Failure of Communication , Failure of Deal

Price negotiation is a part of business deal making process. It is business as usual and entrepreneurs should not mind involving in negotiation with customers. 

This is the response from one of the hoteliers in response to price negotiation request:  

Rs. XXXXX/- final.I will give u the old rates.sorry, if u want the experience,you have to be able to pay for it.specially if u want to celebrate an anniversary.

With the above response, deal was closed and customer was lost. 

Learning is when one is engaged in negotiation it is not always about one's affordability. Rather than talking about potential customers' ability, entrepreneurs MUST be able to explain WHY negotiation is not possible. This is true even if you are in monopoly business. 

Customer is a millionaire but he won’t pay whatever he is asked to pay. He will negotiate and will pay full when satisfied that wherever is asked is fair and reasonable considering what he is getting in return. 

Negotiation is not about customers’ ability but it is about convincing customers that whatever is quoted is the best possible quote. 

Following reply could have saved the customer and deal:

We appreciate and acknowledge that this is your special day and you would like to make it memorable by spending a few days with us. Let me assure you we will make special attempt to make it memorable. 

As far as pricing is concerned we have been able to maintain the property in such a beautiful way to offer best possible experience to our customers. You have acknowledged the same by referring to reviews about our property on tripadvisor. 

Therefore I request you please do not negotiate on price and we on our part make an extra effort to make your special day , very special with us. We look forward to welcome you on your special day.

Even if one is not able to afford Rs. XXXXX/- , the above communication could have saved the customer for future engagement and even for referral business. 

Point is ; communication plays very important role in business deals & customer experience creation. It can break the deal or make the deal and can bring more referral customers. 

Its always how you make customer feel while dealing with you, not only while using your product or services but during the entire process.

Everywhere Customer Experience Issues

Experience Design or Service Design, both requires mindset of HOW customer would behave & WHAT customer would want out of the service /experience. 

These are the major issues everywhere. Service provider neither engages with service designers nor engages with customer experience designers. 

Result: pathetic customer experience, unhappy customer, stressed and frustrated customers & even citizen when it comes to public utilities. 

Be it design, process, experience or communication most business fails miserably. I have a few experiences during last one week. Today I will share one of them.

In Mumbai, Mumbai Central is a station where from out station long distance trains leave. This is also one of the stations for local trains. Therefore many people get down from local trains at Mumbai Central to catch their long distance trains.    

Earlier there was only one bridge and way from local platforms to reach platforms for out station long distance trains. In between there was a ticket window which was also serving people who wanted to buy platform ticket to enter long distance train platforms. 

Since last few years they have built one more bridge , to enter platforms for long distance trains , which is closer from local train bridge than the old bridge. Everyone need not walk long distance to reach the long distance train platforms with their luggage. 

Good thinking. 

Now this new bridge can be used by three kinds of commuters:

- Actual long distance traveller - Need to know on which platform train will arrive to get down on proper platform with luggage

- People accompanying the long distance traveller - Need to buy platform ticket

- People just want to get out of Mumbai Central Station and are not long distance traveler - just need to walk till exit on the other end of the bridge

Now this new bridge does not have sign board indicating on which platform trains will arrive. This is absolute must requirement. 

Ticket window for person wanting to buy platform ticket was quite far & closed. I do not know whether it remains open any time during the day. 

Therefore only people who can use this bridge effectively are people who want to exit the station or want to enter local train platforms through this route.

For first two categories of people in spite of the new bridge there is no option but to travel through old route with their luggage to reach the long distance train platform. 

Therefore so much of investments in bridge just to cater to one class of people out of the three classes which requires this bridge. 

Issue is of design; issue is of applying mind to know who will use this bridge & what people wants while using this bridge. Design & experience mindset both were lacking here. 

No effective use of resources results in public inconvenience.These kinds of service design and customer experience issues are rampant across the industry and public utilities. 

What CEOs should know before they ask for ROI of CX Initiatives ?

ROI of CX (Customer Xperience)  initiatives is a big challenge when CX Professionals/Consultants have to get approval of their CFO & CEO.

First few pointers:

- How many CFOs & CEOs are aware about cost of acquiring new customer?

- How many CFOs & CEOs are aware about cost of mis-handling complaints and service calls?

- How many CFOs & CEOs are aware about revenue potential of each customers? 

Secondly:

- Are CFOs & CEOs aware that revenue of the company is coming from ; 

Repeat Purchase of Existing Customers + Referred Customers + Newly Acquired Customers + X & Up sale to existing Customers + Higher pocket share of existing Customers - Customer Attrition. 

