Is Customer Lifetime Value (CLV) driven by Care more than Sales or Marketing

While the CMO rightly increasingly “owns the customer” in many companies, what all the research shows really defines the customer’s perception of Lifetime Customer Value is the ongoing Care Experience.

That’s right the Customer’s Perception of your Lifetime Value to them (CCLV I call it) DRIVES the Customer Lifetime Value (CLV) value to you. Lots of companies measure CLV to the company, how many use the voice of the customer to measure the outside in view from the customer

If you do it quickly becomes obvious that while marketing awareness and engagement and sales generation activities are critical and the experience at the moment of sale is crucial ONE BAD CARE INTERACTION can ruin it all.

So make sure your Digital Customer strategy focuses on Care as much as Marketing and Sales

IVA Guided Experiences

Intelligent Virtual Agent (IVA) Guided Customer Experiences Humanize The Digital At Reduced Cost

The business transforming applications for Intelligent Virtual Agents (IVA’s) continue to evolve.

The major focus of IVA’s in the past 5 years has been the automation of service interactions, especially text based chat, email and social interactions and a few speech interactions.chatbots

However the next generation of applications of IVA technology is emerging rapidly, that is embedding IVA’s in websites and mobile apps to provide guided, cocierge digital experiences.

Digital experiences are becoming infinitely more complex as digital solutions are applied to more complex problems in financial services, media, healthcare and other industries.

Exploding customer data volumes provide more information on which to base decisions and customers demand more assistance in product selection, configuration, usage and management across all industries.

angrymanThis digital complexity is overwhelming customers on web and mobile devices and overwhelming corporate digital developers as they struggle to build more targeted personal experiences within current budget constraints..

There has to be a better way.. The answer is IVA driven personalized concierge experiences at digital cost.

The best description i have heard in the past few months of this trend is providing “Turbotax for  web and mobile experiences..

For those readers who do not experience the wonderfully complex USA income tax system we have meeting asiato complete an annual income tax  return. While the majority of tax payers easily complete an easy 2-3 page document anyone with a relatively successful financial life completes a much more complex process, my personal return averages 60 pages.

A vast army of tax filing professionals and accountants help with this process. however companies like Intuit (producer of TurboTax and personal financial management software Quicken) provide software to automate the tax preparation process. Turbotax,has evolved into a truly guided experience, making suggestions as you go along, providing videos to show what to do and discussing different options to  manage your taxes including things you haven’t thought about.

If you use personal finanncial managemnt system (like Intuit’s Quicken) then you dont even have to type in your data to the tax software, just import, answer some  carefully guided questions, press a button to electronically file and wait for your tax refund to appear in your bank account.

Many accountants are already offering discounts for taxpayers who provide their data within a leading personal financial management application and the most forward thinking are offering steep discounts for those who do their own tax return and provide the results. These accountants then use their experience to get a better result and gainshare the upside (for example keeping 30% of whatever she gets as a refund that exceeds my return)..

shopping 1We will see the same experiences and preferential financial models applied to complex experiences like insurance product selection and claims, financial planning, investment product selection and trading, healthcare scenarios and even retail and travel experiences. Data bout us will guide the experiences, combined with interpreting our answers to questions today and in the past and the journeys that other consumers like us have taken, including our immediate social media community.

Happier customers, higher operating margins and higher sales will be the result.

This doesn’t just affect the 114m USA based 18-44 year olds (from US Census Data) who are leading the digital revolution but also the 83m USA 55+ olds (us old folks) who are adopting digital solutions rapidly as their disposable income increases with kids leaving home. These two categories number over 1b people when globalized.

The financial, healthcare, travel and retail professionals who support us will increasingly become “digital team captain” or “digital quarterback” with their customers using these new guided experiences and then coming to the professional for additional advice and input. And If they aren’t top performers providing clear value they will get replaced.

CAN YOU HEAR ME?can you hear me

Your customers are asking the following questions and so should you:

  • Do I really get worse results picking my own investments rather than my advisor?
  • We just had our first child, how should our home, life, health and disability insurance change?
  • I get 10 minutes with my doctor when i can get an appointment, wouldn’t it be better if i did a detailed question and answer session at home before talking to the doctor?
  • How do i find the program I will really like on my 500 tv channels and 100,000 internet content locations?
  • How do i get my phone to do what I want?
  • How do I configure all these gadgets in my car?
  • How do i find the right professional to help me?
  • What shoes match my favourite business suit?

And “the internet of things” is going to take our digital lives and make it more complex than we have ever seen before. As consumers we need help .. guidance . .assistance .. IVA’s to the rescue.



