My Favorite Acronym is Either CEL or PVC - And They ARE Mine - Part I

I ordered something from Amazon.com the other day and I have a 3 month free trial of the two-day FedEx package service - one that would (will) cost me 79.95 a year (which is well worth the amount given how much I order from Amazon). It was a book - Special Topics in Calamity Physics by Marisha Pessl, a debut author who has been getting raves for both her writing skills and looks (both of which are formidable, as we say in French).

It came in one day.

About a week and a half ago, I ordered a book, my favorite satiric author, Jasper Fforde's latest, The Fourth Bear, and some small electronics things via Amazon, using the same two-day FedEx service as I mentioned above.

It came in one day.

FedEx 2-Day always comes in one day.

On Sunday, I ordered several items on Treocentral to trick out my Treo 700p. They have a fairly slick applet online that lets you know exactly how long each UPS category will take you to get it to your house. Accordingly, I ordered UPS Ground because if the items went out Monday as promised, they would arrive on Wednesday at the cost of only $4.95, rather than $14.95 which would be a single day.

On Monday morning early, I got a UPS tracking number and email from Treocentral stating that the package was shipped.

I got it exactly as scheduled. Treocentral and UPS did everything perfectly. Everything perfectly except what FedEx did.

And that, ladies and gents, is the sad part of the current customer ecosystem. There are things in it that you can't control and you have no way to - at least not exactly. And THAT is the acronyms you see above. Lemme explain.

PVC = Personal Value Chain; CEL= Competitive Expectation Level; OMG = Ohmigod!

Here's the scoop. Or at least part 1 of the scoop. The PVC.

We live in a material world, and I am a material -- guy. So are you, unless you're a girl and then Madonna gets you right. Because the customer ecosystem is at the hub of the business universe (and you don't have to agree with me on that), the value chain is not what it was because it's now focused around moi and mon Chaîne Personnelle de Valeur (CPV) which translated into English is Personal Value Chain (PVC). It sounds so dramatic and noble in French, I couldn't resist.

Back in the days of yore (approximately 2001), when the corporation ruled the ecosystem and dragons roamed the land, the customer-centered company had a responsibility to see that its enterprise value chain which included the sales, marketing and customer support operations aka "classic" CRM or the customer-facing departments or even the demand chain, the supply chain (formerly not tied to customer satisfaction) and even the internal departments fondly known as human resources then not the atrociously named human capital management and accounting had to be "working seamlessly to please the single customer." I wrote this now stock phrase endless times as did many of my colleagues - in fact, enough to turn it into a stock phrase.

But times changed, things changed and I changed too. I realized not that long ago that in fact, a seamless enterprise value chain worked well enough in a corporate ecosystem - even when it was focused on the customer. But in a customer ecosystem, there are many other factors in play - including the increased participation of the customer in their control of their corporate relationships and destinies. Its no coincidence that Disney Destinations made the "tweak" they did in their CRM program, changing it to CMR. That means it went from customer relationship management to their self-styled (rightfully so) "customer managed relationships." While they called this a subtle tweak, or something to that effect, it is a crystalline recognition that the customers are moving to take control over their destinies and that, based on their overall level of expectations and actions, they make decisions that will impact your company. And, from a corporate perspective, worst....you will have no control over how or why they make the decisions. But you can decide how you will play once invited into their sandbox.

That's what leads me to the idea of PVC and CEL. I'm taking a deep breath here because you're getting my first take on something that I hope is important. I don't have my arms entirely around this so forgive whatever rough edges there might be.

Plus a disclaimer.

I make no claims to originality of thinking, since the way I've always seen CRM is taking the art of life and living and making it a science of business - so this is observed human behavior made conscious by a person (me) who is often pretty unconscious. Something you've probably noticed. I'm trying to tie all of these observed human behaviors into a grippable, but pretty, business bow.

