2018 Conference

Patricia O:    Our book is called, Wow, Wow, And Win: Service Design, Strategy, And The Art Of Customer Delight. Which is why I thought it was so great that Carl kept on hitting the notion of delight, because that's really what you're trying to do with customers. 

And why should you care? Well first of all, you all are customers. You all have customers. But it's important because customer experience is the next battleground where business is going to be won or lost. We have data here that shows now it is the most important thing to customers. It is more important than product and price. The experience that they have with you.

It is going to become even more important. And beyond 2020, as we continue to see generational shifts in the workplace, and more and more millennials and generation z's who forget about being part of the intranet of things, have been raised in the intranet of me age, the expectations for having their needs met, having their desires for delight met, in all arenas on their terms is increasingly important.

How you start by delighting customers is thinking about what is the experience do you want your customers to have? And we have two examples of two different kinds of experiences here and this is a much easier exercise than when we did it in Seattle, which is kind of a Starbucks town as you may know. And Boston which is kind of Dunkin territory.

Okay, who here is a Starbucks person? Who hear runs on Dunkin? What do the rest of you do? Ostensibly, they are both selling the same thing, better than average coffee for more than you'd pay at the corner deli. But really what they are saying is two very different kinds of experiences. 

The experience at Starbucks is … Antone you're a Starbucks person right? What is Starbucks about?

Antone:    It's about hanging out.

Speaker 1:    About hanging out. Yeah.

Patricia O:    Hanging out. Lots of time especially when you're waiting in line and you're ordering. Lots of time at Starbucks. Who was one of my Dunkin people? Come on be proud. Alright, I know one of the things I love about Dunkin is I'm in and out. You spend more than three minutes in Dunkin Donuts and you feel like a lurker. You really feel that there is something wrong with you.

But they're both selling different experiences built around similar products. And they both happen to be very successful at it. The goal with whatever service experience you're selling, whatever experience you're selling around the product is, you want your customers to have that "Ahh" moment, that moment of delight. That moment when they know that they're not only in good hands but they're specifically in your hands, the reason that they chose you. 

At Starbucks, the "Ahh" moment is when you start digging into that funko munko cappuccino choco and it's gonna take you 15 minutes to get through the whipped cream on top. And that's your "Ahh" moment when you start digging in.

Dunkin it's when you get in the car and you're able to start eating the Munchkins out of the cup, because the cup that they put the Munchkins in, fits conveniently into the coffee cup holder in the car. Both "Ahh" moments, which is what you're always after. 

Now, services are harder than products to create "Ahh" moments because of these unique design challenges. First of all, think about the fact that, the customer shares in the act of production. Well, what does that mean? 

Your customer is there with you. We think of products as hand offs. And services as hand shakes. It takes two people in a service to create the experience. It has to be that way. You can't outsource your haircut. You can't outsource the nights sleep you had last night here at the Hilton. You had to have that experience yourself. 

The customer is there. And you know, one of the things that Carl was talking about, variation and customization with AI, that is one of the things that you always have to be conscious of, in terms of designing a service. 

Agan, Carl terrific setup. Services involve multiple interactions. Touch points, channels and conversations. It's not just that one discreet moment. It is that C process, that flywheel, that continuation where it's always going on. You're always trying to improve your relationship with each other. It is a series of moments and touch points across various channels and various ways of interacting with each other. And it's not just one conversation.

It's hard for customers to know in advance what they're getting. Even though one of the things that we're going to talk about is how important it is for you to set customer expectations and then of course meet them. There still is that subjectivity that customers, that people, that individuals are bringing into the situation. 

One person's cramped hovel in the woods, is another persons charming rustic inn. You always have to be mindful that you don't really know what you're getting. And customers pay for a service but they don't own it. What they are taking away is, the experience, the emotion. That's why we like to say, you have to be able to handle variety and customization. 

Every department and every partner effects your success. Not only set the expectations but give clear, tangible evidence of the quality that you're offering. You know in a bank, it might be the fact that you have well dressed employees and mahogany desks. Here at the Hilton, it's staff dressed a certain way. You know who the valet guy is, you know it's not just some shady guy running away with your car.

And the customer is taking away the memories and the emotions. You're not making alone. And the person doesn't want alone. You're making somebody's dream come true. You're giving them the possibility of making something happen. 

So, who do you woo? Well you woo by designing great customer experiences. That starts with the promise you make, which is about design archetypes. When we were working on the book we studied a lot of different industries B to B, B to C, all different sectors. Tom and I both have backgrounds originally in business journalism, as well as lots of other things we bring to the table. Me being as I like to call it, a discerning consumer, that is part of what makes me an expert in customer experience. 

