Converting knowledge to wisdom

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“What use is it to have a bellyful of meat if one can not digest it? If it cannot transform us, if it cannot improve us and fortify us?”

Wrote Michel de Montaigne back in the 16th century in one of his many rants against a French school system that “requires you to just parrot back everything you are told”.

So how do we actually convert knowledge into leadership wisdom?

The key word here is experience, experience not as in breathtaking customer experience, but learning from experience.

Because we all agree that we learn from our experiences, or do we?

If you have ever made the same mistake twice, you will have to agree that we do not consistently learn from our experiences.

When then do you learn from your experiences?

Elementary my dear Watson: Whenever you take the time to reflect on your experiences, you make deeper learning possible.

Reflection can be a personal reflection, or it can tackle the form of a team reflection.

Our reflection can be a surface reflection:

  • What happened?
  • Which actions were taken?
  • What were the consequences that we observed?

Or we can choose to do a deep reflection:

  • What did I learn about myself through this experience?
  • What are we learning about how this team functions and handles conflict through this experience?
  • What broader issue can we see arising from this experience?

Surface reflection helps us understand past actions and behaviours. Deep reflection helps us examine underlying beliefs and assumptions.

Both are important. But even more important is to start developing a practice of reflection. Make a habit of having a regular end of day/week or month reflection session with your team. Develop a personal particle of reflection. The best way to do that is to start a journal and spend just 10-15 minutes a day nothing dow your answers to:

  • What has been my focus today?
  • What have I observed?
  • What am I learning?
  • What will I focus on tomorrow?

Now your are on track to convert knowledge into wisdom.


BestThis blog post is the second in a series of blog posts where Mike is exploring: Why is it important to develop not just yourself but also the people around you?

Building capacity is at the heart of the Service Profit Chain. If you are not familiar with the intricacies of the Service Profit chain, we have a special treat for you:

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What is our biggest challenge when we map our customer journeys?

Customer Journey

The short answer to that is that we are deeply biased. Despite all our good intentions about delivering superb customer service, we time and again end up seeing the situations from our own point of view. And using that point of view, we make assumptions about what we think the customer is experiencing. But unless we actually walk in their shoes, we have no clue what they are experiencing.

I see this time and again when I give workshops that introduce Service Design to groups of service providers. In order for them to really understand what this is about, I let them try it for real. So we pretend that they are a group of city tourism planners that need to improve the tourism experience in our city. In order to do that, I let them choose a persona situation and set up their hypothesis (or assumption) for this experience.

One team of three said that navigating the Copenhagen subway is very hard if you don’t speak Danish. Another team of three had the assumption that tourists easily pick the wrong kind of restaurants and end up in the tourist traps. And other groups pick other similar situations that they felt had some problems seen from a tourist point of view. So we sent them out for a 3-hourr field study. Armed with just their iPhones, we asked them to bring back proof in the form of pictures or recorded testimonials that confirmed their basic assumption (so that we could start working on ideas for improvements).

So what happened?

None of the teams could prove their assumption to be correct, none. What they thought a tourist experience was like (here in their own home city) was nowhere near what the tourists said they experienced.

So then I had to ask them: So how many of the assumptions that you have made about how your customer experience your service do you think are accurate?

Food for thought: How can we test our own assumptions about our own service product?

The same way as we did with the tourists. We get out of the office and we observe, document and collect lots of testimonials in the actual situations (not post-experience 6-page surveys, please). With that raw data, we can now start truly talking about what we need to do to improve our various touchpoints.

If you don’t have the time or inclination to do that ground work, your next best solution is to ask a group of students (Anthropologists or service designers) and have them do the real-time observations for you.

Map out the guest journey. Record your assumptions at the critical touch points: “Our breakfast is the best in town.” or “Our meeting facilities are perfect.”; “Guests think our coffee shop has the perfect selection.” Now ask the researchers to prove you right if they can.

Don’t forget: Assumption is the mother of all f… ups.


This blog post is part of a series of answers to frequent questions that I get around the concept of the Service Profit Chain. In future’s posts, we will continue to explore other key points. If you would like the full concept served up in one go, you will find Mike’s book “Best! No need to be cheap if…HERE.

If it is all about loyalty, does satisfaction matter?

Consistency

It is true that in the Service Profit Chain framework, there is a huge emphasis on establishing loyalty; loyalty is the key driver of profit and growth.

