Neff Hudson, AVP Emerging Channels at USAA shared some of their secrets to success in their customer (“member”) experience strategy at last week’s CXPA event.    “Doing the right thing because it’s the right thing to do” is a core part of USAA’s strategy.  Therefore, conversations generally don’t start with internal measures or processes:  decision making at USAA starts with customer evidence.

Like the rest of the Financial Services industry, USAA is going through a major change.  Mobile will become its largest channel by next year.  The challenge is that for every live customer call – where there is an obvious opportunity to build loyalty – there are 20 visits to their digital sites.  The Financial services industry is highly competitive, so they need to reserve the humans for the touchpoints that matter most.  Everything else must be delivered exceptionally well through cross-channel customer experiences.

To accomplish this, USAA operates with these 3 pillars:

1. Know our members: The ability to create personalized solutions starts with products “pushing” information, and then often move to segmentation strategies that are more about” pulling” information and driving conversations.  Ultimately, USAA strives to be member centric, where they can anticipate needs.
   As an example, Neff talked about a change of address procedure.  Instead of just changing the address, they can provide a tailored package that deals with this important life event more holistically.
2. Organize around members:  Instead of being “product” focused, provide solutions to members that meet their needs now, and in the future, from a single point of contact.
   As an example, when a member called to add a car to their call insurance it was thought to be a good opportunity to talk about the loan.  But this is too late in the cycle – USAA wants to be more proactive. So now they provide auto-buying advice that covers all the aspects of the car buying experience.  In one case, a customer inquired about loans for a used car and USAA was able to get the same car brand new and delivered to the member’s home.
3. Make it about a bigger mission:  Know what the member’s needs really are.  As an example, a recent tornado leveled a neighborhood.  Instead of just sending a claims adjuster to work with their members, they provided advance payment on same day it was reported to enable customers to get into hotels and feel some confidence.  Claims are settled completely within 7 days.  And now, dealing with cross-channel experience, 12% of initial loss reports are completed online.

Looking to the future, Neff believes digital channels will certainly have the opportunity to be more empathetic and provide an emotional connection with customers.  For evidence, just think about IBM’s Watson winning at Jeopardy, a game that has many linguistic nuances and even humor injected into questions.  For now, solid customer-centric design based on anticipating customer needs is certainly effective.

Signature Health Care’s VP Customer Experience, Andrew Smith, and Strategy talked about the challenges of operating in the nursing home market.  Signature Health care found they had “satisfied” customers but no promoters, largely because expectations were so low.  Recognizing that people want quality care and compassion, Signature set out to transform their culture.

Similar to UMPQUA bank, they researched companies like Zappos, Chik-fil-A, Ritz Carlton, and Southwest Airlines, and got started documenting their service values – those non-negotiable service elements of their culture.  What they found through their process is that wisdom was a missing yet critical ingredient, so they engaged their employees to help get answers to the critical questions that underlie healthcare, including

• Attitudes toward death
• Belief in miracles
• Most important relationships at work
• What customers value most

They found that while their employees felt cohesive bonds with one another and wanted to deliver excellent care, their mission (“Mission: To radically change the landscape of long term care, forever”) wasn’t exactly inspiring to their employees and “corporate hypocrisy” was the #1 threat to their culture.

The journey established “4 chambers” that use the very words that their employees provided and started working to implement core processes that make it stick.  Starting with “test facilities” they implemented service standards, training, compensation incentives, and more.  They are transforming the nursing home from just care for the sick, to instead be a center of wisdom and transformation.  They co-locate with schools to promoter intergenerational learning, provide meaningful connections with society (including arts and social entrepreneurship), and even engage their workforce with gamification and whole-health (mind, body, and soul).

Nothing does more that to reduce the sense of hypocrisy than to have the executives walk in their employees shoes.  Taking care of customers isn’t beneath them.  In fact, everyone at the company is required to acquire a CNA to be a capable nurse when needed.

What is your company doing to reinvent your industry?  How do you stand out?  Can you differentiate through the experience?

Day 2 of the CXPA Insight Exchange was opened by Ray Davis, President and CEO UMPQUA Bank.  Ray seems to be no ordinary CEO, and UMPQUA is no ordinary bank.

UMPQUA’s biggest challenges were to differentiate, determine work out how to get people in to stores – one of the best opportunities to engage customers and sell – and create a compelling value proposition that was truly differentiated.  Especially as more and more interactions go online, banks need to work out what to do with all their real estate.

Can you believe this is a bank?

While their competition thinks like a bank, UMPQUA doesn’t.  Since UMPQUA didn’t have the resources of the big banks they decided to learn from firms like Starbucks, Disney, Nordstrom, and Ritz Carlton to deliver a differentiated experience. Stores are designed to be fun environments that don’t look at all like a bank, and there is an emphasis on technology that helps make it fun and educational.  They also use the facility as “community centers” and even hold Wii Bowling events in the middle of the work day!  But the key isn’t a “fancy store” – it’s more about how the store is operated.

On the “people” side UMPQUA has some practices that are unique to the banking world.  For example, they don’t have “tellers” and instead have Universal associates that are experts on everything in the store.  Ray describes the culture as empowerment and gives accountability to the front line.  Incorporated into the environment of high expectations and “tough love,” Ray instructs employees to call him directly if they are ever criticized for doing something they think is right, and he commits to following up.  And critically, culture doesn’t end at the front line and is extended into all the bank’s operations.

