CX expert Jon Picoult on shaping memories, not just experiences
In today’s highly competitive market, meeting customer expectations is no longer enough to stand out from the crowd.
For CX expert Jon Picoult, if you’re aspiring to satisfy your customers, you’re aspiring to mediocrity. It’s a provocative take, but we get the reasoning behind it – those who are content with satisfaction are likely not putting much effort into creating end-to-end experiences that delight, enthrall, and excite customers. And that’s exactly what you want to do. Companies aren’t just in the business of creating experiences; they’re in the business of shaping memories.
Jon knows a thing or two about memories – before getting his MBA, he received a bachelor’s degree in cognitive science. In the next 15 years, he worked in a variety of functions, from IT to customer service, sales, and marketing, until he set up his own practice, Watermark Consulting, where he helps organizations capitalize on the power of loyalty. In 2021, he decided to take everything he had learned throughout his professional life and compile it into a book, “From Impressed to Obsessed: 12 Principles for Turning Customers and Employees into Lifelong Fans,” where he explores how companies can shape their customers’ perceptions and impressions.
If you’re short on time, here are a few quick takeaways:
- By addressing the entire customer journey – product, marketing, sales, and design – you can greatly reduce the need for support and redirect those resources into higher-value activities.
- Great CX is like a performance. The onstage (product, retail stores) and backstage aspects (hiring processes, tech stack) must come together in order to leave a positive impression.
- Investing in the customer experience has a tangible ROI. In fact, companies that excel in CX have a three-to-one margin in shareholder return compared to others.
- To engineer a great customer experience, focus on creating higher peaks, eliminating valleys, and ending every interaction on a high note.
- The same strategies companies use to engage customers can be used to engage their employees – it’s all about making their experience effortless.
Make sure you don’t miss any highlights by following Inside Intercom on Apple Podcasts, Spotify, YouTube, or grabbing the RSS feed in your player of choice. What follows is a lightly edited transcript of the episode.
Oldies but goldies
Liam Geraghty: John, you’re very welcome to Inside Intercom. We’re delighted to have you.
Jon Picoult: It’s great to be here, Liam. Thank you very much.
Liam: Could you just tell us a little bit about yourself, your journey to this point, and what got you into customer experience consultancy?
“I saw how very subtle aspects of the interaction you have with a prospect or a customer can materially influence their likelihood to work with you”
Jon: Sure. So my entrée into business was actually selling radio advertisements door to door. This was back in college. They had a commercial radio station on campus run by students, but it didn’t receive any funding from the university – it was all ad supported. And in my sophomore year, I went in and said to the station manager, “I’d like to be a DJ.” And he was like, “Yeah, great, but if you want anything other than the graveyard shift, you need to bring money in.” And so, I started selling radio ads and actually ended up being pretty good at it and became Sales Director of the radio station the next year.
That was when I first got my taste of customer experience because I saw how very subtle aspects of the interaction you have with a prospect or a customer can materially influence their likelihood to work with you. Even something as simple as the formatting of our rate sheet for our ads made a tremendous difference in terms of whether it was crisp and clean and easy to interpret. And that’s what got me interested in business and customer experience. From there, I went to business school, worked in the corporate world for about 15 years, and had the fortune of working in lots of different functions – IT, sales, marketing, service, distribution. I launched my own firm in 2009 because I thought I had a very unique perspective having walked in the shoes of all of those different functional leaders. And as you know, delivering a great customer experience requires all those functions to coalesce around the same vision.
Liam: What kind of music did you play when you were DJing?
Jon: I hosted the Sunday Night Oldies show every Sunday from 11:00 PM to 1:00 AM. Back then, oldies, as I defined it, was fifties, sixties, and seventies music. All the classics. I still love that music today. What’s funny is that the show was on a college radio station focused on alt-rock, but because I was bringing in all the revenue, they let me do whatever I wanted. So in the middle of this alt-rock sort of sea, you had this oldies show, so it stood out.
