(While the person buying a product or service might be different to the people using it, for this article I’m grouping them together and calling them customers.)
There is no business without customers so in some way a company’s purpose has to be about creating customers. The customer is the most important part of the value stream but Ackoff reminds us that an enduring commercial future requires the social system of stakeholders in a company to be taken into account. Deming said the aim for any company is for everybody to gain - shareholders, employees, suppliers, customers, community, the environment - over the long term. Shareholders expect maximum return on their investment. Successful business requires customers, forward thinking and innovation, sound economics and ever improving operational effectiveness. Customers want their problems solved, they want help to achieve whatever it is they’re doing. Employees wish for meaningful work with opportunities to learn and be creative in an enjoyable environment that provides job security. Suppliers desire a trusting and equitable partnership. Society wants to see ethical behavior, responsibility, and accountability.
CEOs want customers to be happy with what they’re getting but they’re under pressure to realize increasing shareholder value year on year. Balancing short-term demands against long-term needs is a fundamental challenge for executive management. Business is a long-term game being played with short-term thinking. It’s right that shareholders receive a good return but not to the detriment of customers, employees, suppliers and society; not to the detriment of a company’s long-term health and ability to be competitive. The best way to serve the interests of shareholders is to forge lasting relationships with customers that build loyalty while balancing the legitimate claims of the other stakeholders.
Customer loyalty is the key to profitable growth
It’s important that customers continue doing business with a company, increase the amount they spend, or share their happy experiences (or at least refrain from saying bad things). But loyalty is more than that. Loyalty is when customers turn down a better product or a better deal to continue doing business with a company. Loyalty is when customers don’t even contemplate looking around for other options. Building loyalty starts with building a relationship. A company needs to earn the trust of its customers and needs them to know it is honest. Customers want to be understood and they hope someone listens to them, so the experience they get when they interact with us should let them know we care about them as a person, we’re interested in what they have to say, we want to understand what they’re trying to do and that we want to help. Customers seek help with some aspect of their life because they want to be successful in what they’re doing and feel happy about doing it. We must solve their problem simply and make things easier for them. We must anticipate other problems that may be encountered and address them at the right time, before customers encounter them.
Fundamentally, we need to make it easy for customers to do business with us. We should invest ourselves in our customers. We should give customers our creativity, our ingenuity, our passions and our emotions. That investment should be explicit so that customers know we’re there for them and that we’re in it for the long haul. The emotional side of interactions with customers should be addressed out in the open. They might just teach us something. Feedback from disgruntled customers or customers who are having difficulties should be accepted positively and put to good use by informing improvements that make things easier for customers. No matter what our job, whether we realize it or not, we all work in customer service. The working environment needs to empower us to act deliberately to improve the end-to-end customer experience (as they engage with the company throughout their life as a customer), reduce customer service costs, and decrease customer churn, all as part of our work.
Customers are potential marketers
To make a personal referral a customer doesn’t want to look bad in the eyes of his friends. Beforehand he wants to be absolutely sure his friends will get good value from the company and will be treated right. Rationally, a customer must believe that a company offers superior value in terms of price, features, quality, and ease of use. Emotionally, a customer must feel good about his relationship with the company. He must feel valued. He must believe the company knows him, understands him, and listens to him. A delighted customer is sure of all these things. Delighted customers will become enthusiastic promoters to their friends and colleagues. That’s the behavior that contributes to a company’s growth and best serves shareholders.
Up close and personal
Listening to customers only goes so far. Why not co-create what customers actually need with the actual customers? Customers ought to have a voice in the design of products and in the delivery of services they desire. Inviting customers to participate means they can make meaningful contributions (and potentially have valuable input to important decisions). This provides us with a facility to quickly and continually test our ideas and validate their needs. From this we gain insights about which direction to take, what to prioritize, and how much to invest. By tapping into the collective knowledge and creativity of customers, a company can grow a community of promoters that becomes its catalyst a innovation and its most valuable asset for growth.
