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In our customer experience consultancy, clients tell us customers make decisions based on price or features. However, in our research, we never find price or features are the most important things. Instead, it tends to be a combination of a few insignificant, humanistic-type factors that drive customer behavior.

We discussed the significance of the insignificant in a recent podcast. When you ask people what is important, they will give you obvious, easy-to-justify things, but these aren’t the real reasons they buy—or don’t. Often the reason they make the decision they do is the result of something experienced deep in their subconscious. Sometimes when they don’t buy, it is because their brain interprets a problem, and it doesn’t “feel right.”

Your Intuitive System Reacts to the Insignificant

Two parts of our minds contribute to the decisions we make. The Rational System that psychologists call System Two can articulate specific and vital attributes of a choice. The Intuitive System that psychologists call System One also provides input, but often of an emotional or subjective nature. System One is the part of your brain that senses your experience seems like a hassle or is harder than it should be. It is also the system that will tell you “I don’t feel welcome in this retail environment.”

If you’ve experienced these feelings over and over, the intuitive part of your brain can move it over to the rational part so you can become aware of it. You can then articulate the problem.

However, many things we experience don’t have that level repetition. So, it stays intuitive, and just “feels wrong.”

In our Customer Experience Strategy consulting, we do research called the Emotional Signature®, which identifies the things customers don’t say they want but drive a great deal of value. When I say value, I’m talking about spending or increase in their Net Promoter Score (NPS), which measures how likely they are to recommend you to friends and family.

For example, we did Emotional Signature research for a hospital system. When we asked patients in a survey what they wanted from a doctor or how they could improve their experience of seeing the doctor, patients said they wanted the doctor to spend more time with them. However, we discovered that it wasn’t the amount of time patients had with the doctor; it was whether patients perceived the doctor was listening to them.

The word “perceived” is significant here. You see, we also discovered the doctors were using a new computer system. Doctors spent a lot of time when the patient was talking to them putting information into the computer system, and it was distracting the doctor. However, the patient perceived that the doctor wasn’t listening to them, so they thought they needed more time with the doctor.

The irony was more time with the doctor would have had the opposite of the intended effect. Patients still would have felt frustrated but for a longer time.  

The Next Level of CX Requires More Sophistication and Specifics

Insignificant things are significant, but difficult for the customer to recall and articulate afterwards. It would help if you discovered these things in a much more sophisticated way than asking customers what they want.

An example of sophisticated research to understand how customers feel is authentic emotion measurement using facial recognition. This technology communicates much about customers’ real-time feelings in an interaction through the capture of microexpressions.

Microexpressions are the unconscious physical reactions in our facial muscles that communicate our emotions. Professional gamblers use microexpressions, aka “tells” to get inside the minds of their opponents. The best players look for things like sweating or drumming of the fingers, or even things as minor as whether the player’s pupils contract when they are dealt a card, and so on.  

Software can interpret those types of microexpressions, also. If you were to have your customers on camera, you could see when these moments occur. Moreover, you could understand what I call the hidden experience, meaning emotional moments in the Customer Experience that the customer isn’t always aware of because it occurs at a subconscious level. This technology is invaluable for identifying the significance of these insignificant things.  

In addition to incorporating sophistication in your research, you must also provide specific instructions to your employees. You can say,  “Spend more time with the patients,” but you also need to say what they should be doing during that extra time.  In my hospital example, more time spent staring at the computer screen saying, “Uh-huh, uh-huh,” won’t make the patient happy. Neither will spending more time with patients but talking down to them.

Instructing your employees differently, and with specific actions, will produce better outcomes. For example, explain that patients do not feel like the doctors are listening to them, and you want patients to feel like the doctors do. Then tell them you need them to think about interactions with patients and how to communicate you are listening, with active listening techniques and a lot of patient eye contact.

Avoid Leaving the Details to Chance

Another way to address the insignificant is to think about the broader environmental context. In other words, if we’re talking about an experience in a retail setting, know how it makes customers feel. Determine if the environment will activate certain memories because of how it looks, sounds or smells.  

For those of you around the world that don’t know, Americans vote at polling places that are often different municipal locations, e.g., a school, library, or a fire station.  A research team from Stanford looked at how the voting location affected the way people voted. They looked at the likelihood of people voting to approve additional taxes to fund education. They found voters were more likely to support education funding when voting in a school building versus voting somewhere else. The environment surrounding the voter activated memories and feelings about schools and it led to favorable outcomes for the issue.

The environment you are in affects what customers feel as well. From the music you play to the odors they smell, these details change how customers think about the experience.  

Whenever I have a Customer Experience, I analyze it. I was in a dentist’s chair the other day having a tooth drilled. The dental team is drilling away, and I am staring up at the ceiling, but there is nothing there to see.  Also, this light is shining into my face, and the lens is dirty. The radio is playing, but it’s not my music. All of these individual things were insignificant, but together they made the experience awful.

In contrast, my colleague went to a dentist with a TV positioned above the chair and provided a remote so he could distract himself during treatment. His experience was much better than mine. As I lay there in the chair in my poor dental experience with nothing to look at except a dirty light and listening to bad music,  I was thinking to myself that the dentist’s experience was more important than mine that day.

Insignificant things can drive experiences and purchases one way or another. Experiencing things from your customers perspective will provide intuitive insights of the minor annoyances that build up to major problems and turn you against a product, service or experience. You must investigate and take control of these moments. Otherwise, you are leaving a significant and influential part of your Customer Experience and the customer behavior it produces up to chance.

To hear more about Why Are Insignificant Things So Significant in more detail, listen to the complete podcast here.

If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire.  Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.

Hear the rest of the conversation on Why Are Insignificant Things So Significant on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in, please click here.

If you enjoyed this post, you might be interested in the following blogs and podcasts:

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

Sources:

Chemi, Eric. “The place where you vote affects what you’ll vote for.” www.cnbc.com. Web. 23 April 2019. < https://www.cnbc.com/2016/11/08/my-polling-place-your-voting-location-affects-how-you-vote.html>.

The post When It Comes To CX, Sweat The Small Stuff appeared first on .

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In 2004, I presented to an insurance company in Germany about how they should be evoking the proper emotions in their customers. It was a tough audience.

One of the guys asked, “How much money are we going to get back by doing this?”

It was not an unfair question, but it was one for which I had no answer. We needed to change that and so began two-years’ worth of research with the London Business School to identify which emotions drive and destroy value.

Now, when I say value, I’m talking about which emotions make people spend more money, and make people give you better Net Promoter Scores.

We discussed what we discovered from the research in a recent podcast.  These results were also published in my third book, The DNA of Customer Experience: How Emotions Drive Value (Palgrave Macmillan, 2007). We discovered 20 emotions that drive and destroy value for an organization, broken down into four clusters.

As you can see, there is at the bottom, a Destroying Cluster. If you’re evoking one of these emotions, you can statistically prove that you’re losing value because people will not be spending as much. They also won’t be as loyal, and they’ll be giving you lower Net Promoter Scores, etc. So, if your customers display any of those emotions, then you’re losing money. It’s as simple as that.

The Attention Cluster is feeling things like interested, energetic, stimulated, exploratory, and indulgent. This area is marketing’s job. They make the product look interesting to stimulate customers to explore the offer. From our research that we did with London Business School,  these emotions drive short-term spend. So, in other words, when your customers feel these, you can get blips of improvement in your “value” metrics.

The next level up from that is what we call the Recommendation Cluster. It contains emotions that affect trust, so people feel valued, cared for, safe, and focused. The way I describe the Recommendation Cluster is like the Net Promoter Score; i.e., they would recommend the company.

The Advocacy Cluster are the “big daddy” emotions. In this cluster, you see only two, which are happy and pleased. It differs from the Recommendation Cluster in that people talk about your brand to people that didn’t ask. Advocacy Cluster emotions inspire your customer to promote your brand.

