Dr. Joseph Michelli's Blog

How to Deliver Service plus Chocolate!

Written by Joseph Michelli on August 29, 2010 — 1 Comment

Having recently consulted or spoken in 6 countries in less than 30 days (ranging from Bolivia to Hong Kong), I keep facing questions that center around the distinction between operationally consistent service and emotionally-engaging customer experiences.  While I’m not convinced that these two service approaches need to be mutually exclusive, I do know that without consistency of basic service excellence, emotionally engaging experiences are unsustainable.

In my book, The New Gold Standard, I spend a great deal of time talking about the role operational excellence and process improvement plays in setting the stage for service that meets and exceeds the expectations of Ritz-Carlton guests.

By designing a 45 minute massage that lasts an hour (scheduling the massage therapists for 1 hour and 15 minutes – so they are not rushing between customers and pricing the massage equivalent to an hour of service) the customer consistently receives a massage that exceeds expectations. The business assures operational consistency through processes that over deliver and pricing is set in a way that does not compromise margins. Moreover, if staff are trained well concerning the desired brand experience and rewarded for empowered acts of service excellence – everyone wins!

Since the question of consistency versus connection keeps following me, I thought I should include the voices of my esteemed colleagues on the matter.  During a recent on-line conversation Heidi Miller, the Chief Conversation Officer at Spoken Communications in Seattle, brilliantly noted, “I’d rather have a dozen ‘good experiences’ than to be a ‘delighted customer’ once…Wowing me is nice, but on a daily basis, I’d rather just not think about ‘brand interactions’ at all.  Let’s take the cable company, for example…. I would MUCH rather have a cable company that I can call twice a year, get my issue resolved immediately without long hold times and get a timely appointment – compared to one that wows me. Truly, if I could have the expectation of a quick and efficient call and appointment, that would be more powerful to me than George Clooney showing up to fix my cable – with a chocolate cake and roses. Maybe my expectations are too low, or maybe I’m just busy. But before you try to wow me, remember that for the most part, I’d be happy with timely, prompt, basic service delivered in a reasonably polite manner. In short, it would be plenty valuable just for me not to *dread* having to make the call.”

Ahh but what if Heidi could get her cable fixed and be given chocolate?

Claudio Costa a program manager for Colt Technology Service Group in London offers a simple example of service with the little extra as his friend experienced a taxi company in Munich “that does airport trips. The taxi was clean, smelled nice and the driver gave him a small packet of sweets with the company’s business card attached. He then gave him a catalogue of music to choose from. For all this, he paid a fixed price that was no greater (or cheaper) than any other taxi. Since then he has recommended this company to many people who now use them regularly.”

For Claudio, this is “a good example of customer experience translated in more business for the company. At the end of the day what counts most is that companies aim to deliver the right product/service to its customers according to the customers requirements and then add that extra bit of service which has a marginal or no additional cost to the company but creates a significant positive impression on the customer and the customer becomes a strong advocate of the company because he feels that he got the best values for his money.”

So what are the “must do” right product/price service elements for your business?

What process improvements, service standards, and other considerations must you put in place to execute operational excellence?

How do you drive accountability on those standards? and

Where are your “chocolates?” The low cost/high value flourishes that nudge you beyond the ordinary…..

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Walk Before You Run, But Run for Service

Written by Joseph Michelli on August 18, 2010 — Leave a Comment

I must admit I’ve been spoiled by working with so many amazing customer experience businesses.  Many of those companies, such as Starbucks and the Ritz-Carlton Hotel Company,  are simply sprinting ahead of the pack when it comes to making emotional connections with customers.   In fact after spending an extended period of time with Tony Hseih and his team at Zappos working on The Zappos Experience book, I am struck by how a knowledgable and empowered workforce can consistently innovate legendary “wow” experiences for customers.

I also consult with businesses who are in the infancy of their customer experience journey and before they can even contemplate running toward goals around forging emotional connections with their customers they must walk back to the basics of pure transactional service.  Given the demands of the marketplace today, those companies have to develop a sense of urgency and make it a brisk walk around execution of service basics.

