“Acquiring a new customer can cost up to 5 times more than retaining a current customer and a 2% increase in customer retention can have the same effect on profits as cutting costs by 10%.” Think about it. Is your organization actively engaged on the front lines? Are you actively involved in satisfying customers? Or are you turning your last remaining customers away with poor service experience? This article talks about why it is important to consider the various moments of truth a customer encounters and how to get “high grades” on a customer’s report card.

1. 50,000 Moments of Truth:
Getting High Grades on a Customer’s Report Card
“Acquiring a new customer can cost up to 5 times more than retaining a current customer and
a 2% increase in customer retention can have the same effect on profits as cutting costs by
10%.” Think about it. Is your organization actively engaged on the front lines? Are you actively
involved in satisfying customers? Or are you turning your last remaining customers away with
poor service experience? This article talks about why it is important to consider the various
moments of truth a customer encounters and how to get “high grades” on a customer’s report
card.
© Rupa Shankar
www.cxpdesign.com

2. 50,000 Moments of Truth:
Getting High Grades on a Customer’s Report Card
The term 'Moment of Truth' was coined by Jan Carlzon, who managed the Scandinavian SAS
Airlines. He used the term to mean those moments in which important brand impressions are
formed and where there is significant opportunity for good or bad impressions to be made. He
once said – “We have 50,000 moments of truth out there every day”. At the time, Carlzon was
the CEO of Scandinavian Airlines Systems and had helped the company reorient itself to
become customer-driven. In his own words, "a company that recognizes that its only true assets
are satisfied customers, all of whom expect to be treated as individuals and who won’t select
them as their airline unless they did just that.”
Moments of Truth often happen when they are not thought to occur, in our interactions with
staff, store visits, encounters with products. As they say – you don’t get a second chance to
make a first impression; moments of truth are very critical moments. When customers have
certain expectations and they are disappointed, they can form very negative impressions. With
the proliferation of social media, you can be sure that they will not keep their negativity and
disappointment to themselves but will share it with their friends, family – in the process,
passing on the feeling to the community-at-large.
Each of us has a personal storehouse of memories of the moments of truth in our life
experiences. We have experienced lousy moments when it seemed that people or systems or
both almost went out of their way to be difficult or unhelpful. And we have had shining
moments when we felt appreciated, cared for, cared about, and genuinely valued. From your
point of view as the customer, or the receiver of the service, you experience the moment of
truth as intensely personal.
For instance, when a Zappos.com customer service representative took the time to understand
the “specificity” of our needs and redirected us to a competitor’s website to purchase the
© Rupa Shankar
www.cxpdesign.com

3. product as it was not available on the Zappos website at the time, that demonstrated that it
truly cares about its customers’ objectives and is willing to go to great lengths to help customers
find what they are seeking.
The moment of truth for Carlzon was every opportunity to make a difference when in contact
with customers, by and large on the front lines.
In another situation, when our brand new Motorola RAZR XT910 phone stopped working due to
some accidental water spillage, we were told by Motorola to bring it to a Motorola-
authorized local service center. Additionally, they instructed us that the phone being premium in
nature, it would be sent directly to the factory for a careful analysis of the problem and
repair/replacement. When we visited the service center, we were shocked by the atmosphere of
the place—over 60 people cramped into a small 10 X 10 feet room with no ventilation. It had the
claustrophobic, loud, fish-market like atmosphere – everyone waiting to get their phone (all
brands, all price points) repaired. There was nothing premium about it. Starting with this “very
poorly managed” first impression, every touch point from this moment on went down-hill for us.
The customer service rep, looked completely exhausted and harrowed from handling such a
wide variety of mobile issues—exhibiting little patience or concern, she quickly dismantled the
rather expensive phone, openly and very carelessly—despite repeated requests to send the
phone to the company for proper repair. Then she explained to us that we would have to pay a
fee for inspection of the phone. We were assured that the phone would be repaired and ready
for us in 7-10 days. We heard back from the customer service rep only after 2 weeks and were
told that we would again have to spend quite a lot of money to have some of the phone parts
replaced. There was no talk about warranty, sending the product back to Motorola, the original
manufacturer for repair, etc. After we agreed to go ahead with the repair, the service center
kept the phone with them for over a month. After 2-3 desperate attempts to get our phone
back, they finally returned it saying that the phone is permanently damaged and cannot be
repaired. The whole process (including diagnostics) which should have taken 7-10 days, as
assured earlier, took almost 2 months—what remained of the phone? Nothing. The entire
© Rupa Shankar
www.cxpdesign.com

4. continuum of the experience left us feeling frustrated, disappointed and terribly under-served as
customers. When we wrote to the customer query email address provided on the official
Motorola website and explained the above experience, we did not get any help or
acknowledgement from the Motorola team. The whole experience had left such a bad taste in
our mouths—promising never to consider Motorola products again in the future due to the
terrible experience encountered.
From research we know that, “Acquiring a new customer can cost up to 5 times more than
retaining a current customer and a 2% increase in customer retention can have the same effect
on profits as cutting costs by 10%.” Think about it. Is your organization actively engaged on the
front lines? Are you actively involved in satisfying customers? Or are you turning your last
remaining customers away with poor service experience?
© Rupa Shankar
www.cxpdesign.com

5. About CXP Design
CXP Design (www.cxpdesign.com), founded by Rupa Shankar, is a platform for marketers,
technologists, designers and leaders to discuss and gain a deeper understanding of cross-channel
customer experience design, develop empathy for customer needs and learn how to create
products and services that deliver "wow" experiences for customers.
When we check into a hotel. When we shop on-line. When we buy a pair of shoes. When we get on
a flight. These are experiences by which we measure brands every day. However, most companies
are without the tools to purposefully design those experiences for maximum value. That’s where
CXP Design comes in.
Day in, day out, we live, sleep, eat, breathe and unravel the riddle that is human experience, leading
to more loyal and committed customers for our clients.
www.cxpdesign.com
www.facebook.com/cxpdesign
www.twitter.com/cxpdesign
http://in.linkedin.com/groups/CXP-Design-Creating-Customer-Wow-4726523
Rupa is an Associate Director at Happiest Minds Technologies (www.happiestminds.com), a next-
generation IT Services & Solutions company at the forefront of Providing Advisory, Implementation and
Managed Services on Social computing, Mobility, Analytics, Business Intelligence, Cloud computing,
Security and Unified Communications. At Happiest Minds, Rupa is responsible for uncovering and
activating innovative digital and social engagement strategies for its clients, spearheading the
development of frameworks and solutions for different industry verticals and enhancing the global go-to-
market strategy. She taps into her past work as both a design practitioner and marketer to help Happiest
Minds clients envision and define broad, end-to-end customer experiences.
© Rupa Shankar
www.cxpdesign.com