What makes the the worlds #1 Customer Experience brands?

#1 CX Brands

As I quite literally travel the world talking, listening and working with individuals and organisations who have an interest in Customer Experience, I am regularly asked who the world’s ‘best’ Customer Experience brands are. ‘Who is good at CX?’ is a pretty typical question. It is a good question to ask and one that I can most certainly answer ‘in my opinion’. However, having been asked the question so many times, rather than me just citing my opinion, I thought I would go a significant step further and ask as many people as possible for their opinions.

In January 2015, I conducted an independent survey of people across the world to find out who their ‘#1’ Customer Experience brands are and most importantly WHAT makes them their #1. In this blog post, I am delighted to officially reveal the findings of the research. Some of the findings may surprise you……some of them will not. What you can be certain of is that the findings are likely to provide validation of the things that are the most common reasons for these brands ‘delighting’ their customers.

Customer Experience is not just for the big, bold brands

The first big surprise for me was that  94 different brands were mentioned as people’s #1 Customer Experience brand in just over 200 responses . It is fascinating and encouraging to see that great Customer Experiences are not exclusively the preserve of those with huge budgets. Many of the companies named by respondents are small, independent businesses who share a similar mindset with brands we’re more familiar with. What is not a surprise though is that the top four favourite brands accounted for 40% of the responses. We’ll find out later why it is that the same brands keeping topping this kind of poll, but first, let me acknowledge the top 10 #1 Customer Experience brands coming out of the research:

Top CX Brands

Other well-known brands such as Emirates, Premier Inn, Argos, Airbnb, USAA and Sky all received endorsement as a #1 Customer Experience brand. In the interest of balance, some of the names mentioned by respondents that you are less likely to have heard of are as follows:

  • Sixthman Music Festival Cruises
  • Jabong.com
  • Dutch Bros
  • Discount Tire
  • Hatem Shahim (a barber’s shop!)
  • Dyreparken i Kristiansand
  • Spear & Jackson
  • Wegmans
  • Firebox.com
  • e-bolt
  • Container store

Different countries and a variety of industries – the sheer number of organisations receiving a mention suggests that there are many doing something right – the question is – what exactly are they doing that warrants a customer such as you citing them as their #1 Customer Experience brand? Before we find out, let us just have a quick look at the commercial performance of the top 10 CX brands coming out of the research.

The right customer experience is commercially rewarding

The sheer mention of  ‘Customer Experience’ and ‘Customer Centricity’, is still often greeted with a rolling of the eyes by those who are more focused on sales targets, operational efficiency and tasks. The irony though is that the former makes the latter much more successful. And it’s no coincidence that each of the top 10 brands has recent performance milestones to be proud of:

  • Amazon Q4 14, net sales increased by 15% over Q4 13
  • Apple 39.9% profit per product (3 months to end Dec 14)
  • First Direct Moneywise “Most Trusted” and Which? Best Banking Brand
  • John Lewis profit before tax up 12% in 2014 vs 2013
  • Disney Earnings per share up 27% in year to Dec 2014
  • Air New Zealand Earnings before taxation up 20% in H1 15 vs H1 14
  • Mercedes Revenue increased 12% from 2013 to 2014
  • Starbucks Revenue rise 13% in Q1 FY15
  • BMW 7% increase in vehicle sales in Jan 15 vs Jan 14
  • Boden Shipping 12,500 parcels each day

Pretty powerful stuff. Is it just a coincidence that the brands you are saying are the best at Customer Experience all seem to be faring pretty well on the commercial front? It appears as though all of the brands that are ‘great’ at Customer Experience share common characteristics – in fact the research identifies 13 common characteristics that are the reasons WHY these brands are #1 in your eyes. Lets us have a look at the ‘lucky’ 13!

