© 2009, Ron McCulloch MBA

Customer Experience:Roots and Reasons

Ron McCulloch, MBAhttp://rmcculloch27603.tripod.com

rmcculloch@mindspring.com

Read the article at:http://www.bxjonline.com/bxj/earticlefull.asp?magarticle_id=1388

© 2009, Ron McCulloch MBA

Customer Experience Defined

• It’s about the client, not about me!

• Do what they want, the way they want it

• It’s more than just service!

© 2009, Ron McCulloch MBA

Customer Experience Defined

• Environment + Execution + Service = Customer Experience

Environment

Execution Service

The Magic Lives Here!

© 2009, Ron McCulloch MBA

This Should Be Intuitive, but…

The Magic Lives Here!

• How many businesses display this attitude toward their customers?

• “ …get out of my store – and please come again ”– A. Nahasapeemapetalan

• “ It’s funny because it’s sad ”– H. Simpson

© 2009, Ron McCulloch MBA

Finding the Bull’s Eye

Environment& Execution

Service

Experience

Customer Satisfaction

Repeat Buying

© 2009, Ron McCulloch MBA

Value Questions

• How much does it cost to acquire a customer?• How much is customer retention worth?• Customer Lifetime Value: a little math• CLV = [M/(1 - r + i)] – AC

– M = margin in a given year– r = annual retention rate– i = interest rate– AC = Acquisition Cost

© 2009, Ron McCulloch MBA

Is Great Customer Experience Really Free?

““Great customer experience is not only free, Great customer experience is not only free, it is an honest-to-everything profit maker...if it is an honest-to-everything profit maker...if you concentrate on improving customer you concentrate on improving customer experience, you can very likely increase experience, you can very likely increase your profits.” your profits.”

-Bruce Temkin-Bruce Temkin

© 2009, Ron McCulloch MBA

Short-Term Costs

TravelOther

Marketing Costs

Time

Long-Term

Benefits

© 2009, Ron McCulloch MBA

Long-Term Gains

Retention(CLV)

Reputation

Referrals

© 2009, Ron McCulloch MBA

Roots

• Business leaders hold the keys• Planning (strategic)• Educate and demonstrate

(consistent behavior from leaders)• Empower staff to act (tactical)

© 2009, Ron McCulloch MBA

Build Great Experiences

• Study customers’ habits and preferences• Pay attention to the small details• Provide help when and how customers want

it, not when they don’t want it

© 2009, Ron McCulloch MBA

Sustain Great Experiences

• Be intentional – ask customers and yourself hard questions

• Communication loop – more tactical execution

• Plan/do/check/act cycle – strategic planning

© 2009, Ron McCulloch MBA

Examples

• Consider your favorite and least favorite local grocery

• Do you have a trusted auto mechanic? Would you switch to save a few dollars?

• How about Chick-fil-A® vs. the rest of the fast-food universe?

© 2009, Ron McCulloch MBA

Still Don’t Think Great Customer Experiences Are Really Free?

© 2009, Ron McCulloch MBA

Just Try Creating Lousy Ones!