Using Intelligent Virtual Advisors (IVA’s) as an onramp to the Intelligent Business Associates (IBA) revolution


In 2002 a movie “Simone” starred Rachel Roberts as a computer generate actress filling in for a real actress (Winona Rider) who was unable to complete a movie. Simone became a star and the movie is about her agent (Al Pacino’s) difficulties in avoiding revealing she didn’t exist.


In 2013 a movie named “Her” is about a man who falls in love with his computer due to an intelligent computer operating systems with a female personality (voiced by Scarlett Johansson) (

While these may be Hollywood fantasies (not to mention a little scary) the premise behind them is real based upon three technology trends that will impact all elements of business in the next 10 years:

  • Artificial intelligence capabilities are rapidly emerging to be able to engage in real time interactions with people.
  • Data platforms provide massive amounts of information to ensure the interactions are contextually real
  • Video animation technology led by the gaming industry is rapidly emerging to make visual interactions real

When combined with other transformational trends such as Facebooks purchase recently of Occulus Rift virtual reality systems ( and there is a foundational shift underway in many elements of business that will soon reach a critical tipping point.

All these trends together will accelerate the rise of Intelligent Business Associate (IBA) of the future.

An IBA is a highly personalized “bot” that will talk to you fluidly in text format (chat, email, social) or in voice to voice conversations or on video. Will know you well, “speak” to you in your language in  a style you prefer, will know his/her subject better than anyone, will know everything you have ever done with the company,  your preferences, what your friends on social media are up to and will never leave you.

The journey learning how to use these technologies, building the knowledge bases, data analytics teams to continuously optimize them and delivering engagement personalities which truly reflect your brand and even different personalities for different customer communities will be long, probably 3-5 years. That will coincide with the maturation of the technology.

Companies that are looking to own this IBA driven business model of the future are engaged today in learning about these capabilities especially in places where there is a fundamental difference possible today. iva

An early but powerful example of this which provides an easy and compelling option for businesses  is in Intelligent Virtual Agents (IVA’s) as a key component of their customer service and contact center operations.

IVA Technology is proven in airline and retail industries today ( , (, (Ask Anna and now coming to other industries like banking ( and even media with the recent Canal Digital announcement (

IVA’s provide an excellent business case in service cost reduction, upsell and cross sell improvements and customer satisfaction uplift. An eve greater business case is to have a way to enter this new revolutionary trend in a self funding way. That doesn’t happen often.

Let the revolution begin

Mark Twain And Three Urban Myths about Multichannel Customer Interactions

I have been working on a series of presentations to newly appointed Customer Experience leaders and have come to the conclusion that my chosen industry of Multichannel Customer Experience is suffering from a number of myths held as given truths that are worth calling out. To quote:

marktwain“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so” Mark Twain.

I looked around for somewhere where these were collected and couldn’t find them so decided to publish my own list so others can add on to it. So here goes

Myth #1 – The total number of interactions (per person, per hundred people or whatever) is a constant and the division among channels presents a basis for investment decisions by companies

mobile bankUntrue .. Technology especially mobile has changed the game. If you add the transaction statistics together for online, mobile, email, IM, social, contact center and store interactions the interaction counts are exploding. I can’t find a cumulative statistic anywhere but the following may make a useful example.

I have a client who, way back in year 2000,  used to check his bank balance and credit balances monthly when he got his statement, update his checkbook balance weekly, keep a weekly record of his credit card balances on a post it note and call his banks IVR or call center for a balance check about once a month (this is only 2000 we are talking about) and visit his branch about twice a month. About 14 interactions a month.

He recently told me he now, in 2013, gets his balances daily for each of five accounts on his mobile app, by text or email, gets notifications of every deposit or about 10 a month and every transaction over $100 or 20 per month, goes online to each of his 5 accounts at least twice a month, calls the call center or IVR about 5 times a month in response to the balance messages he gets and visits his branch every other month.

That is a move from 14 to 197 interactions a month or 19% CAGR per year 2000 to 2013. And I have a suspicion 50% of that rise is since he switched to an iPhone in 2010.

ccagent3Myth #2 – The rise in digital transactions is reducing the volume of call centre interactions

Untrue. Mobile especially is increasing interaction counts.  However a recent Bancography (June 2013) survey indicated that US retail banking contact center interaction volumes in banking had declined less than 1% a year “forecast to drop 4% over 5 years from 2011 to 2015, 6.4 billion to 6.1 billion”. 

From the America Express 2011 Global Customer Service Barometer “US consumers prefer to resolve their customers service issues using the telephone (90%), face to face (75%), company website or email (67%), online chat (47%), text message (22%), social networking site (22%).”

