Business Solutions Unfair to Customers

Emotional Advocacy
Yesterday, I started writing about the book, Human Sigma by John Fleming and Jim Asplund and as promised, I wanted to continue exploring the book today. One of the things I was happy to see addressed was the idea of the single question customer survey. I had pondered the validity using the question, “Would you recommend this company to others?” in a past entry.

Fleming and Asplund note that not only do you miss a lot of information by asking only one question, but also all advocates are not created equal. As discussed in my last entry, people can be satisfied and thus have no reservations about suggesting a company or service to others, yet they aren’t really invested in the company and may defect. Then there are those who are emotionally invested and can serve as enthusiastic promoters.

The authors don’t have any specific suggestions about what questions to pose on satisfaction surveys, likely because they urge you to “get under the hood” of customer relationships and ask about things that matter. What matters to one business may not have any significance to another.

The authors give an example of a survey they conducted at an amusement park where most of the feedback they received was negative. People complained on and on about the parking, lines, the prices, the food and the lack of shade. When they were asked if they would return, everyone said they would without hesitation. The deciding factor was their childrens’ enjoyment. Had they the same experience on a Saturday night (sans the lack of shade) at one of our performance venues, they would never come back again, but the vicarious joy they experience through their kids provides an emotional connection with the theme park.

Fairness In Interactions
Later in the book, the authors discuss perceptions of fairness and how that can feed people’s emotional investment. That section of the book is fairly long so it is difficult for me to cover all the ways interactions can be viewed as fair or not. Anyone who has worked in customer services knows that people’s preferred treatment can swing between wanting to be treated exactly like everyone else to wanting an exception made for them, all depending on their situation.

There were a few examples they gave that are recognizable as significant the arts world. For instance, subscribers and donors who have invested themselves in your organization expect preferential treatment in return for their loyalty. (The example the book gives is airline frequent flier program.) If you launch a campaign to attract new business that offers a better situation to new people than to long time customers, you run the risk of alienating them. An example that comes to mind is the low introductory rates offered on cable television packages that are only good for new accounts while you get no recognition for your long term relationship.

Another example in the performing arts world can be found in ticket exchange policies. Many organizations have a no return/no exchange policy with subscribers and donors being the only exception. As long as policies and procedures are enforced equitably, there is no problem. But once you perform an exchange for a flat tire but not my canceled babysitter excuse, then the inequity in the system is exposed. And then there are policies that are confusing to patrons from the start such as why internet and phone orders incur a service fee but walk up orders don’t.

Business Solutions Unfair
One example they give as an impediment to good customer relationships is the phone queue with the recorded message about your call being important leaving you to reconcile how this can be if the place is so poorly staffed the average wait time is twenty minutes. What the authors say about this really struck me, (my emphasis) “From the customer’s perspective, any process or system whose primary purpose is to solve a business problem rather than a customer concern is unfair.”

They also note that treating people equally can appear unfair. If your customer service staff follows the exact same scripted process with customers not recognizing that the script can’t cover all eventualities, the result may make you look incompetent and patronizing for asking questions or suggesting solutions which obviously do not apply to the situation.

Tomorrow I want to address what the book says about solving customer problems. It turns out how you attempt to resolve a problem is much more important than whether you actually solve it.

Emotional Satisfaction

A two years ago I had been entranced by a comment Neill Roan made about arts administrators being so emotionally satisfied with their jobs, they didn’t feel the need to keep current on the latest literature and theories about arts administration. Earlier this year, I was in touch with Neill on another matter and asked him about the source he had cited. The book was Human Sigma by John Fleming and Jim Asplund.

Human Sigma and Emotional Satisfaction
I had assumed Human Sigma would be about psychology or the biological factors which emphasize or inhibit our actions. Instead, the book is a response to the Six Sigma process which the authors feel is detrimental to employee and customer interactions. Six Sigma seeks to reduce inefficiencies in the workplace. The authors note that human interactions, especially those with customers, are inherently inefficient and trying to make them otherwise can be alienating.

Biology does actually wield a lot of clout in our decision making processes. The authors cite NYU neuroscientist Joseph LeDoux who,

“has argued that it is much easier for emotional responses to influence our thinking than for rational responses to temper our emotions. This is because the neural pathways that extend from the emotional system to the cognitive or thinking system of the brain are wider and faster than those that extend from the cognitive system back to the emotional processing areas.”

This is a contributing factor to the field of behavioral economics which examines why people don’t always behave rationally in their own best interests. The book mostly focuses on employee and customer interactions. My intention is to talk about some of the things that caught my interest in this and future entries.

Even though the book doesn’t explicitly address how high emotional satisfaction can cause people to–well, it is difficult to find the right word because most either connote willful or unconscious neglect or incompetence, let’s say overlook—the need to keep abreast of latest developments, there is a lot be learned about how people make their decisions. In fact, some of this might help explain why people choose to devote themselves to causes with low material rewards like the arts in the first place.

Satisfaction Ain’t Enough
About 10 years ago I went to a session on customer service where the speaker said that satisfaction and competitive price doesn’t contribute to a long term relationship with a customer. She noted that people who were satisfied with the service they received would still defect to a competitor. The book breaks this down on a finer level distinguishing between those who are emotionally satisfied and those who are rationally satisfied. Those who are emotionally satisfied with a company have a far greater investment in the company than those who are rationally satisfied.

What surprised me was that those who are rationally satisfied “behave not any differently than customers who are dissatisfied.” They use the example of a credit card company. Those who were emotionally satisfied spent an average of $251/month and used the card 3.1 times a month. Those who were rationally satisfied spent an average of $136/month and used the card 2.5 times each month. Those who were dissatisfied also spent $136/month and used the card 2.2 times.

The authors make the point that tending to a person’s emotional satisfaction can actually enhance their material value to your company. Investment in relationships is an investment in the financial health of your organization. We in the arts should understand this because of our constant efforts to woo and maintain relationships with donors. Even though we have a list of benefits we provide for different levels of support, we will go above and beyond to stay in a donor’s good graces.

The example of the credit card company was really apt in my case. I just canceled the card I had for 20 years because I felt the card company violated our relationship. I started the card with a $500 limit in 1989 and had gradually built it up to nearly $30,000 after the last two decades. After the fiscal crisis in 2008, they cut my limit by more than half despite my excellent credit. I never needed anywhere near the limit, but it was a point of pride for me that I had built it up to that level. Not an easy thing to build excellent credit while working in the arts.

There was also some deceit a couple years back when Bank of America bought the credit card company. They sent me a letter saying my card number had been compromised. When I called to find out who had been lax with my card information so that I could avoid the company, they gave me the run around before finally admitting everyone got the letter as an incentive to move to the Bank of America card.

That episode made me leery, but it was the credit limit cut that sent me into the arms of my credit union. I tolerated all sorts of rate hikes and the suspicious changes of payment due dates, but when they attacked the source of my pride it was over.

When I called to cancel the card, they didn’t even try to stop me. I have heard stories about companies being willing to reduce interest rates and do other things to keep customers, but they didn’t even ask me to reconsider after I told them my reason. I wonder if they have received so many calls they have learned that there is no use in talking people out of it.