Employee Hierarchy of Needs

I actually considered calling this post, “If mama ain’t happy, ain’t nobody happy.” In the same way that mothers are often the key connector in familial relationships, employees are the key connector in the relationships between a company and its customers. As a result, if our employees aren’t happy, our customers won’t be happy with our companies and our companies won’t be happy with the business results.

For some reason, the topic of employee satisfaction has come up in a multitude of conversations I’ve had lately. I recently had a great one with my most excellent colleague at ForeSee Results, Maggie Kalahar. Maggie had this to say:

“Employees shape the experience a customer has with your company each time they have contact, making employees the most memorable voice of your brand as they constitute the actual brand experience.  It’s people who ultimately deliver your brand promise.  It does not make a difference what you tell your customers about your brand if those who actually encounter the customer don’t deliver the values consistently.  For example, one poor experience with a rude sales associate at Retailer X can undo millions of dollars of brand advertising touting “The Friendly Faces of Retailer X”.  On the other hand, when employees deliver a positive experience consistent with your brand promise, your customers will in turn become stewards of your brand as well, translating to dollars for your company.”

Given the huge importance of satisfied employees in the overall success of a company, it’s surprising that more attention isn’t paid to employee satisfaction as a key financial driver. (And by the way, I’m certainly not guiltless. Sadly, it’s taken me way too many posts about other topics before getting to this important topic.)

All too often, we take our employees and their job satisfaction for granted. We focus all the power of our Type-A personalities on achieving financial results, acquiring new customers, launching new businesses, and driving customer satisfaction, but too often we forget about the people who actually turn all those action verbs into real-life actions.

We spend lots and lots of time considering our brand messaging, and we even spend a lot of time teaching our brand stewards (our front line employees, in particular) how to message our brand. But how much time do we spend ensuring our employees have the tools and the environment they need to effectively deliver our brand promises (as well as the actual desire to deliver the brand promises)? Sure, HR probably talks about it all the time, but this is not an HR issue.

This is really about the basic service every manager in an organization should provide to his or her staff in order to achieve those financial goals.

I previously mentioned putting employees first (even before customers) as one of the keys principles of a customer centric organization. The base principle is really the same as when flight attendants advise us to put the oxygen mask on ourselves before assisting our children. If we don’t provide a productive, positive environment for our employees, how can we expect them to provide the right environment for our customers?

But, man, satisfying employees is hard!

Providing the type of consistent environment required to really satisfy employees is actually a lot harder than providing the type of experience that satisfies customers. The reality is employee relationships are more interdependent, frequent, intense and intimate than the relationships we have with even our best customers. And we have so many more interactions with employees, any one of which can potentially derail the relationship if we don’t handle it correctly.

So what do we need to do to satisfy employees?

In my experience, the things that make the biggest differences are not parties, free lunches or even bonuses. Those things, while good and worth doing, are fairly temporary. They come and they go and they can be quickly forgotten if there are problems in the basic working environment.

I think the tenets of great working environments are really more akin to Maslow’s Hierarchy of Needs. Maslow’s pyramid starts with physiological needs and progress through safety, belonging, esteem and ends with self-actualization.

The Employee Hierarchy of Needs, if you will, contains a similar progression to ultimate satisfaction:

Basic tools
Certainly, a company’s employees need to have the basic tools to do their jobs. Those tools could be computers, uniforms, office supplies, etc. I don’t think many companies have big problems at this level. I would even add being paid a fair wage here. There can be little question that pay is an important aspect of any job. But getting the pay right is part of the very basic level of the working environment.

Trust and Respect
Trust and respect are the foundation of pretty much all successful human relationships, and it’s certainly no different in employee relationships. One of the best ways to assess the levels of trust in an organization is to examine assumptions regarding intentions. Do policies and procedures seem to assume the employees act on their best intentions or their worst intentions? In other words, are the policies in place mostly to ensure employees don’t do things they shouldn’t do, or are the policies in place to ensure employees have the right environment to do the things they should be doing.

