How Small Customer Experience Improvements Can Add Up

How Small Customer Experience Improvements Can Add Up

How small customer experience improvements can add up to big changes, why signs tell you more than just where the bathroom is, and the do’s and don’ts of return policies.

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Full Episode Details

How Small Customer Experience Improvements Can Add Up

Bite-Sized Delight From the Episode:

  • How you can use small customer experience improvements to make a big impact.
  • Why L.L. Bean changed their famous return policy.
  • What office signage says about worker morale.
  • Using customer segmentation to deal with problem customers.

CX PRESS: 1 Percent Improvement [02:07-10:20]

This week we take a look at James Clear’s article, entitled, “This Coach Improved Every Tiny Thing by 1 Percent and Here’s What Happened.” Dave Brailsford used “the aggregation of marginal gains” to help Great Britain’s professional cycling team win the Tour de France. By improving everything that they did by 1%, and those small advancements added up to big improvements. We look at how you can make small customer experiences improvements add up for your business.

Tweetable Quotes

Empower your employees to make the change at the moment they notice it. #CX Click To Tweet

The secret to big success is making small customer experience improvements. #CX Click To Tweet

The British cycling team won 70% of the gold medals at the 2012 Olympic Games. #CX Click To Tweet

Companies focus on major policy shifts, but little enhancements have a huge impact. #CX Click To Tweet

Takeaways

  • Many companies focus on major policy shifts, but little changes can add up to have a huge impact.
  • Look for customer experience improvements that seem small but might have a compounding effect.
  • Once you make an improvement in one area, look to other areas and find ways to make incremental improvements there, too.

THIS JUST HAPPENED: L.L. Bean [10:20-19:45]

L.L. Bean is famous for its return policy, which lets you return an item at any time and for any reason. It’s been that way since the company’s founding in 1912, but they’ve had to change it because people have been taking advantage of the policy for cash. The number of returns had doubled in the last five years and was costing them $250 million. Dan and Joey discuss whether or not the company made the right move.

Tweetable Quotes

It’s a shame when the behavior of the few impacts the experience of the many. #CX Click To Tweet

Consider a move to go in the right direction even if it doesn’t solve the problem. #CX Click To Tweet

I’m a big fan of firing customers that aren’t a good fit. #CX Click To Tweet

Give the majority of your customers the best deal possible but keep the gamers at bay. #CX Click To Tweet

Takeaways

  • Find a way to keep the people who game the system at bay while giving the vast majority of your customers the best deal possible.
  • You can fire a customer who isn’t a good fit.
  • When you need to make a sweeping policy change, consider the move that gets it going in the right direction, even if it doesn’t solve the problem.

DISSECTING THE EXPERIENCE: Restroom Signage [19:47-28:47]

Joey was at a rental car agency recently when he spotted a wall with FIVE signs pointing towards the restrooms, all on the same wall. We talk about office signage and how that sets the tone for the customer experience, and how changing it can make customer experience improvements.

How Small Customer Experience Improvements Can Add Up

Tweetable Quotes

I spotted a wall with five signs pointed towards the restroom. #CX Click To Tweet

Signs can be a great asset, but they can also promote bad customer service. #CX Click To Tweet

Make sure you cover the basics to establish foundational customer experience. #CX Click To Tweet

“Everything Click To Tweet

Takeaways

  • Don’t assume that someone new to the building knows where everything is.
  • Everything in the office contributes to the customer experience.
  • Take a look at the layout of your space and make sure you’re communicating what you want to communicate.

CHECK OUT THIS NUMBER: 15x [28:49-31:02]

Customers with the highest likelihood to return an item are 15 times more likely than normal customers, according to research from Custora. Insights like these and more from Oracle CX.

Tweetable Quotes

Customers with the highest likelihood to return an item are 15 times more likely than normal customers. #CX Click To Tweet

Takeaways

  • Segment your customers and figure out how to communicate to problem customers differently.

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Episode Transcript

Joey Coleman:

Get ready for an episode of the Experience This! show.

Dan Gingiss:

Join us as we discuss the smallest improvements a cyclist can make, the end of an era for the maker of duck boots and going overboard with restrooms signage.