Before we can even hope to establish a relationship that will lead to loyalty, we must ensure that we have a firm grip on the basics and that we can deliver on our promise every time. The keyword here is consistency, the key driver of basic satisfaction.

Consistency or lack of consistency is also one of my pet grievances. Consistency is the flip side of reliability. If as a customer I had a great experience last week, you as a service provider have implicitly promised me that I will have the same experience when I return next week.

If not, you are not only unreliable in my eyes, but you are also performing below my expectations, and we all know that meeting expectations is the first key to customer satisfaction.

This is a balancing act because, on the one hand, we would like to see creativity and initiative on the part of our teams, but on the other hand, we need to deliver a product that is as expected.

The name of the game is to generate repeat business. Customers return to get more of what they enjoyed the first time. If they don’t get that, then they could just as well have gone somewhere else.

Just think back for a moment about how many times in your life you had a great experience somewhere, and then went back only to find that what you had last time was not what you got the next time. Did you go back a third time just to make sure?

Probably not.

Where do you go frequently? Most probably to a place that is very consistent in some aspect of their service delivery that is important to you. That consistency is what brings you back.

Requiring consistency in the delivery process is universal across all types of services. It is the foundation of your success, and that applies to all service businesses, the way your insurance company processes your claim, the way the consultant interacts with you, how your auditing firm performs the audit. You return to the same supplier in all of these situations because you liked the way he or she did the work.

Together with emotions, consistency is an important element in our ability to recall one service experience more easily than others. You remember the consistently good experiences. They stand out. You have a much harder time remembering inconsistent experiences because you easily confuse them with all of the other inconsistent experiences that you have had.

Customers come back to experiences that consistently live up to their expectations. When that happens, we call it loyalty. Loyalty is built on consistency. Never forget that.

So take a good hard look at your basic processes, are they consistent?


This blog post is part of a series of answers to frequent questions that I get around the concept of the Service Profit Chain. In future’s posts, we will continue to explore other key points. If you would like the full concept served up in one go, you will find Mike’s book “Best! No need to be cheap if…HERE.

How does one design a great experience?

Positive Experience We talk a lot about the customer experience.  We even talk about an experience economy. But what do we actually mean, and when can we qualify something as an experience?

Firstly, let be clear. Everything is an experience. Unless we have managed to shut down every sensor in our system, we will be experiencing something. The challenge is that experiences come in three broad categories: God, bad and indifferent. Most of your experiences belong to the last category – indifferent. If I ask you ‘So how was your train commute this morning compared to the same Monday last year?’, you would probably give me a rather blank stare.

This Monday last year? Sorry, I can’t remember at all what that was like.

Why not? Because the experience was bland, it was no different from all your other morning commutes. To put in very simple terms, there was no emotional trigger.

What makes us remember one experience and not the other depends on to what degree our emotions were stirred. Remember your first teenage date? Most of us do. Or the birth of your first child? The stronger the emotion, positive or negative, the more the experience is etched into our memory.

So most of our experiences are quickly forgotten. There is no emotional trigger. What we retain are the negative and the positive experiences.

So what do we mean by positive and negative in this context? Do I need to bring in a 12 man Mariachi band for this wedding party to be successful or would a 3 piece Jazz trio work just as well or better?

It’s not about the ‘thing’.

It’s about the customer and their perception of what is going on. You see, what causes a shift in our emotional makeup is tied to shifts in the circumstances that we happen to be in. When circumstances change to the better (compared to what we expected), then we are slightly happier; if they shift to something much better than we expected, we are very happy. On the other hand, if they shift to something worse than we expected, we are miserable. And if everything is running exactly as we thought it would, we are … indifferent.

Once we understand this, we have a great design tool at our disposal. We need to work on managing expectations. So standing in a queue at the airport security for 10 long minutes is hell on earth if you thought you would be through in a breeze; but it’s actually not too bad if there is a sign that says from this point on just 10 more minutes, and if we then get through in 8 minutes is actually a good experience.

In most types of customer journeys, there will be things that need to happen that may not be easy to frame as positive. Queuing is one, having a tooth fixed at the dentist might be another. It is not always possible to turn negative experiences into something positive but we can often neutralise them by putting the customer more in control, helping them set their expectations. So my dentist will say ‘In a moment I am going to do this. It might be a bit painful but it’s quick and you will feel much better afterward.’ Now I know what to expect. Ouch! It happens exactly as she said, so no shift in my emotions. Then she finishes up and we have a little chat about my last vacation and what I plan to do next weekend. She is such a nice lady. And there you go. The negative aspect was neutralised and she ended on a positive note making a personal connection: Man I just love going to the dentist.

