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Here’s another version of this week’s ManagementSpeak:

“We are effectively a technology and marketing business that just so happens to be in the insurance space. It’s an important mindset to drive. When a consumer comes to our website, they don’t compare us to GEICO, Progressive or The Hartford. They compare us to Amazon, Zappos and Expedia in terms of their experience.”

– Kevin Kerridge, head of direct, Hiscox USA

Well, when you put it like that …

When you put it like that you’re still wrong, not because consumers aren’t comparing your website to Amazon, Zappos, and Expedia (they are) but because Amazon’s, Zappos’, and Expedia’s customers aren’t paying attention to the technology.

They’re paying attention to the experience.

And even that’s wrong, because if they’re paying attention to the experience you’re either delivering it through VR goggles and the novelty hasn’t worn off; you run a cruise line, theme park, or some other business where the experience is what customers are paying for; or they’re having an experience bad enough to notice.

But for your average business that’s just trying to make an honest buck, the whole shopping and buying experience should be close to subliminal — as natural as the sales associate at a clothing retailer asking, when you’ve chosen a suit, whether you also need shirts or a belt.

Very little of this belongs to IT. My own inclination is to place every customer touchpoint under Marketing’s purview, or, if that isn’t possible, under its influence.

But just because IT doesn’t own customer experience design, that doesn’t mean IT is free and clear. Quite the contrary, IT has everything to do with making sure customers enjoy (that is, can ignore) the best experience possible when interacting with your business no matter which interaction channel is involved. Here’s a terribly incomplete checklist of what IT should bring to the customer-experience potluck:

Fundamentals

In any for-profit business, underneath all the complexity are customers, the products and services customers buy, and transactions through which customers buy products and services. IT had better provide solid support for these customer experience fundamentals:

  • CRM: Customer is semantically slippery. It includes the buyer, who makes or influences the decision to buy your products, consumers, who use them, and wallets, who pay for them; also there are both individual customers and composite entities they’re part of like households and business departments. CRM systems have customer data models designed to accommodate the complexity so you know who you’re talking with and in what capacity.
  • Product Information Management System (PIMS): Customers want to understand your products. Sure, general-purpose content management systems can handle product content, but why make life harder than it has to be? If your company sells a lot of SKUs and a PIMS isn’t part of your application portfolio, fix that.
  • Voice: Sure, digital stuff is fun and glitzy. But call centers and interactive voice response (IVR) are customer touchpoints too. Ignore them and the results are predictable and aren’t pretty.

Running with the pack

  • Analytics: Marketing needs a place to put its data and tools for analyzing it once it’s there. Not news. Not quite fundamental yet, but close: Companies that lack it are at a disadvantage more than companies that have it have an advantage.
  • Social media monitoring: Mining falls under analytics. But looking for individual messages that badmouth your company so you can respond in near-real time, before the message spreads too far? Not analytics, very important.
  • Customer Service monitoring: This should be a fundamental, except for how few companies do it. It’s low-tech, too. Your company’s customer service representatives know everything that’s wrong with every aspect of the customer experience, because Customer Service is where customers go to complain. Someone should listen to these folks, don’t you think?

Getting ahead … for now, at least

  • Chatbots: Sure, sure, right now chatbots are prone to smartphone spellcheck-caliber gaffes. But they’re going to be a big deal everywhere companies provide level-one support at scale for customers having problems, and not only to save a few bucks.
  • Less is more: Customer touchpoints aren’t for when a customer is lonely and wants company. They’re for when customers want to: Research a product; buy it; complain about it; return it, or complain about a different touchpoint. They want as few interactions as possible. Get rid of the ones that are annoyances if you possibly can.

I know there are more IT-driven get-ahead customer experience opportunities. I just can’t think of any right now.

How about you?

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Metrics are less useful than you’ve been told. Even the best are just ratios that tell you whether you’re making progress toward a well-defined goal.

But not why, how, or what to do if you aren’t. As last week’s KJR pointed out, not only aren’t metrics explanatory on their own, in most cases a metrics change won’t have a single root cause. If, for example, you’re losing marketshare, you might have:

  • Missed a complete marketplace shift.
  • Lousy advertising.
  • No advertising, lousy or otherwise.
  • Poor quality products.
  • Deplorably ugly products.
  • Products that lack key features competitors have.
  • Hapless distributors.
  • Hapful distributors who like your competitors better.
  • A customer disservice hotline.

To list just a few possible causes, none of which are mutually exclusive.

Which is to say, root cause analysis is a multivariate affair, which is why analytics is, or at least should be, the new metrics.

But while multivariatism is an important complicating factor when business decision-makers have to decide what to do when success isn’t happening the way it should, it isn’t the only complicating factor.

Far more difficult to understand in any quantitative fashion is the nasty habit many business effects have of causing themselves.

Many cause-and-effect relationships are, that is, loops.

These feedback loops come in more than one flavor. There are vicious and virtuous cycles, and there are positive and negative feedback loops.

In business, the cycles you want are the virtuous ones. They’re where success breeds more success. Apple under Steve Jobs was, for example, a successful fanbody fosterer. (Don’t like “fanbody”? Send me a better gender-neutral alternative).

The more fanbodies Apple has the cooler its products are, making it more likely the next electronics consumer will become another Apple fanbody.

These loops work in reverse, too: Start to lose marketshare and a vicious cycle often ensues. Corporate IT pays close attention to this effect: When choosing corporate technology standards, products that are failing in the marketplace are undesirable no matter how strong they might be technically. Why? Because products that are losing share are less likely to get new features and other forms of support than competing products.

So IT doesn’t buy them, and so the companies that sell them have less money to invest in making them competitive and attractive, and so IT doesn’t buy them.

A frequently misunderstood nicety: virtuous and vicious cycles are both positive feedback loops. In both cases an effect causes more of itself.

Negative feedback loops aren’t like that. Negative feedback as the term is properly used is corrective. With negative feedback loops, an effect makes itself less likely than it was before.

Take business culture. It’s self-reinforcing. When someone strays from accepted behavioral norms, their co-workers disapprove in ways that are clear and punitive.

Want an example? Of course you do. In many companies, employees are known to complain about management. Not necessarily any particular manager, but about management.

An employee who, in conversation, makes complimentary statements about management is likely to be ostracized, no matter how justified the statements might be.

Symmetry requires negative feedback loops to have unfortunate as well as fortunate outcomes, just as positive feedback loops do. Here’s a well-known one: Analysis paralysis. It’s what happens when corrective feedback overwhelms all other decision criteria.

Where does all this go?

The idea behind “if you can’t measure you can’t manage” is well-intentioned. Underneath it is an important idea — that you should prefer to base your decisions on data and logic, rather than your mood and digestive condition.

The point here is that those who lead large organizations need to kick it up a notch. Measurement isn’t the point, and it isn’t the be-all and end-all of decision-making. It’s just a part of something much bigger and more important: Leaders and managers need to understand how their organizations work. That includes understanding the simple cause-and-effect relationships metrics tend to be associated with, and the multivariate causal relationships multivariate analytics can help you understand.

And, you should add to that at least a qualitative understanding of the various feedback loops that drive success or failure in your line of work.

A quantitative understanding would be better. It’s just not often possible.

Qualitative might be inferior to quantitative, but it’s much better than ignoring something important, just because you can’t put a number to it.

As Einstein … by all accounts a bright guy … put it, “Not everything that can be counted counts, and not everything that counts can be counted.

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