The Art of Customer Recovery: Transforming Negatives into Positives

0:08Hello and welcome to another episode of the duct tape marketing podcast. This is John Jansen. My guest today is John Pico. He helps companies impress their customers and inspire their employees, creating raving fans that drive business growth. He's the founder of Watermark Consulting and a noted authority on customer and employee experience. He's a sought after business advisor and speaker working with some of the world's foremost brands, personally advising CEOs and other members of C-Suite. He's also the author of a book called From Impressed to Obsessed, 12 Principles for Turning Customers and Employees into Lifelong Fans.

0:48So we're going to talk about customer experience today. So, John, welcome to the show. Hey, John, it's good to be here with you. So I'm always curious on people's origin stories for how they got into the particular line of work that they chose to focus on. So how does somebody become a customer experience expert? Just lucky, I guess. I guess I should have said, how does somebody, why does somebody choose to as well? No, I'm not doubting it. I just mean, I always love hearing what story backs somebody into what they're doing now. Yeah. So my first entree into business was selling radio ads back in college, door to door selling radio ads because the college station that I was trying to get a DJ job at, it was a commercial station.

1:32It didn't get any funding from the university. And so they basically said, well, if you want anything other than the graveyard shift, you need to bring in some revenue for us. And so it was actually through that experience that I began to see how even very small details in your interactions with prospects or customers can have a really significant influence on their likelihood to purchase from you, to repurchase from you. And so that was the first time I was kind of exposed to what I would now call customer experience, even though back then there really wasn't the term for it. And then eventually when I went into the corporate arena, I had the opportunity to work leading various areas like sales, marketing, service, ops, distribution, even I.

2:13And that really gave me a chance to see how the customer experience is delivered from the perspective of many different silos. And that's a big challenge for many organizations is getting all of those functional leaders to really coalesce around one vision for the experience you're trying to deliver. And so after that experience, I kind of thought to myself, well, you know, this is a unique perspective to have, having walked in the shoes of all those people. And I always wanted to set up my own consultancy. And, you know, that was the trigger for me was leveraging that expertise and those different perspectives to help other organizations improve the experiences they were delivering.

2:48So my next question was really going to be about challenges. you teed up a pretty big one that, that, you know, somebody can have an idea of, oh, we should be seen as this kind of company, you know, customer centric, you know, employee centric, but then, you know, at the end of the day, you've got this person executing this person executing. So how do you help people work through that particular challenge? Yeah. You know, I think it comes to good leadership in the end. I mean, that might sound trite, but I have found that the common thread of any company that I've ever worked with that has been successful in its efforts to differentiate itself through customer experience.

3:22It really came down to the top executives, if not the CEO themselves, being passionate about that and making sure that it was something that was woven through every action that the company took. So, you know, how do you make sure that you are not trying to herd cats in terms of all of these functional silo leaders? And I think that it really comes, it's the job of the chief executive to make sure that they are holding accountable everyone in the organization for not just maximizing their own metrics and their own organization's success, if you will, but that they are cognizant of how they fit into the bigger picture and that they are standing up and raising their hand when they see that something that might be good for their organization is not good for some larger objective that the enterprise is seeking to achieve.

4:13And I think when you make heroes out of the people who step forward, raise their hand and say, hey, I got an issue here. We need to recalibrate. I think that's how you start to create a culture where people are not just strong silo leaders, but good corporate citizens. And I think that's where you want to end up. Yeah. I mean, what I hear you saying is it really, it's really related to culture, isn't it? Or, you know, or permission, you know, to be that person to speak up, isn't it? Absolutely. Yeah. I think that the cultural norms that surround executives within an organization are going to shape their behaviors.

4:48And if you've got a culture that rewards people for hitting the metrics and the objectives for their particular silo, ignorant of how that may or may not actually hurt other parts of the business, that's a problem. And conversely, when you create a culture where people are just by default thinking about the enterprise as a whole, I think that the sum ends up being greater than the parts. So we went through, I try one of these days, I'm going to get through a show without blaming the pandemic on something that's changed in business. But I think we went through a period in the pandemic where people were very forgiving.

