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Customer Experience 3.0
High-Profit Strategies in the Age of Techno Service
By John A. Goodman AMACOM
Copyright © 2014 John A. Goodman
All rights reserved.
ISBN: 978-0-8144-3389-8
CHAPTER 1
Why Good Service Might Not Result in a Great Experience
My wife bought me a high-end brand-name surround sound system for my birthday. Recently, the four external speakers stopped working. After much fiddling, using the poorly written manual as a guide, I called the manufacturer's 800 number, navigated the phone menus as best I could, and waited 20 minutes before giving up. Two days later, I tried again, and again gave up on a long queue. Finally, I arranged for the local retailer to repair the system onsite. The technician was equally stumped and called the manufacturer, only to learn that the unit needed to be sent in for repair. Many weeks later, the company returned my system. The manufacturer's support center most likely recorded a successful once-and-done call. However, every time that brand is mentioned, I wince and want to tell my story to save someone else from making the same mistake.
Chances are high that your organization's overall customer experience (CE) is worse than you think. I refer to customer experience rather than customer service because service is only one piece of the experience. Most executives think that if their staff is courteous, responsive, and effective, their company is delivering a great CE. Not true—because CE is end to end, ranging from honesty in marketing through the product lasting beyond the warranty period. This lack of differentiation between CE and service is the first of a myriad of misperceptions that prevent executives from getting an accurate understanding of their current level of CE. This also precludes executives from understanding the huge potential payoff of enhancing the CE.
The biggest challenge for providing a great CE is to pull yourself and your business out of complacency. Most executives are complacent about the CE they are providing, unaware of the serious damage to their operations and their bottom lines.
This chapter is intended to jolt you out of that complacency. The five most important realities of CE, many of which will surprise you, are identified and discussed:
1. Customer expectations are simpler to understand and harder to fulfill than most people think they are.
2. Employees do not cause most customer dissatisfaction.
3. No news is not necessarily good news; a company receiving few complaints is not always delivering a great CE.
4. Your company's current CE is needlessly leaving huge amounts of money on the table that could easily be added to the top and bottom lines.
5. Technology has changed what customers expect from a company and how the company delivers the CE; most executives do not realize how inexpensive technology is when used effectively.
In addition, I explain how to use each of the five realities to your competitive advantage.
Understanding Customer Expectations
Customer expectations for any experience are seemingly very simple: Customers do not want unpleasant surprises; they expect easy access to service on their terms; they want first-time resolution to requests for assistance; and they require evidence that the company cares. However, meeting these expectations is more complex than it may seem.
No Unpleasant Surprises
For most products and services, customers do not expect a WOW experience. But they do expect what is promised and what they ordered without any hassles or unpleasant surprises.
The first part of delivering what you promise is making sure the customer understands what was pledged. This requires a company's marketing to be honest and customers to read and understand the contract between them and the company on what is to be delivered. The challenge here is that not many people read descriptions, directions, or contracts, especially anything with fine print or footnotes. Executives must understand that the inclusion of any fine print is building unpleasant surprises into the product or service.
The second part of delivering what you promise is doing it flawlessly and memorably. Think about your last airline flight. If the flight took off and landed on time along with your baggage, you probably barely remember the details unless you had personal interaction with an employee. Airlines usually differentiate themselves only when problems occur: How well did they handle the situation? Much of Chapter 6 will focus on how to make problem handling memorable in a positive way.
Part of delivering a great CE is anticipating possible sources of dissatisfaction or uncertainty and addressing the sources before they occur. This can be as simple as the cable company confirming that the technician is actually coming tomorrow between 8 A.M. and 9 A.M., or the pilot announcing a 30-minute air traffic delay. Ideally, you deliver the answer to the question five minutes before the customer asks it. I call this psychic pizza—as though the deliveryperson rings your doorbell and says, "Here's the pizza you were about to order!" There will be much more on anticipatory service later in Chapter 4.
Easy Access to the Service System
Unless companies make it easy for customers to complain, most will not bother; they will simply take their business elsewhere. Thus, companies need to both encourage customers to contact them and make it easy to do so.
The first step is counteracting the common belief that companies do not want to hear about problems. Make it clear that you genuinely want to help by sending the strong message that the company can solve only the problems that it hears about.