These organisations have common characteristics

I wanted to know what it is that your favourite brands do to make them your #1 at delivering consistently good Customer Experiences. I asked for up to three reasons from each respondent and received 575 comments. Following verbatim analysis,  13 categories were identified, each distinct but interlinked. They were, as follows (with the percentage frequency they appeared):

  • Corporate attitude 15.9
  • They’re easy to do business with 14.9
  • They’re helpful when I have a problem 11.4
  • The attitude of their people 9.4
  • Personalisation 8.0
  • The product or service 8.0
  • They’re consistent 7.5
  • The way it makes me feel 6.3
  • The way they treat me 5.1
  • They’re reliable 4.4
  • They do what they promise 4.2
  • They’re quick 2.6
  • The technical knowledge of their people 2.3

We will look in more detail at what we mean by each of these in a moment but to view at any one in isolation would risk limiting what is being achieved by these organisations. This diagram shows how interdependent each area is in aligning with the corporate attitude and ultimately organisational goals and the very purpose for why the business exists:

characteristics of #1 cx brands

So what do the most favourite companies do, exactly?

Focusing on these attributes is what moves companies from fighting a rear-guard action to fix issues of their own making to creating a compelling a sustainable brand for the future. It also means that customers are increasingly exposed to better experiences as they go about their daily lives and that’s important because it keeps nudging the bar of expectations higher. This is why the brands that do these things are ones that people consider to be the very best at delivering consistently good Customer Experiences. Digging deeper into each of the 13 areas we can build a picture of how the companies who get it right control the way they do business.

1. Corporate attitude

It’s another way to describe organisational culture and it underpins everything that happens to or with a customer. More specifically, in the words of those who responded to the research, companies who have the right attitude:

  • put people before profits and non-human automation
  • know they’ll make more money in the long-run with this approach
  • test all experiences thoroughly (to eliminate unintended consequences)
  • listen and demonstrate they understand their customer
  • pay serious attention to detail
  • empower their staff to makes decisions and act straightaway
  • stay true to their values, admit when things go wrong and fix them
  • ensure their staff are fully trained and informed
  • recruit for attitude and alignment to brand values

They also said: “…they treat each customer as we would a guest in our home” and “…they balance customer obsession, operational excellence and financial rigor”.  Almost every other category is a sub-category of this one; it shows how important the right culture is.

2. They’re easy to do business with

It’s obvious to say a company should be easy to do business with and yet that’s not always the case. What respondents meant by “easy” included:

  • there are no barriers in the way for doing what a customer needs to
  • it’s simple to get information, purchase and use the product
  • needs are anticipated and catered for
  • customers don’t need to repeat information
  • they can switch from one channel to another with no impact on progress
  • products can be returned or fixed with minimum effort on the part of the customer
  • they are available when and where customers want; they can be reached without waiting and won’t limit the hours of their support functions to office hours if customers are still using their products and services all day every day
  • they are proactive in taking responsibility, eg finding products at other stores and having them delivered
  • customers have no objection to self-service because it has been well thought through
  • information is presented in a timely, clear and relevant way

3.  Helpful and understanding when I’ve got a question

Being easy to deal with is critical when a customer needs help or simply has a question. On the assumption that good companies do respond (a recent Eptica survey found more than 50% of online inquiries go unanswered), helpful companies are ones who:

  • listen to understand before acting
  • give a customer the feeling that they are trusted and respected
  • will provide an answer and additional, relevant help
  • provide certainty and manage expectations about what will happen next and at each stage
  • empower employees to make decisions
  • resolve issues first time and quickly
  • have employees who are happy to give their names and direct contact numbers
  • preempt problems and solve them before customers are aware
  • fix customers’ mistakes without blame or making them feel awkward
  • follow-up afterwards to check everything was sorted and is still as it should be
  • are not afraid to apologise when they get it wrong

4.  Attitude of the people

Individual employees who are interacting with customers become a proxy for the brand. If they demonstrate the wrong behaviours the damage can be hugely expensive but getting them right does not cost a huge amount of money. Most often a function of the corporate attitude, the most appreciated characteristics are:

  • being courteous and friendly
  • a positive, “I’ll sort it” attitude
  • they are good at listening
  • it’s obvious they care about, and are proud of, the product/service
  • they are professional and not pushy
  • they are helpful and proactive
  • they are genuine and humble
  • they smile
  • hey are engaging and interested in the customer
  • they have personality, not a corporate script
  • they are patient
  • they show respect for their fellow colleagues

