CX strategist Lynn Hunsaker on putting the customer at the heart of innovation

With all this focus on cutting-edge technologies and product innovation, are we embracing the customer experience as a major value-driver, or are we treating it as an afterthought?

In today’s fast-paced and competitive business landscape, innovation has become quite the buzzword. Companies are constantly striving to create groundbreaking products and services, but amidst the glitz of disruptive technologies, there’s one aspect that often remains overlooked: the customer experience. And that’s always intrigued Lynn Hunsaker.

Lynn is the Chief Customer Officer of CX consultancy ClearAction. She began her journey in the CX field over 30 years ago by designing customer satisfaction methodologies, and went on to lead customer experience transformation at semiconductor manufacturer Applied Materials and teach marketing at the University of California. She’s also a columnist and the author of three handbooks, including her latest one, Innovating Superior Customer Experience.

More recently, Lynn found herself in Silicon Valley, hearing a lot about product innovation, but she was more interested in those companies that were innovating in customer experience. She started researching and writing about companies that were pioneering this space, hoping to better understand the mechanisms through which they generated value. She discovered that with a touch of creativity and a strong focus on making things easier for the customer, any business can craft delightful experiences that build loyalty and gain a competitive edge in today’s market.

In this episode, we chat with Lynn Hunsaker about how customer centricity can be a motor of innovation – and how understanding the customer’s needs, wants, and preferences will pave the way for businesses to flourish.

Here are some of the key takeaways:

• Innovating in the customer experience realm can involve setting up peer panels or workshops where employees role-play as customers.
• Companies don’t just compete with direct competitors, they also consider alternatives beyond key players. It’s crucial to promote a customer-centric approach company-wide so you can be sure you’re offering the solution they need.
• Understanding customers’ ultimate purposes and jobs to be done allows you create more accurate customer segmentation in order to meet and exceed expectations.
• To tackle churn, you need to target the ideal customer profiles, set the right expectations, and engage non-customer-facing groups to address CX challenges.

If you enjoy our discussion, check out more episodes of our podcast. You can follow on Apple Podcasts, Spotify, YouTube or grab the RSS feed in your player of choice. What follows is a lightly edited transcript of the episode.

Closing the gap

Liam Geraghty: Hello and welcome to Inside Intercom. I’m Liam Geraghty. On today’s show, we’re joined by Lynn Hunsaker, Chief Customer Officer at ClearAction – a customer experience transformation consulting firm – and the author of the book Innovating Superior Customer Experience. Lynn has led cross-organizational employee engagement in customer experience excellence as an executive in Fortune 500 companies. Today, we’re going to be chatting a bit about CX. Lynn, you’re very welcome to the show.

Lynn Hunsaker: Thank you so much. It’s my pleasure to be here.

Liam: Could you give us a sense of your career journey up until this point and how you got into this whole space?

Lynn: Well, interestingly, I started out in strategic planning. I was interviewing customers face-to-face around the North American continent and trying to understand how they see our performance versus expectations versus competitors and overall value. And we called that relative perceived quality surveys. We use that in our strategic planning formula, something I think is not very common even today, which is a travesty.

“If we can figure out how to close the gap between what customers expected and what they get, we could save a tremendous amount of time and instill a lot more positivity in the world”

A couple of years into that, they asked me to lead a company-wide task force to figure out our customer satisfaction methodology. That’s where I learned a lot about customer experience, customer satisfaction, loyalty, and so on. And I was actually a speaker at the second annual customer satisfaction conference by the AMA and ASQ in 1992. That gives you an idea of how long I’ve been in this field. Then, I went on to be the voice of the customer manager in a semiconductor company, became head of corporate quality within about four years, and led company-wide transformation, saving millions of dollars in hours for our customers. Every P&L had at least two action plans for improving customer experience, which is also a rarity today, and it’s something I’m trying to re-instill.

Liam: What is it about the space that interests you or keeps it exciting?