 This is changing slowly but even Gen Yérs are just people who still ultimately like to talk to people, especially when they are in trouble. The conversations will get much complex as customers resolve the simple things online or in intelligent agent experiences

onlinebank2Myth #3  – Optimizing User Experiences Is The Same as Optimizing Customer Experiences 

Untrue – User experience is focused on the capability and ease of use of a particular transaction on a particular device or maybe multi device to achieve a specific objective. Customer Experience relates to multiple transactions across multiple devices over time (and in fact the concept of a Customer Relationship Experience is emerging for a lifetime of unrelated Customer and User Experiences). These are very different disciplines with very different thought processes.

For example a text message that indicates a fraud alert on my credit card which I click on and auto dials an agent who pushes a picture of a credit card receipt with a signature on it to verify it is me may be a multichannel user experience. However include the message 2 weeks later to indicate that the issues has been resolved in my favor and I will not be charged and it is definitely a customer experience and include a reference to the incident on my end of quarter customer summary and that is very much a customer experience. Do that over 10 years and we are talking about a true Customer Relationship Experience.




“One Bank” Is So 2010, Customers Want The “My Bank” Experience – Ten Key “My Bank” Requirements

chase myaccountsFor the past ten years banks and financial services have been working to provide a one bankexperience. At its basic level this means providing all the offered products and services in one place. That could be a “portal”, or a single 1-800 number or a branch representative who is trained to and permitted to discuss basic banking, credit card, auto, student, mortgage, business, wealth and investment and other products. The best providers offer a portal where all of an individual consumers products are displayed in one place.

mybankHowever banks and financial services companies exist in a world of customer experience expectations driven by a technology revolution (mobile devices, social media, wearables, touch, interactive voice etc), new market players (Square, Kickstarter etc), decreasing consumer time and capacity to research and develop understanding and, as importantly multiple influencing experiences provided by others outside the industry (Amazon, Expedia, Facebook etc).

Looked at from the bank perspective with all the infrastructure and line of business challenges “One Bank” is a massive achievement. Looked at from the consumers perspective, however, it is “table stakes” today. What today’s consumer wants is “My Bank”. A bank we can love.

15 years To Build Our “One Bank” Customer Experience

I have over 40 active “financial relationships” covering small business and personal, credit cards, checking and savings accounts, store cards, auto loans, home loans, working capital loans, investment accounts and insurance relationships  on and on. And these cover 11 different financial institutions.

I pay a nice healthy amount of service fees and interest across all these accounts. I may say so myself but I am a pretty good catch for a bank. You would think each of my providers would want to maximize their income from me while minimizing their expense by having fewer but more valuable customer relationships.

fidelity positionsMy “big four” relationships are with JP Morgan Chase, Bank Of America, Wells Fargo and Fidelity Investments. They have all done a great job of building “One Bank” or “One Broker” online access (and mobile apps) to provide most of what I need in one place. It gets better every day as they all add more products, more visibility, better mobile features, investment advisors to branches, preferred contact numbers and even waive a fee or two when I make a mistake and get myself into trouble.

Industry leaders like Bruce Temkin ( and Forrester Research’s Megan Burns (Twitter @mbcxp) tell us that the experience that banks and financial services firms deliver have been improving over the past few years and I agree with that

The next 5 Years Will Be About The “My Bank” Experience

However I want more. My expectations are, like so many people, evolving faster than the banks execution. What I want is not One Bank (although that is better than the bunch of separate product centric relationships that I have now). What I want is “My Bank”.

For those looking to capture the opportunity this presents here are a few helpful hints about what My Bank might mean from various client discussions this year.

