Recognised for his influential business consultancy and as a world thought leader on Customer Experience, Colin Shaw has accumulated years of knowledge in Customer Experience. He has been recognized by LinkedIn as one of the top 150 business influencers worldwide. Colin leads Beyond Philosophy which has been selected by the Financial Times as one of the best management consultancy companies in the UK.
Can you introduce yourself and tell us about your background?
My name is Colin Shaw, I am the founder and CEO of Beyond Philosophy. which provides consultancy and training services for medium to large corporates throughout the globe. We help organisations do all these things and one of our clients, Ricoh, improved their Net Promoter Score (NPS) by 34 points over 30 months that led to a 10% rise in printer sales.
My background is mostly in corporate, where I worked in the B2B field at British Telecom. Then I had seen that Customer Experience was going to be a big thing back in 2002 and moved into that field. I then wrote my first book on Customer Experience and have now written six books in total on the subject. I have been recognized by LinkedIn as one of the top 150 Business Influencers from around the globe and have a number of awards too.
What’s the importance of Customer Experience for companies?
Basically, the issue is that everything in the world is becoming commoditized. So the time from innovation to imitation is now down to a matter of weeks. So whatever product or service that you have is basically something that somebody else has or can copy. The bit that they struggle to copy is the customer experience.
So the way that organizations now realize that they need to differentiate themselves is not just on the product or the price that they provide, but also on the experience, they give their customers. That is the foundation of the Customer Experience movement over the last 15-20 years.
What’s the impact of Digital Transformation on Customer Experience?
Digital Transformation is clearly part of a customer’s experience, so how the customer interacts with the organization is obviously changing now to digital channels. I personally love technology and think that it is a good thing.
I think that there is a distinct danger. Having worked in corporate life, I know that costs are a key issue and the danger is that everybody will see these crown jewels as a sign that we need to change what we’re doing and transform ourselves. But the danger is that they are going to “throw the baby out with the bathwater” if you know the expression.
What do I mean by that? Well if I give you a brief example. In England, we used to have milk deliveries, where the milk was delivered to your door. So I said to my wife, “Why are we paying to have the milk delivered when we might as well go around to the grocery store and get it?” She said; “I would actually prefer to keep having the milk delivered” because on a Friday night when the guy used to come around to collect the payment, they would have a laugh and a chat together.
But because of the decline in sales, a new delivery guy doing the rounds decided it was a lot more efficient to collect it from under the empty bottles instead of calling to the door. It meant that within two months of having that we stopped getting the milk that way. The key issue here is that customer experience is not just about rational things, it is about how the customer feels, subconscious signals, and psychology. These are part of four elements of customer experience which are rational, emotional, subconscious, and psychological.
The point is that in digital transformation, the danger is people are digitally transforming parts of their experience that drive a great deal of value i.e the human interaction at some points. I am not saying all human interaction needs cannot be digitized. The question that I don’t see people asking is “What is the point of my human interaction that drives the most value for me?” and “How I am going to digitally transform things around that but keep that human interaction there?”. That is the key thing of a customer experience that drives value.
What’s the most significant change in terms of customer behaviors you’ve observed lately?
A big transformation has just been the digital market for retail and other sectors. That obviously changes by generations who don’t necessarily want to talk on the phone as were older people do. I think that human behavior is a really important subject because not many organizations in my view actually understand it. For example, Disney know that when they ask their customers what they would like to eat at their theme parks, they know that people would like them to say there’s an option of a salad. They also know that when people go to their theme parks they don’t eat salads, they eat hot dogs and hamburgers.
So there is a big difference and this is where the psychology part comes in. There is a difference in what people say and what people do. So understanding what is truly driving human behavior, not just at a superficial level becomes key. In our Beyond Philosophy Podcast, ”The Intuitive Customer”, myself and Prof. Ryan Hamilton talk about the psychology of human behavior. It goes in-depth more than people realize. Just like my digital transformation story, somebody may say “the milkman coming along on Friday night is not important to me” but in fact it is. Maybe they don’t want to say it in case they embarrass themselves or it could be that they just don’t know themselves. It is almost like the expression “you don’t know what you have got until it’s gone”.
For customer behavior, on one side I see nothing has changed and human behavior continues to be human behavior. But the other part of it is I don’t see organizations really understanding human behavior and therefore, you get the problems with transformation, and the whole trend of AI is going to be critical as well going forward. Again, the same issues will apply. Do people really understand why customers are doing things because the danger is people will only look at it superficially.
According to you, how to develop a real customer-centric culture?
We have been talking about improving the customer’s experience, which is absolutely key, but the reality is that those changes won’t stick unless the organization is customer-centric in itself. In my book, “Revolutionize your Customer’s Experience”, looks at effectively four stages of customer-centricity. The first question is “Where are you?” so there are naive organizations, who are solely focused on themselves and are typically monopolies who are really not interested in the customer. Some low-cost airline companies are classic examples of that.
