Sepp Ruchti

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Targeting an expansion of its insurance-linked securities (ILS) and alternative reinsurance capital activities, reinsurance broker Gallagher Re has announced the launch of a Paris based entity named Gallagher Securities Europe SAS, to grow activities in the region.

Gallagher Securities is the capital markets and insurance-linked securities (ILS) arm of Gallagher Re, providing structuring, arrangement and broker-dealer services such as bookrunning, for ILS and catastrophe bonds, among other instruments.

The company said that Gallagher Securities is “committed to strengthening its international presence, in line with the sustained and steady growth of alternative capital in the reinsurance market.”

Gallagher Securities has received approval from the French Prudential Supervision and Resolution Authority (ACPR) and the Financial Markets Authority (AMF) to create this new European entity, Gallagher Securities Europe SAS.

It is a subsidiary of Gallagher Re’s branch in Paris, Gallagher Re France SAS, and the broking group says the ACPR and AMF approvals underscore its commitment to upholding the highest regulatory standards.

“The launch of our approved securities entity in France is an exciting and important milestone, making us the first major reinsurance broker with a dedicated capital markets hub in continental Europe,” explained Alexandre Delacroix, Gallagher Re Executive Director and leader of the international team at Gallagher Securities, who will lead Gallagher Securities Europe. “In preparation, we have built a strong capital markets team in Paris, which will grow further as both client demand and investor appetite for alternative capital solutions increases.”

Thierry Myara, Managing Director of France, Belgium & Luxembourg at Gallagher Re, added, “We are pleased to have successfully responded to all of the conditions requested by the regulator and are eager to assist our clients in the Eurozone. Having a licensed securities operation here in Paris alongside our traditional reinsurance broking operation will be a tremendous asset for clients, markets and other regional partners as we work together to deliver best-in-class solutions.”

Dirk Spenner, Managing Director, EMEA, at Gallagher Re, also said, “This is a fantastic pan-European initiative, focused on helping clients access the most effective risk transfer solutions to support their portfolios and strategic priorities. Establishing a European hub that brings together our capital markets transaction capabilities in tandem with wider risk management, broking, analytical and advisory services will harness the full power and expertise of Gallagher Re to best meet clients’ evolving needs and deliver on their growth ambitions.”

Gallagher Securities launches European entity, as broker targets ILS expansion was published by: www.Artemis.bm
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Today, almost every industry is vulnerable to the effects of digitization and to what Accenture calls “Big Bang Disruption.” In Big Bang disruption, rule-changing innovation leads to the creation of entire product lines (or the destruction of whole markets) essentially overnight, with disrupters coming from outside the industry that they are disrupting. Technological innovations ranging from smartphones to Big Data analytics to cloud computing make it easier than ever for new challengers – especially those unburdened by legacy systems or brick-and-mortar networks – to gain access to high-quality market information and mass distribution. New services can quickly go from trial to large-scale rollout and massive adoption, and established players can fall quickly by the wayside; think of how mobile GPS applications have taken the market by storm.

The industries most susceptible to disruption are those selling information-based services that can be delivered digitally – and a perfect example is the insurance industry.

We estimate that up to $400 billion in insurance premiums could change hands within the industry over the next year. According to a global survey we conducted, more than two-thirds of customers would consider buying insurance products from non-insurers, and 23% would consider buying insurance from online service providers such as Google or Amazon.

And outsiders are responding, already experimenting with digital approaches to insurance. Tencent and Alibaba, the two leading Chinese Internet companies, recently announced a collaboration with insurer Ping An to offer insurance products online. Google bought U.K. insurance aggregator beatthatquote.com in 2011 and has since launched price comparison sites in the U.K., Germany, and France.

In the life and retirement services area, start-ups such as LearnVest offer personalized financial advice at fixed prices that most middle-class consumers can afford. LearnVest clients have access to a dedicated certified financial planner who can help them better manage their finances and achieve their financial goals, including budget planning, loan optimization, and investment allocation advice.

Of course, it takes more than market research and distribution to be an insurer. And new players face high (but not insurmountable) regulatory barriers, particularly in regard to capital requirements. Many insurers have spent decades establishing well-known and well-respected brands. They have important “hard” assets that are difficult to replicate, like large investment portfolios to back up claims payouts, complex back-office systems, and expertise.

These assets, however, will lose value if insurers don’t develop digital capabilities to meet the changing demands of their customers. At the strategic level, insurers, like other service providers, need to move from simply selling products to delivering “useful experiences.” Our research has shown that customers are willing to pay more for better advice and coverage that is carefully tailored to their individual needs. Customers also want insurance providers to not only insure risk, but to help them manage risk. And the proliferation of connected devices and the “Internet of Things” opens up new opportunities to insurers interested in meeting these needs.

While not new, telematics and usage-based insurance will grow rapidly in the coming years, as consumer acceptance of personal data collection is growing. Insurethebox, a U.K. online carrier that uses telematics to collect its customers’ driving information and reward them for driving safely, acquired 200,000 clients within three years after its launch in 2010.

“Pay-as-you-drive” insurance is a clear example of the growing collaboration between insurers and customers; customers share information and insurers provide better service and lower rates. Smart homes can already send alerts about security breaches and physical threats such as fires or burst pipes. State Farm announced late last year that it is teaming up with ADT, a home security company, to provide a special offer on a home security solution to its policyholders, who may also qualify for home insurance discounts. And in Kenya, weather stations are used to provide farmers with weather index-based insurance coverage. The system enables automatic claim payments based on data from the monitoring stations, which reduces the number of costly farm visits.

For senior management in insurance, and any other industry, the big question concerning digital disruption is not If, but When. With internal and external competitors using innovative technologies to launch products that better fit consumers’ demands, company leaders need to take pre-emptive action or risk the same fate as the pay telephone.

