Customer Experience Management

Top 3 Practices of Customer Experience Leaders

Okay, are you ready for this? These are lessons that I learned during my 20+ years managing health clubs. Simple to identify but harder to implement. Three practices used by top Customer Experience Management practitioners that can help you begin to manage the experience at your business vs. just putting out fires as fast as they start. Here they are!

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  1. Listen!

    The true leaders of a positive customer experience actually listen to their customers AND their employees.  They have systems in place that allow them to listen to their customer & employee feedback (un-solicited!) and methods to analyze and use the data or information provided by those customers and employees.  When the customer or the employee points out a faulty policy or ‘friction-full’ procedure, they listen and work together to find a better way.

  2. Shelve the ego!

    It takes a unique leader to be able to openly listen to criticism and to make positive change as a result. Most leaders are set in their systems and operations and are unwilling to make changes even when their customers and employees are clearly telling them this isn’t working. A true leader knows they are only as strong as their weakest employee and operation. For example: at the next convention or out of town meeting, listen for this: “My people just can’t survive without me. I need to get back! Things are falling apart.”  This company is NOT a leader in the customer experience world.  True customer experience leaders don’t wait for the bottom line to drop before making change.

  3. Have a Customer Experience Mission!

    EVERY employee must know his or her role and expectations in the customer experience strategy. The customer experience mission statement is clearly and effectively communicated to every single employee, every single day. Customer experience is the first thing and the last thing talked about when hiring a new employee. The new hire KNOWS and UNDERSTANDS the company’s commitment and passion for customer experience from day one. And they also are clear on what role they play in that experience. The true leaders of customer experience continually hire and train around their customer experience strategy.

RETENTION BY DESIGN

I own and operate two health clubs and in our clubs we relentlessly work to remain focused on delivering great “member experience.” As my own understanding grows about “customer experience” (member experience in fitness terminology) and the memories they create, I hope to share what I’ve learned to continue improving not just our own operations but to have a broader impact on the fitness industry.

Getting the customer experience right requires acute awareness that all interactions between customer and company (people, plant, equipment, advertising, website, etc.) will merge into a single belief about your company.  This “memory” IS the experience.     Experience shapes belief.  Belief shapes action.  Action shapes results.  Say someone walks into your club for the first time and they are greeted warmly and personally. The sales person is genuine, caring and inquisitive about this person’s world.  The club is spotless and there is energetic and friendly conversation all around.

From this experience one begins to form a belief – “These people care and this place is authentic.”  If, when returning the next day, there is someone different behind the front desk talking on a cell phone and not paying attention, I start to question my belief –“Maybe I was wrong. Perhaps it was just the individuals that were caring yesterday, not the company.” 

Getting the experience right can’t be a “sometimes” thing.  It must be pursued “all the time” thing, even if you know that “all the time” isn’t possible. We call this the pursuit of excellence!

 

The authors of The Experience Economy (B. Joseph Pine and James H. Gilmore) explain that if we receive any cues not aligned with the experience we expect, the experience is degraded. At Disneyland, if we see two staff members arguing or a sweeper walk past garbage on the ground, we log this in our memory as a “chink” in the Disney armor. Which by the way, I have never seen. But I give these examples of what would be negative “cues” inconsistent with our beliefs about Disney.  

In our own Member Experience Manual (our internal “Bible” for our gyms) we describe negative cues as “defects,” or, something that will degrade the quality of the product. We create customer experiences. Negative “cues” are the defects of great experiences. Our industry delivers all levels of member experience. Many health clubs effectively apply the same customer experience principles as some of the world’s greatest companies (Apple, Four Seasons etc.). Many are small and connected enough to always deliver a great “home town” experience. But mostly, when it comes to customer experience management we deliver mediocrity.

If we are to live up to our potential as major contributors for solving the current health care crisis, we need more legendary customer care stories than are being generated today.  If we totaled up all stories told about health clubs around the world, it seems the net result would be far more negative stories than positive.   Our goal should not be to merely have more positive stories than negative, but to obliterate negative stories. 

Create so many positive stories that the negative are insignificant by comparison. 

