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Tackling Customer Strategy? Better take this to meeting.

posted Apr 16, 2014, 5:18 AM by Michael Hoffman

Customer Management for Profit Optimization Strategy

Tackling Customer Strategy? Better take this to meeting.

 

How can I help you explain customer management challenges to IT?

Likewise, How  how can I help IT discuss customer management with each and all customer-related departments?

 

CRM 2020 Strategy Prep Tool for IT Business

Hopefully everyone at your company gets  the point of this diagram right away: customer management  is not simple. The intent of the image is not to scare management into a consulting fueled, 12 month diagnostic project, you have probably been through that exercise a couple times. The intent is to highlight the innate connection between IT, process and people to customers.

 

Analytics Big Data Challenge: Audience

posted Jan 22, 2013, 11:49 AM by Michael Hoffman

News to CIO's, BI and Big Data practioners: YOU HAVE AN AUDIENCE PROBLEM.

Analytics and business intelligence is the top priority for Chief Information Officers (CIO's), according to the latest Gartner survey of more than 2,000 CIOs, which at first seems out of line with the same article's list of top 10 business priorities where the top priority is "increasing enterprise business growth." 

But wait... How will the company grow? Where are growth prospects? What's working and not working? These questions and their respective answers are the promised rewards for analytics and BI efforts and investments.

So Big Data + Data Scientists + Self Service Business Intelligence + Predictive Modeling = Business Growth? 

If only it were that easy:  "ask business managers 'what business questions, if answered, would ensure you meet your business performance objectives,' then hit 'go' and answers are sent to managers." 

But this solution hasn't worked for twenty years. The majority of employees continue to be dissatisfied with the results, the end user benefits, of companies' analytics and BI initiatives. 

Why? Because analytics and business intelligence are rarely implemented with the audience's learning style and information consumption style factored into the analytics information architecture.  

Good News: Analytics audience acceptance is pipeline issue, meaning, content refinement and presentation are refinements that take place just prior to end user consumption. It many cases, analytics refinement expense is less than 5% of the analytics total cost of ownership. 

Caution: The lack of 5% analytics audience centric content and delivery tuning investment likely blocks 90% of BI and analytics potential value. 

WHY ANALYTICS AND BI FAILS AT THE POINT OF AUDIENCE CONSUMPTION


The picture above depicts categories of analytics and reporting audience types (more detail in white paper tbd).

[Side note/recent example: In a presentation a couple of days ago to a small audience, five global department executives, I watched 2 high power executives zone out as the presenter clicked on the third slide of charts and graphs showing exponential gains in customer awareness from 2009 to 2012. As an analyst, the percentage growth was impressive. As a business owner the customer awareness increase was only mildly comforting because it wasn't correlated to revenue growth. To the two Solitary, non Visual audience members, the presentation was simply painful.]  

Analysts, report designers and presenters should print the Learning and Consumption Styles and put it on post it notes and reminder tags all around their work environment (the presentation graphic above has also become a popular " audience reminder".

Visual - needs to see text, diagrams, flow charts, demonstrations.

Auditory -  needs to hear, either to listen or to participate in discussions.

Tactile/Kinesthetic - needs to write, to touch, to do, to move, to build.

Reflective - needs to think through before doing.

Social - prefers to study with other people.

Solitary - prefers to study alone.


While recognizing audience end user learning types and consumption types just prior to information delivery is shortcut to growing performance gains through analytics, a better solution, that will likely grow performance gains and create superior competitive advantage by empowering more decision makers with insights, alerts and guidance aligned with their ability to use them (consumption preferences) will likely evolve to an analytics consumption model that resemble the Apple iTunes consumer centric model depicted in the picture below.


The Outcome + Audience Centric Analytics Information Architecture encourages companies to examine the analytics and business intelligence priority cited by Gartner in reverse order, from the analytic consumer perspective backwards, without regard for analytics platforms, skill sets, tools nor providers and data sets and data structures. 

While most CIO's, CTO's and analytics executives will likely scoff at the Outcome + Audience Centric concept, cloud, business process outsourcing, SAAS, PAS, advances in expert systems and business process management and gain share models (performance improvement for hire) and owners and managers seeking performance enhancement innovations will slowly make the concept a reality. 

