Customer Success: The Next Evolution of Customer Service

By James “Alex” Alexander

Whether you are a traditional on-premise supplier or a cloud-based subscription business, “customer success” is where the big dogs play.

What is customer success?

“Customer success” is a term bantered about in boardrooms and breakrooms in different ways. It has been perceived as a business model, a company-wide priority, an organization, a profession, or a technology.[1]

Research for my recent study, “Customer Success: Managing the Customer Experience for Loyalty and Profit,” [2] confirmed this disparity—the definitions given regarding customer success and customer success management were as varied as Mexican chilies at Santa Fe’s Saturday farmers’ market.

Customer success is a strategy and a philosophy. It is a way of approaching how you interact with your customers and your marketplace. But an important understanding is that customer success is personal. Just as kids in a candy store might prefer different treats, each customer may value certain outcomes more highly than others at a given point in time, and hence, customer success varies from person to person. So I prefer a concrete, actionable definition.

Customer success is a customer state of mind in which a specific customer (let’s call her a key player) feels that she has achieved her desires (business outcomes and personal wins) while undergoing brilliant customer experiences. Here are definitions of the three requirements of customer success:

  • Business outcomes. The results that a key player hopes her organization will get from purchasing and using a supplier’s offerings such as increased revenue, lowered downtime or enhanced productivity.
  • Personal wins. The results that a key player hopes will happen directly to her from purchasing, using a supplier’s offerings or both. This could be job security, personal recognition or less job hassle.
  • Customer experience. The customer’s perception of a supplier’s performance, including activities that do not directly touch the customer but that affect the customer’s overall view of the supplier. Brilliant customer experience occurs when the seven things that customers want, expect and deserve are met.[3]

Figure 1: Brilliant Customer Experiences Enable Customer Success



The Brilliant Customer Success Performance Chain

For those of you serious about delivering success, I recommend using the Brilliant Customer Success Performance Chain as a guide, as Figure 2 shows. It is a robust model applicable to almost all organizations for planning, building, implementing, monitoring, diagnosing, and enhancing customer success results. I will start our discussion on the far right side of the chain and work backward.

Figure 2: Brilliant Customer Success Performance Chain



Business Results

This is your reward for doing customer success right. Selfishly, your desired outcome as the supplier is business results. Yes, there can be a multitude of preferable outcomes, but for most organizations, there are two vital business results that trump all others: new streams of profitable growth to fund the future of the business, and brand dominance based on a reputation superior to your rivals’.

Customer Impact

Customer loyalty drives business results. Loads of research over the last several years show that the loyalty of your customers is a prime driver of the business results discussed above and outlined in Figure 3. There is a direct relationship. Loyal customers buy more and more, again and again, rarely quibbling over price.[4]


Figure 3: Customer Impact Drives Supplier Business Results



Emotionally, loyal customers tout your attributes far and wide and gladly provide testimonials to woo your prospects for you. Loyal customers are the crown jewels of your resources and should be guarded as a miser would a strongbox. If we embrace the eminent management consultant Peter Drucker’s declaration in Management: Tasks, Responsibilities, Practices that the purpose of a business is to get and grow customers, customer loyalty is the secret sauce of the recipe.[5]

Customer success drives customer loyalty. As discussed, to earn that loyalty, you must deliver customer success as each key player in the customer account defines it.

Brilliant customer experiences enable customer success. The promise of customer success requires brilliant customer experiences. Like the catalyst in a chemical reaction, a brilliant customer experience releases the full potential of a supplier-customer relationship. Customer experience is shaped at every touchpoint—every encounter or contact the customer has with your organization.

Touchpoint Management

Brilliant employee performances drive brilliant customer experiences. The more closely your people give the customer what they need, want, and expect at each step in the decision-making process, the more powerful the moment of truth, and the more likely the customer will invite you to participate in the next decision step. Figure 4 shows the progress from touchpoint management to business results.

Figure 4: Touchpoint Management Effects on Business Results



Capable and loyal employees are required to deliver brilliant employee performances. Your frontline personnel must have the capabilities needed to interact with the customer the right way at the right time.