Would that help retention? Yes. We hear that we service the same 15% of the market. Yet attrition is stil 40% (or so). If membership growth in the US has moved from 45 million in 2009 to 50 million in 2011 and attrition is 40%, then over the last three years there are roughly 56 million that have quit. Granted, may of those rejoin somewhere else. But, I am concerned with those who came to use to solve a problem and instead were sold a membership. I am concerned with those that are used to the customer experience they receive from Apple, Starbucks, Disney and others, only to wonder why the same experience hasn’t permeated a business dependent on repeat visits and recurring revenues.

If we are ever to live up to our potential, we must design (Design: to create, fashion, execute, or construct according to plan) the end-to-end experience in a way that connects with and dazzles people when they are at their most vulnerable and we are in our greatest position of power and influence. This is retention by design. The next step is to deliver the experience. No process, policy, or person stands alone.  They all connect in a “customer experience ecosystem” to form what is the experience of our members. 

Share your comments on this topic. Do you have a purposeful system designed to retain members at you health club? We would love to hear from you.

Thanks!

7 ways great companies use OCEM

As a health club operator and the vice president of strategic initiatives for a customer experience management software company, I know the importance of operational customer experience management (OCEM), which involves listening to customers and improving their experience by implementing changes based on that feedback. OCEM is not new to large enterprises that have big budgets along with a host of analysts and researchers as well as a driving desire to differentiate themselves from competition. But OCEM may be new—and a challenge—to smaller companies.

Executives at Fortune 500 companies know that customer loyalty is critical to their companies’ success, so they understand the importance of listening to those customers. Doing so helps to increase retention, and the recession has meant that the focus on retention is at a fever pitch. Executives see the importance of quantifying the return on investment of their loyalty initiatives, and this fosters even more investment in customer loyalty.

All of these OCEM initiatives have become commonplace at Fortune 500 companies. Not so for most companies in the fitness industry. Our industry needs to catch up. The fitness industry has pockets of companies with incredible customer loyalty and experience with OCEM, but the overall level of awareness and the desire to change is quite low. No matter what kind of fitness facility you run, you are a service business. You pay people to do things that are supposed to make the members’ experience better. OCEM systems tell you if that is working. They measure what, up until now, has been lost in the ether of the club.

The following are 7 ways that great companies use OCEM:

They set OCEM goals and measure progress. The key to OCEM is to talk to your members about customer experience, then measure it. As one company leader put it, “By the time poor customer experience shows up on your profit and loss, it’s too late.” Every gym owner should use a system to capture member feedback and benchmark against widely accepted methods for quantifying customer experience.

They embrace all feedback. The best companies do not get bogged down in dogma. Negative feedback as well as positive feedback are embraced and deeply investigated to recover customers and improve the future experience for all. Every individual piece of feedback matters.

They close the loop. When customers provide feedback, they get responses. Your members want to know that they have been heard. Your OCEM design should allow each of your locations to receive a stream of feedback at a pace that is easily manageable by the front line on a daily basis.

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They socialize feedback. These operators share with their staff the company’s scores for friendliness, cleanliness, overall experience or likelihood to repurchase. Staff discuss and dissect the numbers in meetings. Customer comments are used to support the desired culture. This is easy in the gym environment, and it is fun. I send comments to our entire staff about twice a week emphasizing what makes us different and thanking the staff for doing what we cannot do without them.

They nurture staff engagement. Part of the reason you need to socialize customer data is that it increases staff engagement. Business owners make sure all corners of their operations are aware of key loyalty metrics relative to goals and to peers in the system.

They know that customer experience leads. Downward trends in customer experience scores are the leading indicators for customer exodus. Awareness around customer experience allows one to see what has not been visible and to respond before it hits the profit and loss statement.

They never stop. These companies listen, respond thoughtfully, recover customers, make changes to delight and keep customers, set targets and measure the effectiveness of their efforts. This is how OCEM works and how companies differentiate by enchanting their customers. The playing field is wide open in the fitness industry. Operators with the right philosophy, the tenacity and the willingness to learn from enterprises more experienced and more profitable than ours will reap the greatest benefits.

Click below to learn about a software system that will improve the member experience.