5:24It's like, I know you can't get people, oh, supply chain, you know, I get it. I mean, it was like customer experience kind of went by the wayside in a way out of necessity, maybe. And then I think some companies relied on a little too long. And I feel like we've almost got this backlash now where it's like, no, that passes over. You know, I actually, you know, things have changed to the point where I actually expect more. I think you're absolutely right. I think there was this period of forgiveness among both B2B and B2C consumers. But I think we are long past that. And I think that if anything, that there is an aggravation among customer populations when they see a company that is trying to attribute its experiential weaknesses to the pandemic at this point, what, you know, four years in.

6:14And I think there's very little tolerance for that. And I think that you're seeing the companies that are succeeding and thriving following the pandemic are the ones that didn't cut to the bone during that downturn and were able to bounce back strongly and continued their focus on the quality of the experience they were delivering. Right. Right. What, you know, there's been a lot of talk lately. In fact, you know, I don't know if you're familiar with Jay Baer. I was on this show recently talking about speed, you know, being, you know, maybe number one in terms of customer experience for a lot of industries.

6:49What role do you see that, you know, I want it fast. I want the response to be quick. I want, you know, the solution to be quick or the resolution to be quick. What role do you see speed playing in today's market? I absolutely agree that for many businesses, speed is a key driver to customer success. And I don't want to say customer satisfaction because satisfaction, in my view, is setting the bar too low. It is a way to delight people when you are super responsive. And the reason that I would say that's the case is because, number one, it's rare that people see that these days. So when it happens, it creates what I refer to as a peak in the experience that people remember.

7:28kind of snaps their head around and they're like, that's unusual. I don't normally see that. The other thing that quick responsiveness does is it actually reduces the amount of effort that your customers need to invest in order to accomplish something with your business. Because if you're not super responsive, it really saddles me as the customer with more effort, because what do I need to do? I need to reach out and follow up with you or follow up with a colleague or maybe another potential business, a supplier, that can help me more quickly. So I would say, yes, speed is important. What I want to be clear, though, is it's not always the key driver.

8:03And it really depends on the nature of your business and what you want to be famous for. So, for example, there are some luxury products. The fastest brain surgeon on the planet is probably not what you want. Yeah, that wasn't the example I was thinking of. But, yeah, that's a good one, too. But, you know, I'm thinking about some luxury products like Hermes, for example. You know, there are luxury high end providers where the fact that you actually have to wait potentially many weeks for the product to come in and be delivered to you, maybe to be handcrafted for you. That is actually a strengthening element of their brand experience.

8:43And so their speed is not a plus. So that's the one caveat that I would say to your listeners is you got to really know what you want to be famous for as a company. And speed in that case might play in to the whole value proposition. But in other cases, it might detract from it. Yeah, absolutely. So let's use an example. A lot of people use the term raving fans. You use it as part of your unique positioning for your organizations. Do you have an example that you can think of a company that brought you in and asked for, hey, we need to transform our experience. and maybe kind of talk about some of the things that they did or you did or how they turned it around.

9:19Yeah. So, you know, one example that comes to mind and the reason I like this example is because when many people approach customer experience improvement, they think about fixing pain points, right? You know, they think about, let me look for stuff that's broken and then figure out how I can remedy that. And that's obviously an important component. But what I always like to tell people is that the customer experience game isn't just about find and fix. It's about discover and delight. And what I mean by that is it's about understanding things that your customers need or want that they never thought to ask you for because they never imagined that you could possibly help them.

9:59And so the example that I have actually is from a medical technology company that my firm worked with, one of the largest companies in its industry. And essentially what they do is they provide automation products for laboratories. So, for example, when you go to a local lab or a hospital and you have a blood drawn or something, it's their systems that are automating the processing of those samples. And so here's the thing. They have this great newfangled technology that completely automates the entire hospital laboratory. Well, that's great. Super exciting. But what they never realized was that one of the biggest challenges for their customers was actually the change management that was involved for the people working in the lab.

10:44Because the people working in the lab, these lab technicians, they had done it the same old way for decades. And then suddenly there's this newfangled technology coming and they have to completely relearn how to do their jobs. And as you can imagine, there was a lot of friction and hesitation and concern there. And so in working with this, that was an opportunity. Like there was an opportunity for my client to actually provide their clients a turnkey program to help manage the change in their laboratories. And when they started to offer that, it was like they made the lab leaders at these hospitals heroes in the eyes of their employees.