Figure 5 shows how performance systems provide the information and tools required to help your capable and loyal employees in their moments of truth.

Figure 5: How Performance Systems Affect Business Results



Leadership drives the bus in creating a culture of success and in building and implementing a compelling blueprint to guide implementation, as shown in Figure 6. As we all know, if the big dogs don’t get off the porch, the pack doesn’t hunt.

Figure 6: How Leadership Can Build a Culture of Success



Leading the Pack

Customer success is much more than the latest marketing mantra…it is a strategy, a philosophy, a way of doing business. It can make your customer more successful, your company more successful, and hopefully, you will be more successful. Act like the big dog you are and lead the customer success pack!


Note: This article was adapted from Alex’s new book Brilliant Customer Success: Managing the Customer Experience for Profitable Growth and Brand Dominance, due to be released in November 2016.



[1] “An Executive Primer to Customer Success Management.” April 2014. Thought Leadership Paper. Forrester.

[2] Alexander, James A., EdD. 2016. Customer Success: Managing the Customer Experience for Loyalty and Profit. Alexander Consulting and Service Strategies Corporation.

[3] Alexander, James A., EdD. January 26, 2015. “Brilliant CX: The 7 Things Your Customers Want, Expect, and Deserve.” LinkedIn Blog.

[4] Mehta, Nick. October 18, 2015. “The 5 Kinds of Customer Success.” Gainsight, Venturebeat.

[5] Drucker, Peter F., 1974. Management: Tasks, Responsibilities, Practices. New York: Harper & Row.


Join the Center for Services Leadership at Compete Through Services Symposium on October 27th, 2016, to hear James “Alex” Alexander, Alexander Consulting, speak on Customer Success Management: The Marvelous Opportunity to Grow Your Services Business.



James “Alex” Alexander is founder of Alexander Consulting, a management consultancy that helps product companies build brilliant services. Contact him at 239-671-0740, or visit for information and valuable resources to speed your journey to brilliant customer success.



Check out my new book!



by James “Alex” Alexander


Delivering an Effortless Customer Experience

In early September, I traveled with friends along the Dalmatian coast, enjoying the sunshine and lingering over cappuccinos late into the night. One evening at dinner, I couldn’t help but remark about the wonderful service at the restaurant. While it was the end of the busy tourist season, our waiter was amazingly attentive. He made it easy for us to order the right amount and variety of fish for the table, tailoring the offering to meet individual preferences. I suggested to my friend that I was surprised that although he knew he’d never see us again, he delivered exceptional service. A native, she told me that the customer was an integral part of the dining experience. For the business, ensuring customer satisfaction was as important as ensuring the quality of the food.

So how can companies everywhere deliver effortless, memorable experiences for its customers? How can they ensure that the service they deliver lives up to its brand promise?

It’s simple. The best companies deliver straightforward, reliable experiences that meet real needs. People want to interact with companies where doing business is personalized, easy and hassle free. Consider Starbucks, where you get a consistent experience and your morning jo customized for you no matter what city you are located in. Or Nordstrom, where you can link directly from Pinterest to their store to order the latest products that catch your eye.

Delivering an effortless experience begins with listening to your customers. It’s important to take the time to look at your business through the lens of your customers. This involves setting up multiple listening posts to capture different viewpoints. Most importantly, you need a robust system to capture and categorize that feedback in a manner in which your organization can easily act on it. At Verizon, we have a social media team that monitors posts across a wide variety of sites. The data they collect is analyzed using Clarabridge, a data analytics platform, that lets practitioners quickly identify trends.

Once you understand what matters to your customers, leveraging tools like Six Sigma makes it easy to effectively eliminate pain points. The goal of your process reengineering effort should be to create a simple and intuitive process for your customer. To coin an old phrase, “eliminate the small print”. If you have to explain the offer, it probably isn’t pain free.

Structured, data centric decision making is not only a powerful way to drive problem solving, it also helps align your stakeholders. Verizon found that it was easier to align its leaders when data formed the basis for the conversation.

Finally, successful businesses need alignment throughout their organizations. If the customer service organization isn’t prepared for the latest product offer, it can’t provide the training necessary for a successful launch. If the sales organization isn’t aware of what the marketing team is putting out into the market, it isn’t going to present a consistent message. So, in short, align your brand message internally before you take it external.


