significant disconnect between the customers’ perspective on their goals and a provider’s beliefs about the customers’ goals. For example:
  • An automobile insurer might assume that customers buy insurance to “transfer risk in exchange for a premium.” However, the customer may really feel that the goal is to have the insurance company “erase an unexpected mishap.” As a result, the insurance company might do a brilliant job of transferring risk… but fall far short of meeting the customers’ emotional needs regarding erasing a mishap.
  • A jewelry retailer might assume that their customers are interested in an effective jewelry buying experience, while the customer might see their goals as “giving a gift that represents a positive and mutually satisfying investment in a relationship that I care about.” As a result, the retailer might do a great job of selling jewelry but miss the opportunity to really innovate a great experience around what the customer is trying to accomplish.
  • A moving company might believe the customers’ goals are to move their belongings from one place to another. The customer sees their goal as reducing the stress and uncertainty of relocating his family.

• The customers experience does not just happen at a providers touchpoints. This point was covered in detail in a previous post. However, the short story is that the customer may have to navigate and integrate a wide range of activities in order to satisfy his or her needs. Only some of these activities involve any contact with a given provider. A provider that just focuses on their touchpoints with the customer is generally only able to make incremental improvements in the quality of the customers’ experience. The more significant opportunity to innovate a significantly better experience comes from a deeper understanding of the customers’ experience at the non-touchpoints.

• The actually customer experience is “how the customer thinks and feels” as they navigate their process in an attempt to address their goals. An overwhelmingly important part of this is how the customer feels. As Buck Rogers, VP Marketing for IBM between 1974 and 1984 observed, “People buy emotionally and justify with logic.” If you want to understand the customers’ experience, think about how your business makes them feel. How they feel has an overwhelming impact on what the customer ends up thinking and, ultimately, how they end up behaving

Outstanding experiences have much more to do with the transference of emotion than the exchange of rational value!!!

• Finally, you can’t design the customers’ experience. You can only design what you do in a way that positive and highly effective customer experiences emerge. One of the best ways to think about designing for emergence is captured in the work of the visionary architect, Chris Alexander, who in his book “A Pattern Language” describes how an effective architect organizes physical space in a way that generates specific compelling experiences. For example, how an architect can create a town square specifically designed for the emergence of a “Dancing in the Street” experience or a compelling “Sidewalk Caf” experience. Similarly, the open design of platforms like Second Life, Facebook, and MySpace were effective because they created the conditions that allow for the emergence of positive and engaging customer experiences.

This can be summed up in one major point:

Creating the conditions for outstanding experiences results from… designing from the mental model of the experiencer… not the mental model of the provider!

Would you decide to just go out and spend $15,000 on tools to do a little work around the house? Are the improvements to your backyard worth the $12,000 you ended up spending? Would you decide to invest $3,000 on repairs to your old, unreliable car, even though it was only worth about $4,000 in the first place? Or, is your prize collection of beanie babies, figurines, watches, or ___________ (fill in the blank) really worth the thousands you’ve spent on it over the years?

If these were single, rationally considered decisions, you probably wouldn’t have made them. However, as psychologist Robert Cialdini observed, a person’s commitment to a particular course of action sometimes “grow legs.” Once we become clearly committed, we have a strong tendency to gradually increase our level of commitment to that course of action. In doing so, we often lose sight of the original reasons and justification for choosing that course of action in the first place.

For example, it’s not unusual for the owner of an old car keep incrementally spending money on repairs as things break down… first the brakes… then the muffler… then the transmission… etc… hoping that each of these repairs will be the last. As the bills mount, the owner often becomes even more determined, “I’ve already spent more than $2,000 repairing this thing. I’m not going to back down and, in effect, throw that money away.”

This very common pattern is called irrational escalation and describes situations in which people make seemingly irrational decisions in order to justify the decisions they’ve already made or the actions they’ve already taken. Irrational escalation shows up in a wide variety of situations including: bidding wars that occur during auctions or corporate takeovers; military strategy (consider the Vietnam and Gulf wars); corporate or market investments that wind up “throwing good money after bad;” “collector” behavior; or the escalating cycle of retribution and punishment that occurs when a husband and wife become locked into a contentious divorce. In addition, clever salespeople or fundraisers often employ “foot in the door” techniques that take advantage of people’s tendency towards irrational escalation as small initial commitments eventually build towards large commitments.