But we realized there are different types of companies. When he said a squirrel is a really good squirrel, but a squirrel would make a really bad cat okay? Think about these different types of archetypes. Let's think about some of them. Who here might consider themselves a trendsetter? You're on the cutting edge, you're sleek, you're quick. Who here is doing something like that?

Speaker 1:    Who are yeah?

Patricia O:    Who are you?

Carl:    Oh, I'm Carl. 

Patricia O:    I'm sorry. You moved.

Speaker 1:    You're hiding. You're hiding. Yes you're right. The Precision Lenders a trendsetter. Absolutely.

Patricia O:    Alright.

Speaker 1:    Absolutely. You're in the dark.

Patricia O:    Okay, good answer on both scores. You know, some of you might like to think of yourselves as the safe choice. You're the place people know and they trust you. Some of you might want to be the specialist. You do one thing and do one thing really, really well. But the purpose is to really figure out what is the essence of your value proposition? Why are people coming to you? Why are they coming to you and not somebody else? What is it that you're offering? 

Here we give some examples across different industries of the people who are great at creating those "Ahh" moments. We like to call them the wizards of aah's, those people who really nail it for you. Disney, you go there for a certain type of vacation. You're not going there for the romantic honeymoon. Your "Aah" moment is when Cinderella comes up to your little girl and gets her picture taken with her. That's your "Aah" moment at Disney. 

Your "Ahh" moment when you go to a trendsetter like Ward B Parker is, you try on six different frames, and you go into the instant photo booth they have like an old fashioned carnival. You can then send photos from the fun photo booth to your friends and say, which ones do you like?

They don't need a photo booth at Ward B Parker, everyone whose shopping at Ward B Parker is taking 200 selfies a day and posting them on Instagram. But it's just part of what they do to create that vision of, we're fun, we're different. 

But in terms of thinking about who you are as an archetype, the reason we only put up one bank here is, we want you to think about inspiration from different industries. There was a company we wrote about it in the book called, Surf Air. I don't know if anyone here from California might be familiar. Jessop is that you?

Jessop:    Yeah.

Patricia O:    Okay, but are you familiar with Surf Air? Surf Air is an all you can fly subscription service that flies around California and to Nevada. So you pay a monthly fee. You can fly as often as you want. They will take a scheduled flight with one passenger signed up for it. That's the way they're motto works. Who do you suppose was their inspiration in the archetype? Any ideas? You don't count for this. It was Netflix. Netflix all you can watch model.

Before we binged watched, we had to get them buy the mail but you got as many as you could handle in a month. That is the power of the archetype is to look beyond your industry, to look beyond your direct competitors, and see what other people are doing that can help you figure out better ways to give your customers the experiences that they're coming to you for.

The other tricky thing is, just as there are different types of companies, different types of archetypes, there is what we like to call this customer bestiary. The first one is the loyalist. This is the customer who loves you pretty much no matter what. Who you have a great experience with. You are always meeting their expectations. You two are made for each other. I would say you're a match made in heaven but I'd say, you're a match made on E Harmony at this point. You're ideal for each other.

The captive, the captive is the customer who is forced to work with you. Maybe it's because of some contract that encompasses the whole company, and it's kind of a legacy thing. But why not work to make the captive, feel like they would work with you if they had the choice? Because at some point, they will have the choice. 

And also, so much of we know about recommendations do come from word of mouth. So say you know, I have to use this service, this product at the bank because all the other parts of the company use it. But you know something? It's really good. I'd use it even if I had the choice. We know a water utility in Connecticut, their customers have no choice. But their motto is, we treat our customers as if they have a choice. 

The butterfly is an interesting type of customer that you really should spend a little time trying to figure out how to extract more value from them. Because they are coming to you for some things. They're going to you for something else. And they're footing over there to get some of their services from somebody else. The butterfly has more value to give you. You have to figure out if you have the ability to get that extra value from the butterfly. 

The bargain hunter. It's pretty clear who the bargain hunter is and whether you want to be the right person for the bargain hunter. You may recall in one of our archetypes, there was the bargain. And do not go after the bargain hunter unless your value proposition is strictly playing on price because the bargain hunter is after you for one thing only and it is low price. Competing on price and competing for the price conscious customer is not a game for the faint of heart.

I was speaking I think with that nice man Carl in the back of the room last night, who was telling me that for a potential client they're talking to, when asked who are your competitors he said, "Well the company they're currently using charges … We charge seven times more for a product than they do." 

Now, we can charge seven times more because our product really is that much more robust and that much better. Obviously Precision Lender and the bargain hunter are not a good match. And that's why it's important to know your archetype, and to understand your customers.