11:22Because now it wasn't just like, oh, yeah, we got this new technology, deal with it. There was a whole structured program for them to take their staff through and navigate them through that change. And, you know, that's something that I would say was the kind of thing that creates raving fans within your employee ranks, which, as you know, from my book, I consider a type of customer. And it comes down to delivering something that nobody really asked for. But when you look and listen carefully, you see, you know what, there's an opportunity there to do something different. And that's a perfect case of what can be seen as a customer experience.

11:56Touchpoint is actually being a core differentiator from a marketing standpoint. Yeah. That's right. And to this day, they actually do market that. Hey, have you ever tried to hire freelancers and found that the quality of work was lacking or you got all the outsourcing excuses as to why the work didn't get done on time? Well, Desk Team 360 has revolutionized the outsourcing game with their insourcing program that eliminates all those frustrations and excuses. You get unlimited graphic designs, website funnels, CRM, email automation, integrations, automations, really anything that requires you to log into software.

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13:22Yeah, it's absolutely true. It is not a myth. It bears out, as you say, in study after study. And the bottom line is that happy, loyal customers are less price sensitive because they don't focus on the cost of a particular transaction, but rather they look at the value of the entire relationship that they have with you. And so when they're less price sensitive, you can absolutely derive greater revenue from them, You know, not only in terms of adjusting your price, but they're also more likely to entertain ideas for other products and services from you. They're more likely to refer others to you.

13:55So, you know, there's a whole bunch of goodness there. But absolutely price. I'm not going to say they'll pay any price, no matter how good the experience is, but you absolutely have more latitude. And the research that I've done that is described in the book actually looked at the shareholder returns of companies that excel in customer experience. And I mean, the contrast is quite stark. The companies that lead in customer experience outperform that those that lag by an over three to one ratio. And one of the key reasons they're able to do that is because they get a loyalty lift from their revenues and that just increases their profitability.

14:30Well, I think you said one of the key words, value. I mean, convenience has value, for example. So I think, you know, obviously all those things go into the equation of analyzing whether a price is worth it or not. I had you share an example of creating raving fans in a positive environment of doing something proactively. Every now and then, somebody screws up, right? And the customer experience is not what they meant it to be. Somebody has a bad experience. Do you have any advice for somebody to think of as a point of view or a, I don't think it's a set tactic because it applies differently across the board, but how do you save a bad experience?

15:09I mean, how should you approach saving a bad experience? Yeah. And so I love the question because this is very dear to my heart. It's one of the key principles I talk about in the book, the notion of recovering with style. And the key thing for people to understand when they are faced with a failure in the experience is that you should not resign yourself to creating a dissatisfied customer or even just a neutral customer. because what great companies recognize, all the legends out there, the legendary brands, they sometimes screw up. But what makes them different is that they recognize that doesn't have to, it doesn't necessitate creating that dissatisfied customer.

15:48And that if you overcorrect on the recovery, you can actually create a peak in the experience that's going to eclipse the negativity of the failure itself. And this has been researched so much that there's actually a term for it. It's called the service paradox. And it refers to this idea that you could create a more loyal customer after the failure if you're recovering in style as compared to before the failure even occurred. And so, you know, my suggestions for folks is first, that's the number one rule is you got to approach it. If there's a failure, you say, this isn't just about fixing. This is about fixing and then figuring out how can I create that peak that people are now going to remember.

16:24And I think the way to accomplish that is, number one, it's very easy to immediately focus on solving the problem. But the first thing many customers want is just to feel seen and heard. And so simply empathizing with them and acknowledging the issue and the impact that it had on them, that can go a long way. Once you do that, then the second key thing is to take exceptional ownership. People, what really aggravates people at a point of failure is when you have somebody that says, that's not my department. You know, I can't really solve that. I've got to pass you off to this other area. When somebody just says, I can help you with that, just those words, immediately the tenor of the conversation changes.