Respect can certainly be gauged by how we treat each other. Do we follow the Golden Rule? In the workplace, one of the best ways to test Respect is in how input is heard from various members of the team. Are people’s ideas, when presented with thought and backed with supporting evidence, taken seriously? For the record, I don’t think “taken seriously” necessarily means the ideas are always accepted and implemented. However, if the idea is ultimately rejected, it should be rejected with the same or better level of thought and supporting evidence. To me, that’s taking an idea seriously and respecting the generator of the idea.

Matching the “A”s
This one is critical, and a mismatch here is often the source of some of the biggest problems I’ve seen during my career. The “A”s are Accountability and Authority. Many positions have job descriptions, but I’m talking about something a lot more specific and meaningful. I’ve found it’s critically important to be very, very clear about what each and every person in the organization is accountable for. This takes a lot of careful thought. Once we’ve defined those accountabilities, we have to ensure each person has the authority to deliver those accountabilities. This is hard. Accountabilities will inevitably overlap in some areas, particularly in hierarchies in the organizational structure. So the accountabilities need to be defined specifically and conflict resolution paths must be predefined. (Frankly, this could be a whole separate blog post…and maybe it will be.)

All of this is made much easier if the company has the types of vision, values and objectives frameworks I discussed in a recent post. Such a centrally defined framework provides the types of guidelines for decision-making that, while not eliminating conflicts and disagreements, at least provides a solid basis for debate and resolution.

Confidence
With a solid framework for decision-making, clear accountabilities and matching authority, employees can begin to make decisions about their daily work with confidence. As those decisions become more and more effective, employees become more self-confident. I’ve always found that self-confidence is the key to success in all aspects of life. Self-confident staff find it much easier to do what’s right for customers and for the business.

Training/Knowledge/Growth
The final layer of employee satisfaction is all about growth. Companies that invest in their employees’ growth will not only have happier employees, they will have more productive employees who generate better and better ideas for improving the company. This means mentoring employees, training them in areas even beyond their current scope of responsibilities, being more transparent about aspects of the business that are interesting to particular employees and more. Creating more skilled and more knowledgeable employees has an extremely high ROI.

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Focusing and delivering on all layers of the Employee Hierarchy of Needs can lead to the type of employee satisfaction that leads to customer satisfaction and big profits (investor satisfaction?). But there’s no question that it takes constant focus and a lot of hard work.

Behavioral economist and author Dan Ariely, in his excellent book The Upside of Irrationality, ran some interesting experiments around meaningful working conditions. He found that “if you take people who love something…and you place them in meaningful working conditions, the joy they derive from the activity is going to be a major driver in dictating their level of effort. However, if you take the same people with the same initial passion and desire and place them in meaningless working conditions, you can very easily kill any internal joy they might derive from the activity.”

We’ve all encountered employees of various establishments who’ve had their joy killed. They’re not productive and they don’t provide great experiences. We certainly want more for our teams and our companies. The alternative of course, is joyful employees, customers and investors. That’s a happy world I want to live in!

What do you think? How would you describe the Employee Hierarchy of Needs? What have you seen work and not work in your organization?

“What does it really mean to create a customer-centric culture ? We hear companies say it all the time. I would wager that almost every retailer claims to have it. But what does it really mean and how do you know if you really have it?”

Culture is a powerful and interesting beast, and I certainly don’t claim to be an expert in developing corporate cultures. However, it’s a topic of great interest for me, and I’ve had the opportunity to observe and operate within many corporate cultures. I’ve learned that corporate cultures cannot be decreed from the top as cultures get their power from all of the people within them. While CEOs and other leaders can be influential in culture development, they can also be completely enveloped by powerful cultures that are driven from all levels of the organization and formed over many, many years.

That said, I believe there are certain dynamics that drive cultures, and we can influence and shift cultures by focusing on these key areas.

Without further ado, here are what I believe are the four key facets of a truly customer-centric culture:

1. Faith
   Customer-centric organizations believe in an almost religious way that sales and profits are the by-product of great customer experiences. They are unwavering in their belief that intense focus on creating the best possible experience for their customers is the best way to grow their businesses. Some of these organization will go as far as saying sales don’t matter, but that’s not exactly accurate. All businesses need to create profits, but truly customer-centric organizations focus on the customer experience and not on directly “driving sales.” They believe the best way to improve sales is to view them as an outcome of great customer experiences rather than something that can be directly affected.