Organizations recognize that there is an emotional experience, but still tend to talk in generalities, i.e., positive emotions and negative emotions. However, you have got to be specific. There are two key questions you should know the answer to, which include:

  • What emotions are you trying to evoke in your customers?
  • Which emotions drive the most value for you?

Do you know the answers to these questions? Most organizations don’t. However, you should be trying to evoke an emotion that’s driving value for your organization. There’s no point in trying to evoke a feeling that isn’t getting you any closer to your company’s goals.

At the top levels, an organization should be defining what emotions they’re trying to evoke. It’s part of the brand and its relation to Customer Experience. Then, it can become experience-specific.

For example, we were doing work years ago in England with one of the train franchisees.

The train company wanted customers to associate feeling cared for and reliable punctuality with their brand, which makes sense for a train company. The interesting thing was punctuality was far more important than comfort for a commuter, but comfort was more essential than punctuality for a leisure passenger. So, the ratio of those emotions may be different depending upon the situation or the customer.

In our global Customer Experience consultancy, we have found you can evoke two to four emotions that work in different situations around the world, although different cultures may require different emphases to get there. In other words, if you’re trying to make someone feel cared for in America, you may do different things than you would to make someone feel cared for in Japan.

That said, the human emotion of feeling “cared for” is universal. People want to feel it even in environments where you don’t think they will.

We did some work with a construction equipment manufacturer. They were dealing with construction people.  You wouldn’t think that feeling cared for is a crucial emotion for this lot, but it was. Through our Emotional Signature® research,  which measures the emotional engagement that you have with your customers,  we learned that these rough and tough individuals wanted the equipment company to make them feel cared for.

Getting down to these emotions that you want to evoke in your customer requires research. Our Emotional Signature research is based on structural equation modeling, which is an advanced form of statistics.  Without getting into the math, I’ll summarize that it discovers the “hidden emotion” that is driving value for customers. Hidden emotions are the ones that customers either won’t tell you or that customers don’t know about themselves.

So, knowing the hidden emotion that drives value for customers is the first piece of information that you need. The second piece of information you need is whether evoking that feeling is practical for your organization as it is now.  The third piece is you’ve got to bring people on board with your plan from a cultural perspective. In other words, tell them how much money it will make the bottom line, like our guy in Germany at the insurance company wanted to know. So, for example, if you evoke trust, it results in this amount of revenue; and if we evoke cared for, then it’s this much, and so on.

Once you have the buy-in from your organization, you need to figure out what you need to change in your present experience to evoke these emotions. Let’s say you chose “feeling valued” as the emotion you have targeted. However, the call center routinely has long waits on the line. After a half an hour waiting on hold, how valuable do you feel? If that was the case for your organization, then it’s clear to evoke feelings that customers are valued will mean redesigning the call center experience.

Well, that requires resources. If you have the buy-in and the real commitment from senior management (based on the process I have just outlined), you’ll get them. If not, you won’t. Again, it’s as simple as that.

What Does All This Mean You Need to Do?

You should identify the specific emotion you’re trying to evoke in your customers that drives value. I recommend you start by looking at these 20 emotions we’ve gone through today. If you want to go one step further, buy the book.

Then, set as a strategy evoking this emotion in the things you do as an organization. Design it in your experience and train people how to evoke these emotions.

Finally, you measure it. But that’s another story for a different day.

You need to have goals as an organization. You’d need to be working towards something. So, the idea that you can set an emotional state of your customer as a goal shouldn’t be that far out of the realm of what you’re doing anyway.

Remember, what I am suggesting is only a slightly different angle on what you’re doing already. Everybody wants satisfied customers; everybody wants happy customers. Our way is a precise way of getting there in a way that improves your bottom line.

To hear more about What Customer Emotions Drive Value in more detail, listen to the complete podcast here.

If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire.  Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.

Hear the rest of the conversation on What Customer Emotions Drive Value on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in,please click here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post Emotions Drive Spending, But Do You Know Which Ones Drive the Most? appeared first on .

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Brands have already begun using facial recognition technology in their Customer Experience. Walmart and KFC use facial recognition technology. Passengers on Delta check in for flights in the Atlanta airport using facial recognition. Even my phone password is my face.

Technology also exists that captures customers’ authentic emotion measurement using facial recognition software. I believe both of these technologies are the future for Customer Experience and, in some cases, the now.

But is it creepy?

We had Professor Bill Hedgecock, associate professor of marketing Carlson School of Management at the University of Minnesota, as a guest on a recent podcast to talk about facial recognition and facial expression analysis technology and application in Customer Experience programs. As an academic marketer and an expert in neurology, Hedgecock does psychology-based research and studies neuromarketing, or how the brain works when we make decisions.

Hedgecock explained the difference between facial recognition and facial expression analysis:

  • Facial recognition takes someone’s face and matches it to other images.
  • Facial expression analysis figures out what emotion you feel based on how your face looks.

The two technologies involve identifying a face in a screen, what direction it is facing, and landmarks, like where a nose is or where the ears are.

However, at this stage with the landmarks, the two technologies deviate:

  • Facial recognition takes all these landmarks and matches them to other images, like your photo software or Facebook.
  • Facial expression analysis uses these landmarks to determine if the person is showing joy or sadness or anger.
So, Is it Creepy?

Facial recognition data collection about customers during a Customer Experience is the future. The uncomfortable feelings we have are a reaction to experiencing something that is different from what we have had before. When you look into the details, the odds of harm are low to nonexistent. In other words, once we get used to it, it won’t feel creepy anymore.

When you consider the chance for harm, the regular data that companies collect all the time is more creepy to me than facial recognition and facial expression analysis data. For example, companies now use your Wi-Fi connection to know where you are when you linger in a store and don’t get me started on the sheer amount of information “they” have about your clickstream data (i.e., the websites you visit and in what order). Sure, you know data is collected in these cases, but “they” never tell you how it’s going to be used. Frankly, this data contains more private things about you than information collected about your facial expressions.

How to Help People Get Over the Creepy Feeling

Hedgecock and his team were trying to determine if facial expression data could be used by retail or marketing departments. Hedgecock and the team decided to do a study to determine if people’s emotions could predict their food consumption. They called it “The Creepy Project.” Why? Their unconventional name reminded them to do what they could to minimize any perception of malfeasance.

The research team diffused the discomfort people feel about the technology in a couple of ways:

  • They used a camera that was already there and in a public setting. The significance of this fact was that it was not a place where people expected privacy.
  • They didn’t record video and the participants were anonymous. They don’t even have examples of actual participants in the study because the software can take an image from the screen to encode what the expression is and never record it.

To help people adapt, companies should provide some benefit to the customer when they use facial recognition and facial expression analysis software. The facial recognition on Facebook is useful because it can match the photos for me and my kids. Google used to mine all kinds of data from people’s Gmail accounts and people were OK with that because they got free email.

So, for example, let’s say you use ice cream to cheer yourself up when you are having a bad day, that you “eat your emotions,” as it were. Imagine if the data collected from this technology developed an app that would recognize when you were feeling down and intervene before you head for the ice cream shop. What’s more, it directs you to get a healthy snack instead. An app like that could be quite useful…to me, anyway.

As NBC News points out, the film Minority Report explored this concept a bit back in the early 2000s.

In the futuristic film, the adverts would use a retinal scan to find you. Using all the data about you, the display would show you a specific offer.

Per Hedgecock, that’s not science fiction anymore. There are companies using this, sans the retinal scan. Now, all they need is your face, so it’s less intrusive than the movie’s predicted technology. Moreover, it isn’t as specific as the movie was. They are using broader demographic information to target their message, e.g., gender or age, to name a couple.