Joey Coleman:

Cyclist, duck boots and restroom signage, oh my!

There's so many great customer experience articles to read, but who has the time? We summarize them and offer clear takeaways you can implement starting tomorrow. Enjoy this segment of C express where we read the articles so you don’t need to. Today's C express article comes to us from my good friend and super thinker James Clear. James is an absolutely incredible researcher and writer who specializes in uncovering the habits and routines that make exceptional people the best at what they do.

His article is entitled This Coach Improved Every Tiny Thing By 1% And Here's What Happened. Back in 2010, David Brailsford was faced with an incredibly difficult task. No British cyclists had ever won the Tour de France. He was hired as the general manager and performance director for Great Britain's professional cycling team and asked to change that. He was tasked with developing the team in a way that one of them would go on to win the Tour de France. That was the goal.

Dan Gingiss:

So, Brailsford's plan was brilliantly simple and it focused on something that he called the aggregation of marginal gains. Now, what does this mean? His goal was to improve everything the team did but only by 1%. He felt that the small enhancements would add up to a remarkable improvement. So, he started with the obvious things like rider nutrition and weekly training programs, the weight of the tires, etc. Then he looked at improving the tiny things that the competition wasn't even thinking about paying attention to let alone actually paying attention to it. These were things like discovering the pillow that offered the best sleep and taking it with them to hotels and testing for the most effective type of massage gel or even teaching riders the best way to wash their hands to avoid infection.

Joey Coleman:

This plan was crazy, right? It was extremely radical. It was not anything that was even being considered in the world of cycling, but it was also extremely detailed. Brailsford believe that if they follow this plan and kept at it, they would win the Tour de France in five years. Sadly, he was wrong. They did it in three years. Not only did Sir Bradley Wiggins become the first British cyclist to win the Tour de France and probably have the coolest name of anyone that ever won the Tour de France, but later that year Brailsford coached the British cycling team at the 2012 Olympic Games and obliterated the competition. They won 70% of the gold medals available in cycling.

Now keep in mind this was the same team that have not done well at international competitions before and they go to the Olympics and they win 70% of the golds. The interesting thing is the team actually repeated their success the following year winning the Tour de France again but this time with a different rider. So, it wasn't even like, "Oh the same person won it a second year in a row." No, these philosophies and this approach won it a second year in a row.

Dan Gingiss:

So, what can we learn from this and how can British cycling behavior actually help us with our customer's experience? Well, to start with, the secret is making these small improvements. I think all too often companies focus on gigantic major policy shifts or changes to the vision and mission that they believe will radically improve the customer experience. The thing is, is that at the same time it overlooking these little enhancements that could actually have a huge impact when you add them all up.

Joey Coleman:

The crazy thing about focusing on these 1% Dan is that improving by 1% isn't really notable and as the author of the article James Clear mentions it's something that often isn't even noticeable, but it can be incredibly valuable. These small choices don't make much of a difference at the time, but when you add them up, they have a really compounding effect long term.

Dan Gingiss:

For sure. I think the way that businesses can adapt this and we talked about this before is step into your customer shoes, make sure that you are experiencing your business as a customer would every step of the way. So, I used work for a credit card company. Go online and apply for a credit card. Fill out that long application. See if you understand what it's asking for. See how long it takes you. See what happens when you make a mistake. All of these things present you with these opportunities to make these little 1% changes, because sometimes you'll intentionally cause an error on a form for example and you'll see that the area your message shows up in a red color that's too bright and is difficult to read. So, you change it into something that's more readable. That's an example of a 1%. It's not notable. It may not even be noticeable to most people but it's going to simplify the experience. You do 100 of those and now you're making real progress.

Joey Coleman:

Absolutely. I think two pieces. Number one, you're spot on when you talk about these little things. So, for example, there are many online kind of e-commerce type sites that I go to now where they had that little checkbox that allows you to say that the billing address and the shipping address are the same and so they prefilled the fields for you. That's a tiny little improvement that makes moving through the shopping cart faster. Some of the ones I really like are the ones that will ask for your zip code first and then they'll pre-populate the name of the city and the state. Now this probably only saves seconds or even milliseconds of your time, but these are the type of things that as a customer I notice and appreciate. I think focusing in on these little things is hugely important.

