To Gain Customer—and Employee—Loyalty, Go Beyond Good Enough

0:01Legal teams face more data and more scrutiny than ever. They need AI built for both. Relativity is the AI platform for legal work, delivering defensible AI that handles the tedious tasks so judgment stays where it belongs with you. Learn more at relativity.com slash ideacast.

0:23on May 20th join me at HBR's annual leadership summit with masterclasses interviews with the CEOs of AT &T and Mattel and an interactive case discussion led by Harvard Business School professor Kareem Lakhani for 25 % off be sure to grab your early bird ticket by April 14th learn more go to hbr.org slash leadership summit see you there

0:59I'm Adi Ignatius. I'm Alison Beard, and this is the HBR IdeaCast.

1:11So, Alison, today's conversation is about customers. We all know it is not enough simply to sell a product. We need something more. We need to delight our customers. We want to create a habit. We want to build a relationship. You basically want people to love your product. I get that, but it seems like a tall order for a lot of companies, right? You know, it could work for food or fashion or technology, consumer products that people really get passionate about. But how do other types of businesses inspire devotion or even, as you say, love? Well, look, it isn't easy necessarily, but it is attainable, and it's definitely a helpful goal.

1:50And there are steps you can take to generate these strong feelings from your customers, and by the way, from your employees as well. That's the crux of our discussion this week with Marcus Buckingham, a researcher and author of the new book Design Love In, how to unleash the most powerful force in business. He also wrote the new HBR article, What Companies Can Learn from Their Biggest Fans. Here's our conversation. You know, every company wants to delight its customers. Your article suggests that many, that most, are going about this the wrong way.

2:21Marcus Buckingham:So talk about that. Well, if you look at extreme positive outcomes that companies want, they want customers to come back more. They want word of mouth. They want employees to be productive. They want loyalty and resilience from those employees. And if you think about it, that's really what the job of a leader is. You're just trying to change behavior. Most companies go about it in a way that's simple and directive. So you set goals for employees and then you give corrective feedback. Or you set pricing or loyalty programs for customers and incent them to change their behavior. Which works, but it works temporarily.

2:50Marcus Buckingham:If you want to actually develop ongoing, sustainably productive behaviors from your customers or your employees, then you have to follow an equation back upstream. And that equation is simply experiences of people drive their behaviors, which drive the outcomes. So if you want extreme positive outcomes in terms of productivity or in terms of repeat visits and so forth, then you've got to design extreme positive experiences and experiences live inside the person the customer or the employee that's what then drives their behaviors sustainably and that's what drives their outcomes which means companies need to be in the experience making business experience design is the mechanics of behavior change and we don't think that way we design hospitals and schools and and stores and restaurants and businesses in general around processes and systems which isn't bad it's just not the actual way in which you get sustainable behavior change.

3:38Marcus Buckingham:So the point of the article is we ought to be really interested in how do you design experiences that live inside the person that move them to act in sustainably productive ways. Experience making is a capability that most organizations and many leaders don't really look at seriously or implement or operationalize. So you say confidently that this is the way to better long-term sustainable business results. What is the evidence that that's true? Well, if you look meta-analytically at sentiment, so customer or employee sentiment, and you just look at the relationship between sentiment at time one, as measured on a one through five scale, and then outcomes at time two, outcomes in the form of grades for students or patient outcomes for patients or repeat visits for customers, productivity or loyalty for employees.

4:25Marcus Buckingham:the relationships are strongly causal. So the more positive you are expressing your experiential feelings on the x-axis, the more productive the outcomes are on the y-axis. So the first finding is that there is a causal relationship between experiential feelings and then subsequent outcomes. And the median or the mediating variable in the middle is the behavior. So that's the first finding, Adi. But the second one's more interesting. We assume that relationship between experiences and outcomes, many of us, is linear. So if you move a two experience to a three or a three to a four, you get the same level of outcomes increase.

5:00Marcus Buckingham:So if you've got an awful lot of unhappy customers at a two, it behooves you to move them to a three, or you've got a lot of sort of averagely happy employees, it behooves you to move them from a three to a four. But in fact, the data show that the relationship between experiences and outcomes isn't linear, it's curvilinear, which means it's like a hockey stick. And so moving a two experience to a three doesn't change behavior, doesn't change outcomes. When it comes to the measurement of experiences, you got fives, extreme positives, which do drive behavior, and everything else is just not a five.

