Convenience: Just One Reason Businesses Should Accept Mobile Payments

Today I'm pleased to present another guest post by Chris Martin.

Here's a question: Why would a customer willingly go to a store where there are fewer choices, average customer service, and the goods are priced higher than can be found elsewhere? One word: convenience. The proliferation of convenience stores across the country is proof that buyers value convenience as much as (if not more so than) price, selection, service, and other market factors.

Customers Love Mobile Payments
Mobile payment systems have received a lot of publicity pertaining to their advanced level of technology. But the prevalence of mobile payments wouldn't be growing significantly if they weren't convenient for businesses and purchasers.

In fact, the most important aspect of mobile payments' convenience does not involve the business at all. People love having choices, so allowing them to pay for goods or services with a credit card gives them the option of keeping more money in their bank accounts for a bit longer. And after all, the customer is always right, right?

Businesses Love Mobile Payments
But mobile payments are incredibly convenient for merchants, too. For starters, businesses don't have to buy, lease, or otherwise obtain additional equipment like checkout machines, swipe terminals, or specialized keypads. All they need is their smartphone or tablet computer and perhaps a credit card reader that plugs into their digital device (these readers are often supplied free of charge to mobile payments account holders).

The most obvious convenience of mobile payments is the elimination of a physical link to a power source. Businesses don't need a telephone landline, data cable, or even an AC power cord in order to accept mobile payments. If merchants have a wireless Internet connection and/or a cell phone signal, credit card transactions can be processed securely, quickly, and easily almost anywhere on the planet.

For many businesses, the ability to accept mobile payments means the eradication of invoicing. Instead of writing up an invoice, giving it to a client or customer, and then waiting for a check in the mail, mobile payments can complete the entire transaction within seconds - and the funds are transferred into the business owner's account with a few days' time. And the convenience of improved cash flow cannot be overstated for a small business.

Mobile payments also improve the convenience of the actual credit card transaction. Customers approve the transactions by using their fingers to sign a touch screen rather than fiddling with a pen and a small credit card slip. In addition, customers receive an electronic receipt that is sent to their email address - so they don't have to mess with keeping or storing paper credit card receipts.

Marketers and Accountants Love Mobile Payments
There's another aspect to this e-receipt process that is often overlooked by businesses. As part of the transaction, customers provide their email addresses - which can be used for marketing purposes for the business. In other words, businesses don't have to wrangle contact information out of a customer because it is already folded into the transaction process. How convenient is that?

Finally, most mobile payments services can simplify a business owner's bookkeeping functions to some degree. Generally, these systems can display the past purchase history associated with a given credit card number, which can aid the merchant not only in accounting but also in future marketing efforts. Some mobile payments systems can even be linked directly to a company's back office so that transactions don't have to be manually entered into a computer at the end of the day.

It's surprising (or perhaps not) how many buying decisions are based primarily or solely on convenience. So if you want a competitive edge in the marketplace, mobile payments can help make patronizing your business substantially more convenient - and your customers will notice.

Chris Martin is a freelance writer who writes about topics such as small businesses, home improvement, and online reputation management.

The Problem with Inside-Out Thinking

I originally wrote today's post as a guest post for I Want It Now on March 18, 2013.

TSA recently announced that it was changing some of its carry-on restrictions next month; in addition to  certain types of knives, they will allow passengers to bring golf clubs, hockey sticks, and plastic bats onto planes, all of which had been restricted post-9/11. Other than the obvious question about whether the world is a safer place now than it was then (or even a month ago), is this really such a good idea? Where did this come from?

Supposedly, this brings U.S. carry-on rules in line with those of the EU. Who decided that what the EU was doing was a best practice?

According to the president of the Transportation Workers Union, Stacy Martin, "This policy was designed to make the lives of TSA staff easier, but not make flights safer." Her comments come as a direct result of what TSA Administrator John Pistole said: "Frankly, I don't want TSA agents to be delayed by these." Clearly he believes the destructive weapons of choice have shifted, but I think when you take your eye off the ball, that's when the other team scores. My two cents.

Anyway, there's more to this story than just that, and I don't really want to debate it; that's not my point here. I'm using this as an example for my topic, and I want to focus on those two statements in the previous paragraph - and the problem with inside-out thinking when it comes to customer experience.

Inside-out thinking means your focus is on processes that are designed and implemented based on internal thinking and intuition. The customer's needs and perspectives do not play a part in this type of thinking. You make decisions because you think it's what's best for the business.

Outside-in thinking means that you look at your business from the customer's perspective and subsequently design processes and make decisions based on what's best for the customer and what meets the customer's needs. You make decisions because you know it's what's best for your customers.

