Sunday Readings #4 // How the quest for understanding customers’ needs impacts their journeys & experiences

How many of these little pop-ups that ask you for feedback did you click away? And how many of those emails that ask you to take a short survey did you delete without even opening them in recent days, weeks and months?

We do it every day. As do most customers. Because business and brand owners, enthused by all these new opportunities at their fingertips, tend to overdo it once again …

The digital transformation has revolutionized the way we are able to ask customers for their feedback. Instead of lengthy surveys where people are asked what they did and felt 8 months ago during the time of a transaction, we are now able to ask and get feedback ‘in the moment’ – in real-time. Businesses like Medallia, Qualtrics, Usabilla, or others thrive and have grown exponentially by building products, services and, ultimately, integrated platforms around what we today call VOC Listening (VOC = Voice of the Customer).

These platforms have many advantages above traditional market research. And with the arrival of AI into text analysis, etc. become smarter every day – with one of the great features being, that you can shorten surveys in a customer friendly way, while getting important answers on questions that you never asked. This was a big problem before, as customers in traditional surveys could only answer those questions that researchers asked them. And those might not be relevant to customers and their decision making – garbage in, garbage out!

In this sense, real-time VOC Listening is a great step forward in catching customers’ needs, perception, satisfaction, etc. and understanding their frustrations and pain points. But there is a big mistake, that a lot of companies make:

They are so enthused about this great new opportunity, that some of them tend to overdo it!

Why? First, because they ask their customers so many times across so many different touchpoints that people get fed up with it very fast. Those businesses do not understand, that the feedback gathering process creates customer touchpoints in itself and becomes part of the customer journey. And, worst case, creates new pain points because customers can’t stand all those pop-ups, emails, etc. Thus, it is very important to establish clear rules when and how often a single customer is approached for feedback through a VOC platform. However, that’s only possible if you have a working CRM system allowing for a Single Customer View. If your business doesn’t even know that it is asking the same customer twice, there’s a lot of data integration base work to be done before you can truly exploit VOC listening’s full potential.

Secondly, a lot of companies tend to focus on ‘marketing-performance questions’ rather than truly aiming to understand customer’s needs and frustrations. Thus, a lot of those questions asked, are not really relevant for those customers. This leads to drop outs and even more frustration. And it’s not good for businesses who use VOC listening either. They won’t get any insights into what really matters to customers and, in the eyes of their customers, they burn the great tool that VOC listening is or at least could be.

Thirdly, in most cases, customers don’t get an answer to what is actually done with their feedback. Will it drive improvement initiatives? How has feedback changed things for the better in the past? Or in other words, if there is no visible benefit for customers from spending their valuable time answering questions why should they bother in the first place? Thus, closing the loop on customers’ feedback both, in terms of issue resolution and structural improvements is crucial.

In short, if you want to make use of the great opportunities that real-time VOC listening offers, carefully think of how customers feel about the process of feedback generation itself, what’s acceptable and what’s not, and – most importantly – how you can make sure that this feedback is put to good use in a way that is visible to and an creates value for both, your customers and your business.

Sunday Readings #3 // The illusion of rationality // Personal value beats business value in B2B decision making

For decades, many marketing professionals and academics believed that there is a big difference between B2C and B2B marketing. The rule of thumb was that, whereas consumers can be influenced by emotional advertising and psychological messaging, professional decision makers would decide what they buy based on rational analysis and facts.

So, although Nobel prize winner Kahnemann’s, Shiller’s and Thaler’s pioneering work in behavioral economics already proved this assumption wrong, this paradigm remained unintelligibly unquestioned over time. Moreover, those marketing professionals would have just needed to talk to any successful sales rep to understand the real drivers of B2B decision making, and that their theories on rational purchasing decisions are no more than that.

The absence of the homo oeconomicus

Now, there is new proof for it as CEB and Google teamed up to commission a study amongst 3.000 B2B buyers across 36 brands and 7 categories, producing some really interesting results (find the white paper including all results here).

