Connect with Jim Tincher:
Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network podcast. I'm excited to introduce you today to Jim Tincher. Jim sees the world through the eyes of the customers. He's a nationally recognized customer experience expert, keynote speaker, and the author of DO b2b: Drive growth through game-changing customer experience. His firm builds loyalty and B2B organizations and works with multiple global manufacturing organizations. Jim, welcome to the show.
Jim Tincher: Thanks, Lisa. It's great to be here.
Lisa Ryan: Jim, please share a little about your background and what led you to do what you're doing.
Jim Tincher: Sure. I've always been a customer and am very interested in that. In my first job out of college, I worked for a high-resolution laser printer manufacturing organization. During my first summer, I was going to visit my girlfriend, now wife, out in Connecticut. So I wanted to see a customer while I was there, just for whatever reason in part of it.
It's always been a customer focus, but over time I recognized that the field of customer experience is where I gravitate towards. I didn't connect to the business, and that was my case. Once, I worked with a B2B to C organization, and it was all about the customer. I noticed that my internal colleagues needed to be resonating with them because I only talked about customers.
I never connected it to the business. Since that time, 12 years ago, I've been focused on making that connection to how helping improve the customer experience creates a more substantial company. I'm especially intrigued with b2b, which is far more complex and richer than B2C. But nobody ever writes about it.
They all write about Amazon. They write about Best Buy, where I spend some time. But instead, they need to talk about how creating a better customer experience creates a healthier organization in a manufacturing environment. That's my passion, and my mission is to make that connection.
Lisa Ryan: One of the things when we look at engaging employees, the more engaged your employees are, the better they take care of your customers. So the better customer service you have, the better your business, which means the employees feel more connected to the organization. So it's this nice cycle that, again, in manufacturing, because they're often just making products that they don't see that result.
They need to be more focused on the customer experience, according to what you're saying in your brand-new baby book, congratulations. That is a huge part of the picture. We talked a little bit before the show about your four items and your unique experience with Dow Chemicals.
So why don't we start with Dow since everyone has heard of them? Then, you can share that story.
Jim Tincher: You bet. First, our research shows that most manufacturing programs have a customer experience program, and I don't know whether that's doing a more substantial business when done.
Your customer experience program should create an environment where customers want to buy more from you. They want to stay with you longer. They want to operate in less expensive ways for them and you, but only some programs can do that. Dow is an outlier in a very positive way. I first met the Dow team about four and a half years ago, and we were working on their complaints journey and had the opportunity to meet Dan Fedder, now their chief commercial officer.
At that point, he was the VP of CX, and we were working again on the complaints journey. So when I first met him, he said, Jim, my goal is to create an enjoyable complaints journey.
Lisa Ryan: That sound, it sounds like an oxymoron.
Jim Tincher: Right? That caught me by surprise. And they measure effectiveness, ease, and enjoyability.
They don't calculate net promoter score because they've proven net promoter score does not link to any business outcomes, and that's what they care about. They don't care about somebody moving their mouse to the right on a survey they care about. Do they create an environment where customers want to work with Dow?
When there's a discretionary purchase that any of their suppliers can give, they want to go to Dow first. So that's the outcome they're driving towards. Not in that promoter score behaviors are they care about behaviors. And they have found that when customers say it's enjoyable to work with Dow, their order velocity increases.
The categories in which they order go up. The genuine interest to Dow, their number one outcome, is joint innovation - a customer says, I trust Dow enough that I want to work with you to create new to the world products, and we'll benefit from that. But that only happens if they find that it's enjoyable to work with Dow.
Lisa Ryan: And you look at that too, that when business is going smoothly, of course, we love the business. But most business loyalty happens when a mistake has been made, and it's up to that company to solve it. When that company acts, based on whoever messed up through that complaint process, that can completely turn that around and create that customer for life because they know that, for example, in this case, Dow has their back. So, talk about that complaints journey. What did it look like before, and how did they make it enjoyable?
Jim Tincher: Sure. They started in the same situation probably many of your listeners experience. A complaint comes in, and it bounces around the organization. It's easy to convince yourself that this is somebody else's problem and send it to the organization. We see that in all kinds of organizations, not just manufacturing, but certainly in our multiple manufacturing clients.
There's minimal incentive to take ownership of and solve an issue, and certainly one issue. Nobody wants that on their plate. It's very easy to commit yourself. That belongs somewhere else, and that's the situation they found themselves in. Where it comes in through, customer service goes over to the sales team or account management.
From there, it goes to R&D and manufacturing and bounces around, with nobody taking ownership of it. And that is true. That's not a Dow problem. That's true of all our manufacturing clients. And what they said is that's not acceptable. So we worked with them to interview their clients; to talk about the impact when a complaint is not resolved and how that impacts the organization and the individual.
