Why you have to meet and exceed customer expectations

It is important to communicate and set expectations correctly to avoid disappointment

Cheryl Hanna wrote an interesting post titled “The Art of Meeting Customer Expectations” in which stresses the need to clearly communicate and agree upon expectations between the organisation and the customer.  She goes  on to tell us how her non-tech savvy mother ended up buying a Blackberry because the sales person assured her that it was easy to use.  It turns out that her mother does not find it easy to use and she is frustrated and unhappy.

I am in agreement with Cheryl on the need to set the right expectations up front.  I have written about how the folks in Marketing and Sales are the source of most poor customer experiences: both of these functions tend to promise what the rest of the organisation is unable or unwilling to deliver.  I have been the delivery person who has had to sit down with the customer and explain that despite what the sales person said it is simply not possible for me to provide the Sun and the Moon overnight and at that price.

Research suggests that customers have 4 distinct expectations

Where the story gets interesting is that Francis Buttle wrote the following in response to Cheryl’s post:

“I agree that it’s critical to understand expectations. The trouble is there are different levels of expectation. I published some research on this back in the early1990’s. The fieldwork showed that customers can think of expectation at 4 levels of abstraction, as follows.

1. Expectations of performance : “I expect to have my car serviced within 2 days of calling the workshop”
2. Desires: “I want my car serviced the day I call the workshop”
3. Experience-based norms: “Most people normally have to wait 3 days to have their car serviced”
4. Ideal standards: “My car should be serviced overnight and delivered to my home the next morning”

Competitive advantage is enjoyed by meeting ‘ideal standards’, but this can be extremely costly to deliver.”

Should we meet or exceed expectations?

Reading Francis’ comments I was reminded by the incessant conversation around whether one should meet or exceed customer expectations.  On the one hand you have folks who are absolutely convinced that you have to exceed customer expectations and delight customers.  On the other hand, there are folks who are adamant that exceeding customer expectations is simply flushing money down the toilet as it does not necessarily lead to customer loyalty and a return on investment.

In the real world only one expectation really matters

My personal experience suggests that the real world is a lot simpler than many of us make it out to be.  Allow me to explain.  Whilst Francis’ research may show 4 different types of expectations, I believe that the one that matters is the one that we are conditioned to expect – what Francis Buttle refers to as ‘experience based norms’.   That is to say what I have been used to (personally) and what my social circle tells me that they are used to.  That is the expectation that I am expecting you, the supplier, to meet.  If you fail to meet this then I will be disappointed.  If you exceed that expectation then I will be pleased.

In the real world you need to both meet and exceed customer expectations

The world is full of suppliers that are competing for my business.  If you want to end up on my radar then you have to both meet and exceed my expectations. If you meet my expectations then I am likely to do business with you.  If you exceed my expectations from time to time then you will stand out and thus help yourself to a bigger share of my spend on your category of product or service.

Allow me to illustrate this through an example.

How Diet and Fitness Resources has put itself firmly on my radar for fitness supplies

Recently, I wanted to buy a Swiss ball and so I searched for it on the Internet and found plenty of suppliers.  So why did I end up buying it from Diet and Fitness Resources ?  Quite simply because their website was the one that I found the easiest to read / make sense of, their price was competitive and I liked the fact that the delivery charges were clearly spelled out on the home page and were reasonable.  Other suppliers made it hard for me to get hold of this information; one supplier had made me go through the purchasing process only to hit me with a delivery charge of £10 right at the end – a charge I was not willing to pay.

So I chose to do business with Diet and Fitness Resources because they were the first supplier that I came across which met my expectations around the website, the price and the delivery charge.

Once I had placed the order I got an email confirmation about my order.  The email confirmation itself met my expectations as I am used to getting these confirmations when I buy stuff on the Internet.  What exceeded my expectations – because I remember noticing this and being surprised – was the fact that the email came from a human being (Zoe Harris) rather than a faceless autoresponder.

The next surprise that I got was the second email which arrived within half an hour of the first email.  This email was once again from Zoe and simply stated that the order had been dispatched.  This took me by surprise because many suppliers do not send this kind of email and the ones that do tend to take between 1 – 3 days to dispatch the goods and send the email.  Whilst I was surprised, I did not actually pay any attention because the Diet and Fitness Resources had set the expectation that I was likely to get the goods 2-3 days after placing the order.  And that is exactly what I have been used to with other suppliers.

