S4e13 The Asking for Salad When They Want A Burger Edition with Colin Shaw
James chats with Colin Shaw, an original pioneer of ‘Customer Experience.’ LinkedIn has recognised him as one of the ‘World’s Top 150 Business Influencers’, where he has 291,000 followers.
Colin’s Customer Experience consulting company, Beyond Philosophy, has been recognised by the Financial Times as ‘one of the leading management consultancies for the last four years. Shaw is the co-host of the highly successful Intuitive Customer podcast.
They discuss what it means to improve customer experience, changing customer demands, hiding behind covid, call centres, emotional drives, subconscious messages, focusing on the wrong thing, heuristics, loss aversion and treating people as human beings.
James Nathan 00:54
Hello, and welcome to the Only One Business Show with me your host James Nathan, and yet another fabulous guest for you today. This gentleman was an original pioneer of customer experience. And LinkedIn has recognised him as one of the top 150 Business influencers where he has, now that this is this is not a mistake, 291,000 follower. His customer experience consulting see business beyond philosophy has been recognised by the Financial Times as one of the leading management consultancy of the year for the last four years. And he’s co host of a very successful podcast, the intuitive customer podcast, which I’m sure we will talk about, because also the title of his latest book. Please welcome Colin Shaw. Colin. Hi, how are you?
Colin Shaw 01:39
James, thanks very much for having us on the show. Yeah, it’s good to be here.
James Nathan 01:43
The complete pleasure. And thank you for taking the time for me as well. It’s lovely to talk to someone who’s been in this industry for a good while.
Colin Shaw 01:51
You’re showing my age now, aren’t you?
James Nathan 01:52
Well…. I’m just jealous because we’re before we went before we started recording will tell me how you were about to nip off to Florida for a few months. And I thought it sounds, sounds pretty reasonable. But no, look, you know, this, this industry is one which is… has never really not been there. It’s just been properly recognised. I guess, what, 15,20 years now?
Colin Shaw 02:14
Yeah, I mean, I wrote my first book back in 2002. And at that stage, no one was really talking about customer experience, there was two or three people around the globe. I myself was one of them. But I spent probably the first five years of my life just explaining to people what in the hell customer experience was because, right, well, we’re still talking CRM and all the rest of it.
James Nathan 02:38
Yeah. And it’s amazing to think like that, because, you know, good businesses have always looked after people and thought from their perspective, but now there’s, you know, there’s a whole industry around making that more sensible. What’s changed in the in those 20 years?
Colin Shaw 02:55
What’s changed in 20 years? Well, I think that there is an understanding that customer experience is important. But I think that, you know, the and the voice of the customer programmes have come out the software’s come out that to help people do things, and so on and so forth. But I also have to say from a negative perspective, and these are stats that have come from the US, but I’m sure the same would apply in the UK as well. Believe it or not, customer satisfaction is something like a 17 year low. Wow. And, and you may turn around and go as I did when I first read this, and this is from the American Customer Satisfaction Institute. When I asked the the president there, you know, why was that the case? You know, the natural reaction is to say, well, it’s COVID. But what he said was that, actually, if you look at the stats between 2010 and 2019, so pre COVID, only a third of organisations, had improved their customer experience. Everybody else and either remain flat or declined. So the point I’m making is, you can’t blame it just on COVID. So when you ask the question, what’s changed? I could be very cynical and go, not much.
James Nathan 04:27
Colin Shaw 04:29
So it’s, you know, I think there is undoubtedly a recognition and obviously customer experience is talked about a lot more than everything else. But as the name of our company tries to portray, it’s all you know, beyond philosophy. It’s alright, you know, you need to have a strategy or a direction or or philosophy of where you’re going, but you’ve got to go beyond it and do something. And I guess not a lot of, not enough organised are doing things that affect and make things better for customers. In my view.
James Nathan 05:07
Well that, you know, doing something is quite an interesting thing I remember listening to, you’ll have to forgive me now I’ve completely forgotten his name the guy from Southwest Airlines
Colin Shaw 05:20
Yeah, I know. Keller. Keller.