Most companies have taken steps toward “digitization.” They are using digital technologies to increase their own efficiency and to improve the customer experience. The next step is what we call “digitalization” – using digital technologies to create new business models, products, and services, even those outside their traditional businesses. By realizing that digital technologies present an opportunity, and by getting digitalization right, large established companies have a chance of not only surviving, but becoming disruptors themselves, capable of thriving in the new environments they create.

In 1953, at the dawn of modern computing, Nils Aall Barricelli played God. Clutching a deck of playing cards in one hand and a stack of punched cards in the other, Barricelli hovered over one of the world’s earliest and most influential computers, the IAS machine, at the Institute for Advanced Study in Princeton, New Jersey. During the day the computer was used to make weather forecasting calculations; at night it was commandeered by the Los Alamos group to calculate ballistics for nuclear weaponry. Barricelli, a maverick mathematician, part Italian and part Norwegian, had finagled time on the computer to model the origins and evolution of life.

Inside a simple red brick building at the northern corner of the Institute’s wooded wilds, Barricelli ran models of evolution on a digital computer. His artificial universes, which he fed with numbers drawn from shuffled playing cards, teemed with creatures of code—morphing, mutating, melting, maintaining. He created laws that determined, independent of any foreknowledge on his part, which assemblages of binary digits lived, which died, and which adapted. As he put it in a 1961 paper, in which he speculated on the prospects and conditions for life on other planets, “The author has…
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I have for decades watched CEOs and other executives try to explain a corporate strategy to a small group of senior managers or to a much larger group of staff. For the most part, it has not been a pretty sight. In the case of senior managers, I usually hear 3 or 4 different interpretations of what the boss said, or disagreements about what they thought he or she said. In either case, no alignment at the top. In the case of a larger group of staff, often many people look on blankly during the presentation. They may appreciate a CEO’s willingness to share crucial plans. But because they don’t have the context or experience, they can’t even begin to understand what is being thrown at them in a thick PowerPoint deck. And what they do see certainly doesn’t make them want to get up in the morning and come to work.

I have watched CEOs have better success communicating a good vision. It is much shorter, easier to see (literally), at best emotionally compelling. It is the place that a strategy is trying to drive the enterprise. But better success communicating the vision only goes so far. To truly help an enterprise succeed, this needs to be tightly connected to the actual strategy, and often is not. Worse, the vision can come out sounding as if it has no real content, or antiseptic or foggy.

My colleagues and I have found an alternative that is easier to communicate, more effectively aligns people, and generates and sustains energy better and for longer. We call it “The Big Opportunity” and I devote an entire chapter to it in my new book Accelerate. We have been using this in all our field work with different kinds of companies and organizations.  I have been impressed with the power of this simple, clear concept.

Briefly, here is the idea: a Big Opportunity articulates in language that is analytically accurate and emotionally compelling an opportunity that will move an organization forward in a substantial way. It is that exciting possibility which, if you can capitalize on it, will place you into a prosperous, winning future. It is related to vision and strategy in a very straightforward way: a strategy shows you what you need to get to a vision; a vision shows you what you will be doing if you get to, and are able to capitalize on, a big opportunity.

A written statement of a Big Opportunity can be a very useful tool. It is short, like a vision statement, and unlike a strategy description which is often much longer. “Short” usually means about half a page long. The crisp clarity of it is one of its advantages. Another is its tone. Both strategies and visions can sound like: OK, this is what top management has decided and now you will go do it. Effective Big Opportunity statements direct attention to an inspiring rainbow outside; they don’t feel like a finger pointing out what the managerial and employee children should be doing inside the organization.

Big Opportunity statements, as we have used them, have real rational content (like any good strategy) and are emotionally compelling (like any good vision). Here are the basic characteristics of an effective Big Opportunity statement:

Short. Written on less than a page, often just a quarter of a page. Short length makes it easier to share with others and to create a sense of urgency among large groups of people.

Rational. It makes sense in light of real happenings inside and outside an organization. A good statement concisely addresses issues of what, why, why us, why now, and why bother.

Compelling. It is not all head. There is heart in it. And it speaks to the emotions of all relevant audiences — not just to select people and groups, excluding others.

Positive. Because it is about an opportunity, it has a positive tone. It is less like a statement about a “burning platform,” which seeks to scare us out of our complacency, and more like a statement of a “burning desire.”

Authentic. It feels real. It is not just “good messaging” to motivate the troops. The senior leadership team that puts it together, or at least signs off on it, must genuinely believe in it and feel excited about it.

Clear. You can create a statement that is short, rational, emotionally compelling… but still unclear. A great statement makes people rush off in the same direction — not different directions.

Aligned. The statement is aligned with any important existing statements of strategy in the group or organization. Or at the least, it is aware of any non-alignment and the stresses and strains that will create, so leaders are prepared for it.

In our experience, we have found that that you can get 75% of a large employee population to understand, believe in, and be energized by a good Big Opportunity statement in a way that just doesn’t happen with a larger description of a business strategy or a vision. In an increasingly fast-moving world, this achievement can can be hugely helpful in dealing with rapid-fire strategic challenges.

This is the fourth in our Aiming for the Hearts of their Customers interview series, with seven Minnesota customer experience leaders sharing their strategy for the coming year. In this article, we catch up with Lisa Hoene, the VP of Brand and Marketing Services for Allianz Life. You can see all of the interviews here:

• Setting the Customer Experience Stage – Interview with Dave Kirsch, CEO of Shipper’s Supply
• Creating a Customer Experience Capability – Interview with Mara Bain, Chief Experience Officer, Western National Insurance
• Serving Diverse Customers – an Interview with Ghita Worcester, Senior Vice-President of Public Affairs and Marketing, UCare
• Customer Experience is a Partnership – Interview with Robin Schribman, VP of Customer Insight and Customer Experience, Thomson Reuters
• Driving a Customer Experience Culture Change – Interview with Ingrid Lindberg, Chief Customer Experience Officer, Prime Therapeutics
• Customer Experience Drives 37 Consecutive Quarters of Same-Salon Growth – an Interview with Rhoda Olsen, CEO of Great Clips

Overview

Allianz Life Insurance Company of North America (Allianz Life) helps Americans achieve their retirement income and protection goals with a variety of annuities and life insurance products sold through independent financial professionals. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry.