Then, we brought that to Dow. They had us bring that to their senior leadership, showing how they now match. We brought in a video of their clients talking about the good and the bad of working with Dow, and they brought the data. Ricardo Porta is now their head of customer experience, and he brought in all kinds of data to show not just what people said but their behaviors and how that impacted Dow.
What we then did was we worked across the regions. We went to Shanghai; we went to Tunisia in the Netherlands. We went to Brazil Rio, as well as the headquarters of Midland, to bring in the employees to talk about how this impacts their jobs. We also wanted to get the employees' ideas of making this an enjoyable experience without investing in new roles. It's very easy to say, Let's bring another 50-person department. They'll solve it. Dow was clear - we need to do this with the existing headcount. How can we do that? What they said is that what we'll do is we will carve a group out of customer service and other groups. We'll create a center of excellence for complaints, and we will work and give this group accountability to resolve complaints as fast as possible. As a result, they piloted in Latin America, and Ricardo was the one who led that pilot. They saw that complaints were handled more efficiently, which clients loved and led to greater, more substantial business outcomes for Dow and their clients. This created a positive vibe of success.
Dow invests in this. They support a better complaints journey. They saw that the KPIs got better in time to resolve. For example, they saw enjoyability get better. The customers became more engaged, and then they saw behaviors improve. For example, future orders, order velocity, and order categories made Dow, a stronger company.
This wonderful flywheel where investing in customer experience results in a stronger company. And that's the magic about Dow; they proved it. They didn't just say we think that once we invest, everything will be better. Instead, they proved it to help their executives reinforce the importance of the investment.
Lisa Ryan: I look at that again, returning to the employee standpoint. In many places, complaints bounce around because nobody feels they have the authority or they're not empowered to take care of it. So, number one, they don't care, or they think they're going to get in trouble or they're going to have to jump through a lot of hoops.
You said several things. You're empowering your employees, making them feel more connected and married to the results. I just learned about the IKEA effect: people are more connected to things they've had a chance to build. So, when you have that employee experience, and you take away that blame, that safety, you're creating a safe environment, and then these employees get to work for what's called a center of excellence. Yeah, I'd want to work for that too. So, you're creating such a win-win in such an easy way to do that.
Jim Tincher: One of the other keys they did is they didn't make this a headquarters initiative. We're talking with one client of ours for who 20% of business happens in the US, but the US is where they are headquartered. So, all the ideas are focused on the US first, even though that's a smaller organization. But, again, this is not Dow. It's another group. Dow is very deliberately saying. We're going to involve all four of our regions. We're going to interview all four regions. So, we sent our team, for a second time, out to China, to Rio to involve the customers, talk to them, and understand their experience. Then the customers, because one of the things that Dow did that was effective is they went back to those customers and said, Thank you for giving us your feedback. This is what we're going to do about it. So many programs need to remember to do that.
And Dan, the chief commercial officer, is very articulate. He went back and recorded a video sharing, here's what we're going to do differently. But also, their sales team deliberately reached out to everybody who participated, saying, Thank you again for being part of this. Here is what we're doing. They were closing the loop with clients, which makes them stronger advocates because that's more enjoyable. You get that feedback that we are your partner, and the sense of being a partner is a crucial part of enjoyability. Dow is not just a vendor. Dow is there to help my business be stronger.
Lisa Ryan: That feeling is vital to Enjoyability and feeds into that immediate feedback in closing the loop. That also sounds like when you're doing employee engagement surveys. You want to ensure that you're getting back to the employees. Hey, this is what you wanted. This is what we did.
And then employees, next time you reach out to them, they're not going to say that was a waste of breath last time. It's Holy cow; they're doing stuff. So just getting back to the customer and let them know that what I shared made a difference. And again, you're building that.
We've spent quite a bit on number two: that emotional North star in the complaints journey. Let's go back to the other three steps in your book—tying the customer experience to business outcomes.
Jim Tincher: Yeah, that's so important and rarely done that most programs. Our research is very clear. Most programs say, oh, we should do customer experience. They create a group over on the side somewhere. We should do net promoter scores. Let's do that. Okay, now do your survey work. Let us know what happens. That's where the most end, where they, if they do any analysis past that, they'll say, Okay, last year our detractors, those who give a low score, they churned at 7% versus our promoters, those who give a high score churned at 2%. Interesting. Many manufacturers, by the way, don't have a churn issue. It's more about a share of the wallet. But that's hard to measure. And so most customer experience programs don't even try, and they'll look at attrition at, what's that?
Lisa Ryan: Can you define Share of wallet? What do you mean by that?