When TSA is thinking about processes and policies that simplify things for their own good, without considering the impact on their customers, then that is inside-out thinking. This is a prime example, another quote from John Pistole: “The idea that we have to look for, to find, and then somehow resolve whatever that prohibited item is -- that takes time and effort." Yea, but that time and effort will hopefully save the lives of hundreds of people (your customers).

There was a glimmer of hope when I read an article a couple days ago that lawmakers are trying to reverse this decision. And I quote: "This decision appears to have been made without formal engagement with stakeholders impacted by this policy, including those most likely to come into contact with someone possessing a knife on a plane - flight crew members and air marshals."

Um, what about the other passengers? Aren't they also stakeholders impacted by the policy?

OK, so let's just assume for the sake of this post that everything TSA decided was truly done without taking into consideration the customer perspective or the impact on the customer.

It might be inside-out thinking when there's a conscious decision to make process, policy, people, systems, or other changes that:

1. Don't improve the customer experience at the same time
2. Are about maximizing shareholder returns, not about benefits for the customer
3. Improve internal efficiencies but to the detriment of customer interactions
4. Are cost-cutting measures that also negatively impact the  customer experience
5. Might be the wrong process, policy, people, or systems to change

By contrast, outside-in thinking flips each of those points on its head and looks like this. There's a conscious decision to make process, policy, people, systems, or other changes that:

1. Improve the customer experience at the same time
2. Are about maximizing benefits for the customer
3. Improve internal efficiencies known to be painpoints when executing customer interactions
4. Are cost-cutting measures that significantly improve the customer experience
5. Are the right process, policy, people, or systems because you've listened to customer feedback and know how customers are affected

Outside-in thinking, i.e., applying the customer perspective to every decision the company makes, leads to a number of things, none of which you'll get by making decisions that are not based on what's best for your customers...

•    reduced complaints
•    increased satisfaction
•    increased referrals
•    increased repeat purchases
•    improved ease of doing business
•    fewer lost customers

... all of which translate to reduced costs and increased revenue. Now who can't get on board with that?

Here are a few business leaders who get it:

Don’t try to tell the customer what he wants. If you want to be smart, be smart in the shower. Then get out, go to work and serve the customer! -Gene Buckley, President Sikorsky Aircraft

This may seem simple, but you need to give customers what they want, not what you think they want. And, if you do this, people will keep coming back. -John Ilhan, Crazy John's

For us, our most important stakeholder is not our stockholders, it is our customers. We're in business to serve the needs and desires of our core customer base. -John Mackey, Whole Foods

Disrupting the Automotive Customer Experience

This is the second in a two-part blog exchange I’m doing with Denise Lee Yohn. Because we have similar perspectives on customer experience, we decided to share with our readers each others' thoughts on disruptive experiences.  Last week, I discussed on Denise’s blog how Square is disrupting the payment experience.  In this post, Denise describes how Tesla Motors is disrupting the automotive buying experience.

“A new kind of car.  A new kind of car company.”

Saturn may have used those lines to launch its brand 20 years ago, but it’s Tesla Motors who is truly disrupting the automotive industry today.

Saturn may have challenged the conventional designs of American-made cars, but Tesla has combined an electric powertrain and luxury sports car style into a new breed of automobile unlike anything seen before.  Saturn may have instituted a different culture and organizational design, but Tesla is run by Silicon Valley entrepreneurs and engineers whose tech start-up sensibilities contrast sharply with those of automakers.  And Saturn may have trained dealers in low-pressure sales and encouraged them to pay salespeople salaries rather than commissions, but Tesla has set out to fundamentally change the car buying and owning process.

It is this last point that I find most noteworthy because the automotive customer experience is in dire need of change, and Tesla seems to be re-designing every aspect of it.  As Chairman, Product Architect, and CEO Elon Musk explains, “At Tesla Motors, we really want to improve aspects of the car business that we've found unpleasant as consumers.”

The company is disrupting the automotive shopping experience in five significant ways:

1. Customer decision-process: Tesla’s stores and galleries are located in venues with high foot traffic and visibility like high-end malls and shopping districts, including San Jose’s Santana Row.  Of course the company enjoys the brand halo that comes with such aspirational adjacencies, but its strategy has a more fundamental objective.
 
In mainstream shopping areas, the company can generate broader brand awareness than its start-up ad budget could produce – and it can reach people before they’re even considering buying a car.  The company knows it’s important to reach people at such an early stage in their decision-process because they need to be educated about electric vehicles before they’d be open to Tesla as a brand for them.
Critics question if shopping malls are the best venues to reach qualified buyers – and indeed, I imagine Tesla stores get more than their fair share of lookie-loos.  But if a retailer wants to connect with new customers and get them to add the brand to an established consideration set, it can’t expect to be a destination – it needs to be where the brand can be discovered.

