Dell Is Not Alone: Most Companies Are Efficiency-Driven

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Is your company delivering an effective customer experience? Most companies aren’t. They are using the conventional approaches that result in ignoring the emotions of the customer. The approaches, driven by efficiency and the need to comply with “standards,” typically go against human nature and wind up delivering an increasingly costly homogeneous experience.

Dell is one of them.

Based on what the 757 respondents of the July-August 2007 Customer Experience X-VOC Research—B2B Purchase Experience (IT Solution) survey told GCCRM and CustomerCentric Selling, Dell may be very efficient at individual attributes by performing better at most of the subprocesses (23 out of 25) throughout the entire buying experience than competitors, but the PC company is not delivering an effective experience at all. Among the 14 vendors rated, Dell provided the least-liked purchase experience to our survey takers.


Figure 1: Least-Liked B2B Purchase Experience (IT Solutions)—Dell Versus Average

For our survey, we broke the buying experience down into 25 subprocesses, from identifying and contacting the vendor through the sales process, implementation and integration and on to the post-purchase follow-up.

IBM performed better than the competition in only some of the sub-processes and under-performed in others. (As shown in Figure 2, IBM was rated the best at service and much worse than the average in price.) Yet, survey respondents ranked IBM’s B2B purchase experience highest.


Figure 2: Most-Liked B2B Purchase Experience (IT Solutions)—IBM Versus Average

Dell and IBM are similar. Both companies generate significant pleasure and pain peaks with the B2B customers surveyed. And Dell performed better in most of the sub-processes. So why did respondents like Dell’s experience the least and IBM’s the best?

Consider price. If you ask respondents what is important to them in their purchase process, they will most likely rank price highly. In our survey, 17.5 percent of the respondents rated price as the key reason for liking their B2B experience, and 19.1 percent of respondents rated it as the key in their least liked buying experience. But using regression analysis to derive the implied importance of each subprocess, we found that price is unimportant in the overall satisfaction, with an implied ranking as least important to a good buying experience.

This is despite the fact that price is the pain peak in a B2B IBM purchase emotion curve and a pleasure peak in a Dell purchase emotion curve.

Consider service. Although service alone is not equivalent to the entire buying experience, respondents rated service as the No. 1 reason for liking the purchase experience (38.7 percent), as well as for not liking a purchase experience (41.1 percent). Service appears in the pleasure peak in the IBM B2B purchase experience emotion curve. And it appears in the pain peak at Dell’s. This implies that service is the critical reason respondents like IBM and dislike Dell.

So when you consider whether either company is delivering an effective customer experience, you find that Dell, still driven by efficiency, is delivering an ineffective experience.

People experience events in a natural-time sequence and are affected by their emotions and sensations throughout the process. However, conventional approaches to customer experience management usually work against human nature by taking a discontinuous path to track satisfaction and by adopting a process-driven perspective in designing satisfaction research. It is still a company- or brand-centric approach, but it is not an experience-centric approach. And it ignores the emotional feeling of customers.

Conventional approaches usually drive enterprises to improve overall satisfaction in all aspects of an experience by complying with the quality level set by renowned standards organizations. Service levels are being raised continuously as a reaction to ever-increasing competition. But is this effective? Probably not. More resources are being expended to deliver a homogeneous experience. Excelling in all aspects is not only inefficient but also ineffective.

Most companies follow the voice of the customer to try to satisfy customers or improve that are important to the customers but poorly performed. Yet the companies rarely have a focus. As a result, they deliver non-branded experiences, blurring the lines among competitors.

Even though most companies are delivering ineffective experiences, you don’t have to do so. You can deliver an effective experience that creates positive emotions and memories in your customers. It will be one that delivers differentiated brand values to target customers and optimizes resource allocation. Just follow these core principles:

  • Principle No. 1: An effective experience has to be remembered. Noble prize-winning psychologist Daniel Kahneman pointed out that people remember only two things during an experience: how they feel at the peak and how they feel at the end. Uncover the subprocesses that are essential to your customers by deriving the “moments of truth” in an experience. Why bother to be as efficient as Dell if you can’t be effective?
  • Principle No. 2: An effective experience has to be contrasted. People are comparison animals. Whether we feel good or bad is largely the result of comparison. People need pain to contrast with pleasure. You should free up resources and release constraints by maximizing the gaps between the pleasure peaks and pain peaks. See how wide the gaps are between service (pleasure peak) and price (pain peak) in IBM’s emotion curve?
  • Principle No. 3: An effective experience has to be branded. A branded customer experience works to amplify your brand through intentional and consistent delivery of on-brand experiences across all touch-points. Only when you are branded can you differentiate. Only when you are differentiated can you have loyal customers. To optimize the branded experience, you have to deliver your most unique brand values and meet (or exceed) the most critical needs and expectations of your target customers through peak and end experiences. You should build the brand values into the experience and concentrate the limited resources on attributes that are important both to the customers and to the brand—and have the guts to select the critical few areas to focus on. The question is: Is service IBM’s core brand value?

