Shaun Smith, founder of Smith + Co and author of three books on customer experience, joined Simon Groves, head of customer experience and strategy for O2 UK, to discuss the critical link between your brand promise and your customer’s experience.
Shaun opened the presentation by describing the importance of creating an emotional bond with the customer through the ensemble of your company’s interactions with them. According to Shaun, companies that are successful in creating both a functional AND emotional connection with the customer improve retention considerably.
Shaun returned to a brand we heard about this morning, First Direct. Shaun stressed that it is absolutely critical to be clear about what you promise. Here’s what the First Direct website says:
“Most banks are about money, First Direct is about people. We believe banking should fit around you, not us.”
According to Shaun, First Direct gets a new customer every 5 minutes through referral. In fact, 38% of their business comes to them through word of mouth. This isn’t just about their brand, it’s also about their people. Having employees that are passionate about working at the company is critical. He told a personal story of how a First Direct call centre employee helped him by faxing some extra documents as proof of identity when he needed a retail loan…no hassles, no waiting. When experiences like this reinforce the brand promise, you have a winning recipe.
Shaun described this as an overall shift in the marketing world from “branding and advertising” to “experience marketing.”
One First Direct competitor, Barclays, ran an ad campaign that won awards in advertising circles, but it fell mostly on deaf ears by Shaun’s assessment. “A big world needs a big bank” was the tagline. But as Shaun put it, “this just made customers feel small.”
First Direct, by contrast, asked its customers what they like about First Direct. Customers told them that they love the fact that they can get through any time of the day or night to an enthusiastic customer service agent. Many of these customers who gave feedback agreed to participate in an advertisement. By building their advertisement on these “real experiences,” First Direct not only saved a lot of money on its ad campaign, but also had a guaranteed receptivity to its message, as well as a natural link to the reinforcement they would get through organic word of mouth.
The O2 Story
Simon Groves from O2 followed with a short history of the O2 brand and customer experience journey.
When O2 first de-merged from BT as BT Cellnet back in 2001 and 2002, they were on a tough road both in terms of financial performance and customer loyalty. But within 4 years they had turned things around and were purchased by Telefónica for nearly £18 billion. How did they accomplish this?
O2 has tracked a customer satisfaction index going all the way back to 2001. That also use something similar to NPS to track advocacy, but the early years of their journey were really more about getting satisfaction right to build the foundation for more advocacy over time.
During the first phase of their programme from 2002 to 2005, satisfaction was lagging competitors. Their shift to a customer-focused strategy all started with intuition and a belief that doing the right thing for the customer would pay back handsomely. Some key executives championed this, and they went through to drive operational improvements and measure step by step. This was effective at that particular point in their history.
Metrics were starting to move in the right direction, but the market wasn’t standing still. It was becoming tougher to compete. Customers were saying, “there’s no good reason for me to stay with the network I am with,” “nobody is looking after us,” “they’re all as bad as each other.” How could they differentiate from this?
They developed a customer plan in 2004 in reaction to this feedback. They were determined to invest in the areas that customers valued. They couldn’t just spend more…they had to strip out things that were low value to put money into the right areas.
They developed a new brand promise that was about putting the customer at the heart of everything they do. Then, they drilled this down to specific plans that would underpin the promise. All the KPIs and measures linked to this, and they tracked it every quarter to reinforce it throughout the company. The plan had 5 points:
Become the customer champion by rewarding loyalty.
Invest in front-line service and sales experience.
Have the best range of devices for target customers.
Engage our people by making O2 a better place to work.
Drive efficiencies to deliver a better experience at lower cost.
From 2005 to 2006 this strategy moved them into a leading position on their satisfaction measures relative to their biggest competitors. And they reinforced these messages in their advertising, helping to move brand perception in the right direction, too.
Since this inflection point in 2006, they have worked hard to successfully retain a leading position and have been acquiring new customers faster than their competitors.
Where is O2 headed now? O2 is now focused on creating more “fans.” They are moving toward building a more emotional connection with their customers. The rallying cry is to “create a million more fans.”
Ultimately , Simon summed it up this way: our goal is to get more customers that are happier and more loyal. That’s the heart of it according to O2.
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