5:29Marcus Buckingham:The world is far more binary than we think it is when it comes to experiences driving outcomes. So basically you're saying you want to get that five. And it's tricky because, you know, I feel like, you know, Uber and Lyft has ruined the meaning of the five-star experience. You know, the five-star is sort of, you know, the minimum that is considered acceptable. So I worry that we rate things a five when we actually mean a three or four. But let's take what you're saying for gospel, that you want these five experiences. I don't think anybody would argue about that, but isn't that like, you know, writing a bestseller?

6:01You know, it is hard to pull off even by design.

6:04Marcus Buckingham:Yes. Well, and I think you're right. I think there's been a lot of people that have ruined the fives, not just Uber and Lyft and so forth, but you could argue every car dealership where they're calling you up afterwards and saying, by the way, I won't get my commission unless you give me a five. There is something called Goodhart's Law, named after an economist from the London Business School, that basically said when you turn a metric into a target, it ceases to be a metric. But if you can remove Goodhart's Law and just look at the metric, that curvilinear relationship is very strong and reliable.

6:35Marcus Buckingham:But to answer your question, yes, it is really hard to get to do something that is so compelling, so remarkable, so authentic and genuine, resonant, that it actually changes my behavior. The first point of the article, indeed the book, was, but hey, I'm sorry, as a leader, you're in the behavior prediction business, and fours don't do it. Like, take net promoter score. We should just dump it, because it lumps fours, nines with tens in that case, and then assumes you can subtract the sixes and belows, as though these are all the same unit of analysis. They aren't. So to begin with, as leaders, we ought to go, what actually predicts behavior?

7:13Marcus Buckingham:It's the extreme positives in terms of sentiment. We need to be super curious about that. And then if we can reverse engineer that, everything else that we're doing, it's not going to get us the behaviors that we want. Let's just all own up to that and then look really intelligently at, well, what are extreme positive experiences and how do we design them? I mean, yes, to your point, it doesn't make it easy to design them, but you won't do it ever if you're not actually focused on the right target, which in this case is, how do you get somebody, customer or employee, to genuinely go, that's a five?

7:46Marcus Buckingham:When you do that, when you really do focus groups and interviews and so forth with those people saying five, the word you bump into again and again and again spontaneously is people saying, I love that. I love that restaurant. I love those shoes. I love that movie. Hollywood's known this for the longest time, that unless you have someone going five, then you can't predict whether or not they're going to see the movie or tell anyone else to see the movie. It's fives or nothing. So that word love, you know, as a repressed British researcher, I wish it weren't so. The L word, yes. Yeah, the L word.

8:18Marcus Buckingham:That's the word people use. I know I changed it to all sorts of words over the years, joy, passion, satisfaction. But that's the word people use. So really, love isn't a coating. We're not saying to leaders, you should be nicer to people. We're saying five equals love. So if you get people to say, I love that, which is not easy, that's what drives behavior. And so what we're in a sense saying is love is the most powerful force in business. And we ought to be able to look at it intelligently if we're going to design strategies for it. At the moment, we're not doing that, which means sometimes we hit it and sometimes we don't.

8:54I want to stay with extreme positives for a second. So, you know, as you said, it's hard to design them, but they may be the key to building up long-term loyalty that really moves the needle. how about some examples of companies that have identified extreme positives and recognize that

9:09Marcus Buckingham:and built on them the obvious one i think is the walt disney company do you argue with their strategy and the way that they're focusing on all the streaming wars and the rest of it but and the person i profiled actually in the book of the article was josh tomorrow who lost good call i know the new c i'd heard about this thing called the josh effect and he at the time was running the parks resorts consumer products and imaginary and the cruise ships which he'd renamed disney experiences which i think is interesting and i got to follow him around a whole bunch and i mean he's drunk the kool-aid or maybe he always had it in him but he's taken experience design incredibly seriously and everything that he does i think is all about whether it's him as a leader deliberately going he's got a custom where he goes furthest from the stage closest to the guest in any room that he's in.

9:59Marcus Buckingham:Obviously, they want to shove him on stage all the time, but he leaps off the stage furthest from the stage, closest to the guest. That's where you go. That's where you go talk to the cast members. That's where you spend your time. That's for them. For the guest, it's for him, I think, it's not what would Mickey do, it's what would Walt do. And he tells a story of when he first was president of Disneyland, everyone was being presented an imagineering idea that they would fire Spider-Man across the park every night. And every one of the other the Disneyland presidents or Walt Disney World presidents from around the world said, no, that's a stupid idea.

