Customers today want the very most and the very best for the very least amount of money, and on the best terms.
Brian Tracy
Now, Build a Great Business
Chip recently fired his insurance agent—and hired a new one! “The old insurance agent did absolutely nothing bad,” Chip said, “and the office clerk was always friendly when I called.”
It’s just that the agent never did anything other than write my insurance policies and send me annual bills. The agent never called to thank me for my business, opting instead for a form letter only at renewal time. And, this is a small insurance office in a small town, not some mega-business with a gazillion customers!
The straw that broke the camel’s back was when I called one Wednesday afternoon just minutes past noon to inquire about getting a new umbrella policy. I heard a recording stating that the agency office always closed at noon on Wednesday but would reopen at 9 o’clock on Thursday morning. There was no answering service to channel my call should this have been an insurance emergency. So, I considered sending an email. I Googled the agency name only to find they had no website; there was no email address on any of their correspondence. If this were 1950, such practices might have made more sense.
Chip’s new insurance agent (from the same insurance carrier, mind you) is always available. In the first phone call the new agent took a quick look at Chip’s five policies—home, two cars, a boat, and a valuables policy—and informed him that the homeowners policy he had was outdated and a newer one could provide better features and reduce his premium 40 percent. He also indicated that Chip’s boat policy was based on the purchase price and the boat’s value had depreciated by 30 percent, dictating lower coverage and a lower premium. Then, the agent backed up his words with a detailed email. Chip’s “terminated” agent had never bothered to shift him to these better offerings.
Today’s customers have learned from situations like Chip’s to be picky. Not only do they expect value for their hard-earned, ever-challenged income, they absolutely demand it. That value not only applies to product but it also applies to their experience. Remember, their experience yardstick is developed from the remarkable interactions with service providers that occur in all aspects of their life. Chip wasn’t measuring his former insurance provider only against other insurance providers. He was measuring that experience against all of the great experiences across all aspects of his life, and obviously the service the former agent provided fell way short! Customers’ standards for value have been raised to a level that makes average, okay service deemed less than valuable. Chip’s close encounter with service mediocrity was enough to trigger a divorce; it was not a service hiccup that ended the relationship, just the realization that improvement in value was not in the offing.
You might think the shift to focusing on customer experience would trigger an emphasis on getting better. But customers say that they have not seen a focus on improvement. In a recent survey of several thousand customers in a variety of industries, over three-fourths of respondents indicated the quality of customer service provided had either stayed the same or gotten worse.1 And, what do employees and executives think? Fifty percent of them thought service had improved.2 Perhaps it had. But, the expectations of customers have climbed even faster. You may say your service grade has gone from a C+ to a B. But, to the customer, yesterday’s B is today’s C.
VALUE RULES!
2010 customers were 39 percent more likely to select “a good value for the money” as the top attribute than 2009 customers.
Convergys 2010 Scorecard Research
Convergys is favorite customer research firm. Annually, they conduct a survey of thousands of customers, frontline employees, and executives in search of what matters most to customers. Their target sample of customers is chosen from nine key industries ranging from telecommunications to retail to financial services. Their cutting-edge research often runs counter to conventional wisdom, causing service providers to rethink their approach to creating customer experiences that build loyalty.
According to Convergys research, 45 percent of customers think companies do not understand what their customers really experience when dealing with them. Yet, 80 percent of employees and executives think they understand. This could suggest that more leaders take turns on the front line—ear to ear and face to face with customers. Finally, 39 percent of customers think that companies do not listen to or act on customer feedback; yet (and here’s the largest gap between the customer’s view and the company’s perception) 87 percent of employees and executives believe “we listen.”3
All of this comes at a time when customer expectations are rising. Recent research by Accenture showed customer expectations were 33 percent higher than the year before.4 According to the Society for New Communications Research, rather than rely on a trusted brand, 74 percent of customers choose some providers based on other customers’ service experience and 84 percent consider a provider’s customer-care quality when deciding whether to do business with a company.5
Just as many of us check the readers’ reviews on Amazon.com before ordering a book, customers are looking for evidence from those who have experience with a service provider before giving that provider their business. In the past, customers made many provider choices based on brand but, now that the experience (i.e., what a provider puts its customers through) has become so important, today’s pickier customer demands proof before partaking in a service offering. It’s not surprising that today U.S. consumers report more than 500 billion product/service impressions to one another online every year.6
In our imagined Service Museum, the pinnacle of service greatness would have been customer satisfaction. Displays might include billboards or advertising pitches featuring language like “Satisfaction guaranteed,” “Your satisfaction is our number one goal” or “We are #1 in customer satisfaction.” Back then, satisfaction was the ticket to high praise, robust profits, and repeat business. Today, unless your organization is the only fish in the pond, using customer satisfaction as the yardstick of success will ultimately lead to disappointment, maybe even failure.
