You don't know your customers.

Customer experience is the key to a sucessful software company. Do you think you know your customers? Think again.

Wednesday, August 16, 2006

This blog is moving - no more updates on this site

I have created a new blog here:

All further updates will be made to the new blog - see you there!

Tuesday, August 08, 2006

Entry 10: Mazda RX-8 discounting survey responses

The Mazda community is very upset because Mazda has decided that the survey responses concerning the RX-8 will not be counted in some of the dealership service ratings. This is very interesting because Mazda has surveyed their customers, not liked the results, and decided not to include the data from the surveys. Nice.

This violates my golden rule of the customer: Don't ask your customer what they want if you don't plan on doing anything about it. Mazda has basically said, "Customer, please take this survey. If you score us high enough, we will count this survey, otherwise, don't bother."

This is almost the same thing that the lady at Jack in the Box told me. She said, "You will need to rate us on a scale from 1 to 10 where 10 is the best. If you rate us 7 or lower, that is the same as giving us a 1." People should stop trying to cheat the system and focus on the customer.

As you can see both of the above examples show how metrics that were intended to help customer service actually hurt customer service. The problem is that people measure things that are easy to measure. It is a lot easier to tally the results of a survey about customer satisfaction than it is to understand if you are making your customers happy, or being more friendly to customers.

Mazda has now broken the golden rule of the customer. They paid lip service. On purpose. Now Mazda customers are talking and they are not saying good things. They are talking about Mazda behind Mazda's back, and the "customer satisfaction survey" has created a bunch of dissatisfied customers. Hmm. Mazda should fire some people and go back to the basics of making great cars that customers love and stop all this nonsense.

Tuesday, August 01, 2006

Entry 9: Why should I tell you anything?

As Tami points out, customers will only provide you with personal information if they are receiving value in return. If someone off the streets wants to know whether you liked BrokeBack Mountain, you would probably tell them to buzz off, but if you like Netflix, like my friends Peter, Jared, and Kurt, then you will have no problem rating the movie.

You do this because you believe that Netflix will reward you for giving up this personal information, while the stranger on the street is untrustworthy. With Netflix, people are getting excellent movie recommendations in return for taking a second to rate a movie. With Amazon, people are getting excellent recommendations based opon their previous purchases.

Let's take this a step further. Why don't you provide feedback everywhere? If feedback is so valuable, why doesn't everyone ask for it? Why don't you tell the checkout person at the grocery store about your shopping experience? Why don't you tell Microsoft about your feature requests for Powerpoint? Why don't you tell your waiter what you REALLY thought of your meal?

I think Tami has hinted at the answer to these questions. People are trained to give only when they can get. There are some exceptions, but for the most part, people won't bother leaving feedback at a grocery store or with Microsoft because they don't feed any action will be taken based upon their input. At the restaurant, we know that if we send our food back, it will take a long time to come back to us, and we fear upsetting people that are preparing food that we are about to injest.

On the other hand, deep down, people are dying to leave feedback. We all want better shopping experiences, better meals, and better software. We don't mind giving feedback if we trust the company doing the asking, or at least feel that our input will be taken into consideration. In fact, if Microsoft asked me what I wanted in Powerpoint, and then added that feature to Powerpoint, I would be estatic. I would extol the virtues of Microsoft and become a real product advocate. I would feel ownership in the product and have tremendous customer loyalty. Instead, I get this:

Despite Microsoft's claims that they actually use this data, most people don't submit these error reports because they don't perceive any value by doing so. It appears that these things just go off into some black hole. Most suggestion boxes remain empty for this very reason. If you want me to tell you anything, I must trust you with my information and I must perceive some value in giving you the feedback.

Tuesday, July 25, 2006

Entry 8: It's all about Priorities

See if you can relate to this: a group of people in a room, looking at a spreadsheet, trying to decide what priorities are important for the group. It could be a group of product managers trying to decide features should go into the next release of the product. It could be a group of engineers trying to decide what they should work on. In any case, how does the group make a decision?

In my experience, the discussion usually goes something like this:
Person1: We've got to do #4. It should be the top priority.
Person2: But what about #3? The boss's boss says it is his top priority.
Person3: Last time we did this, we said that we would do #5 first starting this week.
Person4: Where is xyz project? Why isn't this on the list?
Person5: If we don't do #2 right away, so and so is going to yell at everyone on Monday morning.

And so it goes on without much progress and without anyone listening to anyone else. If your project isn't on the top quarter of the spreadsheet, it receives absolutely no consideration.
Eventually, the group decides to do projects that will keep the yelling as quite and infrequent as possible.

Is this the best way?

Specifically, when trying to prioritize customer requests, how should you decide what to do, and what not to do?

Here are the most often used prioritization techniques that I have witnessed:
1. The customer that generates the most revenue gets what he wants.
2. The customer that complains the most, the loudest gets what he wants.
3. Everyone else is placated.

The sad fact is that group decisions are hard. There is never enough people or time to please everyone. Customers understand this on the surface, but they still want their stuff done!

If only there was a way to get everyone's input, weight it properly, and make an informed decision that was fair to everyone...

Tuesday, July 18, 2006

Entry 7: Are you mocking me?

From time to time I step down off my soapbox and listen to the little people. They say silly things like:
1. We know what our customers want.
2. We tell our customers what they want.
3. Its a crapshoot.

