[MUSIC] So, how do we measure the satisfaction that I've just referred to? Traditionally, we measure separate points along the journey. Let's say, am I happy with the information I was provided with? Am I happy with the check out in the supermarket, or the billing from some service you might have subscribed to, the product itself? Various interactions or occurrences that I might have had along the way. But it turns out, they don't just sort of average out. You can't just simply add up all those different experiences and then come out with the overall experience. As a matter of fact, some research by McKinsey shows that the correlation between your overall, your holistic sort of retrospective, you're looking back, how was that experience overall? Okay, that correlates very strongly with customer satisfaction. It corresponds to things like word of mouth and loyalty much more than the separate measurements of quality, if you will, of these separate interactions. So that's really a change for companies because you might say, well, I can do my best job over here, but if something else happens over here, they don't really add up. Let me give you an example of this. God, this is now 14 years ago. I was interviewing here at the London Business School and I stayed in one of our executive suites. And what really surprised me is we had, in the rooms, these coat hangers. This the coat hanger you've seen as part of this MOOC, I said I'd come back to it. And it's an odd little thing, this coat hanger, because as I approached the closet to hang my coat, I've just flown in I was at MIT and I was interviewing here for a potential job. It basically screamed at me and it said, you are a potential thief. Now, I found this kind of odd. So when I actually joined this school, I joined a committee, the first and only committee I think I've ever volunteered for. And it was the refurbishing committee of these bedrooms, some years later. And what I did is I brought in this coat hanger and I simply sat there holding it up. And the head of operations at that point said, what's your point, what are you trying to prove here? My point was we should not be doing this. Now, his job is not branding, his job is not sales, but it is. His job is at cost center so some of our clients might have grabbed some of these coat hangers in the past and taken them with them. And he's done his spreadsheet, and he realized if I put in these coat hangers, I'll save some money, and as a cost center, I will deliver on my KPIs. But does it really make sense overall? We have executives, they're paying a lot of money to spend time with us, we cannot be treating them as potential thieves. As a matter of fact, I push things a little further. And instead of those coat hangers, those that discourage theft, I asked them to put in these coat hangers. Much better quality. London Business School and of course you can actually hang them without much effort. And when I teach my seminars, I actually encourage my participants to steal them. Why? Well, you're putting your advertising, our advertising, London Business School into their closet. It reminds them of the positive experience they've had. They might think of talking about us, they might think of coming back for another course, and recommending it to a colleague. And it's certainly a completely different relationship we have with them than with these coat hangers over here. It's not a marketing remit. It's an operational one, but it very much defines the customer experience and the relationship we have with the customer going forward. Now, the second reason the separate touch points might not add up to the overall best experience is because maybe the sequence of experience is not the right one. I might be performing well at each point but maybe I don't need some of them. Maybe I don't need some of these touch points. Maybe I can redefine the customer journey all together. And I'll give you just one simple example. Here, Starbucks came out with a new app. If you're part of their loyalty program, you can preorder your coffee and you can just pick it up in a very effective way. What that does, it get's rid of a pain point that I might have along the customer journey. Now this is not really on brand, if you will, because Starbucks is about the third space. Right, work, home and this is another space to hang out. Getting people to come in and out as quickly as possible doesn't deliver on that brand promise, but it gets rid of a pain point. Disney's come up with something similar. They have these magic bands that you can have in the theme park, and what that does is it makes it much smoother for the customer to go to certain attractions, they might reserve a spot. Because if you think about the magic experience you have at one of their theme parks, you don't want to have sort of this experience interrupted. So for them, it is very much on brand as well. Of course for Disney, this is also tremendous data as the customer travels around the theme park. I know the type of journeys my customers are taking. I might even surprise them at some points with a magical experience. So really it's increasingly at the heart of their offering, and this is the big transition we're seeing. Most of the data on our customers we had, even on the Internet, is kind of transactional. It's all that journey up to the point of transaction. If you think about something like the Tesco Clubcard, half of British households have a Tesco club card. I know everything people buy, and that's really a trove of experience. I can change my pricing, my assortment in this store, I have lots of information. I can have one on one communications. But what that really does, it makes you focus so much on the transaction, and it makes you focus on the sales funnel. Now the sales funnel, if you will, from becoming aware of a product to trying it to buying it to buying it again, that's one view of the customer journey, but it's really the company's view. That's not really the journey the customer's taking. Now, the new kind of data is really about the consumption, and let's think about a business to business company like Volvo Trucks. By equipping their trucks with this kind of technology, they know where the truck is, the speed they're driving. They can tell you which is the optimal route to take. They can reroute you. There are some safety aspects there as well. They've even taken the digital component to handle the processing of paperwork at various points. It leads to fuel savings. And really, what it does is for their customers, not just does it provide an experience or a service, it transforms their business. And that's really the peak, that's the extension of an experience. You're not just delivering something, you're actually transforming the customer, and that's from going from the product or service squarely into the consumer's world. And this new kind of data and which is really extreme, you can think of Chris Dancy. He says he's the most connected human being on the planet. He's got all kinds of devices. He puts the data up on Google Documents. You can examine his data on basically everything he does. And this increasing data is transforming healthcare, it's transforming as I said business to business, it's really transforming many things we traditionally thought of as products. So think of the Nike FuelBand or many of these activity bands that you might have. Well, think of that device. What does it really do? It's really a motivational device. First of all, it tells you how you're doing, what you're doing, but it's motivational in a sense that you can set yourself targets, you can compare yourself to others, you can set yourself challenges. So it's really, in that sense, it just doesn't enrich the experience but it leads you to transform yourself. It helps you achieve your goals going forward. And that's really where experiences are heading, and if you have a transformative impact on your customers, that's really when value is maximized. Another example which is just coming out this fall 2015 is Lamborghini. They have created a new accessory for your Lamborghini. Maybe if you take it out to test drive, you can track your performance, your acceleration, and all kinds of aspects almost like a video game. You can revisit it later. So it really enhances the offering you have. And I think for many companies, they're increasing opportunities to take the simplest products and to enrich them along with what the brand really stands for. So for Nike, it's about the achievement, maybe the running. For Lamborghini, it's the driving experience, and to really deliver on the brand. And especially in business to business, as we're seeing businesses from being what we call sort of box pushers, from selling products or even services to providing total solutions. Like for example Orica used to basically sell you dynamite to blow up stuff, but nobody just wants to blow up stuff, they want to get rid of the rock. So it just really became about managing all the services around the rocks. What you're managing is this complex set of experiences basically that the customer has with your brand. Another example might be Hilti. They used to sell power tools, but they transformed the organization. And the culture of the organization has to transform along with it. Orica has engaged in that process in order to provide a complex set of experiences. So going back to last week, if you think about efficiency, which is about cost reduction that you might pass on to your customers. Effectiveness, which is really kind of the engineering, the technical quality we see. All those things change when you think about the customer experience, and you as an organization have to change along with that. And that's what this module is about and we're going to take a deeper dive into some of those aspects. [MUSIC]