If you look up the definition of “satisfactory” in Webster’s really big dictionary, it says “good enough to fulfill a need or requirement.” The verb “to satisfy” originates from the Latin word satisfacere, which means “enough.” It also means “adequate” or “sufficient.” And it means “finished, done, no more for me.” Today’s customers do not put “adequate” and “value” in the same sentence. “Sufficient” is hardly the language of loyalty, commitment, or passion—what organizations need to evoke to make customers deaf to the siren call of the competition.
Now, if you’re in the product-making business, satisfaction might be okay; most consumers want their new dishwasher only to do what they expect it to and nothing more. But, when it comes to an experience like service, the customer’s definition of what is adequate or sufficient quickly changes. Imagine coming back from a great experience—say your honeymoon—and you answered someone’s “How was your honeymoon?” with “It was completely adequate.” You’d probably land in the proverbial dog house.
With a service experience, like any other experience, both our emotions and our logic play into our evaluation. Measures of “satisfaction” are often poor predictors of the most important of all customer service goals: getting customers to come back again, purchase more, forgive more, and advocate more. Achieving these goals helps ensure lowered marketing and customer acquisition costs, fewer customer defections, more word-of-mouth recommendations, and ultimately stronger bottom-line growth.
Take it from the Strativity Group’s “2010 Consumer Experience Study: Customer Experience Delivers Profitability,” which surveyed more than 900 consumers. They found that customers will buy more and pay more for those purchases that also come with a superior customer experience. More than 70 percent of consumers stated that they would increase their purchases with a specific company by 10 percent or more if that business delivered a superior customer experience.7
Want more proof? Research conducted in 2010 by RightNow found that 55 percent of over 2,000 consumers surveyed indicated they became a customer of a company because of their reputation for great customer service. Forty percent of consumers began shopping with a competitor solely due to their reputation for a great customer experience. And, 85 percent of consumers indicated they were willing to pay more than the standard price to ensure a superior customer experience.8
In their migration toward value, and value only, today’s hard-to-please customers also have been spoiled by greatness. The vintage song “How Ya Gonna Keep ’Em Down on the Farm (after They’ve Seen Paree)?” captures the essence of this issue. In World War I, farm boys went to war and returned changed forever by the charm and color of Paris (or Venice, or Brussels). Suddenly, the mule-powered plow was without allure and necessary chores abruptly monotonous. Customers have experienced the Paree of service and they know great service when they feel it.
Armed with a much higher standard for service quality, they are frequently disappointed. Customers represented in the Service Museum tolerated okay service and fussed only if service was super bad. They were quick to forgive a hiccup. In fact, they were willing to forgive a lot of hiccups before packing up their coins or coconuts and leaving. Not today. No worth, no way. With choices galore and switching costs plummeting, customers are totally uninterested in offerings without obvious value. The moment there is a hiccup that dilutes the value that attracted them, they are plotting their move to a competitor.
Value has also gotten a more precise and personalized meaning because of the 2007–2009 recession. We all know that children of the Great Depression had frugality embedded into their DNA for the remainder of their lives. No one knows how long-lasting will be the lessons learned from the greatest economic scare since the Great Depression. We can guarantee that during the shelf life of this book customers will scrutinize value in a way they never did before 2007. Over 8 million super-value-conscious customers subscribe to Consumer Reports, with another 3 million subscribing to the online version.
An alteration in the service covenant we’ve already touched on is another big factor underlying customers’ picky nature. Customers have been pushed toward self-service. Don’t talk with an attendant behind the ticket counter about getting a boarding pass, go to the self-service kiosk. Don’t engage in friendly banter with the check-out clerk and bagger at the store, go to the self-service lane and do it yourself. Don’t talk with a call center rep about your unique needs, interact with the IVR and push a lot of buttons until you get what you need. On and on it goes. Customers who formerly partnered with people now must go it alone.
Self-service isolates customers and removes them from their “co-creators of the experience” role. Their loneliness is like the thirsty traveler who has just gotten a defective beverage from a vending machine in the middle of nowhere. Never remove easy, timely access to full-service if the customer needs it.
What has been the primary driver for this service isolation? The promise was convenience and time-saving, and that has sometimes been delivered. But, if you have ever been stuck in a self-serve checkout lane when the machine cannot read the item’s barcode and an employee must come to reprimand or reboot the machine, you begin to question the benefit. If the ticket-counter kiosk cannot find your airline reservation, forcing you to the back of a long line waiting to see a harried, overworked agent, you wonder about the yo-yo who came up with the brilliant idea of automation. Folk hero John Henry should have survived that race, not just won it! (Just Google it!)
The real benefits of the proliferation of all manner of self-service has brought cost savings to the service provider. With the rising cost of wages—for people who, unlike machines, are expense rather than depreciation items on the balance sheet—cost saving is accomplished by taking people out of the service equation. So, despite the intermittent virtues of convenience and time savings, there is likely a mercenary motivation behind the merchants’ persuading us to migrate away from servers toward systems. We consent to the seduction when it helps us; we rebel when it does not. It is the act of rebelling that makes us especially picky, and often prickly.