For a moment let’s all return to a basic truth of service.  If you are too busy to serve customer’s in a timely way, you must innovate or source your business to deliver optimum service speed.  To illustrate the negative impact of making customers wait for service, let’s take a look at an enlightening infographic (see below) put together by All Things CRM.  Compiling a variety of data sources, All Things CRM found a number of interesting results.  To make my point I will highlight the following facts from their summary:

45% of customers initiated a contact by phone in the last year.

70% of callers were placed on hold with average hold times of approximately 1 minute.

94% of most marketing budgets are spent on getting customers to call and about 6% of those budgets are spent taking care of customers when they do call.

Customers are greater than 5 times more likely to stay on hold if they can listen to helpful information as opposed to silence.

Only 34% of customers who hang up while placed on hold end up calling your business back.

So here is the quick and dirty relevance for most companies – possibly even yours:

1)  Look at the proportion of money you are spending on brand promise versus brand service delivery.  Where possible drive execution and delivery as it brings you the best kind of customer – a referral.

2) Do everything possible to deliver service to your customers as quickly as your financial resources will allow.  Think about hiring in terms of the evenue generated per employee.  Take the leap of faith that service pays in long-term dividends.

3) If customers must be placed on hold, are not served promptly upon arriving in your building, or are forced to wait for a response through your web-based platform – look for ways to honor the customer’s time by giving them value during their wait.  These value offerings could be a “frequently asked questions” pop-up on your website, recorded resource information as opposed to silence during a phone hold, or an LCD flat screen behind the reception area offering helpful information during an in office service delay.

Since every situation is different, you will have to extrapolate this idea for your use.  Essentially, think about it this way – “how much money and effort am I spending trying to attract customers I am too under resourced to serve?”  Moreover, in those inevitable situations where customer’s must wait , you may want to ask yourself “what am I doing to make that wait time more useful and bearable for the customer?”

I’d love to hear your answers to my questions but I must first put you on hold because their is another IMPORTANT customer is on the line….“

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5 Categories of Customer Preferences You Should Know

Written by Joseph Michelli on August 11, 2010 — 1 Comment

While recently consulting with a client about ways to determine customer preferences, I had a random neuronal firing and from the deep recesses of my brain I recalled the work of Professor Noriaki Kano. In the 1980’s Dr. Kano, known for creating the Kano model, differentiated between 5 groups of customer preferences. As best I remembered it, Kano distinguished between preferences that were:

1. Attractive (producing unexpected value)
2. One-Dimensional (defined by their magnitude – essentially the more, the better)
3. Must-Be (those preferences described as “need to haves”)
4. Indifferent (essentially a lack of a preference since all options resulted in equal impact to the customer) and
5. Reverse (these reflected a customer’s preferences not to experience an option due to it’s negative impact on them)

From Dr. Kano’s work, many of us responsible for designing compelling customer experiences have almost intuitively utilized a systematic process for factoring preferences into a business’ overall service delivery. Based on my recent consulting experience, I realized it was time that I made that process available to you. So here goes…

The Kano Model suggests that when customers interact with a business (whether it be with the business’ products or services) the business must first meet the customer’s minimum requirements for each “must-be” attribute. In essence, minimum “must be” attributes are the “table stakes” for basic customer satisfaction.

Once these table stakes have been met, businesses have an opportunity to add value through “one-dimensional “ attributes. Lathering on a few of the “more the merrier” preferences is essentially a way to enhance customer experience and increase the likelihood that customers will have a stronger emotional connection to you. In that case, you are giving customers more of what they expect and desire.

To truly “wow” a customer “attractive” attributes have to be delivered and negative preferences must be removed. From a cost perspective, every effort to enhance the customer experience must be evaluated to assure that you are not spending money in an area where the customer is at best indifferent and at worst has a reverse preference.

So let’s apply this to you…what are the minimum “must-be” preferences for your customers or clients?

Where can you enhance your customers’ experience by offering them “more of” something?

What are the reverse preferences or the “dissatisfiers” for your customers?

Where might you consider spending money to enhance the customer experience only to find that customers would be indifferent to your efforts?

Of course if you can’t answer these questions you might want to jump back a step and simply ask your customers about their “attractive, “must be”, “one-dimensional”, and “reverse” preferences because in the end we all share a universal preference and that is to have a business care about our preferences in the first place…

(Click here for advances on Dr. Kano’s work)

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How to Create Brand Equity

Written by Joseph Michelli on July 9, 2010 — 1 Comment

Which is it – wide ties or skinny ties? Bell bottoms or straight legs?