Defining Customer Experience

“Our brand is the essence of our customer experience – everything grows out of our vision and mission. In my role I focus on how we bring our brand to life for our financial professionals and policy holders.”

A challenge for many B2B2C companies is defining the “customer” in the experience. As Lisa says, “We have a long history of thinking of the financial professional as our customer. We haven’t been as good at recognizing and focusing on the policyholder experience and the impact on Allianz Life and the financial professional. We’ve gone through a journey to define who our customer is, and ultimately realized that it is an ‘and’ not an ‘or’.   As we build our customer experience we need to keep in mind both the financial professional and the end customer.

“Part of our customer experience journey is identifying the moments that matter for both the financial professional and the customer. What are the moments for the financial professional that drive that customer experience, and vice versa, and what can we improve?”

Starting with Employee Engagement

“We have strong employee engagement – one of the ‘Best Places to Work’ from Fortune, one of the Twin Cities Best Places to Work, one of the Healthiest Places to Work, and Allianz Life was just named one of the ‘Top 10 Coolest Places to Work’. This is a great foundation for our customer experience strategy. We are really lucky to have that kind of engagement to build on.”

Bringing Customers to Life

“Our Corporate Communications team has been critical to this. Customer stories have been an ongoing focus, whether it’s interviews or videos with financial professionals, customers, or a recent story about one of our service representatives sharing how she helped a customer who was in a really difficult situation. The story showed how she went above and beyond. It showed how employee engagement leads to a better customer experience. It was very touching. It helped everybody understand how each person delivers on the promise of our brand.

2013 Successes

“We tackled some really complex enhancements to customer materials, such as annual account statements. It took a lot of cross organizational collaboration. Since we’re such a highly-regulated industry, a lot of thinking went into this, and what are the impacts of each change. We’re also building out the framework for our digital experience. We can’t call it a success yet, because it will come to life in 2014, but I’m very excited about the future enhancements it will enable.”

2014 Focus

“In 2014 there are two major focus areas: Quality and Culture. We’re making significant investments in improved quality, including technology investments and process improvements. Quality is a key part of our customer experience, and our teams really get that.

“The other focus is continued culture change. We’re creating two customer advocate teams. One team will be housed within our Enterprise Operations department. There is strong commitment to improving the customer experience among the Enterprise Operations leadership and team.  The other area is Marketing. We want to continue to innovate, understanding what products consumers need, and how we can help financial professionals not only bring those products to their customers, but continue to provide valuable service throughout the life of the products. We’re increasing our focus on developing insights that will help us build and distribute consumer-inspired products.

“Part of the culture change is to get more out of our voice of customer and voice of distribution capabilities. We’ve built listening posts in the business to bring in information, but we need a stronger framework to apply that information, make decisions and act. So we’re building a repeatable process for sharing what we gather, especially with the advocacy groups.

“The customer experience management is responsible for managing all of this, keeping the strategy fresh, facilitating the advocacy groups, feeding information and decisions up to our senior leadership steering committee.

“We want to understand even more about the moments that matter for our policy holders. What are the things Allianz Life is doing well, and what are the gaps that financial professionals and customers care about, where fixing them makes them more loyal to us?

“Our goal is to be the most producer- and customer-centric life insurance company in the U.S. That’s a big goal, but our leadership is signed up for it. We won’t be there in 2014, but we’re on that journey, and I’m confident we’ll get there by building on our strengths.”

The post Creating a great customer experience for agents AND consumers – an interview with Lisa Hoene, VP of Brand and Marketing Services, Allianz Life appeared first on Heart of the Customer.

It goes without saying that there is a significant amount of pressure on every sales force to deliver its number. Sales management plays a crucial role in reaching that objective, but can sales performance really be managed? I mean, tactically managed? Our research suggests that it can… sort of.

Vantage Point Performance and the Sales Education Foundation recently conducted a study on the measurement and management of sales forces. We collected thousands of data points from sales leaders in various industries regarding which sales metrics they anxiously monitor on their dashboards, from top-line revenue growth down to the number of sales calls made per month. The data points revealed 306 metrics considered by leadership to be key to effective sales management. But which ones really mattered?

We looked at each metric individually and asked the question, “Can this metric be managed?” Our criteria for managing became that a frontline sales manager could directly influence the metric by asking someone to do something differently and experience the desired change in the metric. Our research confirmed our suspicion that some numbers just can’t be managed, no matter how hard sales leaders try. However, our research also revealed that some numbers can be managed, yet we found that few organizations are actively managing the metrics that are manageable.

We found three different classes of sales metrics, each with its own managerial value and purpose. At the highest level, the sales forces in our study were measuring what we call Business Results. Business Results are the metrics, such as revenue and market share, that represent the culmination of an entire organization’s efforts. As much as sales managers talk about “managing revenue” or “managing market share,” Business Results are ultimately unmanageable. If sales managers could directly manage revenue, then every sales force in the world would exceed its target. “We need more revenue,” would sound from the top. “No problem,” would echo from the bottom. But this doesn’t happen.

We also found that there was a second kind of sales metric that, while not directly manageable, could be heavily influenced — Sales Objectives. Sales Objectives are the specific targets that an organization asks a sales force to reach, like winning certain customers or selling certain products. But Sales Objectives are not directly manageable either. To acquire new customers or sell certain types of products requires consent from buyers, and we all know that buyers are prickly market participants.