Definitions: PVC

Each of us thinks with a different metaphor. Each person's life is completely and unutterably different than any other person's life. OK, so they are truisms - and thus obvious truths. Consequently, the way we interact varies from person to person and between person to person, and surrounding circumstances will affect that interaction from moment to moment. (I KNEW there was a reason for the existence of the word "social.") More simply put, it means that the transactions in my life are different than the transactions of someone else's. It also means that perhaps I choose to effect those transactions differently than someone else who has to engage in the same set.

In the past, that meant less to businesses than it does now. Under a corporate ecosystem, even a company that was customer-friendly by culture pretty much had to identify those repeatable processes that worked well for the bulk of their higher value customers - both present and, if they were particularly foresighted, future. Customer Lifetime Value - which was an average value for a single customer over a likely lifespan with the company was the center piece of the metrics that defined how the customer was treated. Customer support's job was to have a set of repeatable processes in place and sufficient individual customer information to fix the glitches that those repeatable best practices often caused because of some aberration by the company or the customer. But it worked OK and generally, customers remained either loyal or happy at the moment at least if the repeatable processes typically worked and they could get what they needed from the enterprise value chain that the company had built around it through its internal operations and its suppliers and/or its partner network and their processes.

So the statement, "it takes a seamlessly working enterprise value chain to please a single customer" was appropriately and relative to the customer-centric corporate ecosystem, right statement to make.

But, ahhhhh, things changed a lot. The ecosystem shook, and rocked, and crashed, and rolled, and broke and rebuilt and evolved and emerged as a customer ecosystem. Note I said, CUSTOMER ecosystem, NOT customer-centered corporate ecosystem. All of a sudden (sorta), you began seeing this list of words and phrases appearing in discussions about new business models and customer focused activity:

1. Web. 2.0 (or Business Web, or Live Web)


2. User created content


3. Co-creation of value


4. Experience economy


5. Customer managed experiences


6. Authenticity


7. Transparency


8. Social networks


9. Social tools a.k.a. blogs, podcasts


10. Customer advocacy


11. Mobile economy


12. Attention economy


13. Support economy


14. Experiences as economic outputs


15. Trusted sources


16. Customer Experience Management(CEM) (Blecchh)


17. Voice of the customer


18. Return on customer


19. Customer value


20. Customer ecosystem (I did that one)


21. Personal value chain (I'm throwing that in now so I have nothing to link to)


22. Service Oriented Architecture


23. On Demand (for both technology and real time services purposes)


24. Prosumer


25. "Actual conversations not marketing hype"


26. Social Customer a.k.a. The Social Customer (this is so I can get in TWO links)

While some of those had been around awhile and others were buzzwords, they were reflections of the changed dialog that the new customer was forcing, largely through the evolution of the Internet and the lightning speed that collaboration and communications occurred at - and 24/7 to boot. The customer knew (and knows) that he could make or break a company or even create one in 24 hours. Look at Dell Hell- Dell has never been the same. On the other hand, look at the instant success that some have because of exposure on YouTube or on MySpace - or even look at MySpace. A good idea gone North - big time. Nearly instant success quickly. For the purposes of the PVC, though, this meant empowerment and a matrix of peers that could supersize that empowerment and keep it fat free at the same time. But the company couldn't do that in this new ecosystem. While any given business still has control over what they do, the customer's way of thinking and operating has changed.

The contemporary customer - the social customer (see #26) - recognizes two relevant things (among others). They have a serious and easily attained choice when it comes to choosing goods and services that they need. That means that they can find the same ones from multiple sources - each with a slightly different approach to how they provide those goods and services - and the customer has the world to choose the provider from. So the differentiator is the experience, not the goods or services or the methods of delivery or even the smiling customer representatives. Plus they have access to the knowledge they need to make sure that the choice they make is right for them. If it isn't they have the means to let thousands and even millions know that it wasn't.

