#4 NEWSLETTER | Unthinking CX Strategy |
PLUS: I've Glimpsed The Future | Smart Thinking | The Gen Z' Luddites | Selling Serendipity | GPT update |
4 May 2023
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Unthinking CX Strategy
You can choose to be the 3Rs: Reliable, Responsive and Relationships.
Or the 3 Cs of customer happiness: Consistency, consistency, consistency. (Not so sexy, but some consider it the secret sauce to making customers happy).
Or the 4Es: Educational, Esthetic, Escapist, and Entertainment.
Or prefer the path of the 5 Es – Entice, Enter, Engage, Exit, and Extend?
if you think more is better, try the 6 pillars: Personalization, Integrity, Expectations, Resolution, Time and Effort, and Empathy.
If you’re in retail, do Personalization, Integrity, Expectations, Resolution, Time and Effort, and Empathy.. ..or the four pillars of CX that product managers, marketers and business leaders are told to execute: Empathy: Consistency: Closure: Personalisation:
In summary:
Reliability, responsiveness, relationships, consistency, entice, enter, engage, exit, and extend, personalise, without forgetting integrity, expectations, resolution, Time and Effort, empathy, and closure.
My point? What leader sits in a meeting saying they don’t want to be reliable, responsive, consistent, easy, and so on?
“Listen, let’s make sure our response times are shit” is not something you’ll ever likely hear. That would be stupid.
So why do we think the opposite ….“Listen, let’s make sure our response times/reliability/consistency/responsiveness is terrific” is a strategy for differentiation rather than just non-stupid?
Differentiate
We live in a noisy, crowded world.
Almost every product is a commodity.
The only way to get attention is differentiation.
In his book on advertising, David Ogilvy explains how he differentiated SAAB in the Norwegian car market.
Without changing anything about the car.
"In Norway, the SAAB car had no measurable profile. We positioned it as a car for winter. Three years later, it was voted the best car for Norwegian winters."
So a simple framing in consumer minds was enough to differentiate SAAB from dozens of car brands.
We miss the point that differentiation can happen in the mind.
A car is a car.
In 2011, Patagonia ran an unusual advertising campaign.
They told people the opposite of what a clothing brand wants customers to do.
They said, “Don’t buy this jacket.”
And they ran it on a Black Friday sales fest.
That same day ads from different brands were telling us about their offers and why we should buy.
But we also saw this ad.:
It grabbed our attention. We read the rest of the ad - about the environmental impact of fast fashion and consumerism. It encouraged us to recycle, reuse and repair clothes. The campaign became a big success and positioned Patagonia as a brand that prioritises sustainability. We forgot all the ads we saw that day except Patagonia’s. Even though the headline said don’t buy, Patagonia’s sales increased 30 per cent.
A jacket is a jacket.
But it becomes salient when you position it right in people’s minds.
So give people unique frames to describe your brand and experiences to become unforgettable.
Strategy Thinking Rule 1: Use the stupid test.
Service excellence and operational effectiveness are probably the two most popular CX “strategies”. They are non-stupid but hardly a standout level of distinction.
There’s nothing wrong with this. Many successful companies compete only on price. Ryanair (Europe) is the butt of jokes from many CX pros for competing on price and its stripped-back service - but that hasn’t stopped them from growing into the biggest, most profitable airline in Europe. Amazon has eaten the world by innovating simplicity.
But if your brand is betting on being brand-led, be CX different. A key differentiator between Branded and Brand-led is brand-led CX builds a strong, compelling narrative that lives outside of product and price - as brands like Zappo’s, Apple’s stores, and Amex do.
This principle holds in every sector, from tech to food to consumer-packaged goods.
Strategy Thinking Rule 2: Don’t buy hindsight.
Don’t be fooled by the experts selling you hindsight. (You’ve heard them: ‘You can be the next Uber, Airbnb, Starbucks, Meta’). Do you know the one first thing these companies had in common? Their value and purpose were stumbled upon - accidents, simple ideas that met hitherto unrecognised and untapped needs of consumers. Uber was two people stuck in a foreign country trying to find a taxi and deciding there was a better way. AirBnB was two friends attending a conference without a place to stay until a friend offered a room with a couple of air beds on the floor. Starbucks was a single coffee shop introducing the Italian espresso coffee style and coffee bar to the US - a small coffee whilst reading a newspaper, listening to music, and standing at a bar. Amazon invented simplicity but realised it left them vulnerable as simplicity can be copied. When their top team identified what a competitor could develop, beyond simplicity, to take away their market share, Amazon liked the idea so much that they adopted it themselves. It’s called Prime, a reverse loyalty scheme.
