Why Richard Branson is wrong about customer-centricity
After almost half a century of stirring up the status quo and bringing good cheer to customers in notoriously cheerless markets (trains, banking, cable TV), Virgin revealed recently that they have in fact NEVER put their customers first. In an interview with Inc. last year Richard Branson said that Virgin’s famous customer service ethic is not founded on customer-centricity at all, but on employee-centricity. His strategy goes like this: happy employees = happy customers = happy shareholders. Employees are not the only fruit Here at Futurelab, while we can’t argue with all that happiness we do humbly take issue with the logic behind it. We’ve always seen employee satisfaction as a key driver in creating positive and profitable customer experiences. Particularly in industries like hospitality and retail, you can’t underplay the importance of carefully recruited, well-trained, well-treated, well-rewarded, impassioned employees. But…. although employee happiness is undeniably one giant juicy factor in customer happiness, it’s not the only fruit; it’s not end-goal. It’s not what CEOs went to bed wishing for on Christmas Eve. Is a customer-centric store a profitable store? A recent project with a German retail client has shown us once again – with glorious data to back it all up – the correlation between not only employee satisfaction and customer satisfaction, but between them both and profitability. For years, this client had been scoring remarkably well in general recommendation/Net Promoter® surveys (i.e. “Would you recommend buying from us?”) but they were keen to go beyond general data and target profitability by measuring customer experiences at individual store level (i.e. “Would you recommend buying from us at this particular store?”). What makes some stores more successful? Could it all be down to happy staff, like Sir Virgin says? Could it be simply due to a store’s size, footfall or location? (Spoiler alert: nope). Or is there some other magic formula? To find answers and measure customer experience at store level we ran a pilot of our Retail 360® methodology. In two weeks we did over 1,000 NPS interviews with customers and employees from 26 of their stores. We analysed newly gathered data and consolidated it with existing mystery shopping data and employee satisfaction results. And crucially, we ran each store’s results by their key financial indicators! Happy staff = happy customers = too simple We found things that, at Futurelab, we’ve known or suspected for years. With Retail 360 we had granular data to prove it to our client and their store managers: FACT 1: Store size, footfall and location do impact in-store customer experience but are not critical success factors for store profitability. FACT 2: Our Retail360 data showed that a store’s customer experience has the strongest, most direct correlation with a store’s profitability. FACT 3: Our data also showed that there was indeed a correlation between employee satisfaction and positive in-store customer experience. So no doubt employees have a huge role to play in creating or destroying customer experience, but we think it’s more complicated and more interesting than: happy staff = happy customers. Truly happy, noticeable, motivated staff, those who go above and beyond, don’t exist in isolation; they belong to something bigger, over-arching, all-encompassing, something that, done properly, beats at the heart and bubbles through the veins of a business. And we believe that’s customer-centricity. Want to see the full case study? Get in touch with Gitta Grobert email@example.com custome experiencescustomer centricityretailemployee experience
Don’t Let Your Marketing Ruin Your Content
Content, in theory, should be a boon to marketers. The Content Marketing Institute says that “consumers have shut off the traditional world of marketing“ and touts content as a “strategic marketing approach that can attract and retain audiences” and “drive profitable customer action.”
Sounds great. The only problem, as I’ve noted before, is that content is crap. Nobody calls anything good, like an Oscar winning film or a hit song, content. The concept mostly exists as a fantasy in the minds of strategic planners who want to replace paid media with long-form ads on media assets they own and control.
In other words, content marketing fails largely because it is pursued by marketers who bring a traditional mindset to a completely new field. Rather than discovering and telling stories, they try to wrap marketing messages inside canned narratives. The truth is that marketers need to shift their mental models to think less like carnival barkers and more like publishers.Creating Experiences Rather Than Crafting Messages
A brand is essentially a promise. When a customer goes to a store or brings a product home, they expect it to deliver on that promise consistently. If their expectations are exceeded and they get more than they bargained for, great, but for the most part people don’t like to be surprised. They want to know what they’re getting for their money.
