How customers think, feel and behave
Social Media – An Emotional View
There has been a lot of debate about the practical applications of social media, the core needs in terms of speed of accessing information, quality of information obtained and so forth. Yet I’ve read very little on how people feel about it all. If emotions are fundamental to how we make decisions (Damasio) and “managing the total customer experience” requires recognising clues of experience related to functionality and clues of experience related to emotions” (MIT Sloan Management Review, Berry, Carbone and Haeckel, Spring 2002), then it would be nice to get the emotional lowdown.
Here I highlight some recent research on how typical (not just Facebook) Social Media experiences feel:
Figure 1: the Social Media Emotional Profile
Using a scale called Emotional Signature this demonstrates some interesting and perhaps counter-intuitive themes (n=360).
Firstly, negative emotions are ‘as expected’ (BP index is an index of typical emotional feelings) – after all if negative emotions aren’t controlled you wouldn’t be in business.
However, the kind of emotions you would expect in a ‘humanic type organisation’ (feeling valued and cared for) or when you achieve total satisfaction (or close to it) – happy and pleased – are just not hitting the mark. Instead, some fairly unusual emotions to do with grabbing attention (stimulated, interested, and exploratory) are most resonant.
This is the kind of sense you get from a business focused on acquisition, not retention. Grabbing subscribers in some kind of land grab. All of this is reminiscent of the dot.com period of boom followed by bust.The lesson: perhaps we are coming up to the end of wave 1 (land grab) and entering phase 2, with the consequent industry shakeout. The survivors may well be those who demonstrate a stronger pleasure-based/cared for and valued-based emotional profile rather than one based on just grabbing attention.
Data deluge and insight
It’s great that more data is being brought to us (see the Economist on the data deluge) but in all honesty I am also a little cautious.
If human behaviour was a physics experiment then I might be keen on the remourseless march of empiricism: the past perfectly predicting the future. But I do not believe this. More data for me simply does not equal better insight.
A nice creative idea, a new way of doing things that previously hadn’t been done before, a ‘Black Swan’ of innovation perhaps, simply takes this apart. I would be cautious of even the notion that statistics is in some ways a fixed science rather than art; to quote Professor Daniel Kahneman, ’The rational model is one in which the beliefs and the desires are supposed to be determined. We were real believers in decision analysis 30 years ago, and now we must admit that decision analysis hasn’t held up.’
For me data is a startpoint not an endpoint, there is plenty of room for intuition: so don’t lose it.
Closing the Experience Gap
It is no great insight to say that executives lack awareness of customer expectations or how customers truly feel. But, in some recent research what was a surprise was just how huge this gap in understanding customer experience really is!
Here are just a few insights. In a survey of 1,000:
15% of customers think businesses are honest and cooperative compared to 66% of businesses who think they are
61% of customers say there is a problem in terms of consistency in handling issues yet only 23% of managers recognize the problem
75% of customers say it is difficult to get to a manager when something goes wrong whereas70% of managers say they are truly committed to the customer experience
Customers said that 6% of businesses understood their expectations whereas 36% of firms thought they did
5% of customers thought their had been improvements to their customer experience in the last 6 months compared to 29% of businesses who thought they had improved their customer experience
Customers felt that they were considered as a transaction by 80% of firms with only 20% offering some consideration of how they feel
(Source: Beyond Philosophy, Customer Experience Trend Tracker Q1, 2010)
Clearly, general cynicism has its part to play here but the magnitude of the gap is something to be aware of. Perhaps too much cost cutting and lack of focus on value creation over the last few credit crunch years is the problem. But even so, you would expect management to be more aligned or in tune with how customers are responding.
NET: closing the gap is the opportunity.
The Benefits of Insight
Sometimes it is a little difficult to answer the question, show me where research has paid off! Where is the return? No doubt part of this is down to the fact that research is part of the discussion and like advertising it becomes difficult to disaggregate a direct effect. Nonetheless, it was interesting to see the first quarter 2010 results from Starbucks state the impact of ‘getting closer to the customer’.
In the First Quarter of 2010, net income was $241.5 million, up from $64.3 million in the year-ago quarter. Same store sales jumped to 4% from –9% year on year. The reason: how Starbucks embraced customer research surveys and found out the seemingly basic finding that people in different regions had different tastes for their coffee:
Sun Belt – prefer cold drinks
Northeast – like drip coffee
Pacific Northwest – drink more espresso
A refocus on more local outcomes resulted in this dramatic sales response. Sometimes then research can make real the most basic of insights. Why? Well in this case executives in charge of regions of the country were divided by time-zone and hence became divorced from real events on the ground. It was through research that executives could get a truer picture of what was happening, rather than one blinded by organizational structure.