Strategy Thinking Rule 3: The Big Question
And to frame the thinking, IMO, the strategy has to answer what I call the Big Question: Are you about saving the customer’s attention or grabbing their attention? (Think Patagonia again).
The answer is important as it frames much of the next-step thinking you‘ll do.
Having spent the last 25 years helping organisations enhance and innovate their customer experience, I've learned two truths:
Most leadership teams miss the biggest opportunity that customer experience represents and waste time and money driving ‘better’, meaning optimisation. Meeting table stakes is vital but has minimal impact on valuable engagement.
The strongest strategies articulate the distinctive value, promise and experience our brand will deliver to consumers and the channels, operating models, and capabilities we will need to deliver them.
Over future newsletters, I will expand my thinking on CX strategy - I hope it may help you.
I Think I’ve Seen The Future
Shapeshifting with Proto
HOLOPORTATION
Holoportation is a new technology that allows high-quality 3D models of people to be transmitted anywhere in the world in real-time. Users can see, hear, and interact remotely with participants in 3D as if they are in the same physical space. Communicating and interacting with remote users becomes as natural as face-to-face communication. (Source: Microsoft)
Proto delivers a truly lifelike holographic experience so a viewer can see, hear and interact with others anywhere in the world. As Proto states, it makes digital real by delivering truly lifelike holograms, albeit the hologram is in a Proto “box.” It’s real. It’s live. It’s human. And it’s mind-blowingly weird.
Proto comes in two sizes - one life-size, and the other a two-foot tall box, with both versions presenting live-streamed holograms of people's bodies as they talk, even when they're thousands of miles away. The device's screen creates a perception of depth, making the speaker appear as if they're inside a confined room. Whichever you choose, it offers up a live hologram. Friends. Influencers. Stars. New collections of clothes. Imagine a Starbucks after-dark performance for Odyssey members hanging out and seeing Taylor Swift performing a live solo at every Starbucks location simultaneously. Or the impact on manufacturing precision when quality assurance is genuinely assured in real-time. Think Legoland competitions beaming simultaneously all over the world. An in-person live performance by a well-known solo artist at your birthday party. Live author readings, signings, and interviews everywhere and anywhere. This isn’t just a Zoom call on steroids.
Business meetings, celebrity appearances, stand-up comedy, art auctions, how-to coaching from experts, and opinions from a specialist. Everywhere, all at once.
The implications for experiences are impressive. When the technology hits e-commerce, we will quantum leap into a future that will up retail’s game forever.
(This is not an advertisement, and I haven’t been paid for this article)
My Pick of the Latest Consumer Trends
Trends are your opportunities. Spotting behaviours or wants early enough allows you to differentiate - leading your competitors rather than following.
1 Selling Serendipity
Jaded consumers want brands to delight them with the surprising and the unexpected.
In a world increasingly focused on speed and efficiency, consumers have an appetite
for mystery, surprise, and serendipity in their lives. Research suggests brands are not doing enough to deliver this - nearly half of those surveyed (48 per cent) say they tend to avoid predictable and formulaic things, and 70 per cent can’t remember the last time a brand did something that excited them.
A Japanese train operator offers new destinations to travellers who can roll virtual dice which dictate the ticket they received to one of six locations, encouraging customers to embrace the adventure of the unexpected and the unplanned.
British online travel company Journee books vacations to surprise locations. Users fill in a 10-minute questionnaire and get matched with a secret destination, only finding out where they’re going at the airport.
For those feeling uninspired in the kitchen, a Swedish food delivery service Kavall offers delivery of a random meal kit box containing a surprise recipe and ingredients.
