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That You Care Is What Matters

November 18, 2009

by:

Joe Patti

Yesterday I alluded to the research findings presented by Fleming and Asplund in their book, Human Sigma, that how you handle customer problems is more important to your relationship with them than actually solving the problem. (I should mention, HumanSigma is a program of Gallup so they have a lot of experience in surveying.) They say that “customers who encounter a problem and are extremely happy with how the company handled the problem often have levels of emotional attachment equal to—and in some cases exceeding– those who have no problem at all.”

The Means, Not The End That Matters
They say that customers don’t expect a business will always resolve a problem to their liking, “but they do except the company to handle them in an exemplary way.” There is also the issue that not everyone has the same expectations of a solution to contend with. They use the example of receiving an undercooked meal at a restaurant. Some people may be content with having the meal cooked properly and the offer of complimentary dessert. Others may feel the whole meal should be free. You are likely to be more successful creating good procedures to address problems than you are at creating solutions that will please everyone.

They have found that people who have a high emotional investment are likely to give a company the benefit of the doubt when a problem arises viewing it as an honest mistake or even pondering how they may have contributed to the situation. Those with low engagement are more likely to place heavier blame on the company for the problem making it more difficult to please them.

Steps to Resolution
Fleming and Asplund suggest six steps that should be part of resolution procedures.

First is to acknowledge the problem exists. Second is to apologize. They are quick to add that apologizing is not accepting the blame. Lawyers warn clients not to apologize out of fear it can be used against them in lawsuits. But according to a NY Times story, policies of apologizing have cut malpractice suits and legal costs for the University of Michigan and University of Illinois hospitals. People who feel wronged view the refusal to apologize as a lack of empathy for the situation and so they escalate matters in an effort to gain acknowledgment.

Good resolution processes can actually strengthen a relationship with people who have experienced a problem. According to Fleming and Asplund, people who have encountered a problem and have been extremely satisfied with the way a bank handled it were 51% full invested in the bank versus 26% full investment by people who never experienced a problem. They say that apologizing validates a person’s trust in the company and reinforces their value as a customer.

The third step they suggest is “Take ownership of the problem and follow up, even if the problem is unresolved.” Promising to follow up by a certain time or date is better than a vague “as soon as possible” because the customer may feel they have to continue checking in on your progress. Even if you haven’t solved the problem by the appointed hour, it is better to contact the customer with that information than leave them wondering or in the position of having to track the contact person down again.

Suggestion four is to handle problems on the spot rather than bumping it to a supervisor. This means empowering front line service people to respond with a solution appropriate to their position. If the customer is not satisfied, then someone higher in the chain can be contacted. They use the example of a hotel chain that generally had managers resolve problems with free nights’ stays. Among the steps they took were to empower housekeeping to offer gift baskets, robes and bouquets of flowers and only refer a problem to the manager if a person was dissatisfied. Because they weren’t defaulting to free accommodations to resolve their problems, their costs dropped and satisfaction rose.

Their fifth suggestion is have a process which quickly brings the problem to the attention of a supervisor or manager. The mention a logging system which alerts managers if a problem remains unsolved after a certain period of time. Most arts organizations are small enough that a computerized system is not needed to communicate complaints to other staff. Just the same, there is plenty of opportunity for the complaint to lie dormant on someone’s desk and never be brought to a supervisor’s attention so the importance of communicating a complaint needs to be emphasized. The authors warn to be wary that your system not make people feel their responsibility in addressing complaints ends upon handing them off to someone else.

The last suggestion is to leave people better off than they were before the problem occurred. Even if the solution is not the one they desired, they should still be in a better position than they were before. Presumably this means gaining intangible benefits such as feeling more valued as a customer and perhaps having a specific contact person who can address future difficulties if the current problem hasn’t been completely resolved.

Audience Relations, Leadership, Management Philosophy, Marketing/PR

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Business Solutions Unfair to Customers

November 17, 2009

by:

Joe Patti

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.

Audience Relations, Leadership, Management Philosophy, Marketing/PR

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Emotional Satisfaction

November 16, 2009

by:

Joe Patti

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.

General Musings, Leadership, Management Philosophy, Marketing/PR, Terms and Ideas

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We Shall Engage Them On The Park Benches!

November 11, 2009

by:

Joe Patti

Something I thought I had posted but I can’t seem to find is my belief that getting other people to talk about whatever experience they have had in the arts is much more effective than you telling them what is so great about the arts. Perhaps I only spoke about it at a lecture or with a group of people, but my basic idea was that if you are somewhere like a wedding and you get on the topic of what you do and people mention that they have attended a performance or a museum/gallery show, you should inquire about the experience.

It doesn’t matter how long ago it was or if they didn’t particularly like it. Try asking them what they did like about the experience. What was valuable to them? What wasn’t? Don’t get too much into explaining why they should or shouldn’t have enjoyed something. This is also a conversation, not an interrogation or survey. If people talk about not knowing what to wear or when to clap, that is an opportunity to offer advice. Telling people why Mozart was the greatest may not be productive if people take it as a statement on their ignorance.

My goal is to connect people back to their positive memories about an experience and help them feel they have some ability to correctly evaluate their experience. Essentially, I want to help them convince themselves the arts hold something of value for them.

I often have these sorts of conversations around theatres with audiences, but that is essentially preaching to the choir. I don’t have as many opportunities to do so outside of a performing arts venue. Or at least perhaps I have been slow to recognize and exploit those opportunities.

My assistant theatre manager (ATM) managed to do so yesterday and I was happy to take a lesson from his example. As I mentioned, we attended a career day at a local high school yesterday. As we were leaving, a gentleman on a bench greeted us and asked what we had been up to. The ATM mentioned who we were and what we were speaking to students about. I don’t recall exactly how, but he managed to get the guy on the bench, a security guard at the school, talking about the poetry he wrote. He hadn’t written any in a long time and lost his notebooks years ago, but he did remember lines he wrote when he was in high school and started reciting them for us. He also recited some haiku he wrote.

Assuming we were professors, he “gave” us his poetry to recite to our classes feeling that college students could identify with the sentiments expressed by verses he wrote when he was their age. We agreed he was probably right about that. We encouraged him to try his hand at poetry again and maybe read it at an open mic night somewhere.

I knew within a minute of the conversation’s start that this was how we should be engaging people all the time. Certainly we don’t want to harangue people to come clean with the experiences they hold close to their heart. But if they are willing to start, we should keep them talking about it for a bit.

Marketing/PR

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