The sniper wants one thing from you. The advantage to the sniper is, because they want and are getting one thing from you, they know that they're getting one thing that you do really well. If you have other things you can offer a sniper, let them know that. Let them stop being a butterfly, and getting stuff from other people, and get more value out of that sniper. 

And finally the asprint, that's the customer who maybe feels they can't quite afford you, they're not big enough for you. You make $200,000 loans. They only want $20,000 loans. Well you know something? People who take out $20,000 loans often end up being the people who eventually need lender $200,000 loans. Asprints, are worth thinking about as customers from whom you can extract more value.

Just as you're looking to understand who you are, also understand who your customers are because when you can make that match you can get maximum value out of your customers while also giving them maximum delight.

And with that, I'm going to turn it over to my co-author Tom, to talk about the five principles of Service Design, and Delivery.

Tom:    Thank You Patricia. By the way, I hope Carl that you noticed that I'm wearing my socks. I picked up a pair of socks yesterday and it just happened to work. I was also really thrilled to see Doug Engelbart and that picture of Doug Engelbart. He later on in life, he created something called, The Boot Strap Institute. And you know, the idea of picking yourself up by your own bootstraps is of course impossible in the world of ordinary physics. 

But Doug Engelbart and those system C kinds of things were really all about that. First he invented the mouse, he also had that thing that looked like a musical instrument, which he actually used as a three key, keyboard. He would do various combinations on it. But that first mouse that he made that showed him the picture there, is made of cherry wood. He made it by hand and it's at MIT right now.

And back in the places when horses had three toes and modems have 14 [inaudible 00:17:48] I actually had a picture of that mouse. And remember when you had screensavers? I had a picture of that mouse floating all over my screen. Doug Engelbart, he should be everybody's hero. He was a really interesting character and legendary in Silicon Valley.

What Patricia was setting up for you here is a really important idea. The idea is that services like products, can be designed, should be designed, and they must be designed. You want to apply the principles of design to services, the way principles of design are applied to products. 

We have 120, or 40, or 50 years of product design. Designing services is different for all the reasons, the four reasons that Patricia enumerated there. And designing services we think, is even more critical than product design because designing services brings you to the very value proposition of who you are and what your reason for being is. The design of your service is your value.

Tom:    Service, the design of your service, is your value proposition. So it is your strategy, and this is why these archetypes are important, and why you need to think about them.

Now as you think about this, these ideas of how do I go about designing a service? As we were doing our research, we realized that there were five principles that ought to be applied to service design, no matter who you are. Whether you're a bank or a software service company, or a restaurant, a hotel, or whatever, these principles will serve you well in designing a service to create the value to woo, wow and win your customers.

By the way, I've been thinking the title of that book, Woo, Wow and Win, started out as the subtitle, it was Patricia's subtitle, and then our editor said, "No, no. Pull it out of the subtitle and make it the title. And I was thinking, wooing is sort of like connecting, you know, let's form some sort of a connection. And then wowing is let's get in the mix, and services being handoffs we're going to kind of share in the wow process. And winning of course is when you grow, and your customers grow together. We're actually connect, share, and grow, and woo, wow. We're really … This is a match made on eHarmony.

But the first principle of service design is that the customer is only right if the customer is the right customer for you. The phrase the customer's always right, you Google that phrase you'll find various origins. You'll find it talked about in French department stores, English department stores. It is sort of something from teaching shop clerks etiquette back in the days when department stores started. You know, just be polite to the customer. The customer's always right.

It's a good way to train frontline staff not to be … so that they don't act like United Airlines flight attendants, but it is a lousy way to think about setting up a strategy. The customers right only when you've got the right customer in front of you. And an interesting way of thinking about this from a design point of view is, do a little compare and contrast between Charles Schwab and Edward Jones.

Two brokerage houses, both of which are trying to attract a person with roughly the same kind of network. They're not going after multi gazillionaires, they're trying to get somebody with a few hundred grand to invest sort of the similar economic profile, but a completely different profile in terms of behavior and style.

The Charles Schwab customer wants to be in there trading and pumping the keyboard and looking at stuff, and making his or her own investment decisions. And as the Schwab annual report says, we believe that the industry gets in the way of the investor. Get the industry out of the way, so that I can get in there myself. So everything about Charles Schwab is designed for the DIY trader and investor.

Edward Jones, appealing to the neighbor in the same subdivision with a similar house and a similar car, says on the contrary. You're going to go down to the strip mall or down to the office, and you're going to go to the Edward Jones broker, and you and Bob, or you and Sarah, or whoever it is, you're going to talk about things, and we're going to do the trading for you. We're going to give you a lot of advice and you're not going to touch the system yourself. You can't go on the Jones platform and trade, right? You're going to go through the investor because we want a conservative individual investor who delegates financial decisions.