Lynn: Well, I think this is a huge source of improving the world. We have so much confusion, time wasted, or negativity that’s unnecessary. If we can figure out, as organizations, both profit, non-profit, and government, how to close the gap between what customers expected and what they get, we could save a tremendous amount of time and instill a lot more positivity in the world.

Redefining innovation

Liam: I’d love to chat a bit about your book, Innovating Superior Customer Experience. What motivated you to want to write in that particular area?

Lynn: I was in Silicon Valley in Northern California for a long time, and after I left my corporate job, I still went to a lot of American Marketing Association meetings: business marketing, product marketing – all the things that had anything to do with the customer. And there, of course, everyone is talking about the next launch of the new product, and so forth. But when I would talk about customer retention, they would look at me with glassy eyes. If I could research what’s going on in innovation and combine that with what’s going on in customer loyalty, how might that be a door opener to catching people’s attention and growing my business?

Liam: How did you come to the realization that the concept of customer experience and retention might be overlooked in Silicon Valley’s focus on innovation and new products and services?

“We wondered how many other customers were feeling the same way, and that’s when they brought me in to run their annual customer relationship survey”

Lynn: It’s always the better mousetrap that’s going to be your ticket to success. And at a certain point, you reach a commoditization period where competitors are very strong. You don’t really have that much differentiation, except for the experience itself, or you’re trying to figure out how to be more efficient. This actually happened at Applied Materials, even though they were twice as big as their next competitor. That was the company I was working at in the semiconductors.

I was hired in 1994, and the year before this, the largest customer CEO said, “I know we are always celebrating how much we buy from you, but I’ve got to be real frank. You are the earliest to market with the latest technology all the time, and we have to have the latest technology as the biggest semiconductor company in the world, but we don’t want to be buying from you if your competitors can beat you to it because you’re really arrogant and hard to do business with.” We wondered how many other customers were feeling the same way, and that’s when they brought me in to run their annual customer relationship survey and drive a lot of change around the world. I went to Ireland and many other countries in Europe and Asia to help them get to the root of these issues and make some swift changes in our arrogance and ease of doing business.

Liam: I’m not sure now if it was in the book or one of your blog posts where you talk about Adobe’s approach of involving everyone in the organization in suggesting and implementing customer experience innovations. Could you tell me a little bit about them and how their strategy has impacted their overall customer-centric culture?

“One of the other things I loved about Adobe was that they would pretend they were a customer and were given some scenario with a real-life dilemma that customers were struggling with”

Lynn: They set up a panel like Shark Tank, the TV show – if you’re familiar with that. But I think it’s a friendlier vibe. Any employee can suggest some kind of innovation. And it doesn’t have to be a product innovation. It can be anything about the experience. What the peer panel does is put it in an incubator if they feel like it has merit. And then they nurture and fast-track the agile process – getting feedback from customers and prototyping and getting it out into the market or rolling it out. I think that’s pretty cool.

One of the other things I loved about Adobe was that they had an immersion series of workshops where employees would pretend they were not an employee. They would pretend they were a customer and were given some scenario with a real-life dilemma that customers were struggling with. It could be something about billing, finding information, using the software, or whatever. And they were challenged to figure it out without their insider knowledge. The employees got really passionate about these things and carried on the improvements after these workshops. I think these types of efforts are great examples for any company to adopt.

Liam: That’s great. I was imagining the Shark Tank music earlier as employees walked down the hallway into the tank.

Lynn: It probably wasn’t quite that dramatic, but that would be a nice flare.

A sea of customer understanding

Liam: I’ve heard you talk about adopting a blue ocean strategy and understanding customers’ ultimate aims and expectations across their entire journey. How can companies apply this approach to align their businesses with their customers’ needs and desires?

“Why are they buying your stuff in the first place? Are they trying to be more capable and more timely, or have their life simplified in some way to relax or to avoid risk?”

