Most companies are hindered by some degree of disengagement, whether it stems from an inadequate flow of information, employee-management disconnect, being out of touch with the market place, operational dysfunction, or just general entropy.
In his forthcoming book, Why Are There Snowblowers in Miami?: Transform Your Business Using the Five Principles of Engagement (Sept. 2016), Steven D. Goldstein lays out leadership techniques and principles to help top-level leaders improve the way they engage with their teams, employees, and customers.
Goldstein is a proven leader who has held executive positions with leading global brands such as American Express (Chairman and CEO of American Express Bank), Sears (President of Sears Credit), and Citigroup.
He currently works in the private equity industry as a Senior Adviser with the consulting and advisory firm Alvarez & Marsal, serves as Chairman of U.S. Auto Sales, serves as a Senior Adviser to Milestone Partners, and is an Industrial Adviser to EQT Partners (a global private equity firm based in Stockholm).
Loyalty360 caught up with Goldstein to discuss this fascinating topic.
Overall, what is your take on why there is so much disengagement within companies and when they interact with their customers?
Goldstein: Fundamentally, the system is broken. Leaders have isolated themselves in their offices; they spend a majority of their time in meetings and reviewing reports. Leaders need to first take a genuine interest in knowing what their employees think, and they need to let them know they are interested in them, as the employees are the ones interacting with customers. Second, leaders really need to insert themselves into live customer situations so they can see for themselves what customers like and dislike, and what they expect from the company. It shouldn’t have to be like the TV program Undercover Boss– where CEOs need to wear disguises just to find out what is going on in their companies.
CX and effective customer engagement are so critical to brands being successful today, especially those with various loyalty programs and loyalty initiatives. What are brands doing well in this regard and where do the challenges lie?
Goldstein: Many loyalty programs involve high frequency, lower dollar value transactions. Starbucks is a great example of a company that continually listens to what its customers want and creates powerful programs, including an array of payment options to simplify the checkout process. The biggest challenges lie in less frequent purchases and/or higher dollar value transactions. The loyalty programs that are successful are those that provide more than a discount. They provide unique information, privileged access to new products, special offers, and other value added components that make the customer feel special and wanted, and therefore desirous of spending more with that company.
What metrics are the best and most effective ones today for loyalty marketer?
Goldstein: Useful metrics include ones that measure the number and value of purchases per customer over a given time frame vs. customers not involved or enrolled in a loyalty program, or ones that track the number of customers in loyalty programs who do not spend. To me, the best metric is Net Promoter Score (NPS), which asks the most critical question: Would you recommend this product/service/company to a friend? The answer to this one question encapsulates everything you need to know about the effectiveness of your offering.
We talk to brands all the time and many speak of having an embedded corporate culture that promotes employee engagement which, thereby, impacts positively customer engagement. Why is this so difficult for some companies to achieve?
Goldstein: While many companies speak about having a culture that promotes employee engagement, most of them talk about it more than they actually deliver. Almost all companies have a mission/values statement about their approach to employees and customers. Yet most employees in these companies say in feedback sessions that their leaders do not abide by these principles. Patagonia is a great example of a company that gets it right. They produce great products; they hire, train, and motivate a terrific retail sales organization; and they−not surprisingly−have very high levels of customer satisfaction.
What trends do you see in digital customer engagement?
Goldstein: While many marketers concentrate their efforts on boosting online sales, numerous studies have shown that two thirds of customers who have positive engagement experiences spend more in the long run. The companies that are succeeding in this area focus on: 1) creating a detailed, comprehensive plan for their customer engagement strategy; 2) ensuring that the customer experience (in all channels a and formats) is a favorable one; 3) deploying various tools to “get to know” their customer on an individual basis; 4) personalizing all communications in order to have a genuine conversation; and 5) implementing the appropriate KPIs to track success.