James Nathan 05:25
Yes, yes. Yeah. And he had a fantastic quote, was his we have a simple philosophy. It’s called doing things. You know, they see something and think, right, how do we make that better? Or what can we do with it?
Colin Shaw 05:37
I had the privilege of meeting him actually, in Southwest Airlines about 10 or 12 years ago.
James Nathan 05:44
Fantastic. Doing things and thinking about doing things that completely different. You know, if you look at me, you know, I can buy a gym membership. And that’s just a way of throwing some money away. Because unless I go to the gym, it makes no difference. You don’t CX programmes a bit like that? Aren’t they? A lot of people talking about things, but why don’t they get implemented properly? What’s so hard about it?
Colin Shaw 06:05
Um, so I mean, that’s a complicated question to answer. But I mean, big sort of headlines are that a lot of people have just jumped on the bandwagon without realising what it actually means. So in other words, everyone’s doing customer experience, we better do customer experience as well. Not actually understanding what it means to improve your experience, and therefore the things that you’ve got to change. And therefore the investment that you need to make and the changes that you may need to make in the organisation. Some, some of it is around just, you know, the biggest thing…. I tell you what mate, the biggest thing I’ve learned over the last 20 years is this. It’s about a mindset. You know, whether the organization’s mindset is truly focused on the customer or not, right, and most organisations, unfortunately, still aren’t focused on the customer enough, and not looking through the customer lens. And as we go into more difficult times, with, you know, recessions and energy crisis and everything else, the danger is, is that what organisations do is they revert to type. And they start to cut back on, on these things. And I think, again, if you were to look at what’s happened over the last couple of years, you’ve seen that in spades, you know, we’re with, you know, call…. it drives me around the bend that you phone up call centre still, and they basically saying, we’re, you know, we’re suffering from unprecedented demands. And you think, now you’re not, you know, you’ve known about this for two or three years now. No, this is not unprecedented. This is now normal. And what you’re really saying is that you haven’t got enough people to cope with it, you know, for one reason or another. So let’s not get me on my hobby horse.
James Nathan 08:04
Well, I quite like to…. You know I think about, you know, you listen to that, and think I have a very simple thought process at the moment. If you’re using COVID, as an excuse, you’re three years behind. And you know, because things have moved on the new normal was the most annoying. There were two things that drove me crazy during COVID. One was unprecedented, that word needs to be removed from the English language. The other was, was that you know, and you think, come on, it’s not the new normal with this is how things are things change all the time we go through recession, we go, we don’t go through pandemic, thank goodness, all the time. But we’ve had enough time to adjust. And good businesses appreciate the things that they’ve learned from that process. And certainly were if we listened to customers now, they will want things in a slightly different way. But that’s not going to change in three years time. They’ll want them in a slightly different way again, won’t they?
Colin Shaw 09:02
Yeah, and obviously customer demands are changing all the time. And the irony is that is that again, if you go back to the American Customer Satisfaction Index, they saw that customer’s expectations declined during COVID Because they understood that businesses were having problems and therefore we’re making allowances for those things. So, you know, I know it’s not easy. I mean, I know it’s difficult for organisations, if if you’re, you know, you’re having to suddenly recruit a load of people and everything else, but I do think too many organisations are hiding behind that. And it really just shows a fault line in their thinking and a fault line in their approach to to customers basically, and hence the therefore, you know, people are people are upset and most experiences at the moment are not good, basically.
James Nathan 10:05
And we almost make excuses for call centres don’t need to say, well, you know, it’s a call centre. So it’s gonna be terrible. Until you talk to a good one. And then you realise they don’t all need to be like that. But you’ve had vast experience in that world, haven’t you?
Colin Shaw 10:19
Yeah, I used to run call centres back in the day. So my prior to setting up beyond philosophy, I worked in corporate life. So I spent 20 odd years in the practical end of running call centres and everything else. Yeah.
James Nathan 10:36
Yeah. And they don’t seem to move on all that far. Which is a great shame. But when we think about CX and what what it does for a business surely, you know, these, these systems, putting in place, even the smallest changes are going to change your business and make them grow better, aren’t they?
