We’re Moving to the New Customer Innovations Website

We are very happy to announce that Customer Innovations is moving to a new and updated home on the web.

You can find us at:  www.customerinnovations.com

The ideas and insights we’ve been sharing on this blog site have already been relocated to this new location.

Onwards and upwards,

Frank Capek,  CEO, Customer Innovations, Inc.

Customer Experience and Agile Maneuver: Succeeding in a Highly Dynamic Environment

There are four core processes you must execute effectively in order to succeed in any uncertain and rapidly changing external environment.  These four core processes are the foundation of agile maneuver:

  • OBSERVE changes in the environment in real time… while aggressively avoiding your own strong tendency to just see what you either expect or hope to see
  • ORIENT yourself quickly to what those changes mean… being careful to challenge and revise your outdated assumptions and beliefs about reality
  • DECIDE on a course of action… chosen from range of creative alternatives most relevant to the changing environment
  • ACT in a coordinated and committed manner… while being ready to OBSERVE, ORIENT, DECIDE and ACT in order to ensure progress and enable course corrections as necessary.

NOTE: These interrelated processes are called the Boyd Cycle; more on this later

The ability to effectively OBSERVE – ORIENT – DECIDE- ACT is critical for any organization that must adapt to the rapidly changing customer needs, priorities, and criteria.   The current economic environment is just part of the challenge.  The uncertainty and fear we’re experiencing in the economy must be multiplied by the high levels of technological, demographic, social, and global competitive changes we’ve seen over the past few years.  Any organization that relies on an outdated set of beliefs about customer is more likely to accelerate their irrelevance than ensure their success.

Many organizations are already dangerously disconnected from their customers.  One of the indicators that this disconnect is Bain’s research that found 80% of companies believed they were delivering a superior experience while only 8% of their customers thought they were receiving a superior experience.  This disconnect will continue to grow as the rate of change in customers’ priorities exceeds the rate of change of managements’ beliefs about customers.    Across the industry situations we’ve seen, there are four urgent issues that most organizations must OBSERVE – ORIENT- DECIDE – ACT on:

  • Customers’ Priorities are Shifting. During a recession, your customers do not just become more conservative… their needs and priorities change significantly.  As a result, it is very dangerous to rely on traditional or untested assumptions about customers’ needs, priorities, and behavioral drivers.   Prescription – OBSERVE: Get outside of the normal channels to observe, talk with customers, and get a clear picture of specific shifts in their needs, priorities, and behavioral drivers.
  • Experience Issues are Driving Attrition. Your organization is unnecessarily losing customer and prospects you worked hard to acquire.  Most organizations frustrate, annoy, and miss opportunities with customer in ways that are hard to see without looking at the experience clearly from the customers’ perspective.  Prescription – ORIENT: Quickly diagnose and repair specific customer experience issues that are leading to unnecessary attrition and lost opportunities.
  • Customer Profitability is Shifting. A smaller number of your best customers will contribute an even larger share of your profits… while a growing number of margin or unprofitable customers will create even more of a drain on the system.  Prescription- DECIDE: Identify and aggressively prioritize investment in understanding, collaborating with, and improving the experience for the most valuable customers.
  • Employee Engagement is Deteriorating. As a recessionary mindset settles into the workforce, it drives increasing levels of distraction, indifference, and depression.  Unless the employee experience is addressed, these issues will have a profound impact on the level of hospitality employees provide customers.  Prescription – ACT: Shift communications and engagement efforts to mobilize employees and create a drumbeat behind the highest priority initiatives and performance objectives.

The question is… can you do this faster and more effectively than your competitors?

The winner of any business competition is determined by THE CUSTOMER

In any competitive situation, it’s a race to see which of the competitors can effectively re-orient themselves to the rapidly changing customer priorities and, in doing so, outmaneuver their competitors.  An organization that can OBSERVE – ORIENT – DECIDE – ACT faster and more effectively than their competitors will be able to remain relevant, retain and grow their business, and build the strongest customer relationships.

There are many great examples of this.   One classic is the Honda – Yamaha “war.”  Honda learned that Yamaha was planning to build a large factory to ramp up production of motorcycles.  However, rather than responding to this competitive threat by building another factory of their own, they out maneuvered Yamaha by concentrating on business processes that allowed them to quickly release a flood of new models aimed at the rapidly changing concept of what customers would find compelling.  Customers responded positively and Honda emerged with the advantage and additional market share.

There are numerous other outstanding examples, including the way we’ve seen Dell outmaneuver many of the other PC manufacturers in the late ’90s.  We’ve seen WalMart outmaneuver just about every other mass market retailer over the past 20 years.  We’ve also seen Toyota outmaneuver GM and Ford, Southwest outmaneuver Delta and American, Best Buy outmaneuver Circuit City, and we’re currently seeing Google and Apple outmaneuver Microsoft today.  In each of these cases, the prevailing organization has done a better job of OBSERVE – ORIENT – DECIDE – ACT… and the winner has been determined by the customer.

We’ve applied the core principles of agile maneuver in our work with clients over the last decade.  The high level roadmap we’ve followed is:


The overarching goal is to keep the value proposition and customer experience relevant, compelling, and differentiated.   In order to sustain differentiation and even move the market in a new direction, you must offer customers something new; a product, a service, or an experience that both fits with… and influences… the way they think, feel, or act.

