How a “The Customer is Always Right” Strategy Helps to Ensure Digital Transformation Success

How a “The Customer is Always Right” Strategy Helps
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It’s unclear who actually first said, “The customer is always right.” Some say it was Marshall Field, others Harry Selfridge (who worked for Field in his Chicago store), and some John Wanamaker. Who are these names? They are all 19th Century pioneers of the department store, retail business, and the shopping experience. If you add Montgomery Ward, Carlos Ritz (yes, from Ritz Carlton Hotels), and Richard Normann (Mr. “Moment of Truth”), then you have the foundation for modern-day service management principles and the basis for “digital transformation” theory. They all wanted to, “Turn shopping into an event for ordinary people.” By this, they meant “put and keep the customer’s focus on the product,” and not the process to acquire the product. The aim was to find and eliminate all visible friction. It’s a strategy to help ensure digital transformation success.

Mapping their 19th and 20th Century thinking to 2021

None of this is taught in an ITIL training class. Likely none is taught in any other type of IT service management (ITSM) class, but it should be. Why? For the same reason you would teach any history – to learn and leverage from the success and mistakes of others.

For example, Marshall Field gave us “everything as a service” – with a multi-level retail department store that had the first elevators and escalators, restrooms, library, and restaurant. Selfridge also, but he excelled at marketing. He was a showman and even had Louis Bleriot’s cross-channel plane placed in the foyer to pull in a crowd. Selfridge also introduced the “basement bargains” and occasional price-reduced sales.

Montgomery Ward gave us the mail order catalog and a guarantee of what you order is what you get, and a full refund on goods returned. This was the basis for today’s website product catalog and order fulfillment mechanisms and the success of companies such as Amazon. John Wanamaker gave us so many things – fixed price, satisfaction guaranteed, but my favorite is the Christmas light show. All of them were focused on the shopping and service experience. For me, it’s the platform for digital transformation success.

“The customer is always right”

Anyway, back to this phrase. Regardless of origin, the phrase is often misquoted and misused. A virtual comma is missing. The virtual comma precedes an important context – “… when it comes to the shopping experience.”

These pioneers, the people behind what we might call the “analog (physical) transformation” of business, decided customers were right and they deserved to be served as they preferred. Even if that preference was marketed or sold to them! They encouraged a new way of shopping.

No longer must you visit a place to get a type of product and just buy. You could now browse, look, touch, dream a little, save for something, and especially important – interact with the store, its workers, and surroundings. As Selfridge aptly put it, “Excite the mind, and the hand will reach for the pocket.”

Field gave us several great service-provider principles:

  • “To do the right thing, at the right time, in the right way”
  • “To do some things better than they were ever done before”
  • “To eliminate errors; to know both sides of the question”
  • “To be courteous; to anticipate requirements”
  • “To develop resources” (by this he meant the workforce).

And my favorite,

  • “Those who enter to buy, support me. Those who come to flatter, please me. Those who complain, teach me how I may please others so that more will come. Those only hurt me who are displeased but do not complain. They refuse me permission to correct my errors and thus improve my service.”

This is the basis of “a complaint is a gift; it offers the chance to recover lost customer satisfaction.”

Bringing these service-provider principles to 2021 and digital transformation success

All of the above are fundamental principles of modern service management. For instance, if you look at how shopping models have changed over the past 150 years, notice how business capabilities and operating models influence shopper preferences, and vice versa:

  1. BOASS: buy-only-at-specialist-store, “Sorry, we are a pharmacy”
  2. BISNB: buy-in-store-no-browsing, “Are you buying, no, then please leave”
  3. BAFDS: buy-at-first-department-store, “The palace of consumption”
  4. BISXR: browse-in-store-exchange-or-return, “Give the lady what she wants”
  5. BISMC: buy-in-store-manual-checkout, “Checkout 6 is open”
  6. BISSC: buy-in-store-self-checkout, “Let me help you weigh those bananas”
  7. BOPIS: buy-online-pickup-in-store, “Your order is ready for pickup, please text the time you plan to arrive”
  8. BOSFS: buy-online-ship-from-store, “You can track your delivery here.”

Now our new digital world has dramatically changed how products are created, promoted, distributed, and consumed. And digital consumers are a new generation of customer and they see the world differently.

The wants of digital consumers

For them, virtual and physical have equal relevance. They carry their friends and family everywhere they go via social media apps on their mobiles and are more likely to consult their network than listen to traditional advertising.

They share everything online and most have a different view of privacy. They live in a world where the competition is a click away, and so they have come to expect exceptional customer service. The digital citizens and consumers are not shy in expressing their dissatisfaction within their network of friends and beyond. This gives them enormous power and they know it.

The bottom line is that the power balance between the consumer and the provider has shifted, and industry experts urge us to look at matters from the “outside-in” – the perspective of the consumer.

More recently, the global pandemic has changed consumer shopping preferences; plus, of course, both the preferred business model and shopping experience du jour. But the analog shopping experience has not disappeared entirely.

Modern business and digital transformation success (finally)

Modern businesses now support a combination of shopping experience models. Customer preferences or imperatives place a bias on one model over another. So the phrase remains true and important: “The customer is always right, in how they wish to shop and interact with a store, its products, and its workforce.”

Digital transformation is a way of successfully operating in a competitive landscape, having a constant capability to detect, decipher, and adapt to changing consumer preferences – @IanClayton #digitaltransformation Click To Tweet

Now to that infamous term, “digital transformation.” Some are confused by what this term means. I think this may be because there is no end destination implied by the term.

Digital transformation is not a project or initiative with a start and an end. On the contrary, it is a way of successfully operating in a competitive landscape, having a constant capability to detect, decipher, and adapt to changing consumer preferences when it comes to the shopping experience.

The CEO of Salesforce Marc Benioff seems to think likewise, “Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.”

What this means in terms of successful digital transformation strategy execution

A successful digital transformation program needs to step back and look at the customer journey of the new digital consumer, how consumers interact with an organization and its products and services, from both a virtual and physical view, and then adapt and align its operating model.

It also needs to consider the workforce experience when delivering and supporting the service business model. If approached without placing the customer at the core of its strategy in one form or another, it will fail. Similarly, if approached without next considering the workforce experience, it will fail.

If #digitaltransformation strategy is approached without considering the workforce experience, it will fail – @IanClayton Click To Tweet

Our 19th Century pioneers, Field, Selfridge, Wannamaker, and Ward knew this. They succeeded because they matched their business model with the desired shopping experience. Where that desire lacked, they created the desire. They also took their staff with them and designed the worker experience at the same time.

They knew their workforce was a fundamental ingredient for success. They paid them well. Provided a career path. They encouraged their staff to know what the customer wanted and to provide feedback so they could continuously adapt their operations.

Back to Marc Benioff for a moment – “Every digital transformation is going to begin and end with the customer, and I can see that in the minds of every CEO I talk to.” I agree. However, I have to disagree with the premise offered by some – that we must digitize everything and move all analog to digital.

If you’re busy on or planning your own digital transformation success, I suggest that you don’t ignore the human touch aspect. It’s OK to go ‘touchless’ for now in the wake of the pandemic. But don’t plan to digitize and automate everything. When COVID-19 is a little further away, in our rear-view mirror, I have to believe that the consumer will return to wanting that personal interaction. But this will be when they are ready, and to a level they prefer or are comfortable with.

Field and Selfridge were right, “The customer is always right, when it comes to the shopping experience,” and this principle should be at the very heart of any successful digital transformation effort. I’d just temper it a tiny bit with “… most of the time, sometimes you have to lead the customer to the next shopping experience.”

Senior Business Process Consultant at Acorio

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