How to Build an Employee Experience That Rivals Your Customer Experience 01-29

Image credit :  Shyam's Imagination Library.

The marketing landscape is evolving rapidly. Hardly breaking news. There are new companies and
products constantly popping up that enable more efficient and effective work across all channels. The teams that achieve the most success are the ones that are constantly up-to-date with these new tools.

Finding new products is also a lot easier today than it was in the past. Today, there are far more thought leaders, newsletters, and blogs sharing the latest trends and ways in which companies are taking advantage of them.

Moving forward, the landscape is going to continue to morph and expand, which is truly saying something when you consider the number of martech options that were available in 2017 as per Scott Brinker's infamous chart. And if you can't read it here, and who can blame if you can't, you can see the full version here.

Here are 5 ways that tech is going to change marketing in 2018 that you should be on the lookout for:

1. It Will Be Easier To Find Customers

There are inbound leads, like site visitors, and there are also outbound leads, like a group of Sales VPs that get sent an email. Tech is making it easier to find and sell to both of these groups.
For inbound, technology has enabled marketing teams to find out more about their website visitors. Companies can run reverse IP lookups to match a visitor with the company they work for. Different services are also making it easier to capture emails. Emails are more valuable than ever because enrichment products can tell you everything about a person once given an email. Plus, that data is becoming more accurate as time goes on.

Outbound leads have also become easier to find. Marketing teams can take advantage of lead generation services that offer unique targeting of
audiences. The customization that companies will be able to do to gather leads, and the quality of those leads, will also increase in 2018. This is, consequently, enabling companies to spend more time figuring out who their target audience is, instead of actually gathering their information.

2. There Is Better Customization

Once you know the visitor's title, location, company and/or industry, anything about their site experience can be changed. This could be the images they are presented, the customers or testimonials they see for social proof, and even the messages sent by a chatbot. This customization, and the functionality for it, is going to improve dramatically in 2018.

The early movers are also going to get a huge bump in conversion rates. They will be able to target messaging and pictures to fit the psyche of each company and visitor. Instead of needing a catch-all site, companies can segment their audiences. Mark Rabe, SVP of Art Concrete Solutions told me, “We have 2 very different customers. One group are potential franchisees for our concrete repair business. The other group are consumers who might purchase our DIY concrete repair bucket. We have to segment our visitors and show them relevant info or they’re gone fast. We can display the best option given data we have on the visitor. That, inevitably, will increase conversion rates.”

3. There Will Be A Greater Push For Immediate Sales

People have many distractions today, and that will only increase in 2018. They are constantly flooded with emails and content, as well as spend a significant amount of time on social media. Therefore, in 2018, marketing is going to move further towards quick sales. E-commerce sites are trying to capture the sale upon a user’s first visit. They are already offering discounts for immediate buys and will likely continue to do so. Email follow-ups about open online orders will also continue to emerge as the norm.

Implementations of blockchain technologies, like PureGold’s new gold-backed payment gateway, will enhance consumer access to e-commerce using cryptocurrency. Being a brick and mortar company with gold ATMs, gold minting factories and storefronts, PureGold also offers many offline ways to provide instant transactions for consumers. Whether mobile, desktop, or in person, maximum flexibility is offered.

The recent emergence of chat-bots like Drift and Intercom enable a site visitor to schedule a demo with a sales rep in seconds. Being able to do so prevents the need for back and forth email exchange. It also takes advantage of the currently attentive visitor before they become distracted or overwhelmed with other things.

4. No Excuse For Poor Web Design

Engineers have become better and there are new tools enabling novices to design quality-looking sites. In just a few clicks, developers and designers can now easily build content-ready, production sites for their products. Landing pages are critical components of a brand’s image and will largely determine the effectiveness of a company’s funnel. This trend is putting a greater emphasis on people that can design, build front-end sites, or even navigate a CMS like WordPress.

5. There Will Be A Greater Emphasis On Data (if that's even possible)

Marketers can look at more metrics than ever. These include open rates, time spent on pages, and how people interact with a page. This data can drive better decisions and keep marketing people from guessing. There has even been an emergence of machine learning in marketing. Machine learning can qualify leads and determine customer projected value.