It is targeted marketing. While it sounds creepy at first, it is useful once you experience it. I’d prefer to hear about relevant information than irrelevant information, wouldn’t you? Furthermore, the examples Hedgecock has seen are funny and entertaining. Sometimes the billboard interacts with you by reading your facial expression.

Making Customers Comfortable with Facial Expression Analysis

Facial recognition and facial expression analysis is where things are going. However, there is potential for very bad public relations blow back if this is not handled with sensitivity.

No matter how logical you are in your arguments that the technology is not creepy, people respond to it emotionally just like they do everything else. In other words, creepy is a subjective feeling. If it feels creepy to customers, it’s creepy.

However, you can decrease perceived creepiness in the following ways:

Be transparent about your collection of it.

People might perceive facial recognition technology and facial expression analysis as less creepy if they are aware you are collecting this information and it’s anonymous rather than collecting it without their awareness.

Moreover, it’s the law to notify people you are collecting this data. In our global Customer Experience Consultancy, we’ve been talking to lawyers about this for a client. We learned that you must advertise that you use facial recognition or facial expression analysis. It’s a bit like when you phone a call center and they say, “This call may be recorded for training purposes.”

Provide Value.

Companies have a lot of our data. We are usually okay with it when the company provides value with it. For example, I like when I go on to Amazon and it uses the data it has on me to give me better recommendations.

Many times, I wish Netflix used this data more to do a better job of figuring out what movies and TV shows I wanted to watch. I know they know what TV show I’m watching. I want them to use that data.

Keep it as general as possible.

If the data you collect seems like it’s private, like the customer did not mean to show you this expression, a person will have negative feelings about the technology. Instead, follow Hedgecock’s lead and use a public camera in a public place were other people can see, too, and don’t record the images. Instead, analyze them in real-time (with software) and let the images go afterward. If a person knows their facial expressions aren’t being recorded and stored, they are less likely to object to the use of the technology.

Understand people’s emotions and moods.

There are obvious times where knowing moods is important. So, for example, if someone is in a bad mood, wouldn’t it be great to offer them excellent customer service?

However, there are also some less obvious things. Your mood changes your decision-making in predictable ways. When I’m in a bad mood, I evaluate things less. For others, happiness leads to glossing over details. My point is moods would change your purchases in subtle but predictable ways.

The issue of the technology’s creepiness has to be overcome. Transparency, adding value, keeping it general, and understanding emotions will help.

Facial recognition and facial expression analysis is the next level of authentic emotional data collection from your Customer Experience. It’s time to stop playing about and experimenting with it and put it to work.

Sincerely,

Big Brother*

* I’m just kidding, for heaven’s sake.

If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire. Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.

Hear the rest of the conversation on “Is Facial Recognition Creepy or Just The Future?” on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in, please click here.

If you enjoyed this post, you might be interested in the following blogs and podcasts:

Why Too Many Choices Can Be Killing Your Bottom Line

10 Things You Must Know To Establish And Preserve Customer Service Culture

Branding And CX: The Surprising Way They Work Together To Form Customer Loyalty

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post Are You Ready for Facial Recognition Technology in Your CX? appeared first on .

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If you give people the option to shop somewhere that only had a few choices or another venue with a wide selection, people almost always go for the larger selection. However, sorting through options can feel overwhelming.

Too many choices in your Customer Experience are a terrible thing. Of course, too little choice is not great either. We discussed the issues with too many options in a recent podcast and what you can do to make customer’s decisions easier in your Customer Experience.

I remember feeling overwhelmed by choices when we were working with a company in Moscow (when it was still under communist rule, mind you) similar to Best Buy with electrical equipment, audio, and the like. We were doing a Customer Mirror, where we were acting like we were customers, and I was going to buy a webcam.

However, when I went to the webcams, I couldn’t choose. Why? There were hundreds of the bloody things with every variation you could imagine. There was no way I could pick.

The Consequences of Too Many Choices

A couple of things happen when we get too much choice. Both drive negative consequences, at least from the perspective of the seller.

First, it reduces our motivation. One study ran an experiment with students in a psychology class where they could write a paper for extra credit. Some participants could choose from six different topics, and some could choose from 30 different subjects.

The researchers gave these papers to independent reviewers who graded all the papers and the students who only had six choices performed better than the students who had 30. Researchers attributed it to motivation. For the group with 30 choices, the act of choosing a topic taxed them to the point that they had no motivation to write the subsequent paper.

In other contexts, a lack of motivation can cause you to give up and not choose. So, you can walk away from the buying decision because you lose your motivation.

Second, it can change our reference point for satisfaction. The more options you have, the more second guessing you can do. More choices means more chances to make a mistake.  

My wife Lorraine is notoriously slow making a decision about what she wants in a restaurant. Moreover, once her food arrives, she realizes she made the wrong choice. She second-guesses her choice as soon as she sees it—and what I ordered.

But Wait! There’s More

When you’re talking about these concepts, there’s never just one thing happening. Multiple things occur.

Bounded Rationality is making decisions within certain constraints. For example, if you love a brand, then you will pick from that brand even though other brands offer the same or a similar thing. An example is my relationship with Apple. When I need a new phone, I don’t shop around. I get the latest iPhone.

Menus are a form of Bounded Rationality. The restaurant offers these choices. Now, some have a lot to consider; The Cheesecake Factory Menu is so extensive, it practically has chapters. Obviously, it’s great to have so many options. However, it’s also overwhelming.

It can be torture for Lorraine to make a decision about her order at a restaurant when choosing from a sizeable menu. Lorraine wonders, “what if I had gotten this other thing instead?” Whereas if you took her someplace with two options, she might be delighted with what she chose once it arrived.

It’s also indecision. Lorraine would rather keep her options open; I’m decisive. I make quick decisions.

Another problem is you may not have all the data. If we walk into a choice situation, we have a hard time making decisions without enough information.

Lorraine never wants to make a decision on what to order without all the information. In other words, she doesn’t want to make a decision based on what’s printed on the menu; she wants to hear the specials first.

In my case with the webcam, I wanted the webcam I bought to be within a set of quality parameters. However, I didn’t have the data, meaning I didn’t know what the quality parameters were for webcams. I also did not have strong opinions about webcams.  I neither knew how one was better than the other nor how they were different from each other.

In these cases where you don’t have all the data, the way that we inform ourselves is by looking through options. When there are many options and variation, the process gets complicated. With the webcams, it was this number of megapixels versus that, and this webcam has some kind of stabilization feature, but that one doesn’t. You start racking up more and more tradeoffs.

If you went into the webcam situation fully informed or if you had strong opinions, it would be easy. Having more choices meant you would find what you want. But if you don’t, you have to figure it out and making a decision becomes too difficult.  

Extremeness Aversion is also at play here. In many of these situations where we are sorting through information, we tend to avoid the outermost edges of our choice spectrum, settling somewhere in the middle, or a compromise position. For example, we don’t pick the small or the large drink option at a fast food restaurant but instead choose the medium, regardless of details like price per ounce or even the number of ounces. It’s easier to settle on the medium and be done with it.

The same was true of the webcams. Although I didn’t end up choosing one, I was not even looking at the cheapest one or the most expensive one. It was all the hundreds of models in between that did me in and defeated my decision.

How Many Choices Are the Right Amount?

People like being able to make choices. They do not like having one option or only two options because that isn’t enough. If you give them too many, they aren’t happy either, because it’s too difficult to make a decision.

However, you can take action to make decision-making easy for your customer.

Choice architecture describes how to construct choice sets that still give people the freedom to choose, but points in some direction, or makes it easier for them.

In other words, have a lot of options but then make it easy for people to sort through them based on how you organize the process. The way you arrange your choice assortment can make a big difference.

Coca-Cola Freestyle is a machine where you can choose the soda or combination of drinks you want. The possible combinations on those machines run into the tens of thousands, but the touch-screen devices are friendly to use. They start off with four categories and then give you another menu with another set of options. Next, the screen moves you to the specifics within that category.