The second point I wanted to make on this is that I think the way the you really want to think about this within your organization is to empower your employees to make the change at the moment they notice it. What I mean by that is if they realize that an improvement can be made, empower your employees to take the 15, 20, 30 minutes, hour, half day, whatever it is to make the improvement right then and there. Also, often I think these things get turned into a suggestion box. That again float up to management and once a quarter we review these and decide what one we're going to implement. Instead, if you have customer experience focused culture in your organization, you can empower people and just say, "Hey, make the improvements you need to make." Now everyone's making improvements 1% at a time which has gigantic impact on the organization.

Dan Gingiss:

I love that you mentioned the zip code because what I notice is when they asked for the zip code first and then it doesn't automatically fill in the city, I'm like, "But, you already know. Why are you making me do this?" This a great article and there were great takeaways and I would say the three are number one, the secret to big success is making small improvements. Even these 1% improvements but making them again and again across all of your interactions with your customer. I think number two is if you want to go above and beyond, look to these improvements that seem small but have a compounding effect. So, the cyclist who looked at the pillow they slept on at night. You can consider the phone headset that your customer service reps use.

If they're a little bit more comfortable, maybe they're a little bit more friendly to their customers and maybe they have a little bit better reviews on the surveys from customers after that. Little things add up to big results. Finally, number three, once you make an improvement in one area of your customer's experience, look to other areas and find ways to make incremental improvement there too. By the way, you might be able to make the same improvement. So, that example that I gave at the red text might work in other places on the website as well and in a very small amount of time. What you're going to find is that all these 1% improvements have produced a dramatic enhancement in your overall customer experience.

Joey Coleman:

We love telling stories and sharing key insights you can implement or avoid based on our experiences. Can you believe that this just happened? So Dan, did you see the news from L.L. Bean recently?

Dan Gingiss:

About the change to their famous or shall I say infamous return policy?

Joey Coleman:

Yeah, exactly. So, we talked about the lands and version of this policy you way back in episode four Flamethrowers Fashion and Fiberglass, on my! Lands' End has been famous for years with their extremely generous return policy. In short, there is no time limit on the returns and ironically enough the fellow outdoor clothing retailer L.L. Bean had a very similar policy that allowed you to return any item any time for any reason after you purchased it. What's interesting is I kind of did a little research into this and it's been that way since 1912 when Leon Leonwood Bean, L.L. Bean, founded the company and he didn't want his customers to be dissatisfied because the first hundred pairs of hunting boots that he sold, at least according to the legend, resulted in 90 of them, yes 90, being returned due to flaws in the boot. So, they kind of created this policy that, "Okay, we'll take care of you and we have these lifelong warranties on our products."

Dan Gingiss:

Yikes on the 90 boots, but it's a pretty big shift for L.L. Bean. My wife's been a customer. Her family has been a customers of L. L. Bean for many, many years and this is a big part of why they love the company. In their announcement, the company said that the new policy will still allow returns for up to a year after purchase and it will require a proof of purchase as well. Unfortunately, as it turns out, people were taking advantage of the policy by doing things like … When I saw this I couldn't even believe it.

Joey Coleman:

I know it's crazy.

Dan Gingiss:

They go in thrift stores and even in trash bins and finding old L.L. Bean clothing and then returning it to the store for a refund, which I mean, come on people, but according to the company the abuse and fraud had doubled the number of returns that the company had seen in the past five years and was costing them over $250 million. Joey, what do you think of this change?

Joey Coleman:

So, here's the deal. $250 million is a huge amount of money. This is a big problem, but while I understand that they needed to do something about it, to be honest, I kind of disagree with the way they went about it. I don't think they should've made a blanket announcement on Facebook. It really didn't feel spot on with their brand and there are ways that I think they could've gotten around this. I had the pleasure of working with Zappos years ago. One of the things that I talk to their CEO Tony Hsieh about what Zappos return policy, which basically is you can return the shoes for any time up to one year after you purchased them and this is for shoes. Shoes are something that once you wear once, it's pretty obvious that you've worn them.