Companies like Repux are using data and artificial intelligence to help businesses maximize their potential. On the Repux platform, businesses can sell anonymized data to developers for use with machine learning algorithms. Once optimized as intelligent applications, the applications can be sold back to businesses for better business decision making.

Larger brands will likely put more resources towards their branding, images and messaging because they can. Smaller brands do not have the budget or time for that. In the past, this meant that they were less effective. Now, though, smaller brands can test a handful of approaches quickly.
Then, they can use that data to inform their decisions.

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How Customer Service Can Turn Angry Customers into Loyal Ones 01-18

Good customer service seems like common sense for businesses. But how valuable is it really?
Until now, this has not been rigorously quantified across different companies. Businesses are understandably reluctant to share their CRM and sales data, and most research in this field has been based on surveys. But as more Americans seek customer service online, social media offers a better platform for analyzing interactions between service reps and customers.

Using data from Twitter (where one of us works), we designed an experiment to study customer service interactions in two industries that generate a significant number of customer service complaints: airlines and wireless carriers. We found that prompt and personal customer service does indeed pay off —  customers remember good and bad customer service experiences, and they’re willing to reward companies that treat them well.

We identified more than 400,000 customer service-related tweets sent to the top five major airlines (American, Delta, JetBlue, Southwest, and United) and top four wireless carriers (AT&T, Sprint, T-Mobile, Verizon) in the U.S. from March 2015 to April 2016. Our sample of tweets was comprehensive, including complaints, questions, and comments. Since all tweets are public, we could review the entire conversation between the customer and the customer service agent (except direct messages) and code the interaction for attributes such as customer sentiment and tone (e.g., Is the interaction praise or scorn? Is the customer happy or angry?)

We then contacted these customers on Twitter, up to six months after they tweeted at the companies, and invited them to take a brief survey. Without providing a reason for the survey, we asked them to participate in a common market-research exercise called conjoint analysis to see if their customer service experiences affected how they valued the brands.

For example, for customers who had tweeted at airlines, the conjoint asked them to imagine buying a ticket for a two-hour non-stop flight. They had to choose between several combinations or “offers” that varied across dimensions such as airline, seat type, on-time arrival rate, and fare — similar to how customers would shop for fares on sites like Kayak or Expedia. We offered a similar exercise for wireless service customers.

From the conjoint exercise, we could discern what value, in dollar terms, customers attributed to their preferred airline. On Twitter, 1,877 users completed the conjoint exercises – 673 of them had received responses from companies, 375 received no response, and 829 had no customer service interaction and served as our control group for baseline willingness to pay.

We then tested our hypothesis: do customers who had a positive interaction with a brand’s customer service representative value that brand more? Or in management parlance, when a brand provides better customer service, will customers reward that brand with greater loyalty or pay a price premium?

Good Customer Service Matters on All Platforms

Customers who had interacted with a brand’s customer service representative on Twitter were significantly more likely to pay more for the brand, or choose the brand more often from a comparably-priced consideration set, compared to our control group of customers who had no such interaction. On average, across all tweets and regardless of whether the customer used a negative, neutral, or positive tone, we found customers who received any kind of response to their tweet were willing to pay almost $9 more for a ticket on that airline in the future. This extra $9 can be thought of as incremental brand value the airline has gained in the customer’s mind. In other words, all else being equal, a customer would be willing to buy a ticket from the airline even if the airline cost $9 more than its competitors.

We found similar results for wireless carriers. Customers who received any kind of response to their tweet were willing to pay $8 more, on average, for a monthly wireless plan from that carrier in the future, compared to the control group. Unlike airline tickets, wireless plans are monthly and recurring, so an $8 per month higher premium can lead to a significant revenue boost.

We also surveyed customers on their likelihood to recommend the brand to others, so we could derive a Net Promoter Score (NPS), a common measure of customer loyalty. We found that receiving a response improved NPS by 37 points for airlines and 59 points for wireless carriers, consistent with our findings from the conjoint exercise. (This bump is significant considering NPS scores range from -100 to 100.) In addition, these effects held up for at least six months after the interaction, suggesting some permanence to the positive impact of good service.

