On Purpose

by Shaun Smith

  ‘So, I started with why do we actually need to do this at all? Why do we need to create a new differentiator if we already have a superior network? Second, why this particular strategy? Here, we touched on practices we have used with our bigger customers and were able to say that that relationship building has proven to be successful. Well, of course, the network is the first entry point but keeping your customers for years is more about the relationship.

  The leadership conference was key in bringing it together and for the executives to work together and try to find common ground in this belief about customer-centricity. We successfully did that with the help of the ‘Stand Up’ Workshop along with some strong ambassadors among the senior management team. By the time we got to the end of the session everyone was very enthusiastic and saw the benefit of proceeding on this path. So much so, that after that moment no one asked me for a business case again and everyone started embracing customer intimacy thinking, which I think was an interesting shift from short term to long term. We really needed to build upon belief, and that proved very successful for us.’

  Image 12.1 Stand Up Workshop agenda

  But Soraya also realized that belief only takes you so far and then you have to show results. She thought the time was now right to pilot in a couple of the operating units:

  ‘When I realized that okay, the belief is there, we’re talking about the things that really matter – customer loyalty, but now is the moment to show some success, because if you wait too long that belief slips – I started to implement very small programmes in different countries, just taking the most enthusiastic operations, such as Poland for example. Poland is a market that is very traditional and very transactional as well. So if you wanted to take a first step in a market and build upon that belief that customer experience brings benefits, Poland for me was the right market to start with. They are not the smallest, they are not the biggest, they are not seen as Central Europe but not seen as Western either, so an easy country to copy things from. So I started a small programme where we said, “Okay, since we’re so transactional and so traditional, from now on we are going to empower the employees that have contact on a daily basis with our customers to follow their nature, to interact and build relationships, because that’s what they want to do but we’re preventing them because of our processes.” We said to the team, “Just do what you think is good for this customer and fix it.” So eventually they were able to work outside the processes and we saw their NPS go from –33 all the way up to +26.

  ‘We did some testing with them and we measured their employee satisfaction and compared that to the control group and found this was also 26 NPS points higher than for the control group. We asked the pilot group what we needed to do to improve our customer experience. We asked it of the control group too and there were two completely different answers. The pilot said much more about building relationships, like take time to listen to the customer and respond and act on that, whereas the control group said, “We need more tooling, we need a better system.” So small programmes but really tangible results. Coincidentally, at this time, there was a regulatory change happening in Poland: customers had a chance to get out of their contract. We lost some customers in this process but it gave us the means to actually measure what happened to the customers that went through this pilot group versus the control group and we found that the customer churn was 50 per cent lower in the pilot group.’

  Insight

  Image 12.2 Liberty Global brand beliefs

  The next step is customer insight because the danger is in making assumptions about what customers value or trying to improve everything, which is often the default in these initiatives. The outcome is a shopping list of improvements that might never be achieved. The alternative is to be really focused on what customers value and then to design an experience to deliver it. We carried out a customer experience survey for our Liberty Global local companies to determine the value drivers and the touchpoints that offered the greatest opportunity for differentiation and driving NPS scores. We created experience curves, what we call our ‘ECG’ curves, to show what the current experience was like as well as the desired experience that would differentiate the brand.

  Soraya offers a good example of how this insight guided the thinking:

  ‘The key is to understand the difference between doing those things that generate loyalty and just doing the job customers expect from you. One good example of that was installation. Our company has been talking about installing equipment such as modems for years; that we needed to do it quicker, cleaner, better etc, which all comes with a high cost, of course, because a technician has to do all of those things. We stopped that. We said, the satisfaction level that we’re at is already good enough for our customers and all of the initiatives we’re building to be quicker, faster etc are wasted because they are not going to drive loyalty. We could see from the experience curves (“ECG” graphs) and data correlating relational NPS to touchpoint satisfaction what it is that really drives loyalty and that was more about the ongoing customer relationship. We realized that success would come not from striving to do everything perfectly, but from really excelling where it matters to our customers. That was the way to create a memorable experience.

  ‘Some of our operational people had difficulty grasping that concept so we used an example to help them understand; if you go to the baker and ask for bread you don’t necessarily become very loyal if you get that bread in three seconds instead of waiting 10 seconds. However, you might become more loyal if you were to get warm bread or a smiling face from the person you engage with. These are benefits other than the bread itself. We had a lot of conversations saying that our installation process is just what customers expect from us and was not the way we were going to differentiate. So we made a clear decision that despite the fact it has been the focus for years we were not going to excel there. Yes, it needs to be on par, we need to do it well, we cannot have the customer wait for six weeks to get an installation, but the place to over-index is customer care and therefore we are building our programmes to deliver simplicity, the personal approach and top-class service.’