So, in just three steps you can get down to the soda you want out of thousands of options. They have reduced an assortment of tens of thousands down to three easy steps.

If we give our customers tools so that they can reorganize assortments themselves, it makes wide varieties seem like small assortments.

Online, you can present far more products. You can offer 50 million webcams if you want. However, it should be easy to filter by reviews, by price, by brand, or whatever distinction that you can provide customers.  

Also, since we understand that extremeness aversion is at play in choices, we can create extremes that drive customers to choose a middle option we optimized for them to get the best of both worlds. The marketing message can feature that middle option, or in a brick and mortar location, it could be in a featured display case. On Amazon, these “middle” options are often highlighted with a banner that reads “most popular” or “best-seller.”

When it comes to how many choices you should offer, you shouldn’t necessarily listen to your customers. Your customers will always tell you they want more choice options. However, when push comes to shove, choices can be overwhelming to customers in many instances.

Also, multiple things happen that affect what people choose, from bounded rationality to extremeness aversion, and all the other details. Design for these influences in your experience.

Final advice, if you are shopping for a webcam in Moscow, stop yourself right now. These days, the webcam is built in, making that decision the easiest of all.

To hear more about Why Too Much Choice is a Bad Thing in more detail, listen to the complete podcast here.

If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire.  Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.

Hear the rest of the conversation on “Why Too Much Choice is a Bad Thing” on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in, please click here. 

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

Sources:

Goodwin, Bryan. “Research Says…/Choice Is a Matter of Degree.” www.ascd.org. Web. 29 March 2019. < http://www.ascd.org/publications/educational-leadership/sept10/vol68/num01/Choice-Is-a-Matter-of-Degree.aspx>.

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Defining and managing your customer service culture is a significant issue for many organizations. Today we share some important considerations for establishing your customer service culture as well as the best practices of the leading customer service organizations.

We spoke with Marilyn Suttle, a conference speaker, and three-time best-selling author and coach, on a recent podcast.  She helps leaders and teams make subtle shifts to create breakthrough success for customers. Her clients have won industry awards, raised customer satisfaction scores, and increased employee engagement.

Suttle says defining and becoming a guardian of your customer service culture is essential for your organization’s leadership. It’s the standout piece that allows you to be your own entity in the marketplace. After all, Suttle says, your culture is not just words on a page.  Your mission, vision, and values define your customer culture, but your day-to-day actions provide it.

However, with employees scattered around the globe and the regular employee churn an organization has, keeping a company’s customer culture alive is difficult. You can have it established and then a year later, due to turnover or mergers with other global organizations or any host of reasons, it’s gone again.

Essential Considerations for Your Customer Service Culture

Singapore Airlines, which has been consistently voted one of the top airlines in the world, has a strong customer service culture. Suttle says one of the things they say is arbitrary customer service gets you arbitrary results.

In other words, you must first define your culture and then establish standards for achieving that culture. Then, you implement it.

Implementation can have its challenges. For some organizations without a customer service culture or with a less robust customer service culture, change is difficult. Add to it that leadership also wants to have an ROI. The implementation team will have their work cut out for them.

Suttle says you should take the approach to change that customers have lifetime value. Moreover, there is a link between that emotional connection customers feel for you and the dollars they spend with you. If you make a customer service culture a leadership conversation that focuses on this relationship, Suttle says this is where the real change happens.

Suttle says we think that customer service is all about the customers, but it is really about the employees. Employees are the center of customer service because what happens on the inside of a company, will eventually show up on the “outside.” If your organization has an unhealthy employee experience,  meaning there is no trust and departments aren’t talking to each other, etc., then it will reflect in your employee’s behavior towards customers.

In our global customer experience consultancy, we call this situation an inside-out approach or an environment focused on what is good for the company rather than what’s good for the customers. We encourage organizations to flip that around and have an outside-in approach meaning they see their experience as a customer does. When our clients adopt an outside-in approach, they see firsthand what moments in their experience are not customer-focused.

Suttle says that same principle of outside-in applies to your employee experience. We shouldn’t see employees as simply revenue generators. Many times, employees want to grow and spend a significant part of their life working for you. She suggests walking through your company as if you were a new hire. Consider what in your employee experience would make you want to get up in the morning and come to work—and what makes you want to pull the covers up over your head again instead!

When consulting employees about what you expect, Suttle says to explain why. The “why” is essential to getting your employees to create the “what,” which in this case is customer experiences that are memorable and create an emotional connection between the customer and your brand.

Also, changing your mindset from “what’s in it for us” to “what’s in it for them” creates a win-win. Suttle says when your customers are winning, so are you.  

The Top 10 Best Practices of the Leading Service Organizations

Suttle undertook a two-year study of the best companies that excelled at customer service for her book. She researched and interviewed what these companies’ leadership did. Here are the top ten.

  1. Acknowledge what works. Too often we don’t celebrate successes. However, finding ways to draw attention to the positive goes a long way to motivate teams.
  2. Communicate. Communication is critical for achieving both personal and sales goals. Many leaders are, conflict-averse. They see a problem, and know it has to be fixed, but it’s uncomfortable. However, leadership should address it anyway to move forward.
  3. Define expectations and establish accountability. Let people know what you want from a leadership perspective and measure the results.  Hold each other and your teams to a standard.
  4. Define and improve your responsiveness. Suttle spent six months with a global leadership team. She suggested they improve their responsiveness.  They said they were responsive now. She asked all the members of the team to write down what they meant by “responsive” Everybody had a different definition, from half a day to 24-hours. She encouraged them to get on the same page. For example, with email she suggested they respond immediately with an acknowledgment of the receipt of the inquiry and a message that informs the customer you are working on it. Even better if you can tell them when you will get back to them.
  5. Remove “moments of irritation.”  Irritating parts of your experience leave a lasting negative impression of your company.  For example, can a customer go to your website and find your phone number, or do they have to hunt for it? Suttle says you should look at each moment of customer contact and remove these irritations. Then, make it easy, fast, and convenient for customers to interact with you in every area.
  6. Set positive subconscious clues. Every experience has subliminal clues that inform you about how an organization thinks of customers. Make yours positive. Suttle says one company had a voice mail message that said the person was “continuously checking messages throughout the day.” It assured her that the person would hear her message soon and would get back to her in a reasonable amount of time.
  7. Reinforce continuously. Too often, a customer culture is designed and implemented, but then, over time, the standards slip. Suttle says reinforcing these concepts is easy to do and there are many ways to do it. One CEO carries a three by four card that has their values printed on it, as a reminder when they are in meetings and making decisions. He has the rest of the team do it, too. Also, you can catch people doing good. For example, you could give a “shout out” to the driver that came in early to ensure an order got out to a customer.
  8. Incorporate customer service wins into established parts of the employee’s experience. From the daily huddle to the weekly team meeting, add a point where the employees share a moment where they put the customer first. It sends the message of what you expect, and it also allows everyone on the team to learn from one another’s successes.
  9. Recruit the right kinds of employees. People who have a strong work ethic like to work around others who share similar characteristics. Have your high performers recommend people when you are hiring.
  10. Listen before you fix. In customer service, customers want to know they were heard. Suttle advises that you let them finish venting before you jump in and fix the problem. When they feel listened to, the customer is more likely to hear your solutions.

Let’s face it; implementing and maintaining a customer service culture is challenging. When I talk to organizations about implementing anything related to customer experience, an issue that comes up is how are we going to fight against the massive tidal wave of not wanting to change. We can come up with these great ideas and these great programs that we can implement but without a proper culture, it won’t work.

Suttle’s plan to define the customer service culture and set standards is an excellent way to start. Also, the strategy to work from the top is essential; if leadership isn’t on board, no one else will be either. And of course, the ten best practices will help your efforts also. I especially like incorporating the “how did I put customers first this week?” into company routines.