Respond to Customers, Even If They’re Upset

The connection between good customer service and brand loyalty may seem intuitive. What’s more surprising is that seeking to engage an angry or confrontational customer can also have a positive effect on brands.

Handling angry customers is a daily task for any customer service rep. While most companies do earnestly try to solve customer problems, inevitably there are some problems that cannot ever be fixed — the canceled flight that causes you to miss your sister’s wedding, or the dropped calls during your critical business negotiation. In many cases, there is little a company can do to redress a customer’s specific grievance.

But sometimes customers are just looking for a little empathy. When customers used a negative or even an angry tone in their initial tweet to a brand’s customer service team, we saw that the best approach was to respond to negative comments instead of ignoring them.

In our study, simply receiving a response — any response at all — increased the customer’s willingness to pay later, even in cases where customers were aggrieved. While successfully resolving an issue created more brand value (about $6 for our airline sample), responding without providing a resolution was still worth about $2 in added brand value for airlines.

We found even larger effects for wireless carriers. For customers who received no response, we found no statistically significant change in their willingness to pay. But, customers who got any response to their negative tweet were on average willing to pay $7 per month more for a wireless plan from that company than customers who got no response. For cases where the issue was resolved, they were willing to pay $8 more; if the agent was unable to resolve the issue, they were still willing to pay $6 more.

The lesson for managers is to reply to every customer service comment online, even the proverbial “I’ll never fly your airline again!” A mere acknowledgement of the customer’s problem can defuse initial frustration and put the customer back on the road to loyalty. Instead of the customer seeing the company as the enemy, a sympathetic response can reorient the situation so that the customer now feels that the company is on his or her side.

That being said, don’t ignore your happiest customers. We found the highest increases in willingness to pay actually came when businesses responded to customers who tweeted a positive comment at the company. Receiving a response to a positive comment generated $28 more for a future airline ticket and $12 more per month for wireless plans. Customers who say good things about your business are your advocates and your brand loyalists. You can demonstrate that you value them by acknowledging them and thanking them for their loyalty.

Good Service Happens Fast

As important as it is to respond to every customer issue, it is even more important to respond quickly. We observed that a brand can capture substantially more value by replying right away. When an airline responded to a customer’s tweet in five minutes or less, that customer was willing to pay almost $20 more for a ticket on that airline in future months. Similarly, wireless customers were willing to pay a whopping $17 more per month for a phone plan when they received a reply within five minutes.

Customer service representatives need to move fast to capitalize on these opportunities. For airlines, we found that after 20 minutes had elapsed, customers were only willing to pay $3 more, a decrease of 85% in value compared to customers who received responses in five minutes or less. After an hour, customers were only willing to pay $2 more. We found that the median time airlines took to respond to the tweets in our sample was about 20 minutes, meaning that at least half of all airlines were leaving significant money on the table.

While we were only able to measure the response time for interactions on Twitter, we believe fast responses can generate goodwill in all customer service channels. In our study, a response time of five minutes or less meant the airline ranked in the fastest 20% of response times in our data. We expect to see similar effects, regardless of channel, as long as the company is responding faster than customer expectations. (The average customer expects companies to help them within 5 minutes by phone, within 1 hour by social media, and between 1-24 hours for email.)

These patterns also held even if the customer’s complaint was unresolved, meaning that even a short acknowledgement of the customer’s issue and reassurance that the agent is looking into it can pay off. This is consistent with other psychology research showing that we dislike the uncertainty of making a request to someone and hearing nothing back.

Customers Are People, So Be Personal

Another insight from our research is the value of making a personal connection with a customer requesting support. Personalizing a message by typing a few extra characters can make a huge difference. Customers who received an unsigned response showed no detectable increase in willingness to pay compared to the general population. But, when a customer service agent added their name or initials in their first reply to a customer, we observed that their willingness to pay increased by $14 for a future flight on that airline compared to those who received an unsigned response. Similarly, in the wireless industry, customers were willing to pay $3 more for a monthly plan if the agent signed their name compared to those who received an unsigned response.

