Don and Martha say practice the Golden Rule
In their latest post – “Empathy, Self-Interest and Economics” – Don Peppers and Martha Rogers spell out the importance of the Golden rule. They point out that at a behavioural level only psychopaths conform to the view of human nature taken by neo-classical economics. To business leaders they say:
“Companies that want to earn their customers’ trust have to be willing to act in their customers’ interest—sometimes even when the customers’ interest conflicts with their own (at least in the short term). This is why i-Tunes will remind you that you already own a song you are about to purchase, for instance. And it’s why USAA won’t sell you more insurance than you really need, even if you mistakenly ask to do so.”
“The point is that having empathy for others is a critical part of human nature, and if you want your business to succeed, then you have to show empathy for customers, also. That means treating a customer the way you’d want to be treated yourself, if you were that customer.”
Is the UK utility industry listening to Don and Martha?
It doesn’t look like the Tops in utilities industry in the UK are listening to Don and Martha. Npower has been slapped with a £2m fine by the regulator Ofgem. Why? According to Marketing Week:
“Ofgem says Npower failed to record all details of the complaints it received and did not put in adequate processes to deal with complaints. It was also accused of not giving dissatisfied customers enough information about the Energy Ombudman’s redress service.”
Now you might be tempted to think that this is a one-off, an aberration. Well British Gas (the major player) was fined £2.5m back in July. Why? Well in the words of Marketing Week:
“Ofgem’s investigation found that British Gas had failed to re-open complaints when the customer reported and unsatisfactory resolution; failed to provide customers with key details about the service provided by the Energy Ombudsman and failed to put in place adequate processes and practices for dealing with complaints from small businesses.”
And Marketing Week goes on to write “EDF Energy is also currently under investigation from Ofgem over the way it handles its complaints.”
So where are we at? Two of the six big players that dominate the gas and electricity market have been fined for mishandling customer complaints and a third player (EDF) is under investigation for the same offence. What does Npower have to say:
“A small number of processes were not correctly adhered to. Ofgem is now satisfied that all problems have been rectified and we are fully compliant with our obligations to our customers. We have zero tolerance for this type of issue and we’ll continue to work hard to make sure our customers are put first.”
I don’t know about you but to me that sounds like a load of bull: if Npower really did have a zero tolerance for this type of issue then it would have made sure that an effective complaints management process, team, system was in place. When you lookmore deeply at the industry you see that the structure has been designed to extract profits at the expense of customers: complex pricing, too many confusing tariffs, bills that are difficult to understand……
Making the customer relationship work: what we can learn from John Gottman
I you do operate in a competitive industry then you might be able to learn from the research of John Gottman – he is been studying what makes marriages work (or not) for over 40 years. In a recent article he sets out the key things that he has learnt:
“What I found was that the number one most important issue that came up to these couples was trust and betrayal. I started to see their conflicts like a fan opening up, and every region of the fan was a different area of trust. Can I trust you to be there and listen to me when I’m upset? Can I trust you to choose me over your mother, over your friends? Can I trust you to work for our family? To not take drugs? Can I trust you to not cheat on me and be sexually faithful? Can I trust you to respect me? To help with things in the house? To really be involved with our children?”
“.…zero-sum game.” You’ve probably all heard of the concept. It’s the idea that in an interaction, there’s a winner and a loser. And by looking at ratings like this, I came to define a “betrayal metric”: It’s the extent to which an interaction is a zero-sum game, where your partner’s gain is your loss.”
“But how do you build trust? What I’ve found through research is that trust is built in very small moments, which I call “sliding door” moments, after the movie Sliding Doors. In any interaction, there is a possibility of connecting with your partner or turning away from your partner.“
In his article John provides a good illustration of such a sliding door moment when he saw the sadness on his wife’s face. Here is what he says about that:
“I had a choice. I could sneak out of the bathroom and think, “I don’t want to deal with her sadness tonight, I want to read my novel.” But instead, because I’m a sensitive researcher of relationships, I decided to go into the bathroom. I took the brush from her hair and asked, “What’s the matter, baby?” And she told me why she was sad. Now, at that moment, I was building trust; I was there for her. I was connecting with her rather than choosing to think only about what I wanted. These are the moments, we’ve discovered, that build trust.”
ATTUNE: how you cultivate trust and build strong relationships
John Gottman’s graduate student has taken their work on trust and broken it down into the idea of being in attuenment and has come up with an acronym (ATTUNE). If I replace “partner” with “customer” we have:
- Awareness of your customers’s emotion;
- Turning toward the emotion;
- Tolerance of two different viewpoints – yours and your customer’s;
- trying to Understanding your customer – to look at the situation through his/her eyes;
- Non-defensive responses to your customer;
- and responding with Empathy.
My take on this
How you handle a complaint from a customer is a “sliding door” moment. It is also a great opportunity to practice ATTUNE as complaints are high emotion events that you can use to build or rupture emotional connection. Given that is so I continue to be surprised at how few companies do well in the complaints process. If Npower and British Gas had taken such an approach (call it a customer friendly approach) to the complaints made by their customers then they could have: gotten insights into customer needs; learned where their business practices were failing customers; built a better relationship with customers; and avoided a fine.
