Clients often tell me that my firm Aveus excels at finding money trapped in the performance chain* while strengthening customer experiences. We love the kudos for delivering on both halves of the sentence, but what’s most important here is the word while. We know a company can do both at the same time. In fact, from our experience and research, we know that addressing one without the other leaks both money and customers from a business.
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.
