Joseph A. Michelli, Ph.D., C.S.P., is an internationally sought-after speaker, New York Times #1 bestselling author, and organizational consultant who transfers his knowledge of exceptional business practices in ways that develop joyful and productive workplaces with a focus on the total customer experience. His insights encourage leaders and frontline workers to grow and invest passionately in all aspects of their lives. His latest book is Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way.
In today’s interview with Joseph Michelli you will learn:
- The best examples of customer experience and how you can apply them to your business
- Why companies are using gamification in their customer loyalty strategy
- How to increase customer advocacy and referrals
- Why post-sale has the most opportunity for growth
KELLY: Hi everyone, I’m Kelly, the VP of business development at Social&Loyal, and we are here with Joseph Michelli, a customer experience consultant, international speaker and bestselling author.
JOSEPH: Hello, I’m Joseph and I write business books, consult, and have worked in the space of customer experience for a very long time.
KELLY: How long have you been in the customer experience space?
JOSEPH: Well before customer experience, back when we were still talking about customer service and thinking that was the value proposition. Now we get it, it’s all about engagement, it’s all about driving loyalty, managing the emotional experience as much as the practical experience.
KELLY: Where did you begin your career and then how did you process to start consulting, speaking and writing?
JOSEPH: I got a PhD in systems psychology, went on to work in organizational development and healthcare systems, large healthcare companies. I had the opportunity to consult for small businesses, midsize, and enterprise businesses. I got certified as a customer experience professional, and have worked with some incredible brands which means they have entrusted me to write, things like the Pike Place Fish Market in Seattle, wrote a couple of books on Starbucks, Ritz Carlton Hotel Company, and Mercedes-Benz just to name a few.
KELLY: So how did you get started working with them? Had you worked with them previously? How about the books, what topics do they cover?
JOSEPH: That’s a great question and at some point there’s a time in your career the work starts coming to you, and the last book that I did for example was with Mercedes-Benz. I worked with them over a number of years. I first came to them because they wanted to bring in people from Ritz Carlton and people from Zappos who I had written about to work with the senior leaders of Mercedes-Benz. They wanted to look at what they were doing in digital, in terms of delivering a differentiated experience so Mercedes-Benz brought all those people together and watched them transform what was a really excellent product brand into something that had a better service delivery digitally, and also a better service delivery in what you got when you went to a dealership. So all that said, after a few years working with them they went from about 22nd on JD Powers, to number one on JD Powers, Customer Experience Satisfaction Index, and the next thing you know somebody else is calling. It’s a good gig.
KELLY: So, say you’re a company and you’re trying to make a change, you know you’re not doing great in terms of customer experience and loyalty, where would you say are kind of the first steps you need to take to get started in making a change?
JOSEPH: Well first of all, know you’re not alone. And beyond that comforting awareness that comes with these shared commonalities, execution is the key and understanding customer experiences really narrows down on just perceptions of people based on the contacts they have with your brand. I think it is the time to look at the inventory from a customer’s lens and see where are they touching us across digital, brick and mortar and all the ways in which they interact with you. Once you’ve done an analysis along all the perception points, all the customer journey points make sure that you’re dialed in on who your optimal customer is, who it is you can serve well, effectively and efficiently, who is maybe an outlier who if you try too hard to include them you may lose the core of your business.
So I think having some discipline about understanding core business, these core markets, and understanding that customer journey. Once you have that it’s all about understanding these high value contact points where you can emotionally engage customers, and deliver on whatever it is you’re promising in your brand. If you’re promising ease, then where are the contact points that are really going to prove that you’re an easy brand to work with.
It’s all about that, and then you look at technologies to help you deliver that, automated technologies to help take away some of that friction, digital social technology to get them emotionally engaged, bring their communities in, get them actively interacting with you, creating contact points that are positive and playful and may not even be product related.
KELLY: You mentioned different channels, there are so many channels out there that didn’t even exist years ago, and then you also mentioned the buyer’s journey, we see a lot of potential after the sale to retain and upsell to consumers. What are some ways that you’ve seen these companies, Zappos, Starbucks, etc. actually retain consumers on a large scale.
