According to Webster, Empathy is “the feeling that you understand and share another person’s experiences and emotion”.
This post outlines several case studies demonstrating how facilitated empathy, or helping employees and customers understand each other’s experiences, can improve customer satisfaction and frontline employee performance. In all cases the empathy was facilitated by creating or enhancing an interaction between customers and frontline employees:
In the first case, the mere sight of a customer motivated cooks to do their job better:
Customer satisfaction with the food shot up 10% when the cooks could see the customers, even though the customers couldn’t see the cooks. In the opposite situation, there was no improvement in satisfaction from the baseline condition in which neither group could see the other. But even more striking, when customers and cooks both could see one another, satisfaction went up 17.3%, and service was 13.2% faster. Transparency between customers and providers seems to really improve service.
In the second case, a brief meeting between “call center employees” and “customers” substantially improved the call center employees’ performance:
Grant […] arranged for one group of call center workers to interact with scholarship students who were the recipients of the school’s fundraising largess. It wasn’t a long meeting — just a five-minute session where the workers were able to ask the student about his or her studies. But over the next month, that little chat made a big difference. The call center was able to monitor both the amount of time its employees spent on the phone and the amount of donation dollars they brought in. A month later, callers who had interacted with the scholarship student spent more than two times as many minutes on the phone, and brought in vastly more money: a weekly average of $503.22, up from $185.94.
In the third case, viewing patient’s photos substantially improved radiologists’ performance:
An old-fashioned technology — the photograph — may help improve the performance of radiologists reading test results from high-tech medical scanners, Israeli researchers said on Tuesday. Radiologists often have little direct contact with patients, but showing them a photo of a test subject can help improve their performance, the researchers told a meeting of the Radiological Society of North America in Chicago.
I found this study of Leveraging Customer Feedback to Increase Loyalty very insightful. Please note particularly:
In a large field experiment with highly satisfied customers of a Fortune 500 firm in the hospitality industry, the researchers track both customer attitudes and behavior over a 12-month period. The researchers find that a firm response to highly satisfied customers (in the form of a “thank you” email from the restaurant group’s president) increased patronage by more than 50%. In addition, it significantly strengthened the communal relationship with female customers.
I found this note on “When It Comes To Retaining Your Customers, Sometimes It’s Best To Leave Them Alone” very thought-provoking. Please note particularly:
The research involved 65,000 customers of a South American wireless communications firm. Some of the participants were randomly selected to receive a recommendation for a plan that was predicted to save them money based on their past behavior and others did not receive the same encouragement. As a result, only 6% of the customers who were not offered a plan suggestion left the supplier within the first three months after the program was launched. However, 10% of those that were given a recommendation left the company high and dry.
Please also note a similar study on managing “walking dead” customers:
The walking dead are “customers who currently maintain service but whose next action will be to discontinue all services, an important economic consequence to the firm,” according to a new study that examines how the customers of a telecommunications firm acquire and discard services over time. Companies would be wise to identify their walking dead and not market additional services to them because there may be an unintended effect, the paper suggests.
In my view, in both cases, the best approach to proactively retaining these customers is not to leave them alone but instead to more effectively engage them earlier on in their lifecycle, well before they become “walking dead”. More specifically, customer acquisition, customer onboarding, and customer development efforts should all be infused with proactive customer retention consideration. Deferring proactive customer retention to the end of the lifecycle could often produce the surprisingly negative results that both studies are observing.
Please add your perspective in a comment below:
In his Sloan Management Review article on Finding the Right Job For Your Product, Clay Christensen defined the Customer Jobs-To-Be-Done concept:
“When customers find that they need to get a job done, they “hire” products or services to do the job. This means that marketers need to understand the jobs that arise in customers’ lives for which their products might be hired. Most of the “home runs” of marketing history were hit by marketers who saw the world this way. The “strike outs” of marketing history, in contrast, generally have been the result of focusing on developing products with better features and functions or of attempting to decipher what the average customer in a demographic wants.”