Join the Center for Services Leadership at Compete Through Services Symposium on October 26th, 2016, to hear Carol Fink, Director of Executive Relations at Verizon, speak on Branding Your Customer Experience.


carol-finkCarol Fink is Director of Executive Relations at Verizon.  In her current role, she has responsibility for voice of the customer analytics and process improvements across Verizon’s major businesses.  She holds a bachelor’s degree from the University of Michigan and a Master’s degree in Business from the University of South Florida.  She is a certified six sigma black belt, a certified work out planner and a “Playing to Win” strategy facilitator.  She leverages voice of the customer, employee engagement and six sigma principles to improve the customer experience.   Carol is based in Basking Ridge, NJ at Verizon’s corporate headquarters.  She is a member of the CXPA.


Branding Your Customer Experience – 2016 Compete Through Service Symposium Theme

We invite you to join us for 2016 Compete Through Service Symposium on October 26-28th, in Scottsdale, AZ!

This year the Symposium will emphasize three themes:

  • Branding Your Customer Experience
  • Digital Transformation of Service
  • Growing the Service Business

Day 1 will focus on insightful and dynamic presentations on Branding Your Customer Experience. Our speakers will share best in class strategies that ensure that the critical touchpoints on the customer experience journey support and align with the organization’s brand promise. We will also explore what Branding Customer Experience means in B2C and B2B context. You will further dive into the topic by participating in our engaging and highly interactive breakout sessions in the afternoon of Day 2:

Breakout A: Authentically Branded Service Experiences

In today’s competitive marketplace, more and more companies are seeking to engage with customers by creating authentic and memorable experiences for them. In this session we will look at the critical role of frontline contact employees in creating memorable service experiences that are consistent with the brand’s positioning. We will share research on employee authenticity and branded service encounters and their impact on customer satisfaction and loyalty intentions. Through an applied exercise, you will examine what authentically branded service might mean for your company and how you can effectively link your employees and your brand image to create positive outcomes for customers.

Breakout B: Environment and Behavior: The Power of a Branded Customer Experience 

Touch-points placed on a timeline can create a great branded service experience, but in order to carry that brand story from touch-point to touch-point, each of those moments has to be dense, using every tool at our disposal to make that happen. This talk will focus on the ways that physical space influences behavior, the ways that architectural elements predict movement, the ways that physical and digital information access can influence decision making and finally in the way those all of those things can contribute to a great branded service experience.  I will share research, insights, and case studies that will give participants tools and understanding that will expand their thinking about great service design.

To learn more about Compete Through Service Symposium and to register, visit CSL website.

We look forward to seeing you at the Symposium!

CSL Leads a Conversation on Leveraging Big Data & Analytics for Service Innovation and Growth at ISBM Academic Conference

Institute for the Study of Business Markets (ISBM) of PennState Smeal College of Business held its biannual academic conference “Advances in Business-to-Business Marketing” in August 2016 in Atlanta, Georgia. Center for Services Leadership (CSL) was invited to to lead a session on Leveraging Big Data & Analytics for Service Innovation and Growth: Promising Research Avenues Grounded in Managerial Practice with managers and academics to discuss managerial challenges and identify promising research avenues.

The session was led by Wolfgang Ulaga, CSL’s Co-Executive Director and AT&T Professor of Services Leadership at W. P. Carey School of Business, ASU. In his presentation he discussed some of the pressing issues identified by CSL’s member companies who are collaborating with Center for Services Leadership in a Community of Practice on Big Data and Analytics.

Center for Services Leadership was joined in the conversation by Georgia State University’s Center for Business and Industrial Marketing and PennState University’s Institute for the Study of Business Markets. The session included a diverse panel of experts who offered business and academic perspectives on the topic. The panelists included:

  • Jagannath Rao, President, Customer Services Business Unit, Siemens Inc.;
    Board Member, Center for Services Leadership, Arizona State University.
  • Wesley J. Johnston, CBIM RoundTable Professor of Marketing and Executive Director,
    Center for Business and Industrial Marketing (CBIM), Georgia State University.
  • Gary L. Lilien, Distinguished Research Professor of Management Science, Smeal College of Business, Pennsylvania State University, Research Director, Institute for the Study of Business Markets (ISBM)

Over the next months we will be sharing the highlights from this session and will update you on the work that Center for Services Leadership will be doing in partnership with its member companies in the area of Leveraging Big Data & Analytics for Service Innovation and Growth. Make sure to follow our blog to receive these updates.