You can have the best strategy and it won’t work if you have the wrong culture. One of my favorite phrases is “Culture eats strategy for breakfast.” The reason your customer experience is the way it is stems from the culture you have. It is up to you to ensure you have the type of culture that will allow your team to deliver the experience you worked so hard to design and implement—and keep it going. Don’t let your culture eat all that hard work.   

To hear more about Being the Guardian of Your Customer Service Culture in more detail, listen to the complete podcast here.

If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire.  Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.

Hear the rest of the conversation on Being the Guardian of Your Customer Service Culture on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in, please click here.

If you enjoyed this post, you might be interested in the following blogs and podcasts:

BRAND OR CUSTOMER EXPERIENCE – WHAT COMES FIRST? [Podcast]

BRANDING AND CX: THE SURPRISING WAY THEY WORK TOGETHER TO FORM CUSTOMER LOYALTY

5 THINGS YOU SHOULD DO TODAY TO MANAGE UNCERTAINTY IN BUSINESS

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post 10 Things You Must Know to Establish and Preserve Your Customer Service Culture appeared first on .

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Whenever I talk about Customer Experience with audiences, I begin by explaining that customers do not buy things rationally. Customers buy things emotionally and then justify the purchase with logic.

Irrationality and data don’t mix. However, there are ways that people’s irrational behavior reveals a rational pattern in the data. Let’s take a look at actionable insights about people’s irrational behavior as customers and the importance of the human touch in a digital transformation.

Irrational Decisions Reveal Predictable Behavior

A lot of organizations assume customers make rational buying decisions. They also think survey responses are authentic. However, what people say and what people do are different.  For example, a few years ago Disney asked people what they would change about the food at their parks. People said they wished for the option of a salad. So, Disney added salads, and people didn’t order them!

People didn’t lie; they thought they might want a salad. However, when it is time to order food, they think, “Hey! I am having fun. I deserve a treat,” and order junk.

Also, customers are often terrible at telling you why they did something. Again, it isn’t duplicity; it’s ignorance. Customers think they are telling the truth.

The reasons people do things are often hidden from the customers in their subconscious mind. The subconscious is always processing information for us and from time to time kicks up a decision to the conscious mind—with no explanation.

As a result, uncovering what customers want versus what they say they want is essential. We worked with a Texas hospital system years ago where surveys reported patients said they wanted more time with the doctor. However, we discovered what patients actually felt was that the doctor wasn’t listening to them.

But what would have happened if the hospital did what the patients said they wanted and increased the time for appointments? The patient would still feel like the doctor wasn’t listening, but for longer, and the hospital’s costs would be higher. So, no one would be happy.

If you did what patients really wanted, get doctors to listen to them more, everyone is happy. Furthermore, by training medical staff on active listening skills, you might reduce the time spent per patient, decreasing costs and increasing patient satisfaction.

Actions speak louder than words. If you record data on customer behavior, their irrational decisions will lead to patterns in behavior that will reveal everything you need to know. You will see by what customers do what they really want, despite what they say they want.

Automation is Great But Keep an Eye on the Human Touch

Digital transformation and automation are excellent additions to Customer Experiences. However, with technology streamlining parts of the Customer Experience, do not throw out the excellent points an analog experience provides.

One of these excellent points is the power of human interaction. Let me explain.

We used to have a milkman deliver our milk. I suggested to my wife Lorraine we buy it at the store which was undoubtedly cheaper. Lorraine wasn’t keen. Kevin (the milkman) came on Fridays, she enjoyed chatting with him and felt loyal to him.

However, Kevin left, and Kevin’s replacement didn’t call or chat. Instead, he taped the bill to the milk bottle and asked us to leave a check under the mat.

The value of having milk delivered was the human touch when Kevin came around to chat. The automated experience led to us canceling the service and getting our milk from the store like everybody else. The replacement milkman automated the value right out of the experience.

Self-service and automated conversations have their place and can enhance Customer Experience. However, never underestimate the power of human touch and personal interaction. You don’t want to automate the value right out of your experience and send your customers running to the empathetic arms of your competitor.

About Colin Shaw
Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer Experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker. Follow Colin Shaw on Twitter @ColinShaw_CX.

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Brands are everywhere. Everybody feels like they understand what brands are. However, when we ask the fundamental questions of “What is a brand?” and “What does that mean?”, there’s a surprising amount of variation in opinion.

Branding is a critical topic in Customer Experience. We discussed where branding and Customer Experience interact and prioritize in a recent podcast. We also explained how the two concepts are crucial to creating brand and customer loyalty.

Which Came First The Chicken or The Brand?

People often ask me when it comes to branding and Customer Experience, which one comes first? What’s most important?

The answer is they are both important, but branding comes first, and Customer Experience follows. Here’s why branding comes first and the difference between them.

  • Branding makes the promise in the marketplace.
  • Customer Experience delivers against that promise.

When the Customer Experience is successful in delivering on the brand promise, that is a Branded Customer Experience.

For example, Apple delivers a Branded Customer Experience.  

When I go into Apple, I feel that the “store” is on brand, from the way they dress to the way they act to the absence of tills. It feels like the brand promise they made me in their marketing.  

Another example—and cautionary tale—is Aviva insurance brand Norwich Union,  an insurance company in the UK. Norwich Union had a slogan, “Quote me happy.” They used advertisements of people that were ecstatically happy and rolling about the floor laughing their heads off because they were so pleased with the quote they received.

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Not surprisingly, the Aviva Insurance company ditched the campaign a few years later “amid claims that it was failing to live up to its promise.”  After all, when was the last time you were ecstatic about buying insurance?

Practicality Wins Over Philosophy in Branded Customer Experiences

The Norwich Union example leads to my next point. Your brand promise and brand value should be practical. Sometimes organizations fail to grasp this concept, and it leads to problems delivering a Branded Customer Experience.

For example, I was chatting with a mobile phone company. We were talking about their brand values, and the team from the mobile phone company said one of their brand values was “Red.”  

Red? What does that mean? How do your call center employees deliver on a brand value of “red?” The answer is they can’t.

In other words, colors are for logos, not for brands.

A brand is an inspiration for your Customer Experience. Therefore, it must have a practical application if you want the Customer Experience to deliver on it.

Our global Customer Experience consultancy is named after this concept. Beyond Philosophy means that having a philosophy is excellent, but you must be able to do something with the philosophy. Otherwise, it’s useless.

In simpler terms, when Bert Scroggins phones into the call center to complain, your philosophy should inspire that interaction with some practical application in the Customer Experience. If you have somebody working for you in a call center or in a store, what do you want them to do? It’s the doing where the Customer Experience exists not the high-falutin’ theory behind it.

Don’t get me wrong. You need the high-minded ideals. But you also need to have at least one foot in reality.

What is a Brand?

You can think about a brand in two ways. There is the organizational perspective and then the customer perspective:

  • From the organizational perspective, a brand is a series of symbolic decisions, like a logo, the colors, the character you want to anthropomorphize. These decisions are necessary for consistency. However, too many firms treat that as the brand, and it’s not. That’s just the beginning.  
  • From a customer perspective, a brand exists as a network of memories in the mind of your customer. Managing a brand is managing customers’ memories. It means you should have ideas that you want to be associated with your brand. Then, you have to form consistent and repetitive memories in the minds of your consumers.

Think about the brand for Volvo. Many of us will think of the word “safety” because for decades Volvo hammered that message into our brains over and over (and over) again. Now we associate the concept of safety and Volvo in our memories. That said, Volvo didn’t make the Insurance Institute for Highway Safety’s Top Safety Pick honor for 2018. Maybe the other brands have caught up with them. However, Volvo, at least to some of us older types, is still associated with safety.