This post is in response to a phone discussion I just had about the Outcome +  Analytics slideshare presentation. Thought it was worth sharing.


Manage Customer Experience Slot by Slot

posted Jan 24, 2012, 6:47 AM by Michael Hoffman   [ updated Nov 9, 2012, 7:51 AM ]

How to manage customer experience x digital content


The CxC customer experience Matrix featured in Customer Worthy provides companies and each department a common view of their customer experience and how to manage each component and aspect at each customer contact. The CxC Matrix or Customer Experience Matrix helps companies leverage technology to gain competitive advantage customer by customer.

If You Leave Your Reputation to Chance

posted Jan 19, 2012, 8:57 AM by Michael Hoffman   [ updated Feb 7, 2012, 9:38 AM ]

Video from recent "Are you Customer Worthy?" presentation focused on mapping customer contact points, preparing messages and measuring impact.


Should You Have a Chief Customer Officer? Bliss

posted Sep 27, 2011, 1:40 PM by Michael Hoffman

How do you pay for a Chief Customer Officer? was my reply to Jeanne Bliss's question on the Customer Think email and blog link.

I am obsessed with the Chief Customer Officer conundrum. Putting an individual in charge of all things customer related seems like the right thing to do. It feels right. But customer management spans nearly every function in a company, which includes too many areas and disciplines for any individual, other than the CEO, to be accountable, let alone masterful.

Why aren't there Chief Customer Officer jobs on LinkedIn, Monster, etc? Will there be? 

Should a company have Chief Customer Officer?

My immediate answer is "no," unless the company can cost justify the position. 

Adding a position responsible for contrived metrics across sales, service, advertising/brand, marketing, operations, IT that has no authority in any of the functional silos is doomed to failure. Contrary to passionate CCO's and customer experience executives aspirations (and customer experience advocates and authors, Forrester, Aberdeen, 1to1, Bliss, Tempkin, et al), no company will nor should re-organize and go through massive change to become "customer centric". 

Every company needs a Chief Customer Officer  responsible for reporting and advising departments on customer centric metrics across each department and function. 

The Chief Customer Officer position should be self funded through innovations and programs that add measurable value: 
  • Revenue increases per customer
  • Revenue per interaction
  • Net new customers
The Chief Customer Officer is responsible for the customer dashboard that monitors customer performance across the customer's lifecycle and the lifecycle's intersection with each of the company's functions and interaction points. The Chief Customer Officer is responsible for the outside-in perspective of the business, customer advocate and business method, process and outcome adviser. 

Companies have yet to tap the deep pool of innovation and revenue opportunities resident in their customer's experience (the culmination of every customer interaction across the customer life cycle).

Customer experience is the largest under performing asset at every company and remains the prize for companies striving to become customer worthy





Social CRM (Re-)Defined CRM Advocate Comment

posted Aug 30, 2011, 1:26 PM by Michael Hoffman

My inbox had these headlines paired
"Global CRM to Grow by $1.3B in 2011"
"Social CRM (Re-)Defined"
and yes, the CRM prediction is for 2011, not 2012 - (is it really a prediction if the year is almost over?)

[Response to CRM Advocate blog linking CRM, Customer Experience and Social...to customers)

The forecast in CRM Magazine went on to segment CRM: customer service solutions, marketing applications, sales applications and the contact center. 

No "social," yet, each of the "segments" definitely has a social component and "social" is likely partly responsible for overall market growth.

So the question is should "social CRM" stand alone or be discussed in context of the aforementioned CRM segments? And where is customer experience in the mix?

The only opinion that counts is the customer's opinion,  so CRM includes all of the above - all the contact points across all the corporate functions - so eCRM, social CRM, mobile CRM, next gen CRM all converge at the point of customer contact. 

So how do customers think CRM is doing? 
Customer satisfaction continues to decline regardless of continued investment in technology and outsourcing -  so let's call customer experience the customer's view of CRM and response to CRM; from advertising thru marketing, sales, service, community (social) [see CxC Matrix)... all the customer life stages.

Customer satisfaction continues to decline in telecom, banking, credit card, web (Facebook is the worst? really? http://cnet.co/q8s8qB ) airlines, retail - so customers expectations continue to grow and CRM results continue to wane.

