On this sunny Friday afternoon, I am finding that after more than a decade of customer experience, satisfaction, and loyalty research and consulting, I can still surprise myself!
Earlier this week, my colleague Tim Keiningham and I were interviewed on The Customer Experience Show hosted by BlogTalkRadio. Tim talked about his award winning and Harvard Business Review published work on The Wallet Allocation Rule. I provided color commentary and fielded questions from the three hosts of The Customer Experience Show. I just listened to the show (it’s always a little scary hearing your own voice!) and was surprised at just how simple and yet powerful Wallet Allocation concepts come across. And it was pleasantly surprising to hear the hosts tell us that our interview was one of the most impressive of the 70+ they have conducted on the show!
During the 30 minute segment, we discussed the concerning fact that improvements in customer experience and satisfaction may not necessarily have a positive bottom line results. Without understanding the competitive context of performance improvement, we may fool ourselves into thing we are making progress when in fact we could be losing the race for loyalty. Tim referred to Walmart’s efforts to improve customer satisfaction by reconfiguring their stores to be more pleasing. Customers gave Walmart better survey scores for the new store format. Unfortunately, those same customers were shopping less at Walmart! Without knowing how the Walmart store improvements related to competing improvements, Walmart executives were making bad decisions.
That’s why it is so vitally important for executives to truly understand how their customers rate them versus the competition. It is not good enough to ask “how do you like me?”. You need to also know how your customers think, feel and behave towards the competing alternatives. With this information, we can understand share of wallet which is the core to revenue growth and profitability. You can listen to The Customer Experience Show here. As a bonus you will hear about Tim talking about his music career and me describing my faltering tennis game!