  1. Let me customize and personalize my interface to display all the things I am interested in but just the things I am interested in. This includes =my consumer, credit card, business, banking, investment and other relationship, “My Bank” portal.
  2. Let me add products from other financial institutions into my interface. That’s right, your competitors products right there, like Amazon does or Progressive insurance quotes.
  3. Use the data you have about me to make be trust you and depend on you. Provide me analytics that show how I am doing and compare and offer me products or services that could help me do better. Tell me when you predict I should be doing something differently, ahead of time.
  4. Make it worthwhile for me to stay with you for a long time so you can learn a lot about me. I don’t like using different financial providers but you force me to by not competing aggressively. Tell me what the benefits are of longevity and what I need to do to move up the loyalty levels to get more benefits. It may annoy me at first and you will lose some customers but we will appreciate you more in the long term.
  5. Make it worthwhile for me to get more and more products from you to simplify and help my life, raise your income and reward me for being loyal. Make it really worthwhile.  I want simplicity. If I have 5 credit cards, 2 mortgage loans, 7 personal and small business accounts, a merchant payment account, two retirement investment accounts, a general investment account and have been with you for 20 years you why can’t I
    1. Get a reduced interest rate on my mortgage.
    2. Fast-track a working capital line of credit faster from you than from a random internet banker.
    3. Get a higher savings rate than a “regular customer off the street
    4. Enroll in a loyalty points program (like the one that American Express offers) so I can get rewarded for concentrating more and more business with you.
  6. Act in my best interests. Make it clear that it is in my best interests. For example if you can notify me that I am about to incur a service charge and can avoid it then let me know. And maybe only if I have a certain level of relationship with you. Tell me what that level is and let me choose to get there.
  7. Make recommendations that make sense for me. Finances are complex. I have other things to focus on.  You have lots of data about me including what I spend my money with my debit and credit cards, my cashflow and my business finances. Data driven analytics do a better job of driving recommendations than people do.
  8. Offer me communities of interest I can trust. I remember this from my childhood. The local banker or insurance agent was always a good source of referrals and advice. You can be that again with social media. I am busy, busy, busy so help me.
  9. Partnerships that benefit consumers – There are many alliances out there that you can use to deliver value for me as a customer, that’s as a regular customer. From increased data about me to complementary offers. Of course you have to be careful about how you handle to minimize conflicts it but Delta is with Amex, MSG is with Chase. How about a monthly drawing for two tickets to the Red Sox in the HSBC box. And more, maybe more local relationships.
  10. Surprise me. Do something wild and innovative. OK you are  a bank so I don’t expect that wild and innovative BUT you have lots of information about me so why not, what do you have to lose.
atm user 2

“Experience Critical Interactions” Transform Customer Relationships & Loyalty

There is a lot of talk, a lot of work and a lot of success amongst the customer experience professionals of the world about optimizing interactions. More and more interactions continue to move to online and more of those to mobile. Social is finally starting to make real inroads into business operations.

Yesterday in three back to back client conversations I was forcibly reminded that as we map our customer journeys it is worthwhile noting that not all interaction events are equal. And there are some things that just can’t be handled digitally, well shouldn’t be, they can be but I wouldn’t rely on it.

journeyThese are events that absolutely transform the customer relationship and it is dramatic how often these “Experience Critical Interactions” can only be completed face to face or at least voice to voice. Mess these up and your relationship is dead.

Rather than pontificate about these theoretically I will spell out the three specific examples that we discussed and you can make your own judgements.

I have experienced all but one of these. I will leave you to guess which one I haven’t.

atm user 2Automated Banking And Credit Card Owner Error – “oh no – I just transferred $2000 to my credit card company instead of $200. My account is going to overdraw. My partner will kill me. There is no undo button. What do I do? “ The only thing to do is call that’s what. When the agent undoes the transaction because of your customer status you are a customer for life”

angrymanOnline Dinner Reservations – SMS Text “Because of a computer malfunction your dinner reservation at the word famous Hopolopo Madagascan Restaurant this evening was confirmed in error”. Your biggest client just flew into town with her husband to eat here with a 6 month reservations waiting list that you trumpeted that you had gotten into “Just because she is important !”. Now would be a good time for a Hopolopo phone call or even a “click to dial” in the text message taking you to a telephone concierge service.

shocked woman2Digital Wellness – Posting your health and fitness achievements to Facebook sometimes needs to be subject to some personal message screening and control “Debbie Johnson completed her quarterly check-up at the local pharmacy wellness center. Key Achievements – HDL dropped 8%, weight reduction 8lbs, BMI reduction 4%, now pregnant”. Just because she said she wanted to share her health and fitness achievements with her closest friends still doesn’t mean everything should go there.

Seven key questions for you?

  1. In each Customer Journey and especially Customer Relationship Journey (consisting of multiple experiences) have you highlighted your experience critical interactions that could transform your entire relationship and what do you do about them?
  2. Have you defined interaction channel constraints, some things that can only be handled through a particular channel, for example voice to voice?
  3. Do you differ these interaction constraints by customer segment and customer value? Some people really are more valuable than others.
  4. What is the cost of getting this wrong?
  5. Is this an opportunity to differentiate your store based and person to person capabilities from your new digital competitors in your marketing materials? How do you do that in a positive way?
  6. When you rescue your customer how do you politely remind them that you did so and that you did it because you treasure and care about his relationship with you?
  7. How can you improve these critical relationship interactions? Analytics driven smart agents? Click to chat? Click to talk ? Referrals to other partners who can help? Referrals to social communities with similar experiences?