The worst companies make customers feel bad with bad experiences. Average companies make customers feel good with good experiences, but these experiences are not effectively remembered, contrasted and branded. They are just wasting resources. The best companies never forget about delivering their target brand values and optimizing resources while they make customers feel good with effective experiences.

Take a paradigm shift from efficient to effective in managing your customer experience, and your organization can be among the best.

8 COMMENTS

  1. Sampson

    A well written and interesting article about two giants of PC business.

    The emphasis on emotions (in reality, sub-conscious feelings that trigger conscious emotions) is an important part of the Customer Experience Manager’s armoury. Unfortunately, the interplay of feelings and emotions are complex and widely misunderstood. For example, research in Australia has shown that even customers who score 7 out of 7 on customer satisfaction often describe their experiences with emotionally negative words like frustration, as well as with emotionally positive ones like happiness. Satisfaction is, as we know, a complex construct consisting of a number of individual emotions.

    Experience “pain” is another widely misunderstood area. My reading of Kahnemann, Arielly, Loewenstein and others research on pain (physical pain arising out of painful medical conditions) is that although pain is a bad thing, it is the trend (more painful, equally painful, less painful) that really matters. Arielly, who was very badly burnt as a young man and spent years in hospital recovering, describes experiments where patients undergoing painful treatments would willingly volunteer for further but less painful treatments after their normal painful had ended, so that they would end their treatment with relatively less pain.

    Customers like patients do not need pain during their experiences to contrast with the good parts, but they do need an emotionally positive trend. In other words, as Kahnemann and others describe, the Peak-End rule is incomplete. The missing component is an upward Trend. This provides what Kahnemann and others describe as the Peak-Trend-End rule.

    Further reading:

    Kahnemann Nobel Proize Lecture
    http://nobelprize.org/nobel_prizes/economics/laureates/2002/kahnemann-lecture.pdf

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  2. Graham,

    Thanks for the sharing.

    I agree with you totally that trend is vital for any experience. Actually, we anchor our feeling within an experience. A good start and a bad ending will make you feel worse than it should be, while a ‘low’ start and a ‘high’ ending will make you feel better than it actually is. Nevertheless, the contrast between the ‘high’ and the ‘low’ is critical to influence our feeling, but most important is, it releases the resource constraint and pave the way for the creation of a more differentiated and effective experience.

    Sampson Lee
    The Effective Experience

  3. Sampson

    I agree totally about the relative gap between the emotional low and high points. In the Dell and IBM examples you provide, Dell’s experience gets gradually worse over time. ending on a low note, whilst IBM’s falls then increases, ending on a high one. Customers talk about Dell’s poor experience too. As someone looking for a new high-end PC at the moment, it should come as no suprise that I wouldn’t touch a Dell PC with a barge-pole!

    As research by Paul Verhoef and others shows, customers break down long end-to-end experiences – like the Dell and IBM experiences – into discrete, time-bound, episodes that are evaluated individually and as a whole. The real challenge for Dell, IBM and other customer experience designers is to break the end-to-end customer experience down into individual episodes that make sense to customers. Then to design each of the critical touchpoints within each episode, so that the combination of results, process and interactions deliver an episode experience that starts well, but that gets better over time and that ends on an emotional highpoint. The emphasis is on ‘starts good but gets better’. As you know, I am no fan of pain in customer experiences. Pain comes with too much emotional and behavioural baggage to be manageable. And finally to integrate the individual episodes into an end-to-end experience that is more than just the sum of the individual episodes. Quite a challenge for Dell and IBM with their many internal and external collaboration partners.

    It would be interesting to see your take on how the Dell and IBM experience should be broken down into episodes, e.g. searching for a PC, trying and buying, getting going and installing software, daily usage, asking for tech support, etc., and how these individually and in combination make up the end-to-end customer experience.

    Further reading:

    Service Processes as a Series of Events
    http://publishing.eur.nl/ir/repub/asset/256/erimrs20021119130842.pdf

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  4. Graham,

    Yes, “Pain comes with too much emotional and behavioural baggage to be manageable.”