10:30Marcus Buckingham:We're not going to do that. And in his brain, he was like, you know what, what would Walt do? Walt would do crazy stuff. Let's fire Spider-Man across the park every night. We'll pick up all the mess afterwards and we'll do it again the next night. So his whole natural orientation is toward experience design in all of its many forms. I spent about three hours with him as they were redesigning the Millennium Falcon ride. And to see him, Artie, at the level of detail going, because I was like, why are you redoing the ride. Are you trying to get more throughput? And he's like, no, we got two hour waits already.

11:00Marcus Buckingham:I'm not going for a four hour wait. I'm like, well, why are you spending$40 million on redoing the ride? And he goes, cause people get off. We've got data that show that they like it. It's a four, but it's not a five. And in his telling of it, the Disney brand is super delicate. If you don't get people going, I love it. They go off the ride and they go, yeah, you know, fine. Then the brand will break. And so in his brain, anything I'm doing, he says that will helped me build a little bit more love out of that ride. And by the way, he was super in the weeds about how to tweak the ride, which to me fascinating.

11:31Marcus Buckingham:Anything I'm doing to build more love in the brand is a really good use of my time. Disney's done a really good job over the years of going, we're not universal. We're not Six Flags. We're not selling anything other than an experience. So what if you're not Disney, right? What if you're selling widgets? What if you're selling parts that it actually is important to be cheaper. Can you really aspire to these kind of extreme positives if you're not in a glamour business or a very experiential business like Disney? I mean, really what you're trying to do is that as a leader of a company, you've got two basic questions you're trying to answer all the time.

12:08Marcus Buckingham:You don't have 47 questions, you've got two. In terms of the future value of the business anyway. Number one, do we have more customers loving our business tomorrow than today? And number two, do we have more people loving working here tomorrow than today? Not every single decision is going to drive those two questions, but those are the two questions your investors care about. If you don't know the answer to those questions, and frankly, most companies don't, they measure it wrong, but you're really trying to find out how much love is in the system. And if you're thinking about that as a widget maker, you're thinking about that as a car dealership, you're thinking about that as a grocery store, those lead you to really interesting decisions about, well, what are we doing to get more customers to fall in love with us?

12:44Marcus Buckingham:That's an interesting question. And so if you reverse engineer that, what do people mean when they say love? Because we use it all the time. And it's confounding because we use it about a pair of socks or a movie or a mother or a mentor. So if you're not careful as a business leader, you start going, well, that's just a careless exaggeration of the word like. They don't mean love. But because it's a driver of behavior, it must mean something coherent around the world because it changes what people do. And when you unpack that, what people seem to mean is that an experience people label loving when it's an experience that allows you to feel more fully yourself over time, flourishing by any other word.

13:23Marcus Buckingham:Because if you think about it, we go through our world sort of wrapped up like an armadillo and any experience gives us a chance to take off one little plate of armor, just a little bit. It could be like, I love that outfit because when I wear it, I feel more fully myself. It could be, I love that mentor because she looked past my performance review and actually moved me into a role, even if I didn't want to, like it was tough love, but they moved me to a role where I could do this. If you have any experience, unless you take off one little plate of armor, the word we reach for to define that experience is love.

13:51Marcus Buckingham:So if you're selling a widget and you can get customers to feel like you are interested in helping them through their experience with you feel more fully themselves as they do business with you, which sounds odd, but is eminently doable. That's the human mechanism for buying more stuff from you, for paying more margin from you, from advocating word of mouth for you. How we do it, the activations you would use at Disney will be different than Chick-fil-A, than Kroger, than Rivian. But if you unpack any one of those companies, as an example, Rivian's not selling cars. They're selling, by the way, in a way way more successfully, I think, than Tesla.

14:31Marcus Buckingham:They're selling an experience that they're trying to enable some people to step into that experience and go, gosh, they know me, they care about me, they remove plates of armor from me, so I keep just leaning into that experience. Many people have a knee-jerk skepticism of business. They're cynical about what business does. If business, you know, ratchets up the we love our community message, even if it's sincere, a big group of the population is going to think, oh, come on. And I think your point is, and yet persevere. I mean, how do you communicate a message that I love my employees, I love the community, whatever it is, in a way that not only is sincere, but is perceived as sincere.

15:14Marcus Buckingham:I mean, the answer would be it depends on the kind of leader that you are. I'm sure Josh DeMauro is a different kind of leader than Patti Poppet, PG &E. But I think there's two foundations that you're building off of here. One is the data that we mentioned before. Love isn't a soft coating of niceness. It's not kumbaya, and it's not flattened into kissing in front of the Eiffel Tower with chocolates. Love is the precursor for productive human behavior. The data on this is unequivocal. If you want sustainably productive human behavior, it doesn't happen in loveless environments. The data on love is a very powerful driver of good things.