How many times have you said “I’d rather do it myself because I know it will be done right”? Or done well? When we serve ourselves, we obviously do it right … and well. The tricky part is the ease with which that self-service standard is then generalized to every other service encounter. Having spent time in the trenches of self-service, we know how it is done. And, we watch service providers to match their performance to ours when we are on the other side of the service equation.
Rising standards have also been shaped by our new sense of service time. Self-service, when it works as intended, can be much faster than the old-fashioned way. Let’s take getting an airline boarding pass. In olden days you went to the ticket counter, waited in line, showed the very friendly agent your driver’s license, and got a boarding pass. Today, in the leisure of your home or office, and typically prompted by the airline in an email, you go online and print your own boarding pass. You can even skip the paper part and have the boarding pass sent directly to your smart phone. At the airport, you bypass the ticketing counter and head straight to the security line.
We were participating in a panel discussion at a conference of Fortune 100 CIOs. A senior leader of one of the ten largest banks in the nation asked us, “How can we maximize the profitability and efficiency of our call centers while minimizing the customer’s involvement?” Something about the question left us momentarily confused. “Let me make sure I understand you,” one of us responded. “You want to remove all of the service out of customer service?” He responded, “Actually, I’d like to take most of the customer out as well!”
Substituting full-service for self-service essentially hides the other side of the service covenant. Remember the famous Wendy’s line, “Where’s the Beef?” (If you don’t know the ad, watch it on YouTube.) The final line in the ad is prophetic: “I don’t think there’s anybody back there.” It epitomizes the one-sidedness of self-service. Before self-service, we could influence, critique, affirm, and help guide the service experience as it unfolded. The service deliverer could adjust, respond, slow down, or leave us alone. It seemed fair. Now, without the capacity to quality-control it in the moment, customers are more cautious and skeptical of the value they receive. It explains why 63 percent of e-commerce customers rate “live web chat” as the most satisfying channel.9 Live chat says that self-service can be quickly transformed by the customer into full service if the customer determines there’s no beef, just a very big bun.
To top it all off, we drag our new “instant service” standard from the self-service world to the auto service center or the doctor’s office and find ourselves ticked off if the wait time is more than thirty-four seconds! In fact, we get downright edgy with whatever service person we encounter just because the self-service world has spoiled us. “Why can’t you text me before I arrive if you know the doctor is running late!” or “What do you mean a fifteen minute wait! I had a reservation and I am here right now and on time!” Our outbursts are our way of saying to all service providers, “You folks made me this way, now you get to deal with your creation!”
How do you ensure a healthy dose of picky stays on the tranquil side of “dangerous”? Ensure there is always clear and present value. Value goes beyond a great product or a flawless outcome. It always includes a great experience, one that leaves the customer with a positive memory and, potentially, a story to share.
Chip traded in his Motorola flip phone and Blackberry for a brand spanking new iPhone at his neighborhood AT&T store. Warren Burgess was the perfect sales person. But, within a week, Chip’s happy scale had dropped from delight to disappointment—the iPhone speaker would not advance past the whisper level. A keynote speech in midtown New York put him a few blocks from the giant Apple store on Fifth Avenue.
Go to
Sometimes customers have to go through unpleasantries to the service they need–unavoidable wait, required forms, or unfortunate mistakes. Tool #2 provides tips and techniques helpful for dealing with the Picky in most customers. Tool #9 provides ways to make self-service more partner-like.
“I need a genius!” thought Chip. Visions of rapture from the reputation of the Apple Genius bar were dancing in his head as he approached the Genius. Chip bounced his description of the no-sound challenge off the “I’ve heard this a million times before” expression of the Genius. There were no questions and little eye contact. The Genius seemed impatient to begin his diagnostic wizardry. After ten minutes of checks and tests the Genius announced his verdict: “You have a defective iPhone. You’ll have to take it back to the AT&T store where you bought it for a replacement.” As Chip backed away from the Genius, he could hear, “Next in line,” echoing in the background.
Fast forward to the neighborhood AT&T store the next day. As soon as Warren saw Chip in the waiting area, he beckoned him back to the really smart side of the store. “How’s our new iPhone behaving?” he asked, obviously recalling in complete detail the previous week’s sale. Warren patiently listened as Chip outlined the problem and his trip to the Genius bar in the giant New York Apple store.
“Before we take a look at how we need to reprimand our misbehaving iPhone, Chip, let me ask you a few questions.” Warren laid the iPhone on the counter as if it were getting in the way of his quest for understanding.
“Did you make any changes in the settings after you left the store last week?” asked Warren. His focus was clearly on his customer, not on the product. Three questions later, Chip’s answer to “Did you make any changes to the iPhone itself?” brought a smile to Warren’s face. “Now, now, Chip, a Blackberry screen protector will not fit on an iPhone. It covers up the speaker!” Peeling off the interloping screen protector, Warren brought perfect sound into the room. As Chip left the AT&T store, he thought, “Apple may have a Genius bar but AT&T stores have Smart bars.” And, customer-smart will trump product genius every time!