So Gary, back to your point, it may be up to the organization to define CRM, but investing in CRM and measuring CRM for CRM's sake, i.e. "the company's objectives" may completely miss measuring the customer's experience including the customer's experience from life stage to life stage - the true measure of CRM's value.



CRM 2011 growth http://bit.ly/qBXohB
customer satisfaction declines: http://bit.ly/n2JLaq ,http://cnet.co/q8s8qB ,  http://bit.ly/nextDh
exceptions airline, credit card 

TheHindu.com Customer Worthy Article

posted May 13, 2011, 5:47 AM by Michael Hoffman

Nine objectives at every customer contact as seen in

Return to frontpage

Great summary write-up by D. Murali - Thank you

Identify the customer, recognise, fulfil, upgrade, cross-sell, expand, educate, collect, and generate referrals. These are the nine treatment objectives for each contact, says Michael R. Hoffman in ‘Customer Worthy: Why and how everyone in your organization must think like a customer’ (www.macmillanpublishersindia.com).

Defining ‘contact’ as any connection between a customer and a company, its products, services, and partners, the author observes that customer contacts are the new battleground for companies looking to secure more business and fend off competition. Though each ‘contact’ is an asset and a pivot point for company success, with a potential for tremendous revenue, customer interactions are the most underused asset in most companies, he rues.

Identify, recognise

Begin, therefore, by identifying the customer, as ‘repeat,’ ‘first-time,’ or ‘anonymous.’ Think of this as having caller ID at every customer contact point, the author guides. “This initial identification dictates the contact’s messaging and objectives to best suit the customer’s situation.”

Recognising the customer – the second treatment objective for the contact – involves the ability to access and use the customer’s prior contacts, purchase history, and service history, Hoffman explains. At the minimum, he says, it is important to know and acknowledge whether the customer had prior contacts and to somehow acknowledge the customer’s investment of time and effort. “Platinum, gold and silver levels and loyalty programmes are obvious customer recognition tags that can be used to designate and prepare treatments in each contact and channel.”

Fulfil, upgrade

Fulfil, the third objective, calls for simply delivering what the customer expects in the contact. While ‘fulfil’ may seem simple, it can often be difficult to achieve when customers do not know the best solution or the right product configuration, as the book highlights through many ‘what if’ scenarios that can lead to frustration.

Next comes ‘upgrade,’ because each customer contact is an opportunity to strengthen the relationship. Encourage customers to join a frequent buyer programme, automatic replenishment, or automatic renewing service programme to protect their investments and make ongoing purchases and service easier, Hoffman instructs. “Encourage customers that call customer support to buy the latest and greatest product versions to replace their obsolete product or service.”

Cross-sell, expand, educate

Every contact should be evaluated for its ability to sell another product or service, either from your company or from a partner company, the author insists. He advises companies to design propositions that best fit the needs of the customer and to continuously test what sells best and grows total customer lifetime value.

Urging companies to see each contact as a milestone that should strengthen, not weaken, the relationship, the author recommends expanding the customers’ participation in the company network and community. Techniques for trying out include encouraging customers to experience another channel, explore the web, visit a store, and use a coupon from the web.

The ‘educate’ objective is served by educating customers on your business, processes, and how to better use your product, services, and resources for their benefit. Be the single source and primary conduit to best practices for your most valuable customers, the author counsels. “Provide links to community websites, forums, and commentary.”

Collect, generate referrals

To meet the ‘collect’ objective, you need to capture all the elements and attributes associated with each contact. That way, you can best understand the customer’s experience and opportunities, and also improve the performance of future contacts, the author notes.

As for referrals, he mentions examples such as coupons for friends in an envelope, emails with simple forwarding instructions, invitations for friends and colleagues to attend social events, and asking customers on support calls if they know of anyone else who can use the solution.

The book cautions companies that not seeing contact flow data can lead to surprises about revenue shortfalls, inventory outages, resource cost overruns, and diminished customer satisfaction. For, “Traditional financial measures lag too far behind customer activities to be effective for timely business decision-making. Operations and quality metrics are too far removed from a customer’s interests, intent, and preferences.”

Worthy addition to marketers’ shelf.