What Do You Do When Customer Experience Clashes With Company Profitability?

amexcardI was chatting with a banking executive today, recently promoted as a VP customer experience and engagement, who is facing  a conundrum. He has just completed a national survey of his consumer base (which includes both consumer consumers and small businesses). 

Uniquely it is the first time his finance department sponsored by his CFO. His marketing organization and his independent survey organization have “ganged up on him (in his words).

The results he is trying to balance:mastercard

  • 81% of customers are extremely happy with his retail banking services.
  • 37% believe that experience is more important than fees.
  • 62% of customers who have switched TO his institution from competitors named fees as one of the top 3 reasons they switched, 30% of this 62% are perceived as difficult to manage, high churn customer. .
  • 29% of bank net income now comes from additional fees that many customers consider as penalties.
  • 72% of customers say one of the top 3 things their financial institution could do to help them guarantee their loyalty is to help avoid fees.
  • 5% of customers are estimated to be at high risk of switching and comprise $280m in revenues, 42% or $117m of which are avoidable punitive fees.  
  • The company made $237m in revenue in 2012 from what are perceived as ”punitive”” fees in 2012.
  • Executing a messaging plan to proactively help customer avoid fees they perceive as unfair would cost ” $12m but help customers avoid most of the $117m in avoidable fees.
  • The Long Term Value of the at 5% risk customers over a 25 year relationship model is $4.2bvisacard

His question is what do I do when i have this conflict betwee customer experience and short term proftability ? It is a lot of revenue ? How do I persuade my leadership to forego $117m in today revenue in exchange for a long term value (LTV) return of $4.2b when they won’t necessarily be here to get paid on the LTV return

8 questions about what would you do ?

  1. What is your cost of customer experience maximization?
  2. What is your business case for experience maximization versus immediate revenue?
  3. What are the top 5 of these conflicts in your business model?
  4. Who in your company cares?
  5. Do your customers really care enough ?
  6. How much does a policy of openness and honesty in communications benefit you ?
  7. How well do you manage messaging to execute this openness correctly?
  8. What is your long-term competitive exposure and can you afford not to do this?



DIY Loyalty Moves Voice of The Customer (VoC) To Voice Of The Loyal (VoL) .. Uhuh, Uhuh, Uhuh ..

Much is made of the evolution of Voice of the Customer (VoC) programs over the past 30 years. VoC is defined by Adele Sage (@adelesage) over at Forrester Research as “a systematic approach for collecting customer feedback, mining that feedback for insights, and then incorporating the insights into business decisions”.  A year ago she saw nearly 70% of companies with a formal VoC program, up from 58% three years ago..

vocFor more information on VoC, Bruce Temkin, co-founder and Chair of the Customer Experience Professionals Association and one of the “goto gurus” for Customer Experience Professionals like me, provides lots of tools for VoC advocates at (Bruce Temkin VOC )

VoC focuses on “understanding the wants and needs of customers expressed with the customer’s own language from the perspective of the customer” and we can safely assume that most major companies claim to have such a program.

With a typical business seeing 60% of operating profits generated by the top 20% of “high value loyalists” and “aspiring loyalists” it amazes me how few companies have a modern, structured VoC program that clearly focused on those high value, loyal customers. A Voice of the Loyal (VoL) program.

For loyalty program designers everywhere (including my “big 6” below) the best way

is there anybody there small to demonstrate that you are truly listening and care about me is not just to provide your idea of customized loyalty programs for each segment (prepared Bronze, Silver, Gold, Diamond that is so 2005 !) but to let your customers (aka me) design their own loyalty program. You do not know what is best for me, I know what is best for me. Let me design my own and you rocket to the top of the loyalty pack, moving your VoC program to VoL,  Voice Of The Loyal.

I am a “loyalty nut”. Maybe because I have been helping design loyalty programs  for decades.  I am very sensitive to how loyalty programs work. I surround myself with companies who “treat me special”. For example American Express, Delta Airlines, Starwood Hotels, Hilton Hotels, Bank of America and Fidelity Investments have all been my major goto providers for 20+ years, they provide what I need, they are where I need them to be and (mostly) they treat me right.

are you listening smaLLThey all might want to work on the really listening thing. The problem might start because they are mostly urn by a bunch of guys like me.

A woman I know (hi honey!) defines the male problem as Uhuh, uhuh, uhuh”.  It is more clearly defined as “see I know you are speaking, I see your lips moving , I am not going to remember this or do much about what you are saying but I am an ultra-sensitive, modern guy because I  am not ignoring you .. uhuh, uhuh, uhuh”.