However, we frequently come across organizations that have beliefs about customers and their own capabilities that range from simply arrogant to downright delusional.   This can include inaccurate beliefs regarding who the company’s best customers are, what customers really want, and how differentiated the company’s products, services, and capabilities really are in the customers’ eyes.  If this is true, it’s only a matter of time before the business becomes irrelevant and its customers increasingly go elsewhere.

My post, titled “Rapid Revenue Retention: A “Swarming” Approach to Keeping Customers During Recessionary Conditions,” provides a specific application of agile maneuver focused on customer retention. The Rapid Revenue Retention approach is structured like an OODA loop.  The approach quickly Observes and Orients around the experience customers are having and uncovers the experience elements that create frustration, confusion, annoyance that contribute to attrition and missed additional opportunities.  The approach then focuses on Deciding and Acting on the highest priority interventions required to reduce attrition.  We’ve seen companies realize benefits from these efforts ranging from $20-100 million in incremental revenue.

The Boyd Cycle and Agile Maneuver

f-86The Boyd Cycle:  OBSERVE, ORIENT, DECIDE, and ACT was developed by and named after Colonel John Boyd, an exceptional US Air Force fighter pilot engaged in the tail end of the Korean conflict.  After the war was over, Boyd was intrigued by the fact that the Americans achieved as high as a 10-to-1 kill ratio in air-to-air combat, despite the technical superiority of the Russian MiG 15‘s flown by the North Koreans compared to the American F-86 Sabres.  The MiGs had a higher ceiling, superior climbing rate, faster acceleration, a tighter high-altitude turning radius, as well as, more powerful weaponry.   When Boyd studied this, he found that F-86s had two distinguishing features that allowed the American pilots to better observe the situation unfolding around them and respond more quickly than their adversaries.  Those two features were a canopy design that allowed better 360o visibility and hydraulic controls along with an all-moving tailplane that enabled pilots to respond more quickly.

Boyd concluded that these two capabilities contributed to the American pilots’ ability to OBSERVE, ORIENT, DECIDE, and ACT more quickly than their adversaries.   The result was that the American pilots could outmaneuver the North Koreans despite superior raw capabilities of their technology.  Boyd described an ability called “fast transients” that allow one entity to operate “inside the OODA loop” of their adversaries.  When this happens, adversaries’ actions become increasing irrelevant because they are reacting to an environment that has already changed.  Eventually the adversary gets so confused that they can no longer stay on top of the changing situation.


Boyd went on to develop extensions to this theory that have become the central tenets of modern maneuver warfare and is considered to be one of the most influential military strategists of the late 20th century.   (See:  Robert Coram’s Boyd: The Fighter Pilot Who Changed the Art of War).  In addition, Boyd is credited with the design of the F-16 Viper light weight fighter that put the principles of agile maneuver and fast transients into practice.

By the way, Boyd offered an elegant proof of why there is always on “orientation gap” between an entity’s beliefs and the realities of that entity’s external environment.  He showed that it’s impossible to fully understand the performance of any complex system while operating inside that system.   His proof used a combination of Gödel’s Incompleteness Theorem, Heisenberg’s Uncertainty Principle, and the Second Law of Thermodynamics (see Boyd’ paper titled:  “Destruction and Creation“).   The key learning is that, in order to maintain an accurate or effective grasp of reality, one must undergo a continuous cycle of interaction with the environment in an effort to continually close a gap that is always growing.  This has profound implications for competitive business situations.

OBSERVATION:   Getting Past an Arm’s Length Understanding of Customers

The first issue that must be addressed is the gap between the customer who is “out there” and the decision makers who are “in here.”   Many companies have a very arms length way of trying to understand their customers.  As Wharton Marketing Professor, Peter Fader, observed, “Our understanding of customers is about where it was 40 years ago.  We can store every customer transaction in our database, but we need to find a way to use this to understand what makes them tick.”

Most companies tend to hire market researchers to go “out there” and conduct interviews, surveys, and focus groups in an attempt to find out what those customers really want.  The researchers bring back what they’ve learned and, in most cases, deliver a presentation or write a report.   In some cases, the group of decision makers actually attempts to get their head around these findings and try to guess what new products and services might work for those customers.

I’ve always felt that trying to understand customers based solely on arms length quantitative analysis feels a lot like trying to determine how the furniture upstairs is arranged…  by tapping on the ceiling! But the ceiling is a little like the barrier between the company and its customers.  Obviously, you’d get a much clearer picture if you just went and took a look… rather than trying to infer what’s going on through indirect and limited data sources.  In addition, inferences drawn from arms length approaches are prone to interpretation errors.  Without an adequate visceral context for understanding the data, we’ve seen many organizations draw conclusions akin to “Our customers in South Florida are born Hispanic and die Jewish.”

In the more boundariless, Wikinomics view of the world, there are a growing number of examples of organizations bringing the customer inside.  This Next Generation Experience is “always on” listening to, observing, and interacting with customers.  It includes organizations that are starting providing platforms for collaborating with customers on the development and improvement of the products, services, and experiences.  This includes great examples from Dell‘s IdeaStorm and My Starbucks.com.  It also includes companies like Peugeot, engaging customers in the design of its vehicles.  It also includes platforms for connecting customers with other customers in order to have them share experiences and provide each other support.