What sales managers can control are the third class of metric: Sales Activities. These are the numbers sales managers collect, such as the number of sales calls or percentage of account plans completed. This is very tactical stuff – the stuff that salespeople and their managers actually do. Sales Activities are the metrics that can actually be managed. Want more sales calls each week? Make it happen, sales force. Want more account plans completed? Make that happen, too. You might encounter process or compliance issues, but that’s why you have sales management.

Of course the other metrics are important, but those numbers are lagging indicators. Business Results and Sales Objectives today are the result of Sales Activities last quarter. If a sales force makes more sales calls (a Sales Activity), then it will probably acquire more new customers (a Sales Objective). If more customers are acquired, more sales will likely follow (a Business Result). Or if your sales force does better account planning (a Sales Activity), it will probably do a better job of retaining and growing its customers (a Sales Objective), and if your sales force retains and grows your customers, revenue will pour in the door (a Business Result).

Once senior leadership realizes that the path to increased revenue is a little more nuanced than just riding the sales herd harder, this cause and effect relationship is astoundingly powerful. Sales leaders need to steer their sales force in the right direction with good, crisp Sales Objectives. With clear Sales Objectives, the sales force can better identify what Sales Activities will move the needle. Should I be doing more prospecting or more major account management this week? Well, it depends on which Sales Objective I’m pursuing… new customer acquisition or key account growth. Clarity of task is a powerful motivator.

The only bad news we took from our research is that companies don’t actually measure the metric they can control — Sales Activities. In our study, we found that of all the metrics being used to “manage” sales performance, only 17% were Sales Activities, 24% were Business Results, and 59% were Sales Objectives. That means that 83% of all the numbers on all of the sales dashboard are completely unmanageable. That’s a lot of time spent wringing hands over things you can’t control.

So think about what your sales force does, and think about what you measure. If you’re not confident that your sellers are doing the right things between Monday and Friday, then you might want to give some consideration to that cause-and-effect relationship — Sales Activities drive Sales Objectives that drive Business Results. And if you’re not measuring Sales Activities, then it’s kind of hard to be certain your lagging indicators are going to reveal a healthy company. More time wringing those hands.

Der Schweizerische Versicherungsverband SVV beauftragt das Forschungsinstitut gfs.bern, die Studie «Altersvorsorgemonitor» rund um Wahrnehmung, Einstellung und Forderungshaltung der Schweizer Stimmberechtigten zum Thema Altersvorsorge durchzuführen.   nicht im Bereich Naturgefahren

As an executive vice president for sales, I spent countless hours reviewing, examining, and analyzing the sales forecast for my company. I required the managers who reported to me to do the same. And that’s what they asked their reps to do, too.  We weren’t alone. Conversations between sales leaders, sales managers, and sales staff frequently focus only on numbers: Did you make them? Will you fall short? How much do you think you can sell in the next quarter?  The result is an inordinate amount of time spent on inspection and reporting of numbers that are, speaking frankly, out of the control of any sales leader.

In a recent study, the Sales Education Foundation and Vantage Point Performance identified 306 different metrics that sales leaders used in their efforts to manage their business. These metrics fell into three broad categories: sales activities (things like the number of accounts assigned per rep, the number of calls made per rep, and percentage of account plans completed), sales objectives (like the number of new customers acquired, the percentage share of customers’ wallet, and percentage of customers retained) and the subsequent business results (revenue growth, gross profit, customer satisfaction).

Even though managers were spending more than 80% of their time focused, as I had been, on the second two categories, the report found that sales management could affect only the first – the sales activities. The other two couldn’t be directly managed since they’re outcomes, not the process by which the outcomes are gained.

Which sales activities should sales leaders be managing?  In their book, Cracking the Sales Management Code, Jason Jordan and Michelle Vazzana break down sales activities into four discrete categories: call management, opportunity management, account management, and territory management. Different organizations might need to focus on one or another of these more intently, depending on both the nature of what they sell and where their organizational weaknesses lay. So depending on the needs of your sales organization or team, here’s a way to map the various sales activity metrics to the challenge at hand:

Sales leaders who need to improve call management — that is, the quality of the interaction between individual salespeople and prospects or clients — should focus on such metrics as call plans completed, coaching calls conducted, or even the number of calls that are critiqued and reviewed. Coaching in the area of call management is particularly valuable when the seller need make only a small number of calls to greatly affect the outcome of a given deal. In selling professional services, for example, the ability to create value in one or two interactions with a senior executive often makes or breaks the deal.

Sales leaders who need to improve opportunity management – the ability of their salespeople to vet, pursue, and close a multistage sale — should focus on the number of opportunity plans (outlining the actions required to move through the stages of the sales cycle) completed or the percentage of early-stage opportunities qualified — that is, fully vetted to confirm you are really reaching the right customers, that these customers have the potential to generate a reasonable amount of business for the effort it will take to gain it, and that they are in fact willing to budget sufficient sums to purchase your offering. Identifying bad deals in this way and getting them out of the way early may be the simplest way to increase your odds of success. Most companies I have worked with don’t want their sales teams pursuing every opportunity possible. Instead, they want to put their maximum effort on the opportunities that match some kind of ideal client profile.

Sales leaders who need to improve account management – the ability to enhance the long-term value of a single client – should focus on working with reps to develop and adjust account plans so that they define an overall strategy for the customer. This is also when it would be fruitful for you to spend time creating and monitoring standards for important client-facing activities like establishing peer meetings between your organization and the customer (by, for instance, arranging meetings between your CEO and the client’s CEO) or getting the customer to sit on your organization’s advisory council to provide feedback to your business. I have a high-tech client that tracks the amount of time executives spend each month with a single account that generates $65 million a year. Account management metrics are vital when a substantial portion of your organization’s revenue is concentrated in small number of key customers.

Sales leaders that need to concentrate on territory management – on how you allocate sales reps’ time among all the customers in a given territory — should focus on metrics like the number of customers per rep, number of sales calls made, and even sales calls to different types of customers. By managing the process of selecting, prioritizing, and meeting with target customers you can maximize the use of your sellers’ most precious resource — time.