Whatever you do dont fall into teh trap of your loyal customers thinking you are in uhuh, uhuh, uhuh model. You can design your own version of VoL three things that tell me you are listening to me that prove I am not any run of the mill customer are:

“Digging me out of trouble I get myself into” – I pressed “confirm” on a prepaid / no change airline delta mobile reservation and had entered the wrong departure date (because I was doing it on my mobile phone and the calendar was very very small!). Yes I know your policy says you aren’t going to let me change it once I book it or at least you want to charge me $200 for the privilege to change it (and I get that .. those computer systems cost a lot of money) but because I spend $30,000 a year with you and have flown 3 million miles in the past 20 years  you should make an exception when I call you 15 minutes after pressing that button on my mobile phone and start teh conversation with “Help” (yes Delta Airlines does that for me all the time .. thank you Delta and sorry for being such a pain)

bankofamerica small“Offer me some special tools for getting things done that prove you understand me” I don’t expect things I don’t deserve but help me out with tools to do things my way like web sites, mobile apps and then a phone line staffed with people who have access to all my information and treat me according to my appropriate importance level. Bank of America, for example, struggles every day, tries hard and to me most importantly gets better every day  at recognizing  that my wife and I have and have had business accounts,  checking accounts, savings accounts, mortgages and credit cards  with them (and investment accounts with Merrill Lynch, their brokerage arm).  Now I am not Donald Trump but I probably deserve a little attention.

“Let me choose what I want to get to shows you understand and value my relationship”concierge small  Easiest way to describe is a couple of contrasting examples from a trip I booked this week. I am taking my wife and daughters to New York City. It is a quick trip and they don’t get to visit NYC much so we will be staying in Times Square, “in the middle of the action”. I try to book frequent flyer flights on Delta Airlines and they have blackouts on the dates I want. A quick call to their special service desk and the young lady tells me that I can “buy up” to the flights I want by using extra miles. Why they couldn’t have put that on the website I don’t know but 15 minutes of my time invested and I am happy, happy, happy. Then I go to the website of my two favorite hotel companies to book rooms, knowing I will do some room nights on points and some paid.  One cannot do the configuration I want in the location, fine, the other has a perfect match with rooms available but wont let me do the transaction online because I want to mix points nights and paid nights, Fine I call.  The woman says no rooms available for points reservations, I as her for the special Diamond member points requirement. “Excuse me” she says “I don’t understand, I said we don’t have any rooms available for points reservations ad no program to increase your points bid. All they have is Deluxe rooms (whatever that means). I ask “cant I book a basic room and you upgrade me or I pay points to upgrade”. “No”. So I pay for the rooms, $1000 more for the weekend. My takeaway, no flexibility, no real loyalty program, so 2005.  They got my money, this time, but not again.

So a few questions you might want to think about related to your loyalty program.

  1. Are you still telling your customers what they want or do you allow your customers to design their own loyalty program at least from a menu of choices?
  2. Can you clearly state and demonstrate how your most loyal customers are treated differently?
  3. What are the top 5 things your most loyal customers would like to see improved?
  4. Do you have a loyalty focus group?
  5. How do your customers feel about your loyalty program?
  6. Do you have a benchmark in your functional market as well as your competitive market (eg airlines and hotels are in the same functional group and set benchmarks for each other)?
  7. How have your loyal customers expectations and requirements evolved over the past 20 years?
  8. How have your capabilities evolved and matured with them?
  9. Do your line business executives clearly understand the difference between Voice of The Loyal (VoL) and Voice of the Customer (VoC)
  10. How do you track opportunity cost of not meeting VoL needs

Core Vs Casual Vs Aspirational – Does It Make A Difference In Your Customer Relationship & Experience Strategy?

Energetic discussion #1 of the past couple of weeks has been the impact of Core, Casual and Aspirational customers on Customer Relationship Experience (CRX) strategy. A few simple definitions and some questions may help.


Core Customer –the customer segment or demographic the company or product / service is built around or targets. Your “core” target customer will tend to be loyal once you have them and buy repeatedly.  Generally you don’t really have to constantly inundate them with messages, keep them up to date with why your product is value for them. May have high cost of acquisition but low churn once secured. Big investment should be service and new product and feature/benefit marketing. They don’t want to go anywhere unless forced.

