Just Like Dendrochronology: Creating Tree Rings Around Strategic CEM

Science and nature, it turns out, both have a lot of application to customer experience management. Everyone who has ever taken a marketing course, or been exposed to marketing literature, is probably familiar with Abraham Maslow, a great social scientist. In the late 1960’s, it was Maslow who developed a hierarchical, or layered, theory of human needs and values. Maslow focused on human potential, believing that people go through stages to reach their highest levels of individual capabilities (just as in nature and evolution).

For me, and I believe for every customer experience strategist and marketing practitioner, there are parallels to Maslow’s ideas of moving through basic needs to the highest level and what we are endeavoring to achieve with customer loyalty behavior optimization. The metaphor is easy to see in dendrochronology, the rings and layered composition of a tree, which also has a lot to do with time.

The Bark and Outer Rings – Most Recent Product or Service Experiences/Transactions

A supplier is the most exposed during the latest encounter or transaction with a customer, whether online, offline, or both. If customer-supplier involvement could be ‘viewed’ the same way we look at a tree, it would be the Outer Rings or Bark, what is seen first when encountering the tree. Whether that transaction is a purchase, service experience, or communication isn’t particularly important. What is important is that the customer’s top-of-mind, tactical attitude about a supplier will certainly be affected by the most recent involvement.

As a result, the positive or negative impression left with a customer has both tactical and strategic implications. Tactical, because the attitude tends to be superficial and short-term, and largely driven by what happened in the immediate past. Strategic, because if not either reinforced (positive transaction) or proactively and quickly addressed (negative transaction), the impression is likely to have deeper, longer-term engagement, belief, and behavioral implications for a supplier.

Without reinforcing a positive transaction, this can create a vacuum in the relationship; and the customer may be left to feel taken for granted, especially if an assertive competitor is working to create a relationship. If the negative transaction isn’t quickly and sensitively addressed, the customer may be looking for, or at least may be willing to consider, an alternative supplier.

Those of us in the customer experience evaluation and consultation industry, who measure the loyalty behavior effect of transactions and transactional components, find that we must look at them from both tactical and strategic perspectives. Tactical, because our research can help groups like customer services or sales identify areas of process and relationship management ‘trigger points’ or ‘moments of truth’ which can be improved. Strategic, because there may be direct linkage between these encounters and real loyalty. The strength of that linkage must be determined if a supplier is to optimize customer experience..

So, if endeavoring to understand the impact of the last, or most recent, transactions, both current and former customers should be debriefed.

Middle Layers – Building the Relationship/Creating Long-Term Perceived Value

Here, once the relationship has been established, we are concerned with the supplier’s ability to deliver and provide perceived customer value within specific products and services over time. We are also focused on understanding the strength and vitality of the relationship, and the opportunity to build on tactically-created value.

When addressing measurement protocols in the Middle Layers, we’re principally interested in brand preferences and choices, plus performance over time. Consequently, we ask current customers about:

– Perception of supplier (and key competitor) performance in key areas, and importance of those areas, also including elements of reputation and image.
– Likelihood to use the supplier’s products or services in the future
– Level of favorability regarding the current supplier, and competitive suppliers
– Evidence (and frequency) of having communicated to others, positively or negatively, about the value received, irrespective of medium
– Likelihood to consider the supplier as the primary source for a product or service, or exclusive source
– Likelihood to recommend the supplier
– Evidence of performance change over time
– Evidence of expressed and unexpressed complaints

The Middle Layers are where most customer loyalty researchers direct their efforts, principally because that’s what senior management, sales, marketing, service and related functions want. However, as indicated above, there’s a great deal more to learn at this level than just degrees of satisfaction with the supplier and competitor, or likelihood to recommend. This is where advocacy and bonding behavior begins to take shape.

In the Middle Layers, we can identify both improvement priorities and potential program initiatives for enhancing ties and perceived value with these customers.

Heartwood – Commitment and Advocacy Through Perceived Supplier Reputation/Trust Level

In looking deep into the core of supplier reputation and trust, all customer groups and stakeholders – including staff, investors, and the financial community – must be considered. To understand how the supplier is perceived at this level, in addition to finding out about top-of-mind awareness and salience, familiarity with/comprehension of various offerings of the supplier, and predisposition to purchase or recommend the supplier’s products or services (as would also be done at the Middle Layers), it’s vital to determine:

– How business practices, i.e.ethics, are regarded
– How the supplier is seen as an ’employer of choice’ by staff and/or whether they
would be recommended as an employer
– The supplier’s image in such areas as community involvement, public issues, the
environment, etc.
– Deep feelings and emotional attachment to the company of various stakeholders

Many companies don’t delve into customer, employee, and community perception at the Heartwood depth; but, deeply held emotional involvement has a great deal of loyalty-leveraging impact. One of our areas of research activity, for example, deals with the level of staff loyalty toward the company, advocacy on behalf of the customer and the degree of alignment with the company’s customer loyalty objectives. We’ve found such a strong correlation between customer loyalty and staff behavior through ambassadorship and productivity that such studies are often conducted in tandem to get the most complete picture of overall value creation effectiveness.

There’s one last thing to remember about the tree growth – customer loyalty behaivor analogy, which applies equally to customer experience, and really to all areas of customer management, it typically takes a long time, and a lot of effort, for a tree to grow and mature, but it can be cut down very quickly or slowly decay without nourishment. Keeping the tree healthy and protected, from the Bark to the Heartwood, is in the best interest of every enterprise.