Also, don’t miss session Monetizing Data and Analytics for Service Innovation and Growth: Commercial Challenges and Best Practices with Dr. Wolfgang Ulaga and Ed Petrozelli, CSL Board Member, President and CEO of The INSIGHT Group. This session will take place on Thursday, October 27th, 2016, at Compete Through Service Symposium in Scottsdale, Arizona. Visit our website to learn more and to register. We hope to see you there!


Inspiration concept crumpled paper light bulb metaphor for choosing the best idea

Innovation – What it is, and is NOT

By Don Smith

“You keep using that word, I do not think it means what you think it means.”

Inigo Montoya’s famous line from The Princess Bride instinctively pops into my head (sometimes muttered under my breath) when I read yet another article on the thin, worn topic of “innovation”. In its often misunderstood overuse, the word has become diluted (even polluted) to the point of becoming ineffectual in portraying any clear and distinct meaning; perhaps in similar fashion to the misuse of the word “quality” in the last 50 years. First of all, innovation is not coterminous with invention and should never be used interchangeably. Secondly, innovation is not rooted in technology. And lastly, the pursuit of innovation is not in and of itself innovation. This severe dilution of the term creates confusion and hinders us from actually achieving real and reliable innovation.

In the early 70’s Peter Drucker wrote, “Above all, innovation is not invention.” Apparently the terms were being confused back then as well. Drucker then gives us an important clue about what innovation really is in the very next sentence saying, “Innovation is a term of economics rather than technology.” It’s probably obvious, but what he means is that innovation occurs because of the economic choices made by a society when they adopt some form of invention. This definition is backed up in the book The Medici Effect, where Frans Johansson says, “Innovations must not only be valuable, they must also be put to use by others in society. …It has to be ‘sold’ to others in the world, whether those people are peers who review scientific evidence, customers who buy new products, or readers of articles or books.” This definition also comes from a body of research on creativity and innovation done by Teresa Amabile, the Edsel Bryant Ford Professor of Business Administration at Harvard Business School.

To illustrate the difference, let’s consider one of the most renowned and prolific inventors of all time. Thomas Edison had 1084 patents; only two others in history have received more. Yet only 31 of those patents resulted in products which were widely adopted commercially. In other words, only 31 of his inventions were truly innovative. I’m not saying the other 1053 inventions weren’t clever or cool in some way. It’s simply that the majority of them were never found to be useful enough by society to be innovative. Innovation is proven when social adoption occurs and the invention is significantly adopted or utilized.

Drucker made a secondary point that needs to be understood as well. He said, “Nontechnological innovations – social or economic innovations – are at least as important as the technological ones.” Technology is not the only platform of invention and innovation. There are as many non-technical inventions as there are technological, if not more. We are constantly coming up with new methods about how we can do things and ways of thinking or perceiving the world. For instance, it can be innovative to simply reconfigure the revenue model by offering free or “freescription” products or services, where basic services are free of charge to the bulk of customers and premium services paid for by a few, which actually funds the business model. Many innovative connector platforms such as Lyft, Uber, and Airbnb are disrupting legacy services. Recent examples of social innovation are the Open Source movement, social media, Open University, Fair Trade, Microfinance, and companies forming for the “social good” (i.e. B Corporations). I recently learned of a for-profit company based in the Seattle area that funds projects in third world countries with no intention of making any profit. This is intentional and allows them to circumvent the governmental oversight imposed on contemporary non-profits and NGOs; not to mention the costs of graft and corruption often associated with international aid. While this cannot yet be confirmed as an innovative approach, when other organizations move to adopt, it may become so.