The Staggering Importance of Memory to Your Brand

The Volvo brand is built on associating the word “safety” with their cars. Memory is a crucial factor for a brand, and brand loyalty, for that matter. If you didn’t have a memory of an experience, then, by definition, you can’t be loyal to a brand.

Loyalty means you’re going back to something; you’re going to use something again. The word “again” implies you know what you’re doing and returning is based upon your previous experience. Therefore, loyalty suggests memory, making your customers’ memories really (really, really) important.  

When we talk about where Customer Experience interacts with branding, experiences are profound. We remember clearly and deeply experiences we’ve had with something.

When you have a list of brand values, how does that translate to the customer? The answer is it doesn’t. Your brand values mean nothing to your customer.

What your customer is going to remember, what’s going to be built into that networked memory structure in their brain, is the experience they had, and their expectations based on what they’ve learned. As a brand or Customer Experience manager, you must manage what people remember.

Professor Daniel Kahneman talked about the Peak-End Rule, which describes how memories are formed. People remember the peak emotion they felt—and that could be positive or negative—and they remember the end emotion they felt in an experience. Those two points form a memory.

So, What Does This Mean to Your Customer Experience?

  1. You need to evoke the proper emotions. Emotions are the most significant influence on the outcome of a Customer Experience. You should ask yourself the following:
    • What emotions are you evoking?
    • Are those emotions the ones that you want to evoke, meaning they drive value for your organization?
  2. Look at it from the customer memory perspective. What do we want people to remember about our brand? Now, to be fair, brand management from that memory perspective is unsexy. It is built on consistency and a narrow focus around a few key elements. Delivering on that in terms of messaging and experience over and over (and over) again is managing memory. It is a slow, repetitive process, but it works.
  3. Keep your promises.  A brand creates the promise in the marketplace, and the Customer Experience delivers against that promise. They should be in line with each other. The brand promise should be practical, something you can do in the call center, in the store or in the way you market.  You must consider how you will have the promise manifest in reality.

I don’t think organizations consider enough how to implement their high-minded ideals for the brand. However, this implementation is essential to your Customer Experience. Customer Experience is the practical application of your brand.

And it should not be red, because no one knows what that means.

Hear the rest of the conversation on Branding and CX on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in,please click here.

If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire.  Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.

If you enjoyed this post, you might be interested in the following blogs and podcasts:

How To Manage Uncertainty [Podcast]

Why You Must Address Customer Irrationality Before It’s Too Late

Why Customers Make Strange Decisions

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post Branding and CX: The Surprising Way They Work Together to Form Customer Loyalty appeared first on .

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A consistent finding in psychology is that people don’t like uncertainty or risk. It’s called Risk Aversion, and we all have it to some degree.

To be fair, we are not risk averse all the time. We also enjoy risky behavior, like gambling, smoking, or playing fast and loose with food expiration dates. However, as a general rule, we don’t like risk. Managing our risk aversion and the risk aversion of our customers is a significant part of providing an excellent Customer Experience.

People don’t like risk in part because of the uncertainty. We want to make a good decision but worry about how terrible the consequences will be if we make a bad one. We discussed uncertainty in business and Customer Experience and how to cope with it in a recent podcast. Luckily, there are a few ways to manage uncertainty—and its related risk.

Coping with Uncertainty in Business

Many years ago, I attended the Confederation of British Industries (CBI) conference in London. I remember the speaker said that businesses want certainty, to be able to predict how much inventory they should produce and how many people they need and so on. It crystallized for me how vital certainty is in business.

In the next ten years, is business going to get easier or harder? The answer is harder. In other words, certainty is critical for business, but also elusive.

I support a team called the Luton Town Football Club. The manager has a phrase I quite like that applies here. He says you have to control the “controllable.” (Now, he didn’t come up with it; I just Googled it, and 33,300 results appeared in .38 seconds. However, most of them are coaching sites, so I can see why he says it.)

Controlling the controllable means that even if the world’s going mad, there are some things you can keep in check (aka, the “controllable”). You can’t rule the world or change human nature, but you can deal with it and use models of thinking that manage uncertainty.

How People Cope with Risk

It starts with your attitude, how you look at things. Most of my career I spent in corporate life. Whenever we went through organizational “restructuring,” there was loads of uncertainty. However, where there is change, there is opportunity. I always thought that the chances of moving up are higher in an organization that is changing than one that is static.

Since uncertainty is a fact of life, like death and taxes, one of the ways people cope with risk is demanding higher payoffs or higher expected returns from risk. For example, if you are going to leave a stable job (read: boring but steady) into a riskier one at a startup (read: exciting because it could flourish or fold any minute), many people would ask for a higher salary and greater immediate benefits. They demand compensation for the riskier situation.

Customers are the same way. If you have people who are risk averse, you have to put a lot of effort into front-loading those benefits to encourage them to engage in that risky behavior of moving over to you instead of sticking with what they have.

Another way that we cope with uncertainty is wanting to feel as if we made the best decision. In other words, we talk about everything even when we don’t know anything. We try to figure out, project, and model what we think is going to happen with the full understanding we only have some of the information significant to that decision.

In my global Customer Experience consultancy, I have dealt with some companies who spend hours talking about the .001 percent chance of something negative happening if they implement a new customer experience strategy design. They make it a huge issue.

We encourage our clients to learn by doing, to test a few things in a less risky environment and then deal with the issue if it comes up. I mean, yes, it could be an issue for one person on a random Tuesday, but let’s get the product out there for everyone else!

It reminds me of one of my favorite phrases: Ready, Fire, Aim! We just engaged in some of that thinking at Beyond Philosophy with training we launched. We are getting a new product out there and seeing what happens. I even told my training manager to put on his researcher hat. I want to know if our customers want this training, and if not, what do they want instead.

The “Ready, Fire, Aim!” approach works well for small decisions. While training is vital to what we do at Beyond Philosophy, it’s also not going to break the bank if we are wrong about it. So, we opted to skip the months of market research that might improve our decision by eight percent. Instead, we are trying to be efficient in doing business while gaining intelligence at the same time.

Unhealthy Ways to Deal with Uncertainty

One of the unhealthy ways that people cope with uncertainty is to throw up their hands and give up. They decide if the world is uncertain, then everything’s uncertain. So, they risk it all on this next big move for the company or the next marketing campaign. It’s the “Go big or go home” mentality. Behavior like that is driven by trying to cope with uncertainty in an unhealthy way.

Over the past decade, one of the positive changes in business has been experimentation in embracing uncertainty. In Silicon Valley, they talk about failing faster, meaning taking lots of smaller risks instead of one big one and getting feedback quickly. This approach allows the company to adjust what isn’t working or build upon their success with what is. Instead of “Go big or go home,” they “Go diverse and go on.”

Some corporate people react to uncertainty by not wanting to make a decision at all. Again, it is because of risk aversion. They feel if they put their neck out on a choice and fail, it will sully (or end) their career.

Failure is valuable in business. Now before you click away to read someone’s post who doesn’t sound a bit cracked, hear me out.

There is a famous story about Tom Watson, Jr., the CEO of IBM from the mid-50s to the early 70s, the IBM heyday. A young executive made some mistakes that cost the company millions. When the executive was called up to Watson’s office, he expected Watson was going to sack him. However, legend states that Watson said, “Not at all, young man, we have just spent a couple of million dollars educating you.

Unfortunately, most corporations are not built that way now. Business today requires everybody to be right all the time. However, everyone isn’t right all the time. Sometimes you blow it.

I don’t remember who said it, but I once heard that a successful business is making more good decisions than bad ones. In other words, if you make a couple of mistakes but outweigh those blunders with successes, you are okay. It’s when you make too many mistakes that there is a problem.

