Expert Interview Series: Stefan Kolle of Futurelab On Improving the Customer's Experience
Stefan Kolle is the co-founder and managing director of Futurelab, a customer centricity and customer experience specialist consultancy working with some of the world's biggest brands to increase customer loyalty and profits. We recently spoke with Stefan about how companies everywhere can improve their customer experience.
Tell us a bit about your background. Why are you so passionate about improving the customer experience?
I started off in financial services, and also started in internet business quite early as well. And even in 1994-95, it was clear that the internet provided incredible opportunities to ‘"do the right thing" for the customer. But most companies weren’t doing it; they fell in love with the technology and forgot about the customer. And when I was in venture capital and incubation, I saw one business plan after the other with stellar growth predictions without once explaining how their new idea would really improve the experience or the life of the customer. And then they failed to fulfill their predictions…
Then I went on to become the CEO of a car insurance company in Eastern Europe. And when I realized that our claims' verifications cost was higher than the actual claims paid out, I decided to go what is now called "lean" - in other words, drop everything that doesn’t add value to the customer.
When we started Futurelab, we initially were a marketing innovation company. Our aim was to help companies be more efficient and effective in their marketing. We basically stopped annoying their customers with pointless marketing and started adding value to their lives by understanding their true needs. We soon found that to be able to do that, we needed to change the whole company into a customer-centric organization. And that’s basically what we have been doing for the past 12 years: helping companies develop profitable customer experiences and strategies.
Since you have developed businesses in 13 countries, could you tell us if there are any differences among nations in how companies view and approach their customer experience?
At the end of the day, I think it is mostly a question of how well developed the whole field of customer strategy is in a country. For instance, the UK is ahead of the pack in Europe, but maybe simply because they are more likely to pick up on general management trends in the Anglo-Saxon world. In Germany, the main focus is on quality of products, which is of course a good thing, but companies tend to overlook the fact that perfect engineering does not yet make a perfect experience. But this is starting to change fast.
Northern European countries like the Netherlands and Scandinavia are also quick to pick up Anglo-Saxon trends, and they tend to be extremely pragmatic. Southern European companies tend to be very hierarchical, so it depends to a big extent on the customer focus of the CEO as to how they fare.
What are some ways to get the employees of a company to become more customer-centric?
What we need is cash, culture, and KPIs.
Cash – we need a business case to show to everyone in the company how happy customers that recommend you increase revenue and profit massively.
Culture – we need to stimulate a customer-centric culture, where every employee can do what they instinctively feel to be the right thing for the customer. But none of this is happening without...
KPIs – if we don’t change the KPIs of the company, we will not see any change in the behavior of the people. Change is hard enough to drive, but we will never achieve change by expecting people to act against their own interest. They get rewarded based on KPIs, so unless we change those KPIs to reflect the needs of the customers, nothing happens.
On the other hand, if we show to the employees why it’s a good idea, and then get out of the way and let them do what is right for the customer, we are well on our way to become customer-centric.
How can upper management of a large corporation encourage innovation throughout all departments of the company?
In the end, the simplest way is to empower your frontline staff. They know what is right, and if you give them the confidence to try out new things (and support them if mistakes are made), they will start innovating by themselves. And the best thing upper management can do is "walk the talk" by demonstrating customer innovation daily, showing support for those that try and fail, and spotlighting those people who created great new customer experiences.
One of our customers has made it a simple KPI: "Do three new customer things on a monthly basis’." It's deliberately vaguely formulated; some people make three calls, others invent three new policies. And it works! Employees love it because they can make customer centricity fit their own schedule.
When it comes to legacy industries like finance and insurance, what are some strategies for innovating the customer experience?
On the one hand, financial services are the industries where the lean principle (as it is really intended) can lead to the quickest wins. There are an awful lot of procedures and processes that do not add value for the customer (and often not for the company either), so these should be scrapped. The same goes for the KPIs that don’t add value for the customer.
Fintech is a perfect example. Thousands of startups are trying to shake up these industries, but most of the time they are focusing entirely on great new technologies while forgetting entirely about the actual needs of the customer. That is why most of them fail.
So, we need to go back to basics. We must design a proper customer journey (based on a true understanding of customers needs), focus on your own people (happy employees make happy customers!), and show how an outstanding customer experience is the way to profit optimization through increased loyalty and word of mouth.
How can a company use SMS text messaging to enhance and improve the customer experience?
Communication is key in a good customer experience. Having a thin but ultimately reactive channel available for timely, precise, and concise messaging is invaluable. It can be an essential part of your multichannel communication strategy. Therefore, SMS messages are a great tool when used in the right way.
What we have seen consistently over the years in many industries and regions is that generally, customers like to be communicated to more than most executives think. However, the key is relevance. And SMS text messaging is perhaps the best channel to get relevant, trigger-based, time-sensitive messages out to the customer.
We emphasize that multichannel service is not about forcing the customer to use "new" channels, but instead finally allowing the personalization that we have been looking for, for so many years. So SMS, with the potential for immediate information exchange, is a great tool.
When reaching out to your customers via text message, what are some tips to keep in mind in order to maximize their engagement and loyalty?
It is essential to not just use SMS as a standalone channel. It must be part of your overall customer journey-based communications planning.
Think through the whole communications journey your customer goes through with you. At what moments do he or she need a verbose interaction, maybe even something personal, and when does a short but clear message really drive the relationship forward? When is there a need for more communications, and when should there maybe be less?
Also realize that you have many different customers to deal with, like the one who would love to have 10 messages a day from you and others where two per year might already border on intrusion. So create a storyboard for each of your customer personas, and ensure you have a comprehensive communication plan that fits the desires and needs of that client. This will mean more human and long form communication for some customers, and a short and to the point (i.e. SMS-driven) approach for others.
Exactly how customer-centric will companies have to be in the future if they wish to be successful?
Simply put, customer centricity is becoming the new core strategy, and customer experience is becoming the new marketing. And if nothing else, as the rising tide lifts all boats, the customers' expectations are rising consistently. So to even stay equal to your competition, you will have to up your game considerably. If you don’t, you will go the way of the dinosaurs very quickly.
But, let's be fair. How can understanding your customers better - and thereby being able to deliver better value to them, make them more loyal, and increase your profits - ever be a bad thing?
See how SMS messaging can help improve your customers' experiences. Sign up with EZ Texting for free today!