When the Swiss Ball arrived the next day, Diet and Fitness Resources were firmly established on my buying radar.  Why?  Because they had under-promised and over delivered.  Put differently they had exceeded my expectations.  And they have done so on the very first occasion that I have done business with them.

Three lessons around customer expectations

  1. If you the supplier meet my expectations then I will do business with you.  However, if you want more than your fair share of my spend on your category of product then it really helps if you exceed my expectations occasionally.  And a great moment to exceed my expectations is on the first order I place with you Why?  Because it is critical moment, it is where I am trusting you, and if you over deliver then you will stand out.  That is simply how it is to be human.
  2. It is especially important that you exceed my expectations when I feel most vulnerable. I  am most likely to feel vulnerable when I place my first order with you; when I have my first significant problem and need your help; when I am stressed; when I need you to be compassionate and bend the rules in order to take my situation into account and help me out.
  3. Whilst you the supplier can take action to shape my expectation the reality is that I already have my own expectations.  They have probably been set by your competitors.  And if you are selling goods over the Internet then it is likely that those expectations have been set by Amazon.  So you have to match those expectations or hope that Amazon does not supply the products that you are selling.  Alternatively, you have to be willing to offer a cheaper price to tempt me to buy from you.

Self service is not an easy fix or why I love Kylie

Yesterday I read an interesting article on self service (well worth reading) and this got me thinking about my recent experience with the Home Delivery Network, a parcel delivery firm that operates in the UK.

One day I was handed this card by wife.  She told me that it looked like a parcel had come for me and as no-one had been home the driver had not been able to deliver the parcel.  The first thing I noticed was that the card had not been completed and so I was not able to tell:

  • who the parcel was for as there are five of us living at this address;
  • when the delivery firm had attempted to deliver it and failed;
  • what had actually happened to the parcel –  taken back to the depot or left with a neighbour etc.

What I did notice was 8 digit parcel ID and the instruction to look at the back of the card for contact details.  Reading the back it became clear that I was being urged to go to the website.  I did exactly that and entered both the parcel ID and my postcode.  The website responded with the following message: “Your parcel(s) cannot be rescheduled for delivery, please contact customer services on 0871 977 0800”.  Just to make sure that I had not made an error, I had a second go at entering the parcel ID and postcode and found that I got the same message.

So I called the number and found that straight away (no waiting) the IVR kicked in and once I had entered the parcel ID it spelt out when I could get the parcel delivered.   As it was a Tuesday, I requested delivery on the Thursday and left my home number so that delivery firm could ring me back if there was an issue.    At this point I was happy with the experience as it had been easy to schedule a delivery.

Thursday arrived and departed: we did not get the parcel delivered and we did not get a phone call to let us know that there was an issue.  So I contacted customer services (the IVR) and proceeded to listen to the option and select another date for delivery.  That date came and went: no delivery, no phone call.  Then I made a third attempt and met the same fate.

At this point I became rather frustrated even angry.  Why?  Because I wanted to get my hands on the parcel and I could not.  Every time I dialled the customer services number I found myself faced with the IVR which spelled out the dates when I could reschedule delivery.  I was wondering: how do I get through to a human being who can help me with my problem?

Then I made another attempt to contact customer services.  This time I listened to the IVR and did not opt for any of the delivery dates and found that right at the end I was given an option to speak to a human being.  I selected that option and found myself talking to Kylie.   She greeted me warmly, took my details, looked at her system and was able to tell me that the parcel was addressed to (my wife) and sent by Republic (the clothes retailer).

Kylie also told me that the delivery drivers handheld had failed and so he had not been able to upload the information into the system.  As a result I had not been able to find and reschedule the delivery of the parcel.  Then she went on to tell me that the notes on her system were telling her that the parcel had actually been delivered the very first time.  And clearly that might explain why I had a lack of success in getting the parcel delivered!

When I told Kylie that my wife and I had not received that parcel (despite what her systems said) Kylie went on to clearly explain what I need to do.   She was great and she completely changed my mood and my attitude: she took away my frustration because she had shed light on my situation and provided me with a clear path that I needed to follow to close the matter out.  Above all she had a friendly, helpful disposition throughout our conversation: she made me feel that she was on my side.

