CHAPTER 9

THE CORE TOUCHPOINT MOMENT

The core touchpoint experience occurs when customers are engaging with your product, brand, or service. By the time customers reach this point, they would already have navigated the research phase of the pre-touch and initial engagement of the first touchpoint moments.

My research suggests that most organizations focus only on the core touchpoint, and regrettably, they tend to do it in a way that doesn’t deliver exceptional experiences. Instead, they are inconsistent at this touchpoint, and the result is unreliable, variable, and fractionated customer experiences. In the old days, companies could succeed even if they delivered these mediocre experiences, but today such experiences guarantee business failure.

Organizations often emphasize the core touchpoint but do not always apply it consistently. It’s important that you do so and also that you make certain that it fits comfortably with the other touchpoint experiences you create along your customers’ journey.

The core experience itself is really a series of internal touchpoints. For example, let’s assume you’ve done your research and decided to try a new restaurant. You arrive and the gracious hostess seats you at a beautiful table with a view of the water. Once you’ve been seated, you continue to have core touchpoint experiences. Your server greets you, another staff member pours your water, and the sommelier offers to help you with your wine selection. It’s all going beautifully until you visit the restroom, which is disgusting. Because it isn’t clean, you assume the restaurant has cleanliness problems everywhere, and your dinner is ruined. One poor core touchpoint can unravel everything positive in the customer experience.

SELF-ANALYSIS:
WHAT DOING BUSINESS WITH YOU IS LIKE

As a management consultant, I’m frequently shocked at how many companies have never asked themselves, “What is it like to do business with us?” In taking executives through this self-scrutiny, I often discover the reason they haven’t is that they are ashamed of the services and experiences they provide. As you build out your core experience, sit down with your team and really ask, “What is it like to do business with us?” Be honest, get outside input, and most important, act on the insights you glean from this process.

Most organizations transition through a corporate or enterprise life cycle. In the beginning, they are market-and customer-focused. As time marches on, if they are successful, they begin to turn inward and operationalize their business; in other words, they start to spend way more time on the internal functions of the business than on their external customer. At one level, this makes good sense. For example, if you’re a sandwich shop and you make the best sandwiches on the planet, you get really, really busy. Now, not only are you making these amazing sandwiches, but you’re also trying to find ways to increase your customer flow; you’re addressing issues related to parking, you’re hiring more people so you need to build up your human resources infrastructure, and so on.

Unfortunately, at this point, as most organizations transition from being customer-centric to operations-centric, they go into hyper-internal focus. This is like a turtle going into its shell. Instead of looking outward, they concentrate on internal issues like managing staff, rules and regulations, shipping, and the supply chain. These are all important functions that serve the company, but they have little direct effect on customer value. It’s a natural cycle and one to watch out for because it can cause companies to pretty much shut off any external listening and connection to the customer. Unfortunately, in today’s world, this approach is almost a guarantee of failure because what is critical to success is a customer-centric culture that delivers exceptional experiences across the entire customer journey.

The Profit and Protection Myth

A common pitfall as companies slide into internal focus is that they begin to model their business, and therefore their core experiences, on “profit and protection.” More attention is paid to how profits can be gained than to how customer experiences can be made exceptional. Inevitably, customer interactions sour. Then, instead of understanding this as a symptom of being too internally focused, the organization quickly builds out customer-punitive policies to protect itself from the very customers it is in business to serve.

Interview a hundred retail or storefront businesses that have been in existence for more than ten years and chances are each has experienced some sort of litigation over any of a wide range of things, not the least of which is a person’s slipping and falling on the premises. Being sued is an emotional and traumatic experience, and the natural reaction is to protect oneself. However, businesses commonly go into an overprotective mode.

Take our fictional NeoWash Auto Spa as an example. During a car wash, a windshield wiper snaps off. NeoWash’s customer-punitive policies to protect itself might include having customers sign a windshield wiper release form. But consider this: Customers are busy people, and asking them to sign a form would take time. Moreover, it would also set a bad tone for the rest of the experience. Instead, the owner of NeoWash could think of broken windshield wipers as a cost of doing business and include replacement windshield wipers in the annual budget. Employees could be trained to be appropriately sorry if wipers break, but at the same time immediately and pleasantly offer to replace the wipers at no cost. Be customer-centric and win every time.

