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50,000 Moments of Truth: Getting High Grades on a Customer's Report Card
 

50,000 Moments of Truth: Getting High Grades on a Customer's Report Card

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“Acquiring a new customer can cost up to 5 times more than retaining a current customer and a 2% increase in customer retention can have the same effect on profits as cutting costs by 10%.” Think ...

“Acquiring a new customer can cost up to 5 times more than retaining a current customer and a 2% increase in customer retention can have the same effect on profits as cutting costs by 10%.” Think about it. Is your organization actively engaged on the front lines? Are you actively involved in satisfying customers? Or are you turning your last remaining customers away with poor service experience? This article talks about why it is important to consider the various moments of truth a customer encounters and how to get “high grades” on a customer’s report card.

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    50,000 Moments of Truth: Getting High Grades on a Customer's Report Card 50,000 Moments of Truth: Getting High Grades on a Customer's Report Card Document Transcript

    • 50,000 Moments of Truth:Getting High Grades on a Customer’s Report Card“Acquiring a new customer can cost up to 5 times more than retaining a current customer anda 2% increase in customer retention can have the same effect on profits as cutting costs by10%.” Think about it. Is your organization actively engaged on the front lines? Are you activelyinvolved in satisfying customers? Or are you turning your last remaining customers away withpoor service experience? This article talks about why it is important to consider the variousmoments of truth a customer encounters and how to get “high grades” on a customer’s reportcard.© Rupa Shankarwww.cxpdesign.com
    • 50,000 Moments of Truth:Getting High Grades on a Customer’s Report CardThe term Moment of Truth was coined by Jan Carlzon, who managed the Scandinavian SASAirlines. He used the term to mean those moments in which important brand impressions areformed and where there is significant opportunity for good or bad impressions to be made. Heonce said – “We have 50,000 moments of truth out there every day”. At the time, Carlzon wasthe CEO of Scandinavian Airlines Systems and had helped the company reorient itself tobecome customer-driven. In his own words, "a company that recognizes that its only true assetsare satisfied customers, all of whom expect to be treated as individuals and who won’t selectthem as their airline unless they did just that.”Moments of Truth often happen when they are not thought to occur, in our interactions withstaff, store visits, encounters with products. As they say – you don’t get a second chance tomake a first impression; moments of truth are very critical moments. When customers havecertain expectations and they are disappointed, they can form very negative impressions. Withthe proliferation of social media, you can be sure that they will not keep their negativity anddisappointment to themselves but will share it with their friends, family – in the process,passing on the feeling to the community-at-large.Each of us has a personal storehouse of memories of the moments of truth in our lifeexperiences. We have experienced lousy moments when it seemed that people or systems orboth almost went out of their way to be difficult or unhelpful. And we have had shiningmoments when we felt appreciated, cared for, cared about, and genuinely valued. From yourpoint of view as the customer, or the receiver of the service, you experience the moment oftruth as intensely personal.For instance, when a Zappos.com customer service representative took the time to understandthe “specificity” of our needs and redirected us to a competitor’s website to purchase the© Rupa Shankarwww.cxpdesign.com
    • product as it was not available on the Zappos website at the time, that demonstrated that ittruly cares about its customers’ objectives and is willing to go to great lengths to help customersfind what they are seeking.The moment of truth for Carlzon was every opportunity to make a difference when in contactwith customers, by and large on the front lines.In another situation, when our brand new Motorola RAZR XT910 phone stopped working due tosome accidental water spillage, we were told by Motorola to bring it to a Motorola-authorized local service center. Additionally, they instructed us that the phone being premium innature, it would be sent directly to the factory for a careful analysis of the problem andrepair/replacement. When we visited the service center, we were shocked by the atmosphere ofthe place—over 60 people cramped into a small 10 X 10 feet room with no ventilation. It had theclaustrophobic, loud, fish-market like atmosphere – everyone waiting to get their phone (allbrands, all price points) repaired. There was nothing premium about it. Starting with this “verypoorly managed” first impression, every touch point from this moment on went down-hill for us.The customer service rep, looked completely exhausted and harrowed from handling such awide variety of mobile issues—exhibiting little patience or concern, she quickly dismantled therather expensive phone, openly and very carelessly—despite repeated requests to send thephone to the company for proper repair. Then she explained to us that we would have to pay afee for inspection of the phone. We were assured that the phone would be repaired and readyfor us in 7-10 days. We heard back from the customer service rep only after 2 weeks and weretold that we would again have to spend quite a lot of money to have some of the phone partsreplaced. There was no talk about warranty, sending the product back to Motorola, the originalmanufacturer for repair, etc. After we agreed to go ahead with the repair, the service centerkept the phone with them for over a month. After 2-3 desperate attempts to get our phoneback, they finally returned it saying that the phone is permanently damaged and cannot berepaired. The whole process (including diagnostics) which should have taken 7-10 days, asassured earlier, took almost 2 months—what remained of the phone? Nothing. The entire© Rupa Shankarwww.cxpdesign.com
    • continuum of the experience left us feeling frustrated, disappointed and terribly under-served ascustomers. When we wrote to the customer query email address provided on the officialMotorola website and explained the above experience, we did not get any help oracknowledgement from the Motorola team. The whole experience had left such a bad taste inour mouths—promising never to consider Motorola products again in the future due to theterrible experience encountered.From research we know that, “Acquiring a new customer can cost up to 5 times more thanretaining a current customer and a 2% increase in customer retention can have the same effecton profits as cutting costs by 10%.” Think about it. Is your organization actively engaged on thefront lines? Are you actively involved in satisfying customers? Or are you turning your lastremaining customers away with poor service experience?© Rupa Shankarwww.cxpdesign.com
    • About CXP DesignCXP Design (www.cxpdesign.com), founded by Rupa Shankar, is a platform for marketers,technologists, designers and leaders to discuss and gain a deeper understanding of cross-channelcustomer experience design, develop empathy for customer needs and learn how to createproducts and services that deliver "wow" experiences for customers.When we check into a hotel. When we shop on-line. When we buy a pair of shoes. When we get ona flight. These are experiences by which we measure brands every day. However, most companiesare without the tools to purposefully design those experiences for maximum value. That’s whereCXP Design comes in.Day in, day out, we live, sleep, eat, breathe and unravel the riddle that is human experience, leadingto more loyal and committed customers for our clients.www.cxpdesign.comwww.facebook.com/cxpdesignwww.twitter.com/cxpdesignhttp://in.linkedin.com/groups/CXP-Design-Creating-Customer-Wow-4726523Rupa is an Associate Director at Happiest Minds Technologies (www.happiestminds.com), a next-generation IT Services & Solutions company at the forefront of Providing Advisory, Implementation andManaged Services on Social computing, Mobility, Analytics, Business Intelligence, Cloud computing,Security and Unified Communications. At Happiest Minds, Rupa is responsible for uncovering andactivating innovative digital and social engagement strategies for its clients, spearheading thedevelopment of frameworks and solutions for different industry verticals and enhancing the global go-to-market strategy. She taps into her past work as both a design practitioner and marketer to help HappiestMinds clients envision and define broad, end-to-end customer experiences.© Rupa Shankarwww.cxpdesign.com