When agents sign their name in their tweets or posts, it humanizes them and helps customers feel that the company, or at least someone within the company, is on their side. Customers are also likely to feel more comfortable following up about an issue later if they have the name of the employee who helped them.

As consumers turn to a wider array of channels for help and expect faster responses, it has become more challenging to provide customer service. Bottom-line pressure restricts what companies are able to provide without breaking the bank. Our research shows that customer service that shows empathy can drive a lot of value, and there are some simple best practices to turn aggrieved customers into loyal advocates.

First, surprise customers by responding quickly, so that they feel someone is watching out for them. Even a simple acknowledgement to buy time to diagnose the customer’s issue can drive future revenue. Second, don’t shy away from responding to unhappy customers, even if you can’t immediately resolve their issue. Finally, even small gestures such as having agents sign their names or initials creates immediate value for your business.

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Guide to Getting Your Customer Churn Rate in the Zone 05-26

Guide to Getting Your Customer Churn Rate in the Zone

Whatever you call it – defection, attrition, turnover – customer churn is a painful reality that all businesses have to deal with. Even the largest and most successful companies suffer from customer churn, and understanding what causes formerly loyal customers to abandon ship is crucial to lasting, sustainable business growth.

In today’s post, we’re going to look at what customer churn is, what constitutes a “good” churn rate, and ways you can stop your customers turning their backs on you forever.

Art installation by Tim Etchells

What Is Customer Churn?

Client churn is when existing customers stop doing business with you. This can mean different things depending on the nature of your business. Examples include:

• Cancelation of a subscription
• Closure of an account
• Non-renewal of a contract or service agreement
• Consumer decision to shop at another store/use another service provider

Before you can figure out what your churn rate is, you need to decide how you’re going to quantify actions such as those above and agree on what defines customer attrition for your business. Once you’ve done this, you can hit the books and do the math.

Calculating Customer Churn

You can measure client churn in one or more of the following ways:

• Total number of customers lost during a specific period
• Percentage of customers lost during a specific period
• Recurring business value lost
• Percentage of recurring value lost

Let’s look at this example from Churn-Rate.com, in which your company has 100 subscribers at the beginning of the month:

You could also choose to calculate your churn rate based on how many subscribers you had at the end of the month, rather than the beginning:

You can also calculate customer churn based on revenue. Businesses that take this approach typically use monthly reoccurring revenue (MRR) as a baseline figure. Now bear with me, because the math gets a little more complicated when calculating client churn using MRR.

In the following example, a company had $500,000 of MRR at the beginning of the month, and $450,000 at the end. Now, let’s say that the company brought in $65,000 from existing customers who purchased upgrades that same month. The churn calculation looks like this:

As you can see, the churn rate is negative – meaning that the company actually ended up making money despite the $50,000 loss in MRR. This is known as negative churn.

However you choose to calculate it, customer churn hurts – a lot. So grab your Kleenex, wipe away those tears, and let’s look at “good” churn rates and how you can lower yours.

What Is A ‘Good’ Customer Churn Rate?

In an ideal world (one in which customers never complained, cats and dogs lived together in peace and harmony, and nobody ever posted “Game of Thrones” spoilers on Facebook), the perfect client churn rate would be zero.

Unfortunately, this is not going to happen. No matter how excellent your service is or great your products are, you will lose customers. This doesn’t mean you can’t achieve and maintain a “good” churn rate – or, at least, one that’s acceptable. But what is a good churn rate, anyway? Well, that depends on your industry.

Some sectors have significantly higher rates of customer attrition than others. However, it’s difficult pinning down average customer churn rates by industry because, for some reason, most companies aren’t too keen to broadcast how many customers they lose on a regular basis. Weird.