Similar businesses, but like Starbucks and Dunkin, very different designs designed to attract and appeal to certain customers. So for the right kind of …. Charles Schwab at one point actually went and bought a wealth management company, I think it was US Trust. It was sort of like that Gatorade sale. Three years later, they sold it at a loss because it just didn't fit.

They're now trying to get back in with not custom advice, but customized advice. Again, focusing on what that aggressive hands-in and hands-on, it's up to my elbows, investor wants. They're trying to move up the chain with this guy, but when they first tried to do it with people, it didn't work because it was the wrong kind of design for their customer. So you want to design for the customer who's right for you.

The second thing, the second sort of counterintuitive principle is, forget about this phrase "surprise and delight". At one point, I was working in a consulting firm and literally in our performance review questions there was always this question, did you … what did Tom do that surprised and delighted, or what did anybody do that caused surprise and delight? And I sort of always grated at this, because I thought why should it be a surprise if I do a good job? Why should it be a surprise even if I do a superior job? Oh my God, I didn't … He's not quite the idiot I thought he was, right?

One of the things that's really interesting is, this phrase surprise and delight has got in the way of the fundamental idea that what you want to do, as Carl was saying, is you want to hit delight, and you want to hit that delight button every time. What that means is you've got to do a really clear job of setting expectations.

Now your expectation in a McDonald's is going to be different from your expectation at a 21 Club, or something like this. You're not going to go into McDonald's and say I'd like my Big Mac medium-rare, or whatever it is. You're going to set clear expectations and meet them.

Back in the days when management-thinking was first starting to be applied to services, one of the really interesting questions was, how do you get quality in services? How do you get reliability in services? And Ted Levitt, one of the famous editors of Harvard Business Review, and the guy who created the phrase marketing myopia, and was the first guy with the three quarter inch hole rather than three quarter inch drill, stuff that Carl was talking about. Ted Levitt sort of talked about quality coming to services, and how do you get reliability and predictability?

Now his model was the industrialization of services. He said, "McDonald's is a great example of reliability and predictability." That's true for a certain kind of industrialized service. It doesn't work if we're having a custom relationship in a bank, right? Where it's one-on-one, and I really want to get to know you and know your business. So ted got that part wrong, but what he got right was you want this predictability, this reliability, you want to focus on setting expectations and getting delight.

That leads to the third principle. The third principle is that great service and great customer results, great customer experiences, cannot require heroic efforts either by you or by your customer. I love the brick, you know the tool that becomes a tax. The pencil with a brick on it, because it really is an example of the kind of thing that happens when heroic efforts are required.
    
We like to think about, I think it was Patricia who coined this, the Downton Abbey Syndrome. The Downton Abbey Syndrome is what happens in a company when upstairs the customer, his lordship, is having a spectacular dinner, entertaining his guests and everything is totally wonderful. Where downstairs in the kitchen, it's chaos. Things are … people are feuding, people have cut … people are sick, people are not there, and there's a total random chaos in the kitchen. It makes great television, it's a lousy business model, right?

You've got to be able to have the backstage processes, the things that are going on downstairs that allow you to deliver what's going on upstairs in a sustainable, repeatable way because you're not … you don't get great customer experience by saying, "Go out and be nicer to customers," if the systems and the processes won't let that happen.

Similarly, you need to think about what your customer's experience is. People talk a lot about lean, and lean production, and so on and so forth. Probably many of you have lean experts in your banks, or certainly are working with lean people and know this, but how many of you have turned the telescope around, and said, "How can we make our customers experience lean too?"

In lean, you look about where do we waste time? Well, where does your customer waste time? Think about hospitals and doctor's offices, and think about all the time you sit in a chair waiting for the doctor. Think about all the wasted time that happens in the medical care system, and you can apply that then to your bank and your business. How could we look at the customer's process and design that to be lean too, so that we are easy to do business with?

One of the companies we talked to, is a company called Mobile Mini. You've seen them. They are the countries, maybe the world's biggest provider of those mobile storage containers that you see at construction sites, and so on and so forth. They say that they want to be the classic in our system of archetypes. They say, we want to be the Mercedes of storage. And one of the things that they actually do is they ask their customers a very simple question. How easy were we to do business with? And they just keep a score on that question, and they always want to be moving that number up.

Now when you think about it, how easy are you to do business with? You don't have to do this right here and now, but maybe you will. How many of you would give yourselves a four? So, we are so easy to do business with that we win business, because customers say, "Wow, you guys are so easy to do business with."