5. Personalisation

We are all individuals and like to be treated as such. Having “big data” was seen as the answer but as these companies demonstrate, it’s not only more important to have the right data and do the right things with it, but it’s also linked again to corporate attitude. Those who get the personalisation right:

  • understand, anticipate and are proactive
  • keep customers informed with relevant information
  • shows they listen and act, not just collect feedback
  • create a relaxed environment because a customer’s needs fits neatly into what they are offering
  • create a feeling of respect, that they care and have “taken the time to know me, to make things easier for me”
  • make it feel like dealing with a person where there’s a connection, not just a transaction
  • allow their customers to control the degree of personalisation in terms of frequency and content
  • remain flexible and adaptive to the circumstances, not scripted

6. The product or service itself

Making it easy, personal and rewarding will be wasted effort if the core product or service doesn’t live up to expectation. At the end of the day, your business has to have something of value to the customer to sell! When it comes to products and services, the #1 Customer Experience brands are those who:

  • the right mix of choice, relevance, quality and innovation
  • well designed, so it is easy to get it to do what it’s supposed to
  • quality is complemented by relevant innovation, not technical innovation for the sake of it
  • obsessive about the detail
  • paying as much attention to secondary products, such as food on airlines
  • good at turning necessary evils into compelling attributes – Air New Zealand’s legendary on-board safety briefings, for example
  • adept at keeping up with, ahead of and shaping basic expectations

7. Consistency

As customers we like certainty and predictability. It means that the decisions we make carry less risk because we can confidently trust the outcomes. It also demonstrates stability of, and a shared understanding of, strategy. For our respondents, consistency is about experiences that:

  • look and feel the same
  • can continue easily wherever, whenever and however
  • match or build on the positive expectations created last time
  • have continuity in not only what happens but how it happens; tone of voice, quality, different locations, store or franchise, people and processes, performance
  • provide the same reliable answers to the same questions
  • integrate with other services

8. The way it makes me feel

Emotions are a function of how good the other two cornerstones of Customer Experience – function and accessibility – are. How they were made to feel, whether intentional or not, is what people remember. Being the personal consequence of most if not all the issues covered here, it is what drives our behaviour about whether or not we will do the same next time and tell others to do the same. If people think they are part of something special, connected to a company that lives by like-minded values, they will FEEL special. And as human beings, we appreciate that. Survey espondents cited a number of great examples:

  • “get on an Air New Zealand flight anywhere in the world it already feels like you’re home”
  • “the packaging increases the anticipation when opening a new product” (Apple)
  • “interactions with employees don’t feel like processes out of an operating manual”
  • “there is (the perception of) a genuine relationship; it’s not just about them selling every time they are in touch”
  • “they make me feel as if I’m their only customer” (Land Rover)

9. The way they treat me

At the root of how we feel and therefore behave is often down to how we are treated. Good and great companies have experiences that:

  • demonstrate respect
  • show an empathy with customer needs
  • don’t do things like asking a customer to repeat information if handed from one colleague to another
  • keep customers posted on feedback they’ve given
  • recognise their customers both by staff individually in-store and organisationally
  • have a consistency of treatment even when not spending money in-store
  • create relevant retail environments so that customers feel they are treated as if they are somewhere special
  • develop meaningful loyalty programmes that acknowledge past purchases and reward future ones
  • are not patronising in tone

10. They’re reliable

Not surprisingly, reliability is cited as a key attribute. Although we simply expect things to work as they did last time or as it was promised, we probably won’t get too excited if that is the case. However, the consequences of it not happening will result in additional time, effort, inconvenience and sometimes cost to the customer; not what a brand would want to be blamed for. There are some markets where the mere hint of a lack of reliability in its truest sense has serious consequences for a brand. More generally, reliable customer experiences are ones that

  • give confidence and a level of trust that what we ask for when we buy is what we get; there are no nasty surprises
  • understand that they are key to repeat purchases and advocacy. No-one will put their own reputation on the line to recommended any brand product or service that is unreliable