I am convinced that if you wait long enough the old will become new again and the out-of-vogue will return to fashionable. Recently, I asked if brand loyalty was dead? In the context of that question I posed data to suggest that in some categories thought to have high brand loyalty (such as over-the-counter medication brands) consumer’s were trading down based on commoditized price considerations. But the pendulum appears to be swinging back again based on findings from the annual RetailingToday.com ‘s Top Brands report.

As you know the Top Brands survey has been going on now for over two decades and provides an important benchmark for the retail sectors since it tracks “consumers’ unaided expectations when it comes to brand names they look for at mass market retailers.” The study polls consumers on their expectations across 17 product categories, and this years results are of particular interest given the volatility of the marketplace. According to the results of the study “top brands weathered the recession and have emerged even stronger last year with an increased percentage of consumers in 13 of the 17 measured categories, indicating a stronger brand preference when compared with the prior year … In the other four categories where brand preference did not increase year over year, it either held steady or was down only slightly.”

The authors of the study go on to suggest that “The overall surge in brand preference is noteworthy because it took place against the backdrop of one of the worst recessions anyone can remember, which caused a predictable shift in purchase behavior as shoppers deferred purchases or sought less-expensive alternatives. However, that was only the beginning. Top brands also withstood efforts by their trading partners to reduce expenses and simplify operations by reducing assortments, oftentimes at the expense of shoppers who were then left to wonder why they couldn’t find the very item that was responsible for them visiting a particular store. In addition to retailers’ efforts to pare assortments, brands had to withstand retailers’ increased emphasis on their own brands, with notable examples involving the relaunch of Great Value at Walmart and the introduction of Up & Up at Target. “

If you have an interest in a specific sector of the retail market the RetailingToday.com results are essential reading. For those outside of retail, the broad implications of the study are also important. Consumers truly do seek out brands and expect to find major brands during their shopping experience. By creating not only product excellence but also a positive emotional connection through your products, people seek out your business as well.

People look for names like Coke, Nike, Hanes, Crest, and Cover Girl and frequent businesses that carry them. While those brand names have been aided by advertising and marketing, each has had to produce products that exceeded expectations and position their brand identity beyond the attributes of their product offerings. Each top brand has had to meld into the lifestyle and social identity of consumers such that buying the product connotes certain emotional and social truths for the purchaser.

So let’s bring this back to you, what one thing can you do to strengthen the perception of your brand? How do buyers in your market sector see themselves? What do they value? What can you do to authentically connect your brand to the things they value? What community events can you support? How can you infuse the customer experience with aspects consistent with their values?

While style fads may change and economic hardships can create temporary adjustments in consumer behavior, in the end “brand strength” and customer experiences WILL forever matter.

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Customer Connections by the Facts Not by Total Nonsense

Written by Joseph Michelli on June 25, 2010 — Leave a Comment

While researching the book I just completed about elevating the “patient experience” in healthcare, I encountered a powerful quote about the “lemming mentality” of business leadership. In their book entitled “Hard Facts, Dangerous Half-Truths and Total Nonsense,” Jeffrey Pfeffer and Robert Sutton note, “Business decisions, as many of our colleagues in business and your own experience can attest, are frequently based on hope or fear, what others seem to be doing, what senior leaders have done and believe has worked in the past, and their dearly held ideologies—in short, on lots of things other than the facts. Although evidence-based practice may be coming to the field of medicine and, with more difficulty and delay, the world of education, it has had little impact on management or on how most companies operate. If doctors practiced medicine the way many companies practice management, there would be far more sick and dead patients, and many more doctors would be in jail.”

That quote has inspired me to seek out more evidence before I go chasing new management approaches or tools. Take “Foursquare” for example. As you are aware, New York mobile startup Foursquare is a very hot Internet company. The software application “Foursquare” is enabling friends to know one another’s locations and enabling businesses like Starbucks to engage customers in collecting points, prize “badges,” and coupons, while regularly connecting with those customers on the customers’ mobile devices. With droves of people signing up for Foursquare almost at it’s inception, many business leaders hopped onto the Foursquare bandwagon out of the of fear of being left behind. But how many of those businesses will execute well on the Foursquare platform before they let that strategy drift for yet another poorly executed “next big thing.”

