The cash model of “customer experience”


Here’s the handy thing about cash: it gives customers scale. It does that by working the same way for everybody, everywhere it’s accepted. It’s also anonymous by nature, meaning it carries no personal identifiers. Recording what happens with it is also optional, because using it doesn’t require an entry in a ledger (as happens with cryptocurrencies). Cash has also been working this way for thousands of years. But we almost never talk about our “experience” with cash, because we don’t need to.

Marketers, however, love to talk about “the customer experience.” Search for customer+experience and you’ll get 35+ million results, nearly all pointing to stuff written by marketers and their suppliers. Even the Wikipedia entry for customer experience reads like an ad for a commercial “CX” supplier. That’s why a big warning box at the top of the article says it has “multiple issues” (four, to be exact), the oldest of which has persisted, uncorrected, since 2012. Try to read this, if you can:

In commerce, customer experience (CX) is the product of an interaction between an organization and a customer over the duration of their relationship.[1] This interaction includes a customer’s attraction, awareness, discovery, cultivation, advocacy and purchase and use of a service.[2][not in citation given] It is measured[by whom?] by the individual’s experience during all points of contact against the individual’s expectations. Gartner asserts the importance of managing the customer’s experience.[3]

Customer experience implies customer involvement at different levels – such as rational, emotional, sensorial, physical, and spiritual.[4][need quotation to verify] Customers respond diversely to direct and indirect contact with a company.[5] Direct contact usually occurs when the purchase or use is initiated by the customer. Indirect contact often involves advertising, news reports, unplanned encounters with sales representatives, word-of-mouth recommendations or criticisms.[6]

Customer experience can be defined[by whom?] as the internal and personal responses of the customers that might be line[clarification needed] with the company either directly or indirectly. Creating direct relationships in the place where customers buy, use and receive services by a business intended for customers such as instore or face to face contact with the customer which could be seen through interacting with the customer through the retail staff.[7][clarification needed] We then have indirect relationships which can take the form of unexpected interactions through a company’s product representative, certain services or brands and positive recommendations – or it could even take the form of “criticism, advertising, news, reports” [7] and many more along that line.[7]

Wholly shit. Do you—or anybody—have any idea what the fuck they’re talking about? Did you even try to read more than a few words of it?

Why would an industry big enough to put 35 million documents on the Web not have one comprehensible document in the only place where it would make full sense?

Here’s why: the CX industry is talking to itself. It’s one big all-BS echo chamber.

And actual customers want no part of it. I mean, really.

Hey, you’re a customer, dear reader. Do you want, or would you actually pay, for any of the shit that industry talks to itself about?

Here’s a different question: is it fixable?

I think so.

Basically, CX has two problems: complexity and perspective. Let’s unpack those.

First, complexity.

Company promotions tend to be complex, because they’re gimmicks. Meaning they are a come-on to customers and not a persistent and predictable part of doing business.

Because promotional gimmicks are temporary and provisional, they also tend to have a bunch of moving parts. Even coupons, the simplest of promotional gimmicks, require that the company mint its own currency, for conditional uses, for limited periods of time, with restrictions on eligibility and lots of other forms of cognitive and operational overhead for everybody: the company, the customer, and whatever other partners that might be involved.

Here’s a good example.

This morning I got a promotional email from T-Mobile with a promo that looked interesting to me: an hour of free Wi-Fi from GoGo In-Flight, the next time I get on a plane. When I went to T-Mobile link for the promo, I found these instructions:

Before you board

  • Have a valid E911 address on file and a T-Mobile phone number.
  • To get your hour of FREE Wi-Fi and unlimited texting, make one Wi-Fi call before you board.
  • If you don’t have Wi-Fi calling, you can still get FREE Wi-Fi for one hour and use iMessage, Google Hangouts, WhatsApp, and Viber all flight long.”

Each of those bullet points contained deal-killing conditions:

  • I don’t know if I have a “valid E911 address.” In fact, I didn’t know what one was until I looked it up in Wikipedia, 30 seconds ago.
  • I think I know what they mean by a “Wi-Fi call,” but my experience of that (or what I think it is) with T-Mobile is with making normal calls on my T-Mobile phone over Wi-Fi where there is no T-Mobile cellular coverage. Would I have to look for a place at an airport where there’s no cell coverage but there is Wi-Fi? Am I making a Wi-Fi call when my phone says “T-Mobile Wi-Fi,” but I’m also getting a signal reading on my phone? I don’t know, and I don’t want to take the time to find out.
  • I have no interest in getting a free hour of Wi-Fi that limits me to four services I don’t use.

