The verdict from neuroscience is in: While a pound of feathers may weigh the same as a pound of nails, a “pound” of bad experiences and disappointments outweigh a “pound” of good experiences and delight. This “negativity bias” is inherent in people.
For anyone charged with managing and measuring customer experiences and loyalty, this means that defending against customer dissatisfaction and poor experiences must be the first line of attack in promoting customer retention and protecting brand reputation.
This doesn’t mean that companies shouldn’t strive to delight customers and deliver WOW! experiences to build loyal relationships. Rather, it means that the foundation must be rock solid, that businesses must satisfy and meet basic customer expectations as a prerequisite for instilling any sense of loyalty.
Marketing Table Stakes
The foundation may not capture the headlines or be sexy. The table stakes never are. When was the last time that a customer raved or a story was written about how great it was that a store opened on time? That a website or network was up? The bathroom was clean? The bill or invoice accurate? These are among the millions of mundane experiences and touchpoints that consumers take for granted.
Meeting customer expectations on these fundamentals may not always be easy for a company or organization, but they are an absolute yawner for consumers – until there is a performance failure. Then watch out.
Bad experiences trump good experiences. This is where traditional economists and most approaches to key driver analyses fail, as they rely on the linear model, in which equal negatives and positives cancel each other out. In this view, a “pound” of bad experiences and disappointments can be offset by a “pound” of good experiences and delight.
Behavioral Math
Behavioral economics, on the other hand, indicates that a positive plus a negative still equals a negative. While the net effect of a negative plus a positive in math may be neutral, the net effect when it comes to human attitudes, memory and behavior is still negative
For a practical matter, this has important implications.
- Adverse customer experiences and perceptions cannot be overcome or neutralized with simple compensatory measures – such as reducing the restaurant tab to compensate for service or food problems.
- Removing or avoiding a negative experience almost always is more important to and creates more value for a company than adding a comparable positive experience (recognizing that “comparability” here is very difficult to measure).
- It probably will take more resources or cost more to correct a problem or failure than to fix the problem and avoid it in the first place.
Negative experiences are customer pain points – disappointments, unmet expectations, dissatisfying touchpoints – that demand prompt attention to minimize risks of churn and negative word of mouth. Managing the potential negatives or the downside of the basics, in fact, is all about risk minimization, as there usually is little opportunity to delight customers when delivering on the fundamentals. While this may be frustrating to companies, as they want to see a “positive return” on fixing problems, they need to think more like Ben Franklin: “A customer saved is a customer earned,” or something like that.
Measurement Issues
Voice-of-the-customer (VOC) research programs assessing customer experience and loyalty also need to overtly recognize this reality. This necessitates modeling key drivers of “risk” (customer dissatisfaction or disloyalty) separate from the key drivers of “opportunity” (customer delight or loyalty). Many of the items that pop as drivers of risk because of possible performance failures never make the list of the drivers of opportunity. A single driver model of risk and opportunity totally misses this important nuance of behavior.
Equally important, it is critical to minimize reliance on approaches that (at least implicitly) assume that positives and negatives with equal weights balance out to neutral. The scale of human memory and perceptions skews to the negative, and this needs to be recognized in any analysis and modeling.
These realities should be reflected in how companies measure and manage customer experiences and loyalty. So while companies shouldn’t stop looking for opportunities to strengthen customer relationships, deepen loyalty and deliver high-impact customer experiences, they need to recognize that all such efforts can be undermined by performance failures and customer disappointments. The defense always has to be on its game.