As you contemplate various customer engagement approaches this week, (like whether to connect with customers on Foursquare) I thought I would compile some data for you to contemplate, so you can operate in the words of Pfeffer and Sutton from the “hard facts” and not the “half-truths” or the “total nonsense.” This set of facts come from a colleague, Bruce Temkin, who I worked with at an event in Miami a couple of years ago. Bruce’s team the Temkin Group published a new study entitled “The Current State of the Customer Experience” which is purchasable at their website. The highlights of the study however were posted at a Linked-In discussion group for Customer Experience Professionals and includes the following:


“Only 16% of respondents think they always or almost always delight customers getting customer service online.

95% want to improve profitability, but only 43% want to improve the work environment for employees.

37% have had an executive in charge of customer experience for at least 12 months.

57% have a formalized voice of the customer (VoC) program.

32% have been using Net Promoter Score (NPS) for at least 12 months, but 19% are not familiar with NPS.
31% analyze conversations in social media sites like Facebook and Twitter; the most commonly used of 11 social media activities asked about.”


From Bruce’s data, I think about the importance of learning to walk before I run. Rather than bolting off into Foursquare, I have to ask myself (and you may wish to do the same):

How can I delight my customers more consistently with my existing online presence?
What should I be doing to elevate my staff experience in the service of our customers?
Is our Voice of the Customer program appropriately formalized?
Can we use our Net Promoter Score data more effectively to leverage improvements in the customer experience? and
Should our business be focused on executing well in the main social media portals (Facebook and Twitter) before we venture out to less travelled locations?

Don’t get me wrong I like being an “early adopter” of technology but I love being an “effective executor” of compelling customer experiences EVEN MORE!

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How to move customers up the loyalty ladder

Written by Joseph Michelli on June 15, 2010 — Leave a Comment

I think of customer engagement as a ladder. The lowest rung is simple customer satisfaction, with subsequent ascending rungs be things like “repurchase intent”, “perception of a brand’s integrity” and the highest levels being a “customer’s identification” with a brand or a “sense of loss” should the brand not exist. A recent study by Epsilon revealed some interesting findings about industries that are moving customers up or down that ladder. Moreover the Epsilon research examined drivers of repurchase intent and consumer buying behavior. Some of the purchasing drivers explored by Epsilon included the recommendation role of family and friends, the impact of product reviews, the value of unstructured user generated content on websites, and even the channel preferences that contributed to buying.
While Epsilon’s survey produced a panoply of results, I’ll share a few highlights to get you thinking about ways to drive initial purchases and long-term customer relationships in your industry. Unfortunately or fortunately, (depending upon whether you are trying to maintain customers or lure customers from competitors) the Epsilon results suggest that a fairly large number of recent purchasers said that they wouldn’t buy from the same brand again. For example, less than 60% reported strong repurchase intent. Across categories auto insurance purchasers reported the highest likelihood to maintain brand loyalty. I’m sure no one will be surprised that the lowest repurchase intent was found among credit card brands.
Looking across categories, Epsilon’s analysis of the interface between brand communication options and consumer attitudes reveals:
Friends and families were the primary source of information that affected purchase decisions,
Net promoter scores were generally low (meaning customers weren’t likely to be recommend brands). Some industries like telecommunications and credit cards had abysmal net promoter scores,
Product review websites are playing a significant role in consumer’s purchases,
Few respondents reported that “unstructured user generated content” (i.e. blogs, social media networks) affect their buying behavior, and
When given the choice and when consumers consent to receipt, customers reported that they preferred product information via email.

According to the report summary from Epsilon’s combined qualitative and quantitative research:
Consumers appreciate a sense of control and trust from email today, which has become the key to consumer experience marketing that consumers accept and value
Consumers are seeking validation from multiple sources. Marketers are featuring product testimonials or links to objective third-party reviews
Search marketing and optimization are important topics today, but the best marketers realize they only want a consumer to search for their products once, since each search needs to result in an engaged consumer

So are your marketing and customer experience strategies resulting in something up the food chain from simple satisfaction. What percentage of your customer’s report “repurchase intent”? What is your “net promoter” score? What are the preferred methods for your customers to receive information about your product or service? and What sources of content or recommendations are influencing the purchase intent of your consumer?

