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Analyst reports: the ever-present companion to a corporate exec’s life. I know,
because they were my ever-present companions when I worked in corporate
life.
because they were my ever-present companions when I worked in corporate
life.
Too many things in corporate life are geared around the analyst reports. They
seem to make people act like rabbits in headlights. They can’t focus on
anything other than what’s in front of them. It’s understandable, because
analysts are good at what they do. They look at the facts of today and make
predictions for the future of your business. But in today’s business
environment, in my view, analysts are missing a part of the big picture that
could lead to a poor analysis of where a company’s future may lie - the impact
of improving their organization’s Customer Experience.
seem to make people act like rabbits in headlights. They can’t focus on
anything other than what’s in front of them. It’s understandable, because
analysts are good at what they do. They look at the facts of today and make
predictions for the future of your business. But in today’s business
environment, in my view, analysts are missing a part of the big picture that
could lead to a poor analysis of where a company’s future may lie - the impact
of improving their organization’s Customer Experience.
Companies Create Customer Dissatisfaction to Meet Short Term Goals
In these days of cutting costs to increase margins and a no-fail attitude on
posting growth every quarter, analysts are tasked with finding out how the
company is going to make the numbers for the next quarter so the earnings
report will boost the stock price, and it appears they don’t concern themselves
with the long term effect on the Customer Experience. These cuts will post
growth this quarter, which is the only thing that the analyst’s bosses want to
see. However, cost cutting such as limiting the call-center hours to 9 to 5
Eastern Time or dismantling the warranty program can prove to be a big deal
to the Customer. Yes, it boosts immediate profits but causes a poor
experience and the Customer can be lost for the future.
posting growth every quarter, analysts are tasked with finding out how the
company is going to make the numbers for the next quarter so the earnings
report will boost the stock price, and it appears they don’t concern themselves
with the long term effect on the Customer Experience. These cuts will post
growth this quarter, which is the only thing that the analyst’s bosses want to
see. However, cost cutting such as limiting the call-center hours to 9 to 5
Eastern Time or dismantling the warranty program can prove to be a big deal
to the Customer. Yes, it boosts immediate profits but causes a poor
experience and the Customer can be lost for the future.
But somewhere between their analysis of the strengths and weaknesses of
the company’s ability to make the bottom line this quarter, the analysts and
his or her boss missed the opportunity to prevent one of their biggest threats
to long-term growth: a poor Customer Experience.
the company’s ability to make the bottom line this quarter, the analysts and
his or her boss missed the opportunity to prevent one of their biggest threats
to long-term growth: a poor Customer Experience.
An Exception in Big Business
One company that does not buy into the need to post huge growth every
quarter is Amazon.com. Their long-term vision has resulted in actions that are
the opposite of what the rest of the pack is doing. It is because of these
actions and their lack of huge profits every quarter that Amazon.com is
regarded with a sense of incredulity and even dismissive derision by their
competitors.
quarter is Amazon.com. Their long-term vision has resulted in actions that are
the opposite of what the rest of the pack is doing. It is because of these
actions and their lack of huge profits every quarter that Amazon.com is
regarded with a sense of incredulity and even dismissive derision by their
competitors.
Amazon knows that their methods are not business as usual today. In
Amazon’s Letter to Shareholders last month, Amazon’s Founder and CEO Jeff
Bezos details his plans for the future, which are being built today with
foundations in customer satisfaction made from the materials of customer
experience. From paying its authors monthly to proactively cutting prices to
increase their value to customers, or even investing in technology that
enhances the customer’s interaction, Amazon.com puts the customer
experience at the top of their short and long-term to-do list. It is no mistake
that Amazon.com is one of the longest living online entities of the new
millennium. They have planned for this future and built it, one satisfied
customer at a time.
Amazon’s Letter to Shareholders last month, Amazon’s Founder and CEO Jeff
Bezos details his plans for the future, which are being built today with
foundations in customer satisfaction made from the materials of customer
experience. From paying its authors monthly to proactively cutting prices to
increase their value to customers, or even investing in technology that
enhances the customer’s interaction, Amazon.com puts the customer
experience at the top of their short and long-term to-do list. It is no mistake
that Amazon.com is one of the longest living online entities of the new
millennium. They have planned for this future and built it, one satisfied
customer at a time.