Would anybody here give himself a four? You would, why?

Speaker 2:    Because I work at PrecisionLender.
Tom:    Aww, these guys, they've drunk the Kool-Aid. It's really great, yeah.

How many people would give … Would anybody give himself a zero, like we make the DMV look good? I hope nobody would give himself a zero. But I'm guessing that most of you would give yourselves a two or three in this. And the really interesting question is, what can you do so that you could move that up? And we'll come back to that a little later in this talk.

The fourth principle of service design, remember we're talking about these five principles you want to apply as you're designing your service in your business. The fourth principle is that you have to deliver a coherent experience across all touchpoints and channels.

Now go back to the archetypes idea, what's our experience? We're a safe choice, we're a classic, we're an aggregator, we're a bargain, we're a trendsetter, whatever it is. If you are going to be a trendsetter, you need to deliver that trendsetter experience at all times.

Think about hotels that you know. In the Hyatt chain, the Andes hotels. Andes is the Hyatt brand that is for hipsters, right? When you go into an Andes lobby, the lighting is dim and so on. The lighting is dim and kind of vaguely erotic. Some slender person, male or female, maybe sort of Androgynous, will come up to you with an iPad to check you in. It's very much … Everything conveys that experience.

So whether it's your marketing, your website, the actual experience, your aftermarket experience, wherever it is, and it all channels with what you deal with companies, and all across the journey from check-in to check-out, you need to deliver an experience and design an experience that expresses who you are, so your customer knows who you are.

That can get pretty complicated in some cases. Think for example about the fact that whenever you want to fly, you may be flying first class on Emirates or Singapore, or Singapore Airlines, but you're still going to have to go through TSA. And TSA really doesn't care about that luxury first class experience. So sometimes you're caught in an ecosystem that makes it difficult.

But even when that happens, and you may be facing that with regulation sometimes, where the regulations require that you do something that sort of screws up the customer experience you want to create. So you may be able to exercise some influence, but you certainly want to figure out ways to deal with those rocks that may be in the stream of the experience you want to deliver to customers.

Finally, the fifth principle of service design is that you are never done. Now, an interesting distinction between products and services is that innovation in products tends to happen in a lab. It tends to happen with Gyro Gearloose and retorts and alembics and bubbling chemicals, and so on and so forth. And then maybe out there with bench scale production and prototypes, and so on and so forth.

Service innovation happens in the wild. Service innovation almost inherently has to happen in the presence of the customer. Every spring, Intuit is running literally hundreds of experiments every week on its tax software. And they're getting the results back and learning and applying it, and making those changes as they go. It's A-B, A-B, A-B, A-B. It's A-Z testing constantly.

It also, interestingly, service innovation happens across the whole length of the value chain, it's not just introducing a new product. But if you think, for example, and this is a Lexus, one of the really intrinsic things that Toyota was thinking about as they introduced Lexus, is we can create.

They innovated a car, using Toyota production system methods, they could produce a car with the quality of Mercedes much more inexpensively than Mercedes because they could just get it right, and Mercedes was sort of having to hand rub quality in after, but Toyota could build it in.

They took all of that saved money and used it to create an innovative dealer experience, which was what actually sold the car. They said, we are not going to be able to deliver Lexus through our regular Toyota dealerships, we're going to set up dedicated Lexus dealers.

You know, it's the thing where, if this car [inaudible 00:33:23] should actually break down, we'll come and pick you up. We'll drop off a loot, will drop off a car loaner for you, and we'll drive you to and from the repair shop. All of this stuff that they did to innovate in the service end. But service innovation is fundamentally different, as I said, because it never ends and it happens at all stages of the value chain, and not just back up there at the beginning.

So those are the five principles of service design. And with that, having brought you through the woo and the wow, Patricia's going to take us into the win.

Patricia O:    It's Patricia for the win.

Tom:    Yes.

Patricia O:    How do you win? Think about your customers being on a journey with you. Service design is an outgrowth of design thinking, and one of the things they love to do in design thinking is use post-it notes on whiteboards and really map out the customer journey. And you have to think about it in a couple of different ways.

There are the customer actions, what your customer actually does. There's the stuff that you and your customer are doing together, that customer being in the active production that we talked about, that handshake. There's what's happening backstage, sort of behind the curtain, the man behind the curtain who's making the magic happen, and then there all the processes that enable the man behind the curtain to make the magic happen.

The customer journey really encompasses all four of those paths, if you will, because all of those paths influence the kind of experience your customer's going to have, and the quality of that experience, and whether or not you're going to delight them.