11. They do what they promise

Again, this is a character trait we appreciate in friends, family and colleagues and it’s no different when dealing with a business. It can be seen as a subset of “the way they treat me” but it is also critical at a strategic level too; the brand is what people say it does and so that has to be consistent with what it’s promising, just as its employees need to keep their own promises to customers too. There’s a real financial benefit here too where unnecessary and costly rework can be avoided. How many enquiries coming into the business are because “You said you’d get someone to call back”, “You said you’d send me a copy of that statement” or “Where’s my fridge, I’ve had to take the whole day off work and there’s still no sign of it”. Customer experiences that do what they promise:

  • live up to the expectations they set
  • have employees that do what they say they will do
  • do it all consistently
  • fix it quick if they fail
  • are good at managing expectations

12. Quick

As customers, time (alongside money) is a commodity we trade with. A company who appreciates the finite and precious nature of it will create a distinct advantage. In today’s everything-everywhere-now life it’s not surprising that speed is an issue. Expectations are rising all the time where customers interacting with other brands see what can be done. Quick customer experiences are ones that:

  • move at the right speed for customers
  • show respect by having have good reaction times once a customer has initiated part one of a two-way activity
  • manage expectations, so if it’s not “quick” as defined by customers there are also, no disappointing surprises
  • are not just focused on speed of delivery but are quick to answer the phone, flexibility to find ways around rules and respond to questions

13. People knowledge

Having people who are technically competent with their product knowledge is another character of top brands. Companies that possess employees like this have an invaluable asset who are:

  • able to translate the concerns and questions
  • able to articulate complex issues in simple language
  • are not patronising
  • are proud that their knowledge can help someone else

So what?

There is no shortage of good and great experiences to learn from and they bring favourable commercial results to the companies that do have them. They don’t have to be high-tech out-of-this-world experiences; simply knowing what the basic expectations are should not be that hard and delivering them well time after time should just be the norm. This independent research also shows that it’s a combination of characteristics that matter, not one in isolation. That said, experiences, customers and balance sheets are always given an essential boost where having the ‘right attitude’ is the common thread running right through the organisation.

 Thank You!

A huge thank you to all those who participated in this research – without you giving up your valuable time and insight, I would not be able to share such valuable output.

An even bigger thank you to my friend and colleague, Jerry Angrave. Not only has Jerry co-authored this post, he also conducted the detailed analysis of the research results. A brilliant CX mind, he is also one of the most genuine Customer Experience practitioners I have ever met. You can read more of Jerry’s work at empathyce.com – I strongly encourage you to do so!

Shareholder or Customer First? The difference between Tesco and Amazon

0 amazon V tesco

October 2014 was not the best day to be a shareholder of two of the world’s retail giants. Tesco continued their unfortunate journey from world domination to public implosion. The company who convinced the UK and beyond that ‘every little helps’ are going to need all the help they can get to fight through their greatest ever crisis. Whilst the plight of Tesco was very visibly reported in the UK, the performance of an even bigger retail juggernaut was less so. On the day that the BBC reported Tesco shares ‘plunging’ by more than 8%, Amazon shares ‘plunged’ by 10%. All is not rosy in the supersize retail world it seems.

As someone who spends every working day influencing organisations to focus on people (customers and employees), I am always intrigued that the reporting of business performance seems to spend more time empathising with shareholders than it does with customers and employees. Do not get me wrong – I obviously recognise that the financial performance of any business will determine its very existence – declining financial performance is big news, especially if the decline is significant. However I think it is important to focus less on the effect on shareholders and more on what is behind the decline in the first place.

Too many businesses worry about Shareholders first, automatically placing concerns for customers and employees lower down the list of priorities. Businesses cannot operate without shareholders and investors – that is true – yet I believe that it is vital for companies to focus on getting things right for customers and employees first so that in turn, shareholders will benefit from the improving financial performance of the business. This is a subtle but very significant reversal of what we see reported in the business pages on a regular basis.

Although both Tesco and Amazon saw their declining financial performance very clearly displayed in the car headlights yesterday, the reasons behind the declines are very very different – in my opinion, the reasons highlight brilliant why their business models/cultures have been so very very different over the last few years.

