By Shayna Stewart / July 17, 2019
A people-first approach is neither easy to create or quick to implement. But it is the secret sauce at the core of the biggest and best brands in the world today.
Customer experience is a strategy that all digital insiders know has to be a focus if they want to have a lasting impact in their industry. However, the execution of customer experience isn’t as easy as just coming up with a plan to leverage emerging technology and building digital products. It’s as much about igniting cultural change within a company as it is about planning for the evolution of the experience.
At YML, we’ve designed a dynamic and thorough people-first strategy built to cultivate cultural change.
That people-first approach is what is missing from the majority of CX initiatives — and it shows.
- Executives who have made a push for a CX strategy have not seen a tangible business improvement. 20% of companies scored 9-10 for seeing a Return on Investment, with 14% of companies scoring 0-2 (Confirmit, 2018).
- The public doesn’t believe they have reaped much benefit from CX initiatives.
- 54% of U.S. consumers say customer experience at most companies needs improvement (PWC, 2018).
- Culture and legacy technology systems have been major reasons for people not seeing the consumer benefit of CX initiatives.
- 54% of organizations cite culture as the primary challenge to becoming more agile, followed by the inflexibility of legacy technologies (Confirmit, 2018).
- The companies who are reaping the rewards of CX initiatives, whom are mainly located in Silicon Valley, are the ones who have unequivocally added benefit to people’s lives.
- The S&P Index is largely a Technology Index as of 2018, including companies such as Alphabet/Google, Facebook, Apple, Microsoft, Amazon (Seeking Alpha, 2018).
What differentiates the Silicon Valley behemoths and startups is the people-first approach.
A people-first approach comes with a shift in mindset that is drastically different from the historical business executive mindset. You suddenly are talking about the broad spectrum of all people, internally and externally, instead of just customers, and ultimately revenue. You are talking about emotions as opposed to products. Instead of technology solutions, you are building conversational tools. Lastly, whereas a business-centric mindset is one that optimizes based on minimizing risk and maximizing revenues, a people-first mindset is one that optimizes for transparency and intrinsic value.
In the short term, when first making this cultural shift, these optimization goals can constrain each other. In the long run, a people-first approach will maximize revenue, reduce risk, build loyalty with your team, and, quite frankly, keep your business relevant.
But this is a very difficult story to tell when in a boardroom meeting. Often times a savvy executive can make the initial case for investing in CX, but isn’t able to clarify the full scope of that CX investment, which includes a gradual and tangible, cultural change to people-first. What ends up happening is that the first part of the project may go well and the customer may come first, but then the returns on revenue and reduced risk are not immediately recognized and therefore the mindset shifts back to business as usual.
The trick is to trust the strategy. Trust consistency of message and approach.
Here are some examples of companies optimizing for people-first.
- Netflix created an easy to cancel monthly subscription experience along with reminders to cancel after the trial period so that customers never felt like they were overcharged or cheated in someway. However, this people-first change, optimizing towards transparency, had an estimated loss of $50M in subscription revenue. At the time, that was still a small percentage of overall revenue and in making the change towards transparency it built long term trust. As a result of improved brand perception, they continue to increase their monthly subscription base, hitting their highest level of subscribers in Q1 2019.
- In 2016 McDonald’s invested in elevating the interior environment of their stores to feel more premium, along with adding in self-ordering digital kiosks and table service. Investing in improved interiors is a table stakes strategy. Let’s face it — they needed to make this people-first investment just to stay relevant. It is table stakes because the outcome will get you to a net-neutral spot; it’s not going to increase customer base, it’s just going to make sure you don’t lose customers at a faster rate than if you did not implement that update. A clean, premium eating environment is the expectation. But the digital kiosk paired with the improved interior is what took the strategy to a level that would actually increase sales.
- The digital kiosk solved a customer pain point of waiting in lines in a way that was hard for competitors to copy right away. Their strategy was to ensure their experience met standards and then improved the standards of the industry. This investment didn’t start to see a return until 2018 for stores within the test. McDonald’s has many other competitive pressures, such as new restaurants with the perception of better quality food and convenience offered through delivery overriding in-store speediness. But refreshed strategy may not be enough to overcome these new customer expectations. Changing expectations raises the importance of adopting a people-centric approach that will allow you to rethink the entirety of the business and how it can pivot from an existing model to a new one.