So I went on Twitter, tweeted what I hoped would be some good feedback to @T-Mobile and @GoGo. Here’s that tweet, with responses from both companies:


Before we go forward with the lessons from this example, I want to make clear that I do appreciate what *NikosP, *RudyG and ^Joe are trying to do here. I am also clear that there are buildings full of other good people, all doing “social CRM,” or whatever its called this week, to care about customers and give them the best possible experience.

The problem for me, as a customer, is that getting this free hour of Wi-Fi on a plane isn’t worth the trouble. The problem for T-Mobile and GoGo In-Flight is that it’s probably not worth the trouble for them either.

Many years ago the great Jamie Zawinski uttered the best (and perhaps only worthy) critique, ever, of Linux. He said, “Linux is only free if your time has no value.” You can swap any promotion you like for “Linux” in that sentence. For example, “An hour of Wi-Fi on a GoGo equipped plane is only free if your time has no value.”

As Don Marti often puts it, customers are much better at applied behavioral economics than any of the companies trying to make customers fall for promotional come-ons.

So I’m wearing my applied behavioral economist hat when I decide that my time is worth more to me than whatever sum of it I might spend getting one hour of free wi-fi on a plane some day, even with all the help being tweeted to me.

I am also noticing that my time would be spent on this thing, and not invested. Worse, it would all be gone in one hour. Worse than that, it would be gone on a plane, where the working conditions are not ideal.

I have no idea how much time and money T-Mobile and GoGo In-Flight are spending on this promo, but I wouldn’t be surprised if the internal and external costs of it turn out to be far higher than whatever they would get out of investing the same amount of money and effort on simply making their services better.

So that’s complexity.

Now let’s look at perspective.

All of the CX perspective—100% of it—is anchored on the corporate side, the seller’s side (or the CX system supplier side). Not the customer side. Worse, in every CX case the perspective is of one company, or a small collection of companies (e.g. T-Mobile and GoGo Inflight, or both plus the four other companies in the third of the first set of bullet points above).

Each of those companies is doing its own kind of CX to “deliver” an “experience” that is exclusive to them. In fact, that’s one way they compete. With this promo, T-Mobile is trying to do something Verizon, AT&T and Sprint aren’t doing.

The problem with this perspective is that it makes the customer’s experience different for every company she deals with. Worse, she has to spend non-recoverable time and effort trying to figure out what’s going on with each of the different companies imposing cognitive burdens along with promotional bargains. As the promos add up, the diminished returns are compounded, and the bargains add up to far less than $0.

If we take away the complexity, and take the customer’s perspective, we see only two ways a company can “deliver” the best possible “experience” to customers:

  1. By making it as simple as possible to deal with the company; and
  2. By offering better products and services than competitors. That’s it.

For example, my wife and I have T-Mobile phones because we travel a lot outside the U.S. T-Mobile, alone among U.S. mobile phone carriers, provides free data and texting in something like 200 other countries, plus just 20¢/minute for phone calls, which we don’t make because it’s free or cheaper to use some other way to talk over the Internet. We also like not worrying about data usage, because T-Mobile essentially has no data usage caps. So we don’t worry about going over. To obtain those simple graces, we put up with T-Mobile’s inferior coverage outside metro areas in the U.S. (though, to its credit, is catching up fast).

Our 19-year-old son, on the other hand, doesn’t travel much outside the country, so his phone is on Ting, which has outstanding customer service and the simplest possible usage pricing, with no promotional gimmicks. So both company and customer have low cognitive and cost overhead to deal with.

Which gets me back to cash.

Cash comes from the customer’s perspective. She can use the same cash with every company she deals with, because cash has scale—for her. She isn’t busy thinking, “Gee, I need to use Walmart’s money at Walmart and Burger King’s money at Burger King.” The cash in her purse gives her scale across every company that accepts it. Cash also gives her the same leverage across all her credit cards and other vendor-dealing instruments she carries in her wallet. Cash also doesn’t require an intermediator. In other words, there’s no need for a cash vendor. Cash also doesn’t track you. It doesn’t require an entry in a ledger. (Yes, it’s good to have that in many cases, but optional record-keeping is a huge grace. Thus, cash is a great CX model.