For those of you in camp #1, here is my rebuttal:
Maybe you do know what your customers want. If so, consider yourself lucky. You are probably rolling in money. After all, every product is a hit, customers are thrilled, and you are just thinking about execution. What's that? It isn't like that? You don't have enough resources (people) to give your customers what they want? That is an easy problem to solve - hire more people. What? Can't afford it? Why not? If you know what your customers want, and you hire the people to give them what they want, they will pay you handsomely. What is the problem here? You are naive. There are only two paths - either you are rolling in money because you know what your customers want, or you are fooling yourself. Which is it?

For those of you in camp #2, here is my rebuttal:
Aren't you lucky. You own the market. Customers must be begging for your products and you must also be rolling in money. After all, you tell customers what they want, then you build it, and then you sell it to them. What a great system. You should tell them that they want more, or tell them that they are willing to pay more. You should tell them to tell their friends to buy - after all, you are the center of their universe. Your wish is their command. Why aren't you filthy rich? Confused? You see, you only pretend to tell your customers what they want so that you can build what you are good at without listening to them. It is a good thing you are good at building products, because you are unbelievably ignorant at marketing.

For those of you in camp #3, here is my rebuttal:
You win some, you lose some. It is a tough game to play. Customers are fickle, markets are unpredictable, and you are just hanging in there. Actually, consider yourself better off than either of the first two folks. You probably have some understanding of your customers, and you are listening, but not sure what to trust. I understand. There is no magic pill. You aren't kidding yourself. It takes a lot of work to build true customer insights. Hang in there and keep reading this blog because I might just have some ideas about this...

Tuesday, July 11, 2006

Entry 6: Who is looking out for the customer?

I see it over and over again: business decisions made for internal optimization at the expense of the customer. Examples of this include things like:

1. Let's make our customers fill out a complex order form so that we don't have to fill it out and then if they don't get what they want they have nobody to blame but themselves.
2. Let's tell the customer to wait in line (or on hold) when they want to order some product so that we can control our expenses.
3. Let's tell customers they can't change their shipping address after the order is placed because that is just extra work for us and we already got the order.
4. Let's organize our company around the way we create products instead of the way customers buy them so that it is easier to know who is working on what.
5. When we can't ship a product when we say we are going to ship it, let's not tell the customer, because they will just complain.

Does this sound familiar? Employees around the world are bitching and moaning about all the work they have to do. HELLO! That is your job. Hey support guy, if customers stop calling for support, we don't need you anymore, so be happy every time that phone rings. Hey shipping guy, the same applies for you - without "all these shipments" we don't need you anymore.

Hey everyone. You exist at your company to serve your customer. Treat them like royalty and watch your company kick ass. Treat them like a nuisance and watch your company dwindle away.

Engineers are working on products. Sales is selling away. Finance is looking for ways to move the money around. Accounting is counting the money and paying the bills. Execs are working on corporate strategy. Marketing is building advertising campaigns and herding the engineers. Who is looking out for the customer? Who should it be? Should they be left to fend for themselves? That is about the worst mistake a company can make.

Everyone should be looking out for the customer, but in reality, they are all busy doing "real work". The buck should stop with Marketing. That's right. It is marketing's job to fight through all the support people and sales people and account managers and get to the customer.

Marketing, I know you are busy. I really do. The fact is that if you don't do it, nobody else will, and in reality, there is nothing else you could be doing that is more important than spending time understanding your customers. Maybe you need help - more people, better software, a restructuring - whatever. Do what you have to do to get close with your customers.

Think you already know your customers? Yesterday is gone and tomorrow may never come. Use your time wisely.

Tuesday, July 04, 2006

Entry 5: Customers - you can't shut 'em up

A very interesting blogger, Ramit Sethi, has written a great blog entry about businesses that need to go the last mile. In this entry, he focuses partly on Best Buy (BB). What is really interesting about this retailer is that the top-brass tout the effectiveness of a "customer centric" philosophy which provides a competitive advantage for Best Buy. Meanwhile, consumers and employees alike are over at railing the company's customer service up one side and down the other.

Best Buy is interesting in that it is one of the few electronics retailers who doesn't pay a commission to it's employees. Of course, employees are encouraged to promote "customer loyalty", but I'm not really sure I feed that when shopping at BB.

At, there are six years worth of feedback (mostly complaints). If I was an executive at BB, this would be an absolute goldmine for customer research. It is clear that BB has pissed off a lot of customers with it's unfriendly fine print and anti-customer behavior. It appears that they are doing a lot of things wrong from a customer experience standpoint. Why?

They have years worth of unsolicited complaints logged in a public forum. They are (presumably) not dumb people. Why aren't they listening and improving? MY theory is this: There are short-term costs associated with improving the customer experience at BB, and they don't believe the long-term benefits are worth the short term costs. Are they right?

Let's examine some basic facts:
1. BB sells a lot of gadgets
2. These gadgets depreciate quickly
3. These gadgets can be damaged easily
4. Profit margins on these gadgets are significantly lower than other retail items, especially with competition from the internet

These 4 points lead to tough situation for BB. The fact is that returns for these gadgets cost BB a lot of money - more than returns to just about any other retailer that I can think of. What is BB to do? Clearly there are a lot of unhappy customers, but solving this unhappiness will clearly cost BB a lot of money. Will customers be willing to pay more at BB for better service? I don't think so - that is what they get at Circuit City.

Ramit doesn't have a specific recommendation to BB either, but he talks about the importance of the last mile. He refers to the peak-end rule, which says we judge our past experiences almost entirely on how they were at their peak (pleasant or unpleasant) and how they ended. If this is true, BB needs to work on their ending, perhaps using all the available customer feedback to figure out how to create more happy endings and less anti-Best Buy customer evangelists.