On a typical summer day in Hong Kong, the weather is hot and humid with lots of sunshine. I take the subway to a business meeting and when I come out of the station, a sudden and heavy rainfall has replaced the sunshine. It will take a few minutes’ walk to get to the meeting place and I am dressed in my best business suit. I don’t want to get wet but the meeting starts in five minutes. I am in a panic.
A street hawker saves me. He is selling umbrellas just outside the subway station. The umbrellas are in an untidy pile on top of some cardboard boxes. The colors and varieties are limited, but the prices are reasonable. I don’t stop to think. I pick one with a conservative look in navy, and I pay. The whole transaction is completed within a minute.
It turns out that the umbrella was even more durable that others I bought at stores. I used it for several years before it wore out. Whenever I pass by that station, I try to locate the umbrella hawker so I can buy a new one, but I have never seen him again, not since that rainy day. This was a one-time transaction.
The Common Goal of Every Organization
Service and operations people want to drive customer satisfaction. Branding and marketing people want to drive brand differentiation. Yet, satisfaction and differentiation are the means not the end. Service staff satisfy customers to make them happy, to retain them and to generate positive word-of-mouth. Branding staff try to differentiate their brand from competitors and to make customers remember their brand and return for future purchases. Satisfaction and differentiation are different means to achieve the same end. The common end is to turn one-time customers into long-term advocates who drive referrals (NPS) and repeat purchases (retention) – the resultant behaviors of loyalty.
The umbrella hawker never expects customers to repeat their purchase – it is merely a one-time transaction that happens outside the subway station on a rainy day. He wants you to buy on the spot that one time. Whether customers return is not his concern. He doesn’t care about customer loyalty at all.
Other than the umbrella hawker with his one-time transaction, are there companies that do not care whether customers return for repeat purchases? Monopolies really don’t need to care about this. Customer loyalty doesn’t matter to them because customers have nowhere else to buy.
Besides monopolies and hawkers with one-time transactions, caring about customer loyalty is universal – we want customers to keep coming back and to say good things about us. Customer loyalty is something that all enterprises in competitive markets need to survive and prosper. Therefore, customer loyalty is not only the goal of service staff and branding people, but the common goal to all departments at all companies across all industries. Customer loyalty is the common goal of every organization.
Managing Your Brand = Managing Total Customer Experience
The design and branding guru Walter Landor said, “Products are built in factories; brands are built in the mind.” Brand is a perception not solely created by advertising or product. Customers perceive a brand through every experience that they have at every touch-point and channel from the beginning until the end of their customer lifecycle. A brand, literally, is represented by the total customer experience (TCE).
Therefore, by logic, branding covers the total customer experience to drive customer loyalty – retention and referrals. However, this is not always the case. In reality, managing a brand usually falls under marketing. This is the primary reason for the disconnect between branding and business results.
When “managing your brand = managing marketing,” your branding efforts and investment will focus heavily on marketing-related activities. But, in truth, it could be the other touch-point experiences that affect how customers perceive your brand and influence customer loyalty. When you are blind to this notion, you cannot see the full picture. The price of not seeing the full picture is incorrect investments and biased measurements. This causes the disconnect between your branding efforts and target business results.
With the TCE Model, you can invest and measure objectively and effectively because you can see the full picture. The full picture consists of all the touch-point experiences that affect how customers perceive your brand and the importance level of each in driving the ultimate objectives of branding, referrals and repeat purchases, the resultant behaviors of customer loyalty. We have built TCE Models for and applied them to various industries, including financial services, telecommunications, and both governmental and non-governmental organizations (NGOs).
The TCE Models for FSI, Telco and NGO
Figure 3 shows one example of the application of the TCE Model in financial services industry to a credit-card issuing bank. The data are derived from Credit Card Customer Experience Research, an independent research commissioned by Global CEM, with 4,567 valid responses of credit card holders from 16 major credit-card issuing banks in Mainland China.
The horizontal axis spans the customer lifecycle of credit card users, from experiences at X1 to X39 within the customer life-stages: Image, Application, Card Usage, Promotions, Gift Redemption, Repayment and Service. The vertical axis addresses all interacting touch-points from T1 to T27 within the channels: Face-to-Face, Call, Mobile, Online, Direct Marketing, Partner, Media and Others.
