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This blog explores insights for multinational corporations, NGOs, academics, social entrepreneurs and others working at the Base of the Pyramid.

Monday, January 14, 2013

NexThought Monday : Customer Experience needs to drive vision at the BoP business, not vice versa

By Glen Burnett

Product demos in town centers helped build up demand from consumers and from shop owners who wanted to add the products to their shelves. (Photo credit: Kim Beevers/Mercy Corps).

Base of the pyramid (BoP) organizations may arguably have some of the best intentions the private sector has to offer. But even they don’t always get it right. As the Grameen Foundation’s Leo Tobias pointed out on NextBillion recently, Grameen has long used mobile phones as a point of access for the BoP. But the organization has learned that 22 percent of their customers may not even own their own handsets, so they’re either shut out of Grameen’s mobile money solution or vulnerable to security risks if they use someone else’s handset to transfer funds.

No one would say that Grameen lacks customer focus. But if they can encounter this kind of disconnect, it means there’s a compelling need to introduce customer experience to companies and organizations that count the BoP as customers.

Customer what? Customer experience goes beyond customer service, beyond working once or twice with a representative. Customer experience encompasses the entire lifecycle of a customer, from learning about an organization to ending the relationship with it. From the company’s perspective, it’s about managing your customers’ expectations and emotions by designing the way they walk through that lifecycle with you. It means consciously designing the process of interacting with customers at significant points, listening to them throughout, and building metrics and governance to track their evolving needs and improve their experience over time.

In the private sector, customer experience has grown as a best practice over the last 10 years, and many major companies—think Starbucks, Tata, the Cleveland Clinic—have integrated it into their strategy and operations. Aspects of it come naturally to BoP leaders, including collaborative design. But strategically designing that experience to predict customers’ needs and set their expectations accordingly is not as common.

The impact this can have on the BoP is as pronounced as it is for any customer of a Fortune 500 company because it focuses the organization on the needs of the customer as opposed to operational metrics.

This is what both companies targeting the BoP and their customers get from a designed customer experience:

  • Understanding-Most BoP companies are not run by the BoP, an automatic hurdle for connecting with end users. A customer experience approach creates a participatory relationship with the BoP, and changes the focus of the company from product/service delivery to fulfilling customer needs   

  • Predictive Impact-By designing the customer experience using customer feedback, companies go beyond reacting to customer wants and needs, to anticipating them. As customers’ wants and needs change, you can predict changes to make in your business model to allow new service offerings to better meet your evolving customer’s needs

  • Loyalty- A well thought-out customer experience keeps customers engaged. Building a product that works is only part of the process. If you fail in other areas that are important to your customer, they won’t come back. For example, if you are a hospital that prescribes medication to a patient, but doesn’t properly explain how to take it, that patient will blame you when it doesn’t work, and may opt for the traditional healer the next time around 

  • Competitive advantage-When we talk about BoP solutions, we usually mean solving a problem, which doesn’t necessarily translate into improving lives. By focusing on customer experience as a whole, we find additional solutions we may not have identified before, which also gives us competitive advantage. If you sell a time-saving product like a water pump, yet your customers spend several hours to make a microfinance loan each week to pay off the purchase, you’ve lost the time saved. Customer experience design helps identify that issue’s importance to the customer.

 

So how can you incorporate this into your business model? Forrester Research has been studying industry leaders (CISCO, Vanguard, and FedEx) for years now. In their book “Outside In,” they identify six disciplines of customer experience that are applicable to any company and can be internalized by BoP companies as well:

  • Strategy- Define how you will address your customers’ experience, and align it with your company’s overall strategy, including your brand.

  • Customer understanding-Have an open dialog with your customers. This builds on customer insights research (a good BoP-focused primer for this can be found here), but also focuses on qualitative voice of customer research, including employee panels, customer interviews, and SMS surveys.

  • Design- For every new customer interaction you create, actively plan how you that interaction will happen in your customers’ eyes, and plug that into your strategy. User-centered design, or as IDEO.org describes it, “human centered design” is really helpful here.

  • Measurement- Most companies track service or product key performance indicators (KPIs). But to tie performance to customer experience design, you also need metrics on how those performance indicators translate into customer satisfaction. More on this here.

  • Governance—Customer experience initiatives will fail without proper governance integrated into every functional area of the company. This includes establishing a governing process, with authorized oversight to keep customer focus a priority.

  • Culture— Employees need to reflexively listen and report what they hear from customers, and help identify new customer experience improvements. Start with hiring customer-focused employees, but ingrain it into company culture, with senior leadership championing the focus.

 

Overwhelmed? Don’t be. Customer experience is fundamentally aligned with the good intentions of most BoP-centric organizations - plus it just makes good business sense. Here are a few starting points: If you aren’t already doing it, open a dialog with your customers. Map out your customer lifecycle with them, focusing on good and bad experiences, and then go back and identify what your company can do to better deliver those experiences. Ask what the customer is thinking that they can’t already see, and build that into your future state design. Talk about how you would incorporate a customer-obsessed culture at your firm. Make sure that everyone is focused on satisfying the true needs of your customer. And make customer experience a priority at your firm, not just a buzzword.

Customer experience is complex, but BoP companies are well positioned to focus on it. Take the Grameen example from earlier. By interviewing and talking to their customers, they have identified a gap in the services they provide and are now thinking of ways to address that gap.

So here are a couple of closing questions: Does your company currently focus on customer experience, or do you focus on delivering your product or service? What value do you see in actively designing a customer experience, and where do you think it can lead?

 

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