Colin Shaw 10:54
Well, they are if you focus on the right things, and here’s the rub. So I’ve written seven books on customer experience. And my second one was around customer centricity. So I always find it strange in saying what I’m just about to say. Which is that the irony is, is that sometimes you should ignore what customers tell you. Yeah. Because what some, oftentimes, customers don’t know what they want. So and the best example of that is, it’s a bit like, you know, Disney know that when they ask their customers what they want to eat at a theme park, Disney know that people say they’d like to have an option of a salad. But Disney also know that people don’t eat salads at theme parks!
James Nathan 11:44
They get put up on the shelf to let throw them out again later.
Colin Shaw 11:47
Well, yeah, and that’s the issue. So the issue becomes, you know, because people eat hot dogs and hamburgers and not salads, that if you fill the park full of salads, you’d be throwing loads of salads away, at the end of the day, costing you money, and you would have run out of hot dogs and hamburgers pretty quick. And therefore, it would affect your revenue line. So, so the issue becomes that, you know, when you start talking about a customer experience, and as I said at the beginning, you know, organisations not understanding what a customer experience actually is. You know, a customer experience for me is about the rational things that customers are doing. So, you know, they’ve physically buying things, they’re going into a shop, you know, go into… phone in a call centre, when it may be, it’s about how the customer feels. So emotions. And understanding that you we as human beings are driven by emotions. It’s about understanding that there is a subconscious experience. So in other words, we receive messages, subconsciously, and we do things, subconsciously. So if I said to you, now, think about the fact that you are breathing, and you’ve just thought, oh yes, I’ve just breathed in, and I’m just breathing out. Yeah, but you were breathing before, but you were doing that subconsciously. So, you know, a subconscious message could be, you go into a bank, and they put pens on chains, and tells you that they don’t trust you, you know. And then there’s the whole element, then about the fourth element is the whole area of, effectively psychology or behavioural science, which is the stuff that we talk about on the on the podcast, which is effectively understanding why human beings do what we do. So why do we say that we want a salad? And then we hotdogs and hamburgers? Yep. And how therefore, can you provide an experience? And just one last thing, and then I’m going to shut up? It is, you know, so when you start saying, well why are businesses failing to improve their experience. A lot of times, it’s because they’re focusing on the wrong thing. They’re focusing potentially on the things that customers have said that they want them to improve. But that doesn’t necessarily mean to say that that will move the statistics. So literally, yesterday, I was recording a podcast where we had one of our listeners, contact us and basically say that they, you know, they’ve been running a customer experience programme. And the numbers haven’t moved and yet they’re they’re basing it upon what customer feedback and feedback from Voice of the Customer, you know, they’ve improved things and they can show that they have, but customer stats are not improving. Why is that the case? And the answer is, well, actually, it’s like the salad, customers have said that, you know, you need to improve these things. But actually, that’s not really the thing that’s driving their behaviour and what they really want. And then you get more into this whole area of, well, what do they want? And therefore the subconscious drivers of that?
James Nathan 15:22
Well, that’s, that’s yeah, that’s the bit that becomes quite fascinating isn’t. When you mentioned that McDonald’s or sorry, the Disney salad. You know, there’s a lot of pressure on corporate business to, to provide healthy options and what have you. So they can almost be seen to do it. I remember, Kentucky Fried Chicken changing its name to KFC, so the fried word disappeared, and then taking, you know, when you buy chips from them, they haven’t got any salt on them. And the reason they did that was they could reduce, they could say there’s less salt in our product, but they give you a bag of salt to put on yourself. And there’s there’s lots of stuff around that. Also remember McDonald’s bringing out a salad when I was a kid. And everyone going My Mom, it’s great, because you can get a salad there. I don’t think they ever sold any. No. When when people analysed it, they had more fat in it than a Big Mac. But how do we how do we get to that understand those emotions and those subconscious drivers? Because clearly there’s there’s a direct connection between the way someone feels and the what they then purchase?