Lynn: We’re usually competing in a red ocean where we’re in price competition and direct competition with our industry players. But if you step back and think of how customers view things – step into their shoes –, they may not view their alternatives only as your industry players. They may see their alternatives as something wider. They may have unmet needs adjacent to or associated with them. And so, usually, your strategic planning group is figuring those things out. But if you can focus on those unmet needs where your competitors aren’t playing, that’s a wide-open opportunity; a blue ocean.

I’ve found that concept to be really useful in customer experience work because usually, a company is quite product-oriented, financially driven, and competitor-centric. To combat that, you need to help employees and managers everywhere. Every single employee and partner needs to be shifting their ideas to how the customer views things. And then you find that you have a lot less waste.

Liam: What about customer personas? They’re commonly used to understand and target specific customer segments, but how would you define them?

“When you understand what their ultimate purpose is, you can create segments of customers that have more natural groupings”

Lynn: Well, in the course of this research and the things I was hearing in Silicon Valley, I started to understand this idea of jobs to be done. A customer’s job to be done is not necessarily the functional task they’re doing or what they’re doing in the interaction with you. It’s more about their purpose. Why are they buying your stuff in the first place? Are they trying to be more capable and more timely, or have their life simplified in some way to relax or to avoid risk? When you understand the natural purpose for this group and that group and that group, let it surface. Don’t put arbitrary bounds on it or labels of any sort. Let go of all your previous segmentation ideas and see what bubbles up from customers’ comments. How are they talking? Usually, you can use customer service comments to mine that and find these groups.

The idea is that when you understand what their ultimate purpose is, you can create segments of customers that have more natural groupings. And the whole idea of business is to meet or exceed expectations better than your competitors. Then, you’re going to win the market share and share of the wallet. Why are we segmenting customers and organizing strategic planning and innovations and efficiencies on anything besides the expectations of each group? And when that is really clear for everybody, it makes everything so much easier. You’re going to succeed a lot faster and higher with your innovations as well as running the business.

“I’m a firm believer that each brand has only two to four overall purposes that their customers buy”

Liam: I love that. It really simplifies the customer understanding process.

Lynn: But very few people do it. I was able to do it for a company where they had about a dozen segments, and all for good reason – luxury, industrial, and so on. And when we looked at the natural breakout of expectations in the comments, we found that there were actually only two camps for that brand. I’m a firm believer that each brand has only two to four overall purposes that their customers buy. When you do that persona based on that expectation, you’re looking at the things that are showstoppers and inhibitors. What’s in it for them? What are the consequences to them and time and worry, money, reputation, whatever? And then you overlay your journey map moments of truth onto that persona, so it’s a very rich persona. And you share those two to four personas with your non-customer-facing groups.

That’s easy for them to digest because it’s only two to four, not 12. And then, what we found was simplicity. Simplicity was an overarching theme for one, and timeliness was the other. Everyone cared about simplicity and timeliness globally, but there were very specific reasons why timeliness was so important and such a showstopper for this one group. And simplicity was a showstopper for the other group. I think that helps drive customer centricity and so much more value in a company when everyone can think daily, “Is this decision we’re making or this handoff I’m doing going to help or hinder our simplicity for our customers? Will it help or hinder timeliness for our customers?” If you treat your internal customers the way that you, your external customers, want to be treated, you’re going to have that congruence in who you are internally and who you’re trying to be externally. And it puts a lot less pressure on the customer-facing groups and touchpoints.

Churnbusters

Liam: Engaging customers and building trust are essential elements of a successful customer experience strategy. Could you give me some examples of companies that have excelled in earning their customer’s trust and how they’ve been able to leverage that trust to build these lasting relationships and loyalty?

“You’re not just putting on a surface layer of how you want to be known – you are that through and through”

Lynn: Well, I think that trust is demonstrating you have the other party’s best interests at heart. And being watchful for anything you say or do that might give the impression otherwise. And, of course, having a certain amount of credibility and reliability that you do what you say. One company that comes to mind is actually in the air conditioning and heating area. They came to my house and were very organized. They were very considerate on every level. They had thought through in advance everything that might be my reaction or concern and were very proactive about things. That’s one that comes to mind.