Since this medium is an important way for me to communicate with you, please allow me to take a brief moment to make a formal announcement about an upcoming book project for which I would welcome your input. For the fall of 2011, I will be writing and McGraw-Hill will be publishing “The Zappos Experience.” In the future, I will offer you ways to share your insights and personal stories about the “unique customer experience” that is Zappos. It is my sincere belief that Zappos has many lessons to teach us all – particularly when it comes to creating a “craveable” brand experience in what once seemed like an unlikely business concept namely purchasing shoes online. Stay tuned for updates and ways for you to share your wisdom and perspectives in our book.

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How to assess the Online or User Experience

Written by Joseph Michelli on May 26, 2010 — Leave a Comment

Having spent a decade of my life conducting a daily radio talk show in a top US market, I know the importance of engaging listeners with provocative and alluring content. Unfortunately, at times most of us who’ve work in the media have painted an overly negative picture of the world around us, as evidenced by the “if it bleeds it leads” mentality of publishing. If you were to spend a lot of time consuming popular media stories, I suspect you would conclude that getting up in the morning is pointless because the world is irreparably broken.

Fortunately there are positive and hopeful messages buried in the sea of information. As it relates to economic recovery and consumer behavior, allow me to shine a light toward an uptick in online advertising forecasts. According to the eMarketer revised projections of Internet ad spending, the US investment in on online advertisements will increase nearly 11% to $25.1 billion, up from $22.7 billion. That is a growth rate of double what eMarketer previously predicted in December 2009. Apparently, this robust spending projection is based on a stronger-than-expected search and banner market, and an influx of advertisers seeking greater accountability for their marketing efforts.

Analytic data of website click-throughs and conversion rates allows advertisers to get immediate feedback about the effectiveness of their on-line advertising campaigns. So when an internet user’s search delivers a prospective customer to your web store and when that prospect makes a purchase there is tangible proof that your ad dollars are being well spent. Similarly, when purchases are made by people who arrive at your site as a result of a banner ad click through, the value of the banner ad can be easily determined. These metrics provide a snapshot of customer behavior and the overall on-line experience.

Recently during a conversation with a Zappos’ user experience expert, we talked about a new technology being considered by Zappos which literally records and archives user sessions. Rather than seeing click-through data presented in a table, this technology captures a movie of the customer journey through your website. The video show a user on your landing page and follows the visitors mouse position and other navigation behavior. Once the visitor clicks to another link like your shopping cart, the video shows the fields that are being filled in by the user and any areas where the process becomes belabored. In essence, the technology provides a continuous feedback loop of your consumer’s on-line behavior and gives you a flowing, qualitative perspective regarding their on-line experience. No wonder advertisers are gobbling-up search and banner advertising!

David Hallerman, eMarketer senior analyst, says “… Google reporting a 21% jump in net US ad revenues for Q1 2010… was a key signal that the tide was turning.” The search market will be up 15.7% year over year to almost $12.4 billion, while spending on banner ads will increase 8.2%. Video will again post the highest growth rate, rising 48.1% to $1.5 billion.

Tracking consumer behavior and seamlessly observing the purchase experience means big money for online advertising and it reminds us all how important it is to watch our customer’s feet or mouse clicks to assure the experience we are providing engages and draws customers to the check-out line.

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Customer Loyalty – Dead or Alive?

Written by Joseph Michelli on May 19, 2010 — Leave a Comment

The “customer experience” blogosphere has served as the forum for a raging debate about whether “customer loyalty” has died and should be long forgotten.

I have championed the side of the argument that posits “customer loyalty” is ONLY wounded and will recover. However, my belief in customer loyalty should be looked at through a suspect lens, since I tell my teenagers that children who don’t believe in Santa Claus, don’t receive presents.

As much as I would like to share information that only supports my view of the viability of “customer loyalty,” I have to hand over ammunition to the opposition. A recent survey conducted by comScore ARS, a specialist in consumer trending research for online activity, shows a significant decline over the past two years in consumer loyalty. According to Gian Fulgoni comScore’s chairman, “A decline in loyalty to consumer goods brands is typically one of the byproducts of a recession as consumers give greater consideration to price. Research we’ve conducted at comScore ARS has quantified the impact of the ‘trading down’ effect within a number of different product categories, highlighting consumers’ increasing willingness to switch brands in the face of pocketbook constraints.”