Given the long-term paradigm and beliefs around B2B branding, the results should have proven the following:

  1. Branding and marketing don’t really matter as decisions are made purely based on facts
  2. Business value should be the key driver for any decision and based on those facts
  3. Personal value and emotions should not play any role in those decisions and neither need to be considered nor addressed

Interestingly, all of that conventional wisdom has been proven wrong by the results produced by CEB and Google.

Strong brand connections matter

Today’s B2B marketing environment is as crowded and competitive as for many B2C categories. This makes it more and more difficult for B2B brands to stand out from the crowd.

Historically, B2B suppliers used branding to establish a reputation for quality — to drive consideration and choice. Today, B2B customers typically identify the leading suppliers in a field and evaluate if any can meet their needs on their own through digital channels.

One way to address this challenge is to focus B2B branding and messaging on customers’ business outcomes to convey superior business value. As a result, quality features transform into proof points to support the benefit to the customer.

Figure 1: Impact of brand connection in B2B

Using business value to build stronger brand connections is a powerful way to drive preference, purchase, and premium pricing. The figure above shows clearly, how customers with strong connections to B2B brands have much higher rates of consideration, purchase, and willingness to pay a premium.

Moreover, if the business value is not understood, buyers are four times less likely to consider that brand. In other words, most buyers who don’t believe a brand will deliver business value simply won’t even consider purchasing from that brand at all.

Figure 2: Business value & consideration

Thus, business value has become a prerequisite for consideration. However, it’s not easy for B2B suppliers to identify and express business value to their customers. Why?

Business value is difficult to proof

Unfortunately, a B2B brands’ success in demonstrating business value has strong limitations. The reason is that business value perceptions often don’t really vary between brands, either within or even across industries. Different B2B suppliers offer almost the same products and services and superiority – or superior business value – is extremely hard to prove. This has a dramatic effect on the willingness of buyers to pay a premium.

Figure 3: Perceived business value, by category and brand

In summary, business value is not just difficult to prove, it has also become just table stakes. It gets B2B suppliers into a buyer’s consideration set but doesn’t make them stand out – buyers conclude that the top three leaders in an industry all deliver business value and are acceptable options. This inevitably leads to strong price competition where customers ultimately select the supplier willing to offer the lowest price.

So, neither a strong brand connection nor expressing business value will do the trick when you want to be successful in B2B marketing. They just give you permission to play. Which brings us back to behavioral economics, or what great salesmen intuitively understand and apply …

Personal value trumps business value

The most interesting finding of the research by CEB and Google is the following:

Personal value has twice the effect of business value across a broad range of commercial outcomes – and is the real reason and driver for why and how B2B decisions are made in the real world.

In the CEB and Google study those benefits were defined as follows:

Business value – includes appeals to logic/reason in areas such as:

  • functional benefits (e.g., high performance, structure/order)
  • business outcomes (e.g., achieving business goals)

Personal value – includes emotional appeals in areas such as:

  • professional benefits (e.g. being a better leader, simplifying my life)
  • social benefits (e.g. fitting in with colleagues, admiration from others)
  • emotional benefits (e.g. confidence, excitement, happiness) and
  • self-image benefits (e.g. pride, doing good for society, feeling of accomplishment)

To assess the relative impact of the two benefits categories, CEB and Google analyzed their lift on 14 commercial outcomes, including consideration, purchase, premium payment, and advocacy. The data shows that across the collection of commercial outcomes, personal value has twice as much impact as business value does. So, not only do emotions matter in B2B buying, but they actually matter more than logic and reason.

Figure 4: Impact of perceived benefits on commercial outcomes

This finding highlights a huge, in many cases untapped opportunity for B2B marketers to (re-)position their brand(s) around personal value, and tailor their messaging accordingly.

B2B buyers need to trust personal value

So, to really press the right buttons via your marketing and messaging, it is important to fully understand the drivers of personal value in B2B buying. One of the key reasons why purchase decisions in B2B buying are that personal – in fact, even more so than in B2C buying – is the level of personal risk buyers feel. Risks like losing time if a purchase decision goes poorly, losing credibility if buyers make a recommendation for an unsuccessful purchase, or losing their job if they are responsible for a failed purchase.