So here is my take on self-service technology:

Your self-service technology is only as good as the people, processes, technology and data that sits behind your self-service technology

If you consider my experience, you find that the driver left the card behind even though he had delivered the parcel according to Kylie.  Second, the delivery driver did not fill in the data fields in the card: either he should have filled in the data fields or the data fields should not be there.  Third, his handheld failed to update the data into the delivery tracking system.  Fourth, the IVR allowed me to schedule a delivery even though there was no parcel to be delivered as it had already been delivered.

Give customers an incentive to use the self-service technology: make their life quicker and easier

At first I jumped at the idea of rescheduling the parcel delivery through a website.  Why?  Because, in the past I have had to make a number of calls and/or wait a long time to have delivery depots answer my calls, find my parcel on their system and then reschedule a delivery.  Even when the website did not work, I was happy to use the IVR to schedule the delivery as it was quick and easy.

Give customers an easy way to bypass the self-service technology

It is necessary to give customers an easy to find option to bypass the self-service technology.  Why? Because the self-service technology can fail and does fail as it did in my case where neither the web nor the IVR was able to tell me that there was no parcel left to deliver or to deliver that parcel.  In my case, I made four failed contacts with the delivery firm before I was able to figure out how to get through to a helpful human being – a customer services agent called Kylie.

Also because not all customers can or want to use self-service technology.  A case in point is the UK supermarkets replacing cashiers with self-service tills where the customer has to do the work of the cashier.  I am in that segment of people who do not agree to the proposition that I should do the work of the supermarkets especially as the two times I have made the effort the process has not worked and I have had to wait for one of the supermarket staff to come over and sort out the issues.

The more you replace human-human interactions with self-service technology the more important human beings become

Why?  Because human beings are usually the best at dealing with and sorting out the problems that you create for your customers through the introduction of self-service technology.  This is where Kylie was great: she simply defused by frustration and anger by listening to me, getting where I was at and then helping me through to the solution.

Whilst self-service technologies can improve the functional experience it tends to be at the cost of the emotional experience

At a recent conference I heard several female customers mention that whilst they appreciated the ease and convenience of banking electronically with First Direct they did not feel any emotional bond with First Direct because they never spoke with a human being.   This points to a truth: whilst technology can make life easier it rarely makes human beings feel acknowledged, appreciated, respected, valued.  This is why I love Kylie:  she made me feel all those things when the self-service technology had left me feeling insignificant, neglected and helpless.

How about thinking and talking about business in customer terms?

It strikes me that organisations can take a big step forwards in becoming customer centric simply by measuring, reporting and talking about the impact of their actions on customers and the value that customers represent to the business.

Allow me to illustrate this by using a consulting experience at a brand name telco.  One of the things that really matters to customers is how easily, quickly, effortlessly, conveniently they can get a replaced handset if they have an issue with their existing handset.  The functional department that is charged with this task is the Device Logistics.

What do you think the focus of the typical Device Logistics function is?  The focus of the function is, typically, on devices, operating cost and service levels.  As a result management talk about and measure the no of devices that needed to be shipped, no of devices on back order, lead time between ordering and receiving handsets, no of devices shipped, no of devices delivered to the customer address within the SLA, productivity and cost of operations.

Not once did I hear conversations about customers, nor the impact of policy and practices on the customer’s life or attitude towards the company.

Now imagine thinking about the Device Logistics function in terms of impact on customers.  If such an approach was taken then management would be measuring and talking about the following types of matters:

  • How many of our customers have been impacted by our delivery process in the last month?
  • How many customers have we lost as a result of our policies and practices?
  • How much revenue, profit, lifetime value has walked out of the door as a result of these policies and practices?
  • What kinds of customers – Gold, Silver, Bronze, Young, Professional, Older – are we losing?
  • What will it cost the business to replace these customers with new customers so as to replace the revenue, profits and lifetime value that has walked out of the door?
  • How many potential new customers have we lost as a result of the bad word of mouth from existing customers who have been disappointed by us?
  • What is the cost associated with this bad word of mouth?
  • How many customers ended up calling the contact centre to ask questions and/or make complaints about the handset replacement process?
  • What cost did the business incur in dealing with these customers – their questions, their complaints?
  • How many hours did customers spend waiting for us, at home, to receive their replacement handsets?   What is the cost to our customers of this waiting?
  • How can we do away with the biggest cost and inconvenience – making them staying at home all day – we impose on our customers?
  • What would be the impact on customer retention, customer loyalty, as a result of designing the handset replacement process from a customer perspective?
  • How can we engage our customers in the handset replacement process so that we all come out as winners?