JOSEPH: I should formally say that the greatest opportunity comes after the purchase. I think oftentimes brands will do a very good job with the marketing, trying to handle the higher value touch points during the purchase up to when they’re cashing out, and then the consumer leaves, and all of a sudden it’s like until you buy from us again we’re not that interested in trying to engage you, but the more you spend time in nurturing a relationship with them after the purchase, the more likely you’re going to be top of the line, top of the heart when it comes time to buy again, and you don’t have to spend quite as much advertising dollars to lure them back to you.
I’ve seen Starbucks use some great social engagement campaigns. In a lot of different markets, I mean you have to think about the competitive space now, not just in the US but if you look at some things that they’ve done in China where they crowd source just the lighting of a downtown square in a park so people would literally activate their friends and engage in certain playful activities. You’ve seen some amazing scavenger hunts using Lady Gaga, releases of her album that creates win-wins between engaging her fan base and activating some behaviors within the Starbucks relationship. These are great examples of competitive relationships, engagement and leveraging, crowd sourcing if you will, getting them to get their platform actively participating with your brand. Some wonderful things going on in the digital space post-sale now.
KELLY: You mentioned some things that I feel can sometimes be classified as elements of gamification. Is that something that you see brands leaning towards, maybe not even using the word gamification, but driving behaviors, not just the classic buy ten get one free?
JOSEPH: Oh yeah. I mean, you can lure people in with free stuff, that works for a while, but you normally have to up the ante all the time. The beauty of gamification, and I see it in all types of brands I work with, and I’m not ashamed to use the word.
I think it’s an absolutely fabulous set of disciplines that help us understand human motivations and help us appreciate that what drives and sustains human behaviors is often not the human drive to just consume things, it’s the need to have our minds engaged, it’s our need to be able to share our stories with others, socially, get them activated in something, it’s our ability to beat something, to achieve badges, to magnify the levels of accomplishment.
We as human beings are motivated by achievement, by mastery, by social, and when you put those things together it really snaps up demand, that you create ways to gamify your business. It can push you beyond the benefits and attributes of your product, it really creates this whole fleet of emotional activators that may not even be inherent in the product you sell.
If you think about the Pike Place Fish Market is a really good example, the products they sell at that tiny little fish market in Seattle, is really slimy dead cold fish, not really a very sexy product. But if you create playfulness by throwing fish and activating it in their actual sales experience, now you only play. And how do you only play in dead fish, that’s because they gamify the sale and show of the fish stand. And that’s a non-digital example.
KELLY: So now you create this positive experience and that’s all great. Now how is there a way to take it a bit further to take it to actual advocacy where you bring in new users, have you seen different brands create a mix between advocacy and gamification to bring in some new users?
JOSEPH: Well clearly you still can tie this into acquiring things. I mean you don’t have to make this separate. You can level up by bringing in new players or new referrals into a business space. For that bringing in of people you can get higher levels, bragging rights and new things. I think the innovation of gamification with loyalty strategies is part of where people are going. It’s one thing to say I’m likely to buy from you again, it’s another thing to say I’m likely to recommend you, and finally it’s even more extreme to say not only am I likely to recommend you, but I just recommended you. I just asked people I know, I just used that advocacy, my voice, to bring in people on your behalf. And there are a lot of net promoters out there who don’t turn out to be actual advocates, they don’t do anymore than tend to recommend.
You have to give them a reason, what’s in it for me to leverage my good name and go prey upon on my social network on your behalf. I think one, delivering great products is part of it, because it’s fun, and because you say to them the more of your friends you engage and play and enjoy the same kinds of things that you’re enjoying, the better off you are with our brand as well. We value you for your advocacy.
KELLY: I want to touch a little bit more and get more specific regarding industries. If you look at food and beverage, these are products that are frequently purchased but the same individual but vehicles for example are purchased every 10 years by an individual. How would you say the customer experience differs in Food & Beverage?