Profits, purpose and people
Customers are becoming more aware of profits made through unfair or misleading pricing, or from poor quality products, unreliable services, or poor user experiences. Fred Reichheld called these bad profits. Profits made from disgruntled customers damage the customer relationship, tarnish a company’s reputation, and hurt market performance. To create an exciting, remarkable end-to-end customer experience winning customer hearts and minds must somehow be a part of our purpose. When we buy into the whole accounting view of work and fixate on profits we drastically reduce our capability to create value for customers. Profits afford us the freedom to do good for customers and to get better at doing it.
Stephen Denning proposes that the purpose of a company is to delight its customers by delivering a continuous stream of value starting early on. Doing something good for others is inherently motivating. When we make someone happy, the joy we feel comes in part from the joy we spark in the other person. The meaning we see in our work isn’t in the work itself, it comes in the reactions and responses from people we are doing the work for, it comes from their enjoyment of the experiences we create. The meaning we see is related to the people and not the things.
Our challenge is to develop capabilities to continuously find new and surprising ways to delight customers that are effective and economical. The intensity and detail of creating software combined with the pressure to deliver features easily distracts us from the necessary attentiveness to delighting customers. Our goal is not to build software. The software is not the product. When we shift our thinking from what’s being produced (i.e. the problem and the solution or prescribed feature, if you like) to the person, what they’re trying to achieve and why they want to achieve it, this opens up all kinds of possibilities for the customer, which they probably hadn’t considered. If we don’t do this we’re doing our customers a disservice. If we can focus on people and not things we stand a better chance of delighting customers.
Don’t be satisfied with satisfied customers
Customer satisfaction is a state of mind that customers have about a company when their expectations have been met over the lifetime of a product or service. But satisfaction isn’t enough because satisfied customers are usually quite passive. Faced with increasing choice and diversity, customers are beginning to demand products and services that not only meet their desires and expectations but also meet unrecognized needs. They want to be wowed. If the customer’s experience using a product or service fits a pattern they’ve come to expect, they’ll think it’s boring. Customers are starting to vote with their feet.
What does ‘delighted customers’ mean?
I’ve already mentioned positive emotions related to purpose. Delight is great pleasure. Pleasure is a fleeting positive reaction to something experienced, which has sensory and emotional aspects.
The Kano model offers us some insight into the product attributes perceived to be important to customers.
Basic attributes are the features a product must have in order to enter a market or meet the basic demands of customers.
Performance attributes are characteristics associated with task performance. Better performance makes customers happier because they can complete tasks more easily and more quickly. The price a customer is willing to pay for a product or service is closely tied to the value they place in the performance attributes.
Excitement attributes are usually unforeseen by customers. They hold great potential for wow if they connect with customers and trigger impulsive desires.
On this basis we can deploy our creativity to produce products and services so that customers:
derive simple pleasure from using basic features to complete their tasks and achieve their goals.
are impressed by the quality and performance because it exceeds their expectations and gives them a sense of good value given the price they’ve paid.
are pleasantly surprised by unexpected features that spark their imagination as they discover needs they’ve never thought about before and invent new ways to use the product or service.
Of course, we can’t really understand what aspects of a product or service will specifically delight customers until we have seen their reactions to what we have create given our understanding of what they’re doing and why. Customers probably don’t know what will delight them until they’ve had the opportunity to experience what we’ve created. This is why customer-driven iteration is so powerful. Iteration helps us keep investing a little at a time as we hone in on what customers truly need. Our aim is to deliver the simplest possible thing, and deliver it so well, that it delights customers.
