People are motivated by their personal drive and character or by the context that surrounds them. While an economic “downturn” is unneeded motivation some, for others it’s these bumps in the road that get us up and out of our chairs moving, thinking and acting differently. In many ways a challenging business market is the business leader’s Moment of Truth.

But Moments of Truth with our customers are what really matters and innovating around Moments of Truth in customer interactions represents the greatest opportunity to improve business success, create customer loyalty and expand market share.

What are Moments of Truth? Moments of Truth are any – and every – interaction with the customer. First articulated by Richard Normann (considered by many to be one of the most profound and sophisticated management thinkers of our time) in the mid 1970’s, Moments of Truth are the heart and soul of the experience customers have with the businesses they patronize. They are also the singular most influential source of customer dissatisfaction. As a general rule that applies to virtually any industry, excess Moments of Truth are the number one limitation to businesses achieving their full potential.

You may recall the SAS turnaround led by Jan Carlzon back in the early 1980’s. This is the most popularized use of Richard Normann’s customer value chain insights using Moments of Truth to challenge the way the business interacts with its customers. Where Normann theorized, Carlzon implemented and the astounding turnaround results led to Carlzon’s publication of the book Moments of Truth.

The basic principle goes like this. When customers engage with a business for any reason they end up participating in a “process.” That process, as the customer experiences it (from their point of view), is the customer relationship. From the customer’s point of view there is nothing else.

Each and every customer interaction in all of these “customer processes” will leave an impression on our customers and every single interaction is a potential point of failure. Customer dissatisfaction comes from two places, interactions the customer deems unnecessary and interactions the customer deems inappropriate or unsuccessful.

In all of these interactions the customer is judge, jury and when needed, executioner. The business is not an equal partner in this relationship. The customer has all of the power simply because the customer can take their business elsewhere anytime they choose to do so.

Sounds like our customers aren’t very reasonable and that we are at their whim or fancy however that may take them doesn’t it? That’s not how it works though. Customers are generally reasonable and they also act on comparisons. In its simplest form providing an experience that is better than our competitors is usually enough to tip the scales in favor of increased business success. Yet understanding the concept of Moments of Truth and the customer experiences we create can be very empowering to business leaders as a way to create significant differentiation.

For example, if we asked the question “How might we innovate to increase the value of what we offer to our customers?” what might come of that? There are a number of companies that have done just that. Here are several examples... (next blogs...)