White stars denote the touch-point experiences that are important in driving both retention and NPS, white dots are important to retention, grey dots important to NPS, and black dots unimportant to both. (Note: The importance rankings of the three TCE models shown in this article were generated using the derived importance approach with regression analysis.)
Figure 4 is a simplified version of the TCE Model for a mobile network operator. These data are derived from the Mobile Network Operators Customer Experience Research, an independent research commissioned by CustomerThink (U.S.) and Global CEM, with 2,275 valid responses.
The horizontal axis represents experiences (from X1 to X30) that customers encounter and their corresponding life stage (Image, Activation, Usage, Valued-added Service, Payment and Service). The vertical axis represents the corresponding touch-points (from T1 to T27) covered by various channels (i.e. Face-to-Face, Call, Online, Direct Marketing, Media, Marketing and Administration). White stars denote the touch-point experiences that are important in driving both retention and referrals, white dots important to retention, grey dots important to referrals, and black dots unimportant to both.
We have built and applied the TCE Model to an NGO for tourism. Figure 5 represents the TCE Model of global city tourism using data derived from Global City Visiting Experience Research, an independent research co-organized by CustomerThink (U.S.) and Global CEM, with 2,585 valid responses from tourists surveyed in ten cities: Amsterdam, Dubai, Hong Kong, London, New York, Paris, Shanghai, Singapore, Sydney and Tokyo.
The Visit Experience lifecycle covers experiences from X1 to X36 and life stages including City Image, Pre-Arrival Experience, Arrival Experience, City Experience, People Experience, Enjoyment Experience and Departure Experience. These experiences are delivered by touch-points from T1 to T30 within the channels of Governmental Organizations, Commercial & Non-Governmental Organizations and Other Channels.
White stars denote the touch-point experiences that are important in driving both repeat visits and NPS, white dots are important to repeat visits, grey dots important to NPS, and black dots unimportant to both.
Emancipate Branding: Hijacked by Marketing No More
With the TCE Model, you can change from the biased “Managing Branding = Managing Marketing” to an objective “Managing Branding = Managing TCE” perspective. Whether you work in financial services, telecom or an NGO organization, and whether you run a credit-card issuing bank, mobile phone network or promote global city tourism, you need to see the full picture and quantify the importance of each touch-point experience to drive customer loyalty.
Marketing departments may deploy great advertising and make great commercials. The commercials produced may have successfully won prizes and attracted eyeballs, but do they justify the effort and resources? We have seen award-winning commercials that created only short-lived awareness and buzz but not long-lasting impact to the brand. Would anyone in your organization dare to speak out and say that resources spent on these marketing efforts could be used more effectively in some other channel or touch-point? Who will voice this opinion when branding is the responsibility of marketing?
To maximize the effectiveness of branding, the branding function has to gain its independence. It is a good thing to have a Chief Branding Officer, detached from marketing and reporting directly to CEO. Similarly, to maximize the effectiveness of customer management, a Chief Customer Officer should be independent, not attached to customer service. Or, more ideally, to have a Chief Experience Officer, with 100% independency and full responsibility, and zero attachment to any function or department, neutrally assessing and managing the effectiveness of both your total customer experience and branding efforts.
When someone is not biased, they can objectively evaluate what your organization does and optimize resources across channels and touch-points to best achieve target results. Now, in the new experience economy and the fast-changing Internet world with so many newly-emerging touch-points, media and channels, you can equip these three officers (Chief Branding Officer, Chief Customer Officer and Chief Experience Officer) with a tool (The TCE Model) to perform their duty (Driving Customer Loyalty) in an objective and quantifiable manner.
Strategy is about resource allocation. The effectiveness of a strategy is judged largely by the effectiveness in resource allocation. The conventional strategy on branding, biased towards advertising and marketing-related activities, uses your resources poorly, no matter you are a FSI, Telco or NGO, in driving repeat purchase (retention) and referral (NPS) – the resultant behaviors of loyalty. To maximize the productivity of the limited resource of any organization, it’s time to connect your branding efforts to business results, it’s time to get the right party in the driver’s seat, it’s time to emancipate branding from being hijacked by any single department, and it’s time to rethink “how to” and “who should” manage your brand. It’s time to change.
Managing branding by your Chief Experience Officer. Why not?
Editor’s Note: The quote “Products are built in factories; brands are built in the mind” was incorrectly attributed to David Ogilvy. Updated 9/15/2017 at author’s request.