CU Direct Drive 18 Coverage: ‘It’s All About Love and Hate’

GRAPEVINE, Texas–Forget your products and services–they don’t matter to members any longer–it’s all about “love and hate.”

“It turns out the best innovations are the way in which we deliver experiences to customers,” said Nicholas Webb in remarks to CU Direct’s Drive 18 meeting here. “It used to be about bright shiny objects.”


Nicholas Webb

Webb, the author of numerous books, including “What Customers Crave” also the holder of 45 patents on a variety of technologies, observed that “disruption” is a frequent subject of discussion and focus, but it’s also frequently misunderstood.

“It’s a unicorn; we hear about it, but most people don’t know what it is and that’s unfortunate,” he said. “Understanding it means being able to protect yourself and also being able to be incredibly innovative.”

So, what is disruption?

“Disruption, simply stated, is the rate and the depth of innovation,” Webb suggested. “We live in this deception dysphoria, where we believe disruption is incremental and predictable. It no longer is. To innovate is to be human. And it’s the future of this enterprise.”

The disruption surrounding all consumers and enterprises that is now taking place is all about customer experience (CX), emphasized Webb.

“Organizations that have a formal CX strategy can enjoy a 30% increase in top-end revenue that is very profitable, because the cost is low,” he said. “Most organizations focus on customer acquisition rather than customer retention and growth. Your members want you to understand their complete journey.”

Four Pillars of Disruption

According to Webb, there are four “pillars” of disruption:

  • Hyper-consumerization
  • Disruptive innovation
  • Connection architecture and enabling technologies
  • New economic models

“When you think about this disruption, it’s really about understanding your customers and understanding them in different ways,” he said. “You can’t look at them from the perspective of demography, such as Millennials or Baby Boomers. It’s about where they are on the journey. It’s about what people hate and love. When you understand your members from perspectives of hate and love you will gain the ability to deliver amazing experiences.”

While the Internet of Things is also frequently the focus, Webb said credit unions really need to be thinking about “the Internet of Everything.”

“It’s about how we leverage all touchpoints and use machines to understand the signals,” he said.

Companies Want to ‘Own’ The Consumer

To no one’s surprise, Webb remained that Amazon, Google and Apple “want to own your customer.”

“Experience is probably your low-hanging fruit,” said Webb. “This is easiest and fastest way to make growth happen in a sustainable way while concurrently limiting your risk of disruption by competition and to also creating an incredible quality of work life. People want to be part of a mission that matters.”

According to Webb, what will overtake price and product as the key differentiator among businesses by 2020 will be consumer experience.

“When you ignore this stuff, that’s where you make yourself vulnerable to disruption,” said Webb. “The truth is all disruption is fueled by organizations doing a far better job of delivering delicious experiences. The good news is we can institutionalize this and really benefit from it.”

This year approximately 8,000 retail outlets are expected to disappear, on top of the 7,000 that went away in 2017. But while CU execs may be able to point out the companies driving many of those outlets in bankruptcy, what is misunderstood is the reason why, observed Webb.

“It’s easy to come to the wrong conclusion that this is happening because of Amazon. What voodoo magic do they have to charge us to buy from them with Amazon Prime? What they understand is friction,” said Webb. “It’s buy with one click. The message here isn’t about the technology; it’s about understanding their customers and creating beautiful experiences.”

What Destroyed Borders Books

Webb said it wasn’t Amazon that destroyed Borders Books, for instance.

“It was Borders that destroyed Borders. If you went into a Borders there were 130,000 books in 35,000 to 40,000 square feet of space. But consumers want beautiful, customized experiences. Amazon has a hyper-influential community of users. We listen to a community of real people. Amazon has made it possible to prove something is a low risk. That was something Borders couldn’t do. But after the bulldozers came in and cleared out the bricks, Amazon showed up with its book stores. In an Amazon store, instead of 35,000 square feet, they have 5,000 square feet and they only bring the best books in the world. Every book faces out. If you’re not a five-star-rated book with a large number of reviews, you will not get into their bookstores. They sell perfection and they don’t try to be everything to everybody.”

Quoting Peter Drucker

Webb said the esteemed business management analyst Peter Drucker had it right when he said “the purpose of business is to create and keep customers.”

For that reason, he said research showed that 89% of organizations said they plan to redirect their investments to Customer Experience Innovations. He asked credit union lenders how many of them have been to an auto dealership and mapped the journey from the car buyer’s point of view, beginning with approaching the dealer’s lot. He noted many auto dealers have done the same thing and discovered that no matter how friendly the salesman, a bad experience at the Parts or Service department results in a bad perception of the dealership.

Webb cautioned credit unions to quit listening to what they want to believe.

“If you don’t believe you have a problem, you’ll never make it better,” he said. “Eighty percent of CEOs believe they deliver a superior customer experience. This is now the experience economy. It’s the difference between success and failure.”

But what’s also critical is to understand just what makes for good customer/member service, said Webb. He noted people don’t talk about service that meets their expectations, as it was what they expected. But it’s also not enough: “Giving people what they want is toxic; this is where we die.”

He termed service that is less than expected the “Chronic Zone” for companies, and services that is far less than expected as the “Death Zone.”

Five Touch Points

Webb said credit unions should pay attention to five consumer/member touchpoints:

  • Pretouch: Micro mobile and digital moments
  • First Touch. “This is setting the trajectory of the consumer experience”
  • Core-Touch: “This is reinventing the core experiences”
  • Last-Touch: “This is making the last touch memorable”
  • In-Touch. “This is authenticity and contiguous value”

Webb said the research makes clear why credit unions should invest more in the member experience. “Satisfied customers buy 50% more frequently and spend 200% more each year. We can turn our members into full time credit union advocates.”

Webb said the “success secrets” to the best credit unions are these:

  • They know members matter. “They matter so much we care to understand them”
  • They know “member personas” and journeys
  • They out-invent the competition
  • They have formal CX strategies
  • They have an innovation infrastructure
Section: Standard
Word Count: 1387
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Copyright Year: 2019
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