S4:E2 The Customer Experience System – Purple Goldfish Review with Stan Phelps

Today’s Guest, Stan Phelps

Stan Phelps is the author of the Goldfish series of books, which includes 11 colors and 19 different books. His background includes working for a couple of decades in marketing, specifically experiential marketing, on both the brand and agency sides for organizations like Adidas, the PGA of America, and the New York Yankees. He became obsessed with the idea of crafting world-class customer experiences as a competitive advantage.

Interview Takeaways:

1. Satisfaction Is a Leaky Metric

Customer satisfaction is no longer a reliable indicator of loyalty. Research shows that up to 80% of customers who leave a business report being “satisfied” or “very satisfied” right before they defect. This makes satisfaction a weak, lagging metric and highlights the need for businesses to track more meaningful indicators of customer behavior and intent.

2. Referrals Are High-Value Customers

Customers acquired through referrals are significantly more valuable than those acquired through traditional channels. Referred customers tend to stay longer, spend up to twice as much, and are more likely to refer others themselves, often at double the rate, creating a compounding growth effect.

3. The IDEA Framework for Experience Renewal

The IDEA Framework is a four-step system designed to intentionally build and continuously renew the customer experience. Many organizations fail not because they lack good ideas, but because they don’t systemize the renewal process. Since customer expectations constantly evolve, experience design must be ongoing, not a one-time initiative.

4. Inquire: Identify Gaps and Opportunities

The Inquire phase focuses on deeply understanding customer needs, often through tools like journey mapping. This stage looks for two things: “gaps,” where friction or frustration exists, and “opportunities,” which are moments where elevating the experience can create an outsized positive impact.

5. Design: Focus on Peak Moments

In the Design phase, teams prioritize which gaps to fix and which opportunities to elevate. While most organizations spend nearly all their effort fixing problems, research shows that creating standout peak moments can generate up to a 9-to-1 return on investment compared to simply closing gaps.

6. Advance: Systemize the Rollout

The Advance phase turns ideas into reality. It involves securing organization-wide buy-in and resources, educating and training the team, and building systems to measure consistent delivery of the new experience. Once complete, the process loops directly back to Inquire, creating a continuous improvement cycle.

7. Competence and Consistency Free Up Warmth

Systems that ensure consistent, competent delivery reduce cognitive load on staff and free them to focus on human connection. While consistency is critical, research suggests customers often value warmth. personal, empathetic interactions, even more when judging an experience.

8. The 95/5 Principle

The 95/5 principle emphasizes balance: ensure 95% of the experience is predictable, reliable, and well-executed, while reserving 5% of capacity to go beyond the script. This small margin allows teams to create memorable, human moments that delight customers.

9. Measure Advocacy and Effort, Not Satisfaction

Instead of obsessing over satisfaction, businesses should track advocacy and effort-based metrics. Measures like Net Promoter Score (likelihood to recommend) and Customer Effort Score (how easy it was to get what you needed) directly support referral-driven growth, still the top marketing channel for over 90% of businesses.