Changing How We Evaluate Success with Decisions is Critical in Uncertainty

How we evaluate whether a decision is good or bad often makes no distinction between process and outcome. When there is uncertainty, and we don’t have full information, we have a method to help make decisions efficiently and rapidly.

We too often judge people by the outcomes of the decisions instead of on the process that was used to reach them. However, isn’t it better if people had a unfortunate result and a great process than someone who had a successful outcome but flipped a coin to get there?

We should focus on the process instead of on outcomes in our evaluation. That approach can help manage uncertainty in decision-making.

So, What Do You Do with This?

A couple of things here are critical to remember when coping with uncertainty:

  1. You must be able to deal with risk. Uncertainty and ambiguity are part of life and business, and it’s not going to get more comfortable moving forward.
  2. You have to control the “controllable.” You can’t control politics or the economy or what your friend posts on Facebook. You can control how you react to them.
  3. You need to recognize that human nature will not change.  People are people, no matter what, so understanding people’s psychology and emotional state is critical. These concepts of behavioral economics are vital to your Customer Experience because it helps you understand human behavior at a deeper level.
  4. You should make your team’s world as certain as possible as a leader. Your employees want certainty, particularly about their job security. Share your decision-making process so your employees know what to expect and how you will evaluate their performance.
  5. You cannot value the outcome over the decision-making process. We can’t guarantee results because we can’t control everything. However, we can make people feel more comfortable when we are transparent about the process. For example, when a customer is upset in a Customer Experience, explain how you are going to resolve this issue for them and what is going to happen next in the process. It provides a general sense of comfort that will help cope with their feelings of uncertainty.

I don’t know whether it’s true that we’re living in more uncertain times than we have in the past, but it feels like it. Moreover, it doesn’t matter. When you’re managing Customer Experiences or employees, what it feels like is more important than how it is.

The concept of uncertainty is fundamental in the study of decision making. After all, if we knew how everything would turn out, then decision making would be easy. We would know exactly how to manage our Customer Experiences and employees. Uncertainty is what makes choices interesting.

Business is as easy today as it will ever be moving forward. Uncertainty is a fundamental part of making decisions in business now and it will be in the future. The question is are you prepared to deal with it?

To hear more about managing uncertainty in business in more detail, listen to the complete podcast here.

If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire. Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.

Hear the rest of the conversation on “How to Manage Uncertainty” on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in, please click here.

If you enjoyed this post, you might be interested in the following blogs and podcasts:

Customers Are Irrational! Why? What Can We Do About It? [Podcast]

The Four Things You Must Do To Keep Customers Talking About Your CX

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

Source:

“Characteristic of Leadership.” The-happy-manager.com. Web. 12 March 2019. < https://the-happy-manager.com/articles/characteristic-of-leadership/>.

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At British Telecom (BT),  we were buying a CRM system. I was leading the project and we had 15 people around the table to make this choice. It was a significant decision for a lot of money.

So, as it was a business decision, you would think we were logical about it. However, we weren’t. We were irrational about it.

Your customers are irrational, too. They are irrational in business-to-consumer (B2C) transactions and they are irrational in business-to-business (B2B) interactions also. We discussed their irrationality in our podcast this week.

Today we will take a closer look at what irrationality means in a Customer Experience and how it applies to customers’ decision making. Moreover, and perhaps most importantly, we will address what you can do about customer irrationality in your Customer Experience design.

Customers Do Not Intend to be Irrational

With the CRM decision in BT, we did not set out to be irrational about it. Quite the opposite. We had pre-meetings about how we were going to choose. We drew up a long decision matrix.  We had people in to train us all on how to make this decision using this matrix, which was what to look for in a CRM system and how to “score” the presentation for the data we collected on it.

After the presentations and the scoring, the matrix told us to go with Company A’s CRM.  However, everything in my gut told me it was not the right decision.

So, we didn’t. We went with Company B’s CRM. Not only was it not the one the matrix told us to choose, but it was more expensive. The finance guys at BT loved that, by the way.

For those of you that have implemented new systems, you know it can be a challenge. Thankfully, the CRM we chose was fantastic—and maybe because we had more of a vested interest in this CRM being fantastic. However, it was also because we got on with the Company B team  better. We trusted them.

The new program was, in fact, so successful that I left British Telecom and began Beyond Philosophy. But that’s another story…the point is, we had every intention of undertaking a logical approach to our decision making and made an emotional one anyway.

Your customers are doing the same thing. They often approach an important decision with every intention of being rational about it. However, the irrational side kicks in and mucks it all up.

What Is Irrationality?

When it comes to customer irrationality, it is surprising how often people have a different idea of what it means. We use the word irrational to define how we behave when we are motivated by emotions rather than logic.

Rationality is, of course, the opposite. When people respond to incentives, it is considered rational behavior in academic circles. However, in my layman’s terms, I often use the word logical interchangeably with rational.

At BT, the CRM purchase was set up to be a logical decision.

  • How much?
  • When will it arrive?
  • What features does it have?
  • When can we have it up and running?

And so on.

In B2B, we think we make logical (rational) decisions. We pride ourselves on our business savvy and being “left-brained” in our decision making. However, there is a lot more happening here than logic.

From a practical perspective, human behavior is not strictly logical. If you have any chance of predicting what your customers are going to experience, you have to have a model of human behavior in your head.  Is it a rational model or an irrational model or is it something kind of in between?

The problem is many companies might say “rational model,” and call it a day. It’s the default. Many companies still think that consumers are logical when they make buying decisions. Something like, “If we sell it at $X, we will sell Y more.”

To be fair, more organizations are embracing the idea that emotions are part of their experience, even if they don’t know it. My example just now was about an organization that thinks business is rational who then adjusts their pricing. Pricing is very much part of the subconscious and psychological parts of an experience, otherwise known as the realm of behavioral economics.

For example, if you price your product at $500, a customer perceives it as $500. But if you price it at $499, only $1 less, customers perceive the price as $400-something.   The $499 “feels” like a better deal. Also, a gym membership that is $365 a year sounds way more expensive than when it is positioned as “just $1 a day.”

Our perception of the price isn’t logical; it’s irrational. These irrational perceptions influence our buying decisions all the time.

However, embracing that customers are illogical (irrational) isn’t enough. Customers can be irrational in all kinds of different ways. Understanding irrationality is the beginning of the journey, not the end.

For some organizations, the idea that there is no cut-and-dried way to manage irrationality in a Customer Experience is overwhelming. So instead, they choose to ignore it and stick to what they can control, i.e. the rational part of an experience.

Moreover, this idea of emotional decision-making driving your Customer Experience is not limited to B2C experiences. I spent most of my life working in the B2B arena. Business people don’t get up in the morning and put on their logical hat for work. They are still emotional and the make decisions irrationally, the same way they do when they are signing up for a gym membership. Their “gut” tells them things at work, just like it does everywhere else in their lives.

The BT example I shared was deliberate. Anyone who has made a purchase for a business could tell that story because it happens over and over again. Sometimes it is the leader who makes an emotional decision, as it was in my case. Sometimes one of the team members says something like, “I don’t feel right about this.” Sometimes it is your boss who takes a look at all your painstaking research and says, “I think we’ll go with this one instead.”

A lot of B2B decision making is emotional because people make the decisions (not robots…yet) and people are emotional. There’s this old saying from the 70s, “Nobody ever got fired for buying IBM.” It’s an interesting phrase because that’s a B2B purchase. A lot of IBM purchases at that time may have been driven by risk aversion, an emotional response to go with the conservative choice.

So, What Do You Do?

As Customer Experience professionals, you can’t afford to make this judgement that “customer behavior is rational” as the default option.  You need to look at the decision occurring in your Customer Experience as if you were a customer yourself. You need to discover what making that decision is like and how you choose between your options.

You need a mental model of human decision making. Some of these models are normative and some are descriptive.  We can study decision making in both ways.