The more personal risks a purchase entails, the more emotional buyers feel and the more they attach to brands that can provide value and eliminate risk. Or, in other words, brands they trust (also see my article on ‘The Trust Equation’ here).

Unfortunately, yet easy to understand, it is easier to build trust in personal value with existing customers.

Figure 5: Business value & consideration

However, high levels of trust and an emotional connection among existing customers don‘t help with non-customers. When non-customers don’t see the personal value, they are over three times less likely to purchase and over seven times less likely to pay a premium. As a result, many B2Bs are successfully meeting existing customers’ personal needs, but they fail to convey those benefits to non-customers. That’s why it is important for B2B marketers to address this urgent opportunity and convince their non-customers of personal value too.

‘Commercial insight’ as the holy grail for messaging

In addition to emotional differentiation to win the buyer via personal value, suppliers must also ‘de-commoditize’ business value. To improve a buyer’s brand connection it is important to combine emotion and personal value approaches with opportunities to improve rational differentiation.

To do so, suppliers must first break down customers’ current behaviors and beliefs (e.g., satisfaction with a workaround or competitor’s solution) and then replace those beliefs with new ones that directly support the purchase. The strongest driver of such shifts is commercial insight: an understanding (as well as corresponding messages) that teach the customer something unexpected and new about their own business needs and challenges – ideally, exclusively leading back to the supplier. The following figure explains the messaging hierarchy:

Figure 5: Hierarchy of information conveyed through commercial messages

Commercial messages must pass through each level of the information hierarchy to be a candidate for the next, but many commercial messages fail at the first two stages. Successful thought leadership messages may teach customers something new but still fail to produce true insight if that teaching isn’t disrupting the customers’ buying criteria. Ultimately, commercial insight is the most potent of all commercial messages, as it challenges customers’ thinking about their own business problems and shows them that the status quo is no longer acceptable

Successful commercial insight disrupts customers

By leveraging commercial inside, customers learn something new about their business and thus appreciate the unique value in the supplier’s offer. Most commercial insight today is conveyed in business value terms, such as unexpected new ways to save the business money or generate returns for the organization. However, to maximize the impact of commercial insight, smart B2B marketers should also highlight the personal needs of all stakeholders involved to achieve both, emotional and rational differentiation.

Sunday Readings #2 // The quest for purpose // More than a 21st-century mission statement?

Purpose is hot. Everyone talks about it. But is it really about something new? Something that didn’t exist a year or two ago? Isn’t businesses looking for meaning – beyond making money – something we have seen before? A quest that resulted in coming up with a mission statement some 20 years ago? In other words, isn’t purpose about regurgitation – old wine in new skins – and consultants repackaging what offered a steady source of business in the past, and selling it again?

Although the economic advantages of riding the wave of any hype seems evident, there are probably two key differences between searching for your businesses purpose vs. a 20th-century mission statement:

Outside-in vs. inside-out

When working on mission statements in the 90s, most efforts had an inside-out focus. The key driver for a lot of ‘vision, mission & values’ initiatives has been staff engagement, motivation, and productivity. It was about giving meaning to employees and providing them with a reason for getting up in the morning and looking forward to getting into work. Obviously, it was already ‘en vogue’ at the time to apply a stakeholder perspective and including CSR aspects when defining that shared mission for your business in the 90s – a quadrinity, trying to balance stakeholder, employee, environmental and societal needs. Nevertheless, the starting point was mostly to provide meaning to employees.

Looking at the current hype about purpose there is a major difference: most initiatives start with the customer in mind. However, although this feels like great news and an overdue paradigm shift from an inside-out to an outside-in approach, it is neither about a pro-active approach, nor about an awakening of finally truly putting customers first. In contrast, it is just a very considered decision by businesses to give an answer to a crucial shift in customer expectations:

Millennials demand meaning

Different from Baby Boomers and Generation Y, Millennials are more and more questioning the growth and consumerism paradigms they grew up with – asking for more meaningful goods and services. They are the first generation that intends to not just ignore the collateral damage and opportunity costs that are a result of our neo-liberal growth paradigm. They understand that we can’t get on as we used to and ask for businesses to act responsibly and to explain to them how they intend to contribute to a global society’s welfare. Or in short: They ask for businesses to have a purpose and life up to it through its behaviors and actions. A purpose that goes beyond the business itself and defines its role in society – on a global scale.