That’s why it’s so important for marketers to put out a consistent brand message and carve out a distinct identity. That takes discipline, especially in large enterprises. Every ad, PR release and action needs to be scrutinized, honed and delivered in a way that supports the overall brand effort. A stray word or mistimed message can bring the whole ship down.
Today, however, consumers expect to interact with brands through web sites and mobile phones as well as in a traditional environment. From virtually any place at any time of day, they can collect information, ask questions, indicate preferences and make purchases. That’s not something that can be standardized in the way that traditional campaigns are.
So marketers need to shift from crafting messages to creating experiences and that’s a tall order. It means that we need to leave behind how we’ve come to think about traditional campaigns and adopt a different approach to brand publishing.Great Stories Don’t Come Wrapped In A Bow
Successful ads demand clarity. They show how features lead to benefits and deliver on a distinct brand value proposition. The outcome is never in question. Products are “new and improved.” Customers are happy and satisfied. Good ads don’t lie, but they do tell an idealized version of the truth.
Great stories, on the other hand, are ambiguous. As David Mitchell, author of bestsellers like Cloud Atlas, points out that we find characters like Darth Vader more interesting than more one dimensional ones like Superman because they lack moral clarity. It is that ambiguity that makes them interesting and provokes thought and discussion.
In Creativity Inc., Pixar CEO Ed Catmull writes that every story starts out as an “ugly baby.” It takes care and patience to transform those ugly babies into hit movies like Toy Story, Finding Nemo and Inside Out. Characters take on multiple dimensions, the plot weaves through twists and turns and we make new discoveries along the way.
That’s the power of story. We want to see how it ends because we genuinely don’t know how things will turn out. Instead of a canned, linear sequence of events, we enter an unfamiliar world that surprises us and teaches us something.Don’t Manage Stories, Advocate For Them
Every organization is full of great stories. Some develop exciting products. Others serve customers and solve their problems. Still others develop expertise in important areas. There is a tremendous amount of value in sharing those stories and telling them well.
Unfortunately, a marketer’s first instinct is to hone those stories to conform to a messaging strategy. They use stories to underline brand values and put positive brand attributes on display, because they see them as a means to an end, rather than an end in themselves. The result is usually so incredibly dull, it never finds a life outside of a boardroom.
Stories don’t need managers. They need advocates. They need someone to uncover them, nurture them and bring them to life. That becomes impossible if they are required to conform to a predetermined script. Ugly babies that never experience a troubled adolescence eventually become very boring middle-aged underperformers.
Marketers need to learn how to champion the stories in their organization with passion and fervor. They’re your ugly babies. If you are unable to see the beauty in them, no one else will.Value Your Mission Over Your Metrics
Marketer’s strive to be accountable and rightly so. Traditional campaigns require vast resources and businesses expect to see a return on investment. So marketers actively track metrics—from GRP’s and “clicks” to awareness and conversions—to ensure that specific objectives are being met. It’s a reasonable approach that will not, and for the most part should not, change.
Yet publishing is more akin to product development than a promotional campaign and measurement is often confused with meaning. For example, Coke’s sustainability blog is unlikely to rival the audience of Nike’s Lebron James video, but that doesn’t mean that it can’t be a great way to for Coke communicate its commitment and share its experience.
What’s important is that brands provide their audience with something that they value because it informs, entertains or excites them. To do that, marketers need to optimize for mission, not for metrics. Be clear about what you value you have to offer the world, uncover stories that deliver that value and tell them well.
Content doesn’t have to be crap. Just don’t let marketing get in the way.
Image via flickr
Original Post: http://www.digitaltonto.com/2016/dont-let-your-marketing-ruin-your-content/contentcontent marketingadvertisingstorytellingGreg Satell
The Future of Digital Industrial Enterprises and the Quest for New Management Capabilities
The next digital industrial revolution is already well under way. But it is not happening where technology visionaries or capital markets are generally looking. It is not a revolution just in technology, machinery, software, or speed.