   I once had the opportunity to meet with Yahoo and Google in back-to-back meetings regarding potential partnerships with my company, and the two discussions could not have been more different. The Yahoo team was very focused in determining how the partnership would increase Yahoo’s revenues while the Google team interrupted us immediately when we began to discuss revenue. They said they were only interested in opportunities that would enhance the Google experience for their users. Period. I didn’t take this to mean they weren’t interested in growing their business. They simply believed that Google’s purpose was to help people find all the world’s information, and they would maximize their revenue by delivering on their purpose in the best way possible for their users.

2. Fortitude
   Relentless focus on the customer experience is not easy, particularly for public companies. Truly customer-centric organizations constantly have their faith tested by both external and internal forces who are looking for short-term sales or profits, even if those sales and profits might come at the expense of the customer experience. Customer-centric organizations focus on the value of a customer engagement cycle that relies on great customer experience as an engine that drives retention and positive word of mouth.

   There will always be pressure to run short-term promotion to goose sales. It’s not that customer-centric organizations don’t run promotions; it’s just that they run those promotions in context of their larger purposes in service of their customer. They focus on earning  sales and loyalty rather than buying sales and loyalty.

3. Employees first (even before customers)
   It may seem counterintuitive to say customer-centric organizations put their employees before their customers, but in my experience this is true and this may actually be the most important of the four keys I’m discussing here. It’s a bit like when we’re instructed by flight attendants to secure our own oxygen masks before helping our children secure theirs. All employees play a part in the experiences we provide our customers. Some have direct contact with our customers and others make daily decisions that ultimately affect the experiences our customers have with us. Their attitudes about their jobs and the company can make or break the experience they provide for our customers. This is sort of obvious for front line staff like store associates and call center agents, but it’s also true for site developers, delivery truck drivers, mid-level managers, executives and, frankly, janitors. Even those not on the front lines are constantly making decisions that affect our customers’ experiences.

   Truly customer-centric organizations therefore provide absolutely great career experiences for their employees so their employees pass along the greatness to their customers. While decent salaries are certainly a factor, money alone is not enough. An “employees first” approach means employees are treated with great respect. They’re trusted with the authority to deliver on clearly defined accountabilities. They’re also given clear direction and clear guidelines and fully supported when they make decisions that improve the customer experience.  Colleen Barrett, President Emeritus at Southwest Airlines (a customer-centric organization), also points out that the customer is not always right. There are scenarios where the customer is clearly out-of-bounds and truly customer-centric organizations know when to support an employee over the customer. Watch a brief clip of her discussion at the recent Shop.org Annual Summit for some of her keen wisdom on empowering employees and defining an employee-first, customer-centric culture.

4. They talk the talk and walk the walk
   As Sarah says in her question, most retail organizations profess to be customer-centric. Those that truly are customer-centric talk about customer experience internally exponentially more than they talk about it externally. Strategic and tactical discussions always center around improvements for the customer. These organizations measure the success of their businesses by metrics that represent the perceptions and voices of their customers. They spend a lot of time and effort ensuring these voice of customer metrics are credible, reliable and accurate, and they focus on them incessantly. These metrics are the first metrics that are discussed in weekly staff meetings from the executive level to the front line level. Bonuses are driven by these metrics, too, but the regular discussion of the voice of customer metrics and the drive to improve the experience on a daily basis is what separates customer-centric organizations from companies that discuss sales first and customer metrics later, if ever.

Are these attributes ideals for a perfect world that aren’t rooted in reality? I don’t think so. Organizations such as Google, Zappos and Southwest Airlines attribute their success to such thinking, and based on some of my experiences with them they seem to be living up to the promise. Is it easy? No way. While earning loyalty may not yield the immediate sales results buying loyalty can, the longer term efficiencies gained through providing great customer experiences can more than make up for the difference.

Those are my observations about customer-centric cultures. But as I said a the beginning of this post, I am not an expert. I’m very curious to hear from you.

What are your observations about customer-centric cultures? Have your worked for such an organization? Did true customer-centricity ultimately lead to solid financial results? What would you add to the keys I’ve listed?

(By the way, this is the first time I’ve had a reader submitted topic for discussion, but I would love to have more. Please email me at kevin.ertell@yahoo.com if you’ve got a topic that would be good for discussion in this space.)