Thus, any purpose (statement) needs to answer why you dare to exist as a business. Not just for your own sake as an organization, but for the world, you operate in as a business. In many ways, this is a question that a lot of businesses find very hard to answer.

An unprecedented paradigm shift for businesses

First, the society and the people in it (the customers!) have never been at the top of most businesses’ or their leader’s priority list. Most leaders (and also management consultants) think in industry architectures and value chains, structures, and processes, financials and ROI’s. Employees are predominantly a resource. And customers equal business opportunities and revenue streams. These are the building blocks that drive how most companies are built and operate. Thus, starting to think about your purpose in many cases demands for taking a radically new perspective.

Second, if you master that question and come up with an answer that could become your purpose, it most probably will demand a major transformation of your business and everything you believed in thus far. A transformation that probably feels too big to be really taken seriously. And here comes the danger to repeat history.

The danger of putting lipstick on a guerilla

As with many mission initiatives in the 90s, there is a big danger with a lot of purpose initiatives, that they are only put on the agenda because the topic is hot and businesses believe that, as everyone is working on similar initiatives, they need a purpose too.

This is the perfect recipe to fail. Although you might be able to create some early excitement with employees and customers alike, both will realize very fast, that the only thing you did, was putting lipstick on a guerilla. The result being, that the business and brand will lose a lot of credibility – and potentially business.

Thus, when you currently feel some peer pressure and get that next call from a consultancy or agency to put PURPOSE on your agenda, think twice if you are ready to open Pandora’s Box. The rewards of taking the quest for finding your purpose will be big – in terms of customer preferences, loyalty and growth potential – but the danger of getting it wrong and just producing some nice sounding words that will harm your business in the long run is equally high.

Personally, I believe there is no real Plan B to eventually putting your customers first and providing them with some meaning – call it purpose or not – if you aim to still be around and prosper as a business in 5, 10 or 20 years time. But, you better take the task seriously and put it on top of your executive agenda, rather than delegating it to some copywriters in your communication department.

Sunday Readings #1 // The change formula // How to transform your business, successfully

© Sergey Nivens

We live in times of exponential transformation and CHANGE [C]. Companies, that have been around for more than 100 years die, while others, that didn’t exist yesterday, become world leaders tomorrow. So, what does it take to survive?

We believe the formula to achieving successful change comprises of six key levers:

Define the what

First, you need a VISION [V] about the future of your business. That sounds easy but actually is a very difficult task. As human beings, we use to think in linear extrapolation. This is also the way how we approach strategy, planning, and budgeting. However, our brain – perception, and cognition – finds it hard to work in exponential mode. We can easily calculate 2×10, but we find it hard to imagine 2^10 – actually, it is 1024. Moreover, we tend to average things. If we have ten competitors we know, we find it hard to anticipate the impact a ‘new kid on the block’ might have. Any ‘black swan’ hits us by surprise. So anticipating the potential degree of change to an industry and defining a corresponding vision is hard. Bloody hard. Because it often means to forget everything you believe to know about the industry you are operating in.

Second, in order for people to engage themselves in something, they need to believe in it. Without meaning, it will be hard for anyone to be motivated to jump the barriers of persistence and move forward into an uncertain future. Because there is nothing that feels more comfortable and secure than the status quo – even if everyone knows that things can’t go on as they used to. Thus, you need to anchor your vision in an aspirational and shared PURPOSE [P] that truly resonates with people – both, their hearts and minds. An aspirational destination that everyone finds to be worth engaging themselves in and fighting for.