Colin Shaw 16:24
Well, first of all, I think, don’t underestimate that the issue being that people in organisations don’t necessarily even just accept what you’ve just said. So, you know, if I was to say to any of your listeners, tell me which emotions drive value in your organisation, you know, so can you tell me which emotion you’re trying to evoke in your customers? Most organisations can’t tell you that. Right? And if they could, then it’s not a strategic choice. You know, everyone may be able to say, well, I think it’s cared for, or I think it’s valued or whatever it may be. But that’s an individual decision. It’s not a strategic decision by the business. The second thing then is, you know, so it’s one is there’s a lack of understanding about why people do things. And this is why I personally find this subject so fascinating. And then there’s a lack of understanding of that deeper side of things about that whole area of behavioural science. So I was mentioning to you before the show that I do the podcast with a Professor Brian Hamilton, he’s the co-host. And he, he teaches consumer psychology at Emory University in the state. Right, the interesting thing is, he’s a stand up comic as well. So we have a good laugh when were doing it.
James Nathan 17:57
Colin Shaw 17:59
But, you know, what he brings to what he brings to the party, if you like, is that you suddenly realise in academia, there is so much information and knowledge about why people do things. Okay. So stop me if if I’m, if I’m boring you, but let me give you an example.
James Nathan 18:21
Please, please do
Colin Shaw 18:21
You know, we’re having some work done around the house at the moment. And we never, we never…. the way we make a decision about you know, should… is the plaster the right plaster, and is it the right price. Is we typically get three quotes. We never go with the most expensive, we never go with the cheapest, we always go for the one in the middle. And that is what is called a heuristic. And a heuristic is basically a way that we human beings have developed to help us make decisions quickly. So it’s a rule of thumb. And, and that heuristic is basically called extremeness aversion. Okay. Human beings do not like extremes. Right? We never go for the most expensive we never go for the cheapest, we always go for the one in the middle. So you once you started to understand that you can then start to go, okay, well, given that, how do we now build that into the design of our, of our customer experience? Another example is there’s a thing called the evaluability heuristic. Okay. So I’m thinking at the moment about buying solar panels because of all the energy crisis and everything. And I got through a load of information from the solar panel company and I didn’t understand the bloody word it said
James Nathan 20:03
It is a minefield that
Colin Shaw 20:05
It’s just, it’s talking about this and that. And you know, and I’m reading it, I’m thinking, I don’t understand a word it says. So what does the evaluability heuristic though it basically says, there is a, you know, one piece of information that I can understand and get to grips with and that effectively, in the case of solar panels, is well, how many kilowatt hours is it going to produce? What money simple. You know, but again, knowing that, to be honest with you, they didn’t need to produce these 27 data sheets, they just needed to tell me that, you know, now, different people will have, you know, different views, and therefore, you’re into different segmentation, etc, etc. But the point I’m trying to make is this. And I know I appreciate it’s long point, that the understanding at level of detail in behavioural science, how people make decisions, enables you to design an experience that drives value, that drives the numbers, that ultimately gives you the ROI that you, you need.
James Nathan 21:16
And when you when you when you start breaking it down like that, we can all think of examples in our own lives where, you know, we do those simple things, but also, I mean, I’m terrible for this, if I go to buy something, I usually end up with a slightly better version, and the shops know that. I was working with, with the business quite a while ago now, actually. But the there’s a restaurant business and you know, it’s very simple way they put wine lists together and is that the cheapest wine is not the best profit maker, the second cheapest wines the best profit maker because no one wants to buy the cheapest bottle. And they always shift above. And, you know, we know these things, and businesses know these things. But what baffles me is, why are they not training and developing people to understand that within the business and then setting process, so it allows us to make, you know, make allow our clients and our customers to make good decisions, which are good for them and allow us to make a good income as a result? Two things are very important.
Colin Shaw 22:23
Yeah, I but I would, the difference is that I would say that not enough people know those things. And then they are not implemented well enough to build on those things. I mean, another thing with restaurants is that you’ll find that that restaurants are going to understand this, interestingly enough, will not put the dollar sign or the pound sign on the menu, they will just put, you know 9.99. Now, we know that if we’re in England, that’s £9.99. But because there’s some psychology around the fact that if you equate it to money, then people are less likely to spend that amount. So this stuff is happening all around us, all the time, okay. And you know, we are being influenced by these things all the time. But in most cases, most organisations don’t understand it. And they are not in control. And it is like the bank putting the you know, the the pens on chains, it is not what I would use the word deliberate. So they are not, they are not in control of what the subconscious messages are, that they are giving their customers. And therefore, as a result, it’s, you know, they’re designing their experience, well, they’re not done in their experience very well.