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3 Best Practices of CX Leaders

These are lessons that I learned during my 30+ years managing health clubs. Simple to identify but harder to implement. Three practices used by top Customer Experience Management practitioners that can help you begin to manage the experience at your business vs. just putting out fires as fast as they start. Here they are!

    1.  THEY LISTEN!

The true leaders of a positive customer experience actually listen to their customers AND their employees.  They have systems in place that allow them to listen to their customer & employee feedback (un-solicited!) and methods to analyze and use the data or information provided by those customers and employees.  When the customer or the employee points out a faulty policy or ‘friction-full’ procedure, they listen and work together to find a better way.

     2.  NO EGO!

It takes a unique leader to be able to openly listen to criticism and to make positive change as a result. Most leaders are set in their systems and operations and are unwilling to make changes even when their customers and employees are clearly telling them this isn’t working. A true leader knows they are only as strong as their weakest employee and operation. For example: at the next convention or out of town meeting, listen for this: “My people just can’t survive without me. I need to get back! Things are falling apart.”  This company is NOT a leader in the customer experience world.  True customer experience leaders don’t wait for the bottom line to drop before making change.

     3.  Have a Customer Experience Mission!

EVERY employee must know his or her role and expectations in the customer experience strategy. The customer experience mission statement is clearly and effectively communicated to every single employee, every single day. Customer experience is the first thing and the last thing talked about when hiring a new employee. The new hire KNOWS and UNDERSTANDS the company’s commitment and passion for customer experience from day one. And they also are clear on what role they play in that experience. The true leaders of customer experience continually hire and train around their customer experience strategy.

2 best practices for closing the loop

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In all bricks and mortar operations, the leverage point for improving customer experience happens at the location level. It is at the location level where the most information on individual members resides.  Empowering at this level draws out more impactful actions for improving the customer experience.  This is the “distributed approach”.

Distributing the responsibility and authority for multiple people to close the loop and solve problems within each location reduces business processes and speeds action.  Location-specific knowledge and tacit knowledge about individual members makes problem solving and member dialogue much easier. Moreover, a distributed approach creates a platform for adopting other OCEM best practices that will drive your program and ultimately, the customer experience. Here are 2 best practices.

#1 – Response Team Approach

  1. This approach is generally used when an organization does not have a “daily huddle” for operations at the location level.
  2. Requirements
    1. Establish a team lead
    2. 3-6 people trained in CLF best practices
    3. MXM logins for each person
    4. Each Team Member “owns” 1 or more specific days of the week. (e.g. Bob has Monday, Lisa has Tuesday etc.)
  3. Team Responsibilities
    1. Respond to 100% of new feedback on assigned day(s).
    2. Cover one another for sick/vacation days
    3. Take ownership of issues and follow up to resolution
    4. Share ideas for improving member experience
  4. Impact
    1. Heightened awareness of the customer experience throughout the location
    2. Greater empowerment to solve problems and improve operations

#2 – Daily Huddle Approach

  1. This approach is possible when a daily leadership huddle takes place at least every weekday.
  2. Requirements
    1. Top of daily agenda
    2. MXM logins for each person
    3. Trained in CLF best practices
    4. Ability to look at the system together during the meeting
  3. Team Responsibilities
    1. Review status of case assignments from the previous day
    2. Review new cases
    3. Ownership of cases distributed to appropriate team member
  4. Impact
    1. Establishes priority of member experience at the management level
    2. Creates easy pathways for managers to use member experience data in departmental team meetings
    3. More likely to have authority to make change

The opposite of the “distributed approach” is the “centralized approach”.  The centralized approach is generally ineffective and overly cumbersome for multiple reasons.  Here are two examples of centralization:

  1. Single person responsible for CLF in one location
  2. Single person or small team with centralized responsibility for multi-location operation

Closing the loop in a timely, meaningful, and personalized manner is the starting point of optimizing your Operational Customer Experience Management practice.  The intent of each of these two best practices is to ensure:

  • Cases are handled swiftly
  • Action is taken
  • Workload is distributed
  • Increased opportunities to share ideas for improvement
  • Most importantly, the customer experience actually improves.