Jim Tincher: That's a great point. Share of wallet is in a category in which they operate - of all the dollars spent in that category, how much goes towards us? So, LA Grand is another manufacturer, and I spent some time over the last eight years we've done programs with them, one of which we measured customer experience. We asked customers, who are your top two providers in this space? We worked with the AV division. Who are your top two providers, and how much do you spend with each? To get a sense of how much of their discretionary, how much of their spending is with that division. And we found for them that confidence in LA Grand was a great predictor of that.
So, we're connecting the customer experience to outcomes to how much you spend with us versus our competitors. Very few programs do that. They believe that by improving the survey scores, they probably score better behaviors happen. But that isn't very compelling. We met with a $2 billion manufacturer the CEO of a month ago, and we shared one slide that talks about how we measure the customer experience, which is four categories.
Yes, we have transactional sentiment surveys and net promoter scores, what they use, and that is part of it. But we also talked about behaviors. For example, how many complaints are opened? How do customers order? Do they order digitally? Which did many manufacturers want to drive? Do they order the old-fashioned way instead?
How often are they ordering within lead time windows? Because again, if we have a better experience, they're more likely to come to us earlier, which means they're outside of the lead time windows, which we want, or before the lead time windows. Then we look at operations. What is the on-time delivery?
What is the perfect order for Dow users to get it right? What is, how often are we getting the orders? Perfectly on-time product, no issues. And then so we, and the fourth category then is financial. Are we getting it now? A higher share of wallet is hard to measure because it's hard to know how much your customers spend with your competitors, but a good proxy is how many categories of products they are ordering from us. There are specific products for many of our manufacturing clients that they're the only ones who can offer, and that's not where the competition is. There are also several categories of products that their competitors also offer.
That's the battleground. Do you earn the right for those more discretionary orders by doing a great job on the unique products? And so, the financial is another key part of that order. Velocity is another part, but by bringing in those financial metrics, we measure the customer experience into a combination of sentiments, but behaviors are key. Maybe 10% of your customers respond to your survey. But what percentage of your customers have behaviors? All of them. Univar is a distributor. They work with Dow and others clients outside their distributor of chemicals. They looked at it and said that 90% of our customers must complete a survey.
Can we predict those who are happy and unhappy based on their behaviors? They look at the operational behavioral data and say this client seems like they're unhappy. I haven't failed that survey. They haven't told us that but based on what we're seeing in maybe order velocity dropping or more complaints open, they look unhappy.
Hey, account management team, can you reach out to them to see if that's true and what's happening? So they create a synthetic NPS. Because for them, they know NPS matters because they can use the data to do that for them. So coming back to, again, how we measure behaviors. We calculate the operations or impact, and we measure the financial outcomes.
That's how you measure customer experience. The sentiment is not a score; it is diagnostic. To help explain things. We have a conference; it'll be over by the time this comes out where Ricardo's going to speak about how he was asked a question. And let me bring up the actual question right here. How do I see the impact of inventory on my business, and how does customer experience help me explain that impact?
Most CX programs would say, I don't know, but he went and did the math to show that when inventory drops for a specific time. Customers have no confidence. Therefore, they order less often because they'll order from somewhere else with enough inventory that they are confident they will be fine. So he can draw that connection between the inventory levels and future EBIT.
Lisa Ryan: Okay. Amazing. Only a few programs do that. Yeah. You have moved nicely into the third act of bringing the business data into the analysis, where you deal with your inventory levels and customer confidence. For those of you keeping notes, the first one we discussed was tying customer experience to business outcomes. Creating an emotional North Star, the enjoyable complaint journey brings the business data into the analysis. So tell us a little bit more about that before we move to the fourth step.
Jim Tincher: You bet. And that's where that's how you should be measuring the customer experience is based on. If I had to wrap the difference between what we call a hopeful organization. They might be doing good work, and they're doing customer experience work. Still, they need to be connected to the business versus a change maker driving an improved business through customer experience. And again, that's less than one out of four.
If I were to sum it up in one sentence, it would be that hopefuls report on sentiment. This is how people feel. Changemakers study and change behavior, and that's all in the data. Both the manufacturer's behaviors as represented in operational data and in the customer's behavior as such things as future orders or the velocity complaints that are ordered, bringing those together.
For example, if you look at your business and speak to the listeners, I suspect there is a direct link between complaints and future business. There is some threshold between either number of complaints or the length of the complaint where customers change their behavior. There's an issue open past a certain length of time, which will vary by industry in manufacturing.
Let's say it's a month. If the complaint is open for more than a month, future behaviors change to order from you less often. So if you can look at that data and find that linkage, the survey is only there to help explain why it happens, but the critical thing is linking behaviors and using that data.
What we find is that we're a Qualtrics partner. Qualtrics is a survey platform, popular. We did not plan this, but we found that every one of...