Some of the findings listed below, suggest that ‘trading down’ is spreading into categories (such as over the counter medication) typically resistant to the phenomena.

Consumer Sentiment on “Trading Down”
March 2010 vs. March 2008
Total U.S. Source: comScore, Inc.
Category Net Shift 2008 to 2010

Health & Beauty Aids
“I buy the brand I want most” -14%
“I sometimes buy a different brand if it is on sale” 7%
“I buy less expensive brands to save money” 7%

OTC Medications
“I buy the brand I want most” -15%
“I sometimes buy a different brand if it is on sale” 10%
“I buy less expensive brands to save money” 5%

Apparel
“I buy the brand I want most” -15%
“I sometimes buy a different brand if it is on sale” 3%
“I buy less expensive brands to save money” 12%

Food
“I buy the brand I want most” -7%
“I sometimes buy a different brand if it is on sale” 4%
“I buy less expensive brands to save money” 3%

Consumables
“I buy the brand I want most” -5%
“I sometimes buy a different brand if it is on sale” 4%
“I buy less expensive brands to save money” 1%

Housewares
“I buy the brand I want most” -11%
“I sometimes buy a different brand if it is on sale” 7%
“I buy less expensive brands to save money” 4%

The comscore ARC group further reinforces the notion that this ‘trading down’ trend is worthy of our attention by demonstrating that brand shifting could not be explained simply by people buying off-brands because they were ‘on sale.’ Instead the results suggest that people are truly repositioning themselves to buy lower cost brands.

So I guess we should all just abandon the “customer experience” ship and put on our “cheap as possible” life preserver. But wait, analyzing the data more closely Mr. Fulgoni added: “Despite these shifting consumer dynamics, research has repeatedly shown that premium brands which invest in marketing and promotion activities aimed at maintaining buying at ‘preferred’ levels are able to minimize short-term erosion of share to less expensive brands and position themselves for a bounce-back when the economy improves.”

So it is not about abandonment at all….. it is about targeting the experience of high value customers and relying on relevant experiences for those loyal customer to keep you afloat as the economic pendulum arcs back. So what are you doing to “market and promote activities aimed at maintaining buying at ‘preferred’ levels to minimize short-term erosion to less expensive brands and position your company for a bounce-back when the economy improves?”

Yes Virginia, there is customer loyalty it is just playing “hide and seek.”

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How to Be an Innovator

Written by Joseph Michelli on May 14, 2010 — Leave a Comment

When the world economy hit a pothole in late 2008, business leaders executed a predictable and in many cases responsible strategy of cost-reduction. While those steps were important, immediate, defensive business strategies in the face of declining revenues, they had to be balanced with the need to invest in customer-focused innovation to position those businesses for future economic recovery. In essence, you can’t cost-cut your way to organic growth and sustainable profitability.

It is heartening to see many senior leadership teams with whom I work, poking their heads out of their defensive bunkers and engaging conversations about “customer-centric innovation” in the face of a slow but seemingly sustainable recovery.

Given the increase in these discussions, I thought it might be valuable to share observations I have made about innovation across the course of my career. These observations are nothing more than an amalgam of conclusions I’ve drawn from colleagues or consulting experiences. I welcome your thoughts, your dissent, and your additions to this bullet-point list of considerations that I hope will cause you to contemplate what “innovation” truly entails. For me,

Innovation typically comes in two major forms – technology push or customer pull.

Technology push innovation comes when a new class of products evolving out of a technology breakthrough.

Customer pull emerges from products or services generated in response to a compelling customer need.

Most great innovation involves both technology push and customer pull elements.

Invention is not innovation. Invention is a necessary but not sufficient condition for innovation.

Invention alone leads to patents or intellectual property but not necessarily financial success.

By definition innovation is the process by which “ideas translate into profits.”

Innovation is not limited to product development but is an approach to improve cost containment, supply-chain efficiencies, and all other important business processes.

Successful innovation companies place the customer in the middle of all strategy decisions.

Innovators protect their intellectual properties but do not hoard their knowledge or act in isolation.

Innovative businesses include prospective customers in all stages of the innovation process. They start with the voice of the customer in the idea phase and incorporate ongoing input to guide the prototype, manufacturing, distribution and marketing phases of their product and service journey.