Beyond customer satisfaction
Liam: Oh, I love that. Let’s start by talking about this provocative opening line of your new book: “If you’re aspiring to satisfy your customers, then you’re aspiring to mediocrity.” That seems to contradict a fundamental business tenet with which we’re all familiar, namely that customer satisfaction is key. Why should we all rethink that?
Jon: Yeah, you’re right. It definitely contradicts something we’re all taught whenever we go into business. But I think customer satisfaction is a one-way ticket to the business graveyard. And the reason I say that is because if you are just seeking to satisfy your customers, you’re not really leaving an indelible impression on them. And when it comes to cultivating loyalty, that is an exercise in memory shaping.
The companies that do this well recognize they’re not just in the business of shaping people’s experiences, they’re in the business of shaping their memories because it’s those memories that are going to drive the repurchase and referral behavior that is the lifeblood of any thriving business. If you want to capitalize on that opportunity, you can’t just satisfy your customers – you need to impress them and leave an indelible impression in their heads that’s going to shape their future behavior. And that’s why I say satisfaction is not the appropriate goal for any business.
“It’s not just about figuring out how to deliver a better service – it’s about making the need for service to go away entirely”
Liam: You’ve written From Impressed to Obsessed, which is a great book. What compelled you to write it in the first place?
Jon: Something that always bothered me was how companies subject customers to so many incivilities, from long queues and wait times on the phone to hidden fees and people that are generally unhelpful and don’t do what they say they’re going to do. I look at all of those incivilities that companies put customers through and say to myself, “There are so many easy, simple, straightforward things that organizations could do that would help elevate the quality of the experience they deliver to folks.” I almost feel like it’s on a moral level. Companies just should not be treating people so poorly.
I had this book banging around in my head for literally a decade, and it was just a matter of carving out the time to write it. It was based on everything I’ve collected in my corporate career, as well as my career leading Watermark Consulting, of how companies do this. How do they leave those indelible impressions that cultivate loyalty? And again, there are so many things companies can do that are low cost, and, in many cases, have no cost. I wanted to get that on paper and share it more broadly so more people could take advantage of those secrets.
Liam: What do you think the difference is between customer experience and customer service?
Jon: I think customer service is but one component of the customer experience. And that’s a very important thing for an organization to realize. If you, as an organization, use those two terms interchangeably, you’re going to be on a dangerous path. If you’re just focused on traditional customer service, and by that, I mean the text, the chat, and the telephone contact center, that’s all well and good, but oftentimes, the mere need for customer service indicates there is some broader issue in the customer experience. And so, it’s not just about figuring out how to deliver a better service – it’s about making the need for service to go away entirely.
To accomplish that, you need to think more broadly about the end-to-end customer experience. You’re going all the way upstream to the marketing of your products and services, the sale, how expectations are set, the design of your physical products, the installation instructions that come with them – these are all things that most people would never characterize as traditional customer service, and yet, I would say you’re missing an important opportunity as a company if you don’t think broadly that way. In most industries, the goal should be: everything works so beautifully upstream that people never have a need to contact you unless it’s to buy more of your product or something like that, some revenue-generating activity. I think that’s one of the key differences between customer service and customer experience.
Liam: In the book, you have this great analogy of a great customer experience is like a beautifully choreographed performance complete with onstage and backstage components.
“If you’re not surrounding them with the right tools, with the right backstage environment, when they go out onto that stage, forget it. The performance is not going to be what you hope it is”
Jon: Yeah, I love that analogy. Others have used it, but the reason I like it is that what every company strives to do is elicit a reaction from its customers comparable to that of an audience in a theater after watching a spectacular stage performance. Think about what happens after that performance. The audience rises to their feet, applauds, gives a standing ovation. They don’t even want to leave the theater – they’re just too enamored with the experience they’ve had. And eventually, when they do leave the theater, they can’t wait to tell other people about what they just saw. If you take that theater analogy a step further, I think there is an onstage component to the customer experience and there’s a backstage.