Unfortunately, new organizational profit mandates add to the shift away from a customer-centric focus to a profit-centric enterprise focus. When they occur alongside customer-punitive policies, it is a recipe for a toxic culture of contempt for the customer.

Spank Your Customers and
They Will Spank You Back

One of the biggest causes of customer experience failure, especially in midsize to large organizations, is an incessant focus on regulatory compliance and risk management. At one level, this is understandable. Businesses have a right to implement systems to protect themselves. What’s wrong is the nonstop daily focus on it. Race car drivers have a saying, “Never look at the wall,” which is smart because if you do, that’s where you’re going to go.

Organizations that set their sights internally place their backs to the customer. Healthcare, for example, doesn’t have any oxygen left after all the regulation and compliance management. There are reams of policies and procedures, most of which routinely punish the customers healthcare organizations serve. You can’t look at customers as something that needs to be managed, risk-wise. A company’s biggest risk isn’t lawsuits—it’s that no one shows up.

Highly regulated industries like finance and banking have created systems and methods to protect themselves that go far beyond what’s required and ultimately inconvenience their customers. Look at your industry’s rules and find ways to serve your customers despite these requirements. If you don’t, disgruntled customers will leave you—and will let other people know of their poor experience—for the disruptive innovators out there who have invented exceptional experiences to replace yours.

In other words, if you spank your customers, they will spank you back with a bad online review as they sashay out the door to your competitor. Does this mean that your organization doesn’t have a responsibility to comply with regulations and use reasonable processes to manage risk? No! But you have to stop taking a myopic organization-centric view if you want to connect to your customers.

This hyper-focus on risk management happens all too often. The cycle is familiar and enormously destructive. To succeed in today’s market, you must have a customer-centric business model, not an enterprise-driven one. Organizations need to be on the lookout for and constantly guard against falling into an organization-centric mode to prevent this cycle from happening. Like a freight train, once you damage your culture by putting your customer second, it’s hard to turn it around. Perhaps more important, influential networks, public rating systems, and the entire digital grid will not forget or forgive your bad behavior.

A friend of mine (who is one of the most interesting people I’ve ever met) always dreamed of opening an organic fruit and vegetable stand. After he retired, he opened his store, which was a huge success. His business grew like crazy and expanded and expanded.

One day, a woman in high heels slipped on some grapes that had fallen into the aisle. She went sailing across the room, landing square on her derrière. She did what every American does: She sued. From then on, my friend went into grape management mode. He posted signs, he allowed no one without rubber-soled shoes in the grape aisle, and he banned high heels everywhere in the store. It got to the point where the entire flow of his business had changed. His customers resented the new policies and stopped coming.

Worse, it killed his spirit. He went from viewing his customers as people who shared his love and passion for organic food to seeing them all as plaintiffs. He overreacted to cover his rear, and in the process, he created policies and behaviors that disconnected him from his business and customers.

Businesses must resist the temptation to create an infrastructure that punishes all customers to fix a problem caused by 1 percent of their customers. Too often, companies build punitive policies that create distance between the customer and the company. Recently, some businesses have even taken to filing lawsuits against online reviewers who give them bad ratings. They don’t realize that not having customers who love them is their single biggest risk in our hyper-connected, hyper-consumer-focused economy.

Liability vs. Customer-Friendly Policies: Many organizations have convinced themselves that they cannot build customer-friendly business practices that also manage liability and regulatory compliance. Unfortunately, this false and lazy belief leads to an adversarial relationship between the company and customer. As the saying goes, it’s easy to default to the easy.

Successful organizations, on the other hand, know that regulatory compliance and risk management is required, but they use innovation and creativity to drive both customer experience and risk management concurrently. It takes time, effort, and a willingness to risk new ideas, but the results are a successful, client-focused business. Below I show you how to do it.

The idea that it is mutually exclusive to manage risk while managing perfect customer experiences is a well-propagated myth.

FOSTERING TRUST WITHIN THE CORE

In retail trades, one of the biggest problems is theft—also known as shrinkage—and over the years organizations have deployed many technologies and processes to control it.

