How FedEx Revamped Its Brand By Fixing Its "Leaning Tower Of Packages"

Your customers take it personally every time they see or touch your products, services, or support. Take it from FedEx.

Customer experience goes to the heart of everything you do--how you conduct your business, the way your people behave when they interact with customers and each other, the value you provide. You literally can't afford to ignore it, because your customers take it personally each and every time they touch your products, your services, and your support.

It's what your customers think happened when they tried to learn about and evaluate your product, tried to buy it, tried to use it, and maybe tried to get help with a problem. What's more, it's how they felt about those interactions: excited, happy, and reassured, or nervous, disappointed, and frustrated.

Customer experience is how your customers perceive their interactions with your company.

Once you understand that, you can manage your business from the outside in, bringing the perspective of your customers to every decision you make.

Who are your customers? They're both the people who have purchased your goods or services and those who intend to buy your goods or services. Even if they don't actually buy anything, their active interest in buying puts them on our radar. That interest leads them to interact with you through your marketing efforts, your retail locations, your websites, and any other channels you support. And that leads them to form perceptions of their experience--perceptions that will determine what happens next.

As it turns out, those perceptions matter a lot--as FedEx discovered. Looking out from within the FedEx world headquarters in Memphis, Tennessee, it might seem that the customer experience starts with logistics.

The company ships about 3.5 million packages per day in a mind-boggling ballet of planes. If you were to hang around its "Super Hub" at the Memphis International Airport for a month, you'd see about five thousand FedEx aircraft pass through. Handling all the packages that come off those planes takes twelve thousand FedEx employees and more than three hundred miles of conveyor belts that move hundreds of thousands of packages per hour. It's like magic.

But looking from the outside in, the customer experience begins when FedEx picks up a package or when the customer drops one off. For many customers, drop-off involves a trip to one of six-hundred-plus World Service Centers and FedEx Office locations. FedEx had always treated the FedEx World Service Center locations as convenient places for customers who want to fly in, drop off a package, and fly back out again as quickly as possible. They even had a name for this type of customer--the Frisbee. FedEx thought that Frisbees accounted for the majority of walk-in traffic at these locations.

FedEx management thought they had been doing a pretty good job of serving these customers. But satisfaction surveys told them that not all customers were pleased with the experience. So in 2000, FedEx hired Ziba, a design and innovation consultancy, to help redesign the customer experience at the FedEx World Service Center locations. As part of that work, Ziba interviewed and observed FedEx customers to determine how they shipped packages and how they thought about shipping packages.

The results of the study were surprising. Only about 10 percent of the service-center customers were Frisbees. The rest fell evenly into three behavioral clusters based on how prepared they were when they walked in the door, and how much help they wanted from a FedEx employee. Of these groups, the most intriguing of all, were the ones that FedEx dubbed Confirmers.

Confirmers are, in a word, uneasy. They walk in the door well prepared, with wrapped packages and a clear sense of how long it will take the packages to get where they're supposed to go. But even so, they can't help worrying that something bad might happen.

At the time, FedEx team members did something that made perfect sense to them but made Confirmers nervous. When a Confirmer handed over a package to a team member, the team member would process it and then place it on a pile (affectionately dubbed "the leaning tower of packages").

These FedEx team members knew--with a high degree of confidence--that each and every package in the pile would get to its intended destination. For them, the shipping process was working. But just seeing that pile sent a signal to Confirmers that their packages were not going to make it to their intended destination. Based on that simple visual cue, they thought that the shipping process looked broken.

As a result, Confirmers were on the verge of a panic attack because they believed something with no basis in objective reality ("My package will get lost because it's on that pile!"). And that made them highly at risk of taking their shipping business elsewhere.

The solution that transformed shipping into a great experience for Confirmers was elegantly simple. FedEx placed a wall with five presort windows behind the service counter. FedEx then trained their agents to take a package from a customer, say thanks, turn around, and slide the package through one of the windows. That sent a highly visible signal that the package was safe and sound and well on its way.

What was behind the agent wall? The leaning tower of packages.

The Three Levels of Customer Experience

As we've already seen, customer experience is about customer perceptions. The research that Ziba conducted for FedEx reveals something fundamental about those perceptions. What was it about the shipping experience that disturbed Confirmers? After all, every time they used FedEx their packages got to the right destinations at the promised times--FedEx had optimized the shipping process with that goal in mind. Yet despite the fact that their needs were being met, quickly and easily, Confirmers were not having a good experience.

To fully understand why, you need to know that customers perceive their experiences at three different levels: meets needs, easy, and enjoyable. Every time they interact with a product, a service, a person, or an automated system, they judge how well the interaction helped them achieve their goals, how much effort they had to invest in the interaction, and how much they enjoyed the interaction. FedEx employees nailed the first two levels but blew it at the third when they failed to grasp how customers felt about the shipping process.

Meeting needs. Making it easy to buy a product or use a service or get customer service. It's not hard to believe that these are important aspects of a customer experience. But what about the idea that a company should make customer interactions enjoyable? Not everyone agrees that "enjoyable" is a key part of customer experience. Some people want to believe that only a few industries, like media or retail, need to worry about being enjoyable to work with, and not, say, manufacturing or shipping.

But remember the Confirmer. No offense meant to our friends in Memphis, but package shipping has got to be one of the least glamorous industries on the planet. Yet FedEx has an entire customer segment whose experience--and therefore continued business--hinges on positive emotional engagement. And FedEx does something about it. Because when it comes to customer experience, package shipping is also one of the most competitive industries on the planet.

Excerpted from Outside In: The Power of Putting Customers at the Center of Your Business by Harley Manning and Kerry Bodine. ©2012 by Forrester Research, Inc. To be published by Amazon/New Harvest August 2012.

FedEx® is a registered trademark of Federal Express Corporation.

[Image: Flickr user Thomas Hawk]

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