Messages in Slots

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Messages in Slots

David M. Raab

DM Review

July, 2006

Customer Experience Management has never quite achieved the uncritical acceptance that marks a truly successful buzzword. But the term and its underlying core concept—that companies should look at themselves from a customer point of view—are heard often enough to be part of the background hum of industry thinking.

This is a bad thing. People stop paying attention to new terms once they become familiar. As a result, mistaken first impressions are rarely corrected. And initial impressions of Customer Experience Management often are incorrect.

One impression sees Customer Experience Management as a slightly fancier way of saying “be nice to your customers”—that is, little more than a meaningless platitude. Or Customer Experience Management is presented as a reason to study how customers interact with an organization—resulting in detailed touchpoint maps that highlight current problems but provide no long-term direction. Serious Customer Experience Management goes much deeper. It provides a framework for corporate management by relating all business decisions to impact on customer value.

Continuous assessment of customer value requires a permanent infrastructure to gather, organize and analyze the relevant data. The data model involves at least a dozen major dimensions, including customers, channels, systems, products and life stages. But in the end it comes down to one thing: messages in slots.

A “slot” is an opportunity to communicate with a customer. It can be space on a grocery shelf, a panel on a product label, an ad on a Web page, a message in a telephone script, an invoice, or a package insert. The inventory of your slots is the inventory of your customer contacts. How you use your slots determines much of your customers’ experience. (Much, not all. There is also the experience of using the product itself.)

The concept of slots implies coordinated, consistent assessment of all contact opportunities. This is inherently useful. New channels are no longer independent entities that follow their own crazy rules: they are just another set of slots.

This doesn’t mean that all slots are the same. They differ in physical forms, degrees of interactivity, anonymity, customer impact, and many other ways. But it does mean that all slots can be managed against common criteria such as effectiveness and cost. This opens the way to reallocating spending across channels and across stages of the customer life cycle. Because slots include operational as well as marketing contacts, they reinforce the important point that Customer Experience Management is about all company activities, not just marketing.

There’s more to slot optimization than budget allocation. Many slots are free, in the sense that they exist whether or not the company uses them. This applies particularly to operational contacts. Companies have to process orders, send bills, put products in packages, and answer customer inquiries just to stay in business. Each of these contacts provides a message opportunity—that is, a slot—with a real, monetary value that is wasted if no message is delivered.

Sometimes the company just can’t think of an appropriate message. How many utility bills include a useless default such as “thank you for your last payment?” In other cases, the company hasn’t recognized that an opportunity exists because the department managing the slot doesn’t think its job includes increasing customer value. Or, to be more precise, the department manager is not rewarded for increasing customer value.

Failing to use an available slot is no less wasteful than renting a billboard and leaving it blank. It’s just less obvious. By identifying message opportunities and giving each a monetary value, slots highlight the value at stake.

Although the precise value of a slot may be hard to measure, not knowing it is no excuse to ignore slots altogether. When large numbers of contacts are involved, even a small value per contact adds up to real money. Asking your marketers what they would pay to purchase similar advertising from outside sources—such as an in-store retail display or 10 seconds on the phone with qualified prospects—should yield a figure that’s adequate for basic analysis. In many cases, such as package inserts, there actually are market rates available for similar contacts. The market itself can provide another way to estimate base value: if your marketers have no use for a slot, what would an outside firm pay to deliver their own message through it instead?

Strictly speaking, the true value of a slot is the change in customer value that messages in that slot can create. But this is a moving target, depending on the messages themselves as well as the mix of customers, products, and external conditions. So establishing a baseline value for each slot provides a useful foundation for high-level analysis.

Once you understand what slots are, you start seeing them everywhere. Since each slot you discover is an opportunity to increase customer value—often for free—it’s worth keeping your eyes open.

David M. Raab is president of ClientXClient, a consulting and software firm specializing in customer value optimization. He can be reached at draab@clientxclient.com.

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