Managing Customer Experience and Relationships. Don Peppers

told us that the shoe store seemed to be especially busy that afternoon, so he took a place in line behind two other folks being helped by one of the salesclerks. As he waited, he saw that the salesman offered the same off-brand to each of these customers, who looked like they would have been willing to pay full price for a better brand name. The first customer had been interested in a pair of Nike basketball shoes, but the salesman first brought out this off-brand. They cost about two-thirds the price of the Nikes, and the customer ended up buying them. The same sales process, with the same result, ensued with the next customer, a woman who originally had said she was interested in Reebok cross-trainers. But the salesman talked the customer into trying out the cross-trainers from this off-brand first, and she bought them.

      After watching two sales snatched from the jaws of well-known national brands, the consultant's curiosity was aroused. When it was his turn to buy, he first asked the salesman why he had switched the two previous customers to this particular off-brand, which the consultant had never even heard of. After all, he said, these customers seemed to have been willing to pay higher prices for the bigger name brands.

      The salesman said that it had nothing to do with pricing or sales commissions, but he seemed a bit nervous at having been found out, and so the consultant persisted. Was the off-brand conducting some contest, then? Or was there perhaps just an extra supply of these shoes that the store needed to liquidate? No, the salesman said, that wasn't it either.

      The clerk then looked around and gestured toward all the people crowded into the store on this very busy Saturday afternoon during Christmas season. “Look around,” he said. “See how busy it is in here? I don't even have time to slip away for a coffee or a bathroom break on a day like this, that's how crowded it is!”

      So what was it about this particular off-brand? “When they ship their shoes to our store,” the salesman said, “the laces are already in their shoes, so it saves us a lot of time, not to have to lace up one of the other brands which all come with the laces in a little zip-lock bag inside the box.”

      This story perfectly illustrates the importance of removing friction in the customer experience, which is what this off-brand shoe was doing: removing friction in the shoe salesman's customer experience. Other businesses in other industries could do the same.

       At a retail bank, when a customer comes to the branch or website to ask about or apply for a second mortgage, the bank could lace up its own shoes simply by filling out all the information on the mortgage application that it already knows about the customer (starting with name, address, and bank account number, for instance).

       An airline could lace up its shoes for a customer whose flight gets canceled by rebooking them on the most likely next flight immediately, and then texting or emailing them the information, rather than simply telling them the flight is canceled and requiring them to call in to rebook themselves.

       A mobile phone company could lace up a new customer's shoes by printing out a sample bill, while they're in the store or signing up for their service, so they can see what the phone service will likely cost, including all the charges, and making sure the format is clear.

      Friction is the enemy of a good customer experience. Every ounce of friction removed will improve the experience.

      Friction is the enemy of a good customer experience. Every ounce of friction removed will improve the experience.

      For each of these reasons, if a company wants to improve customer loyalty and generate additional business with its customer experience, then the very first undertaking should be to remove any reason for the customer not to remain loyal—to eliminate whatever friction might lie in the way of meeting each customer's individual need in the easiest manner possible. Remember that in physics, friction is the sworn enemy of efficiency. The Second Law of Thermodynamics is that entropy always increases. This means that some friction is inevitable in any closed system and it slowly undermines the ordered systems (including the universe) through gravity, electrical charges, and other forces. Friction will eventually consume everything, as many billions of years from now the universe itself comes to a final end in what physicists call a heat death, because the sheer randomness (entropy) generated by eons of accumulated friction eventually overwhelms all order. But we digress.

      Our point is that friction is a waste product, and in a customer's life friction plays a similar role, bleeding energy out of every customer experience. The wasted time required when we are holding on the phone or waiting in the queue before speaking with a service rep represents friction. Friction consists of whatever time and effort we must spend getting an item repaired or replaced when it breaks or runs down. It includes the cost of the gasoline and time required to drive to and from the store for groceries. Trying to remember the name of that restaurant we liked is friction. Even the time and effort spent online trying to figure out which product is better, or which service package makes the most sense, constitutes friction.

      But the existence of friction in the customer experience also presents a significant business opportunity to an enterprise, because every time it can reduce the friction in its customer's experience, it is adding value to this experience. Value is added. when the friction process is reversed, eliminating waste and adding a bit more order to the customer's life. Identifying and eliminating whatever friction a customer encounters can be very beneficial for an enterprise seeking to gain a competitive advantage, generate new sales, and improve a customer's loyalty and lifetime value.

      When Ally Bank clearly displays its toll-free number on every page of its website, along with the estimated wait time before speaking with a rep, it is adding value to the customer experience by eliminating friction. When JetBlue automatically credits a flyer's account with the value of a refund due after a delayed or canceled flight without requiring the customer to do anything, it is removing friction from the customer experience. When Netflix recommends a movie to a customer based on the customer's previous selections or ratings, it is adding value to the customer experience by removing friction. When Safelite AutoGlass emails or texts the customer with a picture of the repairman scheduled to come to their house on a service call in advance of arriving, the company is adding value by removing friction. When Amazon sends a refund to a customer in advance of the customer requesting it, friction is drained from the customer experience.

Travelocity, the online travel service, embarked on a friction-removal mission when it set out to improve its online customer experience by ensuring that customers were better able to solve their problems and meet their needs using the website's self-help tools and references. One of the things Travelocity discovered was that there were far more null searches logged by the website than they thought there ought to be. A null search is a search that returns no results. Every null search result likely represented a frustrated customer who had not been able to find what they were looking for, at least not with their first search. Digging into the problem, the company found that its own terminology was often at fault. A customer who was planning a cruise, for instance, might have searched for the term “suitcases,” trying to learn the weight limit or number of suitcases allowed on the cruise, or perhaps what the cost of extra luggage might be. But the term “suitcases” would show zero results at all, because Travelocity's references used the industry standard term, which was baggage. By reviewing all such null searches and then incorporating additional keywords to accommodate simpler, more common language, Travelocity was able to remove a substantial amount of friction from its customer experience.⁶

A truly frictionless customer experience is one that presents absolutely no obstacles or barriers to the customer's meeting whatever need or doing whatever job they want to hire a company's product or service to do. The frictionless customer experience has to be reliable, valuable, relevant, and trustable. And for a customer experience to be truly frictionless, the enterprise must be both product competent and customer competent.

EXHIBIT 3.2