Third, you need to translate your vision and purpose into a sound, inclusive and actionable STRATEGY [S]. It’s good to know where you want to go and why, but if you don’t know how to get there, you will fail. It’s as bad as being a trained wanderer without a clear destination, just walking on and on and on … Thus, your strategy should include all initial investments, initiatives, processes, responsibilities, and timelines that you aim to put into action to achieve your vision.

Manage the how

Fourth, culture eats strategy for breakfast. So, the key task of you as a leader that needs to manage transformation and change, is to evolve your business’ culture to support the strategy. This is where the real change begins and your whole business needs to step out of its comfort zone. What worked well yesterday might not work as good anymore when everyone starts trying to deliver against your vision, purpose, and strategy. By default, this is the bumpy part of the journey where most change initiatives fail.

Thus, the key skill your organization needs to develop is RESILIENCE [R]. Because changing business culture is a rollercoaster journey with lots of ups and downs. Here, the highs are not the issue, but getting out of the lows without giving up is crucial.

Fifth, all your efforts need to be tailored to the degree of DISRUPTION [D] that you envision, or anticipate for your business. This can be defined by your own ambition, or by the degree of change forced on you by other players inside and outside your industry. Black swans sometimes not even turn out to be swans, making the job of fore-sighting and anticipation as hard as never before.

Finally, all of the above is not a linear ‘plan, execute & control’ process, as you might have been able to follow in the past. Anticipating industry disruption and the need for corporate transformation and cultural change is an ongoing, iterative process that needs to happen in real-time. It means constant evaluation and revision of all elements over TIME [T] – as needed.

The CX glossary // Establishing a common language

When corporate CX managers, consultants and agencies talk about customer experience they often mean very different things. The following glossary aims to support finding a common language:

Customer experience // The total sum of all interactions of a customer with a business over time, that shapes his/her overall perception – fluid, not static – every new interaction contributes to it

Customer end-to-end or macro journey // The typical sequence of events a customer runs through from need creation to product/service usage & renewal

Customer micro journey or use case // A typical sub-journey that has a dedicated start and end point within the overall customer journey (i.e. product testing, order fulfillment, payment, etc.) – use cases are describing the same sub-journeys from the customer perspective (“I need to find a product with improved specs.”, “I need to order a product.”, “I need to pay my invoice.”)

Customer touchpoint // A single interaction between customer and business on the customer journey (i.e. scrolling the website, analyzing a product spec sheet, a call with the sales rep) – the total sum of touchpoints forms the customer journey – many touchpoints can be controlled by the business, others can not (i.e. an industry database listing potential vendors, the delivery of a product carried out by a logistics company)

Micro moments or nano journeys // A single or series of event(s) that can be important when designing any touchpoint (i.e. the moment the sales rep tells the prospective customer the price of the solution, the moment the customer clicks on ’Order’ on an e-commerce platform) – the micro moments can shape or change the entire perception of the customer experience

Pain point // A touchpoint or micro moment, that frustrates the customer and negatively shapes his overall perception of the customer experience (i.e. he/she doesn’t receive a quote in time for an important internal meeting, the order does not arrive on time, the product doesn’t work on the company’s production line)

Moment of truth // The interactions or touchpoints that matter most to the customer (i.e. an application problem is fixed fast by the technical engineer for the customer not to loose time and money on his production line)

Unmet need // A need that the customer is fully aware of – can not yet be met by any potential supplier yet – usually offers great potential for innovation and added value

Occasion-based need-states // Describes different needs depending on the occasion or circumstances (i.e. a customer normally expects order fulfillment within 10 working days, but for an emergency product request, he needs the product to be shipped within 24h)

Customer listening // The total sum of all research and activities to understand customers’ experiences, journeys as well their needs, expectations, buying behavior, product/service usage, satisfaction and loyalty – quantitative and qualitative; externally and internally – gained through primary and secondary research, media usage, click rates, behavioral data, sales data, product data, etc.