Another source of innovation is repurposing old technology for value creation in a new context. One recent example of an old technology applied in a new way is the flywheel, which was originally used to help maintain the consistency of the rotational speed of a shaft. This technology was ingeniously repurposed to maintain the consistency of electrical flow in the generation of electricity using wind and solar power generators because those sources do not produce consistently (i.e. wind dies, sun fades). As an old mainframe guy, I’m very keen to point out the concept of centralized computing, which came and went in the 20th century, has now returned in what is commonly known as Cloud Computing. Old technologies and concepts may have many new and innovative applications, if we can distance ourselves from the bonds of conventional utilization.

An issue of “The Economist” a couple of years ago focused on the debate about the perceived decline of real innovation in recent years. Whether or not the perceived decline is real, it begs the questions of why and what can be done to mitigate the perception. Could it be the pressure to innovate is itself killing innovation? One possible validation of this notion is the often seen phenomena that according to the measure of our intense desire for something, is the measure to which it eludes us. A more rational aspect points to a temptation to label something as innovative when, indeed, it hasn’t reached the level of adoption required for true innovation. While some invention may be massively clever and endearing to its small circle of fans, the bulk of the world remains indifferent. This shouldn’t, but often is, mislabeled as innovation. We lack innovation because most organizations don’t truly know what it is.

Why is the distinction between invention and innovation so critical? I would like to suggest that innovation is the desired outcome, while invention is one of the elements or prerequisites. On the path to innovation we must invent.  The process of invention begs failure, which increases learning and knowledge and is the investment in potential future innovation. Yet many organizations are failure averse. We need prolific invention from all possible sources, technological as well as non-technological. But invention alone isn’t enough.

While invention is the precursor to innovation, another critical ingredient is required. The value proposed in said invention must also be adopted by customers. I often wonder how many truly useful inventions never materialized because their value proposition was never effectively communicated to potential beneficiaries. The sad truth is, most inventors are really good at developing very useful inventions, but lack the skills to effectively communicate the value proposition. Therefore, an additional precursor to innovation is effectively and successfully marketing inventions. Inventors come up with really interesting and clever ideas. However, it’s the innovators who take a clever invention and effectively communicate the value proposition, which then drives significant adoption (i.e. lots of customers). I would like to suggest that the true measure of innovation is the rate of social adoption of some value proposition (social or technological) and thereby creating significant new demand.

Just like the challenges of the “fire swamp” in The Princess Bride, the journey to innovation is anything but easy. Nevertheless, we make the work possible when we have clarity about what innovation truly is, and is not.


This article originally appeared on FutureSmith Blog and has been republished with permission.

3D rendering of a compass with a excellence icon

Service Excellence: Creating Customer Experiences that Build Relationships. Interview with Dr. Ruth Bolton

Podcast Transcript

This podcast is brought to you by the Center for Services Leadership, a groundbreaking research center in the W.P Carey School of Business at Arizona State University. The Center for Services Leadership provides leading edge research and education in the science of service.

Darima Fotheringham: Welcome to the CSL podcast, I’m Darima Fotheringham. Today I’m talking to Dr. Ruth Bolton, Professor of Marketing at the W. P. Carey School of Business at Arizona State University. She is the author of the new book “Service Excellence. Creating Customer Experiences that Build Relationships.” Ruth, thank you so much for joining me today, and congratulations on the new book!

Dr. Ruth Bolton: Thank you. It’s my first book, so I’m very excited.

Darima Fotheringham: It is very exciting! And I really enjoyed reading your book. It covers a lot of ground but it’s not a textbook. It is a very engaging and informative read that you can finish quickly. And it is the type of book that you want to hold on to so that you can go back to it again and again. Can you tell our listeners about what led you to write this book?

Dr. Ruth Bolton: Markets have been changing very rapidly, and I hear from the managers that there are many new opportunities and challenges. However, amidst all this change, managers kept emphasizing the importance of the customer experience. And I was intrigued that this term came from business not from academics. So what was it that managers were seeing that was so important? After thinking about it for some time, I realized that service researchers have a really important perspective to offer on the customer experience. So I decided to write a book about it!

Darima Fotheringham: Great! And it’s very timely. So as you said, customer experience is a really hot topic these days, and in your book, you emphasize a service-centered view of the customer experience. Can you talk about that? Why is this distinction important?

