August 27, 2012 / CONSUMERS ARE PEOPLE
August 27, 2012
Business is about creating value for someone. That someone is a person, generally with a problem to solve or a desire to fulfill. Sure businesses need to generate profits, but profits are a lagging indicator of creating great value for a lot of “special someones.” When is the last time you felt treated like a person with a problem (or a desire) by a business?
I recently had a personal experience when I ordered a new printer for my home office so my wife, an interior designer, can show her clients photos and decorating ideas (to solve their problems and meet their desires). The company who sold it to us made it very easy to order and had it sent directly to my house (wow!). But once it was up and running it made a terrible clacking sound that made me think some serious damage had occurred in the roller mechanism (ugh!). Now I was congratulating myself on having purchased the “on-site” service contract so someone could come and fix it for free (phew!).
So I called the service company only to learn that I had an “extended” service contract that didn’t kick in until the manufacturer’s one-year warrantee expired (uh, oh…). With rising trepidation, I made a second phone call to the manufacturer, only to be passed through several phone trees and routing screens (so annoying!) but clinging to the hope that this would all get fixed easily (please!). When the actual, appropriate service agent, Sondra, understood my situation she said, “Don’t worry, I’m going to help you!” in such a sincere and warm way that I calmed down immediately.
She told me she’d heard of this problem before and it was going to be an easy fix (yay!). I believe she really understood how frustrating it was for me to spend my time solving a problem that I already thought was solved and instead of being bored, defensive, or just plain mean, she treated me like a person with a problem. This company is Lexmark, by the way, and I hope this agent represents a systematic understanding of their customers, not just a lucky draw by me.
This approach is not simply a nice way to treat people—it builds relationships that have real monetary value. I am significantly more likely to buy more Lexmark products because of the way I was treated on that phone call instead of being frustrated with the damage that occurred during shipping and never buying from them again. There is additional value to Lexmark because they are also able to discover problems in their supply chain they can fix to avoid having this be an ongoing hit to their bottom line.
What I experienced is actually an established phenomenon in marketing. That is, a customer who experiences a service or product failure, followed by a highly effective service recovery seems to be more loyal than a customer who didn’t experience a failure at all. This is known as the service recovery paradox.
This is not to suggest that ineffective service followed by an outstanding service recovery is a good way to run your business. The point here is that sometimes things don’t work as planned, and if you and your team demonstrate empathy with your customer (a person who is now frustrated or disappointed) you have an opportunity to surprise and delight them by acting quickly and demonstrating genuine concern for their situation, and making it right.
A friend of mine just told me about his daughter having a brand new Apple MacBook stolen from her only moments after buying it. She had just purchased it for college and set the bag down while shopping in another store at the mall. When she bent down to gather her stuff, it was gone! Sad and in shock, they went back to the Apple store to explain what happened, and the Store Manager gave her a replacement totally free. I’m sure there are plenty of examples where Apple has let someone down, but on the whole, Apple is considered a company with exceptional product design and outstanding retail service, which is perhaps why they are the most financially successful company on the planet.
The key to success in this kind of problem solving is empathy. If you have real empathy for the people you call customers, then you’ll naturally want to help them solve their problems, achieve their aspirations, meet their goals, and fulfill their desires. These are all emotional elements of being human and require authentic connection from you to them.
I noted the emotional highs and lows I felt during my printer transaction to illustrate the opportunities where my relationship could be won or lost at various points in my experience with Lexmark. Businesses that expect and understand emotional swings are far more likely to earn trust and gain repeat business, thus benefiting from the loyalty effect.
Yes, emotions are difficult to understand and take time to manage. But customers are not transactions you can optimize—they are messy, emotional contradictions that need your help. Customers are people, and people connect through relationships.
Thankfully for those of us who really like a rational basis for running a business, there is a very clear economic value to having better relationships with your customers versus “one and done” transactions. Better relationships lead to higher profits due to less churn and more promoter behavior. Better customer relationships have a positive effect on employees as well, increasing their productivity and lowering negative costs associated with turnover and absenteeism.
Businesses that seek to maximize the return on their investments by shaving costs out of products and distributing them at mass scale are not wrong, they are just incomplete. Cost containment and efficiencies are necessary, but not sufficient for sustainable success. To achieve sustainable success with customers and create real business value, you must recognize the messy human aspects of customers—and deal with them successfully. Customers are people with a problem to solve or a desire to fulfill. Become their partner and commit to a relationship through the good and the bad in order to succeed over the long-term.