We live WHILE with our clients every day.

photo by Pat Guiney

WHILE outcomes might seem dreadfully common sense, but have you noticed how easy it is to feel trapped by a perceived trade-off between a profitable operating model and investments of time and money in customer experience? Without thoughtful design for both, it is indeed all too easy to maximize one alone – reaping a short-term performance boost that is either unsustainable or causes a new problem to be solved somewhere else.

Examples are easy to find. Take Zappos. Shoe fans and admirers of smart companies know Zappos runs a high touch, high service oriented operating model that’s traditionally expensive – the kind of operating model that makes most leaders think “How do they do that and stay in business?” But stay they have. Zappos started turning a profit in 2006 and reported $1 billion in sales in 2008. Now acquired by Amazon and offering loads more than shoes, the folks at Zappos know how to find money in the business in a manner that strengthens customer experience.

Zappos has proven that you can achieve terrific profits and operational excellence WHILE offering its customers a one-of-a-kind experience.

Another example is Starbucks. (It’s fun to dish on them since they are well-known with a global supply chain, and a declaration of customer experience as an operating strategy). In 2008, CEO Howard Schultz was criticized for closing stores to reset the in-store customer experience. Yet by August of 2009 the Wall Street Journal was reporting how Starbucks use of ‘lean’ to drive efficiency was already impacting their profitability. I blogged recently that Starbucks has rebounded nicely. Do you think this change will be sustainable?

Closer to home, we recently helped a health plan define the target customer experience for its members.  It was easy to see the payoff in satisfaction and loyalty by improving the organization’s existing experience. Then we put the other kind of reward on the table: by improving – and simplifying – the customer experience, we saw the very real opportunity to pull up to 20 percent of the communications and support expenses out of the business.  We used customer experience as a way to find money in the performance chain*.

In any case (including yours), the WHILE imperative should always underscore the steps you take to strengthen your customer experience – for Starbucks, certainly, and for any leader thinking about how best to win better and sustainable performance in 2010.

In your organization, is “finding money in the performance chain in a manner that strengthens customer experience” a challenging trade-off, or simply how things are done?  How important is WHILE for you?

*We define the performance chain as all the things, people and ideas that have to move from the moment you have demand until you have cash in the bank.

“A process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors.”

This plainspoken but elegant video by Jeff Monday does a great job explaining Christensen’s theory:

Christensen challenges us to stay focused on needs, and not on demographic segments or on pushing products.  He asks what job are your customers asking your product to do? In a post I consider to be a classic, Christensen talks about how it’s more important to understand the job a product has to do rather than the customer who is buying the product:

Pierre Omidyar did not design eBay for the “auction psychographic.” He founded it to help people sell personal items. Google was designed for the job of finding information, not for a “search demographic.” The unit of analysis in the work that led to Procter & Gamble’s stunningly successful Swiffer was the job of cleaning floors, not a demographic or psychographic study of people who mop.

Said another way, “What you solve is more important than what you sell.” Sounds familiar doesn’t it?

It did to one of my clients. We were talking about the keynote Christensen delivered during a recent visit to his company.

“When he asked us what job customers were hiring our product to do, I instantly thought of our customer experience,” he told me.  As a provider of health insurance, it would be easy – but not very powerful – to focus on price and product. They’ve chosen differently, defining a clear need to solve for a carefully chosen customer.

I was, of course, overjoyed that he made the connection. And I was happy that Christensen’s speech solidified that defining the triggering need (or job) you solve is the first step in the target experience that will drive performance for your company. Getting really clear about what people are asking you to do is the initial litmus test you should undergo before developing or changing your products or services.

By now an obvious question, but Clayton and I have to ask: What job are your customers asking you to do?

Here are two examples.

First, I’ll point to Julia Halberg, Director, Global Health, General Mills, Inc. Julia serves two stakeholders simultaneously: her “customers” are the General Mills’ employees working at more than thirty locations throughout North America. The problem she solves for them? Helping employees live healthier lives. Julia also works with the company’s Benefits group, to link incentives to healthy behaviors in an effort to help lower health benefit costs (or lower the slope of increase).

After reading Domino Julia worked through the customer experience steps, and realized she needed to develop different messages and approaches for each of the groups she works with to have them engage in General Mills’ health promotion efforts.

“Earning trust and demonstrating results has always been a priority, but putting the concept into a complete cycle from both the organization’s experience (our Health Safety and Environment department) and the consumer’s experience (our different plant populations) has conceptualized the process for me and provided a method to share and teach other staff,” she told me recently. Go Julia and General Mills.

Second up is Xcel Energy, a multi-billion dollar energy company. When Xcel’s technology leaders needed to implement several enterprise-wide technology changes to 12,000 employees, they chose to use a customer-experience driven approach.