Finally;

- Customer Experience initiatives positively impact;

Repeat Purchase of Existing Customers, Customer Referrals , Low cost on New Customer Acquisition  , X & Up sale by existing Customers , Higher pocket share of existing Customers , Lowers Customer Attrition. 

Plus it also impact;

Sensitivity to price rise - customer becomes less elastic in the event of price rise, it reduces complaint handling cost , it reduces after sales services cost , it reduces marketing cost.    

Plus it influence;

Public perception of the brand, it attracts better talent to the company & low employee attrition {as better CX is not possible without better EX (Employee Xperience)}. 

CX initiatives are a business survival strategy but those who understand only data, for them the above economics should be sufficient enough to ACT.  

Customer Experience & Social Impact

Customer Experience (CX) Focus , more than a business is in fact a social cause. Surprised? But its true. 

Focusing on better customer experience means making lives of customers easier , making them happy with what they buy/consume. Its at the end peace of mind for them.  It brings trust back in business. 

This cannot happen without focusing on employees engagement & happiness. 

This can save customers from misleading & misguiding advertisement & marketing gimmicks.  

With happier customers & happier employees , CX initiatives spread overall happiness in society. It shifts focus from only profit to profit through happiness. Companies focusing on CX are making money by keeping employees & customers happy. 

Today's corporations otherwise are cause of mass unhappiness with their ONLY share holder driven policies. Only PROFIT at the cost of customers & employees unhappiness , social & ethical erosion in values.  

From whatever angle you look at: CX focus is the only way for sustainable competitive advantage & social betterment. 

Hardware without Compatible Software !! CX Disaster.

Scenario One: 

If you have finest of hardware i.e. laptop, electric cord , socket , mouse  etc but as far as software is concerned you do not have matching software, either its older version or its inadequate, its incompatible & it can't help you to achieve your purpose. 

Scenario Two:

Imagine reverse: You have smarter software but weak hardware. You can achieve your purpose but it takes little longer due to weak hardware. But out put is much superior.  

Out of the two which scenario do you prefer? Ideally both will make it perfect but given a choice between the two, I think the answer is scenario two.

Your enterprise has finest of machines, equipment , furniture & infrastructure. 

But do not have well trained staff, seamless customer friendly processes , customer friendly policies.  

What will happen? You can’t achieve your business results. You can’t make your brand stand out, you can’t make rave fans, you can’t beat someone working with second scenario. You will have to spend more on marketing & advertising but customer retention is an issue. 

We use hardware to get desired results from software. 

Recently I visited a well-known diagnostic center along-with my dad. They have latest equipment, modern furniture / fixtures & clean toilets. 

But patient waiting area was irritatingly noisy due to non maintenance of door closure. Person handling the patient during the process was ill trained to handle senior citizen. For him it was a one more number to tick & getting ready for the next patient. Showing careless hurry to a patient who has gone through MRI (highly disturbing to mind)  and weak at knee was a killer. It was a perfect case of customer experience (CX) disaster. 

They have lost a patient forever. My dad told me not to ever visit this centre and to find a new diagnostic centre. It may be far , it may be costly but not this one close my residence. & he told about his experience to all his friends & relatives.

All enterprise must know where to put its effort and where to invest to get the desired end result. Walk the talk , walk the customer journey. Just putting up finest of hardware is not enough. 

Brand Minus Customer Experience

Nothing !!!! Yes it is nothing. 

Everything that a customer feels, thinks, sees is all CUSTOMER EXPERIENCE (CX). 

M of McDonald represents fun, food, taste, ambiance, service excellence, smiling & helpful employees. M reminds us of all these. Therefore M is not a logo or McDonald is not a brand , but it is all about what M & McDonald represents. 

Whenever next-time you think of designing your logo or planning a branding exercise, if the same is not commensurate with the experience your business is offering to the customer. It will not be a branding exercise. It will be a waste or It will be all negative experiences it can recall.

The 1st step is designing Customer Experience. Branding will follow from Customer Experience. 

Have you designed your CX & walked your Customer Journey to know the brand your entrepreneurial efforts are building  ? 

3 Steps to REJUVENATE Customer Experience

Ok , at our business we have decided to focus on customers and create Customer Experience (CX) that gives us competitive advantage. What next ?  

1) Discover (know the present CX your enterprise offers to your customers) 

- First know your Customer's Journey Maps 

- Know the touch points along the journey

- Walk the Journey Maps to know the present experience 

- Test check Net Promoter Scorecard (NPS) 

- Have customer experience audit by analyzing critical aspects impacting CX 

  (Leadership to Channel Partners, all which incl people, process, product, expectation,

culture, branding & marketing & systems)

2) Design (redesign the CX you would like to offer to to our customer to have un-duplicable competitive edge) 

- Define CX Statement 

- Redesign the experience along the journey through various touch points 

 ( CX Statement minus Discover Stage Status ) 

- Keep human rationality , emotional aspects , senses in mind while redesigning for need, ease & delight. 