 

     

      Animate your health club with a new strategy

      From 36 percent to 89 percent. According to Gartner Research, 36 percent of enterprise CEOs in 2011 said customer experience is the dimension on which they are now competing. That number jumped to 89 percent in 2016.

      These CEOs of major companies are saying that customer experience is the battlefield, and having a strategy to win on that battlefield is imperative. I suspect that in the next three years, the percentage of CEOs who say that customer experience is their differentiator will rise to 95 percent. But why, and why now? What is happening that providing a customer experience has become so imperative for so many companies? Haven’t they always focused on customer service? Yes, they have. So when they talk about a customer experience strategy as a new competitive dimension, they are talking about embedding the customer perspective into every cell of the company and creating a unified (i.e. whole company) approach to understanding the customer.

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      The very nature of strategy is that it animates an organization. When you have a unifying vision and strategy and electrify it with the right customer information, your decisions will be different. That sounds simple, but it is where differentiation begins. Your decisions will be different than they would have been had you not adopted the strategy. In other words, if you have not created a unifying customer experience vision and strategy, and you have not adopted the discipline to track and manage its progress, you are getting left behind. You become the guy or gal who is in a highly competitive race but is unaware whether you are running first, last or somewhere in between.

      When you consider why there is such a massive push on customer experience, you might come to the conclusion that it is because of the proliferation of social media in all its forms — Yelp, Snapchat, Facebook, Instagram. Pinterest, Google+, etc. — and that these companies want to make sure they look good. Although improving social commentary is a nice outcome, it isn’t the main driver. The drivers are market share, revenue growth, same-store sales, share of wallet, margin and all of the usual suspects. In fact, I would sum up many of these companies’ approaches to social media as “Be a great company on the inside, and it will show on the outside.” Looking good on social media isn’t a driver; it is an outcome.

      What business owners are recognizing is the parity in the normal business functions among their competitive set. You better be good at marketing, finance, human resources, etc. You probably wouldn’t be around if you were not good in those areas.

      Moreover, all of these normal business functions are operational. This means that they have numbers and metrics that guide the day-to-day and give goals for the future. Someone at the top of the food chain takes ownership of these functions and ensures their success. This is simply the ante to being a good company.

      Managing the customer experience is the ante to being a great company, and someone has to decide to make customer experience a strategic objective. That person is the CEO, president or owner in the case of many smaller companies.

      Once that decision is made, aggressive action should be taken to break existing inertia. Set big goals — net promoter score (NPS) is a good one — measure and monitor all of the NPS key driver metrics on a day-to-day basis, respond to every single customer that provides feedback, get multiple people involved, establish a company-wide vision with hard edges on understanding when and how you will reach it.

      The worst mistake I see is when company leaders take a tactical approach to customer experience. This usually takes the form of testing whether one’s teams are willing to adopt and execute the new operational disciplines that it takes to make a strategy work. If their teams lack the interest in adopting the day-to-day disciplines, then these leaders capitulate. Strategy is not a trial balloon. Strategy is not decided at the front line. It is executed at the front line.

      If you are a CEO, president or owner, if you own one club or 100 clubs,you are the strategist, and it is you who will determine whether your strategy gets adopted or fizzles.

      There is a race going on. We are all in it, and there is a tremendous opportunity to differentiate your company. We estimate that only 2 to 3 percent of fitness companies are ramped up in their customer experience management discipline.

      Medallia Experience 2016

      The ClubWorks team had an amazing time in Orlando for the 2016 Medallia Experience.

      If you’re curious to get to better know the theme of the conference — Generation CX — check out the video below. This video kicked off the conference and speaks to the power of today’s customers. We hope it resonates with you. And if it does, we’d love it if you shared it with friends and family, on social media and beyond.

      Satisfaction Shift (ROI)

      What:

      Segment your customers into three groups: Detractors, Passives and Promoters. Identify the percentage of your customers that each group represents. Define the value of each group to your company based on how much they spend per visit, per month, per year, or over a lifetime. Now answer the question: What is the business impact of transforming 10% of Detractors to Promoters?

      Why:

      The answer to this question defines the world of opportunity created by greater customer satisfaction. Pin one big, aspirational number on satisfaction