Hidden Defectors in an Experience
Following on from the earlier Blog on the concept of Silent Attrition, I thought I'd enclose what has been in the Customer Experience world quite a useful model. This is from Cherry Tree research and highlights the high defection rate from the 'do not complain' but had a poor experience segment! This is like the Convergys model and resonates highly within Social Media: especially when you think about how 'do not complain' can turn into 'but I'll talk about it any way in my Social Media.
By way of a contrary view, Gartner has just released a useful article: Social Media is the New CRM. To quote from the article placed on Mycustomer.com:
"More than 70% of all IT-led social media initiatives will fail over the next two years compared with about half of business-led ones, according to researchers Gartner. This high failure rate is because organisations do not currently have the right skill sets in place to design and deliver such offerings, while the situation is also not helped by a dearth of suitable methodologies, technologies and tools to help them."
In short, there is perhaps an Experience shortfall. Technologies maybe good at initially capturing interest but actually achieving engagement beyond the student facebook type approach, still falls far short of what is required.
One bad tweet can cost you 30 customers
One bad tweet can cost you 30 customers
Thanks to Convergys for some interesting recent press. The basic strapline is one bad tweet can cost you 30 customers.
We have probably all heard how Dave Carroll’s song about United Airlines breaking his guitar received 4 million hits. Well a recent study has tried to quantify this Twitter effect more generally. For more information on press coverage see the links:
One bad 'Tweet' can cost 30 customers, survey shows
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afod9i5PqoMQ
Can Twitter solve customer service hell?
Companies hurt by angry bloggers
http://www.computeractive.co.uk/computeractive/news/2254115/customers-posting-negative
Silent majority risk worse customer service as companies monitor Twitter, Facebook
This is one of the first times I have seen such an attempt to quantify the Twitter effect: true it is survey based but the basic concept of a silent attrition, that customers see a bad review and switch companies without complaining (Frank Sherlock) is a good one. Indeed a similar notion has also been expressed by Cherry Tree research in Experience: source Responsetek (white paper: how to increase bottom line profits by improving customer experience). The base concept here is that while 22% receive a poor experience only 2% actually complain i.e., 98% of dissatisfied customers never complain with 55% at risk and 45% actually defecting.
The Convergys research does seem however to go further by focusing on the switching effect at an earlier browsing for information stage. This makes the social media effect even more important if you are also losing customers you never realised ‘you could have had’.
This also means experience-wise there is a much stronger emphasis in the market of seeking peer review: the start of an experience is now much more likely to be when you log-on.
Would be interested to know of any other quantifications out there or opinions: is this an overblown effect?
So ends the Credit Crunch
I am a little disppointed with the Credit Crunch. House prices are still far too high, at least they could have fallen to 1999 levels, and I see no real reductions in big ticket items. From a consumer point of you, the behaviour of companies has also not been at its best. The well known problems with ‘collaring’ of mortgage rates is just one example and likewise car prices:
http://www.foxbusiness.com/search-results/m/25502226/why-car-prices-aren-t-falling.htm
At a personal level the constant rises in parking charges at my local train station, up another 50 pence with only the briefest respite is another thing, as is the introduction of what feel like gimmicks when a straightforward price cut would have been more appreciated.
What does this mean? Well take advantage in the short-run but consumers remember. In the worst of times how firms behave really is important: treat us right now and we will stick with you later. One of the lessons about generating loyalty must surely be that now is the time to show relationship matters! Think about how SouthWest airlines were saved from a collapse in sales following 9/11 due to their strong focus on customer care. Real friends are those who stick with you in the worst of times.
Banking on relationships
Perhaps the Credit Crunch has had at least one important effect. That is the nice to see article on the BBC that relationships between banks and their customers may matter after all: getting a mortgage, no longer a convenience product, now a suit and tie meeting to actually meet someone called a Bank Manager. Certainly actually seeing customers may help banks establish risk better but it is also a nice contrast to the focus on convenience and speed of the noughties. Of course its too much to hope for, but perhaps in a broader way, the humanic side of the experience might be the new differentiator. Relationships may indeed be the new rock and roll. So rip out those automated menu systems and offshore call centres and start to think people: I jest but maybe the pendulum is starting to swing the other way.