Now you actually can do some quick math, and yes, you thought this was going to be the easy Friday morning after the Thursday night. No, there is an exercise on your table and there are pens. There is paper and pens so you can figure out how to do the math on how good a job you're doing on delighting. This is a fun, simple exercise, I will just talk you through the different elements of it. But delight is a function of the customer's experience, what happens on stage, and the technical excellence that happens backstage.

Here you will see your service design report card, and you will ultimately end up with something in the realm of a 4.0, or below, as a GPA. And you'll see that it's divided, and the really astute of you will notice that there are 10 Es here. So the 10 Es about, are the excellence of customer experience.

There is, again, that customer side and the excellence side, so I'm going to take you through each of these and I'd like you to give yourselves a grade from zero to four in each of these 10 things.

Empathy, have you done a good job thinking about what it is like to be your customer, and what is the job your customer wants done?

Expectation. Have you done a good job of making clear what the customer has a right to expect from you? Does the customer know what your value proposition is? Do they walk in there with a clear set of ideas? Do they have enough sense to walk into McDonald's and know they should not order a hamburger medium rare?

Emotion. Back to what Carl was saying, nobody wants a loan. Back to what I was saying, you're not giving a loan, you're making a dream come true. Have you thought about the kind of emotion your customer is bringing into the experience, and the kind of emotion they want to walk away with?

Elegance goes back to the idea of, are you easy to do business with? Is it easy for the customer to interact with you? Is there enough of a process that they can do what they need to do, but not an excessive of process?

Engagement. Are you doing a good job of keeping track of these different steps and stages in your customer's journey with you? Remember, it's not just a series of moments, it's about engagement. Are you keeping them engaged? Is the process …

Patricia O:    Are you keeping them engaged? Is the process of engagement consistent? So let's talk about backstage now as you're giving yourself scores. Overall execution, how good a job are you doing at making it happen? Is your engineering robust enough that execution does not involve heroics on the part of your staff? Have you got the economics right? Are you making money on it? 

Experimentation. I was talking to somebody last night at the dinner who said, “If it ain't broke, don't fix it.” Yes, that's you [Jessup 00:38:43] and it is an excellent point and the thing is, it's not that it ain't broke, it's just, it ain't ever right. It's never completely right. It's a constantly moving target because customers' needs, customers' expectations, customers' desires, the jobs customers want done are always changing so that's why you need to be experimenting.

Do you have experimentation built into your process in a cadence and in a way that makes sense for you? Intuit can do it hundreds of them a week because it's an online tax platform that everyone's using starting April 12th to meet the April 15th deadline. That might not be the cadence for the rest of you. And equivalence. Hopefully it's good for the customer but is it good for you too? Are you getting what you need to out of this situation? 

So now that I've talked you through the ease and I'm pretty sure that this is a pretty smart math savvy group, I'm going to guess that most of you are [inaudible 00:39:53]. So you can give yourself a score on the customer experience side. Give yourself a score in the technical excellence side and give yourself an over GPA. And I am going to ask somebody to, if they will be brave enough to share their GPA with us. Dustin, are you here? Okay, what's your GPA Dustin? 

Dustin:    [inaudible 00:40:24].

Patricia O:    Okay, how many bankers does it take to come up with a GPA? 

Dustin:    We want to make sure we listen to your whole presentation first. 

Patricia O:    Okay. You're going for some afterschool tutoring. Okay. 

Speaker 3:    Andy will help you do this real fast. Yep. 

Speaker 4:    [inaudible 00:40:48] help me, it'd be great. 

Patricia O:    Okay. Jess, have you put your pen down and this is what get for sitting in the front row and getting stuck with me at dinner last night. Will you share your scores? 

Speaker 5:    Sure. I think you've got to hide the manual process [inaudible 00:41:04] getting better, so I think on the customer experience side, we're in that two to three range.

Patricia O:    Okay. 

Speaker 5:    [inaudible 00:41:14]. 

Patricia O:    Okay, so you're saying you were sort of in the two to three range for customer experience

Speaker 3:    Partly because you're very manual and moving on that.

Speaker 5:    Yeah, yeah, absolutely. So I mean the manual processes are things that I think today, [inaudible 00:41:29] shifting customer expectations. If 
you're not automated and you have a very manual process, that immediately drags you down. From a technical excellence perspective, I think that goes right back into it. It's right in that two to three range as well. Again, that technical side is where we're trying to get better.

Speaker 3:    You're a tough grader.