Many sales leaders have been inadvertently micromanaging through revenue or profit numbers, which is counterproductive. This is your chance to provide your sales team with a new context to succeed in. By closely managing the things you can control, you will give your organization the best chance for success.

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As a boy, I loved to watch Father Knows Best, a TV program showcasing your typical sitcom family of the 50s. One of the more memorable episodes involves a short-wave radio that teenager Bud is refurbishing. When he finally gets the contraption working, he finds himself listening to a conversation between two boats located over a thousand miles away. The signal is bouncing off the ionosphere—making him privy to a conversation between the “Betty Anne,” a 34-foot cabin cruiser and other vessels nearby.

Soon, the entire Anderson family is drawn into the action as the Allen family aboard the Betty Anne heads into a horrible storm. The Allen’s think the turn in the weather is nothing more than a rainsquall. The Coast Guard sounds a warning of an impending storm. But the two parties can’t hear each other due to local interference.

The Andersons, beneficiaries of the signal bounce, can easily hear everyone involved and can’t figure out why someone doesn’t help the Betty Anne or radio the Coast Guard. As the Allens are about to be tossed into the violent sea, the Andersons anguish over their inability to offer help.

Completely pulled into the teleplay, I shouted into the TV: “Call the Coast Guard! You know the Betty Anne is about to capsize five miles off Shark Island. You can save the Allens! Just make a phone call!”

Finally, after ten minutes of tortuous inaction from the Andersons and constant coaxing from me, Mr. Anderson realizes that he can phone the Coast Guard. He makes the call, saves the Allen family, and I stop yelling at the TV.

I walked away from that teleplay vowing that if I were ever in a position where I could spot an upcoming disaster (one that I could foresee but others couldn’t) I’d shout out a warning. Today, I feel as if I’m watching just such an impending disaster, so please allow me to offer up a warning.

As you observe young people working their way through school, you can’t help but take notice as they approach certain critical junctures. Early on, they decide whether school is their thing or not. They decide whether grades and studying is their thing or not. And finally, they decide whether math, science, literature, art, or philosophy is their thing or not.

There was a time when the subject you chose to master at school, or for that matter, how many years you attended, didn’t exactly seal your financial destiny. When I was young, there were a variety of jobs available for people who barely limped through high school. Manufacturing positions paid good money and offered a solid career path to individuals who were willing to roll up their sleeves and get dirty. In fact, blue-collar positions paid, on average, more than white-collar ones. The joke at the time was that factory workers made more than lawyers. Advanced education seemed more of a luxury than a strategic choice.

Circumstances have changed to the point where the data are now crystal clear. While we still have a strong manufacturing core, contemporary firms produce high-tech, high-cost items, built by people who’ve done well in school and have had plenty of it. As a result, on average, American employees make more money with each year they spend in school—all the way through a PhD.

So, when youngsters say, “You know, school isn’t my thing.” It’s our job to let them know of the disaster that might lie just beyond the horizon. It’s our responsibility to explain that when they distance themselves from school, they might be choosing a job pool and income level they won’t like—and it could last their entire life.

In a similar vein, when a youngster says, “I know that school matters, but it isn’t easy for me. I don’t test well. Grades aren’t my thing,” alarms should go off in your head. Grades matter a great deal and according to recent research, most people can learn to get good grades if they’re taught how to study. Learning how to learn doesn’t call for rocket science.

I’ll never forget the day I graduated from high school and our friend Harry Roller sat me down and prepared me for college by teaching me how to succeed in school. He told me to go to every class and do every assignment. You read the reading assignment beforehand. You leave class and head straight to a quiet place in the library where you don’t study with noisy friends. Instead, you sit down in that quiet spot, review your notes, and prepare for your next class.

Reading is a science in itself. You take a short walking break after fifteen minutes. At thirty minutes you take a three-minute break. At sixty minutes, a five-minute break. You start a chapter by reading the questions at the end and pouring over the headings, charts, and models, then you read the chapter. And so forth.

We know how to maximize learning. It’s not a mystery. So when young people say grades aren’t their thing, teach them how to earn good grades by helping them improve their study techniques. It’s hard to imagine an investment that has a greater rate of return than learning how to learn.

And now for the final danger sign. Say your kids agree that both school and grades matter. Unfortunately, they find math and science to be puzzling. It’s not long until they explain that they don’t like math. Eventually they suggest that they don’t “do” math. After all, they aren’t nerds. With time, they come to frame their disdain for all things quantitative as an asset—sure they’re bad at math, but hey, they have social skills that give them an advantage.

For others, math and technology is their thing and they see literature, art, and the like as weak and without scientific underpinnings.

While it’s wonderful to find a passion, it’s sad when young people turn this love for one field as a reason for not exploring others. Not only does this narrow framing cut them off from important parts of life, it makes them vulnerable.

I used to sit on the admissions committee of a popular master’s program. Demand far exceeded supply so we could only accept a fraction of the applicants. About once a year, one of the local candidates who had been turned down would corner me in the hallway and plead his or her case.

“I scored nearly perfectly in the verbal section of the qualifying exam and I won two writing awards. Sure my quantitative score was only average, but my verbal skills more than make up for it.” Or: “Did you see my quantitative score? I’m a gifted scientist. Sure, my verbal score wasn’t all that great but . . .”

You can see where this is going. I would point out that the students who were accepted scored high in both areas of the test. To be admitted, you have to be able to play with both sets of blocks. It was sad to watch these eager applicants as they realized for the first time that doing well in only one domain simply wasn’t enough to earn them a place on the roster.

Of course, all of us are acquainted with people who’ve found ways to work in careers they love, and some of them earn a good living. There are always thousands of exceptions to the rule. Nevertheless, I believe it’s important to let your young family members and friends know the impact of school, grades, study methods, and a balanced skill set.