Psychology of electioneering
As we move into 2010 there will no doubt be the usual plethora of opinion polls to look forward to. What is interesting from a consumer research point of view is to see how much of what is being done is so much psychological engineering - or psychobabble for some/ many! Whether its removing the 'brand contamination' of the Conservative Party; the use of social media on the back of the demonstrated success of the Obama campaign; the concept of Nudge Marketing - using messages that create an aura of social unacceptability around a way of behaving or the supposed application of the wisdom of the crowds method to policy making (even though opinion forming is a little different concept than measuring the weight of an ox at a fair-its original conception). This could be so much hogwash, but at the end of the day, if there is a change of Government then consider that it might be as much to do with David Cameron wearing a red tie or 'nudge marketing' comments to the marginal's on their similarity to the Lib Dems as actual policy. In fact perhaps policy doesn't matter anymore, what really counts is the latest poster of a leader with a full set of hair and a young complexion Twas ever thus, as with politics so with life: its less about the brand offer as the brand experience.
Commentary on scent of a cashier
Nice to see that the Columbian financial group are taking the concept of experience to the next level (scent of a cashier in diary section of Research Magazine). Clearly these kind of sensory clues can lead to a degree of sarcasm, sometimes rightly so. But the overall concept of engaging at a level different from the functional transaction is correct. After all we have all experienced the effect of muzak in grocery stores or soft lighting in restaurants even if we don’t state it, so why not take the same concept to banks. OK so it may not be ‘the reason’ I engage with you, but getting a kick from the experience of it all is reason enough if the marginal difference between competitive banks is well marginal.
Indeed, in terms of memory and what you carry forward, you are almost creating memorabilia in a bog standard offer. And of course by so doing, even a boring product or service can feel enlivening, you can forgive the mistakes. So don’t forget the sensory, the artistic statement in an offering, people may say it’s a gimmick but then still go there because they like it.
Sherpa's Wanted
One of the frustrating things about research is that you seem to have all the data and analysis in the world but sometimes lack the skill to tell me what it means. For me what is needed are Sherpa's; research professionals who can tell the story, read both the qualitative and quantitative side of the equation, add a dose of creativity and come up with a solution. There is in short a lack of guidance.
In an earlier blog I mentioned the need for quali-quant experts and interpreters. The reason, there is danger in a siloed approach. Quantitative researchers may like to think they are hard-nosed empiricists but statistics in marketing at least can often end up as much an art as a science. I equally have an issue with Qualitative research. Is what you are saying generalisable or is it one person saying this, no problem with that just make the case. Although I have to say the only people talking may be the few with a gripe. Both then make huge assumptions they are not final truths, its not press a button here's the answer approach.
Perhaps I am being unnecessarily negative, I'm not trying to say don't do research just that the person interpreting is just as important as the data coming in. Give me 2 pieces of data and I'll interpret it 2 different ways.
For me, more Sherpa's are required in this profession to guide clients to the story. In short researchers really should feel the fear and do it anyway. Real truth lies in the interpretation of the data, not the data itself - now that's a statement that might cause confilct!
Looking forward to the end of the recession
2010 must surely be the year the recession end, if it hasn't technically ended by now. But what does it mean in terms of customer research. Certainly in this new age of austerity, which I guess we are moving into, unless you are banker, I fear that understanding your customer is rather like training and consultancy an indulgence ripe for non-investment. The mantra is cost control, perhaps even more of a focus on Lean initiatives: forgetting the old adage from Prahalad that (a) you can't shrink to greatness and (b) Lean was always supposed to be about creating value for customers.
In these times I am kind of reminded of the story of the motor racing driver who said that he always picked up speed in wet conditions because the other racers were slowing down: clearly he had the right tyres. But the point is, there is opportunity for the brave while everyone else is battening down the hatches.
The reality is though, that rather than taking any risks the focus will continue to be on cost reduction and solutions that are quicker and cheaper: never mind validity. So this is good news perhaps for some online solutions and the type of standard continously conducted survey (satisfaction and recommendation). Unfortunately this also means that some of the more creative projects will no doubt be shifted to less risk adverse times. At the same time as a defensive issue, there will be investment in social media as a platform for communication. My question is, is this an unnecessarily pessimistic view?
More surveys or more balance!
Having just been phoned up by yet another research company that seems to get around the telephone preference list, I would like to ask the question are we reaching a saturation point in customer research? At the end of the day if all you get from your responses is a fatigued ‘yeah it was OK’ or responses from consumers who have the biggest gripe, how much can you trust their representativeness or even their veracity!
Flashier or shorter surveys don’t quite do it for me. Instead, perhaps what we need is not to replace existing surveys but look for balance in the qualitative, immersion approach or the customer depth interview: note I only raise this as a provocation, but still I am unconvinced that the law of big numbers is a panacea against all sins by itself.
