Companies are shooting themselves in the foot consistently when it comes to their Customer Experience.

Why though…and how do we help them improve?

In the past 18 months, we’ve seen several major Customer Experience (CX) blunders from big brands. Three that come to mind immediately are: the exploding Samsung Galaxy S7 Note smartphone,  the passenger dragged off a United Airlines flight, and Volkswagen’s ‘diesel dupe’.

This is a global issue. In the US, we have also seen Wells Fargo’s fake accounts issue, while in France, according to Forrester research, not a single brand surveyed  received even a “good” rating for CX.

Meanwhile, German CX has long been considered very poor, and in Singapore, sub-par CX is costing brands $26 billion per year!

There is a pathway to improving CX globally, but it’s not necessarily the route many currently think it is. We need to shift our thinking to start from a different place.

What is the most important aspect of Customer Experience?

That would be quality of the product or service you are offering to the marketplace.

Quality is the main pillar of any product or service – and definitely the backbone of CX.

When you remove the quality, the experience is definitely going to suffer; if you remove the quality of a car, the experience of driving it and transporting your family will suffer. Ultimately, people won’t want to buy it.

The failures of companies such as Samsung, Volkswagen, or United Airlines are ultimately failures of quality, which arise from shortcomings of company culture at different levels.

So, above everything else, there is this: whatever you are producing or selling must be quality. No experience, however well-designed, can make up for a lack of it.

But what do Customer Experience thought leaders say?

There are many thought leaders around CX and they all approach it a little bit differently:

Barak Eilam, the Nice System CEO, is perfecting the Customer Experience.

Paul Segre, the Genesys CEO, says you can’t have exceptional omnichannel products without a focus on innovation and quality.

Lior Arussy says you need to “exceptionalize” your Customer Experience.

Shep Hyken wants you to amaze customers.

Mike Wittenstein has defined the “human prototype”. In short: understand the customer.

Colin Shaw has defined the intuitive customer.

Ted Rubin talks about #RonR – the return on relationship.

I respect those leaders a lot, so I try to think of CX this way:

Quality is imperative for successful Customer Experience

  • Quality is the key pillar for excellence.
  • Design is both how the product is designed and how the experience is designed.
  • Culture refers to the basics of how people work together and make decisions, and how the quality is maintained.
  • Strategy is how the quality product gets into the market and becomes known globally.

Any product roadmap needs to amaze – I firmly believe that. Some questions we need to ask about the quality of the end product are:

  • Did we include the enhancements in our new product or services?
  • How is it designed?
  • How it is tested?
  • What are the process and specs?
  • Who are the partners and suppliers? Are we checking their quality in detail?
  • How is quality and testing assurance being measured?
  • What we are missing to make our quality bulletproof?

The quality of the product/service is then reinforced by the culture:

  • Are people cutting costs and corners to have better margins?
  • Is it OK to reduce quality for profits?
  • Is quality protected in every situation?

Only after the quality is assured and the culture protects the quality of the product can you think about the strategy. The strategy is meaningless if:

  • The product is not quality or lacks good design
  • The product is quality but the culture reduces its quality to increase revenue

In either of those two situations, you could have the best strategy in the world, and it would not be executed properly.

Either the product would lack quality, the design would lack quality, or the culture would prevent it from reaching market in the most effective way possible.

This is why I don’t lead with strategy when thinking about CX. You need to lead from a place of quality in all details first.

The Samsung example: what went wrong?

Samsung themselves blamed the Galaxy S7 Note issues on bad batteries and, probably more accurately, a rushed manufacturing schedule.

In fact, as Fast Company has noted, it truly was a crisis of leadership: their mobile silo head was aware of battery issues and rushed ahead with production anyway.

This is important to remember, however: phones use lithium ion battery packs for their power (virtually all phones do). The liquid within lithium ion batteries is highly flammable, which explains other phone explosions and issues, including Nokia in 2009 and an iPhone giving someone third-degree burns in 2015.

The point is: the phone manufacturing industry knows about the potential problems with phone batteries. They continue to use lithium ion because they are smaller and lighter than less-destructive chemicals.

Because the potential problems are known, there is a huge responsibility on the phone manufacturer to triple-check their product.

Instead, Samsung suppliers “placed pressure on plates contained within battery cells”, according to a memo, which “brought negative and positive poles into contact”.

This created variations of tension and exposed electrodes, which caused the phone to explode/catch fire.

You cannot leave quality as a risk factor in these processes, even more so when third parties are involved. That is a cornerstone of trust.

So this could have happened to anyone, from Apple to Android, or any other manufacturer. But it happened to Samsung.

The open market impact was disastrous in brand value, perception, CX and trust.

And now we come to an important point: tying these problems to the bottom line and revenue.