**

BookPeek.blogspot.com

Epsilon Data Breach, "Our Data Went Where?"

posted Apr 12, 2011, 11:35 AM by Michael Hoffman

I have received numerous calls and emails from friends about the recent data breach - and while Epsilon and their major name brand clients affected would like to 'make this go away,' and refer to this as only an e-mail list breach - it is much, much bigger and only a symptom of customer data vulnerabilities. 

Real Chase Customer Alert e-mail... Or is it? (Forwarded from real customer) 

Chase is letting our customers know that we have been informed by Epsilon, a vendor we use to send e-mails, that an unauthorized person outside Epsilon accessed files that included e-mail addresses of some Chase customers. We have a team at Epsilon investigating and we are confident that the information that was retrieved included some Chase customer e-mail addresses, but did not include any customer account or financial information. Based on everything we know, your accounts and confidential information remain secure. As always, we are advising our customers of everything we know as we know it, and will keep you informed on what impact, if any, this will have on you. 

We apologize if this causes you any inconvenience. We want to remind you that Chase will never ask for your personal information or login credentials in an e-mail. As always, be cautious if you receive e-mails asking for your personal information and be on the lookout for unwanted spam. It is not Chase's practice to request personal information by e-mail. 

As a reminder, we recommend that you:
  • Don't give your Chase OnlineSM User ID or password in e-mail.
  • Don't respond to e-mails that require you to enter personal information directly into the e-mail.
  • Don't respond to e-mails threatening to close your account if you do not take the immediate action of providing personal information.
  • Don't reply to e-mails asking you to send personal information.
  • Don't use your e-mail address as a login ID or password.
The security of your information is a critical priority to us and we strive to handle it carefully at all times. Please visit our Security Center at chase.com and click on "Fraud Information" under the "How to Report Fraud." It provides additional information on exercising caution when reading e-mails that appear to be sent by us. 

Sincerely, 

Patricia O. Baker 

Senior Vice President 

Chase Executive Office

If you want to contact Chase, please do not reply to this message, but instead go to Chase Online. For faster service, please enroll or log in to your account. Replies to this message will not be read or responded to.

Your personal information is protected by advanced technology. For more detailed security information, view our 
Online Privacy Notice. To request in writing: Chase Privacy Operations, P.O. Box 659752, San Antonio, TX 78265-9752.

JPMorgan Chase Bank, N.A. Member FDIC
© 2011 JPMorgan Chase & Co.


There is no way of knowing whether this email came from Chase or whether it is another step in a massive phishing scheme. Wouldn't the customer data and email hackers also have an account with Chase so they could spoof whatever email follow-up Chase initiated? 

WHERE IS THE PHONE NUMBER TO MY PERSONAL BANKER? OR DISASTER RECOVERY REPRESENTATIVE?

Yes - the service recovery email or notice from Chase could have been much, much better but obviously Chase and Epsilon and the 50+ major brands affected want to keep the costs down, limit exposure and limit customer alarm. But be alarmed!

The government is stepping in  and must step in to protect customers and frankly companies like the brands tarnished by the breach. Readers of Customer Worthy (book) can calculate the estimated cost to customers for this breach - which far outweighs the cost to Epsilon or the individual companies involved. See the Customerpayback section of book. 

These types of breaches are more common than companies want to admit - and are happening at consolidated company data points - TJX data breach - was more severe, yes, and scary and Heartland's data compromise reached epic proportions . And Epsilon is not just an 'email provider' but part of the  enormous credit card company Alliance Data.

Surprise - If you are reading this in North America, and you have a credit card or a debit card, your data has most likely been compromised in at least one, if not all three of these major data breaches - read Dark Reading regularly to feed well justified personal data violation paranoia. 

I can imagine the hundreds of bank relationship managers at Citi, Chase and others bombarded with customer phone calls, visits and yes - emails with concerns and questions, confirmations and account closings. Disney, Best Buy and a who's who of brands were affected - the cost of trust and goodwill lost is immeasurable - (OK, use the CxC Matrix - everything is measurable) 

The excerpt below is meant to be a wake up call to companies and consumers regarding data privacy, storage, disaster recovery and data handling:

Customer Worthy Excerpt, by Michael R Hoffman

Chapter 12 : Matrix Benefits and Use by Function and Department pg 163 under Legal Department Benefits 
 

Our data went where?