Image © Bethesda Softworks

However, there is some data out there that can give you a better idea of what you can expect in certain sectors:

• American credit card companies typically have customer churn rates of around 20%
• European cellular carriers experience churn of between 20-38%
• Certain American telcos, such as Verizon, have reported very low churn rates – like 0.84% in Q2 2012
• Software-as-a-Service (SaaS) companies usually report client churn rates of between 5-7%
• Many retail banks have churn rates of between 20-25%
• In 2003, the churn rate of daily newspaper subscriptions in the U.S. was 58%

Customer churn rates that could be considered fantastic for one business might be atrocious for another. Why? Because not all business models are the same, and even companies with similar business models might define churn differently.

Let’s say your business operates on a subscription model. How long are your subscription contracts? How much does the lifetime value of a typical customer change in relation to the length of their contract? How long does it take to recoup the initial costs of customer acquisition and for the account to become profitable? On average, how many new customers do you attract per month? These are all questions that will affect what client churn rate you should be aiming for.

Ways To Reduce Customer Churn

So, now that you’ve got a rough idea of a churn rate that’s acceptable for your business, how do you reduce client churn? By going the extra mile, right from the start.

Make a Great First Impression

Customers are less likely to look around for something better if you blow them away from the very first moment they encounter your business.

Josh Ledgard, co-founder of KickoffLabs, says that the first five minutes with a new customer are paramount. If someone sees immediate results when using a product or service for the first time, they’re significantly less likely to look for opportunities to churn because they believe that they could be even more successful as time goes on.

The better a customer’s first experience, the stronger their commitment and buy-in will be – and the chances of them churning further down the road will be lower.

Consistently Exceed Customers’ Expectations

Failing to deliver on a promise is one of the fastest ways to lose a customer, and many companies say that dissatisfaction and unmet expectations are among the top reasons for client churn. It’s not enough for you to just make a great first impression – you also have to consistently meet your customers’ expectations and exceed them whenever possible.

You could be forgiven for thinking that you start meeting and exceeding your customers’ expectations when they’re already a full-fledged user of your products or service, but the process begins much earlier than that – specifically, with your sales team during the very first call. Don’t let reps who are trying to meet their monthly quota oversell your business or make promises you can’t keep, or you’ll find it very difficult (or impossible) to meet your customers’ expectations, never mind exceed them.

Be honest about what your customers can expect, and consistently deliver what you promise.

Provide Awesome Customer Service

This one should go without saying, but if you’ve ever spent half an hour listening to hold muzak waiting for a disinterested, incompetent customer service rep to “assist you,” you’ll know that some companies simply don’t put enough effort into customer service.

Image © Scott Adams

A recent survey by Zendesk revealed precisely what drives people crazy about customer service. Some key takeaways:

• 42% of respondents said repeating their problem to multiple reps was the most frustrating aspect of dealing with customer service departments
• 35% of consumers stop doing business with a company altogether after a single negative customer service experience
• 16% of irate customers will vent their frustrations on social media sites following a negative interaction (a figure that seems very low to me) – but only 8% will do the same to praise good customer service
• 60% of consumers are strongly influenced by comments about companies on social media sites

Something else to consider is being proactive, rather than reactive, when it comes to customer service. Don’t wait for customers to come after you with burning torches and pitchforks; make sure you have an outreach initiative in place to check in with customers long before problems arise.

Remember – it’s much cheaper to retain an existing customer than it is to acquire a new one.

Listen Carefully to What Your Customers Tell You

Some business owners think that nobody knows their business better than they do, but they’re wrong – their customers do. Listening carefully to feedback from customers is one of the best ways to identify those who may be at risk of jumping ship.

For example, if a customer threatens to close their account because your service costs too much, they might actually mean that they haven’t had time to fully explore the product, resulting in a misconception about its true value. Then again, it could mean that you really are charging too much.

Whatever your customers tell you, try to really listen to what they’re saying. Think about how sales professionals overcome prospects’ objections – many people throw up “smokescreen” objections that may not necessarily be legitimate concerns, simply because they dislike being “sold to.” Be ready to help make your customers’ lives easier with real solutions based on what they’re actually saying, not what you think they’re saying. Of course, in some cases, you’ll have little choice but to…

Let Some Customers Churn

This is another concept that some business owners find difficult to wrap their head around, but sometimes, you just have to let customers go.