ORIENTATION:  The Destruction and Recreation of Beliefs

Of the four processes ORIENT may be the most pivotal.  The way we ORIENT filters and biases the way we OBSERVE.  It also influences and constrains what we DECIDE to do and how we ACT.  In essence, ORIENT is all about accurately understanding how the environment you’re in is unfolding.  This is very difficult for people to pull off.  The issues is that to some extent, we all hold onto beliefs about the world that significantly bias the way we perceive and interpret what happens to us.   Our beliefs also have a profound impact on the way we perceive, interpret, and evaluate what we OBSERVE in our environment.

We don’t see the world the way it is… we see the world the way we are.

Although our beliefs are never fully accurate representations of the way things actually are, they become a real problem if the environment around us is changing rapidly.  Very often we just see what we expect to see. Dr. Leonard Orr said this succinctly as, “What the thinker thinks, the prover proves.”

In addition, our beliefs limit and enable what’s possible by influencing the alternatives we consider and the actions we take.   George Bernard Shaw once said,

Our lives are shaped not as much by our experience as by our expectations.

Our beliefs limit and enable what’s possible for each of us in our lives.  Regardless of what we’re willing to admit… our behavior is always fully aligned with our core beliefs.  In fact, we cannot activate, maintain, decide about, prefer, plan for, or pursue any goal which is not grounded (implicitly or explicitly) on a set of underlying beliefs.

In any situation where the external environment is changing faster than our beliefs, we run the risk of taking actions that are not only irrelevant but, in many cases, accelerate our own demise.  In order to close that gap, the trick is to uncover and master beliefs rather than belimited by them.  These can include the beliefs about what’s important, as well as, the unwritten rules that drive the real behavior of the organization.  This is both critically important and easier said than done.  Your beliefs are so much a part of how you think that it can be difficult to recognize them.  It’s like a fish being unaware of the water it’s swimming in.

In a fascinating CIA paper titled “The Psychology of Intelligence Analysis” Richard Hauer describes not only the issues surrounding the perception and interpretation of information but also outlines an approach to overcoming this bias.  The approach, called the “Analysis of Competing Hypotheses” forces analysts to more deliberately evaluate evidence for alternative conclusions rather than searching for evidence to confirm a pre-existing hypothesis.  I’ve found that following a simplified version of this approach to be invaluable on a personal level.  It avoids the tendency we all have to just look for and see the evidence that supports our pre-existing beliefs.  The basic steps of this approach are to:

  1. Identify a wide range of competing hypotheses
  2. Gather evidence for and against each of these hypothesis
  3. Prioritize each hypothesis based on the weight of evidence that disproves rather than proves it


It’s important to recognize that customers’ needs, priorities, and choices are different today than they were just 6 months ago.  Any organization that relies on an outdated set of beliefs about customer is more likely to accelerate their irrelevance than ensure their success.   In order to overcome this tendency it’s critical to follow the Boyd Cycle:

  • OBSERVE changes in the environment in real time… while aggressively avoiding the strong tendency to just see what you expect or hope to see
  • ORIENT yourself quickly to what those changes mean… being careful to challenge and revise outdated assumptions and beliefs
  • DECIDE on a course of action… chosen from range of creative alternatives most relevant to the changing environment
  • ACT in a coordinated and unconstrained manner… while being ready to OBSERVE, ORIENT, DECIDE and ACT to ensure progress and enable course corrections as necessary.

I’d love to hear from you with comments and questions… Cheers, Frank

A World Class Hospitality Experience: Four Seasons Aviara

Last month, I had the opportunity to do a keynote speech at a Maritz Customer Experience Conference.   One of the highlights of this event was a behind the scenes tour of the beautiful Four Seasons Aviara Resort.    I took copious notes and wanted to share a few of the salient elements that contribute to the world-class hospitality experience delivered by this resort.  Across the clients we’ve worked with, there has been an increasing recognition that No Matter What Business You’re In… You’re in the Hospitality Business; it doesn’t matter if its a hotel, restaurant, bank, auto dealer, healthcare provider, or an insurance company.

The central thread that ran through the entire tour was the high level of excitement and engagement of the associates in each area of the operation.  Each person we spoke with emphasized the Four Seasons management model:  Teach Lead Coach Counsel Consistently (TLCCC Model).

A strong employee experience focus is consistent across the Four Seasons brand.  Hiring is critical; based on the observation that an individual’s desire to serve is innate; there to be discovered not taught by the organization.  As Four Seasons founder Isadore Sharpe has emphasized, “We hire for attitude.  We want people who like other people and are, therefore, more motivated to serve them.  Competence we can teach.  Attitude is ingrained.”  For more information see the following publications:

(Both of these documents are available through the Cornell University School of Hotel Administration:  Center for Hospitality Research)

Every aspect of the facilities, services, and personnel are carefully designed and orchestrated in a way that is consistent with their mission:

Four Seasons is dedicated to perfecting the travel experience through continuous innovation and the highest standards of hospitality. From elegant surroundings of the finest quality, to caring, highly personalised 24-hour service, Four Seasons embodies a true home away from home for those who know and appreciate the best. The deeply instilled Four Seasons culture is personified in its employees – people who share a single focus and are inspired to offer great service.”

Here are a few of the highlights of the tour:            

Housekeeping.  The Four Seasons has highly detailed housekeeping standards that dictate the exact condition and location of every item in the room.  For example, the two desk chairs are always pulled out from the desk at a 45 degree angle to make it easier for a guest to sit down.  There are always four magazines carefully arranged on a magazine rack, placed in the same sequence, staggered with a one inch margin between magazines.  The body wash, shampoo, and conditioner are always placed in the exact same location in the shower. 