For me then what we should be doing is not typecasting people into ‘Quals’ and ‘Quants’ but ensuring a greater balance between the two. But perhaps due to the unnatural division of research into silos, I don’t see this balance being brought to the fore. Yet I would much rather hear from ‘Quali-Quants’ or even better ‘people who can interpret the data’; the last point is of course a particularly ‘old chestnut’ and essentially says how can we become more consultancy orientated?
Nonetheless in a world increasingly awash with data this is becoming even more valid which is why I believe consultancy and research should become closer.
So by all means measure, but also seek to understand. Ask yourself the question not only what is our satisfaction score but what is the experience of our company, would I be a customer of my own firm?’
Should we take the politics out of research?
Yet another survey, yet more measurement: I mean it’s nice that you ask, I’m sure you are trying to understand but does anything really change? Are my results sent into the ‘black hole’ of analysis to spew out some poorly conceived interpretation that actually says little or nothing at all? And certainly does not change my experience of your firm.
But perhaps I am looking a little outside-in rather than inside-out; the real reason this exists is for the benefit of the firm not for the benefit of understanding ‘what I want’.
I raise the point because it seems to me that there are some blatantly political research surveys out there that mean nothing to the consumer. From poorly constructed scales - where most of the choices are on the positive side - to unrealistic conjoint tests - I am getting the feeling from some surveys that you’d be better off just asking me straightforwardly: tell me what you think. Although I guess then you’d have no numbers to claim ‘this is the unadulterated truth’.
Perhaps we should follow the pharmaceutical industry route of laying out the methodology before undertaking the research? Perhaps education is the key?
Research has always been a complex beast; we all know question order influences results as does question wording and statistical technique. So what are we doing about de-politicising it? Should we do anything? I guess a more rigorous approach would end some of the ‘pop surveys’ out there and seriously question the validity of some entrenched approaches - but isn’t this better than just following a method because it keeps the department employed?
Measuring Consumer Decision-Making Implicitly
Controversial, absolutely, Different, Yes.
An increasing trend in research today is the use of Implicit techniques: see the Harvard University website https://implicit.harvard.edu/implicit or in the UK the work of Dr Nigel Marlow (London Metropolitan University) and Dr Peter Shire.
What we mean by this is a survey process that rather than asks people: ‘on a scale of 0-10 how satisfied are you with X’ we test their speed of association between a brand, logo, experience or other concept and a word – say a set of good or bad words. To use a ‘pop culture’ example this is rather like ‘You say Mother… I say Father’. The advantage of this is that by measuring speed of association we avoid survey issues of social desirability bias, lying and the fact that consumers simply don’t know what they don’t know!
Consider how for instance, if we had taken an Implicit survey of attitudes towards Bankers at the time of the Credit Crunch the word ‘dislike’ would have possibly been more quickly associated with a picture of a Banker than say a picture of another business person.
This measurement approach essentially avoids people’s response bias, which is perhaps why the take up has been high in studies of race and gender. No-one is going to admit they ‘are a racist’ on a survey but through speed of response we can see if they associate negative words more quickly with a certain ethnic group.
What does this all mean for consumer research? Well if we are moving to accept the role in consumer decision-making of ‘gut-instinct’ and intuitive reasoning (as outlined by Malcolm Gladwell in Blink) then perhaps we need new measures that look at this side of our experience. Further, as Sasser identified, Satisfied customers defect: perhaps this is because they are not truly satisfied or loyal at this intuitive level, they just say they are, they don’t feel it.
For me then there is a call for action for more research and use of intuitive measures like the IAT (Implicit Association Test) in the commercial world. In marketing and branding there is a clear case for this. For instance, at the intuitive level what emotions or concepts are most associated with my branded experience; which logo or packaging design resonates most with consumers?
But like all things there should be a note of caution. Association for me does not equal prejudice and there are a number of technical challenges to overcome. I for one would deplore its use as a tool in the hands of HR to make dramatic statements like ‘your score says you are a racist’.
If anyone has any Implicit stories, good or bad, I would be interested to hear of them.
Nursing by Degree, an example for research?
I’m not entirely convinced by the need for this degree-mania but with Nursing looking at the very least to increase the level of learning within the profession I’m going to put my head on the block, after all what is a blog for but exactly that, and ask the same question of research.
My big issue here is that the level of understanding at the corporate and decision-making level around research process seems to me to be slight, in some cases dangerously so.
Perhaps it is time to beef up the profession?
My main concern is actually a negative one, the lack of understanding around the use and abuse of statistics. To be clear, we often talk about Key Performance Indicators – essentially my job and bonus - yet the application of poor technique to make vital real life decisions on this and consequently how we relate to consumers is for me an issue. At the very least if you are using data you should be able to spell regression even if you don’t use it.
