The Customer Confidential Podcast
Don’t just reduce the impact of customer hurdles—eliminate the need for them altogether, Joe Wheeler advises. Joe is an old friend, CEO of CX/Digital, and author of a new book, The Digital-First Customer Experience. We first crossed paths in the 1990s when he helped popularize the concept of the service-profit chain. His belief in the importance of human interaction for delivering profitable, top-notch customer experience was pioneering.
In his new book, Joe challenges the businesses of today, posing the question: In a digital-first environment, how do you think about the employee experience in a way that is consistent with service-profit chain principles, while still meeting customer expectations around digital channel usage?
Joe argues that a digital-first strategy strikes at the heart of the matter, seeking to eradicate issues, not just reduce them. This maxim of Joe’s has roots in our shared past. Just as the service-profit chain values employees for profitable customer experiences, eliminating negative customer interactions is pivotal to bolstering customer lifetime value (CLV) in today's digital-first world.
But embracing a digital-first mindset requires new ways of working and thinking. “Agile isn't reading a book on the topic and saying, ‘We should get around to that,’” Joe says. “It's a different way of not just doing product development, but lots of processes that will make a big difference.”
Joe emphasizes how essential digitization and machine learning are for enhancing the customer experience and growing CLV. High-level technology not only enables profound customer understanding but is also a potent tool for efficiently resolving customer issues. Combined with a deep understanding of CLV, it can unlock new actions and initiatives.
“The other perspective is the degree to which you understand the CLV of customers," Joe says. "Digital-first companies, because of the data they're able to collect, can calculate CLV much differently than we have for the last 25 years.”
Adopting the right digital-first approach can ensure in-depth customer insights and a responsive personalization flywheel, spurring earned growth. However, initiating this transformation can seem formidable.
Joe uses a "three-lane highway" analogy to help break down this transformation into three achievable parts:
- Identify and act on processes that can effect sizable change within a 90-day cycle
- Zero in on processes that enhance customer, employee, and shareholder experiences
- Identify opportunities for innovative, game-changing solutions
In this episode, Joe and I dig into examples of successful digital-first strategies from his book. We also explore CLV as the yardstick for sustainable growth, and in classic Joe fashion, he emphasizes the importance of eliminating negative customer experiences, not just improving them.
In the following excerpt, we discuss what can happen when companies focus on solving the wrong problems, and how to get digital-first right.
Rob Markey: Lots of companies that make attempts to go digital-first do kind of a half attempt, and they convince themselves they're doing something important and big, but they don't develop the right skills. What's underneath that?
Joe Wheeler: Yeah. You know, the book opens with a case study of Zume Pizza. The idea was to use robotics to not just make pizza but also to deliver it. They took the cost of labor down and they could predict zip codes in their area. So the concept was that you could order pizza with Zume Pizza, and within five or seven minutes you might have a hot pizza delivered to you.
It's one of these things that on paper looked interesting, but the headline was they went out of business in about two and a half years.
Other companies fixed their quality problems for the most part, and they could get a pizza to me in about 30 minutes. I didn't really need it any faster.
You have to ask the question, “Was this a solution looking for a problem versus a problem that found a solution?”