  1. Normative models of decision-making describe what people should do. Most rational models, or logical models,  describe how people should make decisions if they were to make optimal choices without any bias. That is the mode that a lot of us default to when we’re trying to anticipate other people because it is the easiest for us to imagine.
  2. Descriptive models of decision-making show what people do. These models get very messy and specific and are difficult to create. However, descriptive models are more useful because they are based on reality instead of theory about how people should operate.

When you are developing your theory of how your customers make decision, you need that mental model to function. In our global Customer Experience Consultancy, we recommend a model that describes what people actually do.

Changing the World Comes Down to You (No Pressure)

We’re still in the infancy of educating people about customer behavior. Behavioral economics is diving into the psychological influences.

So, the good news is you, dear reader, are leading the way on these concepts. You can include these ideas in your Customer Experience design and educate your friends and colleagues on why you do it that way.

Then, your sphere of influence will realize the value inherent in the rich vein of customer data regarding behavioral understanding and do the same. Little by little, your pioneering work in understanding customer behavior will help  change the world.

Customers are irrational whether they are acting on their own behalf or for their employer. Designing a Customer Experience strategy that works with their illogical nature will help you provide and experience that leaves them feeling happy and pleased.

In other words, it all starts with you. We’re depending on you to take action. So, go out and change the world.

To hear more about customer irrationality and what to do about it in more detail, listen to the complete podcast here.

If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire.  Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post Why You Must Address Customer Irrationality Before It’s Too Late appeared first on .

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Today, people appreciate good Customer Experience, but not enough to talk about it a lot. What gets them talking to people about your brand is having a unique Customer Experience with moments of Innovative Service, or an Innovative Customer Experience.

In other words, a good Customer Experience is important, but an Innovative Customer Experience is better because your customers tell stories about it. Some of those stories are in person; some are online, and others related in 280 characters or less.

However, your customers tell the story, innovative service is the way to earn a customer’s loyalty. It is also the way to earn the business of their friends, family, and followers.

We had a guest that explained why Innovative Service is crucial to Customer Experience on our recent podcast.  Author and speaker Dr. Chip Bell is a world-renowned authority on innovative service and customer loyalty consulting. Bell also helps many Fortune 100 companies implement innovative customer-centric strategies.

What Do We Mean by Innovative Service?

Innovative service is creating experiences that are not just value-added but also value- unique. Value-added is what your customer usually gets and, over time, expects; value-unique is giving your customer what they expect and adding more. It is a customer centric surprise that delights your customers.

Bell describes innovative service as a gesture of generosity hopefully exceeding the customer’s expectations. It’s creative, different, and unexpected. The goal is not to make the customer go, “Wow!” but make them go, “Whoa! I didn’t expect that.”

When you are looking at how to deliver an Innovative Customer Experience, you have to consider a few things:

    • Which experiences have surprised you in the past and how did they contribute to your customer loyalty?
    • What kind of things can you surprise the customer with that are appropriate for your experience?
    • How can you enable your team to have them deliver on the “Whoa!” moments?

One of the pitfalls of Customer Experience is that once you have added value, it becomes part of the offer and loses its effect. For example, if you are a frequent flyer and you get upgraded to first class on a flight, you recognize that it is a benefit, or added-value of being a frequent flyer. However, you also start to anticipate upgrades in the future on other flights. Your expectations have gone up. Since the airplane only has so many first-class seats, the disappointment of not getting upgraded is a certainty.

Bell says that there are limits to generosity but not to ingenuity. If you have different ways of rewarding your customers, you are always surprising them.  You also have more options to provide a “Whoa!” moment.

Bell says there is no limit to creating ingenious ways to get an unexpected response. For example, Bell’s wife traded in her old car and bought a new one. When she turned on the radio for the first time, she discovered that the dealership had programmed her radio stations into it. Her reaction? You guessed it, surprise and delight. It was a “Whoa!” moment

What he likes about this example is that it was unexpected and straightforward, meaning it didn’t require rolling out red carpets or hiring dancing girls. Also, it was customer centric and appropriate, which probably can’t be said for red carpets or dancing girls—at least not in this experience.

Also, there is a story here. Bell says she doesn’t talk about the car; she talks about the radio. She told the story to all her friends and family about the inventive way the dealership surprised her with programming her favorite stations. Now, Bell tells the story all the time, too, proving that innovative experiences get more airtime than excellent ones.

Creating “Whoa!” Moments in Your Experience

As a global Customer Experience consultant these past two decades, I’ve worked with many organizations where they seem to have blinders on. They certainly don’t seem to have the ability to create new innovative ways to surprise and delight the customer. So, how can you implement the idea of innovative Customer Experiences in your organization?

Bell has a few ideas for this:

    1. Prove to senior management it works. As I have said many times before, you have to have senior management on board if you want to do anything and Bell agrees. High-level management love metrics. You have to show them in actual numbers how having innovative Customer Experience produces results. Bell recommends pilot programs to serve as evidence that providing innovative customer service works to increase customer retention and loyalty for your senior management team.
    2. Define customer loyalty for your organization. People often define terms differently; you need to ensure they define customer loyalty in the same way. A common mistake is thinking that customer retention is loyalty. However, customer retention can have a lot of motivations, and loyalty might not be any of them. Customer behavior is the best indicator of customer loyalty. Customers that spend more, trust you with more of their business, and recommend you to their friends and family are demonstrating their loyalty through their actions.
    3. Measure what customers do, not what customers say they will do. I have always had my issues with NPS, which is a metric that gives a score to organizations based on responses to the question “How likely are you to recommend us to friends and family?” The higher the score, the more likely they are to recommend you. However, it doesn’t track whether customers do it. Saying you will endorse a brand to your friends and family is not the same as actually making the endorsement. Bell proposes that instead of asking customers if they will recommend you in the future (the NPS question), ask if they did recommend you already. What you hear back from that question will be the real measure of the effect of your innovative Customer Experience.
    4. Ensure that employees have the leeway to do what it takes to keep it fresh.Employee engagement is essential for Innovative Service to work in your CX design strategy. The people who deliver the experience need to believe in the concept behind it, and they need to have the ability to change it up in the moment if necessary. So, you have to trust employees enough to allow them to be creative with customers and the freedom to make the decisions they need to at the moment. Otherwise, they will end up delivering an innovative Customer Experience that has gone a bit stale—and a bit ineffective.

Innovating Customer Experience goes back to the concept from Behavioral Economics, the Reference Point. Reference points, as you might recall, are the ways we compare experiences whether to a previous experience with the organization or another Customer Experience in general. In this case, an innovative Customer Experience, or a “Whoa!” moment, can violate a customer’s expectations and differ from the Reference Point, but positively.

One of the problems in Customer Experience today is many times organizations are looking for the magic bean of experience design. They want a simple solution that will fix all their experience problems. Firms are looking for the one thing they need to repair or buy. They want to change the process in one way that will solve everything else.

It doesn’t exist. As I have said before, there are no simple solutions in Customer Experience.

What Bell suggests is a systematic shift in mindset, a different CX strategy altogether. It’s not about a single decision you’re going to make.

It’s an entirely new approach through empowerment of employees through an understanding of what your customers’ expectations are and what drives customer delight. Moreover, the ability to pull that together and have a culture that is conducive to it also provides Innovative Service that leads to Innovative Customer Experiences.

Best of all, you create a great story for your customers to share with friends and family and followers. They might tell it once, twice, or in 280 characters or less, but I will take any of those numbers over a “likely-to recommend” NPS score of 10 and a story that never gets told at all.

To hear more about Innovative Customer Experience in more detail, listen to the complete podcast here.

If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire.  Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.

Hear the rest of the conversation on “How to Create Innovative Service”on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in, please click here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training 

organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post The Four Things You Must Do to Keep Customers Talking about Your CX appeared first on .

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