Although much of the research on commitment has focused on this negative behavioral cycle, the escalation of commitment is not always negative! Whenever we commit our time, energy, hearts, and minds to a worthy cause, it can have a very positive influence on our identity and our future behavior. Over time, under the right conditions, we eventually have a hard time letting go; our positive behavior becomes less about “what we do” and more about “who we are.” The positive escalation of commitment can describe how people adopt healthy behaviors like getting regular exercise or engaging in wellness programs… or become involved charity work and community service.

Recently, I’ve been studying the process people go through as they increasingly commit to energy conservation behaviors or “green” causes. It seems that people typically adopt a conservative or green attitude in baby steps. As they take each step, it reinforces their focus and awareness, as well as, their sense of identification with an aligned set of underlying values and beliefs.

Many utility companies are starting to more actively promote energy conservation or demand management (shifting use to off peak times) programs. The effectiveness of these programs is highly dependent on the careful design of offerings, communications, and feedback mechanisms that get a “foot in the door” and build customer commitment incrementally from there. Effective programs make it easy for customers to get started and then carefully reinforce a gradually increasing level of association with being a conservative, ecologically and economically minded consumer. These programs can amplify customers’ commitment by providing positive feedback and by making the customer’s commitment publicly and socially visible.

Effective design of influential energy conservation and demand response programs is highly customer personae dependent. Obviously, not every customer has the same beliefs, attitudes, priorities, and behaviors related to energy use, conservation, the environment, and social responsibility. In many ways, the adoption of energy conservation programs is similar to the adoption of wellness programs. Some people readily adopt these programs because they fit with the way they already think. For example, some customers have an “independently healthy” or “naturalist” personae related to their health. On the other hand, some customers will never engage in a wellness program; they might have more of an “avoider” personae regarding their health. However, there are several personae that are more influenceable. The most effective programs must be designed to resonate with the mental model of these customer personae.

Cognitive Dissonance… Driving the Escalation of Commitment

One of the factors that drives the escalation of commitment is cognitive dissonance. Cognitive dissonance was first identified in the 1950s by psychologist, Leon Festinger (see: The Theory of Cognitive Dissonance and When Prophecy Fails). Since that time, it has grown to become one of the central theories of social psychology. A great, more recent book on the topic is Carol Tavris‘ and Elliot Aronson’s Mistakes Were Made (But Not by Me): Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts.

Cognitive dissonance is a state of tension that occurs whenever a person simultaneously holds conflicting ideas or beliefs. Because holding two conflicting ideas or beliefs creates an unpleasant tension, people are naturally motivated to reduce it. Dissonance reducing behavior is ego-defensive; by reducing dissonance, a person gets to maintain their positive self-image; an image that depicts them as a good or smart person. Cognitive dissonance often produces behavior that is apparently irrational; although, to the person, it may seem very sensible.

Understanding and leveraging cognitive dissonance is a powerful tool for designing customer or employee experiences that positively influence a person’s thinking and behavior… and drive the escalation of commitment:

• Justification and Filtering. Following a decision, especially either a difficult one or one that involves a significant amount of time, effort, or money, customers almost always experience dissonance. Did they do the right thing? The chosen alternative is seldom entirely positive, and the rejected alternatives including the “do nothing alternative” are seldom totally negative. After a significant decision, customers typically seek reinforcement that their decisions were good ones by seeking information that is reassuring. If at all possible, they try to convince themselves and others that it was a logical and reasonable thing to do. They avoid thinking about either the negative aspects of the choice they’ve made or the positive aspects of the un-chosen alternatives. In designing customer or employee experiences, it is important to arm customers with the story they’ll tell themselves and others. In many cases, it makes sense to continue marketing after the sale in a way that provides people with the ammunition they need to justify the decision they’ve made.
• Responsibility. Dissonance effects are greatest when (1) people feel personally responsible for their actions and (2) their actions have serious consequences. If there is a significant amount of external reinforcement or incentives, we may not “own” the decision. For example, offering rewards to individuals for performing even the most pleasant activities decreases the intrinsic value of those activities and reduces the individual’s responsibility for having done it. This is why “incentive programs” not only don’t build permanent behavior, but may undermine it in some cases.
• Consistency and Escalation. In the absence of strong conflicting signals, dissonance reduction will reinforce actions consistent with earlier commitments and behavior. In addition, once a small commitment is made, it sets the stage for ever-increasing commitments. The behavior needs to be justified, so attitudes are changed; this change in attitudes influences future decisions and behavior. When customers commit themselves in a small way, the likelihood they will commitment themselves further in that direction is increased. This process of using small commitments to encourage people to accede to larger commitments has been dubbed the “foot in the door” technique. It is effective because having done the smaller favor sets up pressures toward agreeing to do the larger favor; in effect, it provides justification in advance for complying with the large requests.
• Irrevocability and Inevitability. Two of the most important characteristics that effect cognitive dissonance are the relative irrevocability and inevitability of the decision. Irrevocable decisions always increase not only the dissonance but the motivation to reduce it. Once we’ve committed ourselves to an irrevocable course of action, it’s in our best interests to justify the decision we made and avoid conflicting information. In addition, research shows that a person’s dissonance is reduced with choices they see as inevitable.

In summary, designing influential experiences requires an understanding of cognitive dissonance and, in particular, how cognitive dissonance drives the escalation of commitment. More on this in future posts.

Customer Experience Concours is a unique research and development program dedicated to enabling major corporations to improve business performance by delivering a differentiated customer experience. The program will allow a select group of corporations to collaborate with the award winning BSG Concours research team (a division of BSG Alliance) along with:

• Lou Carbone, a pioneer in leveraging customer experience as a differentiated business strategy and author of the book Clued In;
• Don Tapscott, best selling author of Wikinomics, The Naked Corporation, Growing Up Digital, and Paradigm Shift and a leading authority on strategic business trends

The Customer Experience Concours program will officially launch in June 2008 and organizations that join prior to the launch will have the opportunity to participate in a major research project titled “Leveraging Integrated Customer Analytics” that kicks off in March 2008.

Each year, the program will include the following features:

• Two major Research Projects focused on developing actionable insight, approaches, and tools that improve your ability to acquire customers and develop extended and mutually profitable relationships with them. Members will have the opportunity to shape the direction of the research and enjoy privileged access to findings, recommendations, and new management techniques as they develop. Each project will be documented in a concise research report, executive summary, and presentation deck.

Note: The first major Customer Experience Concours research project will be focused on “Moving to Next Generation Experience”

• Two 2-day Research Summits held in easily accessible locations, often academic conference centers. Each summit incorporates:
  • 1 day of discussion and application of the research project being completed
  • 1/2 day of discussion of member-generated topics related to customer experience
  • 1/2 day of discussion to shape the next topic for research
• Invitation for senior executives to attend an additional Senior Executive Summit hosted by BSG Concours.
• Access to an exclusive Collaboration Hub, a mechanism for information exchange among the community of participants and a repository of leading-edge intellectual capital.
• Six Teleconferences/Webcasts for discussion of special topics related to customer experience.
• 2 days of Individualized Support which could include guidance on customer experience-related initiatives, on-site executive briefings, or targeted research on organization-specific issues.
• Given sufficient interest, Special Interest Groups to discuss industry-specific or technique-specific customer experience issues and share experience and best practices.
• The program’s ongoing work will include development of a Field Guide to Customer Experience covering the most essential tools and approaches.

For more information on this innovative program, see the Customer Experience ConcoursBrochure.

How do you get your customers to talk about the experiences they’ve had with you? Over the past week, I’ve had a few conversations with executives about improving their organization’s Net Promoter Score (NPS). While there are certainly differences of opinion on the importance of NPS as a central metric for an organization’s performance with customers (see Randy Brandt’s Core Customer Metric blog), it goes without saying that…. customers telling other prospective customers great things about your business is… well… a great thing. Each of people I spoke with have invested a considerable amount of money making incremental improvements in their products and services and are frustrated by their inability to move their NPS.