Thinking in terms of customers and impact on customers – in terms of customer satisfaction, customer retention, customer loyalty, word of mouth, brand reputation – can be applied to every single function that touches the customer.

My assertion is that organisations will only make the transition towards becoming customer centred, designing and delivering better customer experiences, when the organisation as a whole and silo’s in particular think about operations in customer terms.  Specifically, the impact of operational practices on customer retention, customer loyalty and word of mouth.

What do you think?  Have you seen this in practice? If so where?

2011: what is likely to stay the same?

Right now there are lots of people putting forward there views on what will be hot /new / different in 2011.  As I do not have a crystal ball and because I believe in the fundamentals, I am going to focus on the key themes that are not going to change in 2011.

Customer will continue using trusted resources to find information and make decisions

Customers live in a world that is full of suppliers, brands, products and services.  Choosing between them is difficult and there is always the concern around making the right choice.  So for low consideration products (the basics of food, drink, utilities, retail banking..) customers will simply continue using the brands that they use today. Some customers will continue to be tempted by ‘specials’ – to try other products, other brands, other suppliers.

For high consideration purchases, customers will turn to trusted sources: the internet, Google search, social network, other customers and independent sources.  Customers will particularly value trusted resources that take out or cut the hassle associated with doing all the research and coming to a decision.

Companies will continue to shoot themselves in the foot as the content and tools are often created by marketing.  And too many marketers are disconnected from the real lives of customers and their real needs.  Too often the need for spin outweighs the need to provide useful, informative, honest content.

Customers will continue to have the same needs around products

Most customers will continue to look for products that are easy to understand, easy to set-up, easy to use and which work as they expect them to work.  Some customers will pay a premium for products that are novel, beautiful and/or well designed.

Many products will fail to live up to customer expectations either because the marketing communications are misleading, or the product has not been well designed or because the customer has unrealistic expectations.  And this will result in calls into the contact centre and negative comments offline and online.

Customers will continue to look for, be attracted to, special offers

Direct marketers are the masters of special offers – they know that the right offers will drive purchases.  Human beings are drawn to all kinds of  special offers.  The offer can be around membership of an exclusive club, or a special edition product or simply one of a price discount.

Businesses will continue to offer attractive ‘specials’ to get new customers.  In the process they will continue to cut loyalty from existing customers and thus encourage them to move to competitors to get their special offers.

Customers will continue to look for and value good service

Customers live in a complex world where they have a lot more to juggle and less time to do it; a world where choosing the right products and solutions can be a tricky and time consuming task; a world where they need help in setting up and using products effectively.  For example, one time you could just go and buy a tv, try doing that now with the latest HD tvs.

As a result customers will continue to cry out for good service in the form of correct and informative marketing material, customer centred sales advice, convenient product delivery, ease of product set-up and use, accurate billing, easy access to the right people in the company to deal with problems and issue and responsive caring customer service.

Many companies will continue to give less than good service because of the internal, silo centred, efficiency oriented metrics, processes and culture.

Companies will continue to focus on the shiny new stuff and neglect the basics

Time and again companies are attracted to the shiny new stuff, the silver bullets, the miracle cures etc.  Social media, mobile, location-based services, group buying (Groupon), customer experience – are examples of the latest shiny objects

In the process, companies will neglect the basics such as making good easy to use products, easy to use websites, improving the delivery process so you don’t have to take a full day off work, sorting out issues that prevent sales and customer service staff delivering the kind of service that customers expect etc. Here is an example of neglecting the basics: Toyota Just Doesn’t Get It

Companies will continue to focus on the sell side of the business at the expense of the service side

The majority of companies will continue to focus their best people and the bulk of their money on the areas of the business that generate or promise to generate revenue. Revenue and market share growth are the top priorities of the C-suite in most companies.

These companies will also continue to spend money on products and services that promise to cut operating costs – thus boosting profits.  That means more investments in technology and less in people – especially those that actually interact with and serve customers.

It also means that companies will continue to focus on getting new customers than on keep existing customers through good service and fair treatment. This is partly because the it is easy to show the return on getting customer and difficult to show the return on retaining customers.

Companies will continue not to embrace and make effective use of social technologies

The philosophy – transparency, openness, interaction, connectivity, sharing, participation, co-creation etc – of social is fundamentally at odds with the command and control philosophy that is at the heart of almost all businesses.  The powerful love to exercise power – this applies to all kinds of institutions including corporations.  And it applies to the C-suite executives.