In both of these instances with Netflix and McDonalds, the immediate impact on the business metrics (revenue, profit) went down. In the long run, these CX strategies resulted in heightened retention over time. Brand perception and revenue drastically improved. They illustrated how creating a people-first culture will help mitigate the initial shock of investment and reduce risk over the long run because the investments made are directly informed by people’s emotions.
At YML we have created a step by step hierarchy to help you understand what actually goes into creating a people-first cultural mindset. Breaking it down into steps can help your teams understand where they are in maturity. The plan is also a tool to understand what steps were missed in the past. The key to this model is that it implies a high level of collaboration from stakeholders from historically siloed teams at every step.
Levels to Creating a People-First Culture:
- Feel What People Feel
- Extensive marketing research that looks beyond your customers, your competitors’ customers and the points of interaction with you and your competitors
- Employees from each team pretending to be your own customer
- Employees from each team pretending to be a service rep that interacts with the customer
- Empathize to Solve Problems
- Build your strategy around the crucial moments of emotions in step 1
- Identify what part of the strategy is table stakes vs. what will move customer expectations
- Projects that only have table stakes will fail because that only postpones the inevitable of customers churning, it will not promote long term engagement
- Ideas that will move customer expectations should be prioritized despite being harder to develop (See how to prioritize innovation with Innovation Index)
- Igniting Cultural Change
- All team members should be aware of the new people-first research and strategy
- The people-first strategy should be outlined in terms of how every person and team can help implement this new strategy and what is expected of them
- New rules of engagement defined, highlighted by a culture of not being afraid to fail, must be adopted. This about making a transition from fear of change to perceiving of smart risk-taking as admired
- Talk the Way People Talk
- Your backend systems and content need to reflect the nomenclature of the way people talk, as opposed to the way an industry insider speaks.
- The backend systems must be able to support people’s desired navigation
- This sometimes can be a significant change to legacy data architecture.
- Build The Experience
- Design, develop and deploy
- Continuous Optimizing of The Experience
- Must have the ability to move quickly and make quick decisions.
- Much of this is about empowering mid-level employees with the ability to have more decision making power.
- Creating New Customer Expectations
- Continuous pulse on changing expectations and creating new solutions to meet those new expectations
- Creating new technology
- Taking a new technology to solve an unsolved problem
Each step is crucial, and completion of a step without completing the one before it will invalidate all steps. In addition, the investment in each level is additive and represents a cost that is continuously incurred. This means the investment does not go away once a team has leveled up. The result for each step will be unique to every brand and even the approach to all steps is not a one-size fits all. Even if you meet the requirements in each step there are still some cultural habits that will undermine this entire investment.
Habits to Avoid in Order to Preserve a People-First Mindset
- Don’t forget to create advocates across all teams. Be sure to allow lines of communication for input and collaboration from all teams. This is a high-collaboration sport.
- Don’t say the investment will end with a specific project. Your teams should be continuously optimizing the project and there is no end to the investment. Remember, the CX leaders are actively investing billions every year in creating new expectations (i.e., Steps #1-#7 never go away).
- Don’t a business case around just Step #5. Steps #1-#4 are crucial to making sure the investment incurred in Step #5 is not wasted.
- Leveraging emerging technology without contextualizing why and how people would use it creates costly mistakes. That can only come once you have hit step #7 and shouldn’t come sooner.
- Not investing in robust people-first research. This seems simple enough, but most companies think they have the right research based on satisfaction scores from customers. This is too narrowly focused for a people-first approach.
- Not properly communicating the people-first research and initiatives built from it to all teams in the entire company. Teams need to understand what this shift means for them and how they can support it.
- Not allowing for employees to feel comfortable about outcomes that weren’t positive. Not everyone will get it right the first time, but they should learn from why it didn’t work. That insight will get teams to the next big thing.
- Not expecting team structure shifts in order to become more agile.
- Not expecting major changes to database warehousing teams. Usually CX initiatives are considering just what it takes to build a website or app, but fail to consider that the systems that they may read from are not set up to comply with the new people-first strategy.
A people-first mindset should permeate the underlying thinking of all teams. It should be an iterative process that produces long term business results.
It should unite and empower all employees to stand up for what’s right for the customer.
Employee thinking should be able to shift seamlessly between their executive persona and people persona. And most importantly, it should allow employees to feel like people feel because, at the end of the day, all of us are just people.