Second, they have access to the resources to carry out multiple interactions and transactions in any given slice of time. Those resources could involve multiple enterprises and multiple sources. Think of the process I used to order the different items. The items were unrelated; each had a delivery process involved; the delivery processes provided by one vendor was different than the other one and yet, one because of the superior effectiveness of the other items delivery process, suffered. In this case UPS suffered by comparison to FedEx. Treocentral didn't suffer by comparison to Amazon. In the world of the corporate ecosystem, Treocentral would have suffered because they as the brand holder are responsible for the various parts of the enterprise value chain. But the parts are separated when it comes to segments of the personal value chain. So UPS, who merely does everything as they promised suffered because FedEx exceeded expectations. But I'd order from Treocentral again, regardless of the fact that they used UPS.

What does all this mean for a business? After all, you're not just a consumer, you're also a business person, aren't you, big shot?

It means that a personal value chain which is just a set of actions related to various aspects of someone's life, and the practices and agencies used to carry out those actions are the dominant value chain in the customer ecosystem. That means that the enterprise value chain which dominated the last phase of the business ecosystem - which was a time when a seamless version of it was good enough to keep your customers coming back - is no longer dominant.

It also means that your business no longer has control over all facets of the customer's decision making and weighing process. That can mean one of two things.

EITHER

YOU DECIDE THAT since some of this is out of your control, you can sink into gloom, despair and be distraught, running your blood pressure up, no longing shaving whatever body parts you shave depending on gender and inclination, letting your business die a little each day as you realize that you can't control your customer. Which also means that customer relationship management must have been a farce all along, because how can you manage something you can't control?

OR

YOU DECIDE THAT since you can't control the entire value chain of any customer, that you will give him as much control as you can over both your part of it and more generalized services associated with your part of it. Meaning you provide him or her with the tools to control their own customer destiny - thus making the customer's experience with you superb and memorable. Which means that you give them the chance to control other parts of their value chain through you. Even though you don't control it. You become an aggregator of services, products and experiences related to your own business - and the customer benefits.

What the f--- are you talking about, Greenberg, you might be asking about now. How the f--- do I know? I told you this was primitive thinking. I'm not sophisticated enough to fully formulate it and frankly, am throwing it out to you. But there are some ideas here.

So, for example, I'm Treocentral. I find out through my visibility into the life of Paul Greenberg, offered by giving him a discount if he's willing to give me information that I can use for more insight, that he prefers the way that FedEx is delivering the goods to UPS. FedEx may be a dollar or two more expensive. Well, I, Treocentral, assess the costs of having both UPS and FedEx available to my customers. I give them the choice when the time for delivery comes and say, hey, I see that your experience with FedEx is better than with UPS, well, know what, Paulie, we decided that you are a good person and we want to be good to you so you can tell the world about us, so we'll offer FedEx to you too, if you want it.

Know what? If you read this thus far, you'll know that I said earlier, Treocentral already has that tool, putting them a leg up on their competition and next time I use them, I'm going to see if FedEx makes more sense, given my experience with them. Treocentral is a winner to begin with because they are aggregators as well as providers of products to me. They appeal to my PVC and aren't just focused around their enterprise value chain's seamlessness. They give me choices that make my PVC seamless.

A Final Example

Perhaps the best example of attempting to gain customer insight rests in something that recently happened to me. If you remember this entry, my wife and I recently stayed at the Mandarin Oriental in Washington D.C. to get away for the weekend and to celebrate her 60th birthday. The Mandarin Oriental is a chain that is five star in almost every review you ever could read of it. It is, in D.C. the house for one of the best restaurants in the city - CityZen, a restaurant run by Eric Girard, who is a protege of Thomas Keller, who owns and is the chef at the California based French Laundry and New York's Per Se - two of America's finest restaurants - in fact, French Laundry is number 1 in almost everyone's book. I won't go into a restaurant review - suffice to say, we loved it - awesome and interesting food. We also loved the hotel but there were a couple of glitches one on entry and one on exit that were significant on entry and minor on exit.