Clearly, the cartoonist was frustrated with some recent visits to university websites. But it’s not hard to apply his Venn diagram to many of our retail website home pages (and many other pages as well).

If we were to diagram our own sites — breaking out our customers’ expectations and our own objectives — what would be contained in our overlap? How often during the internal battles for homepage real estate are customer expectations considered? And when they are, how quickly are they pushed aside when conflicting internal objectives over limited real estate means something has to give?

Does the merchant who’s in our face get priority over the customer who is not?

Assuming we’ve got a list of customer expectations or objectives, how were they determined? Would the items in our “customers’ expectations” circle be our perceptions of our customers’ expectations or would they be expectations gathered directly from our customers? You might say there’s no distinction between the two, but my experience tells me there is often a significant gap. This is because those of us who work on sites day in and day out are about the worst possible people to understand our customers’ perspectives. We simply know our sites and our business way better than our customers ever will, and our knowledge clouds our ability to see our sites and our businesses in the same way our customers see our sites and our businesses.

Oh, yeah. To add to it all, believe it or not, our customers are not of a single mind and a single purpose. It’s hard enough that we’ve got to deal with competing internal interests; we’ve also got to somehow provide a self-service experience for our customers that magically anticipates and responds to their expectations and objectives.

So, these are a lot of questions. What do we do about it?

1. Objectively understand customer expectations and objectives, directly from our customers.
   This is, of course, not as simple as it sounds. We’re dealing with the human psyche, which is a complicated thing. It’s important we ask questions very carefully to ensure we are getting accurate results. For example, the Myers-Briggs test is a scientifically proven method for assessing personality. If you’ve ever taken it, you know how thorough and accurate it is. The results you get are very different than you would get if you simply asked someone to describe his or her personality. It’s also important that we collect this data properly, ensuring we get a representative sample of our customer base that is statistically valid enough that we can project our findings on our entire customer population. In other words, simply asking the next 15 customers we come in contact with is not enough. When done correctly, customer surveys can be extremely reliable, accurate, and predictive and can give us an excellent view into our customers wants, needs and expectations. It will come as no surprise that I am a huge (and admittedly, biased) fan of ForeSee Results’ ACSI methodology because it asks a series of well-tested questions that have been scientifically proven to draw precise, reliable and accurate information from respondents.
2. Educate internal constituencies
   Once we understand our customers’ objectives — from their perspectives — we need to educate our internal partners in an effort to align their strategies with our customers’ needs. Ideally, they’re already aligned, but my experience tells me that daily internal pressures have a way of evolving (or should I say devolving) their individual strategies away from customer needs.
3. Map out a strategy that responds to key personas and/or purposes
   Delivering on multiple objectives requires a lot of thought and planning. Meeting the needs of so many constituencies, customer and internal, can be tricky. I highly recommend reading Bryan and Jeffrey Eisenberg’s excellent book, Waiting for Your Cat to Bark, for some quality advice.
4. Personalize and customize
   While online real estate is technically unlimited, trying to simultaneously meet too many competing objectives can lead to a chaotic mess. I won’t call anybody out specifically, but surely you’ve see the type of site I’m referencing. Companies such as Monetate and Certona have site personalization capabilities that can take what we know about the customer, where’s she’s coming from, what search term she might have used and even, in the case of Monetate, what the current and upcoming weather in her location is, to help us make some determinations about the configuration and content of the page she might see.

To be sure, filling the overlap circle of our Venn diagram is not easy. But in a world where low single digit conversion rates are all too common, focusing on discovering and then meeting customer expectations is the quickest way to improving business and gaining market share.

What do you think? What fills your Venn diagrams? How do you understand customer expectations and objectives?

Cartoon: XKCD

The missing links are Satisfaction and Referral.

Before discussing these missing links, let’s take a quick second to define the other stages:

Awareness: This is basic branding and positioning of the business. We certainly can’t progress people through the cycle before they’ve even heard of us.

Acquisition: I’ve always thought of this as getting someone into our doors or onto our site. It’s a major step, but it’s not yet profitable.

Conversion: This one is simply defined as making a sales. Woo hoo! It may or may not be a profitable sales on its own, but it’s still a significant stage in the cycle.