I’d argue that inappropriate use of technology has made life in the digital age more complicated than it needs to be. Less is more. There’s opportunity to make digital lives simpler by using technology more appropriately so it doesn’t get in the way. Products and services need to put people in control of what they’re doing and quickly integrate into their daily routines without interrupting their life. I believe there’s an innate elegance to simplicity that’s about aesthetic appearance, interaction experience, and performance characteristics combining seamlessly to facilitate a customer’s entry into flow for the task they are performing. I’m speculating here, but if we can remove complications and make it easier, smoother for a person to become completely absorbed in what it is they’re doing, because the product or service we’ve provided is pleasurable to use, then maybe we can amplify their delight to a deeper feeling of gratification. If we can keep coming up with ways to tap into unrecognized needs, to sprinkle the wow factor so there’s always something new and exciting, then we can keep stimulating intrinsic responses from customers (by stimulating the limbic system in their brains where feelings live and busily influence decisions the neocortex thinks it makes logically). For delight to be meaningful, well, I figure that has to come from the customer because it relates to their purpose, not ours. Maybe if they’re doing something because it contributes to something bigger than themselves, and they’re using our product or service to assist them, then any delight we can create for them just might be that little bit sweeter because it was part of a reaction to doing something meaningful.
We should look for opportunities to delight customers not only in their use of a product or service, but also by engaging with them in the co-creation of the desired product or service and during the whole end-to-end customer relationship experience. Humans are wired to be creative, so being creative together might have a multiplier effect. What kind of delight might customers experience if they were proactively co-creating the product or service they desire with a company? It feels good to be involved, to have a say. If their involvement somehow reflected their purpose, and the act of creating something useful and of quality gave them meaning, then customers might be stimulated beyond simple delight. The relationship with customers needs to be one where customers pull what they need from a company. When they need something we’re there for them, otherwise we stay out of the way. Could we be an understanding, supportive, inspirational friend? We should continually invest in the ongoing relationship so that it always provides customers with a memorable end-to-end experience that helps them be successful.
Customer delight isn’t about more customer service
Creating the right product or service is borne out of extended conversations with customers. To improve this there needs to be a shift from creating products and services for customers to creating products and services with customers - the customer relationship needs to become a collaborative partnership in which they feel energized and excited rather than used and unimportant. This is a change in mindset as well as a change in how the work is done. If a company is to develop the capabilities and opportunities to delight customers then it must genuinely appreciate and care for its customers. Listening to customers is a start but the toughest challenge is knowing what they’re truly feeling. They’ll only fully engage and really let you get to know them when they feel valued.
To be so focused on profits increases the likelihood that they are in fact bad profits. I wonder if companies are so busy being busy they have no time to think about what’s truly valuable to customers let alone how to actually delight them. Any thinking done on this is probably trapped upstream in various marketing activities, research, or concept design work. Any notion of customer delight stays in this imaginary world because the daily grind of building specified feature after specified feature doesn’t allow the people building the product or service to take the time to think about customers, really understand them, and further develop ideas to evoke delight. Typically, an organization structure keeps these people away from customers. Corporate innovation initiatives rarely make any impact because they’re preoccupied with being labelled innovative or playing with the latest cool technologies rather than actually being innovative in the service of customers. Creating delight for customers should be imbued in every thought and action. It should be engrained within the fabric of a company. The process of building a product or service should be fueled by exciting discovery and valuable learning about customers, their world, and their ambitions.
Enduring customer loyalty creates a meaningful advantage in the marketplace that’s difficult for other companies to compete against. Enduring customer loyalty comes from continually investing in the customer relationship to make it an equitable partnership. Customers aren’t always right, they don’t always know what’s best, and they don’t always appreciate the business and financial benefits of software quality in terms of reduced rework and the cost and speed of change. They’re human. We must be mindful of this. Stanley Marcus said: “You achieve customer satisfaction when you sell merchandise that does not come back to a customer that does.” Delighting customers or surprising them is an amplifier that helps create sneezers who actively work to spread the word from customer to customer. If we can create more positive emotions in every interaction with customers we not only increase their lifetime value, we also increase the chances of them becoming advocates for the product or service, even for the company.
Recommended reading:
Sense and Respond: The Journey to Customer Purpose by Stephen Parry
The Leader’s Guide to Radical Management: Reinventing the Workplace for the 21st Century by Stephen Denning
Purple Cow: Transform Your Business by Being Remarkable by Seth Godin
Footnotes:
- Some customers will never be compatible with your values and principles. Best not to work with them. Respect everyone, whether you choose to work with them as customers or not.