15:48But the other part of it is that, I know this is going to sound strange, Adi, but

15:52Marcus Buckingham:you can operationalize it. If you take people who say, I love that toothpaste, or I love that car, or I love that, I love my PG &E, or I love my Disney, and you reverse engineer it, you don't get nothing. In fact, in the article, it breaks down into a sequence of five feelings that are sequential, which serve for any leader as a blueprint for experience design. And it basically says, if you can design activations that create these feelings sequentially, you will gradually be intentionally moving people, customers or employees, toward that lovely place where they're walking around with love in their heart for you.

16:32Marcus Buckingham:Well, if we can break it down into a sequence of feelings, well, now you can design for it. Now it becomes a methodology, which you could dismiss an eye roll. But boy, you look at the most sustainably successful companies, they haven't eye rolled. Whether it's the Apples of the world, or whether it's the Disneys of the world, or whether it's prior to their sale, the Southwest Airlines of the world, you can see that there are a lot of companies that took it really seriously and did try to design it. So these conditions, you know, harmony, warmth, growth, etc. They also are aspirational. So, you know, how can a leader tell whether these are actually showing up in the lived experience of either their employees or their customers?

17:09Marcus Buckingham:There are these five. Control, not control over others. Control over self. That's the first feeling of love. If you create a world in which I feel powerless, I will lean out. I will keep my armor plating on. So the first thing you're doing, you know, like Chick-fil-A going, we're closed on Sunday. That's a very loving thing to do. Even if you lean out, there's a whole lot of people that go, I understand what that stands for, and I lean in. That's clarity is loving. Harmony is do you understand what I'm feeling and do you care? And so have you designed an experience which communicates to me? Wherever you might want to move me to, you've got to meet me before you can move me.

17:40Marcus Buckingham:That's intentional. Significance is basically do you understand my story and do you care? So that's uniqueness. And have you understood my story? And can I, anything about my experience change because of it? Warmth of others sounds obvious, but it's actually who's with me and how can they help? Humans hate being isolated in experience. And the last one is growth. Will this experience make me more capable in any way to face the world tomorrow? So if you can design those in, then you are creating the experience of one plate of armor coming off after another until the person is walking around with love in their heart.

18:16Marcus Buckingham:How do you know if you're doing it? In the book, I've just had two very simple questions to measure each of those five. So you could use those to figure out whether or not you've got love coursing through the veins of your experience or whether it's basically a bloodless, loveless experience. But the other extreme idea, if you and I would go start a business tomorrow, I would blow up the entire mystery shopper business and the entire employee survey business. And I would say, look, the data is compelling. The world's binary. It's either unloving or loving. It's like a Staples easy button. And what we should do, actually, is just have a free app.

18:52Marcus Buckingham:And every customer and employee should just have a button, loving, unloving. And if you're a CEO and you really wanted to know, if you're a bank, you could do a lot worse than just have a binary. Loved it, didn't love it, loved it, didn't love it.

19:08AI is reshaping organic search. Is your brand ready? EyePollRank has helped companies grow AI overview visibility by 250 % and chat GPT visibility by 660 % through relevance engineering. They'll help you earn visibility as a trusted authority. Visit EyePollRank.com slash HBR and book your discovery call today.

19:39legal teams are under more pressure than ever more data more complexity more scrutiny they need ai built for the realities of legal work for more than a decade relativity has invested in ai built specifically for legal teams designed to meet legal standards and support defensible decisions. The result is explainable AI that handles tedious tasks, so judgment and critical decisions stay where they belong with you. Relativity is the AI platform for legal work. Learn more at relativity.com slash ideacast.

20:16I'm interested in your view of AI and to what extent it can help in these processes to what extent it is a risk for companies to bring into their processes.

20:27Marcus Buckingham:The way that I think about anything in a company that a leader does, the fundamental measuring stick is, is this bringing more love into the system or is it driving love out? AI, we need to think about in that way. And there's two angles to it, which I don't hear talked about very much, but two really different angles to AI. One, can I love it? And of course, if love is really just me feeling more fully myself over time. That's flourishing. Can AI help me flourish? Apps are flippin' lootly. Makes me smart. It's really good at patent recognition. It's really good at summarization. It's really good at some things that enable me to be smart quickly.