Many business and technology leaders might define the problem to be solved in this kind of situation as follows:

• Employee-customers want to be happy with technology change. This is sometimes unrealistic, because some enterprise changes – like security upgrades – are mandated, not optional for employees.
• Business and technology leaders want enterprise-wide projects to be delivered on time and under budget. This can require a trade-off, as employees’ needs and preferences appear last on the priority list.

Xcel leaders wisely spotted the opportunity to reframe the problem. The mutual need to be solved: plan, design, implement, and digest technology change to maximize organization performance.

For employees, maximizing organization performance means minimal disruption to their functional work – be it in field operations, sales, finance, or customer care.

For business and technology leaders, maximizing performance means planning the scope, sequence, training, and communication of projects to flow as naturally as possible into functional work.

Approaching this problem through a comprehensive customer experience view, Xcel gathered a cross-functional team that participated in ideation and mapping sessions to determine the global impact the suite of proposed changes would have on individual employees and their work, as well as on the organization overall. They created a target “employee-customer” experience map based on this target employee’s needs during the change process. The map was then translated into a broad customer experience model of the technical actions and formal roles needed for successful technology change in the future.

What’s happening here? At both General Mills and at Xcel, leaders defined an ideal experience for a carefully chosen group, then used the ideal experience as a guide for decision making and action.  This is experience used as an operating strategy.  (If a business strategy is what your organization does and why, your operating strategy is HOW to get it done.)  Who says customer experience is just for customers?

My question for you is, when you think about your constituencies, what is your target experience for them?

According to the NY Times:

• Starbucks’ net income was $241.5 million up from $64.3 million in the first quarter last year
• Revenue climbed 4 percent to $2.7 billion
• Same-store sales were up 4 percent
• The company’s stock has nearly tripled to $23.29

But I’m not telling you this just to report Starbucks’ good news. What I wanted to point out was this interesting paragraph from the Times’ story:

Mr. Schultz brought Cliff Burrows, who was managing stores abroad, back to Seattle to run American operations. One of the first discoveries he made talking to customers seemed basic, but had been lost in Starbucks’ push to open stores.

Burrows goes on to say that by talking to customers Starbucks was learning how customer preferences varied by geography allowing Starbucks to better meet customer needs/desires.

What I love about this turnaround is that it nicely exemplifies how focusing on customer experience, listening to what customers want, and fulfilling their needs can directly effect your bottom line. Shultz and Starbucks are re-learning what the 460+ leaders in our groundbreaking research helped us prove some time ago: that customer experience is not a tradeoff to profits; it is the pathway to stronger financial performance.

If you’re a regular participant in this conversation, you know I’ve just completed a series of posts outlining the six steps common to any customer experience. You know that every customer experience starts with a person with a need, problem, or desire they would pay to have solved. You know their experience is what happens, and how they feel as they realize the need, learn about options, try them out, buy, use your product or service to solve the need, and evolve to a new need over time. And time is the backdrop for every experience. Knowing WHEN your customers are in their experience helps you meet customers where they are. Leverage this knowledge to maximize the profit payoff for your actions.

A while back, I was working with a company that helped consumers express themselves online with digital photo editing and web design software. They were incredibly customer driven. The day we began working together they showed my their freshly redesigned company website.  And if you’ll forgive my crude rendering, here’s what I saw:

Me: “I’m curious. Why devote the primary focus and about 40 percent of the real estate on your home page to this message?”

Them: “We pay attention to our customers. We track the top reasons we get calls into our care lines . . . consistently the top question is from customers who download software from us and then can’t find it on their systems. We’re addressing that concern straight out.”

Using time as context, can you spot the problem with this well-intended effort?  Visitors to your home page are likely in the LEARN or TRY step of the customer experience. They are learning about options to solve their need, or exploring which options they know about might be best. They are likely NOT in the purchase step, where the content above is most appropriate. The interaction designed here wasn’t bad, just placed in the wrong time. It is an opportunity cost that is lost to what could have happened here to earn a spot on this customer’s short list of good options.

It may sound obvious, but customers are locked in their own chronology. Each time they interact with you, they expect you to know when they are and that you remember what and how much happened before.

This is why we find it so frustrating to call customer service for help using a product and the person who takes our call starts with some version of “what’s your name?” or “what product do you have?” We’re in the SOLVE step, being addressed in some earlier time. It’s why I appreciated it so much when my insurance agent proactively reviewed my policy and suggested some changes based on the events of the previous year. I was in the EVOLVE step, and he spotted an emerging new need.

When evaluating a new action or auditing the effectiveness of your customer experience overall, use time as your context. Use the six steps common to every customer as a framework to your thinking. I bet you’ll see a more potent payoff for your efforts.