So, is there hope we can wind down the BS in CX, and bring something with cash-like scale into the portfolio of tools customers have for dealing with many different companies?

Yes, there is.

A number of VRM developers are now working on CX, mostly by helping companies welcome help from customers, and learning from it. There are also some CRM companies starting to look toward VRM as a way of giving customers cash-like scale across many different companies as well. (The jlinc protocol, for example, has a lot of promise in that direction.)

That work, and other developments like it, give me hope that “Markets are conversations” will actually mean something—in less than two decades after marketers were first inspired to talk about it.

5 responses to “The cash model of “customer experience””

  1. Doc, I’m big on customer experience when designing products but it’s nothing like what you describe (thank the gods). I view it from an intention marketing standpoint. I start at the point when a customer is researching / interested in the product / service that I have (and others may have). Then I look at the total customer journey from beginning to end. My viewpoint is “How can I make it easier for them to get what they need, when they need it, for the least amount of pain or effort.” Then I examine the longer ongoing relationship and again figure out the best way to make it easy for the customer and help them achieve whatever needs they have.

    Ting comes to mind (love those guys). On the other end of the spectrum is Comcast who focuses on touch-points (how do we improve support?) instead of asking “Can we eliminate the need for customer support?”

    Instead of talking about total life value of a customer ($$), we should focus on total life experience of customer. SouthWest Airlines gets it. Delta doesn’t.

  2. Thanks, Bruce.

    Great points. I hope what I’m making clear here is that there are two frontiers.

    One is the VRM one, of giving customers independence and scale with tools that are theirs and work for them the same way with many suppliers. We already have that with cash, phones, and the protocols behind the Net, the Web, and email. Silo’d intermediaries such as social networks aren’t the same. Nor are, as I say here, the many different silo’d CX systems of companies.

    The other is exactly what you’re talking about: being good to customers by making interaction with the company as easy, convenient and valuable for both sides as possible.

    And you’re right about Southwest vs. Delta. Or Southwest vs. any of the major airlines. Simplicity vs. complexity. We’re loyal (locked in) United customers that are sure to lose our statuses this year, even though we’re flying more than ever, simply because the airline would rather attract corporate customers with big expense accounts than small business operators who need to fly a lot. We’re in the latter group. Having >2 million miles with the airline means little now. They want you to have overspent in the last year.

    Alas, Southwest only flies in the U.S. This means we’re going to be doing more time-wasting bookings among the gimmick-filled offerings of the many airlines that fly everywhere, and probably enjoying privileges with none.

  3. Really enjoyed this post, as I do all your writing, Doc.

    I am just trying to make sure I understand.

    So, cash provides a standard interface between parties. (No more converting Beads to Goats and then Goats to Oil!)

    With respect to customer experience, I think you are pushing for a standard interface for exploring a market, in which cash would still be used as the standard interface for exchanging value for a good or service?

    Thanks for sharing… stay cool out there

    1. Thanks, Davis.

      I’m trying not to remark on the nature of cash, or where it comes from. I’m just using it as a familiar example of a tool customers can use everywhere, giving us a kind of scale.

      When companies talk about scale, they usually mean two unrelated things: getting bigger (e.g. “scaling up”) and having lots of reach (e.g. “scale across the marketplace”). It’s the latter I’m talking about here. I’m saying there should be ways customers have scale too.

      When every company gets scale across many customers, for example with “Loyalty” programs, it’s a good thing for them, within their own system for rationalizing it. But it’s lousy for the customer, because she has to carry around up to dozens of loyalty cards and key tags to get rewards, discounts or whatever from each of those different companies. Imagine if a customer had her own way of expressing loyalty with every company she deals with. Or one way of issuing a request for service, or to provide data on product use. Both those cases are cash-like in the sense that they would be simple and give the customer scale. This is also very do-able. Nobody has successfully done it yet, but the means increasingly appear. See this post for one example.

      You might call that example, JLINC, “a standard interface for exploring a market. But cash has nothing to do with it. Again, I just used it as a simple example of a tool in the customer’s kit that gives her a kind of scale.

  4. I have long thought that companies purposefully make getting a deal more trouble than it’s worth, in hopes that new customers don’t realize they didn’t read the fine print until after they sign the contract. They miss the deal, so the acquisition cost for that customer who won’t jump through the hoops (probably most of us) is lowered.

    I enjoyed the tweets you shared. I had a similar experience with Comcast years ago.

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