Speaker 5:    Well, I'm highly critical having just gone through some of it. I think the piece where my bank tends to win is on the emotional side. We really [inaudible 00:41:55] along on the emotional side with our culture, with our customers, and our employees. That's a big part of who we are as a company and I think that, as our bank goes to market, that's a big piece of who we are to our customers and that's a big reason why they latch on and they stay with us over time.
Patricia O:    Just so Jessup doesn't think I'm picking up just him, I'm going to asked someone else to give their score, Dustin. One of the things that is valuable about this exercise is even if you … Sometimes we find that people have really different scores on the customer experience side and the technical excellence side and that's a really good sign to them of where they should be focusing some time, money, attention of how to improve. Even though your scores were pretty similar, unsuspecting, you gave yourself a four on emotion. So even it helps you figure out even among the 10 things where you have the luxury of not having to focus as much and where you need to focus more.

There are a couple of really valuable ways to use this tool. One is to give it to different lines of business, give it to people from different parts of the organization to get different perspectives. If you're really brave, ask a customer to do it for you, a trusted customer. And if you're really bold, see how much you know about your competitors and see where you think they're winning and are those the ways in which you could be winning. Okay. Who else has some scores that they want to share? Dustin. All right, that nice man. 

Speaker 6:    I'll do it. Our organization have only been doing commercial … Commercial lending for eight years, so we started from scratch. I also do community theater as a hobby because I couldn't make a career out of it. When you had the backstage-

Patricia O:    You got it. 

Speaker 6:    [inaudible 00:44:03] it's like, you don't see the hell that went on backstage but you enjoyed the production. You enjoyed the show. I rated us better on the customer experience side than on the technical excellent [inaudible 00:44:14]. I wouldn't be here if I wasn't interested in precision lender to improve the technical piece of the business because that's where we fall short. I am a tough grader too. You can ask my kids. Two point five three. I'm a banker so I got up to two decimal points for you as well. 

Patricia O:    Okay. So has this been useful though in giving you some ideas of where you want to start improving and specific areas to do it.

Speaker 6:    [inaudible 00:44:39]. 

Patricia O:    Okay, because that's what we have found is really valuable about this. It's quick, it's [inaudible 00:44:45]. Well it should be quick, but actually we'll give you a URL at the end of the presentation where you could do it on our website so they do the math for you. For all of those who, after last night, math proved to be a little challenging, you'll be able to do it and get your scores right away. But one of the great pieces of feedback we've gotten about this really quick little tool is, it's something that people walk away with immediately having a clearer understanding of different aspects of the business and different parts of the organization where they can focus and where they can tell people to focus. And also to get the perspectives of different people.

So what stands between you and a four point [oh 00:45:34]. Now, obviously you're in a very heavily regulated industry and there's not much you can do about that. We are going to just make a plug for going along with regulation and compliance [inaudible 00:45:47] it says it may be, but what are some of the other things that stand in the way of you not having a score you want?

Speaker 7:    Dollars. 

Patricia O:    Dollars, yes.

Tom:    Money.

Patricia O:    Money. 

Speaker 7:    Time. 

Patricia O:    Time. Well, here are some of the things you might want to think about that we came up with. Values issues. Do people really understand the values of your organization? That's very much an internal issue. Are you over promising? Think back to the idea of setting expectations. Are you not setting the right expectations? The front line. Is your frontline, whoever it may be, do they have some mechanism for giving feedback to the rest of the organization? The great thing about frontline employees, whether they're your low paid hourly employees who are dealing with people in the front of the bank, whether they're the customer service people on the phone, whether they're you're highly paid sales wizards, they're hearing what the customer talks about.

Do you have a way for the front line to communicate back with the rest of the organization about what those customers' pain points are and how you could make their problems go away. Technical breakdowns, silos, regulation, we know money. Weak knowledge management, documentation, sharing. That goes back to is there enough communication between the front line but also from the front line … The front of line also needs to know from the top of the organization what the strategy is. Do people have the training? And are you doing enough planning? The KPIs. So it's also important to think about what stands between you and a four point oh, try to correlate it to those areas and figure out what are the things you can do something about, and what are the things you can do something about now? And Tom is going to now take over and ask about some of the fundamental questions regarding service design.

Tom:    Thank you Patricia and thank you all for participating in this. One of the things that I'm a sort of a … I like spider charts or radar charts depending on [inaudible 00:48:16]. I mean, a lot of people hate them but my mostly buried inner geek loves them and one of the things that I think is really interesting with that exercise is that you can plot it on a radar chart and you can see your strengths and weaknesses. You can plot different lines of businesses. You can plot your competitors and you can also decide by the way, if we're winning on emotion, is there a way we can get a five? Is there a way we can extend that lead or what does that mean? If that is the key that unlocks [inaudible 00:48:52] are winning for customers, what do we need to do around these other elements that really reinforced that emotion so we're not breaking that with other things, right?