Each new housekeeping attendant is given 2 weeks of training.  In addition to learning the housekeeping standards, attendants are expected to be able to answer questions and handle a wide range of guest requests.  Housekeeping attendants are assigned 12 rooms per person with the assumption that caring for each room will take 45 minutes per day.  Attendants are expected to know each of their guests’ names. 

With the exception of the evening turndown service, there are no carts in the hallway to obstruct guests’ passage.  In order to make this possible, the Four Seasons specially designed roller bags for carrying supplies and a vacuum.  Attendants hand carry linens back and forth to the linen closets.

Guests traveling with small children are provided with toys, as well as, milk and cookies at bedtime.  The housekeeping staff places letter sponges with the letters of each child’s name in the bathtub before the guest checks in.  In addition, housekeeping provides child-sized bathrobes, cribs, step stools in the bathrooms, and child proofing.

The Four Seasons allows guests to stay with small pets.  If a guest is traveling with a pet, the hotel provides dog beds and dishes.  The carpets are cleaned after any guest has stayed with a pet.

The Perfect Room Program.  Although housekeeping evaluates the condition of each room on a daily basis, every room is taken out of service and refreshed every six months.  This process takes 1-2 days per room and is based on an 82 point checklist involving every aspect of the rooms décor, furniture, and equipment.  If there is ever a “Guest Activated Problem” (a.k.a., GAP), the standard for responding is no more than 15 minutes.

Concierge.  The concierge desk is a focal point for guest requests from simple restaurant reservations to more complex guest requests.  For example, one guest indicated they were bored and wanted something exciting to do for the day; the concierge arranged a helicopter day trip to the Napa Valley.  Each person on the Four Seasons concierge staff is either a member of or working towards membership in Les Clefs d’Or (pronounced lay clay door; meaning “keys of gold” in French), the international association of professional concierges.

It’s the bellman’s responsibility to learn about the guests preferences when greeting the guest either in the lobby or in their room.   Four Seasons bellmen consider themselves detectives; they have to watch for subtle clues.  Bellmen are given a lot of latitude to correct problems as they occur rather than having to get approval from management.  For example, one couple checked in to the hotel to decompress for the weekend and were given a room overlooking the pool.  As the bellman was escorting the couple into the room, he noticed the wife’s very slight reaction; she’s wasn’t excited about being above the pool.  The bellman immediately looked into the availability of another room.  The only available room was the Presidential Suite.  The bellman arranged to have the couple moved to this suite for the same rate as their regular room.  When the couple checked out, the husband said the following about the bellman, “I’ve never met someone who loves their job as much as he does!”

Facilities.  Everything about the lobby and the grounds are designed to signal “relaxation.”  This includes the muted color scheme, lobby layout, and beautiful fresh floral arrangements.  Employees with a passion for landscaping pay acute attention to detail in caring for the grounds.  Daily cleaning, trimming, and painting are done during times of the night and day with minimal customer traffic.  In addition, they make very limited use of power equipment in order to reduce noise.  The facilities and golf course staff at this property has surprisingly low turnover; they’ve only hired 5 new people over the past 4 years.

Overall, it was an impressive tour; enlightening to see the kind of effort that goes on behind the scenes in order to deliver a superior hospitality experience.  The challenge for leaders across industries is to figure out how to deliver compelling and authentic hospitality in your business.  Ultimately, it’s knowing how you want the customer to feel about themselves… not how you want the customer to feel about your business that will guide your way.

Amazon: Putting Customers First

I just came across a wonderful article in the NY Times, titled:  Put Buyers First? What a Concept.  The author had ordered a Playstation from Amazon for his son for Christmas.  On December 21st, he realized he had not received this $500 item.  Apparently, it disappeared after the package had been signed for by a neighbor.  The author called Amazon to report the missing item and, in the author’s words, “The Amazon customer service guy didn’t blink.  After assuring himself that I had never actually touched or seen the PlayStation, he had a replacement on the way before the day was out.  It arrived on Christmas Eve.  Amazon didn’t even charge me for the shipping.” 

On a personal note, I’m a (slightly) obsessive reader…  and a (somewhat) frequent Amazon customer.  I just looked back at my records for 2007.  In one year, I placed 54 orders and spent $3,951.13 with Amazon on books alone!!  (Pretty scarry… OK, I might be a little more than a slightly obsessive reader.)  Be that as it may, across all of my transactions with them, the quality of Amazon’s service has been stellar and, in most cases, they’ve exceeded expectations on delivery times.

The author of the NY Times article goes on to quote Jeff Bezos, on why he’s so obsessed with the customer experience, “[customers] care about having the lowest prices, having vast selection, so they have choice, and getting the products to customers fast,” he said. “And the reason I’m so obsessed with these drivers of the customer experience is that I believe that the success we have had over the past 12 years has been driven exclusively by that customer experience. We are not great advertisers. So we start with customers, figure out what they want, and figure out how to get it to them.”

This level of focus has clearly paid off.  According to Forrester Research, 52 percent of people who shop online say they do their product research on Amazon.  Not only does the focus on flawless service keep customers coming back but as Jeff Bezos has always emphasized, if you do something great for one customer, they’ll tell 100 customers.

That’s what the author of the NY Times article did… and I’m happy to do the same.  Onward and upward!!!

Personae-Driven Experience Design in Retail Financial Services

Over the years, we’ve had the opportunity to work with several leading retail financial institutions on a personae-driven approach to customer experience design.  The challenge is that most banks, insurance companies, and investment advisory businesses have a long legacy of product-centric, “everything for everybody” ways of thinking.  This leads to decision-making and resource commitments that reinforce “better sameness” rather than true differentiation.