    Nowadays, with more and more severe competition and demanding customers, ‘good’ is the minimum bar which leaves most companies with not much options. However, there are choices on deciding which attributes are to be enhanced from ‘good’ to ‘excellent’. By discriminating among attributes/subprocesses, but not trying to improve all, branded experience becomes possible, and both customers and companies will benefit from it.

    Sampson Lee
    The Effective Experience

  5. Sampson

    I like your use of the experience touchpoint delivery score diagrams. They graphically display how well a company delivers each touchpoint against competitors over the end-to-end experience. But I would be interested in seeing the diagrams extended to incorporate two additional pieces of information.

    The first is the delivery expectations customers have of each touchpoint. For example, taking PZB’s ‘Zones of Tolerance’ model as a reference point, it would be interesting to see customers’ Minimum Acceptable Delivery and Maximum Expected Delivery mapped against each touchpoint as a box and whisker plot. This would help understand not only how the company scores against its copetitors, but also how it scores against customers’ zone of tolerance for deliver.

    The second is the relative importance each touchpoint has for customers. Although this would traditionally be done by mapping importance against performance on a separate diagram, there are advantages in incorporating this dimension in the diagrams you show. Perhaps emboldening plus colour coding could be used to do this. It would help understand which touchpoints were critical and which were not so critical.

    The addition of these two additional dimensions would make the diagrams much more self contained and usable. In one fell swoop they would show the sequence of touchpoints in the end-to-end customer experience, how well the company was doing vs. its competitors, how well it was doing vs. customer expectations and how well it it was doing on the critical vs. not so critical touchpoints.

    Just a thought.

    Further reading:

    MSS, MSA and Zone of Tolerance as a Measure of Service Quality
    http://www.amc.edu.au/mlm/papers/IntServMarketingConferenceBrisbane2002.pdf.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  6. Graham,

    They are good suggestions and added good values to my graphical presentation.

    The first suggestion should be easy to implement as we’ve coined it as the “Unacceptable Level” which should be similar as the Zone of Tolerance.

    The second suggestion is a bit tricky to execute. Besides the implied importance generated by regression analysis of each subprocess to customers, our model also generates and emphasizes the importance of each subprocess to brand, i.e. what we call the “Moments of Differentiation”. It takes both to design the ideal experience to optimize the effectiveness to brand and to customers.

    Sampson Lee
    The Effective Experience

  7. Sampson

    A challenge indeed. What you have is essentially two competing views of the customer experience. The brand-driven view that describes how well the experience delivers the touchpoints marketers think are important for the brand. And a customer-driven view that describes how well the the touchpoints customers think are important for them are delivered as part of an experience. The real brand being th eone that customers perceive of course. These would normally require two different views of the end-to-end customer experience. But there are obvious advantages of displaying the individual touchpoint scores, ZOT and importances side by side, thus enabling a direct comparison of the artificial world of the wishful marketer and the real world of the hard-done-by customer.

    An interactive graphical display that allowed you to view what was interesting to you – brand or/and customer view, individual episodes or/and whole experience, plus/minus the ZOT, etc – would be a powerful visual tool. Particularly if it allowed you to drill down into the complementary capabilities – processes, information flows, technologies, organisational roles, and other assets and resources – required for delivering each touchpoint to the required quality.

    The other missing dimension is some idea of how customers sense, feel, think, act and relate (as Berndt Schmitt describes in his excellent Experiential Marketing book) to the touchpoints, episodes and the end-to-end experience.

    The BHAG in all this is bringing all these elements that influence the emergent delivery of the sustomer experience, one touchpoint and episide at a time, together into a coherent view of the working end-to-end customer experience.

    Further Reading:
    What Should You Do? Experience the Brand or Brand the Experience?
    http://www.customerthink.com/blog/experience_brand_or_brand_experience

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  8. Graham,

    For sure an interactive graphical display that contains the experience ratings, unacceptable levels, implied importance to brand and to customers, X-MOT (moments of truth @ experience) and MOD (moments of differentiation) would be a powerful visual tool. I will work towards this direction, really thanks for your advice.

    There are two reasons why customer sensations are missing in the above diagrams. One: they are the emotion curves of B2B purchase experience thus more rational attributes are being stated (the emotional aspects will be featured at individual touch-point. Two: they represent the experience ratings of multiple touch-points, not yet drill down into each individual touch-point. You could notice much more sensational feelings are being addressed at my articles when referring to an individual touch-point of STARBUCKS, IKEA and LOUIS VUITTON. Customer experience is to a very large extent related to perceptions and sensations, I can’t afford to miss them.

    Sampson Lee
    The Effective Experience

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