What motivates people to proactively tell stories about their customer experiences? What is it about an experience that makes it a story worth telling? What are the social and psychological benefits of telling these stories? Telling stories is one of the ways that we connect with and relate to each other. It’s a way that we blow off steam when we’ve had something frustrating happen to us. It’s also a way that we re-live the positive experiences we’ve had… or even a compelling way to share a story about “the next cool thing” we’ve found.

One of the most important drivers of both positive and negative word of mouth is the element of surprise. This can be a single big surprise or a steady stream of small surprises that build over time. If you have an experience that surprises you in some way, it creates an orienting response… you pay attention to it. It might be something small, like a salesperson that is friendlier than expected. Or something more significant, like Delta Airlines knowing it was my birthday and giving me a bottle of Champagne as an unexpected surprise. This happened 8 years ago and I still talk about it. The same thing happens with negative surprises. We’ve all had them… and we’ve all told lots of people about them.

Some industries, like the airline industry, seem to be highly skewed towards lots of negative surprises. Delays, cancellations, change fees, lost luggage, inconsistent service from gate agents and flight attendants, etc… On the positive side, every once and a while a flight attendant or gate agent might be surprisingly pleasant or helpful, or you might get an unexpected upgrade, or something like that. However, it’s difficult to have these small, infrequent positives ever outweigh the big, relatively consistent, negatives. Other industries, like consumer banking, seem to be devoid of positive surprises with a smattering of negative surprises like late fees, transaction charges, etc…

Psychologist John Gottman has done some very interesting research on “Why Marriages Succeed or Fail” that seems like it might apply to other long-term relationships. Based on his analysis of 700 relationships, Gottman found that a central predictor in the success and failure of these relationships was the balance of positive and negative interactions. These were the interactions where there was something surprising, however small. These could be small expressions of love, humor, and small recognitions, as well as, negative surprises like sarcasm, annoyance, sniping, or complaints. He found that there is magic ratio of 5 positive surprises to every 1 negative surprise. If the positive-to-negative ratio dipped below 5 to 1, the relationship began to spiral downwards. If the ratio of positive-to-negative surprise ratio rose above 5 to 1, the relationship became stronger.

I would suggest that a similar logic applies to customer relationships. If you want to build higher levels of customer loyalty and get to the point that customers start generating positive word of mouth, I think creating a drumbeat of small positive surprises is important. There arealways going to be times when the customer has a negative surprise but having a balance of positive surprises should offset this. I would also suggest that these positive surprises can’t be programmatic and predictable, otherwise they’re not surprises. They also can’t be delivered in a way that becomes perceived by the customer as an entitlement. This is how structured “loyalty programs” lose their effect over time.

Most of the design work that we do with our clients is focused on creating a concise set of “signature experience” elements that: get the customers attention, reinforce the brand story, and are perceived by customers as a difference in kind (surprisingly different) rather than a difference in degree (better sameness).

So, what’s the balance of positive to negative surprises you deliver to your customers?

If you’re looking for a good introduction to behavioral economics leading up to the emerging field of neuroeconomics, check out Michael Shermer’s The Mind of the Market. The Mind of the Market isan easy to read summary of some of the work of many of the brilliant contributors to this field including: Daniel Kahneman and Amos Tversky’s groundbreaking work in behavioral economics, Leon Festinger’s study of cognitive dissonance, John Nash on the Nash Equilibrium, Read Montague’s work on decision making, Daniel Gilbert’s study of happiness and the problem of affective forecasting, and more…

For a short teaser, read Shermer’s recent essay: Why People Believe Weird Things About Money

If you’re interested in how all this applies to customer experience design check out the following Customer Innovations blog posts:

• Designing for Customers Reactive, Deliberative, and ReflectiveExperiences
• Optimizing the Most Critical Elements of the Customer Experience: Customer Choices
• Novelty Seeking and the Design of Differentiated Customer Experiences
• Cognitive Ergonomics: How Customers React to Violations of Justice
• Cognitive Ergonomics: Designing Socially InfluentialExperiences
• Cognitive Ergonomics: Framing and Priming the CustomerExperience
• Miswanting and the Pursuit of Unhappiness