So if you want to design a great experience, you need first to map out the customer journey, touch points by touch points. Then you make a note, for this type of customer persona, would this be considered positive, neutral or negative? Then, make a plan to eliminate or neutralise the negatives, upgrade a few of the neutrals to positive and make sure that whatever else happens, you end the experience on a positive note. Nothing affects our emotional state as much as the way things end. A movie that ends on an unhappy note is rarely a success. It just doesn’t work.

And finally, what is the one thing we can always do that consistently exceeds our customers’ expectations at any touch point? Be nice and make a personal connection. It blows them away.


This blog post is part of a series of answers to frequent questions that I get around the concept of the Service Profit Chain. In future’s posts, we will continue to explore other key points. If you would like the full concept served up in one go, you will find Mike’s book “Best! No need to be cheap if…HERE.

What is the difference between satisfaction and loyalty?

Loyalty and Satisfaction

In a world of abundance, too much of everything, what we also sometimes describe as hyper-competition, understanding the difference between satisfaction and loyalty is also the key to profits and growth.

There are many different ways of defining loyalty out there but this is my favourite one (not one invented but I can’t for the life of me remember where I found it): A loyal customer is someone who is willing to pay a bit more for your service than they would have to pay somewhere else for a similar experience.

Think about that for a moment…

If they are paying the same price to you as they would pay anywhere else, they are not loyal. It is just convenient for them to do business with you. And if they are paying less, you have just bribed them to stay with you.

So there you have it, satisfaction is manly about avoiding dissatisfaction: Delivering on the primary results in a consistent and reliable way, what Tom Peters so famously called Ho-Hum.

There is no loyalty in satisfaction. It is just Ho-Hum.

Loyalty is about a connection. Loyalty is emotional, not rational. Loyalty is Wow! You have this ‘feeling’ about a place, a product.

Just think about all the stuff that you own. Of all the things in your possession, which ones are in your eyes brands and what are just products?

It’s quite simple: A product or service becomes a brand when you have a feeling for it.

And then we are back full circle to the Service Profit Chain because things do not create emotions, people do. When I think of a certain hotel or café that I am very fond of, it’s the people. They have some people who have made an effort and established a connection with me, and yes I will gladly pay a premium for that emotional connection. It makes my day.


This blog post is part of a series of answers to frequent questions that I get around the concept of the Service Profit Chain. In future post, we will continue to explore other key points. If you would like the full concept served up in one go, you will find Mike’s book “Best! No need to be cheap if…HERE.

 

Why the Service Profit Chain concept is more important now than ever before?

Service Business

Check out Google trends, the interest in customer service and customer experience is steadily rising year by year and has been for the past 5 years.

Why?

Because we live in an age of abundance – this is one of my key points when I give live presentations. By abundance I mean that there is too much of everything. There are more hotel rooms, restaurant seats, cars for hire or consultants etc. than the market actually needs. So we are all trying to survive in a hyper-competitive environment.

In a hyper-competitive environment, it is not enough to try and compete on product specifications. Because within a given price bracket, the specifications for most product are more or less identical. So in order to differentiate, we need to look at the experience and that typically means that we add some service components.

On top of that, we are rapidly moving away from products and into services (Just think cars, in a few years when cars become self driving, they will no longer be products but we will see them as a service). So society is moving to service dominant logic. And when products are turned into services, the focus shifts, it is not about the product spec but the customer need.

If we want to compete on experience and service, we need to focus on the interaction between the frontline staff and the guest/customer – what we also call the touch points. That is the critical interface – that interaction can lift what is otherwise just a bland run of the mill experience into a memorable experience. And when that happens, we create loyalty. High customer loyalty is the key profits a growth.

So some companies launch major initiatives around creating loyalty. They see that as their main objective.

But that is only because they are not paying attention to the principles of the Service Profit Chain – in a sense they have got the wrong end of the stick.

There is no shortcut to the profits and growth. You need to take the long haul and that starts with creating an inspiring and engaging workplace, and that is what the concept of the Service Profit Chain can help you do – and that is why understanding this key framework is the best way to survive in a hyper competitive environment.

Check our my course The Service Profit Chain explained!

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This blog post is part of a series of answers to frequent questions that I get around the concept of the Service Profit Chain. In future post, we will continue to explore other key points. If you would like the full concept served up in one go, you will find Mike’s book “Best! No need to be cheap if…HERE.