Further, the actual act of complaining must be effortless, or customers will not bother to provide feedback. This is especially true of twenty-somethings, who complain less than older people. In most cases, twenty-somethings will not even call an 800 number; they would rather go to the website or Google the solution. Information should be easy to find without calling the company. Ideally, this information should be provided where and when the customer needs it, through whatever channel (phone, Web, text) is most appealing to the customer.
The importance of this effortlessness can be seen in the following story. A soft drink company in Europe shipped drinks that tasted a bit off. Unfortunately, their hotline did not accept texts, even though young people were their biggest customers, and it was open only from 9 A.M. to 5 P.M., Monday through Friday. Their customers drank soft drinks most in the evening and on weekends—but who is going to save an empty can on Saturday and then call on Monday? Because the company accepted phone calls only during business hours, it did not realize the magnitude of what was happening until the problem reached disastrous proportions. They ultimately removed the product from shelves across much of Europe at a cost of hundreds of millions of Euros. So make sure help is available to the customer when the product or service is most likely to be used or when they are thinking about your product or service (e.g., reading a monthly billing statement).
Also, effortlessness involves setting up a communication channel that is easy to use. A complicated, multilayered phone tree (technically called an interactive voice response, or IVR, system) is a huge barrier. On the other hand, when the 800 number listing is displayed along with the three or four simply worded options included in the first level of the menu (for example, "Speak to a live rep"), the success rate will rise significantly. Twenty percent more callers will complete their calls, and satisfaction will be much higher because customers do not need to listen for the right option; they already know which option to push before they dial the number.
A website with a mass of information or hundreds of frequently asked questions (FAQs) also makes it difficult and time-consuming to find the right answer. A home page with the five most common questions will probably answer a majority of the major concerns with one click.
The best communication channels facilitate response to the customer's request immediately—such as the home page with the list of the five most common questions—or with only a minor wait in a queue, usually less than one minute on the phone. This standard requires coordination between the access channels such as the webpage, phone lines, and the service response process to guarantee that the service system has the capacity to handle the workload. For example, an easily accessed 800 number is useless if no one answers or has the information customers need.
Chapter 5 will address the details of developing a successful strategy for ensuring that all the different types of customers you serve will gain easy access to service via their preferred channels.
First-Time Resolution to Requests for Assistance
Customers want to feel they are being treated fairly and effectively, and part of achieving this is resolving their requests for assistance. You can make customers feel fairly and well treated by:
• Addressing all major aspects of the request with your first response or in a timely manner.
• Fully meeting the customer's expectation. The prevalent, incorrect myth that companies should not just meet but continuously exceed expectations—often a wasteful, misguided premise—will be discussed in Chapter 4. Additionally, you must recognize that not all customers can have all of their expectations met. Often the answer "no" is appropriate and acceptable if accompanied by a clear explanation. This will be addressed shortly.
• Explaining the reason for the remedy or action clearly and without jargon.
These actions apply to all responses, whether they are face to face, by telephone, or through a technological self-service system. Keep in mind that the very fact that a problem has occurred often causes damage to the relationship—unless service and recovery are stellar. If incorrect expectations are set up front, trust and loyalty may be lost for good.
It is a fact that good service does not necessarily equate to a great overall CE. Often the customer correctly feels that the problem should never have occurred in the first place.
Evidence That the Company Cares
When unmet expectations cannot be rectified, the only action company employees can take is to empathize and show that they care. Never underestimate the importance of empathy; most customers accept that "stuff happens." When it does, they want sympathy and acknowledgment that the company feels their pain. A heartfelt apology can do wonders. It is even better if the company goes beyond that and also provides some tangible token compensation.
An example is when a customer misses a flight connection or when mechanical problems with the airplane result in a flight cancellation and a long night in an airport. The worst approach is to legalistically deny all responsibility. In these situations, the most an airline can do is quickly provide some physical token comforts (e.g., food and a beverage) and show that it understands and cares. A company can effectively show that it cares by:
• Establishing rapport by paraphrasing what the customer has said, also known as reflective listening, and using a sympathetic, understanding tone of voice. The right tone (even in a chat or email) can convey concern; the repeated words show the customer he or she has been heard.
• Exhibiting empathy, including sometimes offering an apology even if the company does not accept blame for causing the problem.
• Creating an emotional connection, which involves acknowledging a common experience that conveys, "I understand and sympathize with your pain."