Data breeches will continue to grow as more information and transactions
are digitized. As a result, personal and confidential information provided
by customers will be continually at risk. Additionally, company information
stores and data networks will continue to be pirated, poached, and hijacked,
requiring companies to insist on additional third party customer authenticity
validation and authorization among payment systems and partners.

Customer backlash is a likely result of the increased exposure of confidential
data. Legal or governmental representatives may demand specific
disclosures regarding how, why, when, where, and for what purpose customer
information was stored, accessed, and modeled by companies other than
the business customers believed they were dealing with directly. Transparency
is ripe for continued scrutiny, whether to data vendors, credit bureaus,
transaction processors, data exchange, integration companies, subsidiaries,
or lines of business.

It is likely that companies will face not only growing legal and financial
liability for misuse, mishandling, and negligence related to customer data,
but also for not using customer data when that information could benefit
the customer, as in the “Mad Cow” case reported in the Washington Post (July
6, 2004). Although some customers are troubled by the privacy implications
of data capture, many assume that their information will be used to their
benefit. Customers are likely to also assume that they should have access to
their personal information in the company’s context. They will want to see
who had access to their information and how their information was used to
conduct business. If these assumptions are not met, a negative customer
experience could result.

In the “Mad Cow” case mentioned above, a female customer had purchased
ground beef from a local market, using her customer loyalty card,
which recorded every item she bought.

She used the beef to cook a holiday dinner and only a couple of weeks
later learned from a newspaper article that 10,000 pounds of beef potentially
164 customer worthy tainted by mad-cow disease (MCD) had been recalled from stores in Western
states, including hers. She read about another customer whose purchase had
been recalled after he demanded that the store check his customer loyalty
card to determine if the meat he had purchased was part of the recall.

The female customer then asked that her card be checked to verify the
safety of the meat she fed to her family. However, the store made her make
the request in writing and come to the store’s office for the records. She
eventually learned that the meat she had fed her family was part of the
recall. The result was a lawsuit against the store, claiming that it had the
ability to alert her to the recall and did not do so.

Legal CxC Matrix deliverables

  • Visualize: Customer contacts and implied liability by life stage, channel, product, market, and region
  • Analyze: Exposure, remedy scenarios, risk insurance coverage, partner/vendor liability
  • Monetize: Cost to notify affected customers, scope of various legal scenarios, cost of compliance and governance, exposure and risk related to data handling
  • Prioritize: Communications points, highest risk business areas, documentation, communication guidelines and procedures.
  • Optimize: Issue discovery and escalation, insurance protection, risk prevention
Comments? Questions? contact Michael R Hoffman, 908.350.3012

Does IBM Have All The Software To Optimize Customer Experiences?

posted Oct 1, 2010, 8:14 AM by Michael Hoffman

Customer Experience 40 Days Not To Be Forgotten

IBM's recent Unica acquisition announcement changed the customer experience management technology and services landscape forever.  IBM quickly followed up with the Netezza  announcement adding to their ability offer a super fast decisioning engine (BI: Neteeza + Cognos + SPSS + IBM tools - Coremetrics/SurfAid II) customer contact level execution ( Unica + CoreMetrics + Sterling Commerce + Lombardi + Cast Iron Systems , IBM Websphere) guiding content and capturing results to and from every contact. 

IBM has effectively bought best of breed customer experience management software components investing nearly $10B to buy products that actually work and mostly work together. (Unica's Sane acquisition and NetTracker will be more valuable here than most realize... or maybe need to)

While IBM's own products cover a huge expanse of the CxC Matrix customer experience IBM does not offer it's own brand of CRM, social networking, display, broadcast advertising, affiliate management, etc. products but partners with companies based on industry vertical expertise, company size and customer strategy (channel mix).


CxC Matrix Conceptual IBM Customer Experience Platform Contact Execution

What is most notable using the CxC Matrix is IBM's investment in the digital channel, connectivity, and business process management across any system, network and platform now and well into the future. This makes perfect sense as digital transactions and messaging are expected to grow twenty-fold over the next four years. Additionally, more customer contacts are becoming digitized so traditional channels and content management will act and look like digital/web content management, i.e. personalized mail, billing statement, phone greetings, digital signage.