For me a little more knowing skepticism from decision-makers, and a little more involvement from siloed and often ignored knowledgeable experts is required. Far from making research an academic exercise it makes it a more sensible one; I often find those least in the know are the very ones that latch onto some ‘black or white’ statistic, probably to justify their own job.
Yes we have to make decisions, a beefed up profession hopefully will help in understanding what feels like a good one.
Simon Cowell and Research
I can’t say I’m a fan of the X factor but these programmes along with things like Strictly Come Dancing show the risk of completely divorcing our own intuition and experience from decision-making in favour of ‘trusting the market entirely’.
To be marginally heretical, consumers don’t work in isolation, they don’t come up with decisions on their own but ‘need’ to be led - at least to a certain extent. Thats not to say ‘don’t listen to consumers’ but more be aware of the ‘Jedward effect’, people tend to go with the prevailing fashion, hence Jedward are the greatest thing since sliced bread even though when it comes to the medium run they may go the way of Michelle McManus.
Co-creation in its incarntion as listening and developing propositions from customer input risks ‘going the Jedward way’. Its not that you should accept consumer input its just that that’s exactly what it is ‘an input’ not an output.
Equally how input is measured is key. OK so with X million telephone respondents you would have thought that just on raw numbers alone this is in some ways ‘statistically significant’ until you realise that most of those phoning are within a very limited demographic.
Social Media just "another fad?"
Having failed to work Linkedin effectively (there are people out there but no ones listening) and been disillusioned by Second Life, a reasonable question might be "is this just another fad." I am kind of reminded of the way people reacted to the Internet when it first arrived. Business was now 'Internet Business" if you were not an Internet Business in 5 years you were out of Business. The fact of life is that this kind of buzz generates investment, we have to do it our competitors will! Ultimately though this is not about a new business model and more about a new business channel. We can already see some of the increasing power of the channel in the travel industry; tripadvisor, developments from BT and the Daily Mail (from Online Conference) and the like are also key exemplars of the approach. Social Media then, whilst currently immature, has the potential to add to consumers feelings of trust and distrust especially in the prior purchase process.
With a plethora of products and services out their getting this channel right will be an important differentiator particularly in the virtual environment where at one click you can easily go to the next webite selling similar products and services. Perhaps not for buying a can of beans but in a more involved service environment, one where risk is involved, what better way to mitigate this than ask other consumers in neutral or at least perceived neutral environment. And this last point is important, how social media platforms are run is important, already Amazon.com reviews tend to be mistrusted: authenticity is its key value otherwise it just becomes a me-too marketing medium.
Measuring Emotions
Reading the latest edition of Research Magazine I was immediately drawn to the article 'The Appliance of Science'. Some interesting comments were certainly made about MRI and EEG and the like but I'm afraid I still feel there is a huge amount of folklore out there about emotion.
Most grating of all is the continual insistence that emotions are in some way divorced from rationality. This is not the message at all, the two are interlinked. To paraphrase thoughts and feelings start with an appraisal. The key thing about emotions is not 'I am happy' but 'I am happy because....' its not the emotion word alone that counts but what the emotion means, for Richard Lazarus the cognitive-motivational-relational context. In this way a stress response alone is meaningless without an understanding of its context; indeed many key emotions would not register except through verbal report yet absolutely 'relate to' action-readiness. See Zeelenberg on regret and dissapointment.
In many cases then they are mixed up with a cognitive context - think guilt, shame, regret and so forth.
Further, you can have negative and positive emotions occuring at the same time! How would you deal with that? A hotel company we dealt with spoke about how their most loyal customers were also those most likely to express a negative emotion precisely because they were so heavily engaged with the company. If you did not understand the meaning behind the emotion you would assume negative emotions were important to loyalty.
I think emotions also tell us something about attitude - customer satisfaction and the like - the negative is resonant i.e., 'losses speak loader than gains' to use a misquotation. We can push and push for higher satisfaction scores but perhaps what we are really looking at in their current measure is actually the extent to which they reduce dissatisfaction.
Kahnemanism
The Credit Crunch has crunched many economic theories around rational expectations and the like… perhaps more emphasis should be put on understanding psychology instead. I would point to the rise of herd instinct, surely the main winner in terms of explaining the events of 2008. Likewise the theories of Professor Kahneman, Prospect Theory, Peak-End Rule and all that; from Keynes to Friedman to Kahneman, where economics goes research must surely follow?
Perhaps we are at the start of a ‘new wave’ in research that takes account of customer psychology - I dare to hope. This also puts a question in my mind as to where research is going. If rationality ‘alone’ is inadequate, what research models will replace them?
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