We’ve looked out into the future and like the Anderson family, have observed what could easily be an impending disaster. It doesn’t involve boats heading into a storm; nevertheless it could be disastrous just the same. Allow the next generation of youngsters to dismiss the importance of school, disregard grades, and turn up their noses at whole branches of knowledge and they may face a tumultuous future. I feel it’s my duty to sound a warning.

You don't see many tweets touting companies as #betterthanaverage. But there's plenty of social media chatter about really good or bad customer experiences. The same holds true for the feedback companies receive directly via e-mails or phone calls. Customers are most likely to offer feedback when they have either a really bad experience or a great one — and they almost never say a word when their experience falls somewhere in the middle.

The problem is, that silent majority in the middle typically drives the success or failure of a business.

Measuring the voice of the silent majority starts with understanding the difference between collecting feedback and measuring the customer experience. Feedback is opt-in, and inherently reactive, because businesses focus on addressing the issues raised by the "squeaky wheels." Measurement is random and representative, which allows businesses to prioritize changes based on everyone's experience: lovers, haters, and those who fall somewhere in between.

Consider the graph below, which compares opt-in feedback and random-sample measurement (such as the kind designed by my company, ForeSee) to a normal distribution curve. The gray line represents the normal curve. The blue line shows satisfaction scores based on 44,000 opt-in feedback surveys, which can be deployed by posting a button on the homepage that says "give us your feedback here."

The yellow line shows satisfaction scores based on more than 5,000 random-sample measurement responses — these are collected from a small sample of web visitors (usually 1% or less of overall site traffic) randomly intercepted and invited to take a survey.

As you can see in the chart, the random sampling does a better job of measuring the wider range of customer experiences, rather than just the very happy and very unhappy customers that often respond to an opt-in feedback button. Measuring social listening (another form of feedback) could create an even more dramatic high satisfaction score, and it's something we're researching now. But the bottom line is if you track opt-in feedback only, you're missing the silent majority.

Now, I am not suggesting that we ignore feedback — any time a customer wants to tell you something, you'd better be listening. The beauty of feedback is that customers or users put issues and improvements into their own words. That's important information to track and act on quickly. I'm making the case that you should drive your decisions and future investments by real measurement data.

A good approach to customer experience measurement will allow organizations to answer some specific questions:

How am I doing? What is my performance? You can't manage what you don't measure, and you can't begin to evaluate or improve until you know where you are right now.

Sterling Jewelers — the largest specialty jeweler in the U.S. and a ForeSee client — utilized customer experience analytics to help evaluate website redesigns for their Kay Jewelers and Jared the Galleria of Jewelry brands. They asked customers about merchandising, navigation, functionality, and other website elements in order to understand what was driving revenue, loyalty, and recommendations. Scientific measurement gave them a metric the company could rally around, whereas opt-in feedback had never provided a strong enough case to create strong internal consensus for change.

Where should I focus my efforts? Customer satisfaction, when measured properly, predicts sales, loyalty, and recommendations. Research from the University of Michigan shows that customer satisfaction can even help predict stock prices.

Some research we recently conducted on top luxury brands illustrates this point. When customers were asked for feedback about what they like best about a luxury brand website, they typically said things like "great clothing." When asked what they liked least, they often complained about the price. The research shows that if luxury brands were to evaluate the relative success or failure of their websites based on that feedback, they could mistakenly think that changing the price is the obvious way to improve customer satisfaction. But with proper customer measurement, luxury brands would learn that the merchandise is really the top priority for customers. Price, meanwhile, is typically the lowest-scoring factor. So in this case, merchandise improvements will have a much more significant impact on satisfaction than changes in price.

Perry Ellis used analytics based on continuous measurement of the customer experience to discover that people who were engaged by an associate when entering a store were 10 percent more satisfied, and they spent roughly 50 percent more than those who weren't greeted. This is the kind of intelligence that a company can use to focus its initiatives and improve its bottom line.

Why should I take action? Will the payback be worth it? A good customer measurement system is a critical tool for managing decisions and setting goals.

Another one of our clients, PBS.org, used customer experience measurement to learn that many of their website visitors were looking for recipes from their cooking shows, something they didn't provide online at the time. Visitors were searching exhaustively, and in vain, for these recipes. These insights prompted PBS.org to create a new food site that significantly improved visitor satisfaction. PBS Food now receives more than one million page views per month, a sign that their customer measurement is paying off.

A company should be able to quantify the impact of alterations in pricing, product mix, content, or customer service before any changes are made, and predictive customer experience analytics are a piece of that puzzle. By addressing the changes that are most likely to improve satisfaction using continuous measurement, instead of addressing issues that get the most complaints, business leaders can better manage their organizations.

In the new "big data" world, in which organizations collect and analyze enormous amounts of data in order to improve the way they do business, it's important not to get overwhelmed. Understanding the difference between types of data, putting proper data in context, and knowing which data to "listen" to is the key. While feedback data gives you a chance to react, measurement allows you to be proactive and strategic, giving you an advantage over competitors who are still running around oiling squeaky wheels.

Going to market effectively these days, no matter what business you're in, means relating to customers as individuals — even if there are millions of them. In a previous post, I described how U.K. retailer Tesco built detailed profiles of customers and then used these insights and a flexible supply chain to customize their products and offers.