Because if you're, gosh, I love you, and then suddenly you slammed me with the rules, it can sort of create some problems. As you think about this, service design and in the design of a service, you really are asking three fundamental questions and that first question is what experience do we want our customers to have? And the key part of this is the verb 'we,' what do we want? It's like service design starts not with what the customer wants, he wants the best at no cost, right? I mean the customer's expectations and the customers … Your design [inaudible 00:49:41]. What experience do we want to create? What does the customer see at each stage of the journey? And then what do we have to do backstage to make sure that that magic happens at every time? That each stage of the journey has to reflect. Each of these has to reflect, right?

This is the experience and the experience has to happen at each stage and we have to make sure that it happens. That's what you need to think about. Now as you think about how to get started in this journey, here's three thoughts. The first is you go back to that customer journey map that that Patricia showed and you sort of like, what's the customer journey? I mean designers and service designers will fill Post-it notes with walls saying, "This is the customer journey from awareness all the way to … " Go, and never darken my towels again. I mean through the whole experience, map that customer journey and then and what's happening on stage, what's happening offstage, where the emotions are, where the systems are, so on and so forth, and then look for the ah moments. The moments where you're winning and look for the ow moments, the moments when there's a customer pain point.

The moment when the customer is sitting there saying … listening to you on the phone and saying, "Please listen carefully because our options have changed." And slams down the phone and disgust. I was talking to a mortgage division of a very large financial services company about a year ago and they literally do this. They analyze pain points and they have their list of pain points and they work them like a Pareto chart. They just sort of say, "Every six months let's take our worst pain points and let's start with the worst ones and work on the top five and then get our new top five." So that's one thing.

Second thing, you didn't hear this in the in the neuroscience presentation yesterday, but there's a really interesting behavioral psychology finding that says, "You've got a customer journey here, but as people remember experiences, as peoples have memories of experiences, there are two moments in those experiences that actually have a disproportionate impact on what they say afterwards about how the experience was." And those two moments are what happens at the peak and at the last. It's the peak last rule.

Now peak does not necessarily mean surprise or when you say, "I do." At the altar, it's not necessarily a high point of warm emotion. It could be a peak of most intense emotion, right? It can be calling from the side of the road with an accident and somebody injured and smoke coming out of the radiator and you call your insurance company. It's a moment of peak intensity and what happens at that moment of highest intensity with your customer is an absolutely … It will disproportionately color her or his a memory of the experience. And then the last. What happens when they walk out the door? What happens at the end of the experience? What happens when they say, "Yes, you've got the loan." How do you wrap the ribbon that is put around the package is a … What happens when you return the rental car? It has a disproportionate effect on your memory.

So that's another thing. Look at those peak moments. Look at those last moments and how can you figure out how can you really rock those so that you're delivering what you want to do. The third thing is to think about a hierarchy of touchpoints and a hierarchy of interaction. [inaudible 00:53:15] elements of your service. There are things that are table stakes that everybody's got to do. You've got to comply with the regulations, you got to do this, that, and the other. Those may vary by industry or by geography. In New York, everybody's got to be able to deliver, a dry cleaner's got to be able to deliver in New York and a dry cleaners got to have parking in Los Angeles. So they are table stakes. You've got to be solid on the basics. 

Then there are what we call market segment essentials. Now, Motel 6 does not have to compete with the Four Seasons or the Hilton in a lot of ways. But Motel 6 is competing with Red Roof Inn and a few other things, and Motel 6 has got to be near an interstate. So when you think about what is my direct competitor set and how do I compete with my direct competitor set? Then, what is the thing that distinguishes me? What is the thing that says, I'd rather stay at Motel 6 than a Red Roof Inn? What is the thing that says I'd rather stay at the Four Seasons than at a Hyatt Regency? What are those things that are your distinguishing handful of moments and how can you figure out how to be awesome in presenting those things? 

So three things, three ways of getting started. One way is to analyze that journey. Identify ow moments and ah moments. Work on the first and expand the second. One is to identify peak and last and work on those. And the third approach is to sort of take this hierarchy of touchpoints and say, "Am I solid on the basics, competitive on the essentials, and awesome when it counts the most?" So it's a way of getting started. But I want to summarize and we'll turn it over for a few minutes for questions by saying, you woo, wow, and win, you connect, you share, and you grow. By designing the experience you want customers to have and making it reliable, scalable, repeatable, and last but certainly not least, profitable. Services are experiences, experiences are journeys and journeys must be designed.