James Nathan 23:57
And how does that how does that vary the digital world? Because so many businesses, you know, the catchphrase, is digital transformation, moving everything to an accessible online environment. How do we, how do we make sure we’re not putting pens on chains, when we’re putting websites together and adjusting ourselves in a digital way?
Colin Shaw 24:15
They don’t? It’s, so first of all, it’s the same thing. Why? Because the person that you are trying to influence is the customer. And all we’re now talking about is, you know, is the customer in a store or you know, buying on, phoning into a call centre, or are they buying digitally, okay? So, you know, all the same things about how we make decisions apply. So again, let me give you an example. We are we have used Survey Monkey for for some research and stuff like that. And recently, one of the team came to me and said, Look at this, this is a prime example. And and I’ve said what would you mean? He said, Well, we’ve moved away from Survey Monkey. And therefore we’re not going to renews renew it. And as soon as we’ve got the as soon as we didn’t renew it, it came up with on the screen, it came up with a “oh”, you know, we see that you’re not renewing it, if you renew it, then we’re gonna give you I don’t know what the number was, but 25% off. And basically, this was automatic renewal, let me say. And then when we look back at the bills, we basically been paying for something, we’ve been paying for, because we’ve been doing it on automatic renewal. We’ve been overpaying for the last four or five years, basically. Okay, so first of all, that made me angry, okay, it’s not a huge amount of money, but whatever. And then the next thing is, we said, okay, well, you know, move on to the next next sort of screen. And then rightly so it came up with a list of things that we would lose as a result of not having automatic renewal. Okay? Now, that is using a thing called loss aversion. So, you know, loss aversion basically says that, we don’t want to lose things. So they are rightly using loss aversion to tell us all the things that they’re using. So the point I’m trying to make is this is very simple, is the customer is still a human being. So whether it’s in the digital realm, or the on, you know, or the face to face realm, it’s the same thing, you’ve just got to think about how you’re deploying it.
James Nathan 26:43
Do you know, it’s it, I’ve had a fabulous example of this working beautifully, very recently. So I, me and my son started scuba diving last year, and we’re going on a trip this year. And I wanted to buy a dive computer, which is basically a very clever watch, which allows you to know how long you can be under, basically a safety device for what of a better word. And these things are very similar to each other. And the prices vary from not a lot to 1000s. And I was looking at a shop online, a place up in Leeds and, and sent to the guy message to ask, you know, have you got this in stock? And has it been updated? Because there was a recall. Plus, actually, I was trying to decide between this object and this one. What would you suggest for fairly basic beginners? And my phone rang two minutes later, which I thought was amazing. And but also perfect to say, hey, look, it’s much better, let’s just have a chat about you what you need. And guess what? I bought two of them. And, you know, it was it was so lovely that they didn’t just reply with an email. This guys got his business and he’s, you know, will I buy more from him. Yeah. And if you need stuff will I tell you where to go, of course. And it’s very basic. But, it’s what makes the world go round?
Colin Shaw 27:53
Yes, yes, no, absolutely. But they are treating you as a human being. Yeah. And they’ve, you know, but at the end of the day, they’ve also sensibly gone, well, hold on, if this guy’s you know, maybe it’s a beginner, and therefore, he’s probably going to have to buy lots of other equipment. And you know, if he does this over the next 10 years, then he may want other things, and bla bla bla bla bla, so this is worth the investment, basically.
James Nathan 28:17
Absolutely. And it just feels good to and you know, there was no upsell, he was actually trying to tell me that the one I liked the look of was probably more than I needed right now. And you think, great, he’s going to, you know, he’s got a customer for life, which is what we all want, don’t we? And we want to keep designing process around that. And thinking about it, but when when we started this conversation, we’re talking about, you know, why don’t these things work? Why don’t these programmes work? And it is still saddens me, you know, half an hour into a chat later that I don’t really get it. Because I look at it from a business perspective. I think if I could make my business to better now, why would I not do that? If I could make my customers happier. In fact, I don’t want them satisfied. I want them to delighted and how do I delight my client? I want them to come back and say, that was awesome. What can we do next? And that’s I think, you know, I’d be a very strange business who said, I don’t really want that, again, quite happy searching for new clients constantly.