According to the National Association for Shoplifting Prevention, there are more than 27 million shoplifters, or one in eleven Americans, in the United States today.

The owners of a northern California grocery chain takes a unique approach to the problem of theft because they know that designing core experiences that communicate trust is critical to building a business that excels and lasts. Like Walmart, they position a greeter at the front door who welcomes shoppers and gives them a shopping cart. Little do the shoppers realize that the greeter is actually a security guard. Because of the way it is presented, the core experience is positive; it does not in any way suggest that the store doesn’t trust its customers.

By using creative approaches, we can address business best practices while simultaneously delivering exceptional experiences that respect the customers we serve.

PUNITIVE POLICIES KILL BUSINESSES

I consult for an organization that manages resorts. The executives reached out to me because they’d experienced a significant drop in reservations, despite representing some of the best hotels in California.

After an analysis of their online booking and inbound telemarketing processes, we found a simple problem: They had changed their cancellation policy from twenty-four to seventy-two hours’ notice. Their customers had many options for getaways and often made advance reservations that they canceled at the last minute if they decided to go elsewhere. The organization’s new cancellation policy forced customers to make their decision sooner, which didn’t sit well with the customers who bailed.

The policy made perfect sense to the company executives because it eliminated last-minute cancelations. But by trying to protect themselves with a policy that customers considered punitive, the executives ended up with customers punishing them by not booking at all. Today’s empowered customers simply found better options.

I did the math to demonstrate the cost of customer acquisition versus the cost of keeping current customers. The executives instantly realized that any advantage provided by the new cancellation policy was foiled by the cost of acquiring new customers. Plus, how many potential new customers would avoid them simply because people shared their stories via social media?

Punitive policies like this demonstrate a complete lack of innovation because virtually all such policies could be reinvented to create a win-win scenario. Most organizations have a bucket of punitive policies they don’t even recognize are punitive. How about yours? In our customer-driven economy, where customers are presented with unlimited choices and a quick and easy way to determine which choice is best, it is time for you to rethink any of your business’s policies that aren’t customer-friendly. Take a close look. Do an honest assessment and see how you unintentionally might be destroying your customers’ exceptional core experience.

No shirts, no shoes, no service = bankruptcy.

MAKE AN UPSET CUSTOMER A LIFELONG CUSTOMER
IN FIVE EASY STEPS

No matter the business, eventually you’re going to have an upset customer. So what should you do to reduce or eliminate the conflict? Over the last three decades, I have developed a simple plan to turn every upset customer into a customer for life. Remember, in our connected economy, releasing an upset customer into the wild is a bad idea. Statistics show that upset customers are far more likely to share their bad experience on social and digital networks then happy customers, and the impact of negative reviews can be catastrophic. For many businesses, going from a 5-star Yelp rating to a 4-star rating can directly result in 10 to 20 percent reductions in sales. So here’s my easy-to-follow plan for turning an upset customer into a happy and profitable customer.

Step 1:
Affirm

Most organizations engage with upset customers by citing policies and procedures. This, of course, is the kiss of death. It’s okay to have procedures and policies, but if you start there, you fail. My recommendation is to start by proclaiming to the customer that you intend to listen to them and work hard to make them happy. For example, say, “Ms. Johnson, I understand why you’re upset about your room reservation, and I’m very sorry for the inconvenience. Our notes show that you did in fact request a poolside room, and I just want you to know that I intend to make this right.”

Step 2:
Listen

One of the hardest things to do sometimes is to simply shut up. Our natural instinct is to talk our way through the problem. However, I’ve found that upset customers need to release steam and talk about why they’re upset. So if they want to talk, you need to listen. And if you listen carefully, you discover what you can actually do to make the customers happy.

Step 3:
Confirm

It’s not only important that you understand why the customer is upset. You also need to make the customer know you understand why they are upset. So at this point, you need to confirm what you heard the customer say. “Ms. Johnson, I just want to confirm that your preference is a poolside room. You requested a poolside room, and you would like us to offer some compensation for our mistake. Is that correct?”

Step 4:
Fix

The customer has told you exactly why they’re upset, you have confirmed why they’re upset, and now it’s your turn to offer a solution based on what you learned from carefully listening. In the first step you acknowledged that your reservation department made a mistake, and you apologized for the inconvenience. However, the customer still expects you to show your commitment to solving the problem.