Financial personae are used to describe a holistic picture of how specific individuals think about and behave with their money.   A financial persona includes how an individual thinks about making money, spending money, saving and investing money, donating money, etc…    This insight can be used to design highly differentiated experiences that are attractive and engaging for particular types of customers while ensuring that the experience still works well across the full range of customers in the population.  (See Personae-Driven Customer Experience Design for more background).  

There are several niche retail financial services organizations that are leveraging deeper customer insight and an out-of-the-box mindset in order to redefine the customer experience.  For example:

  • Umpqua Bank. With 146 “store” locations in Oregon and California, this growth-oriented retail services organization has been recognized by the Wall Street Journal, NY Times, Business Week, Fast Company, and CNBC for their innovative customer experience.  Their branch design is part upscale hotel, part retailer.  One of the things that is highly distinctive is Umpqua’s productized “banking blends” targeted at individual consumer and small business preferences.  For example, one of these banking blends, called “Club Carefree 50,” is geared toward people 50 or better with benefits such as travel discounts, The World’s Greatest Reads Book Club, Club Carefree 50 Community Connection Corps, and Health and Wellness programs.  Umpqua has a highly professional approach to service with the branch managers and staff cross-trained as “Universal Associates” responsible for delivering “Ritz-level” service. They have appeared 34th on Fortune’s 2007 list of “100 Best Companies To Work For.”  Since 2001, Umpqua’s organic loan and deposit growth has run 39% and 37% respectively.
  • AMPLIFY.  This Austin TX based credit union has a goal to provide more innovative, simple choices that help customers achieve more.  There are no teller windows or cubicles.  AMPLIFY branches have café style seating, wireless internet, gourmet coffee, music.  Employees use wireless table PCs, so they can sit down with customers.  Employees line up for customers rather than the other way around.  AMPLIFY provides online and mobile banking options. In addition to its own branches, AMPLIFY leverages a network of “shared branches” locally and nationwide.  AMPLIFY provides financial workshops in their branches and articles and educational information on their website.

There is a fundamental difference between having an “identity” and having “personality.”  An identity gets you recognized; a personality makes you attractive.  American Airlines has an identity; Virgin Atlantic has personality.  Ford has an identity; BMW has personality.  These two banks have personality.  That personality is driven by delivering an experience that is highly differentiated and focused on addressing the emotional and rational needs of one or more target customer personae.

The Emergence of an Individual’s Financial Persona

Each individual’s financial persona is shaped by a wide range of factors that are deeply imprinted on their perceptions, interpretations, evaluations, and behavior with money.  One important factor is an individuals’ earliest and most influential childhood experiences with money; how they watched their parents worry about, argue about, and celebrate over money.  This is influenced by the family’s financial situation and whether one or both of their parents had dysfunctional financial attitudes or behaviors.  It is also influenced by whether they really understood what went into making money rather than feeling that it just “appeared.”  Another factor is the way each individual interacted with their parents and siblings on anything even remotely associated with money.  Did they get what they wanted? Was money used as a reward or punishment?  Did they get an allowance and was it enough or was it more/less than their friends got?  Were they encouraged or forced to save?

An individual’s financial persona tends to be relatively stable over time.  While an individual’s beliefs and short-term priorities may change based on their experiences, maturation, and financial situation, we’ve found that foundational elements of an individual’s financial character tend to persist over their lifetime.  As a result, this personae-driven approach complements rather than replaces the demographic or life-stage segmentation work that many retail financial institutions have done.  A customer with a given persona will progress through their life stages in a way that is fundamentally different than a customer with a fundamentally different persona.  (See:  What is the Difference Between Personae and Segmentation?). 

Getting to the Bottom of Individual Financial Characteristics and Profiles

One of our starting places for constructing financial personae was Your Money Personality, by Katherine Gurney.  In this book, Gurney outlines 13 important characteristics that describe an individuals’ relationship to money.  This includes: their level of involvement in actively managing their money and reflectivity in considering past decisions; the degree to which emotionality drives decisions to spend or save; their comfort with risk taking; their balance between spending, saving, and altruism; the extent to which the desire for power drives their financial decisions; the level of anxiety they feel about financial decisions; the extent to which the individual associates their work ethic with financial success; their degree of pride about how they’ve handled their money and contentment with their financial situation; their level of self-determination ranging from believing their financial situation is due to their decisions versus luck; and the extent to which they trust others involvement in financial decisions.

Gurney goes on to define nine psychographic profiles that build on these characteristics.  These profiles create a solid foundation for developing situation-specific financial personae.  These nine profiles are:

  • Money Masters.  Experience contentment and security derived from money. They are the No. 1 wealth accumulators even though they don’t necessarily earn the most. They have the highest level of involvement with their money. They trust the recommendations of others and act on sound advice. Their philosophy is “success through determination rather than luck.”
  • Achievers.  The second-highest income earners, usually college graduates and mostly married. They feel work, diligence, and effort pay off. They’re proud of their achievements. They tend to distrust others’ honesty with money. They are conservative and generally not interested in risking assets they’ve worked hard to accumulate. Protection is a primary consideration. Being take-charge types, they are highly involved and reflective on financial decisions.
  • Entrepreneurs. The most male-dominated profile, driven by passion for excellence and commitment to achieve goals. They are the highest income earners but not workaholics motivated by money alone (a scorecard to measure achievements). They enjoy the power and prestige that money brings. They are proud and reward themselves with the best cars, homes, wines, etc. Investing in the stock market is their favored strategy.
  • Hunters. These individuals are usually highly educated, with a live-for-today financial style. Hunters are more frequently women who make purchasing decisions with their hearts, not their heads. Hunters use impulsive spending to reward themselves. They have a strong work ethic, like the Entrepreneurs, but lack confidence. They attribute success to luck rather than ability and judgment. If they understand their traits, they can make dramatic progress.
  • Producers. These individuals rank high in work ethic but lower in assets due to lack of confidence in money management. This leads to real frustrations: they work hard, desire more but feel the difficulty of getting ahead financially. Financial education important since these individuals need help understanding how money system works. They do not evaluate risks carefully and rarely profit from them. They lack confidence in making financial decisions.
  • Optimists. Money has brought these people peace of mind. They have the fewest anxieties and tend to be proud and content. These individuals are the least reflective, and money decisions are somewhat impulsive. Often in or near retirement, they’re more interested in enjoying their money than making it grow. They are not highly involved with their money, taxes or investments, which might cause stress
  • High Rollers. To these individuals, money presents infinite possibilities. They’re thrill seekers. They enjoy risk but are only mildly interested in where it takes them. They seek power and recognition that money brings them. These individuals tend to be creative, extroverted, and competitive. They work and play hard. Money is an emotional release. They prefer to risk assets rather than sit bored by financial security. If they don’t learn to manage their styles, they can end up with low pride and contentment.
  • Perfectionists. They are so afraid of making a mistake they often avoid making a decision. They will continue to try harder, but lack self-esteem, especially about money. These individuals have the least pride in handling financial matters. They have tunnel vision, consider every angle, and find fault with practically any risky venture. Finding suitable investments is difficult for them .
  • Safety Players. They are the lowest in self determination. Most of their money goes into safe and secure investments. They lack confidence and motivation to reap more growth by taking more calculated risk (even though they are well educated). These individuals take the path of least resistance, feel they’re doing fine, and repeat whatever investment strategies worked for them before.

Applying This Insight

We’ve found that each business situation (e.g., retail banking, insurance, wealth management, etc…) can leverage different personae that build on the characteristics and profiles.  For example, a personae-driven design approach in retail banking could start with the following observations:

  • Retail banks are often not the primary place where the highest involvement and highest reflectivity customers “shop.” In Gurney’s model, these are the Money Masters and Achievers. We’ve found that these high involvement and reflectivity customers often access traditional banking services from non-bank providers, such as using checking associated with their brokerage account.
  • The lowest involvement and lowest reflectivity customers may be in the sweet spot for a bank but, since they are not “switchers,” they’re generally not good targets for optimizing the design of the experience. In Gurney’s model, these are the Perfectionists and Safety Players.
  • This leaves several “swing” profiles that can be targeted with highly differentiated experience designs:
    • Entrepreneurs. An experience design focused on these customers might emphasize the tight integration of personal and small business finances.
    • Hunters & Producers. These high work ethic customers have income but limited assets. They’re disappointed about their financial position, but have high potential. A differentiated experience design might emphasize financial planning, more incentivized savings, and financial education. Hunters many need help breaking the cycle of emotional spending. There are a couple of examples of retail financial services organizations that have done a good job of being attractive to these customers: ING with it’s push around http://www.ihatefinancialplanning.com/ several years ago and, more recently, Ameriprise with the promotion of it’s Dream Book.
    • Optimists. Umpqua Bank offers a productized “banking blend” called Club Carefree 50 that incorporates travel discounts, social networking, a reading club, and several other non-banking services in a way that seems to really fit these customers’ priorities for using money as a means of enjoying their lives.

The most creative of the banking organizations with begin to play a broader role in their customers’ financial lives.  This requires thinking about customers’ experiences well beyond the traditional banking touch points.  We’ve found that the most important insight that companies need in order to identify ways to redefine the customer experience occurs at the non-touchpoints.  (See:  The Customer Experience Does Not Happen at Your Touchpoints).  As such, there are significant opportunities for retail banking organizations to facilitate experiences that go beyond the basic touchpoints.   For example, this might include a broader, facilitative role in how customers spend money.   For example, providing financial education, arranging discounts and privileged access to local service business (who are also potentially small business or middle market clients of the bank), providing alternative means of paying for goods and services via micro-loans, and facilitating fractional or short term ownership / leasing of things.

We are continuing to refine our understanding of the beliefs, emotional reactions, and behaviors associated with different financial personae.   This area is ripe for continued sophistication.  Understanding target personae provides a vehicle for thinking more concretely about the design of a differentiated experience.  In addition, understanding the different personae that exist across the population provides insight into how to design more whole-brained and effective customer communications.

Customer Experience and Our Search for Meaning

Customers don’t buy products, they buy desired states.  One of the most significant mistakes any organization can make is to assume customers should care about their products or services.  This doesn’t imply, however, that a company can’t play a very meaningful role in the lives of customers.  The best companies enable people to have experiences that are highly meaningful in their lives.  Customers tend to care a lot about those experiences; what those experiences accomplish for them; how those experiences make them feel.  As a result, people develop strong ties to the products and experiences that create or reinforce meaning for them.  For example, many people love the experience of going to Starbucks, using their iPod, driving their Harley, shopping at Nordstrom or Whole Foods, and going to Disney World.  Witness the level of emotional attachment customers have for experiences like…  NASCAR, Jimmy Buffet, BMWs, Four Seasons Hotels, etc…

Our search for meaning is one of the central, defining characteristics of what makes us human.  At the highest level, meaning is how we make sense of the world, interpret our desires, and put the things that happen to us in perspective.  Tapping into people’s search for meaning is the essence of understanding how to help customers have a great experience.