Dr. Ruth Bolton: Well, managers and academics who have been studying services really have a head start and understanding the customer experience. The reason is that, for many years, services research started from the premise that customer experiences are co-created by participants in a network. The participants, of course, are the company, its customers and other partners, such as suppliers. The key idea is that from a co-creation perspective, the goal of each participant is to use the resources and capabilities to support other actors in achieving their goals. So that’s how companies create value for customers.

In a service-centered view, co-creating customer experiences builds profitable relationships. But the emphasis is on innovating, designing and producing experiences that create value for both. So customer participation and engagement become key. Now if you stop and think about it, it explains the emergence of some of the innovative new business models in many industries such as the entertainment industry which is going through tremendous disruption.

Darima Fotheringham: Most companies are fairly up to speed on topics of customer satisfaction, value, loyalty, word-of-mouth, and so forth. I can imagine these are still very important when we talk about the customer experience, but what’s new today?

Dr. Ruth Bolton: Many people are fascinated by the new collaborative services such as Airbnb and Uber. These companies are co-creating with their suppliers, the people who rent out their homes or cars, and with customers, the people who travel. I think that many of us start by thinking that the technology platform, which enables the service, is important. However, the real challenge is how these three partners share information, develop group norms, and work together to achieve their goals. Uber recently recognized the Drivers Association in New York City to facilitate discussions on workplace issues. And if you stop and think about this from a service center perspective, it makes really good business sense.

Darima Fotheringham: Speaking of technology, as you note in your book, technology and new media enable customers and companies to engage in these new ways. Other than Uber, what other interesting and innovative examples can you share about how companies have been able to enhance customer experience using technology?

Dr. Ruth Bolton: I’m especially interested in how B2B companies have leveraged data driven insights to innovate and create value with customers. DuPont Pioneer was able to leverage its expertise in biotech to identify new services that help farmers map and plan how best to replace nitrogen in their fields. It lead to a new service channel and a new market that provides insights and solutions for land management. And the latest I read in the news is that folks are using drones to look at very large properties.

In China, Alibaba Group has built rural service centers in hundreds of Chinese villages so that people can search for products online and place orders as well as sell products through its online marketplaces. With an economic slowdown in China in 2015, the rural service centers are an important opportunity for new growth. So I really find the data driven insights fascinating. And an interesting feature about both these examples is that they improve societal wellbeing as well as creating benefits for customers and profits for firms.

Darima Fotheringham: Which is really great! In the chapter “the Building Blocks of the Customer Experience”, you discuss practical and emotional motives of the customers as they engage and develop relationships with companies. I think companies are usually well aware of the practical motives of their customers, but emotional motives are often much harder to identify. Why is it important that service experience is designed around both practical and emotional motives? And does this mostly apply to B2C companies or does it also matter in the B2B world?

Dr. Ruth Bolton: Oh, emotions matter for business customers too.  Businesses are composed of human beings, and human beings experience a variety of emotions such as fun, excitement, boredom, and frustration when they interact with companies. The starting point is that the business customer and its supplier are each pursuing their own goals, which may or may not be aligned. And within the business-customers organization, employees have specific roles and identities and they have their own goals.

There’s some really solid research showing that people interact with the company to achieve their goals, and when they do achieve them, they’re happy and feel in control. When they can’t make progress towards achieving their goals, look out for annoyance or even customer rage. Take a simple example, imagine a courier service is late in delivering an important package. The employee receiving the package can’t carry out his responsibilities and then there are ripple effects throughout the organization. Will we see customer rage? Quite possibly!

The effects of emotions can magnify aspects of the customer experience that might otherwise seem like small details. For example, I’ve been participating in research for the global retailer that’s been studying shopper satisfaction with the customer experience. We’ve discovered that people’s feeling of fun and frustration play a big role, no matter whether they are shopping in the store, online, or using a catalog. It’s crucially important to meet shoppers’ goals, say whether they’re browsing, searching, or buying, so that you can satisfy them. Interestingly, despite the fact that there are so many technology-enabled services, people still feel emotions in computer mediated environments.