At this point you might suggest the following: “Ms. Johnson, I have directed our front desk staff to put you on a priority list should a poolside room come available. In the meantime, can I pay for your buffet breakfast during your stay here as a way of offering our sincerest apologies for the inconvenience?” During the listening phase, you more than likely got hints as to what you should offer to make this particular customer happy. (Unfortunately, most organizations give team members limited authority to do the right thing. From a profitability and customer retention perspective, this is a colossal mistake.)

Step 5:
Follow Up

You may have assumed that you fixed the problem by offering something to the customer in Step 4. However, the customer needs you to revisit the situation with an unexpected follow-up one to two weeks after the incident. “Mrs. Johnson, I just wanted to follow up on the mistake we made with your poolside room reservation a couple of weeks ago. Did the new room and our complimentary breakfast meet with your approval?” This gives you the opportunity to do a quality assurance check to make sure what you offered did in fact leave the customer happy. From the customer’s perspective, this demonstrates that making the situation right was truly a priority for you and your organization.

PUTTING IT ALL TOGETHER

This linear process involving the five steps takes into consideration the psychodynamics of defusing anger and brings both parties to a safe and happy landing. What would happen in your personal relationships if you handled conflict in this manner? I’ve been happily married for more than a quarter-century, and on the rare occasions that my wife and I have a conflict, I deploy this process with a 100 percent success rate.

The first thing I say is, “Michelle, before we go any further, I just want to let you know that I love you, and I honor and respect our relationship, and I’m committed to doing anything to make this right.”

Then I shut up and listen. Usually, I discover that I did something that was inadvertently disrespectful. Because I’m willing to listen, I always learn from these discussions.

Then I confirm to my wife what I thought I learned from the discussion to make sure that I’m taking away the real lessons from the conversation.

Then I do whatever it takes to let her know that it was never my intention to do anything disrespectful, and I am 100 percent committed to being more conscious about my behaviors or comments. Most important, I say this with absolute sincerity, because I love my wife and I want her to be happy.

Great organizations love their customers and sincerely want them to be happy. You will see amazing results if you apply this proven formula to your customer conflicts.

TRADER JOE’S:
EXCEPTIONAL TO THE CORE

Trader Joe’s (colloquially known as TJ’s) is a funky grocery chain that began in the western United States and is now expanding throughout the country. It delivers an ideal core experience every time and is a great example of an organization that really understands its customers. The stores are always well staffed and full of money-spending customers, and I can’t think of a punitive policy that Trader Joe’s has. It is truly a customer-centric organization designing core (and other) exceptional experiences, both digital and non-digital, that are relevant and appeal to several customer types. While all TJ’s touchpoints are exceptional, here we’ll look primarily at the core experience.

The Product

In order to deliver a great customer experience, you must first deliver a great product or service—duh! Surprisingly, however, many organizations deliver mediocre products and services. Not surprisingly, the customer ends up disappointed.

Most supermarkets sell several different brands of canned corn, for example. Trader Joe’s decided, brilliantly, that if you find the very best product, you don’t need to offer a dozen options, so TJ’s has a minimal selection of canned corn. As In-N-Out Burger taught us, crisp, minimal options reduce confusion and eliminate stress for customers.

Trader Joe’s begins the core experience with minimal options, but these minimal options are always exquisite; in fact, they’re really exquisite. This reduced number of selections—all quality—allows TJ’s to significantly shrink the footprint of its stores. So not only is the company’s cost reduced, but customers can make their shopping experience quick and efficient.

Trader Joe’s carries special label products using its own brand name. These are often unique and targeted to a season or holiday. In the fall, you can literally buy all things pumpkin. The produce is exquisitely fresh and well thought out. In fact, the products are so well researched and developed that there are dozens of Trader Joe’s cookbooks specifically designed to create affordable, healthy, and delicious meals using store ingredients.

The Price/Value Balance

Trader Joe’s does not charge a premium price for its excellent products, nor is it a low-price retailer delivering mediocre products at a cheap price, all the while requiring you to bag your own groceries.