GE has predicted a new “industrial revolution” worth $1 trillion a year as wind turbines, oil pipelines, and aircraft components become connected to the internet, but the impact will be even bigger than this.
The industrial applications of machine-to-machine connectivity have been around for a long time, long before the idea of the “industrial internet” emerged. Now we are talking about the Fourth Industrial Revolution, referring to a period of digital transformation that will have profound effects on economies, societies, and human behavior. It becomes impossible to ignore, and the digital industrial revolution of various industries can allow a few companies to achieve hyper scale with no industry boundaries of where they can play.
Companies that used to take decades to develop this scale can achieve it in 10 years. Digitization is lowering the cost of entering markets and providing an opportunity to speed past the competition to scale up enterprises. At the extreme, there are hyper scale businesses who push these new rules of digitization so radically, they are challenging conventional management views on scale and complexity.
These businesses boast an abundance of users, customers, devices, or interactions, numbered in the hundreds of millions, billions, or more. These billions of interactions and data points, in turn, mean that events with only a one-in-a-million probability are happening many times a day.
Taken individually, each of these businesses seems like a special case. But soon enough, there will be a few more companies like Google, which processes around four billion searches a day; or Alibaba, which facilitated 250+ million orders in a single day; and Apple, which, until recently, was very limited in scale and scope as a computer company. These hyper scale companies can move into any other industry, from automobile to banking and insurance, to disrupt them using their software and AI capabilities, as well as cheap capital.
One of the most significant changes comes in the form of strategic management and organizational design. We are now operating in a permanently complex world, and there are no signs of slowing down. Technology is making organizations more complicated and responsive. Traditional organizational charts with lots of embedded processes are becoming legacies over time, and we have to slow down on their use in order to move fast and reduce complexity. Reducing complexity in large enterprises is an executive level job, or else the CIO will need to accept this new responsibility. Complexities are slowing company down and this will be the CIO’s top priority.
Every CEO should reexamine new industry structures as these hyper scale companies enter into the industry, or facilitate new entrants to do so. The “reactionary” executives of the “old school” need to give way to “agile” executives. The practice of strategic foresight will be much like strategic management in the 70s. Enterprise systems actually may have aggravated management’s degenerative tendency to focus overly inward. Now, they struggle to organize themselves around the future. Due to exponential progression, it is difficult, if not impossible, to imagine the world beyond even four to five years.
Although the first wave of the information revolution was impactful and organizations are still occupied with digitizing their back offices, they will need to reconfigure the future. It will not be anything compared to what lies ahead in three to five years. Long-term planning is becoming irrelevant, and the art and science of strategic foresight will become the core of strategic management. Companies will have to institutionalize foresight capabilities, which are still emerging. We have been developing foresight tools and methods for the last eight years and are working on integrating them with traditional strategic planning processes.
The danger of vastly underestimating the sheer velocity of change is real. For example, in just six months, the projection for the number of autonomous vehicles sold in 2035 went from 100 million to 1.5 billion. The cycle of AI-driven automation, robotization and visual augmentation will power the Fourth Industrial Revolution. It will be driven by the speed, the breadth and the complete ‘systems innovation’ of technological and behavioral change.
The digital industrial revolution is forcing us to redefine enterprise and what assets they are supposed to own. Companies can now experiment on a massive scale in a short period of time from concept to pilots. Digital platforms can instantly conduct experiments across a base of millions of early adopters. They may, for instance, test different bundles of new products or new marketing approaches, and determine the optimal mix and dynamically adjust to real time changes to make their product and pricing more relevant – all with the help of advanced algorithms. Future enterprises won’t just need better algorithms. They need ways to humanize technologies, so that humanity won’t be lost in a future of machines running or co-running the (our) world.
Image via flickr
Original Post: http://idr.is/the-future-of-digital-industrial-enterprises-and-the-quest-for-new-management-capabilities/Idris Mooteetechnologychangeforecastsmanagementorganisational behaviourhumanizing
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