JOSEPH: It’s great if you’re in food and beverage because you have many opportunities to obtain a purchase – I remember a time early on working with Starbucks where they would have an actual magnetic Starbucks cup on top of taxis so it would look like your Starbucks cups were on top of the cab. Anytime someone would go up to the cab driver they’d say hey, someone left their Starbucks cup on the top of your cab, the driver would give them a Starbucks gift card. The notion is if you’re a good Samaritan, Starbucks rewards your good behavior with what, what’s a better reward than our product. Beyond the attention grabbing aspect of it, it was all about saying that we reward people with our products.
KELLY: That reminds me of an amazing example from Kind. It’s the same idea but digital, If you see someone in the street who did something nice for someone else, and you’re able to give them this promo code for a free Kind bar. And then they could then use a promo code with another person and so on.
I think that’s a piece that loyalty programs are actually having a look at, because that’s way more motivational. If I know I’m helping more people and I’m not just getting 10% off my own purchase, that’s a lot more motivational. Is that something you’re starting to see these large or small brands start to apply to their loyalty programs?
JOSEPH: You know every time I do a keynote, I give back to a charitable cause. And we have a group of charities we support and we let our client know you need to choose one of those causes which you want us to make our contribution in their name in. I do think people want to be good and do well, and so I think that sometimes you have to give a Kind bar and let them share a Kind bar, it’s that kind of message that I think people are looking for. There is something in it for me for the effort of recognizing it. But I also want to have impact, and I think certainly millennials want to have an impact in their purchases, they want to do purposeful activity. Make it social and make it purposeful, and make it loyalty building and attract new people. That’s the whole journey, right there, in a nutshell.
KELLY: I want to pivot to talk about transactional based programs, this is something that we at Social&Loyal try to stick away from. We do the integrations, we provide the classic points for dollars, but there’s so much more you can reward your customers for and there’s so much more they can do. 97% of loyalty programs out there are transactional based, what are the three percent of programs that you’ve seen reward users for activities past the sale?
JOSEPH: I just think, part of the reward is discovery. I mean, that’s the joy, or the surprise. If you look at the early iterations of Panera bread, and you’d go in and you’d use your loyalty card, and they’d give you a free something. And you didn’t know when it was going to happen, it was an intermittent reinforcement schedule, as opposed to a predictable, operant reinforcement conditioning kind of model. And so this intermittent schedule is like whoa even though I didn’t know I was up for an award I got one and it’s an item of discovery that I would not necessarily have tried. I think, those models work better for me, or allowing people some kind of choice. These reinforce loyalty stronger than if you look at just conditioning psychology alone.
KELLY: Okay so I want to jump back into your books and speaking arrangements and things like that; do you do arrangements that are open to the public or are they typically events that are closed events?
JOSEPH: I do probably more than anything else corporately sponsored events or conferences, but occasionally I’ll do a public venue here and there, and we’ll do something like that. Most of the work I do for the public is right there in the books and those books tend to cause people to hire me, we do lots of free blogs and podcasts on our website. So strongly, people interested in any of this type of content they’re welcome to just visit the site. I’ve written now eight or nine books in the area of customer experience starting back with the Pike Place Fish Market and the first Starbucks book, and so it’s been a wonderful wild ride ever since.
KELLY: And for anyone reading, watching or listening, where can they actually find more information and find the books?
JOSEPH: I always like to say you can find the books wherever good books are sold. But josephmichelli.com, and you have links there to be able to get to Amazon and get the books.
KELLY: And lastly, to boil everything down, what is one piece of advice to everyone listening that if they only took one thing away from this, what would it be?
JOSEPH: Well the great consultant computer director said ‘we’re not in business to make a profit, we’re in business to make a customer, and through customers all profits come’. And I think the more we focus our lives on understanding what customers want, understanding we can’t be all things for all customers and only targeting the customers we want to engage, realizing that just serving and satisfying them is nothing, unless we can get them their hearts alongside with that and get them emotionally active and interacting with our brands on a regular basis. And we have to drive loyalty, we have to earn it, and we have to encourage people to advocate on our behalf. People don’t automatically refer people, we’ve got to make it easy for them and we got to let them now that we’re a referral business and help us get to know other people who like the kind of things that you like and we’ll be around for a long time to keep you happy.
KELLY: Awesome thanks so much for you time!