Ray told a story about how a front-line employee used some of their “recognition” funds to send a bouquet with a personalized letter to a customer that had lost their dog.  Employees don’t need to get approval, and they trust (with some oversight) that the funds are used as intended (and Ray says they are).

It’s not all fun and games – expectations are high, teams are measured, and low performers are coached to improve or quickly removed.  One metric Ray highlighted is their “Return on Quality” (RoQ) score, which is an index that combines customer feedback with sales, and the metric rewards both individual and team performance.  Stores are stack-ranked, and any store that is in the bottom-third for a few quarters better have a plan to improve.

I could go on and on with stories (team “motivational moments” sessions), but I think a link to Ray’s book is probably most appropriate.

Ray’s only regret?  Do it faster.  Ray says, “You are even building the business or killing it.  There’s no in-between.”

“No one can grow the business the way customers can.”  Here at the CXPA Member’s Exchange in San Diego Simon Lowe, Director Field Operations, 1-800-GotJunk, shared their real-world results that back up this statement.  1-800-GotJunk realized that satisfied customers will not grow the business – growth comes from loyal “promoters.”

Google never forgets. Get customers to get complaints and issues to you, not posted on the internet.omes from loyal “promoters.”

While the company was growing at such a phenomenal rate (from $1M to $119 million in 7 years), customers had become jobs.  Customer complaints hit the web, and remember that Google never forgets.  So they’ve made it very easy for customers to tell them where there are issues, so that those issues don’t go to Google.

1. They make sure that one person facilitates all complaints through their complaint resolution program, and they make it right within 48 hours.  Having one person facilitate the process helps 1-800-GotJunk maintain consistency, which is critical to their business.
2. This team also builds process improvements to make sure they don’t repeat the same complaints.  As a result complaints are down 15% from 2010 to 2011, which is 2.7% of total jobs.  And they are striving to reduce it to zero.

Before their focus on customer experience, repeat business was declining.  With this new focus, they found

• 4% of Detractors (score a 0 to 6 on the feedback survey) repeated from 2010 to 2011
• 8% of Passives (score a 7 or 8 on the survey) repeated
• 18% Promoters (9 or 10 response) repeated

Their Net Promoter Score has grown from 68 to 85.  This has translated from 31.6% repeat customers in 2009 to 35.01% in 2011.  And from 7.8% referrals in 2009 to 8.7% in 2011.This is $1.5 Million in incremental revenue.

Some practices Simon noted:

• They teach their truck teams to actively listen to customers to determine what value means to them.  What is the customer really looking for?  Loyalty is impossible without value.
• Removed all bonuses based on revenue, and instead bonus based on NPS.  No one can grow the business the way customers can.  Surveys come from the head office, and they encourage truck teams to make sure customers will give a high score so they can correct any issues on the spot.  They track every touch on the customer corridor, and scores impact everyone that touched a given customer, not just front-line.
• They recognize repeat customers – this is more than just technology; it’s education for the front line to listen and watch for ways to remind the customer that they know them.  For example, “Can we get you the same coffee as lat time?”
• At the end of their customer feedback surveys, if the customer is a Promoter (scores a 9 or 10) then they ask for referrals right away, both with localized links to social networking sites and also by asking for contact information.  We can see from the numbers above that this is working.
• They shine the light on customer experience.  For example, they post a stack ranking of complaints per franchisee on their intranet.  And they keep it top of mind with cut-outs placed on executives desks showing the competition stealing away their customers.

Loyalty doesn’t allow complacency.  It doesn’t take much to turn a Promoter into a Detractor.

An article about our friends at Autodesk, “Autodesk Channels Customer Satisfaction” only scratches the surface.

We all know that when rolled-out improperly, “tying customer satisfaction scores to partner compensation” (as the article states) leads to gaming, poor customer experiences, and reduced customer loyalty.  Just think about any recent automobile transaction where the rep tries to “incent” (bribe?) their customer for giving high scores.

While the article covers some of the results that Autodesk has been able to achieve, space constraints prevent the author from detailing some of the best practices that Autodesk has deployed in this multi-year journey.  I need to keep this brief myself, so I’ll just elaborate on 3 key items:

• By focusing more on “carrots” than sticks their partners have gained real insights.  For example, Autodesk couples “peer benchmarking” insights across several dimensions with proven best practices.  A given partner can understand the strength of their customer relationships and resulting business metrics relative to other “partners like me,” and gain expertise around what has worked to drive those improvements.
• Critically, Autodesk has established that the effort is not about the “scores.”  Response and coverage targets are combined with peer benchmarks to encourage the best behaviors and outcomes (loyalty and relationship building in pursuit of profitable growth).  Autodesk channel partners gain every ability to have candid dialogs – the right feedback from the right people at the right time – to drive incremental growth.
• Autodesk provides their channel partners with value-added infrastructure.  They save their partners millions with scalable processes and technology that would be far too costly for individual partners to have to create on their own.

Their winning formula that combines the right data with best-practice insights and tools behind-the-numbers has helped Autodesk’s partners grow.  And it’s working:  revenue and margins have improved significantly per quarterly and annual filings.

Autodesk has been able to walk a very fine line by focusing on the right business outcomes.  Congratulations to our friends on their achievements!