17:04And if you back that ownership up with great execution, that's going to serve you well in terms of recovering with style. Yeah. And that, you know, going all the way back to our, one of our original points is, I mean, that's a culture, right? I mean, that's like, I give you permission to own that and solve that. And, you know, you, if you, even if it's not in your job description, I give you permission to solve that. That's right. Yeah, I actually I call it Velcro ownership. And I encourage any company I work with to embrace Velcro ownership where you imagine, you know, everybody comes to work.

17:33They're dressed in a Velcro suit every day. Every complaint, every need, every request is like a Velcro ball that's thrown at them. And what happens when it hits your Velcro suit? It sticks. It hits your desk. It is yours. You might get other people involved to help resolve the issue, but you're always keeping a string on it. And the customer sees that it's you advocating for them and owning the resolution of their issue. So if somebody is listening to this and they're thinking, yeah, I know we've got some holes. I don't know where they are, you know, but I just feel it. What's the process? I mean, is it an audit?

18:03You know, you take a look at, I mean, how does somebody get started? I think there are a number of ways to get started. You know, I'll suggest two to your listeners. The first is become a customer yourself. You know, whatever business that you're in, sit down, take off your, you know, your business hat, pretend that you don't know anything and try to sign up for that service. Try to go buy that product. Try to go learn about that offering that you've got. Because inevitably, when you go through the experience yourself, you will come across things where you'll be like, whoa, I didn't know that it was like that.

18:37And it's going to give you a whole host of ideas of how to improve it. So that would be my first suggestion. The second is, and this would be a compliment, is go out to your staff and simply ask them. Say to them, what are the top three things that annoy or frustrate our customers? Tell me about those. And the neat thing about that, John, is the mere act of asking your staff and listing them in that process, as long as you act on their ideas, not only is it going to help improve the customer experience, it actually helps improve the employee experience. Because what your employees then see, they're not just gears in the machine, cogs in the wheel.

19:11like you're engaging them as a trusted partner to really help elevate the quality of the experience by capitalizing on the intelligence that they bring to bear. And so that, you know, serves to elevate the experience of both parties, the customer and employee alike. Yeah. And I wonder how many employees hate their job because they are the brunt of bad customer experience processes, right? Yeah. Well, and that's why it's a vicious cycle. You know, a bad customer experience leads to a bad employee experience, which in turn leads to more bad customer experiences. But it works the other way too. If you can get that flywheel going in a positive way, you're unstoppable.

19:49Yeah. All right. We've waited really to almost the last minute of the show for me to ask you, what's the role of AI in customer service, customer experience, good, bad, ugly? I'm not going to purport to know the answer to this because it's obviously a rapidly evolving technology. But here's what I would say is in In the short term, I believe the greatest benefit of it, and that is giving your people a co-pilot that can guide them, coach them, help them navigate what in many organizations can just be a mass of information that people have to sift through in order to find something that the customer is looking for.

20:24How do I solve this problem? How do I answer this question? I think that AI, by being with the large language models to be able to sift through that information very efficiently, it can provide a very effective co-pilot to your staff so they could quickly zero in on the answer. And what that allows them to do is to focus not so much on the transaction of getting the information. It allows them to focus on the interaction with the customer because it becomes so easy for them to get the answer that they can then focus on the softer aspects of the interaction that make it feel warm and inviting. to that customer.

20:58Yeah. I saw a demo of a product somebody's developing where it actually listens. And so it's providing the answers before, you know, like in real time, real time. It's like, this person's asking about this. Oh, here are a couple of scenarios. So yeah, obviously, you know, that makes it a lot easier to get people very effective, you know, in their jobs very quickly. Absolutely. Well, John, I want to appreciate, or I do appreciate you summed by the Duct Tape Marketing Podcast. You want to invite people to where they might connect with you and learn more about your work and anywhere you want to send them?

21:29Yeah, sure. The best way to learn about my work is to go to my website, which is johnpico.com. That's J-O-N-P-I-C-O-U-L-T.com. And from there, you can learn about my book, my speaking services, and my consulting firm. Yeah. Awesome. Well, again, I appreciate you taking a moment and hopefully we'll run into you one of these days out there on the road.

21:56Microsoft Mechanics