OPINION3 May 2018

Why brands need to get fair or fail

AI B2B Data analytics Media Opinion UK

When customers have a bad experience with brands, they are willing to put in some energy to resolve matters – but only if the company does their part too, says Jean-Francois Damais.

Traditional weighted scales against turquise background

Managing the customer experience is not an easy task. The last decade has seen drastic changes in customer-company interactions, with a proliferation of touch points, digitisation and a rising expectation for personalised and seamless experiences, making it harder for companies to consistently meet the expectations the brand promise has set.

Customers often experience ‘critical incidents’; emotionally charged moments of truth that have the potential to make or break a relationship and significantly impact the organisation’s bottom line. Clearly, the stakes are high, and the ability to intervene cost-effectively when things go wrong for customers is crucial to reduce churn and negative word-of-mouth.

But where does it all start?

CX starts with people

This is where some of the latest thinking in neuroscience and behavioural psychology can help organisations make huge improvements in the way they diagnose the root cause of issues and put in place the right type of interventions. through a better understanding of how customers think, feel and make decisions.

Ipsos has carried out R&D (over 40,000 interviews in 16 countries) to better understand emotional and behavioural response following critical incidents.

It is the balance of effort that really matters – and it’s all about fairness (or lack thereof)

The research has highlighted the importance for organisations to measure both perceived customer and company effort – the amount of legwork customers feel they have put in compared to the company to resolve the situation.

When things go wrong customers are, to an extent, willing to put some energy in to get things resolved. But this is only true if the company weighs in too. In their minds, this constitutes a fair exchange. However, if they believe that they are working harder than the company in question to sort out an issue, customers feel unfairly treated. This can have drastic consequences on customer loyalty.  

Our research shows that across all countries and sectors, customers feel they are working harder than the company in more than half of cases. When this happens, they are more than four times as likely to stop using the company than if they feel companies have put in more effort than them, three times more likely to share their negative experience on social media and around twice as likely to tell friends and family about it.

Neuroscience sheds some light on why that imbalance of effort is so important. It tells us that ‘unfairness’ can be a potent ‘button’ that triggers a ‘threat response’ in individuals – or in other words, a distinct emotional reaction that can lead to a strong behavioural response. In the context of unfair treatment by companies, customers are more likely engage in complaining behaviour, bad word-of-mouth, leave scathing reviews on social media or simply stop using the company – all types of behaviour that can impact the financial health of an organisation.

When it comes to dealing with customer issues or complaints, it’s key for brands to deliver interventions that drive the perception of company effort and reduce perceptions of unfairness to lower or stop the ‘threat’ response and associated behaviour.

Where human intelligence meets artificial intelligence

There is no such thing as a ‘one-size-fits-all’ intervention. Depending on the context, history and psychology of a customer, an apology might be enough. In other cases, financial compensation might be the only way to salvage a relationship.

Being able to capture emotional responses following service issues is crucial, as the nature and intensity of the emotional state a customer can tell us a lot about what type of intervention might be best suited.

Companies that use the vast amount of information they hold about their customers to truly understand their needs, psychological profile and expectations to customise responses and communications will have a competitive advantage.

Algorithms based on a combination of factors such as type of issue, customer profile or transaction history can then be created to help companies deploy intelligent case management systems that can suggest what the best next action and intervention is for any given situation.

From my experience researching and developing the customer-company effort ratio, there isn’t a more potent measurement to predict the outcome of a critical incident. As companies become more switched on to what their customers are thinking and feeling about them, using validated conceptual frameworks and advanced analytics to support their staff’s emotional intelligence, I believe we should see a rise in the ambition of companies to manage the customer experience more effectively.

Those that do it well will see an increase in retention, share of wallet and positive word of mouth, and therefore a benefit to their bottom line. And those companies that don’t get fair, will fail.

Read the full report here.

Jean-Francois Damais is global chief research officer at Ipsos Loyalty