Transactional organizations tend to treat the customer as a transaction, so they tend to process customers like the majority of organizations. They say they are interested in the customers but the reality is that they’re more interested in themselves.
Enlightened organizations are ones that genuinely have started to see that providing a better customer experience will pay dividends. They are now realizing that customers have emotions for example.
Those at the top of the chain are what we call Natural organizations, hence the phrase “naive to natural”. They are the organizations that absolutely focus around the customer and a customer-centric (culture). These are organizations like Nordstrom or First Direct here in the UK, who absolutely focus, like Disney, around the customer. That does not mean they do everything the customer wants, because you’re in business so you need to make money and therefore need to do what’s right. But they have looked at things like how are they measuring the customer experience? Are they paying all their staff on those measurements? So even if you’re in IT or finance or HR, they should be paid on those measures.
Looking at customer behavior where natural and enlightened companies would truly look at customer behavior whereas transactional and naive wouldn’t have a clue about customer behavior, they would impose the experience.
Can you tell us about the best Customer Experience you’ve ever had? And the worst one?
My best Customer Experiences have always been personal and genuine. They have been authentic, so they feel right. Pro-active, anticipating what I need before I need it and therefore goes back to understanding customer behavior by anticipating or being proactive and appropriate by flexing between formal and informal.
The worst experience I have had can be summed up in two words, “cable companies”. I’m sure it’s the same in France as it is in England and America. I thought about this the other day and, “a good experience for a cable company is for it to work and for me to be able to have the speeds that are advertised and for it to work consistently”. I am fortunate enough to have a place in the States and here [the UK] and it seems to be a global phenomenon that service is just poor.
According to you, what will be the key Customer Service trends for the next 12 months?
So for me, there are a number of things that are happening:
One is of major concern to me. There have been two reports out recently that say in their Customer Experience index that organisations are not improving their Customer Experience, If you listen to the Forrester report for the past three years, the Customer index report has not improved at all. The implications of that for me are really serious. Without a return, without seeing improvements in Customer Experience that improve the bottom line, what will happen is that investment will stop. Therefore it shows me that people aren’t focusing on the things that are driving value.
So it goes back to my point about Disney knowing the difference between what customers say and customers want, Other companies need to understand that they are not fixing the right things and in my experience, they are spending their time fixing minor problems rather than looking at things more strategically. Recognizing that this is a change that the company needs to make. It is not about suddenly fixing the delivery times or how quickly you answer the phone. Those are small issues that need to get fixed but in the grand scheme of things they are not going to fix anything significantly. That is the number one issue if you like. If I look to the future and start to see what is happening, Digital Transformation and people making the mistake of digitizing parts that are driving value,
The second part which is starting to take off is the whole area of AI, but again the issue is the same. Do people really understand Customer Behavior? Are they going to be able to put the algorithms in the AI that actually address true human behavior rather than just the superficial symptoms?
The third area is psychographics and personas. psychographics is the understanding of human behavior but is getting under the skin of what customers really mean. So you know that the Cambridge Analytica scandal, which was bad in what they did and the way they went about it, but what was fundamentally underneath that is was going, It is about building up a persona of customers and really understanding customer behaviour and personas is the way of articulating that.
The fourth area that is going to be a growing trend is one that we see organizations starting to realize the power of customer emotions. The really interesting area is measuring customer emotions in real time through facial recognition. So I see that as being a big growth area, obviously, it’s on Apple, a lot of security services are using it. That from a customer experience perspective, to identify and measure how customers are feeling are a real breakthrough this year. So those are the four.
What would be your top advice to deliver a remarkable Customer Experience?
To deliver a remarkable customer experience, you have to define what it is. What I have found is that most organizations have not defined what they want customers to feel walking out of the experience.
I am sure if I went to my cable company and told the CEO about my experience and how it made me feel he or she wouldn’t turn around to me and say “that is absolutely great, I’m glad we’re doing that.” Because I would be telling them I am really frustrated, really annoyed. So the issue becomes what is a remarkable experience? What does it look like? And what drives value. There is no point in telling me that you can deliver something in ten, two, one day if that is not going to drive value, then why the hell are we doing it?
So it is defining what drives value for you because otherwise, the rest is a waste of time. Understanding your customers, that is where the psychometrics come in and the personas come in. Understanding them from a rational, emotional, and subconscious point of view. So not just a superficial perspective.
The next area is designing your experience. Training the people, how do you go about teaching how to deliver that experience, evoke those emotions, and measure those experiences. Evoking those emotions could potentially be done by facial recognition in the future.
So you know what drives emotion, so you know what drives value, you have defined that you want your customers to feel cared for, how to deliver that through segmentation created the customer journey that is delivering that, but now you need to measure how your customers are being cared for as part of that. Clearly, the great thing in digital transformation is that if it is digital, customers are looking at a screen and it means you can really get into the digital measurement.