2. Role of salespeople: Given the prevalence of online research in today’s automotive purchase process, most people have already decided what car they want to buy before they head to their local dealer – and many already know the fair price for it.  So car salespeople’s roles have been reduced to Vanna White-type product demonstrators and price negotiators.

But Tesla’s salespeople, “Product Specialists,” play a far more significant role in the customer journey.   They’re focused on educating people first about electric vehicles in general and then about Tesla specifically.  So they’re not paid on commission and their goal is to increase demand, not close a sale.  Tesla’s vice president of sales and ownership experience, George Blankenship, says that it’s their goal for “everyone to leave our stores with a smile on their faces.  I want people to want the car, I don’t want to sell them the car.”

3. Controlled and designed experience: Other automakers have franchise contracts with independent companies that sell vehicles to their respective dealerships. The dealers hire and train the sales and service staff and determine their pay, and they set the sales price of each car. Thilo Koslowski, an automotive analyst at research firm Gartner Inc., explained the risks involved with the established model, saying, "Every time you have a franchise involved you lose part of that intended customer experience because they are independent businesses and have different goals. They use different processes and sales strategies with customers.”

Since Tesla sells directly to consumers through their stores and website, it retains control of the customer experience. And it has designed the experience to be like an Apple store, a Starbucks, or a good restaurant – a comfortable place where people feel welcome and want to hang out.  Musk describes the store design as “beautiful and stylish, but also simple, fun, and friendly at the same time.”

4. Experiential and emotional appeal: Blankenship explains that the stores are intended to “entice, inform, and engage” people in order to “create a highly interactive buying experience.”  

Usually one or two cars are showcased in the center of the store and people are encouraged to get into them to form an initial impression.  Car design options are displayed and lit dramatically on the walls, while other displays highlight various aspects of the cars such as the motor and charging socket.  People can interact with one of a few large flat-screens with touchscreen capability that serve as in-store design kiosks through which they can customize their own car – and eventually make a reservation to purchase it.   And prospective customers can test-drive one of several cars that are stored in a designed parking area nearby.

The company aims to “put as much energy into making our stores look good as we do with our cars,” wrote Musk.  The idea of a store being one of the most powerful expressions of a brand is one I’ve explored before and Tesla certainly proves how impactful a store can be in terms of emotional expression and connection.

5. Consistent brand standards: Tesla has torn down the invisible but unmistakable wall between the sales and service standards that people encounter at most car dealerships.   Instead of presenting an inviting, glamorous sales experience and a functional, generic service one, Tesla designs its service centers to be inspiring and interesting.  In fact, Musk described how they’re modeled on the private VIP lounges for airline frequent fliers.

I suspect that the sales and service businesses are managed separately in other automotive retail networks. With their distinct objectives and operations, it’s no wonder that what the customer experiences in one area bears little resemblance to the other, and there’s limited, if any, consideration given to fostering a connection between the two.  But, applying the highest brand standards to every experience is what distinguishes Tesla and other extraordinary retailers from their rivals.  They design their businesses with the brand vision at the center and ensure there are no disconnects across experiences.

Tesla’s disruptive strategies have not been welcomed universally.  Due to perceived unfairness to other dealers, the company was denied a special exemption that would have let it operate a dealership in the state of Virginia.  It’s unclear whether or not the company will encounter similar barriers as it expands into more markets.

This setback demonstrates how difficult retail disruption can be.  Visionary entrepreneurs like Musk, Warby Parker co-CEOs Neil Blumenthal and David Gilboa, and Zappos CEO Tony Hsieh, conceive of radically new ways of doing business in service of providing more inspired experiences for customers.  But, old systems and established brands resist change.  Let’s hope Tesla and others keep fighting for it!

Denise Lee Yohn has been inspiring and teaching companies how to operationalize their brands to grow their businesses for 25 years.  World-class brands including Sony, Frito-Lay, Burger King, and Nautica have called on Denise, a brand-building expert, speaker, and writer.  Read more by Denise at http://deniseleeyohn.com/bites/best-bites. 

#CXPA13 Day One Live Blog: Mary Lee, AAA Northern California, Nevada, and Utah.

The Customer Experience Professionals Association annual Member Insight Exchange kicks off this morning in San Diego, CA, at the Hotel del Coronado.

The final session that I'll be blogging about today is by Mary Lee, Director of Member Experience at AAA Northern California, Nevada, and Utah. She'll be sharing lessons learned around building a new VOC framework.

AAA is a federation of separate AAA clubs. AAA NorCal started in 1900 and has 4.2 million members.

The AAA Member Experience Journey

Services with membership: travel, emergency roadside service, homeowners insurance, auto insurance. AAA used to be the only place where you could get these services.

The AAA Brand: people helping people.

Competitors: Allstate, USAA, Geico, State Farm, Farmers, Progressive, General Insurance. AAA market share is about 20%.

"With great brand power comes great responsibility."