• Listening lets the customer know he or she has been heard. People feel heard when the company representative takes reasonable action and assures customers that their issues will be used to improve the company's offerings.
Identifying Sources of Customer Dissatisfaction and Uncertainty
Executives assume that dissatisfaction is almost all due to individual employee behavior, either their actions or attitude. However, ask yourself how many of your employees actually come to work thinking, "I'm going to intentionally provide bad service to most of the customers I encounter today." Almost everyone wants to be successful.
Although some dissatisfaction may emanate from employees' actions, the majority of dissatisfaction occurs when the product is delivered exactly according to spec! These causes are rooted in both the customer and the company. Customers misuse products, and companies poorly design, market, and produce products and services. In other words, the product can be delivered exactly as intended and still result in dissatisfied customers because they feel misled by the product description or marketing, or simply do not like the product. No one in the customer service area is responsible for customer expectations or the actual product, but often customer service takes the brunt of customers' anger.
Ironically, issues that leave the customer feeling misled—most often, marketing and sales communications—cause more dissatisfaction and damage to loyalty on a per-problem basis than when a product or service is actually defective. This is because the customer believes he or she has been intentionally misled. Unfulfilled expectations due to what the customer feels is deceit often create two to four times more damage to loyalty than a simple frontline staff mistake or broken product.
Across all industries, the company itself is the primary source of dissatisfaction and unpleasant surprises. Based on reviews across hundreds of companies, I estimate that the distribution of causes across the three broad categories are:
• Customer caused: 20-30 percent.
• Company caused: 40-60 percent.
• Employee attitude, error, or failure to follow policy: 20-30 percent.
Customer-Caused Dissatisfaction
Customers seldom read directions and often make assumptions (some reasonable and others unreasonable) about how a product should operate. As a result, customers often misuse the product. For example, a liquid bleach company routinely receives suggestions to improve the bleach's taste from consumers who use it to whiten their teeth (not a recommended use!). In an attempt to use humor to get customers to help themselves, one consumer electronics manufacturer includes a card in the top of its boxes that says, "When all else fails, try reading the directions."
I have asked dozens of audiences if they read their auto owner's manuals or homeowner's insurance policies. Consistently, fewer than 2 percent said yes. Given this customer behavior, companies must simplify products so that customers do not make errors in using them.
Company-Caused Dissatisfaction
Companies create customer problems by building unpleasant surprises into products, by setting incorrect expectations among customers via misleading marketing and sales, by creating disappointment via processes that are broken or have disconnects between functional units.
Product Design
Products that are not designed intuitively lead to frustration and error. Overengineering and complexity lead to failure. For example, most consumers use only a few of the 3 0-plus buttons on their TV remotes and become frustrated if they accidently push the wrong button and do not know how to recover. Two solutions to this problem are product simplification (e.g., putting fewer buttons on the remote) or highlighting the most frequently used buttons (e.g., making the on/off, channel, mute, and volume buttons larger and a different color).
Misleading Sales and Marketing
Misleading marketing and sales materials do the most damage on a per-problem basis because customers feel they have been intentionally misled. Customers are willing to forgive manufacturing or operational mistakes, but they will not forgive being intentionally misled. When the sales or marketing departments fail to clearly communicate product limitations, they are creating dissatisfaction of the worst kind.
The best practice to avoid misleading customers is to create a simple product or to warn the customer about potential misunderstanding. For example, an insurance company overtly warns the customer about exclusions by highlighting the maximum amount of jewelry and firearms covered in its homeowner's policy. Although its sales department was nervous about highlighting limitations, customers were pleased to be informed and almost always bought a rider for insurance at a higher premium.
Any contract, warranty, or financial service account with fine print or nonintuitive definitions and footnotes is open to creating dissatisfaction. For instance, most automobile tire warranties cover road hazards but not nails or cuts to the side of the tire that result from a rock or pothole. Consumers expect that these damages are covered due to their understanding of the term road hazard and are left unsatisfied upon learning that they must pay for the damage. A warranty that says "bumper to bumper or lifetime" and then hides the exclusions or limitations in the fine print is another common example.
(Continues...)
Excerpted from Customer Experience 3.0 by John A. Goodman. Copyright © 2014 John A. Goodman. Excerpted by permission of AMACOM.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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