By onstage, I mean all the things that your customers can see, feel, hear, touch, and smell. It’s your retail stores, your product, the people they’re interacting with. And that’s where most people’s heads go when they think about customer experience. But there’s another equally important piece, and that’s the backstage piece. It’s everything that happens behind the curtain that, while invisible to your customers, nevertheless exerts a material influence on the quality of the performance that can be delivered to them.
I’ll give you an example of what I mean. How you hire and select people is totally invisible to your customers. But you could easily see how, if you’re not hiring the right people, the people that have sort of a customer experience gene already, no matter how much you train them, you’re going to put them out on the stage and they’re probably not going to deliver the kind of performance you’re hoping for.
It’s how you hire people, how you measure and reward them, and the tools you give them to do their job. I know that’s something that I’m sure is central to your audience’s interest, given the nature of Intercom. All the tools you give your frontline to accomplish the job and deliver a consistently great experience to the customer are all backstage stuff. And if you’re not surrounding them with the right tools, with the right backstage environment, when they go out onto that stage, forget it. The performance is not going to be what you hope it is.
The economic case for CX
Liam: Many customer experience transformations can be expensive. It’s not always easy to measure the direct result. What insights would you offer on that?
Jon: Going back to my history, before I started Watermark, one thing that always challenged me in the corporate world was I felt that executives and boards of directors often took a leap of faith on a lot of costly initiatives that had questionable ROI. For example, the hiring of a celebrity CEO for tens of millions of dollars or embarking on some merger or acquisition.
“The companies that excel in customer experience outperform the others by over a three-to-one margin in shareholder return”
If you think about it, these are all things where it’s kind of sketchy whether you’re actually going to get the ROI, but companies routinely take that leap of faith. Yet, when it came to investing in the customer experience, suddenly, I found that executives and top leaders reign in the pocketbook. They’re like, “Get the pencil out, let’s sharpen it, let’s make sure we account for all the investments and all the benefits.” And that always bothered me. In my view, it reflected this deep-seated skepticism about whether customer experience really mattered. Corporate executives will talk the talk and say, “Yeah, it’s important.” But in many cases, I think it’s corporate window dressing. And so, when I launched Watermark, my own consultancy, it became even more important to persuade people that this matters and that there was ROI.
I remember very vividly the first year I started the firm. It was Christmas time, and I was just racking my brain, “How do you persuade executives in the corner office that this actually has a payback?” And I realized you’ve got to speak in a language they understand. And what most of these executives understand is the language of shareholder value. Whether they’re a public or a private company, they understand what that means. And so, I said to myself, “Wouldn’t it be interesting to look at the shareholder value and return of companies that excel in customer experience versus those that are not good at it?”
“We’ve just talked about the idea of doing things right upstream so that you obviate the need for people to contact you downstream. You save money when you do that”
And that was the origin story of what’s now called the Watermark Consulting Customer Experience ROI Study, one of the most widely cited analyses of its kind. The latest version, which is in the book, has 13 years of data, and it’s really remarkable when you look at the contrast. The companies that excel in customer experience outperform the others by over a three-to-one margin in shareholder return. And to me, that is the exclamation point on the case. The economic case for customer experience. The book dives into what drives those economics.
I think what’s important for your audience to understand is it’s not just about revenue. A lot of companies get hung up on how to quantify the ROI of customer experience because additional revenue is hard to put your finger on. And that’s true, but there’s a whole expense part to the equation. We’ve just talked about the idea of doing things right upstream so that you obviate the need for people to contact you downstream. You save money when you do that. It puts less stress on your organization. There is very compelling evidence about the ROI of customer experience. I hope what I’ve put in the book helps to advance that cause, but it is definitely not soft and intangible – it is very real, and you can take it to the bank.