Darima Fotheringham: I personally found the chapter “Managing Customer Relationships to Achieve Growth and Profitability” packed with great and useful insights. In that chapter, you give an example of IBM, how it successfully used the portfolio approach to managing their customers. Can you talk about that and share what we can learn from this example and this kind of approach?

Dr. Ruth Bolton: Yes, IBM successfully navigated the dot-com crash through better management of its customer portfolio, whereas Sun Microsystems did not. I’m really proud of our work looking at customer portfolios. This was a joint effort with Crina Tarasi and other colleagues at ASU, and it’s won some important awards.

You may have heard people talk about the customer asset and how customers produce cash flow streams over time. However, our research team identified an important issue that’s often overlooked, namely that customers’ cash flows are variable over time and that exposes the company to risk. Just like a stock portfolio, a customer portfolio should be diversified to minimize risk for a desired rate of return, and we were able to identify a number of strategies to reduce risk while maintaining profits.

One way is to manage the mix of customers, which is what IBM did. The general approach is to balance the market segments that your company serves so that its decreases in cash flows over time from one market segment are offset by increases in cash flows from another market segment, so that the average cash flow of the organization remains stable. This insight gives an entirely new perspective on market segmentation strategies. It’s particularly helpful for B2B companies because often they segment their markets by small, medium and large customers who have very different cash flow patterns.

Another approach is to work to increase customer satisfaction with their experiences. It turns out that satisfaction has a double whammy effect, lower cash flow variability and higher cash flow levels. I know it sounds too good to be true, but it’s backed up by solid research by many academics. And surprisingly loyalty programs may not always be the answer. Some loyalty programs lead to more variable cash flows, but not higher average cash flows. So companies need to think about designing loyalty programs to improve the experience or the intangible benefits, for example, membership recognition for consumers rather than offering economic incentives.

Darima Fotheringham: Very interesting! In conclusion, what one advice can you give companies that strive to achieve service excellence?

Dr. Ruth Bolton: I think you’re right that most companies know all about service quality, customer satisfaction, loyalty, and so forth. So my advice is: look forwards not backwards. What does the customer want for the future? Customers have goals they’re trying to accomplish by partnering with you so it’s crucial that companies understand what customers want next. In other words:

  • Understand and align with customers goals.
  • Generate trust that you can deliver experiences that satisfy these goals.
  • Offer products that are relevant to customers’ future needs not what they wanted yesterday.
  • And match the customer’s future circumstances.

Darima Fotheringham: Very helpful! Thank you so much. We were talking to Dr. Ruth Bolton, the author of “Service Excellence. Creating Customer Experiences that Build Your Relationships.” Ruth, thank you so much for your time!

Dr. Ruth Bolton: You’re welcome.

For more information on the science of service visit the Center for Services Leadership on the web at


Ruth_BoltonRuth N. Bolton is Professor of Marketing at the W.P. Carey School of Business, Arizona State University. She previously served as 2009-11 Executive Director of the Marketing Science Institute. She studies how organizations can improve business performance over time by creating, maintaining and enhancing relationships with customers. Her recent research has focused on high technology, interactive services sold in global business-to-business markets. She has extensive experience with survey research design, as well as the econometric analysis of large-scale, integrative data bases. Her research is typically conducted in partnership with businesses, such as the Marriott Corporation, Hewlett-Packard and Schneider National Inc.

Customer Rage Study: Interview With Scott Broetzmann and Mary Murcott


Podcast Transcript

This podcast is brought to you by the Center for Services Leadership, a groundbreaking research center in the W.P Carey School of Business at Arizona State University. The Center for Services Leadership provides leading edge research and education in the science of service.

Darima Fotheringham: Welcome to the CSL Podcast. I am Darima Fotheringham. Today I’m talking to Scott Broetzmann and Mary Murcott. Scott Broetzmann is the Co-Founder, President and CEO of Customer Care Management & Consulting (CCMC) and Mary Murcott is the President of the Customer Experience Institute for Dialog Direct. They will share insights from the latest Customer Rage study that CCMC and Dialog Direct conducted and partnership with W.P Carey Center for Service Leadership. Scott, Mary, thank you both for being here today!