Data analytics & management platform // A data management system, that is a capable to collect, synthesize, analyze and report disparate data points or data sets in order to transform them into customer insights

Customer insights // Valuable information on formerly unknown or misinterpreted customer needs as a result of data aggregation and analysis – customer data from customer listening is an input to it – i.e. Uber understood, that customers want an easy and reliable way to order a taxi and don’t want to worry about how to pay the driver

Customer segment // A distinct group of customers that share similar needs, expectations and/or behaviors – can clearly be differentiated from other customer segments – used to provide those customer segments with the right messages, channels and solutions

Customer persona // A ‘human way’ of describing a typical customer segment – based rather on psychology, attitudes and needs, than product usage, sales numbers and other facts & figures – often makes the description of a customer segment more tangible

Content management platform/system // A marketing tool to more efficiently create, tailor, manage and deliver messages and other content (images, video, etc.) to different customer segments based on their individual needs

Marketing technology // A set or suite of tools to fully integrate the marketing process – from customer listening & segmentation, to content creation & management, to channel management & distribution, and CRM – unfortunately there is now one supplier or solution yet that incorporates all marketing tasks into one tool and created a ‘gold standard’

CX business ecosystem // The other side of the coin: mirrors the customer journey from an internal perspective – the people, processes, systems and technology used to enable the delivery of a certain touchpoint or sub-journey – needs to be fully understood in order to be able to make any CX improvements and change the operating model

CX management platform // Similar to Marketing technology: A set or suite of tools to link all data and learnings from customer listening to the business ecosystem and all improvement and innovation initiatives – allows for an effective and efficient customer experience management

CX management // A data-based approach to holistically manage the customer experience – focuses on three main pillars: (1) using and making internally available the data and insides gained through customer listening, (2) continuously optimizing and innovating the customer experience and (3) driving a customer-centric culture throughout the organization

CX value creation // The analytical link between improvements in the customer experience to resulting revenue growth and cost reductions that drive the financial results and success of a business as a result of a CX transformation

Vt=Vn*T^2 // The trust formula // How to create new value by making CX your OS

Businesses that aim to survive in the digital age need to make customer experience their underlying operating system – to create new value for both, customers and their business. On this journey, customer trust becomes the most crucial success factor. This makes CX the new formula for brand success.

How to achieve this goal? You can read a practical guide to success in my most recent article.

Please find a free copy of the English version here. There is also a CX glossary included in this version.

The German version is available here.

Source: Felix Stöckle, Markenartikel, Heft Nr. 12/2017,

How to give meaning (back) to business and create an ’emotional monopoly’ with customers

Lots of businesses are so focused on their internal structures and processes, they tend to forget what their customers really want. They just don’t listen and operate inside-out, instead of outside-in.

In many cases the same is true for their employees.

Taking a deep view at your customers’ and employees’ experiences and trying to understand their journeys with the business can however do wonders in understanding the key moments of truth, the existing pain points and those needs of customers and employees currently not met.

In a next step, gaps can then be identified and strategies & tactics be developed, that can help close those gaps.

Moreover, in most industries, looking at customer’s and employee’s experiences is just two sides of the same coin, where an improvement in the employee journey often leads to more satisfied customers, buying more of your products and services more often – increasing loyalty, improving profits and eventually turning your brand into a ‘love brand’.

As a result you will be able to establish an ’emotional monopoly’ with your customers that drives sustainable and profitable growth – creating a dividend on customer experience and employee experience investments with an outstanding ROI.

The same is true the other way around, where happier customers have a positive impact on staff motivation, engagement and performance.

If you want to learn more about how to optimize your customer and/or employee experience and give (back) a clear focus and real meaning to your business, just get in touch here!

Why CX is 21st century branding

You might have wondered how branding has changed in the digital age, or how branding in post-digital is different to pre-digital?

Well, one of the easiest, although slightly broad-brush ways to describe the difference is that in the pre-digital era brands have predominantly been built based on advertising campaigns = communicating promises. Today, in the post-digital age, brands are build through exceptional customer experiences = delivering against your promises.

In a world of social media, likes, stars and rankings, it counts less how well you communicate your brand promise, but if you really live up to it and deliver against it – offering exceptional value to your customers.

Sounds easy. But, as we all now, action is a much tougher currency than words!