Liam: In the book, you mentioned these indignities that companies subject customers to. We’re talking about long call center waits, retail stores that are sparsely staffed, hidden fees, and all of that kind of stuff. Why don’t more companies take customer experience seriously?
“There’s this huge chasm between the view of the executives and the view of the customer”
Jon: I think part of it is that they’re skeptical of the ROI, just like we talked about. So they choose not to invest in it.
The other big impediment is that I think many companies look at their customer experience through rose-colored glasses. There’s a very famous Bain & Company study from some years ago where they went out to executives and said, “How many of you think your company delivers a great customer experience?” 80% of the executives raised their hand and said, “Yep, that’s us.” Then, they went to the customers of those companies and asked them the same question, and only 8% of the customers agreed with that conclusion. There’s this huge chasm between the view of the executives and the view of the customer. And when executives think, “Yeah, things aren’t all that bad, we’re doing pretty well, we’ve got this covered,” what does it translate into? It translates them into investing less and focusing less on elevating the customer experience. And I think that’s the other impediment to people focusing on it more.
Liam: So, if you’re a company with a constrained budget, and you want to offer a better customer experience, how can you go about doing that?
Jon: For companies in that situation where you are like, “How do we fund this?” I recommend that the way you approach customer experience, at least initially – I’m not saying exclusively – is through that lens of reducing the need for people to seek our support because that is the most easily quantifiable lever for self-funding customer experience initiatives. You can very easily say, “Hey, if we are able to take 10% of our calls or chat sessions and take that off the table because people don’t need to contact us anymore, we can quantify pretty well what that means in terms of the expenses in our organization, in terms of our ability to redirect those resources to higher-value activities.” That would be my recommendation.
A lot of companies, for example, track what people contact them about, but what they should really be tracking is: why do they contact us? Not, “Oh, they contacted us about billing,” or, “They contacted us about installation.” That’s not actionable. What you want to know is why did they contact you about billing? Why about installation? What was it that triggered them to need help? And then, you want to pull that thread and follow it upstream and say, “Oh, you know what? We’ve got a lot of people that are obviously getting confused with this paragraph in our installation instructions. Let’s modify it.” And once you do that, inevitably, you’re going to see an impact on the number of people that are contacting you for help. I think that is the best way to do it.
Raving customers, happy employees
Liam: In your book, you talk about how customer experience is an exercise in memory shaping. Can you explain what you mean by that and its implications for how businesses engage with customers?
“You want to make sure you’re creating more and higher peaks and eliminating valleys or making them less deep”
Jon: Yes. So, the companies that do this well understand that what they’re trying to create are experiences that people don’t just enjoy in the moment, but remember fondly long into the future for all the reasons I mentioned before in terms of the repurchase and referral behavior. There is a science around memory shaping that’s been very well studied. And for example, we don’t remember things as in a streaming video. It’s not like we remember every frame in the experience, and then we’ve got some algorithm in our head that looks at the number of frames that were pleasant versus the number of frames that were unpleasant and calculates whether or not we’re happy and satisfied. That is not how it works. The way our memories work is we actually remember the peaks in the experience, the valleys in the experience, and the last part of the encounter.
And so, when it comes to engineering customer experiences, that has really important ramifications for your strategy. On the one hand, it means you don’t have to be perfect at every touchpoint. You could actually make a conscious, strategic decision to just sort of be okay at a particular touchpoint as long as it’s not one that’s tremendously important to your customer. But at the same time, you want to make sure you’re creating more and higher peaks and eliminating valleys or making them less deep. And that you’re always thinking about the last part of the interaction, which is so important, given what’s known as the recency bias in psychology.
You could do everything great in all the parts of the experience, but then, if the last part of the interaction is really sour, that’s it, game over. People are going to walk away with a negative impression and memory. And the book, in addition to explaining that memory science, actually lays out a bunch of approaches for how to create more and higher peaks, fewer and less deep valleys, and how to end on a high note at the conclusion of every interaction. That’s really where the science of customer experience, I think, comes into play. This isn’t just about service with a smile. There is a whole science to this that the companies that do it well are very adept at.