3) Deploy (implement enterprise wide redesigned CX) 

- Appoint CCxO (Chief Customer Xperience Officer) 

- Realign all critical aspects impacting CX keeping above two steps in mind

- Launch new journey maps 

- Walk the new Journey (Incl CEO)

Repeat the process !!! Yes its an ongoing process. 

These are the steps. These are the steps to create wow & awe customer experience. These are the steps to create un-duplicable customer experience.  These are the steps to create sustainable competitive advantage. These are the steps to business survival in otherwise commoditised world. 

What is customer experience elasticity of demand of your offerings ?

This principle of economics is used for elasticity of demand for price. Time has come to use the same for better customer experience. 

PED definition is : 

Price elasticity of demand is a measure used in economics to show the responsiveness or elasticity of the quality demanded of a good or service to a change in its price.   

New age definition of importance is:  

Customer Experience elasticity of demand is a measure used in economics to show the responsiveness or elasticity of the quality demanded of a good or service to a change in its customer experience.   

Therefore before you ask for ROI of better customer experience initiatives answer following questions:

What is your advertising & marketing budget ? 

What is the cost of acquiring new customer ? 

What is the potential loss due to losing exiting customers ? 

What is the gain from repeat purchase from existing customers ? 

What is the gain from referral business from existing customers ? 

What is the gain from existing customers (+) WOM across channel ?

What is the loss from existing customers (-) WOM across channel ?

What is the potential market share loss due to competitor taking lead in offering better customer experience ? 

What is the elasticity of demand for better customer experience ? 

What is your better customer experience creation budget for existing customers ? 

What is the gain in to be known as customer experience champion company ? 

Answer these questions before you ask about ROI of customer experience initiatives in your organisation. 

You are EXPOSED !!!

Your company may be working in SILOs but customers see through the company as one entity or brand. This is the reason companies are at greater risk of being exposed. 
Many enterprises may think that only front-end people and front-end outlets are being exposed in front of Customers. 

Customer experiences your enterprise in following ways during their journey. 

Every-time they touch your enterprise you are exposed. 

Touch Points	Exposes (Indicative not conclusive list)
Advertising / Sales Website	Branding, Communication , Product/Service Conceiving Capability
Word Of Mouth	How you have dealt with your previous & existing customers, customer policies posts sales , product & service qualities
Product/Service Display/Demo	Manufacturing , Engineering , Service Capability
Front end people	Training , HR Policies
Back-end Processes	How your business process are designed & aligned to customer needs- like delivery, billing, packaging, queue management, admission process.
Outlet/Website for Transactions	Design & display capability , ease & convenience capability , safety policy, people policy
Company Policies	Return, exchange , store location policy
Product/Service Usage	Manufacturing , Engineering , Service Capability
After Sales Responsiveness	Customer Policy, Company Culture

Whatever the enterprise does at the back-end invariably touches the customer.  

When Mr Zubin Mehta will perform in Kashmir on 7th Sep, in front of the audience, he is aware that they are in front of their audience and their preparation will be in tune with that. There is however no difference be it audience or customer but difference lies with symphony orchestra conductor and business enterprise conductors ie CXOs. 

One is aware and others are not aware that they are in-front of the customers and are exposed to them whatever /where-ever they do. 

Become aware that your enterprise is staging a show in front of your customers & prepare accordingly. Remember author duo - Pine & Gilmore - Work is a theater, every business a stage. 

Why your customers MUST promote your brand ?

Why your previous & existing customers are NOT promoting your brand ? 

When previous & existing are customers are not promoting , their own loyalty is also at risk.

Its is a very serious issue. 

- may be they are not satisfied (not meeting basic need) 

- may be they are not happy (not exceeding expectations) 

- may be they think there is something better available 

- may be experience was not engaging 

- may be experience was not memorable 

- may be it was not emotionally touching 

- may be they considered price was more than value it delivered

- may be your promise was more than what you delivered 

Reasons could be any and many. Company can not afford to ignore these reasons. It is not that it saves your marketing cost but it is for the very purpose to know whether your enterprise is doing the right things in a right way. 

Before you get financial results at the end of the year , knowing what your customers are doing for you in the market is an indicator of financial results one can expect. 

Like political parties would like to know mood of the nation before election & take last minute corrective measures, entrepreneurs also must know & act on mood of the customers. When the mood is like the points stated above challenge for entrepreneurs is bigger. 

Make it a mission that every customer MUST recommend your offerings by becoming brand advocate.  There are few companies that enjoys this kind of reputation.