Companies that develop an innovative culture have core competencies in collaboration and customer analytics. (They seek an “immersive” understanding of the wants, needs, and desires of their core markets both with their business-to business customers and their business-to-consumer segments.)

Most importantly you do not need to be a nanotechnologist to be an innovator. You and a few like-minded impassioned colleagues can create a disciplined set of processes that imbed innovation in all you do!

In the spirit of engaging a collaborative dialogue, I want engage YOU in the process of my next book. Having just finished my book manuscript draft on the “patient experience” at UCLA health systems scheduled for release later this year, I am starting my research on yet another book which will be released by McGraw-Hill in 2011.

As a first step in the upcoming book journey, I thought I would try to pique your interest in the new book topic by creating a contest to see if you can identify the customer-centric business I will be writing about for 2011.

I will select 5 winners from the correct answers and send them each a $20 Starbucks gift card. Each day between now and June 1st, I will give hints about the company or projects at twitter (my username is josephmichelli). I will formally announce the book title and company on June 1st along with the winners. Email your guesses to: josephm@josephmichelli.com There is no limit to the number of guesses you can submit.

After the announcement, I will look forward to hearing the content you would like to have addressed in the book and let you have sneak peeks as the manuscript is progressing.

Thanks for being on my “innovation” team!

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The Gravity of Customer Experience Enhancement

Written by Joseph Michelli on May 5, 2010 — 1 Comment

My first job in organizational development was in healthcare. More than two decades later (I can’t possibly be that old), I appear to have come full-circle as I do a great deal of consulting and training on elevating the patient-experience. This work is largely the result of my involvement with UCLA Health Systems and an upcoming book that I’ve written about their amazing journey to increase patient-centric care.

As I work in healthcare environments, I hear a number of arguments that suggest the patient experience is less important than customer experiences are in non-healthcare settings. John Goodman, BS, MBA vice chairman and Dianne Ward, BS, MA senior account manager for TARP Worldwide, writing in Patient Safety and Quality Healthcare explain the distinctions commonly cited between healthcare and non-healthcare sectors:

“Most industries have readily accepted that improved customer service will lead to increased customer loyalty, increased revenue, and an enhanced bottom line. However, the healthcare industry has lagged in accepting this concept for several reasons:
Customers are not loyal in the traditional sense because they usually wish to avoid using the healthcare system, except when necessary, and most executives believe they go to the health facility to which their physician sends them.

Most customers are insulated from price due to health insurance, and often fail to care about cost, only wanting the best, newest procedures.

Clinical care is often viewed by physicians as completely separate from traditional customer or administrative service (which is viewed as the admissions, billing, and “hotel” aspects of a medical encounter).

Clinicians believe great medicine will gain forgiveness for poor service (reinforced by television shows such as House).”

Goodman and Ward go on to disapprove all of these alleged differences by analyzing TARP Worldwide’s research regarding healthcare delivery. Most notable among these findings are conclusions that the patient experience delivered by physicians is as important as the experience offered by other staff when it comes to determining patient loyalty. Word of mouth reports of patients about their healthcare experiences has as much impact on potential patients as it does on physicians who make the referrals. In fact, TARP Worldwide research shows that referring physicians were greatly influenced by the reports of their patients regarding the way they were treated at referral facilities. In essence, referring physicians had more patient loyalty than loyalty on behalf of physicians to whom they make referrals.

Hopefully, I have gained a little wisdom along with all the frequent flyer miles I have racked up since I started working in healthcare. Over the years, I have come to appreciate that every business sector has different customer experience challenges, and each individual company has it’s own unique needs – so no one is exempt from considering the experience of customers.

In fact recent studies in healthcare suggest, as is the case with businesses in non-healthcare sectors, more than 40 percent of consumers already research healthcare services online and 60% report using the information they gain from that research to make a decision on a healthcare provider. Twitter, Facebook, and consumer review websites increasingly present healthcare tweets, posts, and customer opinions that are considered by prospective patients.

So what are customers tweeting about the experience in your business? What are they telling the people who referred them to you? What value added services are you providing to those who send business your way?

Laws of gravity and customer loyalty apply to all of us – your success can’t go up if a stronger negative force of your customer experience is pulling you down!

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