Instead, TJ’s believes that exceptional products can be delivered for the same price as mediocre products, and its business model proves the company can do it. Any retailer can provide low-cost but inferior products; Trader Joe’s realizes that if it invests time and effort in finding exquisite products, it can also deliver them at a reasonable price.

Although I’m not privy to the finer details of its product costs, I assume that if TJ’s sells a larger quantity of one brand of exceptional corn, rather than a smaller quantity of several brands, it can significantly improve its buying power. In turn, it passes on the cost savings to its customers and thereby offers competitive prices and higher quality.

The FUN!

As discussed earlier, we humans are multisensory creatures. Each minute we are engaged in an experience, we receive thousands of data points that we aggregate to an opinion of that experience.

Trader Joe’s has created a retail environment that can first and foremost be described as FUN! Most organizations are afraid to use the FUN! word. This is unfortunate because people like to have fun. Many consumers describe grocery shopping as drudgery, but that’s certainly not the case at Trader Joe’s.

TJ’s employees sport Hawaiian shirts, and stores are often customized with murals depicting local sites. Products are positioned with great pride; it reminds me of an old-fashioned fruit stand. Free samples of delicious paired ingredients are available every day, and you can always try the latest freshly brewed coffee.

The Employees Who Deliver to the Core

Trader Joe’s treats its employees like royalty, and for this reason it attracts some of the best talent to its fun and diverse environment. You can just see how much the employees enjoy their jobs.

This may sound obvious, but when employees hate their work, they tend to hate their customers. When employees love their work and the company they work for, they deliver far better human experiences.

THE BOTTOM LINE

Trader Joe’s does not give interviews about its business strategies, but it doesn’t take much analysis to see that the core experience TJ’s delivers is special. It’s pretty obvious this company cares about its employees, its communities, and most certainly the customers it serves.

While this type of core experience is easy to talk about, it’s actually quite hard to do. This is why most companies never really commit to being exceptional. I believe that Trader Joe’s wants to be good for goodness’s sake, and this is the key. The success it’s enjoying derives from that commitment. Maybe another business can be successful by replicating what TJ’s does solely for the sake of profit, but I’ve yet to see it happen. TJ’s focus is on how it can serve the community the stores reside in. This ranges from sustainability, to how the company treats its employees, to how it communicates with the customers it loves. Everything is centered on a core philosophy of doing good business, which is a centerpiece of the best organizations. In my local TJ’s, management actually has its employees read books on providing exceptional customer service. The managers look at doing the right thing for the customers, rather than squeaking out profits and instituting punitive policies. The best organizations have integrity; they care about those they serve and want to serve them well. As a customer service snob and a patron of Trader Joe’s, I can say that the stores have never disappointed me. Because of the work I do, I look at all businesses hypercritically. I’m always looking for ways to improve on what someone has created, and from my vantage point TJ’s is as near perfect as it gets. So congratulations, Trader Joe’s: You are exceptional to the core.

“If you work just for money, you’ll never make it, but if you
love what you’re doing and you always put the customer
first, success will be yours.”

—RAY KROC

HOW TO BUILD YOUR CORE TOUCHPOINT PLAN

If you want to be as good as Trader Joe’s, you need to start with the philosophy of goodness. I know it sounds corny, but this is the essence behind the best companies in the world. We live and thrive in a connected economy, and the better we are at creating authentic, mutually beneficial connections, the better our businesses prosper.

Here’s how to build the perfect core experience:

Define Your Mission and Understand Why It Is Important: In researching thousands of companies, I found a key determinant of the success of the best organizations in the world: the power of WHY.

The mission of the very best, most successful, most profitable companies is centered upon the goal of serving a well-defined customer and market. When I ask people at successful companies why they do what they do, it’s all about serving a mission that includes their community, their employees, and of course their customers. When I ask people at failing companies why they do what they do, the answer typically is profit and sales. Isn’t that an interesting observation?

Start at the top with a clear and crisp understanding of WHY you do what you do. If you center your answer on your community, employees, and customers, all of your programs, policies, products, and services will derive from that overarching mission. If yours is a good mission and you are truly committed to it, you get to win.

I Mean It!

In college I took a course on child development. I remember learning that inconsistency in parenting can be disastrous. It’s true. Many parents with unruly children have built their own nest by saying one thing and doing another.