Retention: We get them to shop with us again. Excellent! Repeat sales tend to be more profitable and almost certainly have lower marketing costs than first purchases.

Now, let’s get to those Missing Links

In my experience, the key to a strong and active customer engagement cycle is a very satisfying customer experience. And while the Wikipedia article on Customer Engagement doesn’t mention Satisfaction as often as I would like, it does include this key statement: “Satisfaction is simply the foundation, and the minimum requirement, for a continuing relationship with customers.”

In fact, I think the quality of the customer experience is so important that I would actually inject it multiple times into the cycle: Awareness, Acquisition, Satisfaction, Conversion, Satisfaction, Retention, Satisfaction, Referral.

Of course, it’s possible to get through at least some of the stages of the cycle without an excellent customer experience. People will soldier through a bad experience if they want the product bad enough or if there’s an incredible price. But it’s going to be a lot harder to retain that type of customer and if you get a referral, it might not be the type of referral you want.

I wonder if Satisfaction and Referral are often left out of cycle strategies because they are the stages most out of marketers’ control.

A satisfying customer experience is not completely in the marketer’s control. For sure, marketing plays a role. A customer’s satisfaction can be defined as the degree to which her actual experience measures up to her expectations. Our marketing messages are all about expectations, so it’s important that we are compelling without over-hyping the experience. And certainly marketers can influence policy decisions, website designs, etc. to help drive better customer experiences.

In the end, though, the actual in-store or online experience will determine the strength of the customer engagement.

Everyone plays a part in the satisfaction stages. Merchants must ensure advertised product is in stock and well positioned. Store operators must ensure the stores are clean, the product is available on the sales floor and the staff are friendly, enthusiastic and helpful. The e-commerce team must ensure advertised products can be easily found, the site is performing well, product information in complete and useful,  and the products are shipped on time and in good condition.

We also have to ensure our incentives and metrics are supporting a quality customer experience, because the wrong metrics can incent the wrong behavior. For example, if we measure an online search engine marketing campaign by the number of visitors generated or even the total sales generated, we can absolutely end up going down the wrong path. We can buy tons of search terms that by their sheer volume will generate lots of traffic and some degree of increased sales. But if those search terms link to the home page or some other page that is largely irrelevant to the search term, the experience will be likely disappointing for the customer who clicked through.

In fact, I wrote a white paper a few months ago, Online Customer Acquisition: Quality Trumps Quantity, that delved into customer experience by acquisition source for the Top 100 Internet Retailers. We found that those who came via external search engines were among the least satisfied customers of those sites with the least likelihood to purchase and recommend. Not good. These low ratings could largely be attributed to the irrelevance of the landing pages from those search terms.

Satisfaction breeds Referral

Referrals or Recommendations are truly wonderful. As I wrote previously, the World’s Greatest Marketers are our best and most vocal customers. They are more credible than we’ll ever be, and the cost efficiencies of acquisition through referral are significantly better than our traditional methods of awareness and acquisition marketing. In my previously mentioned post, I discussed some ways to help customers along on the referral path. But, of course, customers can be pretty resourceful on their own.

We’ve all seen blog posts, Facebook posts or tweets about bad customer experiences. But plenty of positive public commentary can also be found.  Target’s and Gap’s Facebook walls have lots of customers expressing their love for those brands. Even more powerful are blog posts some customers write about their experiences.  I came across a post yesterday from entitled Tales of Perfection that related two excellent experiences the blogger had with Guitar Center and a burger joint called Arry’s. Both stories are highly compelling and speak to the excellent quality of the employees at each business. Nice!

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Developing a business strategy, not just a marketing strategy, around the customer engagement cycle can be extremely powerful. It requires the entire company to get on board to understand the value of maximizing the customer experience at every touch point with the customer, and it requires a set of incentives and metrics that fully support strengthening the cycle along the way.

What do you think? How do you think about the customer engagement cycle? How important do feel the customer experience is in strengthening the cycle? Or do you think this is all hogwash?

