Optimizing Customer Experience: Key, Emerging Priorities for 2016 (and Beyond)

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There are several major customer experience enhancement priorities that could be covered in this post, including multi-channel purchase and contact techniques, leveraging content, more effective customer targeting and life cycle management, customer-centric cultural focus/transformation, gathering and sharing of customer data, etc. That said, here I’m going to address three which, based on broad experience in working with an array of b2b and b2c clients, are among those which appear to have the greatest potential to influence enterprise culture, interactive processes, and strategic customer behavior:

– Awareness and Action Based on Customer Experience Emotion and Memory
– Employees as Brand Ambassadors, Inside and Outside the Company
– The Power of Unexpressed Complaints (and Poorly Resolved Expressed Complaints)

Awareness and Action Based on Customer Experience Emotion and Memory

For years, we’ve recognized that much of customer experience is driven by subconscious elements of emotion, and that emotions are largely responsible for forming memories and downstream action. However, most companies continue to focus their generation of qualitative and quantitative generation of customer insights around the tangible, functional, and rational elements of value. These are the largely ‘housekeeping’, or total quality, elements of the experience, which include time, cost, accuracy, completeness, functionality, etc.

There is increasing recognition of the power of emotions, including this recent article in Harvard Business Review: https://hbr.org/2015/11/the-new-science-of-customer-emotions. As stated in a CustomerThink post from earlier this year: “Because the emotion involved in customer experience which, in turn, creates memory is so fundamental to consumer behavior, we very much subscribe to the “Peak-End Rule”, a model co-created by Dr. Daniel Kahneman. For those not familiar with it, the peak-end rule is a concept of human emotions in which people judge experiences largely based on how they were at their emotional peak (i.e. their most intense point) and at their end, or final point.

Peak-end memory occurs regardless of whether the experience is pleasant or unpleasant, uplifting or deflating, happy or unhappy, annoying or soothing. According to Kahnaman’s concept, other emotional “information”, aside from that of the peak and end of the experience, is not lost; but it is not used. In the case of customer experience, it doesn’t get actively processed by the consumer. This includes net positiveness or negativeness, and how long the experience lasted.”

We’re not saying that the functional elements of experience and perceived value aren’t important. But, the subconscious, emotional, and memory components need to have as much, if not more, attention by all enterprises. They require new, and actionable, focus.

Employees as Brand Ambassadors, Inside and Outside the Company

As reported on the front page of a recent issue of USA Today, a key finding of the 2015 Spherion Emerging Workforce Study (Spherion/Harris) was that 93% of U.S. companies believe their employees are important vocal and attitudinal ambassadors for the brand and enterprise. Yet, only 35% of the 2,000+ employed adults in the study would say something positive about their employer. The rest were neutral, negative or silent. To state that this is a huge disconnect is a significant understatement.

Companies often take the role of employees (particularly those who are longer-tenured) for granted with respect to their influence on customers, other employees, and anyone else with whom they come in contact. Maybe employees are satisfied, even happy and productive, both short-term and tactical states of mind and performance for an employee. Is that enough to create ambassadorship, where helping optimize customer experiences is (or should be) in everyone’s job description?

Employee ambassadorship, connected to but distinctive from employee satisfaction and employee engagement, is defined (like engagement) as commitment to the organization itself; but it goes further. Ambassadorship is also identified by commitment to the organization’s product and service value proposition, and, uniquely, to the customers.

Supportive of customer-centricity initiatives, especially as they impact experiences and relationships, ambassadorship directly connects employee behavior to these outcomes and in ways that satisfaction and engagement cannot. Employees, and their linked behavior to customers, requires much more enterprise attention.

The Power of Unexpressed Complaints (and Poorly Resolved Expressed Complaints)

In the almost 20 years since Janelle Barlow’s and Claus Moller’s seminal book, A Complaint Is A Gift, was initially published, my observation is that relatively little has changed with respect to complaints. Consumer advocacy groups report that more than 50 percent of the buying public have problems or complaints with the products and services they purchase. Yet, it has been estimated that only about 2 to 10 percent of customers actually air their grievances to the supplier. Some industries experience notably high levels of customer complaint silence: financial services, food and beverages, pharmaceuticals, and high-tech.

Most companies still gather, and act on, just the complaints that come into the organization; and, whether in a b2b or b2c situation, as noted this represents a very small minority of the negative issues and problems customers have with products and services.

Research by one company has found that over 40% of the companies in their business-to-business database who had a problem or complaint never informed the supplier about it. Their reasons for not expressing their complaints were remarkably similar to those given by consumers (don’t want to take the time, complaint interaction considered a hassle, no direct value in making the complaint, don’t think the supplier will do anything about their complaint, etc.). We’ve seen other studies suggesting that, depending on the industry, unexpressed b-to-b complaints may range as high as 80% to 90%, so this is hardly an exclusive b-to-c issue.

Even though the rate of expressed complaints is higher in the business-to-business world, the lost revenue potential of unexpressed complaints is significantly greater there because of the lifetime value of each customer.

Customer ease and effort are relatively satisfaction-based and transactional. Product and service complaints, however, are very emotion-based; and they can have far more serious consequences for an organization, especially if they remain unsurfaced. The solution to the unexpressed complaints challenge is relatively simple: In any research or transactional situation, ask the customer to identify all uncommunicated problems. Then, build a full complaint database, and act on the ones which are most impacting customer loyalty behavior. Also, do a better job of positively resolving those complaints which have been expressed.

With these priorities effectively addressed, 2016 can be a more customer-centric year.

Michael Lowenstein, PhD CMC
Michael Lowenstein, PhD CMC, specializes in customer and employee experience research/strategy consulting, and brand, customer, and employee commitment and advocacy behavior research, consulting, and training. He has authored seven stakeholder-centric strategy books and 400+ articles, white papers and blogs. In 2018, he was named to CustomerThink's Hall of Fame.

2 COMMENTS

  1. Hi Michael

    A very timely reminder of how powerful and yet, how difficult it is to create the ‘right’ feelings in customers. Kahneman & Arielly’s work on the Peak-Trend-End heuristic raises an important question. We know that strongly negative experiences have a significantly larger impact on customers than strongly positive ones; the research suggest the effect is from 3-8 times stronger for negative experiences. We also know that in competitive industries many more customers are pushed away to competitors by a series of negative experiences, than jump to them to get a better one; 44% of customers mentioned service failures as a reason to switch provider . Bearing this in mind, do you think that companies should focus more on avoiding negative experiences than on creating positive ones?

    Graham Hill
    @grahamhill

  2. Great question, Graham; and agreed that the consequences of negative emotions and memory can have more behavioral impact than positive emotions, especially if the positives are fairly modest, incidental and non-differentiating. From my perspective, and based on what I’ve learned from working with an array of clients around the world, here’s the larger issue: Most b2b and b2c companies focus principally, if not totally, on just the tangible, functional, rational, and attitudinal elements of value delivery. That leaves most of what is subconscious, emotional and memorable in the customer experience largely unaddressed.

    So, organizations can’t “accentuate the positive and eliminate the negative” if emotions and memories aren’t key considerations of the experience, and experience research, in the first place.

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