How, precisely, did they do this? Creating products and services for market segments of one ("mass customization") isn't easy. The only way it can happen: marketing, IT, operations, and human resources functions must collaborate in unprecedented ways. As John Kennedy, vice president of corporate marketing at IBM, told me, success requires that companies execute the marketing basics they've always done — getting to know customers better; helping them in the buying process and tailoring offerings; and developing their trust — but, crucially, updating and amplifying them in light of new technologies. The biggest changes, not surprisingly, are in the marketing function, itself — the source of these new, more detailed customer insights. But the insights won't be useful unless companies change core business processes and employee behavior. Here are some illustrative ideas in each of the three areas:

Getting to know customers better depends on getting them to share more information, as Tesco did with its Clubcard. It means building a profile of each customer, based on transaction and social media data (e.g., their comments on Facebook and LinkedIn). IBM has built a customer database called Blue Insight, an analytics cloud computer system that unifies hundreds of software applications for more than 200,000 IBM consulting, sales, technical and marketing people. Blue Insight integrates marketing campaigns (and the customer inquiries they spawn) across digital, social, mobile and traditional marketing channels. It provides sales and marketing professionals with insights on customers, which in turn helps IBM tailor communications based on this deep customer knowledge.

Helping customers includes offering information to make their buying process easier, as, for instance, Netflix and Amazon do with their product recommendations. They're using tailored suggestions to drive customer loyalty. When done well, it feels like a service. For example, Marcus Sheridan, an owner of River Pools and Spas, a 20-employee installer of in-ground fiberglass pools in Virginia and Maryland, overhauled his company's marketing by shifting almost exclusively to using educational blog posts and videos. In a recent article, Sheridan described how he answered customers' most common questions about fiberglass pools regarding prices, problems, and competitors. Now when you enter these questions in a search engine, River Pools web pages appear prominently. Clicking on these pages shows a company that is educating customers, not hawking products. By addressing common (and often difficult) questions in such an up-front way, the impression customers get, said Sheridan, is "Oh my gosh, these guys are so honest."

Developing customer trust requires managing interactions sensitively in an environment of increased transparency. This transparency works both ways. Companies know far more about their customers by analyzing all the data they collect on them. In turn, customers know far more about the companies they buy from through social media — their family, friends and work colleagues talk about companies and their products every day, often not in flattering ways. How a company behaves, and how it responds to this new customer knowledge, have now become moments of truth, as well as the coin of the realm in customer interactions — adding to or subtracting from brand equity. Disgruntled customers can make a video on YouTube to broadcast their tale of mistreatment, as Jarrett Seltzer did when Verizon billed him $2,345 for its equipment when his home burned down. The video went viral, and caused Verizon to change its policies.

But enhanced marketing capability, by itself, is not sufficient for gaining maximum customer intimacy. All the company functions must collaborate towards this goal. Leading marketers are looking to influence all their customer interactions by working closely with operations and their chief human resource officers on the company culture. IBM is analyzing its brand using a "Corporate Reputation and Brand Analysis" system, and it has launched an initiative to address the full range of interactions with customers.

The IT organization is also crucial in becoming intimate with customers. Besides helping analyze customer data, IT can also increase the number and value of online customer interactions. Consider the Cleveland Clinic, the multispecialty academic medical center rated one of the top hospitals in the United States. In a recent HBR video, Paul Matsen, chief marketing and communications officer, and CIO Dr. Martin Harris described how the marketing team works with IT to deepen online relationships with patients by using the web more effectively. For example, marketing wanted to attract patients who need very specialized medical procedures. So it worked with IT to place online ads when people use key words in online searches. The ads steer patients to information relevant to specific medical needs and provide the ability to schedule a consultation from the Cleveland Clinic's specialists. While this may be seen as a pretty basic story of paid advertising, it also highlights the necessity of collaboration across functions in order to achieve close knowledge of, and high value for, the customer.

As I've said previously, translating customer data into insights is hard. But turning these insights into new customer experiences and revenue is even harder. An even bigger challenge is getting all the functions of the organization to work together to create the most value from detailed customer insights.

Over the last few years, I’ve had some harsh words for bankers, banks, and the culture of the industry. In truth, I could have said worse, and it would have been justified.

That’s why the story of this bank—the Hancock Bank of Mississippi—deserves to be told, watched, and learned from. This is a case where banks play the role they are ideally meant to play, that is, they invest in the stabilization and growth of the community they’re part of, and wind up profiting in the long run from those investments.

It’s the way they did this that’s particularly remarkable—by literally laundering debris-covered dollar bills and handing them out to people in the days immediately following the Hurricane Katrina. How and why they did this is best left to the film clip; suffice it to say that Hancock gave out around $50 million in cash, with handwritten IOUs for contracts, and lost (only) about $200,000 of that when all was said and done. But in the 3 months following the storm, Hancock grew by $1.4 billion. It’s not hard to imagine that the kind of genuine investment they made in their community—both customers and not—earned so much loyalty.

Banks and their leadership have a long way to go to get out of the hole they’ve dug for themselves in the minds of most people. While disasters provide a great opportunity to show caring, I don’t think that banks need to wait for another hurricane to do something –there are many ways to show care and commitment to the community, and it’s in everyone’s interest that they start soon.

For many people, saving money isn’t just difficult; it’s a foreign concept. A recent study found that 58% of Americans do not have a formal retirement plan in place.¹ Why is even thinking about saving money so daunting to so many of us?

We spoke with Dan Ariely, professor of psychology and behavioral economics at Duke University in Durham, North Carolina. He says that many people have difficulty saving their income because our minds and our environments are not naturally suited to thinking about money in the long term. In fact, our minds are not very good at thinking about the concept of money at all. To make it easier, he says, we need to change our environments in such a way that saving money happens automatically and we never even have to think about it.

¹“According to Deloitte’s Retirement Survey, a majority of Americans — 58 percent — do not have a formal retirement savings and income plan in place.”

Last week’s post Customer Experience Journey Map – the Top 10 Requirements generated a ton of great dialog through Twitter, LinkedIn, email and even a few phone calls.  To help continue this dialog, this post includes two example customer journey maps that we use with our clients at SMS Research Advisors.  Please keep in mind that these are simply our implementations of the journey map criteria.  As a Customer Experience advocate and researcher, I make no pretensions to graphic design skills!  But this may help you apply the criteria to your own customer experience.  You can also download a PDF of the two maps at the end of this post.

Even better, there is now a white paper.