What was interesting was the follow-up. There was a survey that is sent to all the departed guests. I filled it out with mostly 4s and 5s (best =5). Easily would recommend the hotel for a multiple number of reasons. But in the comment I put in the following:

No, you have a couple of things that I think are glitches in your processes but otherwise we were quite happy with the accommodations and service. If you care to hear what I think you could do to correct them, please call at 703-551-2337 in the next couple of weeks, before I hit the road again. I live in the area actually. '
Willing to be contacted regarding the comments: Yes

Within about a week or so I was contacted by the DC Mandarin Oriental (I have this incredible urge to call it the DC Mandarin Orange) Resident Manager, a delightful person named Jeannette Shultze, who based on my comment, absolutely drilled me in a really kind sort of way to find out exactly what I meant and being a wordy guy, I gave her the details she requested.

Within 48 hours, I got this followup:

Dear Mr. Greenberg,

Following our telephone conversation I would like to again thank you for taking your valuable time to share with me your constructive and extremely helpful feedback. As a well known 'CRM-Guru' you have an interesting and insightful perspective and I thoroughly enjoyed speaking with you. Feedback such as yours is invaluable to us and assists us in our efforts to continuously improve our service delivery. Being a 'young' hotel we recognize that only relentless efforts in fine-tuning our team and processes will enable us to consistently fulfill our mission which is to completely delight and satisfy our guests.

I look forward to hearing from you in the future, particularly following your stay at our sister hotel Mandarin Oriental, New York. Please do not hesitate to contact me directly for any assistance you may need.

With kind regards,

Jeannette Schulze

THIS is the way it should be done. They contacted me and directly gained both generic and universal insights and made me a delighted customer/advocate due to how well they followed up. They controlled what they could control, which is to provide a means for collaborating with me on making the Mandarin Oriental a better place to stay - for me and for other guests who's personal value chains are similar to mine or pieces of them are, at least.

Final Summary - Really

Okay. Deep breath. Breathe in. Breathe out. Whew. I feel better.

I warned you that this is primitive thinking for me so there are a lot of rough edges in this one and I would appreciate feedback and even some help on getting me to understand what I'm trying to say. I think if I had to sum it up with a HTML coded "ul" (meaning a bulleted list) I would say this:

• There is a personal value chain (PVC) unrelated to pipes (PVC). This personal value chain is a set of multiple enterprise value chains that are used on behalf of the customer by the customer to gain and maintain control over their business/prosumer interactions/transactions.


• There is a competitive expectation level (see FedEx and UPS) which I'll go into with a different entry that takes the control of that PVC out of the hands of any one enterprise value chain, and actually places pieces of varying enterprise value chains into competition, even if the products, services or other transactions engaged in are unrelated between the companies. Again the FedEx, UPS experience for two entirely unrelated purchases


• The best thing that a business can do, given the decision making power of the contemporary consumer is to provide an experience for the consumer that gives the consumer tools to make the best decisions they can for their own PVCs. The Treocentral tool for deciding on your own shipping fits that bill well.


• The PVC is the dominant value chain of the customer ecosystem. The enterprise value chain (extended brand holder, supplier, partner demand, supply and internal practices) was the dominant value chain of the customer-centered corporate ecosystem. We don't live in that world anymore.


• Ultimately, the best thing a company can do for its customer is to give the customer what he or she needs to control more of their own decision making - since the customer's PVC is the value chain that matters to him or her.

That's about all I have so far. I KNOW its rough and I apologize for that. But I'm throwing it out there because while I think its human behavior in the 21st century as empowerment of the individual becomes increasingly preeminent, there is a business science that has to be developed and then applied here for 21st century businesses to be successful with those 21st century customers.

And this has something to do with it.

So give me some help here and start up a dialog. Agree with me. Disagree with me. But do something and let's talk this one through. Its an incomplete insight, but at least I think it is an insight.

Technorati : CRM, customer expectations, customer experience, customer loyalty, value chain