That reminds me of a conversation I had a couple of years ago. We had someone from the Ritz-Carlton, who had been there 25 years, speak at our local customer experience networking group. She said that, as much as it’s well known that customer-facing people have a high standard to understand specific customer interests and needs and to be very responsive, it is equally emphasized that people in IT, legal, facilities, and every place that doesn’t have to be touching the customer at all, need to have that same level of interest and responsiveness to internal customers. I think that is a really good example of having high integrity as a brand. You’re not just putting on a surface layer of how you want to be known – you are that through and through.

Liam: And what would you say is the biggest thing that causes customer churn?

“I’ve been a customer to many, many companies, and sometimes what I heard from the salespeople didn’t really pan out”

Lynn: I don’t know if it’s the biggest thing, but I think it’s very overlooked, and nobody’s talking about it – identifying your target segment or your ideal customer profile. The reason I bring this up is that if you start off with a group that has certain expectations that are not really suited to your operational sweet spot, you’re always going to be having a lot of extra burdens on service and refunds and returns and negative word of mouth and churn. And you’re wondering, why is that happening? It was just a misfit from the beginning.

And then, of course, the second step in getting it right is setting those expectations. I’ve been a customer to many, many companies, and sometimes what I heard from the salespeople didn’t really pan out. Whether I misinterpreted it or not, it just wasn’t true. And that became a factor in everything else. That’s something we don’t really include in our metrics. Nobody’s really watching it. It seems like no one cares, but my goodness, it’s very fundamental. It affects everything.

Then, I think that if you do a survey of any type, you’d likely find that at least 50% of the originators of issues to customers are not customer-facing. This is why I’m a huge fan of engaging the non-customer-facing groups. It’s always been a part of my career since the very beginning. It was a huge emphasis when I was in the semiconductor company for 11 years. And it’s why I’ve created a community that helps customer management people, service, success, experience management, partner experience, and marketing people to learn how to influence this type of engagement across the company to get to the root of it.

AI reality check

Liam: Before we wrap up, I’d love to get your thoughts on AI and customer experience and how you think those two elements come together.

Lynn: AI is definitely going to help us in many ways, but I think we always have inflated ideas about technology, and it never really pans out to exactly what we hoped it would be. That’s been the case ever since CRM came along in the mid-to-late nineties, and it pretty much derailed the total quality management effort, as customer experience just took on an experiential marketing type of thing: “Would you recommend us?” and “Give me a 10.” It’s all just meaningless when you get to that point.

“The other thing I think about AI is making sure we’re balancing the effort of any technology endeavor with culture to a 50/50 degree. Maybe even more on culture”

One thing to remember with AI and machine learning is that it’s based on what information is available. If you’re using it in your company, you’re missing out if you’re not including in your big data text mining, voice mining, video mining, or whatever of your service calls and anything else your customers are giving you. You have to expand your pool to the maximum amount of inputs in order for it to be accurate. One of the dangers of AI is that the intelligence will be artificial because it might not be based on a full set of information.

The other thing I think about AI is making sure we’re balancing the effort of any technology endeavor with culture to a 50/50 degree. Maybe even more on culture. One of my favorite quotes is from a Vice President at Clorox when he was interviewed in a podcast at Salesforce. He said, “We were trying to do digital, but we realized we needed to be digital.” And I take that to mean that they needed to know what the right hand and the left hand were doing among people, even more so since they were setting up technology to do it on their behalf. They had to have that continuity and collaboration internally in order to make it happen technologically.

Liam: And lastly, where can people go to keep up with you and your work?

Lynn: LinkedIn is really the best place. Lynn Hunsaker. Of course, clearaction.com is a direct source.

Liam: Perfect. Lynn, thank you so much for joining me today.

Lynn: I am really glad to have talked with you and appreciate the opportunity. See you around.