This doesn’t mean you should ignore client churn rates, be content to provide poor service, or adopt a revolving-door policy when it comes to customer acquisition. 

It does mean, however, that you should know when to give up and let a customer walk. How do you know when it’s time to break up with a customer? By looking at the situation with profitability in mind.

Let’s say you identify a group of customers who are at risk of turning to a competitor. You immediately reach out to them and offer a generous incentive to stay, right? Wrong. First, you should figure out if the at-risk customers are even worth saving.

This concept is utterly alien to many businesses, because they mistakenly assume that all customers are equally valuable. Sure, this may be the case for some companies, but most businesses have a core group of customers who spend more, evangelize about their products on social media, and stay with the business longer. 

However, even the most loyal customer can still defect to another company if they feel their needs are not being met or that they’re being taken for granted. This is why these are the customers who are worth spending time and money to retain.

Sunil Gupta, a professor of business administration at Harvard Business School, says that in addition to determining customers’ churn probability, businesses should also calculate:

• How much they spend
• The likelihood that they will respond positively to a retention incentive offer
• How much this offer will cost the business in terms of overhead or lost revenue

According to Gupta, businesses should only reach out to at-risk customers once they have all this information. Don’t settle for merely reducing client churn rates – focus on reducing churn andmaximizing profits. You can read more about how to do this in “Managing Churn to Maximize Profits,” a research paper that Gupta co-authored with Aurélie Lemmens of the Tilburg School of Economics and Management.

Identify Why Customers Cancel, Then Fix It

Remember all that math we did earlier to calculate churn rates? Well, although you need to know what your churn rate is, you also need to know why customers stop doing business with you.

A lot of businesses fail at this because it involves asking some uncomfortable questions and admitting that they’re not actually awesome at everything after all. However, identifying the most common causes of abandonment – and acting on them to improve things – can be a great way to reduce customer churn rates.

Make sure you give customers plenty of opportunities to tell you why they’re leaving. This could be a (brief) survey, a multiple-choice question, a comment field in a “We’ll miss you!” email – anything. Just make sure you can figure out why you’re losing customers, then take steps to tackle the most frequent reasons people are abandoning you.

Well, that just about wraps it up for today’s post. Hopefully you can apply some of these tips to your business. Unless you have a churn rate of zero, of course, in which case power to you (your pants appear to be on fire).

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Is Customer Experience Manageable? An Industry Pundit Says No 09-14

Is Customer Experience Manageable? An Industry Pundit Says No

What is customer experience (CX)? To get customer experience right, companies need to first get the definition of customer experience right, according to an enlightening talk I had with Esteban Kolsky  , the Principal and Founder of ThinkJar  , an advisory and research think-tank focused on customer strategies. 

With over 25 years of experience in customer service and CRM consulting, research and advisory services, including eight years spent at Gartner   focusing on customer service and CRM research, Kolsky is taking what companies today think of CRM and customer experience and flipping it on its head. He says that the digital transformation of businesses and the inbound revolution have brought about a radically different way of doing business which has changed CRM and "customer experience" forever.

Esteban Kolsky

Kolsky gives us these 5 insights into how the customer has changed and how this is redefining customer experience, inbound marketing and CRM as they relate to the digital transformation of the business.

1. Customers are not listening to what you have to say - Inbound marketing is a hot topic for companies today. Kolsky tells us that inbound marketing is the first realization that customers don't listen to what you say anymore about your business. "To put it bluntly customers don't have an interest in what companies have to say, they have the knowledge and the information and they don't need to rely on the company for this," says Kolsky. The radical change to inbound marketing, due to the fact that people outside the organization know more than the people inside the organization, will be more about how to manage social channels than about managing content and the inbound flow of communication.

2. Customers know more about your business than you do - To illustrate inbound Kolsky uses the example of the inventor of duct tape, who first created it to be used as an adhesive tape in outer space. He tells us that his daughter has spent the summer building wallets and t-shirts and whatever else out of duct tape thanks to plenty of YouTube tutorials. "A company can make a product for a specific use, but loses control of the product and the uses for it very quickly," says Kolsky. Companies cannot pretend to know more than their customers about what they want to do. Even if they take the time to learn the customer journey, they still don't know what customers want to do at the moment they are doing it. 