The first customer journey map is a variation of the Home Theater Purchase Journey Map from last week’s post.  The map includes commentary on how it implements the 10+4 criteria.  The second is a deep dive into a specific customer experience, scheduling a physical.

The key difference between the journey maps is what you are trying to understand.  The purchase journey map focuses on identifying touch points, including those outside of the company’s control.  The customer experience journey map focuses instead on the emotions your customer experiences through the journey.  As a result, a different map is placed in the center – touch points for the purchase journey and emotional impact for the experience journey map.

I really enjoyed the conversations (and debates!) generated by the customer journey map criteria, and would love to continue the conversation.  Connect to be via LinkedIn, or go to the About Jim tab for my email or phone number.

As a reminder, the 10 critical customer journey map criteria are:

1. Represent your Customer’s perspective.
2. Use research.
3. Represent Customer segments.
4. Include Customer goals.
5. Focus on emotions.
6. Represent touch points.
7. Highlight moments of truth.
8. Measure your brand promise.
9. Include time.
10. Ditch the PowerPoint.

The four optional criteria are:

1. Break the experience into phases
2. Bring in Customer Verbatims.
3. Include Customers and Non-Customers.
4. Use your other Voice of the Customer components.

I wish you the best of luck implementing these criteria and learning more about your customer experience!

You can download the PDF of the two customer journey maps here.

The post Customer Journey Map: Applying the Top 10 Requirements appeared first on Heart of the Customer.

You don’t often see people committing themselves to a cause at great personal risk, without first knowing what it is about, or having the means to do so – well, unless they actually have no choice. Yet, that is exactly what a number of talented people ask of their circle of relations when they have an idea for a business venture or model in mind. Here is a way to proceed in order to avoid the usual pitfalls, bringing your ideas to life with the help of others rather than in spite of them.

Powerful ideas are just a beginning

Even the most powerful and valid ideas need someone to shake things up in order to make them happen. Up until today, the world has been making do just fine without your new and innovative idea. So, if you want to make it happen, you are going to have to figure out how to shake up the structures currently in place.

This is perhaps one of the most difficult jobs to accomplish. It’s not so much the “structures” themselves that you’ll need to challenge, but the people who compose them and make them what they are. Take a moment to think about it: what is an organization without people? You depend upon others to bring your new business model to fruition – if you could do it on your own, you would certainly have already done it. The dozens of people you have identified as being those who can help you to bring about your new idea, in turn depend upon dozens of other people who must all be made to work towards your goal. This intricate network of relationships often fosters inertia, linked to the various members’ diverging interests. For a structure already in place is mainly the reflection of the very people who make it up and their beliefs.

What consequence does this have for your innovative business model? As long as people’s beliefs are not changed through a new prospect of reality – yours – most of them will not see any reason to change the status quo. The current situation, which is all they know, suits them by default, along with the fear of the unknown.

Learning from failure

I have experienced a number of both failures and successes within the business world. The difference between the two situations can be summed up quite simply: when I managed to make each individual person involved with my venture understand the validity of my idea, in almost every case everything went well and the idea became an actual reality. This does at times require a great amount of preparation time, prior to setting up the project, so that each individual is on the same page. Yet, this is what helps to move individuals from their course onto the course you’ve set, for each concerned party understands his or her personal interest in joining your venture. On the other hand, when I wanted to speed up a project, pressured by overly tight lead times, things ultimately never worked out. Either my initiative started out well but finished rather poorly, or I was exhausted at the end, on the verge of burnout, and ended up with something called mediocre results.

And so in 2011, along with several other researchers of the University of Lausanne, and later with project managers in various companies, I decided to use my experience with failure to help make other future projects (yours and mine) be more successful. That is how COOPILOT (for COOrdination PILOT) came to be. Coopilot is a management model (currently in beta version) that draws its inspiration from what causes failure, so as to learn how to avoid failure by (1) helping identify which projects are likely to be doomed from the start because they don’t meet collaborative requirements sufficiently enough, (2) once these initial requirements are met, lead your projects onto an optimal path - to success.

Successful implementation = focus on mutual understanding

Are you about to implement a new business model? Or ready to launch a new, innovative project? Here’s how Coopilot can help you successfully execute your project.

In order to implement your ideas with the help of others, you and your partners have to closely monitor the mutual understanding of what needs to be done. This applies to four concomitant areas that we call the 4 mutual understanding variables:

It works for others

In just a few lines, here is how using the 4 variables of Coopilot can help you bring your idea to fruition: you will avoid setting yourself up for a fall by improving mutual understanding between participants. For, as many scientific studies show, lack of (or insufficient) mutual understanding (often described as miscommunication) is the main cause of project failure. In other words, this means that these four basic areas of understanding (objectives, commitments, resources and risks) are regularly ignored. In a recent six-months study we conducted at the University of Lausanne with several project managers (PMs), all projects managed with Coopilot were redirected onto a successful trajectory; the PM’s also reported a significant increase in the participants’ motivation, which we believe is due uniquely to a higher level of mutual clarity.

Thus, joint objectives, joint commitments, joint resources, and joint risks appear to us as the basic prerequisites for any successful collaboration. Yet they are too often neglected. Should you need a technical explanation, this is what happens behind the scenes: when you increase mutual understanding —the so-called common ground of a group—, in reality you increase your project’s potential for success through improving interpersonal coordination processes and thus maximizing the individual contribution of each participant in respect to the others.

Will it work for you ?

Now, think about how you would react in this situation: what if you were given an objective in which you wholeheartedly believed, for which you felt entirely competent, and for which you knew you’d have the necessary resources at your disposal, without too much individual risk? How do you think your personal contribution would pan out in relation to the whole project? Now imagine that most of the individuals involved with your new business model were placed in the same situation. What do you think would occur?

Why don’t you give it a try on your project, just to see what happens?

 

Stefano Mastrogiacomo
stefanomastrogiacomo.info