The Hungry Hippos vs. Monopoly Approach
When I was a boy, I played a game called Hungry Hippos. In it, you grab the
handle of the hippo and try to gobble up the little white marbles before your
opponent does. The game ends when each respective hippo has gobbled all
the marbles up and the player with the most marbles wins. The game lasts
about 60 seconds, at best. There isn’t a lot of strategy and honestly, unless
you have a bionic thumb, there isn’t a lot of skill involved with winning it. You
are no more likely to win one round over another with much of the game being
decided on which way the marble rolls at any given time. Or, in other words,
luck. If I was being harsh I would say this is what companies are like today,
in part driven by the short term reporting.
handle of the hippo and try to gobble up the little white marbles before your
opponent does. The game ends when each respective hippo has gobbled all
the marbles up and the player with the most marbles wins. The game lasts
about 60 seconds, at best. There isn’t a lot of strategy and honestly, unless
you have a bionic thumb, there isn’t a lot of skill involved with winning it. You
are no more likely to win one round over another with much of the game being
decided on which way the marble rolls at any given time. Or, in other words,
luck. If I was being harsh I would say this is what companies are like today,
in part driven by the short term reporting.
I also played Monopoly. This game requires a sound strategy for how to spend
one’s money, which properties should be purchased and when, then populated
by houses and hotels over time. This game requires a lot of thinking and
planning for a future result. The longest game of Monopoly I played took my
friends and I five hours to complete.
one’s money, which properties should be purchased and when, then populated
by houses and hotels over time. This game requires a lot of thinking and
planning for a future result. The longest game of Monopoly I played took my
friends and I five hours to complete.
Unlike the Hippos, Monopoly took planning and time. Amazon are playing
Monopoly not Hungry Hippo’s. With strategy you could win the game in the
long term and make even more money than using the Hungry Hippo’s
approach.
Monopoly not Hungry Hippo’s. With strategy you could win the game in the
long term and make even more money than using the Hungry Hippo’s
approach.
More companies need to play Monopoly more rather than Hungry Hippos and in
my view, analysts should be encouraging this with the questions they ask
about how the organization is going to improve their Customer Experience
measures.
my view, analysts should be encouraging this with the questions they ask
about how the organization is going to improve their Customer Experience
measures.
If you ignore your long-term goals in order to gobble up the marbles of
quarterly earning numbers, cutting services that customers rely upon and that
enhance their experience, you will create disharmony in your relationship. And
as anyone who has been through it can tell you, harming a relationship just
takes an instant but building it back can take months, or even years.
quarterly earning numbers, cutting services that customers rely upon and that
enhance their experience, you will create disharmony in your relationship. And
as anyone who has been through it can tell you, harming a relationship just
takes an instant but building it back can take months, or even years.
So repairing your customer service satisfaction levels can add more time to
your strategy and implementation phase. This is time that few businesses
have the resources to weather. For this reason, I believe that damaging your
customer experience satisfaction levels in the name of profit could be the
beginning of the end of your business.
your strategy and implementation phase. This is time that few businesses
have the resources to weather. For this reason, I believe that damaging your
customer experience satisfaction levels in the name of profit could be the
beginning of the end of your business.
Analysts Need to Consider the Customer Experience in Their Evaluation
Don’t get me wrong. I believe in analysis. I believe that knowing your
strengths and weaknesses, your opportunities and threats is a good business
strategy. I believe that you should listen to the analysis that you have
invested time and money to have when you construct both your short and
long-term strategy. But you need to protect the customer experience when
building them or your strategy is likely to fail you in the long run.
strengths and weaknesses, your opportunities and threats is a good business
strategy. I believe that you should listen to the analysis that you have
invested time and money to have when you construct both your short and
long-term strategy. But you need to protect the customer experience when
building them or your strategy is likely to fail you in the long run.
Analysts must include the Customer Experience measures in their reports,
along with all their other important data. Because without it, their data is
incomplete as will be their predictions. They could, in fact, predict a future for
a company that will no longer exist because all their customers were gobbled
up by another hungry hippo!
along with all their other important data. Because without it, their data is
incomplete as will be their predictions. They could, in fact, predict a future for
a company that will no longer exist because all their customers were gobbled
up by another hungry hippo!