“Many of the same techniques that beloved consumer brands use to engage their customers can actually be used to engage and strengthen loyalty with employees”
Liam: The title references the idea of turning not just customers but also employees into lifelong fans. How do customer experience design principles apply to a company’s relationship with its employees?
Jon: Yes, it’s so important. I’m glad you brought that up because that subtitle in the book was chosen very deliberately. If you think about it, the very things that foster engagement between a customer and a company are not all that different from the things that foster engagement between an employee and an employer or an employee and a leader. Are you responsive to me? Do you advocate for me? Do you communicate with me clearly and transparently? Do I feel better after I have interacted with you? And because of those parallels, what you find is that many of the same techniques that beloved consumer brands use to engage their customers can actually be used to engage and strengthen loyalty with employees.
One of the principles I talk about in the book is the notion of making it effortless for your customers but also for your employees. We, as human beings, like the path of least resistance. And so, if it is easier for us to understand and buy this product, if it’s more accessible, we’re going to go there before we go to something with a more complex route.
Similarly, with employees, if I am in a workplace where it’s effortless for me to do my job, where I don’t have to jump through all kinds of hoops and bureaucratic red tape, where I don’t have to use archaic systems that seem to compete against me at every turn, that cultivates loyalty in the workplace. That’s a place where people are going to want to work because they know they can be their best there. They can reach their potential. That is a critical point that the book tries to make. The very same strategies that beloved companies use to engage customers can be used by leaders to engage their employees.
The promise of GPT
Liam: 100%. I love that. Listen, I can’t let you go without asking you about AI and ChatGPT. What do you think its effect on customer experience and customer service is going to be? I know we’re in the realm of speculation now, but…
“This new technology is very impressive – it’s not one of those shiny objects I took with a grain of salt in the past”
Jon: Yeah, I know, and I’ve listened to some of your recent podcasts. I have to tell you, I approach new technologies with healthy skepticism because I do think that corporate history is just filled with anecdotes of companies getting drunk on the new shiny object. It distracts them from the fundamentals, and it turns out to not be what they imagined. In the case of ChatGPT, though, I feel a little differently.
My background, my undergraduate degree, was in cognitive science. I actually studied the science of human language and how to apply that to computers. That was the focus of my undergraduate thesis. So, this is very close to my heart. This new technology is very impressive – it’s not one of those shiny objects I took with a grain of salt in the past. I really think there’s something here in terms of ease for customers to get information and interact with companies, but also potentially the ease of employees to do their job in terms of, “Help me craft this message to this customer. How do I articulate this?” Or even just a help system like a knowledge base: “Customer’s asked me for this. What do I say? What’s the response?” The ability to interact with a knowledge base in a way that’s so much more natural and to get a response that is almost packaged perfectly to be uttered to the customer could have a very significant impact. So yeah, I’m very interested to see how things evolve with that technology.
“From a business sense, there’s so much talk – people talk and talk and talk. But the execution is what makes the difference”
Liam: Great. Well, listen, where can people follow you online? Where can they find your book and keep in touch?
Jon: The best place to go to learn more about me and the book is my personal website, jonpicoult.com. You can follow me on Twitter, Instagram, and LinkedIn. And yeah, that’s where you can find me.
Liam: Listen, it’s been great to have you here. Before you go, you’ve got to give us a fifties or sixties recommendation song to play to get the energy going.
Jon: I’ll give you one that I think is very relevant to the customer experience field, and that’s the Elvis Presley tune, A Little Less Conversation. I love that song. From a business sense, there’s so much talk – people talk and talk and talk. But the execution is what makes the difference. And so, a little less conversation and a little more action. That’s good advice for anyone in business.
Liam: I love it. Elvis, the CS king. Jon, listen, thank you very much. It’s been great to have you on the show.
Jon: Thank you, Liam. Good to be here.