I wrote about the ‘Bursting of the Tesco bubble’ in July 2014. In my blog post I argued that whilst they publicly claimed that ‘no-one tries harder for their customers’, the reality is that they were trying too hard to please their shareholders. Their obsession with growth led them to taking their eye off the ball of why they really exist and what their customers want. They are now in a situation where the behaviour has led to an almost complete erosion of trust with the very consumer that they believed they were working so hard to please. Perhaps the greatest challenge now facing the new CEO, Dave Lewis, is to be able to stand up to shareholders and allow them to understand why the needs of customers and colleagues must be put back ahead of their own.

Let us look at the contrast with Amazon. A company that has famously been focussed more on growth than profit, there are many similarities with the trajectory that Tesco have taken over the last few years. Still led by their founder, Jeff Bezos, unlike Tesco their entire business model is based on meeting and exceeding customer expectations. Shareholders need to be in it for the long term. Yesterday the BBC reported the following:

Investors have long been wondering when Amazon will turn its significant revenues into profits for shareholders. Amazon has been spending heavily in various new initiatives, including its Amazon Fresh grocery delivery service in the US, and its $1bn acquisition of video game streaming site Twitch.That has hurt profits at the firm, with operating expenses growing to $21.1bn, compared with the $17.1bn last year. Investors have been tolerant of Amazon’s policy of reinvesting profits back into the firm. But patience has been wearing thin in recent months. Shares in the firm have fallen nearly 20% since the beginning of this year.

Unhappy, restless shareholders whose patience is wearing thin. The response of many large corporations would be to immediately address their concerns and do whatever it takes to deliver them a return in the short term. That may be the response from many, but not from Amazon and Mr Bezos. Rather than pandering to shareholders, Jeff Bezos’s public statement when talking about their financial performance was as follows:

“As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever,”

This is why Customer Experience Professionals love Jeff Bezos!! Amazon is about long term relationships – with customers, employees and shareholders. The returns will come in time. In order to sustain and grow a business, Mr Bezos understands that it MUST be done so by delivering a stress free experience that just keeps getting better and better. It is not difficult to understand. Of course the investors and shareholders deserve to receive a healthy return on their investment – I am completely confident that will come (as I am sure Mr Bezos is) – they just need to be patient and recognise that continually focussing on improving the customer experience will secure both the returns and the sustainability of the business for a very long time.

As the dust settles, I am sure that Jeff Bezos is a far more relaxed business leader than Dave Lewis. Businesses need shareholders, but they need customers more. If both organisations can influence their investors to recognise that greater returns come from consistently getting better at giving customers what they want and need, the media will very soon be reporting a very different story.


I wish all customer experiences were like this! Five Inspiring Customer Service Outcomes

I have featured a number of guests bloggers over the last twelve months – each of them have bought a level of knowledge and expertise that I have felt readers of my blog would find interesting, inspiring and thought provoking. One of the things that connects all of us is PASSION – passion for all things customer. Passion for organisations to just do what is right. The blog that I am sure you are about to greatly enjoy reading is absolutely driven by someone who has passion in spades.

me- sophia wright -csg

Please allow me to introduce you to Sophia Wright. Sophia is the owner and head researcher for Customer Service Guru – we will explain more about that later. This is her very first blog post – if she can write posts like this every week, you will stop reading mine!! Sophia walks us through 5 incredible and amazing customer service stories that help bring to life what ‘putting the customer first’ really means – please read on – you will not be disappointed…..

Everybody knows that a uniquely positive customer service experience – one that makes you feel like you have stepped right onto a red carpet – is an increasingly difficult thing to come by. With many companies wishing to cut costs and focus more on quantity of satisfied customers rather than the extent of satisfaction itself, the consumer world is becoming more and more crowded with automated responses, impersonal customer numbers and reams of vague, pre-prepared FAQs that are neither wanted nor helpful.