I asked Tony, I was like, "How do you handle this? Aren't you afraid of people abusing it?" He says, "Yeah, look, the fact of the matter is there are some people that abuse it. We track it internally in our system and once they reach a certain threshold, which is a secret, but it does happen, once they reach that threshold, we tell them that they're not welcome to be a customer anymore and we just kind of had them exit our business." As you know about and I think we've talked about on the show, I'm a big fan of firing customers that aren’t a good fit. I think there would've been an opportunity here.

Now, the difference to full disclosure between Zappos and L.L. Bean is, L.L. Bean has online sales but they also have retail physical store sales. So, it's a little more difficult to manage this from like a CRM type interaction where they'll actually be able to track whereas Zappos is all online so it's a lot easier for them to know when a customer is doing a return. I do think there might've been some other ways for them to handle it, but again, I empathize with the fact that they were losing $250 million over the last five years on this type of kind of abusive fraud. That's my thought. I don't know. What do you think Dan this change in policy and how they approached it? Any thought?

Dan Gingiss:

I felt for them here. My first job when I worked at Discover was running a rewards program. This is true of all credit card companies, but it's the same kind of thing is that you have a few people taking advantage of the rewards program in a way that frankly makes the whole program more expensive, and therefore, by definition makes it less valuable for everybody else. So, one of the strategic challenges is how you keep these, we call the gamers, how do you keep the gamers at bay because you want to give the vast majority of your customers the best deal possible. I think your Zappos story is a great answer.

It was kind of what I was thinking as you were talking about the announcement was the people that are going to thrift stores and through garbage cans are probably doing this often. They're doing it more than once. So, at some point, they should be tagged. I'm not sure that you say I don't want to be a customer anymore but you certainly can say, "I'm not going to accept returns from you anymore." You know what, even if you do that Joey, they'll figure out a different way. They'll go to the thrift stores and by 10 items and they'll give them to 10 of their friends to return. One thing that I learned about gamers is they will go to great lengths to abuse the system no matter what barriers you put in the way.

So, to that extent, I think that L.L. Bean made the right decision. Frankly, a year after purchase is still an extremely generous return policy. I mean like especially for a company that sells gear and clothing and shoes and things that you are wearing and using, to be able to go buy a pair of hiking boots go for a hike and then return them is ridiculous. They shouldn't take those hiking boots back, but they will for a year. So, I think it's still an extremely generous policy. I think they still have people gaming it unfortunately, but I understand why they did it. There's other reasons to love L.L. Bean. The quality of their products is really, really good and so I think in the end of the day, this will not hurt business very much. The reason is because the only people it really hurts is that tiny, tiny percentage they're taking advantage.

Joey Coleman:

I agree with you on that. I think that some additional clarifying comments have come out from the management team at L.L. Bean afterwards where they said, "Look, we realize this is a big change, but this is really only going to impact the abusers. It's not going to impact the customers who were being respectful of the policy." I think that makes sense. Where I do think it's going to get interesting and this is the lawyer in me, I noticed a couple of people on social media complaining about the contract that they had. That when they made their purchase, this warranty was in place and that they're now changing it. Whether it was a warranty or a guarantee is something that will I'm sure be sorted out on the court somewhere. This is pseudo-dangerous territory here, but I think the end of the day L.L. Bean probably comes out on top. The messaging and the PR and kind of handling this right now is going to be interesting to see how they take this and run with it or don't going forward.

Dan Gingiss:

Yeah. Look, I don’t know if our listeners fall into this category, but in case they share this episode with anybody they know, if you are doing this, please would you please find another vocation and another way to make money. It really does suck when you ruin it for everybody. We see it in other places. It's not just this industry. It's in the number of industries. If anything, I think my reaction to this was I was sad. I was sad that they had to make this change, because I guarantee you they didn’t want to make the change, but they felt like they had to because it was simply causing too much money and it really is a shame that we just have people in the world that do that.

Joey Coleman:

I agree with you Dan. It's a shame when the behavior of the few impacts the experience of everyone. To be clear upon further reflection, I hope I didn't sound like I was being too critical of L.L. Bean. I absolutely understand they had to do something. I think the moral of the story here at least for me is when you need to make these sweeping types of policy changes and I'm sure they spent a lot of time thinking about it, consider the move that gets it going in the right direction even if it doesn't completely solve the problem.