Scott Broetzmann: Thank you.

Mary Murcott: Thanks for having us.

Darima Fotheringham: This is the 7th wave of National Customer Rage study. When and how the Customer Rage study begin?

Scott Broetzmann: The concept of the National Customer Rage study goes all the way back to 2002, but it really wasn’t about customer rage at the time. It was much more narrowly conceived as a replication of a very famous study, a notable White House study from the mid-70s that my colleagues, John Goodman and Mark Grainer, did for the White House. It was that seminal piece of work that connected the words “quality” and “profit”. And the study had not been updated in close to 30 years. When we founded CCMC, one of the things we wanted to do was to provide really good actionable information in the marketplace about the customer experience. So we said, why don’t we redo the “White House study”?

Along the way, when we were first conceiving the study, we thought that we ought to put in some new things as well. One of the things that I read in The Washington Post was an interesting article about how local retailers here in the Washington D.C. area were having trouble holding on to their retail staff because customers were so angry and awful to them, and the pay was so low. It struck a chord with me. I did a literature search, looked around and there were all kinds of anonyms or acronyms for rage that were out there. There was software syndrome rage, road rage, and restaurant rage but there wasn’t really any empirical research, anything meaningful that was even quasi scientific with the exception of one study that, I think, was at the University of Buffalo that talked about angry customers.

It left me feeling that people were saying angry customers and customer rage was really the stuff of lunacy. It was a hyperbole, it was an exception. It was just crazy people that painted the car yellow and stood outside the auto companies, lemon laws, that sort of thing. And that didn’t seem right to me. I knew personally, I’ve gone through my own fits of rage from time to time with products or services. Long story short, we added a question or two on rage. The rest as they say is history because the first Rage Study that came out was published in The Wall Street Journal. It continues to enjoy coverage in the popular press and in a lot of other places.

I would also make these other two side notes. First, I think part of the reason that so many are attracted to the Rage Study, outside of some of our friends in the corporate world that manage customer care, is that everybody has their own personal story of rage. A lot of the times, when we present the Rage Study, everybody comes with their own passionate stories about their worst product and service experiences. Everybody gets really jazzed up before we even start talking about data. A part of the reason why the Rage Study is connected is tied to that.

And I would say as well, it’s the only longitudinal study that offers credible trustworthy data about complaining experience. There’s lots of other studies out there, like American Customer Satisfaction Index, J.D. Power, etc. But this is the only study that, over the course of now in effect of a decade, provides a credible view of what it’s like to deal with a company when you have a problem. That’s really an important part of the Rage Study story.

Darima Fotheringham: Right. And looking at the data collected over the years, what can you say about the most common triggers of customer rage, let’s say ten-fifteen years ago and now? Have they changed?

Mary Murcott: Good question. About 10 or 15 years ago we led simpler lives. The cable companies were not in telephone service, were not in security, were not in wireless service. As we start bundling services in the banks and in telecommunications, we’ve seen the complexities rise. Not only has the complexity risen because we have bundled services, but companies that have actually listened to the customers, added a lot of features and a lot of channels in which they can communicate. That’s causing a lot of customer bouncing from one representative to another representative. So I think the common trigger is complexity.

The features have gotten complicated, so customers have more reasons to call because it’s not intuitive how to use a product or service. Secondly, they don’t know who to call within the company and, lastly, the company isn’t really sure if the representatives have been clearly trained or they lack a common database about customers, a common database about knowledge. That’s become a real problem. So, I think, it’s complexity that is driving the rage at this point.

Darima Fotheringham: Going into the latest customer rage study, did you have any predictions about what you’d find? Were the predictions confirmed? Were there any surprises?

Scott Broetzmann: So what’s interesting of sort, turning a lemon into lemonade, is that the rage data, over the course of these seven times we’ve done it, hasn’t really moved very much. Sometimes, the key indicators are sort of static or now we’re starting to see, now that we have a longer term view – that’s why the longitudinal view is so important – things can move just a little bit, but over the course of seven times over 13 years or so, every little bit adds up to a lot. So there’s a slower decline, maybe, but things are in decline for some of these really important measures. Continue reading