The same is true of organizations. If you say you’re committed to delivering exceptional customer experience but you develop and deliver policies that punish your customer, you create a core experience that will fail.

Your customers are smart and they’re paying attention. Never design a mission you’re not committed to.

Create a mission that matters.

Mean it.

Do it.

Your employees will follow with enthusiasm.

Don’t Play Follow the Loser: Many organizations follow the prevailing norm because it eliminates their need to commit to innovation and take on risk. It’s simply easier and (seemingly) safer to adopt the commonly accepted and expected business practices. However, with innovation and the corresponding risk comes the opportunity to really excel in your industry or organization.

For example, Trader Joe’s has developed a shopping flow using the small footprint of 8,000 to 12,000 square feet. However, this “risk,” given the company’s overall strategy, is actually an advantage to customers and a colossal advantage to Trader Joe’s. This innovation saves money on rent while significantly improving the shopping experience for the customers. Don’t imitate. Innovate! Trader Joe’s did and it worked.

Conduct an Innovation Intervention: If you really want to build an exceptional core experience, conduct an “innovation intervention.” Bring in customers—and if possible critics—and get their take on your core experience.

A friend owns a local restaurant and for a while had a devastating 3.5 out of 5 Yelp rating. It was killing his business. He called me and asked me to recommend Internet reputation companies to help fix the problem. (Companies exist that post good reviews as part of a strategy to push down bad reviews in the overall ranking.)

I suggested that before he attempted to fix his ranking through digital witchcraft, we should assess why people rated him poorly. After a tough discussion, it turned out that, if anything, his ratings were more than fair.

As a result, we reached out to every single person who posted a derogatory rating of the restaurant. We offered to refund the cost of their meal if they would come to a thirty-minute innovation intervention at the restaurant. They agreed, and a virtual tribe of dissatisfied customers showed up and raked my friend over the coals. It was so bad that this man, who is fifty-five-years-old, actually cried. In the end, he offered everyone his sincere apology.

I worked with him for a day, and we rebuilt his core experience based primarily on the insights these customers provided. In the end, the customers updated their ratings and posted about how impressed they were that he took the time to hear their grievances. In fact, they became advocates, regularly posting on various rating boards about how great the restaurant was.

In only eight weeks, his rating on both Yelp and TripAdvisor climbed to 4.5 out of 5. His employees enjoyed work more, and my friend learned a valuable lesson: You don’t need digital witchcraft; fix yourself and you won’t have upset customers. As the axiom suggests, “Our business gets better when we get better.”

GOOD IS NOT GOOD ENOUGH

Remember, the core experience you provide cannot just meet the baseline level of customer expectation. A good customer experience is about surprising your customer with exceptional products, services, and human experiences. Just because you have to manage operations every single day doesn’t mean you can put customer experiences on the back burner.

Develop a philosophy of “customer first, operations second,” because I can assure you your best competition does. It’s easy to get caught in the minutiae of what writer Dennis Wheatley calls “majoring in minors.” There won’t be any operations to manage if you don’t have customers.

In the connected economy, your customers’ expectations climb every day, as does your competition’s. So be good to the core!

The core experience, like all touch moments, is composed of granular micro-moments. The details depend on your individual business, but in a nutshell, it’s about how easy it is to do business with you on an ongoing basis. Remember, over time we tend to take our customers for granted, and this can be true of some of our biggest customers. Constantly looking for ways to reinvent the customer experience by removing pain and adding pleasure and convenience drives sales and profit like nothing else can.

Most organizations pay millions of dollars to acquire customer insights, yet they spend virtually nothing on creating and deploying sustainable and outstanding customer experiences. Stand apart and ahead by crafting exceptional core customer experiences, and avoid one of the biggest hazards in business: a riskcentric, internal focus that takes your gaze off your customers’ needs and problems. Punitive customer policies serve only you, and your customers respond by drowning you in negative social media ratings.

Think of creating these perfect customer experiences as a design activity. First, develop the skill sets you need to gain actionable insights, and then invent beautiful moments across the entire customer journey. When you are truly outwardly focused on your customers, insights will come at you every single day, and you will then be looking at new innovation plans weekly, not annually.