The Whirlpool smart washing machine is a good case of a product struggling to find the right job and the consequences thereof:
“We’re a little bit of a hammer looking for a nail right now,” Chris Quatrochi, Whirlpool’s global director of user experience and connectivity, said last week at a conference hosted by tech blog Gigaom. The buyers of web-connected washers, more than a year after launch, are still “not at all widespread,” he said. “Trying to understand exactly the value proposition that you provide to the consumer,” he said, “has been a little bit of a challenge.”
I am following the Barclaycard Ring credit card concept very closely since inception. It is a very good example of how a company is co-creating a product with a community of customers:
“Barclaycard Ring is a credit card that’s driven by its community of card members. The community is a forum where you can exchange ideas, share knowledge and make Barclaycard Ring whatever you want it to be. It’s also a place where we can hear you out and better understand what you need from us. After all, if it’s your card, why should we have all the say in how it works. It’s time to put you, the customer, back in the driver’s seat.”
Barclaycard Ring is particularly collaborating with its customers on designing their customer experience:
“The second vote asked whether or not we should keep the servicing calls in the United States. Here are the blog and community comments from last year’s discussion. The comments overwhelmingly favored the idea of keeping the calls stateside, despite the fact that moving calls offshore would lower operating costs by roughly $4 per active account, per year.
The results are in and 84.4%, an overwhelming majority of voting community members, stated they’d like to keep Barclaycard Ring calls routed to the U.S. based call center. We hear you loud and clear on this one!”
I still find this 2006 Sloan Management Review article on How to Prevent Your Customers From Failing very timely. Please note particularly:
“Research indicates that about one-third of all service problems are caused by the customer. As companies increasingly shift work to customers and incorporate more self-service technologies, customers will take on even greater responsibility for service quality. As a result, their failures will become more critical.”
The Fifth Third NextJob practice is one unconventional example of preventing a certain customer failure. More specifically, Fifth Third is preventing their unemployed mortgage customers from losing their homes by helping them find their next job.
I found this Lowe’s Holoroom concept by the Lowe’s Innovation Labs very intriguing. Please note particularly:
“We know that for many homeowners, the struggle to visualize a completed home improvement project or to share that vision with others can stop a project in its tracks,” said Kyle Nel, executive director of Lowe’s Innovation Labs. “The Holoroom is our solution, enabling consumers to visualize their project and share that vision with family and friends.”
See also the similar Place IKEA furniture in your home with augmented reality concept:
The choice between customer acquisition and retention is a false choice. I recommend instead employing a diversified and balance customer lifecycle management approach with customer acquisition, onboarding, development and retention elements.
Customer Acquisition, Development and Retention are very connected and have many downstream and upstream implications. For example, many Customer Retention challenges are embedded in downstream poorly designed Customer Acquisition and Onboarding programs. Therefore, focusing on any one element and not the others can produce underwhelming results.
I found this note on “Don’t listen to what your customers say, watch how they behave” by Rita Gunther McGrath very thought-provoking. Please note particularly:
“I am often asked by companies with whom I work whether focus groups, surveys or customer panels are useful in learning what customers want and more importantly, what they will pay for. Sure, these techniques are helpful and sometimes can lead to useful insights. But it is usually a huge strategic mistake to base investment decisions or innovation projects on data gathered through these means. Why? A benign explanation is that we are all massively unaware of what really does drive our behavior. A less charitable explanation is that when people are asked questions, they tend to respond the way they think the person asking would like them to (which is one reason why doctors always double the number of drinks per day patients report consuming).”
See also a similar perspective from Russ Ackoff: There is no point in asking consumers -who do not know what they want – to say what they want.
I found the following observation by Niraj Dawar very instructive. Please note particularly:
“From a brand manager’s perspective, the question is what is a consumer loyal to — are they loyal to the brand that you’re selling or are they loyal to the points? If they’re loyal to the points the moment you stop those points your product will stop selling,” Dawar cautions. “Or the moment a competitor offers an equivalent amount of points on a slightly different program, the consumer will switch.”
There’s a better way to attract customers, he says. Companies that can make product “easier to buy, easier to find, easier learn how to use and then eventually dispose,” tend to retain its customer base for longer periods of time, Dawar says.
“It’s in the interaction. It’s in how the customer buys rather than what we sell them,” he adds.