This clash of idealogies and operating practices will stop the majority of companies from harvesting the true promise of social technologies:  transforming the way that work is done – collaboratively between employees, customers, suppliers, partner etc – within the enterprise.

Instead companies  will continue to dabble in social media treating this as simply another marketing and customer research channel.  Does this remind you how digital marketing and ecommerce operations were treated?  And how some are still treated today?

Companies will continue to talk about innovation and customer experience tranformation and yet fail to deliver

Whilst every company wants to the fruits of innovation very few are willing to go through the birthing process and experience the pains of giving birth to these innovations.

It is no easy matter to make the silo’s work together.  It is no easy matter to change the technology infrastructure – most companies still do not have a single customer view despite the mountains of ink on that subject over the last ten years.  It is no easy matter to change the culture of the company.  It is no easy matter to give up the practices that are resulting in ‘bad profits’ and recapture these profits by creating products and services that customers value.  And there is absolutely no incentive when you are the category leader or the market is dominated by up to four big companies.

The task of category level innovation will continue to fall on companies that specialise in this (e.g. Apple, Virgin) or newcomers that have no investment in the existing way of doing things (e.g. Metro Bank, Groupon).

Great performers focus relentlessly on perfecting the basics

In pursuit of the sizzle too many companies especially those that are marketing communications driven forget the steak – the product/service the customer will actually experience.

Over 10 years ago I co-developed (with my fellow consultants) a customer relationship strategy for an established telco.  This was a brand that regularly was perceived as having a poor quality network and this was in part due to weaknesses at the retail stores (taking on customers in areas that had a poor quality signal) and in the customer services function – this information came directly from the customer base.

If this was not enough spur to action there was information that showed that the customers of a MVNO (mobile virtual network operator) rated this MVNO very highly in terms of quality of network and in terms of customer service.  Given that the MVNO was piggy backing on the infrastructure built and operated by the established telco, this finding should have been a wake up call to get the basics right: only sign up the right customers and then provide excellent service when customers rung Customer Services for help.

Instead of focussing on the basics, senior management were focussed on all things internet.  Why?  At the time the Internet was sexy and any company that had an internet strategy increased its share price, usually dramatically, overnight.  Meanwhile, what really mattered to new and existing customers continued to take a back seat.  And the smarter competitors continued to pull ahead and take market share.

In 2010, the situation has not changed much.  Many companies continue to do the same: ignore the basics and focus on the latest in-thing.  In the latest email that I have received from Drayton Bird (a direct marketing legend)., he shares the following story:

“Recently, after scrupulous research over many months, my partner Marta decided to buy a new flat screen TV, which she did through Amazon.   They use Parcelforce – “proud winners of Business in The Community’s Healthy Workplaces Award 2006”, who also seem rather excited because “Hitwise have recognised our online developments this year”.

It’s good to know they’re all slaving away in such a splendid environment and such hot stuff on-line, though I wonder what exactly “on-line developments” are.  It was their touching attention to things that don’t really matter to their customers that prompted my heading. Because if you want to talk to them there is even a text phone number for the Deaf and Hard of Hearing.

But what if, like Marta, you want to get a TV set delivered?

What if they’re so useless they can’t tell you even vaguely when it is likely to arrive – just any time between 8:00 am and 6 p.m. on a certain day?

And what if they couldn’t even get the day right – so you spend 10 hours waiting – and it still hasn’t arrived?

Then, what if the much-praised on-line developments tell you it’s just arrived at 7:34 pm – which you know is a lie because you and two other people are looking out of the window?

And what if after you (eventually) get a reply from somebody on the phone – during a call you’re paying for – which confirms that they do indeed only deliver – or in this case fail to deliver – between 8 and 6?

What then?

Well, you hang around the next morning till it does arrive.

Then you get an e-mail saying “Thank you for using our website” – with an apology, kind regards and of course details of the deaf phone number I mentioned, signed by an “Internet Advisor”.

Hey, guess what, Parcelforce? I don’t want internet advice. There are plenty of people like BT Broadband screwing me around on-line already, and they need no help from you.

I want you to deliver things. That’s all you have to do. That’s why Amazon (mistakenly, it seems) use you……”

To paraphrase one of my favourite characters (Richard Feynman): Reality must take precedence over public relations, for customers cannot be fooled.