All this gets more interesting, more valuable and yes, more complex with IBM's steep investment in BI and analytics tools. I can only assume that IBM, PWC and clients will use frameworks similar to the CxC Matrix taxonomy to score, rank, prioritize, execute and refine every activity running through their information management network. 


IBM Customer Experience Platform's best of breed components theoretically enable a continuous learning and adapting customer contact infrastructure machine that can be used to quickly identify and automate customer contact processes and components for advertising, sales, marketing, fulfillment, operations and service functions while identifying or sensing under performing and at risk events and conditions. 






Confessions of an Enlightened Customer

posted Sep 13, 2010, 9:30 AM by Michael Hoffman   [ updated Sep 13, 2010, 10:00 AM ]

Confessions of an Enlightened Customer
(by the way—why the heck am I on hold? )

Confession 1: I started writing this book (Customer Worthy) while on hold with my cell
phone company (Free book if you guess which cell phone company), listening to horrific canned music and hearing this recording every 90 seconds: 

“Your call is very important to us . . . You can also get assistance online . . . Have you seen our latest — ?”

It is all about me, the customer

I started writing, “Twenty minutes online . . .now on hold 11 minutes . . . ”

So, why am I still on hold? 

Because it is the only way to resolve my issue
regarding the continued incorrect billing for my service, which is now a
whopping month-end bill of $1,700. It should have been closer to $40.
And the call-holding message keeps telling me: 

“Your issue can probably be resolved online. Please visit us at XXX.com.”

So frustrating. I sketched out the spreadsheet you see below, logging my
time waiting for the phone company the same way I would log time for billing
one of my customers. Using some generic numbers from my call center
consulting days, my frustration grew with every wasted minute because,
obviously, no one at the phone company seemed to have any interest in
calculating what a service issue costs a customer.



The $100 Billion Problem

I know I’m not alone in my frustration. The CSR on this call was kind enough
to remind me, “Sir, we have over 60 million customers to take care of, and
now they are waiting behind your call . . .”

Really? After a brief moment of feeling pity for her and the personal
burden she carried in supporting 60 million service-inflicted customers, it
occurred to me: “What if all 60 million customers were experiencing the
same on-hold frustration?” I quickly started my calculation, and the numbers
floored me. My wireless phone company was costing its customers
$99,180,000,000. That’s nearly one hundred billion dollars that customers
pay in addition to their monthly bill! And what do we as “customers” get
in return? Please hold for the answer . . .

Here is the core customer problem: Companies—not just in the communications
industry—don’t keep score by customer. At the executive and
corporate levels, management does not measure the time customers invest
in researching vendors, building their solutions, using services, resolving
issues, the efforts a customer makes to assist in problem resolution, or the
sacrifices and inconveniences a customer pays. 

This strategy worked until recently when the World Wide Web gave customers a voice and a platform
to speak to one another, news agencies, and prospective customers.

Customer satisfaction surveys—Net Promoter Score, J.D. Power, and other
“everything is all right” customer satisfaction measurement methods—miss
the point. They are too far away from the customers, the interactions, and
the phone call. The “long tail” is on the phone right now. This is “long tail”
meets the Pareto Principle.

Key Takeaway: 

Poor customer experience design is expensive for everyone, but it is most expensive for customers.

This is why the CxC Matrix that you will learn about in this book is so
important. It can be used to fix the customer problems and improve service
delivery from the moment a customer begins the journey to fulfill a need
all the way to product or service disposal.

Poor customer experience leads to incredible expense—not just for companies,
but for customers. (At the time of this writing, the wireless phone
company’s annual report says that it spent $21 billion in “selling, general, and
administrative expense.”) Even if I discount the cost of my personal experience
by 90 percent, it means that my wireless company cost its customers
nearly ten billion dollars that goes unreported.

The point is that with all of the investments in product development,
sales, marketing, and customer service systems, companies continue to
waste an unfathomable amount of customer time—waiting for the technician
to arrive to load software or install cable, waiting for a salesperson to
return a call, waiting for the answer to an emailed question, trying to figure
out how to use a product.

Will I ever do business with the wireless phone company again? Reluctantly,
I already have.

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