They have taken that what averaged out to be probably $50 million of loss a year and knocked it down to 5 million by upgrading their systems and really tracking everyone that did returns or something. I don't know but the moral of the story is I wish them the best. I hope it works out well. I agree with you. It's a great company with a great story and a great tradition. I think when the dust settles, they're probably just going to be fine. Good luck L.L. Bean. We love your duck boots.

Sometimes a remarkable experience deserves deeper investigation. We dive into the nitty gritty of customer interactions and dissect how and why they happen. Join us while we're dissecting the experience.

Do you believe you can overdo it when it comes to signage for your customers Dan?

Dan Gingiss:

You know I am a big fan of signage. I think it's important to make signage clear. I think that telling people things more often than less is generally good rule to follow. Why do you ask?

Joey Coleman:

As a general rule Dan I totally agree with you, but I had an experience at a rental car agency recently that made me question everything I believe to be true about signage. I found myself renting a car and while in the airport car rental location, I spotted a wall with five signs showing an arrow pointing towards the restrooms.

Dan Gingiss:

Five signs? Are you kidding me? I hope you took pictures.

Joey Coleman:

Don't worry baby, of course I did. As much like you, I have joy of finding great little things and capturing them and so we will include the photo in the show notes, but there were five separate signs. Now to be fair, one was the traditional kind of metallic bathroom sign showing the icons for man and a woman and the word restrooms printed on it, but that sign had a neon yellow arrow underneath it made of tape kind of like that colored duct tape you can get. In addition to this, there were four black and white signs printed with a large arrow pointing to the side and the word restroom that was strategically placed all on the same wall.

Dan Gingiss:

Wait, so there were five signs all pointing to the same restroom all on the same wall?

Joey Coleman:

Correct.

Dan Gingiss:

That's absolutely outrageous.

Joey Coleman:

Yeah, it was ridiculous. They are on the same wall in the middle of a room. Like I said, we included the photo in the show notes experiencethisshow.com so you can go check out this for yourself and experience the insanity of this signage.

Dan Gingiss:

So, I mean I'm truly befuddled about this one. Did you have any idea why this happened?

Joey Coleman:

To be candid, I don't know for sure, okay? I didn't feel compelled to ask while I was there basically because of the tone and tenor and the attitude of the people that I dealt with. As a result, based on the attitude of the employees of this rental car company, I think what happened is someone got tired of people asking where the restrooms were located and either one or more employees got so irritated by this that they just go bonkers with their signage and start pasting things all over the wall.

Dan Gingiss:

Either that or somebody lost a dare or there was like an office contest or something. I kind of can see where this is going. I've seen in like some government offices sometimes you find these like snarky cartoons about … or signs about rude customers or what have you. They do kind of set the tone for frankly what you should expect in terms of the experience at that location. Did that happen here?

Joey Coleman:

Yeah. I mean I know exactly what you're talking about. It was definitely not a good experience with this rental car company. I know what you're talking about. These signs always make me cringe when I walk in. Like for example, you walk into the DMV and you see this kind of unofficial piece of cubicle flair that says "We work hard to please everyone but we know we can't. So, if you're hard to please, turn around and go somewhere else." or the one behind the customer service counter that'll say something like, "If you're grouchy and irritable or just plain mean, there's a $10 charge for putting up with you."

These bitter, jaded kind of we think we're being cute but we're going to hang it in the office to kind of exercise our frustrations show up in businesses all over. I've worked in plenty of places that the all too common what I call stack of signs that show up in office kitchens above the sink where they'll be a sign that says like, "Please remember to do your dishes." and then another sign next to that that's like, "No, seriously your mom doesn't work here, don't do the dishes." which has all kinds of horrible gender pre-positioning in that one. Then like the next sign that says, "No serious guys, do your dishes already. I'm not your housekeeper." Each sign gets progressively worse and then if you work at a really awesome place people start making signs about the signs. They'll say, "But actually you look like my housekeeper or whatever." It just falls apart. Yeah, this idea of snarky signs kind of being representative of the experience of the culture, yeah these things are bad and they do show up.