Therefore, the question becomes how do we leverage what customers are doing and saying to sell more product and how do we use information from the world in a more positive way to dynamically and flexibly change the way we do business? This is the digital transformation part that has to go together with inbound. The bottom line is that it's not about the customer at every interaction; it is about what the customer chooses to do in relation to your business.

3. Customers create their own experience - When it comes to customer experience Kolsky wrote the book, so to speak, with Ed Thompson   back in 2002. In it he wrote the first definition of customer experience, which he still uses in presentations to make fun of what we thought it was then and what we still think it is today. Kolsky calls his original definition of customer experience moronic: "Customer experience is what a customer senses with all five senses with any interaction that they have with the company." He pokes holes in his original definition by asking, "When was the last time you tasted a screen?"

So then what is the definition of customer experience? It turns out that it has nothing to do with customer experience. Kolsky says there are two aspects to it. You have what the customer actually gets to experience, but to do that customers will build their own experiences. They will not wait for companies to tell them how to do it; they are the ones pushing companies to create the ability for them to do what they want to do. 

All companies have to do is transform their business and open up as much as possible, and then get out of the way so customers can create their own experiences as they go along - this is the true definition of customer experience. From the business perspective the customer experience should be about building the infrastructure that allows customers to do whatever they want to do through whatever channel they choose to do it.

Kolsky tells us that companies need to throw out the notion that they can create, manage and control customer experience. He says all the time spent talking about customer experience is just wasted time trying to understand something that is not for us to understand. The bottom line is that companies cannot create customer experience, customers create their own experiences.

4. Customer interactions are complex and unpredictable - The way that people interact with businesses has changed, and therefore CRM has changed. Each time a company touches a customer it's an interaction. The problem with traditional CRM is that all these interactions are siloed as customer service, sales, marketing, etc., but today's customer interactions are not so simple. When a customer contacts a company they can do a million different things and companies never know what that's going to be. In the old days customers would call the specific number listed for customer service. 

Today they don't care; they send an email to the main email address or call the main number and they know you have to answer it. With this change, companies can no longer silo operations to correspond to CRM. Interactions have changed from being defined interactions that you could define an experience from to an interaction where anything goes - you don't know what is going to happen but you need to provide for anything that could happen.

The role of CRM today is to provide information to analytical packages that back up this customer experience platform so we can customize interactions with customers. CRM for the past five years has become a system of records, a place where the data is stored and brings it all together into a common infrastructure - an interface to the experience. CRM is moving toward being a central point from where customers can draw their own information to create their own experiences. And when you sum up all the interactions over time that is the beginning of what engagement is all about.

5. Customer (and user) communities are where the knowledge is at - In a thought-provoking blog  , Kolsky states that knowledge decays at the rate of 50% for every minute it exists. He builds a case for knowledge-in-use   by saying that the problem with stored knowledge (knowledge found in books or even accessed via search engines) is that it is not contextual. "If you can ask a person a question and get an answer in 30 seconds then not only is that person's reputation increased but your knowledge of where to go to information is increased," says Kolsky.

"There is something to the wisdom of the masses that cannot be denied," says Kolsky. This is why he thinks that communities are going to kill knowledge management systems. He says that communities are where the knowledge resides and he feels that there is no purpose for a knowledge base to exist, where you put knowledge in a place to decay over time, when you can get a few people to collaborate together and ask them. He says this was the whole purpose of social media. Kolsky says communities will evolve to where users have a reputation score and earn the trust and respect of peers, where the strongest voice is able to rise to the top of the forum and become a source of knowledge for others.

And to bring it the conversation back around to the digital transformation of business, Kolsky says that digital transformation is just computers talking to computers doing the things we don't want to do - a topic covered in Andrew McAfee  's new book Race Against the Machine  . According to Kolsky digital business transformation happens when companies realize that everything we do today is done in digital form and that their business has to change in order to adapt to this total pragmatic change in how we do business today.

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