Whilst aiming to make efficiency and majority satisfaction rates a priority is by no means detrimental, many companies would do well to realise that sometimes just one spectacular, chivalric dose of customer service for one individual has the potential to reap great long-term rewards. When people are on the receiving end of a unique, unusual or personalised customer service, they are thrilled by their own exclusivity and usually cannot wait to tell everybody they know. More often than not, this will involve the art of blogging and social sharing, which can only be further beneficial for brands.

Here are five particular customer service experiences to have made their way into the online airwaves in recent years, rocketing the companies involved into Customer Service Guru Heaven.

Zappos Sends Flowers (2007)

0 zappos flowers

A woman who had to return several pairs of shoes back to online shoe retailer Zappos was touched by how sensitive and attentive a corporate company could be. Her reasons for returning the shoes were circumstantial: her mother had recently undergone medical treatment which had left her feet numb yet sensitive to pressure.

Upon calling the company to ask for instructions on how to return the shoes and explain her reasons for doing so, Zappos later mailed a bouquet of flowers to the woman’s mother to express their sympathy, and proceeded to make the rest of the family Zappos VIP Members. If that’s not a clear-cut example of a company with some soul, then what is?

Amazon Saves Christmas (2007)

0 amazon

For one particular father, it was truly a Christmas miracle when online retailer Amazon took pity on the prospect of a young boy being disappointed on Christmas morning. Three days before Christmas, when his son’s Playstation 3 was still nowhere to be found, the consumer in question was understandably worried and went online to investigate.  After finding that the package had been delivered and signed for by his neighbour, but left in the apartment building hallway where it was no longer to be seen, the customer was devastated.

The man was well aware he didn’t have a leg to stand on – the product had been delivered and signed for; Amazon had done their job. However, an Amazon customer service rep who must have been feeling festive took heed to the man’s desperate pleading and issued him another Playstation 3 that same day, with free shipping.

Even more miraculously, the Playstation 3 arrived on Christmas Eve – a true gift from Santa.

Morton’s Hackensack Surprise Dinner (2011)

Businessman Peter Shankman understandably got the shock of his life when he jokingly tweeted his favourite steakhouse, Morton’s Hackensack, expressing his craving for a porterhouse steak dinner for when his flight landed in Newark Airport after a busy day of business meetings. Despite the nearest Morton’s being a good 23.5 miles away, an employee from the branch was amazingly waiting for Shankman at the gate when his flight touched down, dressed in a tuxedo and brandishing a porterhouse steak meal, complete with silverware.

Shankman was utterly stunned, and did not hesitate to tweet his incredulity to the world…as well as blogging about the experience to the online community. Although the stunt must have taken some extensively strategic planning and time management in order to be successful, this incredible overcoming of logistics undoubtedly did wonders for Morton’s. Not only would it have inspired curious diners to become a part of its customer base, it also put Morton’s straight to the heart of the food industry map.

0 mortons

Delta Airline Passport Rescue (2013)

Marketing entrepreneur Barbara Sullivan was overwhelmed by the kindness, empathy and dedication demonstrated by one particular employee after she accidentally dropped her passport into a mailbox at Charles de Gaulle airport, France. She was told by airport officials that she must wait until the following day to visit the US embassy in Paris before she could fly as the mailbox could not be opened; however, a Delta representative from the airline’s ticket counter proved to be a knight in shining armour to Ms. Sullivan’s dilemma.

0 delta

Mr. Karim Sayoud took matters into his own hands, calling US Homeland Security to verify Ms. Sullivan’s identity, before escorting her to the check-in desk and convincing his colleagues to accept her baggage and issue her a boarding bass. He then continued to escort her through French passport control and security, all the way to Delta gate agents to ensure Ms. Sullivan got on the plane safely.

He then arranged the safe return of his passenger’s passport by taping a handwritten note on the mailbox for the attention of the postal worker the following day. The passport arrived at Ms. Sullivan’s New York apartment via Fed Ex soon after.

Ms. Sullivan did not hesitate to share her experience online, claiming it had changed her attitude towards flight travel forever. She also took the time to reach out to Delta to inform them, in the hope that it would make the same impact on Mr. Sayoud’s life as it had her own.