Dan Gingiss:

If you want to have these signs in the back where customers don't see them, that's one thing. If you're right that maybe there were some people at this car rental company that were tired of being asked where the bathroom was, maybe you put up a poster in the back where only the employees see that it has something to do with top 10 answers to the question of where's the bathroom. You could do stuff like that, but putting up five signs and guys when you see this picture, it is really weird. It's like, "What happened here and why?" I think you're probably right that like somebody thought they're probably being funny or this is how they were expressing frustration. You just don't want to do that in front of a customer.

Joey Coleman:

Totally. I think signs can be a great asset to your customers or they can end up being a cancer that grows in your organization in a way that promotes bad customer service and bad experience. These types of snarky signs actually end up leaving a bad taste in the mouth for the customer and in many ways they almost start to justify bad employee behavior as well. Look, I don't think it's unreasonable to have a public restroom in your building if you serve dozens of customers an hour. It's also not unreasonable at a car rental agency to expect that these customers are new to your location. It's not like you rent a car at the same car rental agency every week.

Usually you've flown or traveled to some city that you don't live in and you're walking into a building you've never been in before. The only other time you're going to go in is when you return the car and in fact you're not even going to go in. You're going to stay outside and return it to the car rental attendants out in the parking lot. I don't think this is unreasonable that a customer might not be familiar with the layout and might ask, "Where's the bathroom?" So, I think making sure that you cover the basics is a great way to kind of establish foundational customer experience and doing it in a way that isn't snarky, really make sure that the culture of your organization is supportive of good customer experience instead of fostering these bad behaviors.

Dan Gingiss:

To your point Joey, if everybody's asking where the bathroom is then maybe it isn't obvious. Maybe your signage isn't good. That doesn't mean you need five signs, it just means you need a better sign. So, what can we learn from Joey's experience with the five, count them, five restroom signs? I'd say a few things. The first is when you have customers, they may need to go to the bathroom or they may need a drink of water or they may have other basic needs that they need to take care of and make sure that they can quickly find out where that is. Don't assume that they know just because you're in the same office every day and you know where it is. Don’t assume that somebody new to the building does know.

As we mentioned, make sure that your employees are not creating their own signs that are in view of a customer. It can bring down employee morale. It can affect the customer experience negatively for your customers. It just looks bad for your company. So, don't do it. Everything in the office contributes to the visitor experience and people look at this stuff so make sure that it's positive. Finally, take a look at the layout of your space and the signage and make sure that you're communicating what you want to communicate. I've said this before, I'll say this again. Get into the shoes of your customer. Walk into your retail location and try to find the bathroom and see whether it's easy and see whether the signage is clear or go through some other aspect of the experience that your customer would go through and that will tell you where you need the signs, how many you need and what they should say.

Joey Coleman:

Listen in while we try to stump and surprise each other with the fantastic statistic from the worlds of customer experience and customer service. It's time to check out this number.

This week's number is 15X. What do you think it refers to Dan?

Dan Gingiss:

That must be the new Vin Diesel movie coming out this summer.

Joey Coleman:

I love it. For those of you that are not big Vin Diesel fans like my good friend Dan Gingiss, Vin Diesel started some movies called XXX. No, the 15X I'm referring to is the fact that customers with the highest likelihood to return an item are 15 times more likely to return their purchase than other customers. So, basically that that means is the people are going to do the returns do it at a rate of 15X the normal customer. This comes from research from Custora, an analytics firm that tracks data from over 100 retail establishments in the United States.

Dan Gingiss:

I don't think this is that surprising given our earlier discussion that it's a few bad eggs that can ruin it for everybody else. The key to handling this is to segment your customers. One metric to consider is the return likelihood especially if you work in retail. I think that the retailers that are using data to drive their decisions are leveraging algorithms that predict return likelihood of each customer and that helps them identify these customer segments that have a higher likelihood and then to communicate with them in a different way.

Joey Coleman:

Totally. You can learn more interesting statistics like this one from the SmarterCX newsletter published by Oracle just once a month. This newsletter is a quick and easy read that's going to share great stats, expert insights, links to fantastic articles, all the things your little CX heart desires. It comes to you from our great friends and sponsors of the experience this show Oracle CX cloud. Go check them out at smartercx.com/experiencethis and sign up for their new newsletter today.

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