  Define

  Conducting customer experience research of this kind leads to insight and the identification of the value drivers. These then provide a firm foundation to define the brand promise, a more detailed articulation of the brand positioning and purpose. The brand promise is used primarily as an anchor for experience design and to communicate the ‘what’ to employees. Some organizations are brave enough to communicate this to customers as well in the form of a guarantee. Our next example, Premier Inn, did just this but for UPC the brand promise was defined to articulate what the group meant by ‘customer intimacy’:

  ‘One of the things we asked ourselves was, “Who do we want to be in the market? What do we want to deliver?” We tried to encapsulate this in three simple principles: “simplicity, personal approach and top-class service”. We then defined what we meant by these principles because they are still very broad. We did this with all of our executives in Europe, the owners responsible for B2B customers in 12 countries together with our MD of Liberty Global Business Services in Europe. We had a long discussion around the questions: “What do we stand for?” “What do we want to be for our customers and how do we operationalize that?” We then started to look at what does the journey look like today and is that journey the same across Europe? We found out that 26 of the 35 touchpoints are exactly the same across Europe so we started to frame them and standardize.

  Next, we did research with our customer base in different countries to find out if there are cultural differences when we ask about satisfaction, and what customers think are the most important touchpoints. We found that there were no significant differences, so we could proceed with our European framework. So we worked together with the executive team to frame our customer strategies and principles, and to agree what is the current customer journey, what is o
ur ideal customer journey, where do we need to improve and build loyalty.’

  Image 12.3 Liberty Global scorecard

  Frans-Willem de Kloet, at that time managing director of Liberty Global Business services, also made the point that the process of defining the principles was a valuable way to bring people together in consensus:

  ‘We spent quite some time with the teams in the countries defining customer intimacy. What does it mean and what does it mean for our customers? And defining our three key brand principles of “simplicity, personal approach and top-class service”. We took quite a while to agree on them, but once we did we realized that we can actually get to a much deeper level of emotional engagement with the customer. Through simplicity, personal approach and top-class service, you ultimately touch the emotions of the customer. So then we went to our customers and our employees and we said “Okay, what does simplicity mean to you? What would it look like?” We applied that approach to all three principles and that gave us an overview. Then we said, “What are the underlying principles to create proof points?” And that resulted in a brand promise and a customer commitments document and presentation that communicated this direction to all of our people.’

  Design

  The value of defining the brand promise is that it clearly indicates the way that you wish to differentiate. That is a crucial decision, and one that many organizations fudge. Being in the mass market does not mean that you have to be all things to all people. Strategy is about choosing how to be different in a way that represents value for your chosen target audience.

  Erik Wiechers, general manager of UPC Netherlands, expresses this very clearly:

  ‘When I joined the company we had fast-declining revenues and EBITDA [earnings before interest, taxes, depreciation and amortization], so we needed to make a shift in strategy. I worked for GE for about four years at the time when the CEO was Jack Welch and his saying, “control your own destiny or someone else will”, really applied here. I also worked with Michael Treacey and Fred Wiersema, who wrote the book, The Discipline of Market Leaders, and one of the things I learned from them is you need to make a choice as to where you want to excel. For me, the only sustainable competitive advantage in the long term is customer intimacy.

  What we have defined at UPC is a unique customer journey, because the only things that people remember in life are the highs and the lows from an emotional point of view, so that’s what we really tried to achieve.’

  How do you design an experience that differentiates? We usually run a two-day customer experience workshop that refines the brand promise and then designs the experience to deliver it. In the case of UPC, the first workshop was just one day and focused on the ‘stand up’ piece. This led to the research and piloting that we have already discussed. In 2013 Soraya decided to conduct a ‘stand out’ workshop at the annual leadership conference. The purpose was to design the new experience based on the research that had been conducted, and to share the results of the pilot activity in Poland that she saw as being so important to cementing commitment to the broader roll-out:

  ‘We have 12 different markets across Europe and of course some perceive themselves as more mature than, for instance, Poland. We hear local company executives say, “We are different, we are special”, but, you know, often it turns out that the similarities are bigger than initially thought.

  So we ran the ‘Stand Out’ Workshop and the Polish team presented their programme but they focused mainly on the emotional change. Figures are important – show them by all means but try to build upon the belief and emotion. So we did some rehearsing to get that right and it was just spot on. Everyone was applauding at the end because they could feel the team leader’s passion. During that day everyone said “I want to copy that programme and, by the way, can I hire this manager?” So tapping into that belief and enthusiasm and trying to get the people in the audience involved was the right thread throughout the whole journey.