Colin Shaw 29:16
Yeah, but the reality is, is that what happens? So…. Yeah, so I agree theoretically with you. But why then, why then do too many organisations still spend the majority of their money on acquisition rather than retention? And the issue for me is that they are they they’re not as serious about it. Okay, so the theory is there. Do you want delighted customers? Yes. Are you prepared to do what it takes to implement that? Well, that may be a different kettle of fish.
James Nathan 29:54
Right. We’re back to doing things aren’t we?
Colin Shaw 29:57
Yes, totally. shall we? We’re back into do I believe that this is going to provide me with the returns that we need?
James Nathan 30:08
Tell me about your podcast? Because I’m fascinated and sounds amazing topics along the list of different things. How did you start? And what do people get by coming to listen to it?
Colin Shaw 30:20
Well, I mean, it started very simply because we wrote my last book, The Intuitive Customer, I co wrote it with Ryan Hamilton who is Professor Ryan Hamilton. And to be honest with you, we just got on like a house on fire. And therefore we were having a laugh and a joke, as we as we did the pod…. as we did the book and working out what to write in the book. And then just simply, at the end of it, we went, this was enjoyable. Why don’t we do a podcast? So we just basically, have been doing that ever since then. So it’s a mixture of…. the good news is it’s a mixture of sort of, he comes at it from a theoretical perspective. And you know, what we know in academia, I come in from a my business perspective and customer experience. And the the other sort of secret ingredient, if you like, is we just have a laugh when we do it, to be honest. And that seems to go down really well with people. And yeah, so yeah, it’s called the Intuitive Customer. And we, it’s every week, everywhere you get your podcasts from.
James Nathan 31:25
All the normal places do definitely have a look out for it. It’s, it’s a fabulous listen, obviously, listen to this one as well. But you know, listen to that too. And so before we wind up, though, Colin, and we’ve talked about doing things quite a bit today, what what’s your your big thing, your golden nugget, the one thing that people could do in their businesses today to make them better today and better for the years to come? What would that be?
Colin Shaw 31:51
So the really interesting area that I’ve started to get into recently, is the whole area of memory. And realising that everything we do is influenced by memory. Okay. So if you think about customer loyalty, loyalty is a function of memory. If you didn’t remember that your experiences, you wouldn’t be able to go back to that experience. So I could rattle on for this for half an hour. But let me just tell you this was one thing and hopefully that suffices. So understanding how memories are formed is a key part, okay. And there’s a guy called Professor Daniel Kahneman. He’s won the Nobel Prize for Behavioural Economics. And what he talks about is that what we remember in an experience, is we remember the peak emotion that we feel. And we remember the end emotion that we feel. And he calls it the peak end rule. Right. And one of the phrases that he came up with which I love to bits, and it’s probably this is the biggest thing I’ve learned in the last 15 years, is that we don’t choose between experiences. We choose between the memory of an experience. So just think about the implications of that. And let me repeat that. We don’t choose between experiences. We choose between the memory of an experience. So if I said to you, what’s the best restaurant you’ve been to? Or what restaurant do go to? You are choosing the restaurant from your memory? All right. So that raises a few really important questions for me. And this is the therefore the golden nugget. Where is the peak emotion that your customers are feeling at the moment? And what emotions are they feeling at the moment? And what emotion do you want them to feel? And does that drive value for you? In other words, does that provide you with ROI and all those other types of things? And again, the same questions for the end? You know, where’s the end of your experience? How are your customers feeling at the end of that experience? What’s the emotion you want them to feel at the end? And does that drive value? And are you designing your experience around that end? And I think, for any business, any business, understanding that the importance of memory and thinking about how can I create this experience to be a positive memory, therefore I’ve got to think about the emotion is key. So there’s y golden nugget.
James Nathan 34:45
Fantastic, that’s superb. Colin, thank you so so much. It’s been lovely chatting with you as well.
Colin Shaw 34:51
Great, nice talking to you. Cheers.