Casual Customers – People who will buy or use the product once in a while based on their chooseaphonecurrent whim, convenience and its qualities. Flips between brands over time . Usually looks a lot like the core from an age and demographic perspective. Your casual customer could be a competitor’s core customer who is just trying you out. Psychographic and behavioral modeling will usually reveal a causing factor behind their indecision but rarely do we have that information (MIllenials for example are always said to have not developed many brand loyalties although the iPhone / Android wars among the 19 year olds I know might contradict that). Focus of significant percentage of marketing spend, interesting return on marketing investment (for more on ROMI see this nice article

Aspirational Customer – Customers who would love to use your brand but don’t for some reasonfashionista2. Usually associated with luxury product aspiration but not always. Aspirationals hold your core customers of the future. It could be because they cannot afford you. It could be because they cannot reach your retail or service outlets (digital helps here). It could be because they have an unmet need and don’t know enough about you (“I really need a higher return on my savings account, doesn’t anyone offer more than 2%”). Aspirationals can be innately core or casual.

My favorite example is embedded in the “Fashionistas” segment. “Fashionistas” are usually fickle china fashionistacasual shoppers looking for the next “hot logo”. However there is a special breed of “Fashionista” (especially in the emerging market and BRIC economies like Brazil, Russia, India, and China). These are brand and logo “trophy hunters” because they are being exposed to many things they can buy for the first time (to quote an American phrase “acting like a kid in a candy store”). Applies from  Burberry to Walmart, from Porsche to Fiat. Buried in this group are long term, loyal, core customers of the future if you can just connect with them

So Should You Care As a Customer Experience Professional –  What’s The Customer Experience Impact

The difference becomes very important when defining long term Customer Relationship Experiences and Customer Journeys. Rather than a long description here are 10 questions to ask yourself about your customer experience design that should point you in the right direction.

  1. Do you have a clear difference in your segmentation model about which of your customers are classified as Core vs Casual vs Aspirational vs Unknown?
  2. Do you have a journey model that shows how Aspirationals move to Core, or Casuals move to Core,  or Core moves to Aspirational or Casual?
  3. Do you know your revenue, margin, CRM investment (sales/marketing/service) and return on CRM for each?
  4. Do you capture enough of the right type of data and have the right analytics to know?
  5. How are you treating your  Core, Casual and Aspirational customers differently? (e.g. all loyalty club members are not loyal core customers, messages are very different)
  6. Do you need to and do you differentiate by product offering, service or experience model?
  7. Do you know if a repeat customer lapsed because they are a natural Casual or an Aspirational  who is working on being loyal Core?
  8. Do you have an Aspirational capture strategy that converts them to long term Core  customers?(e,g, the Mercedes “C” class has always been one of my favorites, offering the full Mercedes Benz experience at a price point much lower than their core product and target market, I know many people who have been hooked on Mercedes that way and traded up several times)
  9. If you are global how does this affect your emerging markets strategy?
  10. How do you help your Core customers to bring their friends? (“Core’s” are natural advocates)

To prove this applies everywhere I suspect I am not a Core customer for my friends at Walmart. In their mission of “Saving people money to help them live better” and their “Every Day Low Prices – EDLP” consumer commitment I suspect they are targeting the working, middle and military class that fills my local store, here in the USA “the heart of America”. I believe they would consider me a Casual. Although I buy a lot of fishing tackle, bike parts, storage containers, office supplies and an increasing amount of groceries from I am quite a valuable Casual !

Customer Relationship Experiences (CRX), Customer Experiences (CX) and User Experiences (UX) Explained (A Little !)

Last week’s interesting travel conversation was about the difference between User Experience (UX), Customer Experience (CX) and Customer Relationship Experience (CRX).

Thanks to Liz-Ann, my unfortunate victim, trapped by me in the Delta Sky Club. She is not in Marketing or eCommerce but in IT Finance. But she asked me to post this so she could pick it up on Twitter and send to her team so here goes.

The three CRX, CX and UX terms are commonly muddled and mistaken for each other but require very different skills and abilities. The difference is important for thinking about the problem you are looking to solve, hiring or allocating employees and certainly for identifying and retaining consultants and solutions’ companies.To keep it simple, definition by example and a few simple questions to think about.We will use airline travel as an example (thanks Delta) since that is where we were.

delta ticketingUser Experience – The experience WITHIN A SPECIFIC CHANNEL or the way a particular interface works for the user or customer to achieve a specific transaction or objective. This could be an information share or eCommerce on a desktop or mobile internet channel, a text interaction on mobile text, a contact center conversation, a store visit, a social media visit or intercation, a TV viewing, radio listen, print media view etc. To illustrate one on my favorite digital user experiences, booking a ticket Delta Airlines at Great UX design and creation requires very specific skills in visual or voice interface or store design or media including deep understanding of how technology affects, presents and enables the “visit” or “view”. Digital channels of course allow us to monitor those experiences to improve them and learn about customers.