  ‘All the countries actually took on a challenge: to come up with something to stand out in their market. It needed to be new for their market, but they could copy something from another country.’

  The Stand Out Workshop was an opportunity to really make some strategic choices about which touchpoints to over-index. It led to some fierce debate but the outcome was a clarity that had not existed before. That clarity then led to identifying the innovations and technology that would deliver the experience. The sad fact in many organizations is that it tends to work the other way round: the technology dictates the customer experience. Erik Wiechers summed this up in his usual forthright style:

  ‘What most telcos do is to try to improve everything, but improving everything makes sure you remain a “flat liner”, and a flat liner is a “dead liner” in our industry because it means that you have no differentiation at all. Everything we do adds to the brand; the brand is a huge asset for us if we build it well. So, the real question is “How will this initiative add value to our brand?” – and to the customer, of course. So we only do those things that add value at the touchpoints that differentiate the brand and add value for the customer. Sometimes people think it strange that we don’t invest in everything, but doing so doesn’t make you a unique organization, it makes you look rather like everyone else in the industry.

  ‘Increasingly, of course, we have to consider digital as well as the human interface. We’ve got eight channels that can be used by customers and they are all aligned with the customer journey; it’s one experience, there can only be one experience otherwise it’s too expensive to build because we have an industrial environment here. I’ve got thousands of customers, and they all will have the same overall journey, but the thing we will do is to make the online experience personal. So the customer calls, has a question, and we make personalized video in real time to help them. How that works in practice is that we will have video of all 27 steps in the customer journey, and the computer will select from those 27 steps, based on the customer question. Of those steps six, say, will be selected and edited and made available as a video, depending on the need of the customer – so it will feel very personal.’

  Align

  One of the ‘seven sins’ is silo thinking. The antidote to this is to ensure that the initiative is cross-functional. Soraya, as the director of customer excellence, was clearly in the frame to deliver the experience strategy but she knew that she couldn’t do it alone so she looked at forming natural alliances across the business such as marketing, operations and segments both within corporate and our local companies to help her. One such relationship was with Michel Pilet, the marketing and communications manager of Liberty Global Business Services:

  ‘Up until now my role was to translate the customer intimacy strategy into our communication, where Soraya really drives the strategy and the implementation in the carrier organizations because that’s where the main opportunity for improvement lies at this stage, really fixing the basics. I will be moving more into the proposition part – how we want to stand out as a brand, and how to make that more tangible.’

  Alignment is also about creating a common approach across different operating units. This is particularly difficult when those units are acquisitions and have their own legacy systems and cultures. It is even more difficult when one of those acquisitions happens to be called Virgin Media, a brand that knows a thing or two about customer experience. So how do you align people behind a common goal?

  Soraya took a very pragmatic approach:

  ‘The interesting thing was that we had just acquired Virgin Media in the UK. At first I held off that they needed to restructure etc, but they were present at the workshop and as they became part of the family they became more interested in this journey. Virgin Media have this image of being an entrepreneurial organization – and they are. If you go into their building you can see that they are. They are also very good at drilling down to the lowest level of detail and quantifying it, but i
n that process of quantifying everything they lost track of the emotional element, according to their operational people. Having customer journeys that show the emotions, and explaining how we can build upon that emotion in the contact that we have with our customers, triggered them to get an in-depth understanding of the path that we were on. So they came over to Amsterdam for a full day to learn about our approach – and they were mostly interested in the emotional part.

  ‘The main thing for me was not to try to standardize everything to the lowest level because we have very successful teams running our country operations, let’s not forget that. So what I wanted to create and deliver to them was more of a framework to win – so this is the playing field and we have some rules; everything you do needs to build upon simplicity, personal approach and top-class service. Within that framework to win we have clear loyalty drivers and you can decide how to apply them to your business. You can decide where you put the emphasis and how to do that. That means in reality that we have different programmes running in different countries. However, they are more similar than you might expect, probably because they are all building to the same means of simplicity and seeking to achieve the same metrics. For example, the Netherlands has been very successful in looking at where to over-index the experience; Telenet for Business, our Belgium affiliate, are really putting the customer at the heart of everything they do; Germany have fully embraced the strategy and have restructured their front line to be the customer experience centre; UPC Business Austria has developed a complete end-to-end service road map; UPC Business Poland is accelerating their cultural change programme on a daily basis; UPC’s cablecom business in Switzerland is becoming a very relationship-driven company; and Virgin Media business is driving the business through NPS. Finally, Czech Republic, Hungary and Romania are running welcome programmes and really looking for improvements based on data from customer feedback. So you can see how each market has developed its own approach, but they all relate to the loyalty drivers.