The overall best e-commerce site award goes to:

Moosejaw.com

Moosejaw has it all. They’ve done an excellent job creating a very intuitive site that provides lots of options to narrow your selection; you can easily sort by price, color, size and brand. They have lots of what they call “custy reviews” available for their products, and you can even choose a “custy reviews” search/browse results page that highlights recent reviews in the product listing. Moosejaw has a great checkout process that does a good job of guiding the customer through the process, and their error messaging is clear and easy to understand. And no commentary on Moosejaw would be complete without mention of their Madness section, which is full of wacky content that keeps you coming back for more. In a final stroke of branding brilliance, Moosejaw provides free Moosejaw flags to anyone who requests them, and encourages people to take photos of themselves with Moosejaw flags at the height of their adventures, literally, like at the top of a mountain. What a brilliant way to make your customers your greatest marketers. As a final point of support for this award, when I asked people around the office for their favorites sites, Moosejaw was by far the most common choice.

Runner-up

Net-a-Porter

Net-a-Porter shows they understand how their customers shop, and they understand that the self-service experience of the web requires extra attention. They have a prominent “What’s New” section, and their landing pages get right to the products (without lots of “window” signs screaming about promotions). Each item in the listing has an alternate view when hovering over it, which is becoming fairly common, but Net-a-Porter uses and alternate view that features the item being worn rather than just showing it from the back. When you click through to the product pages, there are many more product views and some items have an excellent video of a model walking in the clothes so customers can see how the clothing looks in action. Finally, there are details about how items fit and an invitation to contact a “Fashion Advisor” for more help if you need it.

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Best use of video:

K-Swiss

I’ve always wondered why more sites don’t do what K-Swiss is doing with their product videos. Namely, use them as the primary image for the product when they’re available.

When you arrive at a product page that features a video (which, unfortunately, isn’t all of them) the video launches immediately and shows a model walking in the item. You can easily switch the view to see her walking from the front, from either side and from the back.  And best of all, there’s not sound that could get a workplace shopper in trouble. K-Swiss also features multiple static images of product to ensure customers are getting as much information as possible.

Runner-up

Ice.com

Ice.com is also making excellent use of video and using it as their primary image when a video is available. And they’re getting great results. Ice’s Pinny Gniwisch reports conversion rates jumping a whopping 400% after customers view a video, and return rates drop 25% for products with videos. Video really helps give customers a much better understanding of what they’re buying, which helps to remove one more barrier to purchasing products online. I’m really impressed with the quality of the short videos they’re producing, as well. The folks at Ice.com clearly understand the value of video, and they’re making the right investment to improve their business.

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Most interesting merchandising tool:

Polyvore

Polyvore is not a retailer, but that doesn’t mean there’s not something to learn from or leverage what they’re doing. They call themselves “a fashion community site that lets you mix and match products from any online store to create outfits or any kind of collage. It is also a vibrant community of creative and stylish people.” They have a really cool drag and drop capability that let’s visitors “create looks” from product feeds from many different retailers. Essentially, the visitors become merchandisers, and they’re looks are posted to be voted on and commented on by the community. The best looks rise to the top. There are some really amazing collections, and of course each product has a buy button. Polyvore is now making their technology available to retailers, as can be seen in Charlotte Russe “Design Your Outfit” section.

Runner up:

Hunch

Hunch is also not a retailer, but as with Polyvore, there’s lots to learn and leverage. Hunch describes themselves as “a decision-making tool that gets smarter the more you use it. After asking you 10 questions or less, Hunch will provide a concrete result for decisions of every kind.” Basically, they ask you a series of questions and then provide product recommendations that match. The general concept is not new, but Hunch’s implementation is the best I’ve seen and it gets better the more it’s used. They’re using the community to build and refine the question sets, and they’re covering a massive range of topics. The whole experience is really addictive.

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Most proactive:

Restaurant.com

Poorly written error messages are the bane of the web and a shameful way to lose sales, as I’ve previously discussed. But even well written error messages can be annoying because they come after the fact. Restaurant.com has taken a proactive approach in their account creation process. As a visitor enters a form field, a small box appears to the right giving the user detailed descriptions about what’s expected to be entered and, when appropriate, giving the reason why it’s important. Try it out to see how helpful it is.

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I could go on and on about lots of great features on a lot of different sites, but the seven above really stood out for me as great examples worth checking out.

But there are tons of great sites I haven’t even seen.

What sites stand out for you? I would be grateful if you’d use the comments section to share your favorites with the rest of us.