Captain Mike of the Good Ship Netflix (2013)

One particular customer service chap from Netflix who happened to be manning the site’s online chat feature has become renowned for giving one customer an experience that was engaging, funny, and certainly different.

From the word go, the rep – who referred to himself as ‘Captain Mike of the Good Ship Netflix’ – took on a lively, inventive role, using analogies relating to the Star Trek Enterprise to make his customer feel more at ease and get to the root of the problem. What is perhaps even more pleasing about this interaction is that the customer in question had no problem joining in, playing along as an ‘Engineer’. The two exchanged information back and forth until the rep was able to decide what to do, which inevitably must have made for a very entertaining troubleshooting process.

0 netflix

The rep’s initiative to change things up and assume an imaginary world was undoubtedly a risk, but one which has since paid off, earning Netflix extra brownie points for coolness.

Having worked in the consumer marketing profession as a Customer Relations manager and consultant for the last few years, Sophia’s knowledge and expertise have driven her  to establishing Customer Service Guru to share her skills and knowledge of the customer service industry.

When it comes to consumerism, Sophia is compelled by new and pioneering service and marketing techniques that put customers at the heart of success and growth. She values platforms for discussion regarding the satisfaction of the customer and enjoys the recognition of companies who are leading the way with regards to developing long-term B2C relationships. You can find out more at www.customerserviceguru.co.uk or follow Sophia on Twitter  https://twitter.com/gurucustomers

Who cares about ethics – Starbucks do now!! Never underestimate the power of consumer opinion

Unless you are living in a cave (or somewhere outside the UK), you will have noticed that a number of extremely well-known brands are getting a little bit of exposure at the moment. Google, Amazon and Starbucks are three multi national giants who have been ‘highlighted’ as not having paid ‘enough’ Corporation Tax in the UK. This is not a blog that is going to question the rights or wrongs of any organisation’s tax strategy. I am neither qualified nor intelligent enough to start advising on tax related matters! What I am going to discuss though is the effect that issues like this can have on the consumer, their behaviour, and ultimately the organisations in question.

I must start by pointing out that none of these organisations have actually done anything wrong – in the eyes of the law. They, along with their specialist accountants, have designed financial strategies to benefit their shareholders. They would probably argue that these strategies also benefit their customers and employees. The more financially stable an organisation, the more able it is to grow, thus providing its customers with ever better products and services, and its employees with stable and secure jobs. We can all be certain that businesses have been doing this for years!

However, as we all know, the world today is a very different place for a multi national corporation. The consumer has access to information that they would never have had the opportunity of knowing as little as ten years ago. Fuelled by the press, we now have up to the minute insight into the way businesses are performing and behaving. It is this insight that has led to the consumer becoming very interested in the ethical nature of businesses, whether they transact with them or not.

The ethical nature of businesses is actually nothing new. The Body Shop, for example, was launched by the late Anita Roddick in the 70’s. The environmentally minded brand was at the forefront of a revolution that saw many consumers wanting to look after their planet. When you think of the ‘green’ movement today, it is clear how advanced Anita Roddick was – giving the consumer what they wanted in a way that protected what is important to all of us. Creating an ethically based proposition was hugely successful – but in the case of the Body Shop, it was done pro-actively. They were not an existing brand that waited to be told that they way they made products was damaging to the environment. They did not wait to be told they were ‘unethical’. Anita Roddick wanted to do the right thing, and as a result, she created a brand and products that were part of a customer experience that the consumer could connect with – FUNCTIONALLY and EMOTIONALLY.

The Body Shop is not the only example. The Co-Operative Group is an organisation that places great importance on ethical and transparent trading. They have won numerous awards and recognition for the ethical nature of the way they do business in the all the sectors they serve. Just recently, the Co-Op’s energy business reduced prices – here is what the website myfinances.co.uk said about them (http://www.myfinances.co.uk/cut-your-bills/2012/11/18/co-op-shows-that-you-can-cut-energy-prices-during-winter)

Although the Co-op only has 60,000 customers this is set to change, according to analysts in the energy market.