Surprise and delight can also be delivered via customer service, like the impromptu free ukulele lessons for passengers on a Southwest Airlines flight to Hawaii or from unexpected rewards like Brewdog’s “Checkout Chancer” e-commerce promotion that gave one in every 25 customers the value of their order back in credit.
So What?
Mystery and surprise are becoming increasingly important tools for brands looking to break through the noise and deliver meaningful experiences. Wunderman Thompson Intelligence research confirms half of those surveyed say they’d like more surprise in their life, while 74 per cent agree that they enjoy an element of mystery and surprise in their actions. This unlocks pockets of opportunity for brands to deliver an escape from the everyday. Wunderman’s data shows that 45 per cent of consumers would be more likely to buy from companies and brands that surprise and delight them - so money is being left on the table when CX is focused solely on efficiency.
2 Gen Z Luddites
Generation Z are rejecting the overwhelming role of technology in their lives and seeking more real and enriching alternatives.
We’re seeing a growing anti-movement of consumers questioning technology’s unchecked impact. In what the New Yorker calls “The Age of Algorithmic Anxiety,” people - led by Gen Z - are voicing their concerns about the access and control technology has over their lives.
Many think technology makes them feel more detached from the real world. Over half of Gen Z’ers agree that technology distracts them from living a more interesting life. (Wunderman Thompson)
So What?
In a bid to rediscover curiosity and spontaneity, some are turning their backs on
modern technology and returning to analogue alternatives. Paper map sales in the UK and US have spiked, and research from Nielsen BookData found that 80 per cent of books bought by UK Gen Z’ers are physical, not digital. In Argentina, rising sales of children’s books are being attributed to the rise of Gen Z book influencers on TikTok. Gen Z’ers are starting to understand the pros and cons of technology and walking away if they feel it does not allow them to live and think freely.
We must use technology carefully. Digital can make us feel full whilst we remain undernourished. Providing non-digital alternatives for authentic and exciting experiences, however simple, is in growing demand and attracting new consumers.
ChatGPT
I'm reluctant to add more noise and commentary to the thunderous ChatGPT and AI debate.
But I can’t help myself.
ChatGPT4 has more knowledge than any human has ever known. It can converse cogently about mineral extraction in Papua New Guinea, ace exams to enter careers in law and medicine and generate songs, poems and essays. Other “generative AI” models can spit out digital photos, drawings and animations. If they understand language, an LLM only does so in a statistical, rather than grammatical, way - much more like an abacus than a mind.
ChatGPT can’t think. It provides answers from the internet - information that can be factual, incorrect, marketing hype, self-promotion or an opinion. It isn’t suitable off the shelf without serious risks of errors.
ChatGPT is programmed to give answers - and has a tendency to lie when it doesn’t know one.
To be fully trusted in a customer service environment ChatGPT will need a well-managed Knowledge Management system for answer retrieval to keep full control of the narrative.
So What?
Its risks - those which keep the tech elite up at night - have suddenly become more imaginable. LLMs are already incredibly powerful and have improved so quickly that even some working on them have taken fright. The capabilities of the biggest models have outrun their creators’ understanding. That creates risks of all kinds. Generative AI provokes wonder and alarm in equal measure. As the technology advances (and at an unprecedented rate) expect a host of exciting applications that, in time, will prove to be an inflection point for call centres and services. But not just yet. Brands must move cautiously, but those embracing the potential are poised to be at the forefront of awe-inducing creativity and innovation in the years ahead. But we should remember what it can’t do. It can’t give us wisdom. It can’t teach us life experiences. It doesn’t feel. It doesn’t know spontaneity.
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Super-Apps will Super-Disrupt Engagement
I source trends data from many sources, and for this newsletter, specifically IPSOS, Wunderman, SAP, PEW, Dentsu, Merkle, and Exploding Topics.
Smart Thinking
Slightly tongue-in-cheek, but it’s a killer response to the experts arguing what’s better: To focus on acquisition or retention and keeping current customers buying.
When you think strategy remember that, whatever you do, all your customers will eventually die. (Anonymous)
Thank you for reading my latest newsletter from UNCX. If you want more and to better understand the trends driving consumers’ new behaviours, subscribe, share your thoughts or feedback, or contact me at: michaelcooper@pobox.com. Thank you for reading this week. Please share this with others you think would benefit.