Member Promises: 

• We will keep you safe and secure. (auto insurance)
• We will offer you the right product at the right time. (long-term, loyal members)
• We will reward your loyalty. (aspirational; example is birthday card that Southwest sends)
• We will provide helpful and knowledgeable service. (roadside service)

Most important to remember: one member, one AAA. All that the customer cares about is that they deal with AAA, not with NorCal or SoCal clubs. It's all one club. Customers must see that employees represent all of AAA, which is often difficult to do. The club is separate from the insurance company, but that's all seamless to a member.

For their employees, they encourage them to think about the experience as if they were the member. Does that make sense for you?

Why focus on customer loyalty?

• Satisfaction alone is not enough.
• Increases in NPS proven to tie to financial results.

Used to have a very silo'd approach to listening to members. They have since transformed to a single listening system, a single source of truth.  From there, they then look at results by type of transaction and by geography with the same type of feedback but with a clear window into the customer experience from start to end of lifecycle.

There are 96 offices in the AAA NorCal footprint. They did a Member Experience Roadshow to enable all employees to know: how they're doing, what NPS is and why it matters, and what the employee's role is in delivering that experience. They also use it to gather feedback and build connections.

Where is AAA NorCal on their journey?

• Well on their way
• Incentives and annual goals tied to the relationship survey (result: people are more interested, for better or worse)
• Impact on member experience is part of many, though not all, conversations
• Recognition that such an evolution doesn't happen overnight (they started July 2010)

Challenges:

• Software issues
• Obsessive interest in the score
• Scores led to "data chasing"
• Building muscle memory

Lessons learned:

• Change management is critical element to include in the effort.
• Constant and consistent leadership support is essential.
• It takes a village.

"If you focus on the customer, it changes the tenor of the conversation that you have with people."

Thanks, Mary! Great job. Good luck with your continued journey.

#CXPA13 Day One Live Blog: Joe Wheeler, The Service Profit Chain Institute

The Customer Experience Professionals Association annual Member Insight Exchange kicks off this morning in San Diego, CA, at the Hotel del Coronado.

The next session I'll be sharing is by Joe Wheeler, Executive Director of The Service Profit Chain Institute. I last heard Joe speak about 10 years ago, and he's always got great stories. Looking forward to hearing his presentation, which is titled, "Just Tell Me What You Are Feeling! – Uncovering the Actual Emotions of Your Most Valued Customers."

Joe Wheeler will be announcing a new capability that The Service Profit Chain Institute will be launching July 1, 2013. There are great tools for automating customer experience mapping and enterprise feedback, but we're missing tools to map emotions. The new tool with use facial recognition to read the emotions of your customers.

"The truth is, what makes a brand powerful is the emotional involvement of customers." -Charlotte Beers

The Service Profit Chain Institute has a six-step process for how they work with clients called the Customer Experience Workout. They built a platform to simplify.

Business Case
Define the potential financial gain to be achieved by improving the customer experience.

Collaboration
Engage colleagues, key stakeholders, subject matter experts, and customers in the work of improving the customer experience.

Mobility
Leverage mobile devices to capture insights and media about the customer experience at key touchpoints.

Technology
Uses leading edge facial expression technology to capture the emoitnoal repsonse of customers to potential improvements in the experience.

Execution
Applying Experience Blueprints that translate new design strategies into operational, product/service, and behavioral changes in the experience.

Monitoring
A simple dashboard that links to the organization's existing customer measurement system.

A Proven Process: Seven Principles of Customer Experience Design
1. Experience design starts with Leadership Alignment:

• Understand the current experience
• Define the brand platform
• Design the customer experience
• Deliver to exceed customer expectations
• Measure to continuously improve and innovate

2. Establishing the Business Case:

• Start with the results
• What would the experience look like to achieve those results
• Establish baseline for key segments
• Conduct sensitivity analysis specific to customer behaviors
• Determine costs assocated with influencing customer behaviors
• Calculate the NPV from each customer experience improvement

3. Map the Current Experience:

• Define the touchpoints
• Describe the customers' actions at each touchpoint, add photos and rich media to elaborate
• What is the customer thinking or feeling during this experience

Finalize the draft of the experience map, and then involve your customers

4. Define the Brand Platform

Brand position: what the brand stands for.
Brand promise: the unique value that is delivered.
Experience theme: the unifying cues that bring to life the brand promise and evoke the emotions we want the customer to experience.

If you don't pay attention to your theme, to the cues, you can crush your brand.

What is your "Central Narrative?" The story that the customer is telling about them and you. Do you know what story your customers are telling about your brand?

5. Design the Customer Experience

6. Deliver to Exceed Customer Expectations

7. Measure to Continuously Improve and Innovate

Thanks, Joe, lots of great tips and advice. Good luck with the new platform launch!