Tom Lyon, energy expert at uSwitch.com, says: “This move suggests that the Co-op is serious about putting ethics back into the energy market – by cutting its prices, even by as little as 2%, it is sending out a clear message that not all suppliers are the same.”

The electricity price fall will apply from December 21st and means that the Co-op’s annual dual fuel average energy price is £1,143, £191 cheaper than the new average dual fuel price of all of the suppliers after the recent price increases.

The Co-op is a new entrant into the energy market and aims to challenge the hegemony of the “big six” by offering just one price and by freezing its prices until April 2013.

By cutting electricity prices it means the Co-op’s overall energy tariff is cheaper this winter than it was last winter.

It aims to try to entice new customers by offering a different approach to the established energy companies.

Tom Lyons added: “By differentiating itself from the traditional suppliers the Co-op should be able to attract consumers that are fed up with the big six and want to try something new.

“A more ethical approach and good customer service go a long way to winning people over, but attractive prices will see the trickle of new customers turn into a flood.”

The cut in electricity costs by the Co-op will reduce the annual bill by £23 a year.

However, another aspect of the Co-op’s pricing and billing strategy is that it does not offer discounts for customers who pay by direct debit. This is unusual in the utility market these days.

It means that the Co-op does not offer the cheapest tariffs on the market and is more of an advantage for pre-payment customers or people who usually pay their bills by cash or cheque. These customers will not miss out on any discounts with the Co-op and means that the Co-op is cheaper than all of the “big six” energy firms for these type of customers.

The Co-Op have recognised that by doing the right thing for your customer, morally and ethically, it is likely that more consumers will want to transact with them. A straw poll that I have conducted with friends and colleagues is suggesting that people think very highly of Co-Op as a brand. One person said to me that even though their supermarkets are not as good as the ‘big boys’ they feel good about shopping in one.

The Body Shop and the Co-Op are legally behaving in exactly the same way as Google, Amazon and Starbucks. What they are doing differently is perhaps to do with morals and ethics. In a world where there is so much choice, differentiation by any means is vital to connecting with customers. Behaving in what is considered a moral and ethical way, connects to the EMOTIONAL customer experience.

Google, Amazon and Starbucks are now being seriously challenged by the ‘moral debate’. Despite doing nothing legally wrong, they are being attacked by consumers who believe they are behaving in an unacceptable way by not paying what is perceived to be ‘their fair share’ of taxation in the UK. This perception is now fundamentally damaging their brand. This in turn is tainting their customer experience. Starbucks for one is a brand that delivers a strong, consistent, customer centric experience. But by not dealing with the ‘moral debate’ quickly and effectively, the experience is in trouble. What customers are now recalling in the EMOTIONAL element of the experience with Starbucks is not the taste of the fantastic Christmas coffee creation, but the sour taste of immoral behaviour. It is ironic that a brand who has been a keen supporter of the ‘Fairtrade’ movement is in this predicament.

Starbucks have now announced that they intend to pay more tax in Britain – how chivalrous of them. Have they made this decision because they want to do the right thing? Or have they made this decision because customers have started to ‘vote with their feet’? Amazon and Google have not announced anything – will customers stop interacting with them as well? It is not just about these three US-based organisations either. I heard an interview this morning with the boss of TUI – they were reporting strong financial results. ‘I have noticed in your latest results that you have not paid any corporation tax this year’, stated the interviewer. The TUI CEO was noticeably shaken – eventually trying to explain how Corporation tax works. Unfortunately for him, and all business leaders in the UK at the moment – whether you are right or wrong, you now have to determine if what you are doing will be deemed as ethical. Failure to do so can damage your brand and customer experience!

For years, too many businesses have done what they think is right – for their shareholders. We now live in a world where unless you do what is right for your shareholders, customers and employees in equal measure, your brand and the experience the brand delivers can be compromised. I am sure that the brands being put in the spotlight at the moment will recover – their brands and the experiences they provide are very strong. What I do hope though is that this episode highlights the importance of being honest and transparent in business. Let’s see the good guy winning through from now on, whilst the bad boys falter in the shadows.

As always, your comments are very welcome.