 travelocityCustomer Experience (CX) – The experience a customer has ACROSS CHANNELS AND MANHY USER EXPERIENCES to achieve a particular result often requiring multiple transactions  (theoretically a Customer Experience (CX) could consist of one transaction or one User Experience but when you look deeply very few do). For example booking my business trip above in additiondelta mobile to booking the ticket on Delta ( actually involved research of alternate flight options on Travelocity (
then looking at my mobile Delta app after booking my ticket to try and find out my upgrade likelihood (I still cannot figure out how to do that on Delta mobile). After that I call Delta’s customer service center to try to
callcenterfigure out the same thing (“Pretty much No” was the answer),  booking my hotel on ( ) and getting email confirmations from and (and a “you forgot to book”
hotels.comemail from Travelocity. Then I looked at Time Out New York magazine to see what interesting entertainment events are happening while I am in town in case I have some time off. 
Great CX design and creation involves skills in timeoutpattismithunderstanding behaviors, multi-channel and omni-channel process and event modeling, affiliate and partner business models and (if you have an experience you want to link together) deep data skills to understand what information is required to move from item to item.
This gets particularly complex when the media
customerjourneyand channel changes such as the contact center conversation or visiting a store.
 usually represented by a customer journey chart that shows how the customer moves back and forth across specific channels, what happens at each event, how the customer is treated, what is next and what data is extracted from each event.

Customer Relationship Experience (CRX) – The COMBINATION OF CUSTOMER EXPERIENCES OVER TIME which define the overall relationship that a customer has with you.  This may apply to an end to end transaction like the travel experience example adding to the booking experience the actual travel experience (text my boarding pass to me, drive to airport, park, go to kiosk because I deleted the text !, airport security, fly, taxi to office, train to hotel, dinner, office next morning, taxi to airport, fly to home airport, drive home, arrive home, receive customer service email from Delta and Hilton etc). At a more extreme level  the CRX involves all the experiences over a protracted period of time. The latter being critical for designing and optimizing loyalty programs and maintaining customer engagement levels. Absolutely critical for managing long term relationships for long term results and defining and optimizing CRM strategy. Especially critical in the many businesses (and non-commercial endeavors where business profitability and success is dependent on multiple transactions over time because customer acquisition costs are so high.

deltaacctcloseupIn our Delta example the simplest version of a robust, comprehensive and critical CRX would be my 2013 Platinum frequent flyer status in 2013 requiring 88 flight “segments” this year (so far) and MORE BROADLY 20 years of trips it took to reach “million miler+” status.

A CRX map would cover how a customer achieves specific relationship levels (annual Bronze, Siler, Gold, Platinum, Diamond and lifetime levels such as Million Miler status or 5 Million Miler status).
crx transactionThere are few established models for documenting Customer Relationship Experience  (CRX) but the best is to use a combination of Customer Journey charts and state transition charts.

Real world CRX design (and in fact CX design) is complicated by affiliate partners (like Hilton, Starwood, American Express, Hertz, Avis etc in Delta’s case). This gives rise to interesting sidebar considerations like the current burning issue for frequent flyers of all the people earning miles and status through credit card earned points  who rarely fly but put pressure on flight upgrades, Sky Lounges etc.

Great CRX design requires broad time based process skills, systems thinking and behavioral modeling and understanding, a deep understanding of data design considerations and long term customer benefits modeling. Very different design and thinking skills to User Experience and a different perspective than single Customer Experience design and creation.

A Few Questions & Thoughts To Consider – A few questions for consideration when looking at UX, CX and CRX design.

  1. What is the outcome you are trying to design for and behavior you are trying to understand and influence, does it vary by persona?
  2. Is this basically a UX, CX or CRX issue?
  3. Do you have the right skills on your team to address this?
  4. What are the series of  activities and events required for the customer to  achieve the particular result over what period of time?
  5. Do you have the most important and impactful short and long term journeys, events and experiences documented?

And for More thought leadership and expertise click on these Twitter handles 

Forrester Research

  • Kerry Bodine, co-author of Outside In – @kerrybodine
  • Harley Manning – coauthor of Outside In – @hmanning
  • Fatimeh Khatibloo – Customer Intelligence and Customer Engagement @fatemehx2
  • Megan Burns – Customer Experience Leader @mbcxp


Bruce Temkin – Chair of the Customer Experience Professionals Association @btemkin