What was Samsung’s revenue hit,?

I will be blunt here: in companies where CX still doesn’t resonate with the top executives, the only way to get that “seat at the table” is to explain to them how CX ties to the bottom line.

William Stofega, from the International Data Corporation, noted that Galaxy Note sales typically represent about 10 percent of total Samsung phone sales, and that half of those customers may defect to Apple –  a multi-million dollar loss.

To kill off the Galaxy S7 Note they eliminated $17 billion in market value – a historical mistake.

This all comes from a lack of quality.

Overall, companies are losing about $62 billion per year on poor services and CX – in 2013 that number was around $40 billion, so it’s growing rapidly.

Why does this happen?

There are many reasons. Most of them come back to a fundamental misunderstanding of quality.

First, there is a “making numbers” culture that we saw with Samsung. They were aware of problems with batteries and pushed ahead to make a number and please people up the chain. The results were awful.

Second, there is a silo problem in how companies are organised. Information does not flow from Person A to Person B easily.

This creates many ineffective processes, which are passed onto the customer in the form of unclear regulations and inconsistent experience/service.

Third, as noted in this research, many current executives of S&P 1500 companies do not know how to value customers for anything other than their eventual payment.

They haven’t developed systems to effectively get feedback from them, involve them in decisions, or gauge their reactions.

Mostly they know how to operate internally and then hire a PR firm if something doesn’t work externally.

How can we improve the landscape?

In any sector, you need a focus on quality. I see this as happening via a 15-step process:

  1. Establish a culture of quality: this means bringing in a leader focused on delivering quality of products and services. He/she understands the impact on CX.
  2. Make sure you hire quality only: and lead with quality delivery and CX in mind.
  3. Implement quality assurance standards and methodologies: these should work with your sector and connect with leadership KPIs.
  4. Learn from the mistakes of others: Samsung would be one example.
  5. Use the ‘3 Ps’ of Planning, Prevention, and Proactivity: reaction costs a lot more than prevention
  6. Educate your organisation constantly and provide tools to ensure quality control: Invest in quality, design, CX and service excellence.
  7. Avoid short cuts for quality: as with Samsung, they can be very costly.
  8. Do not preach quality without delivering a clear pathway: You need all detailed parts of a testing plan to ensure your products and services are you’re the best.
  9. Reduce communication issues across silos: these lead to inconsistent experiences for both customers and internal employees.
  10. Involve everyone who needs to be involved: this means transparency of information. You don’t want to restrict information to only certain levels. This usually happens when people are concerned about certain data being proprietary. That’s a concern, but in general, restricting information at the top levels causes problems.
  11. Usability testing matters: reduce complexity of what you produce, and don’t drop features or functionalities without legitimate testing to back it up.
  12. Involve customers, partners, and employees in the testing process: add this to roadmap and delivery. Improve your product/service via feedback from multiple channels including detractors, and neutrals to understand some of your pitfalls.
  13. Analyze potential risks, and for each create a clear mitigation plan: Samsung did not do this and the results were catastrophic.
  14. Design the services and CX: both digitally and physically in parallel with all of the above.
  15. Don’t give excuses and immediately enter reactive mode when your company makes mistakes: rather, try to prevent mistakes – and when they occur, try to learn from them. A mistake learned from is less of a failure. Some even say FAIL stands for ‘First Attempt In Learning’.

The new metric we’re moving towards

With apologies to Ted Rubin and #RonR (return on relationship), we need a ROQ metric.

This would be return on quality, which is an imperative for your CX

Simply put, look at the difference between your revenue and customer acquisition when you’re making quality products and integrated decisions.

For easy math, let’s say that’s $100 million. Now, look at your fiscal numbers when decisions are rooted in speed or quantity, as opposed to quality.

Let’s say that number is $70 million. You just left $30 million on the table because you down-shifted the focus on quality experiences.

Quality and design beats all

We need a better metric to measure it. Standard CX metrics are good (and getting better), but we need a way to directly speak to the quality (and design) of the product and experience.

If we had a metric like that, and decision-makers were judged on it, it would strengthen the culture for quality products.

Less people would cut corners on cost and other factors – because their incentives would be connected to product quality, they would prioritise quality and design over cost measures.

 

About The Author

Ricardo Saltz Gulko
Managing Principal at Eglobalis

Ricardo Saltz Gulko is a global strategist, thought leader, practitioner and speaker in the areas of customer experience, experience design, customer success, and global professional services. Ricardo has worked at numerous global technology companies, such as Oracle, Ericsson, Amdocs, Redknee, Inttra, Samsung among others as a global executive, focusing on enterprise software, services, design thinking and customer experience. He currently works with companies of varying sizes to transform themselves around CX, customer success pathways, and professional services.

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