In his outstanding book, “The Culture Code” psychiatrist Clotaire Rapaille, describes Chrysler’s struggle to clarify the meaning of the Jeep Wrangler.  After years of distinctive positioning, the Jeep Wrangler ended up sitting in the middle of a very crowded field of other SUVs.  Many of Chrysler’s natural tendencies were to make changes that tried to make the Wrangler compete more effectively against those SUVs: more luxurious, fixed doors, enclosed, etc…  After in-depth research that dug into the deepest associations that Americans have with the Wrangler, Rapaille was able to help Chrysler see that people associate the Wrangler with a HORSE.

As Rapaille states, “SUVs are not horses.  Horses don’t have luxury appointments. Horses don’t have butter-soft leather, but rather the tough leather of a saddle.  The Wrangler needed to have removable doors and an open top because drivers wanted to feel the wind around them, as they were riding on a horse.”  Subtle features like round head lights rather than square headlights were shown to positively influence sales.  After all, horses have round eyes not square eyes.  In fact, the logo for the Wrangler was redesigned to feature the grille and round headlights… like the face of a horse.

Most companies think too much about their products and what they want to say about them… and don’t really appreciate the deep meanings that influence the way customers’ think and feel.   For instance, a few years ago I had the opportunity to consult with one of the leading mattress manufacturers who, at the time, were positioning their product using the storyline… “Better Sleep Through Science.”  From the internal, mattress company perspective, science might help understand how mattress design contributes to a good nights sleep.  Unfortunately, people don’t positively associate their experience in the bedroom with science.  The company has since dropped the science angle in promoting their product.

How do you get to the bottom of what’s meaningful to people?  You can’t just ask them.  If you ask customers, much of you get are alibis for what they do.  For example, if you ask people why they go to the mall, you tend to alibis about things the customer needs to shop for rather than the deeper meanings of going to the mall to “reconnect with life,” get out of the house, see other people, explore what’s new, etc…   This is one of the reasons we’ve learned that the online shopping experience cannot replace the experience of going to a store.

Getting to the bottom of what’s meaningful requires a more holistic perspective on how people experience.  You need to watch what they do and how they react in the context of their daily lives.  You need to dig into the subconscious associations that shape the ways they perceive and interpret the world.  (see observation and elicitation).   Rapaille make the point:

“The first principle… is that the only effective way to understand what people truly mean is to ignore what they say… When asked direct questions about their interests and preferences, people tend to give answers they believe the questioner wants to hear.  (This)… is because people respond to questions with their cortexes, the parts of their brain that control intelligence rather than emotion or instinct….  They believe they are telling the truth… In most cases, however, they aren’t saying what they mean.”

Rapaille goes on to describe that, “Most of us imprint the meanings of the things most central to our lives by the age of seven.”  These early associations, formed during the most emotionally impressionable stages of our lives, create our strongest beliefs about who we are, what to expect from others, and the way the world works.  Certainly significant imprinting takes place as a result of our experiences later in life.  However, the way we process these later experiences is often highly influenced by the foundation of our earliest and most deeply entrenched beliefs.

Across many of clients we’ve worked with, we’ve observed that customers’ experiences are significantly shaped by their earliest associations:

  • The experiences people have moving with their family today are significantly influenced by conscious and subconscious memories, emotions, associations, and meaning attached to experiences they had moving as a child.
  • The experiences people have at dinner with their families are shaped by deeply imprinted of memories and emotional associations of family dinners they had growing up.
  • The current reactions many people have when a product breaks are influenced by the childhood experiences we’ve had with broken toys and how our parents responded.
  • Today’s American teen attitudes have been significantly shaped by the events of 9/11 as well as the trailing emotional turmoil and extended war that has impacted the entire country.

This list goes on.  Although these associations are uniquely personal, many of these experiences are fairly consistent across a culture.  In any given culture, individuals that have grown up at a similar point in history have relatively consistent imprinting of experiences with respect to world events, safety, family, working, food, home, shopping, sex, etc…   Understanding this imprinting is critical in designing customer experiences that attach with people’s search for meaning in their lives.

What are people looking for?  Here is a list of the most meaningful basic desires many people are attached to… find a way to help customers connect with one or more of these things and you’re really on to something:

  • Achievement. The need to accomplish difficult feats; to perform arduous tasks; to exercise skills, abilities or talents.
  • Affiliation. The need for association with others; to belong or win acceptance; to enjoy satisfying and mutually helpful relationships; to be accepted by those we admire; to act in a socially acceptable or justifiable manner.
  • Consistency. The need for order, cleanliness, or logical connection; to control our environment; to avoid ambiguity and uncertainty; to predict accurately; to have things happen as one expects.
  • Diversion. The need to play; to have fun; to be entertained; to break from the routine; to relax and abandon one’s cares; to be amused.
  • Dominance. The need to have power or to exert one’s will on others; to hold a position of authority or influence; to direct or supervise the efforts of others; to show strength or prowess by winning over adversaries.
  • Exhibition. The need to display one’s self, to be visible to others; to reveal personal identity; to show off or win the attention and interest of others; to gain notice.
  • Independence. The need to be autonomous, to be free from the direction or influence of others; to have options and alternatives; to make one’s own choices and decisions; to be different
  • Novelty. The need for change and diversity; to experience the unusual; to do new tasks or activities; to learn new skills; to be in a new setting or environment; to find unique objects of interest; to be amazed or mystified.
  • Nurturance. The need to give care, comfort, and support to others; to see living things grow and thrive; to help the progress and development of others; to protect one’s charges from harm or injury.
  • Recognition. The need for positive notice by others; to show one’s superiority or excellence; to be acclaimed or held up as exemplary; to receive social rewards or notoriety.
  • Security. The need to be free from threat of harm; to be safe; to protect self, family, and property; to have a supply of what one needs; to save and acquire assets; to be invulnerable from attack; to avoid accidents or mishaps.
  • Sexuality. The need to establish one’s sexual identity and attractiveness; to enjoy sexual contact; to receive and to provide sexual satisfaction; to maintain sexual alternatives without exercising them; to avoid condemnation for sexual appetites.
  • Stimulation. The need to establish one’s sexual identity and attractiveness; to enjoy sexual contact; to receive and to provide sexual satisfaction; to maintain sexual alternatives without exercising them; to avoid condemnation for sexual appetites.
  • Understanding. The need to learn and comprehend; to recognize connections; to assign causality; to make ideas fit the circumstances; to teach, instruct, or impress others with one’s expertise; to follow intellectual pursuits.

No Matter What Business You’re In… You’re in the Hospitality Business

I recently did a keynote speech at a Customer Experience conference in New York.  As part of that event, the participants and speakers had the chance to share dinner with Danny Meyer at his restaurant Eleven Madison Park.  For those not familiar with the New York restaurant scene, it’s an understatement to say it’s highly competitive.   Danny Meyer is the CEO of the Union Square Hospitality Group which includes several of New York’s other favorite restaurants, including Union Square Cafe, Gramercy Tavern, Tabla, Blue Smoke, and The Modern.  Last year, Danny published an exceptional book called “Setting the Table: The Transforming Power of Hospitality in Business.”

Over the course of the evening, Danny Meyer had the chance to share some of his thoughts on the distinction between service (the things we design our processes and train our employees to provide) and hospitality (the sum of all the thoughtful, caring, and gracious things we do to demonstrate we are on the customer’s side).  Service is a monologue; it’s about technical delivery, standards, and execution.  We decide what to do and how to do it.  Well designed and executed service usually does a good job of meeting customers’ rational needs and expectations.  On the other hand, hospitality is a dialogue; it’s about watching a customer’s experience with every sense and following up with a thoughtful and appropriate response.  Hospitality is the component of the experience that addresses the customers’ more important emotional needs and creates real loyalty.

It’s natural to think about hospitality if you’re in the hospitality business.  However, it’s not hard to see that creating a hospitality experience can apply to just about any business… at least any business that wants to have truly loyal customers.    Hospitality is the concept that reframes customer loyalty as the business’ loyalty TO the customer.

Unfortunately and fortunately… true hospitality is rare in the business world.  Very few businesses actually deliver it and, as a result, are unworthy of any real loyalty FROM their customers.  This creates an opportunity for any highly committed competitor.  There certainly are organizations that differentiate their experience based on hospitality.  For example, I consistently have a hospitality experience with Nordstroms and am increasingly willing to pay a premium to shop there.

In his talk, Danny Meyer emphasized that an organization’s ability to deliver hospitality has to do with who you hire and how you manage them… core components of the employee experience.  The individual characteristics he felt critical to a hospitality experience include people that demonstrate: 

  • Optimistic Warmth.  Genuine kindness, thoughtfulness, and a sense that the glass is always at least half full
  • Intelligence.  Open-mindedness and an insatiable curiosity to learn
  • Work Ethic.  A natural tendency to do something as well as it possibly can be done
  • Empathy.  An awareness of, care for, and connection to how others feel and how the individual’s actions affect others
  • Self Awareness and Integrity.  Understanding what makes you tick and a natural inclination to be accountable for doing the right thing

In parallel with hiring individuals that exhibit these characteristics, there are several specific elements of the management environment, managers behavior, and management practices, that Danny emphasized:

  • Infectious Attitude.  Managers have a positive attitude and the ability to stay positive in the face of adversity.
  • Charitable Assumption, Patience, and Tough Love.  Managers assume the best in other people; understand and capitalize on unique strengths; and build accountability
  • Long Term View of Success.  Management maintains a focus on the long term value of the employee and the customer experience
  • Sense of Abundance.  Enlightened generosity with employees and customers rather than operating from a sense of scarcity
  • Trust.  You can’t motivate, empower, or collaborate with people if you can’t trust them

In the time since this event, we’ve had the chance to work with many clients on the role of hospitality in their business.  In most cases, this deceptively simple concept has led to a fundamentally different way of thinking about delivering a differentiated customer experience… one that is intimately linked to and reflective of the employee experience.  

Some of the obvious barriers is that delivering true hospitality can’t be scripted.   You need to create elbow room for employees to do the right thing for the customer.  This requires a deliberately designed pattern of interventions in the employee experience including recruiting, incorporating, training, communicating, measurements, and rewards.  It also involves surfacing the unwritten rules that may be driving employee behavior inconsistent with the desired customer experience (see Why Customer Experience Initiatives Fail?).