Saturday 24 January 2009

Customer Satisfaction Surveys: Learning From American Express's Mistakes

So American Express really want to know what I think of their service and how they can make it better.



Since I contacted them recently by phone I've received a customer satisfaction survey to complete... oh joy.


Rather than simply ignore it, I thought I would share the experience here so that you can learn from their mistakes.

Q. Overall, how would you rate the service you received when you contacted American Express by phone recently? (Excellent, Very Good, Good, Fair, Poor).


I was changing my address. How hard was that to do well? American Express identify the nature of my call in a later question (Q3), but you can bet your bottom dollar that someone will aggregate all the responses so that they can tell themselves their service is excellent.


The fact is the service I received was adequate. It was as good as it could be. But the transaction was so trivial it could never be evidence of American Express's customer service excellence.


Most respondents will answer this question based on the outcome of their experience; since they got their address changed without a hassle they'll select "excellent" - they won't really mean that, but the head of customer service at Amex can feel good.


Q. Based on this recent experience with American Express, how likely are you to recommend American Express to a friend or colleague?
Please use a scale from 1 to 10 where "10" means "extremely likely" and "1" means "extremely unlikely".




Is the fact a company can change my address a sound basis for recommending them to my friends? Of course not. But again, people will provide a 'halo' answer, and corporate backs can be patted!


Overall, how would you rate the service you received from the representative you spoke with? (Excellent... Poor)


Enough already! Haven't we established that all you did was type my new address into your system. And incidentally, now I think about it, I haven't received a new statement yet so I don't even know if you managed it or not!


Q. Please rate this representative in terms of...

  • Having the knowledge and authority to resolve my enquiry
  • Listening to and understanding what I had to say
  • Communicating in an understandable way
  • Spending appropriate time to address my enquiry Making me feel like a valued customer

I won't labour the point further - but, really, who can answer these questions honestly? Are the answers all "excellent" because nothing went wrong with this simple process and I'm happy? Or should I say "fair" - the second lowest possible rating and one that, were everyone to answer in this way, I know the company would be crestfallen with the research results - because this unexceptional event was handled "fairly"?

These pre-coded consumer research questions are really a language all of their own.

I don't know how much money American Express waste on this survey. Of course it won't just be the cost to design and administer it - fairly trivial given that it is conducted on-line. The bigger issue is that, presumably, someone considers the responses and does something on the basis of them.

There is a simple, inexpensive way of gauging the quality of your telephone service. Use statistical sampling (a process which is invariably compromised by non-response in consumer surveys) in a pure form to collect a sample of actual telephone calls (they are all recorded).

Listen to them - or better still get an expert in consumer behavior to listen to them - and evaluate how well they have gone from the customer's perspective.

Much simpler, not compromised by non-response, not open to the vagaries of customer survey language, and far, far more accurate than the post-rationalised 'halo' responses these questionnaires typically illicit.

Philip Graves
Consumer Behaviour Expert

Wednesday 21 January 2009

Consumer Research Lunacy: An Example of Pointless Market Research

Out of professional interest I have signed up to an on-line consumer research study. It's always interesting to see who is asking what of consumers.

When I saw the invitation to complete one on credit cards I fully expected some pointless questions and got my notepad out to jot down a few just for you. This particular survey didn't disappoint.

It is particularly ironic that this survey was commissioned by the UK bank Lloyds TSB; a company that is in desperate trouble as a result of the credit crunch and whose share price has dropped from 488.50 to 37.10 in the space of a year.

If this research is anything to go by the 43% stake the UK government now holds in this bank hasn't made it any smarter (forgive me if I'm not surprised).

I will leave to one side my issues with on-line research (of which I have many) and focus on what they asked.

After asking which credit cards I owned - I realised after clicking the entry that I missed one that I use so rarely I forgot I had it - they asked if I always pay the balance off each month.

This seems a reasonable question. But what are they going to do with it? Lloyds TSB has credit cards, so it has data on what its own customers do. This may not be totally representative of the market as a whole but it's about as representative as you're going to get of what people who are willing to take out a Lloyds TSB credit card are likely to do.

If they get a dramatically different picture emerging for different financial institutions should they trust what people claim in a survey over their own behavioural data? I suggest that would be unwise.

To be fair, perhaps this is a tracking measure and the absolute level isn't the issue. But then a far better question would have been what did I do with my last bill - did I pay that all off or not? Asking me the question they did is really tantamount to asking me "Do I see myself as the sort of person who would like to think he pays off his credit card balance or not each month?"

Next they asked if I got points for spending with my main credit card. The answer was "yes"; but there was no question to ask if I cared about them, considered them useful or valuable, or had considered it when I chose the card.

The reality is that my bank gives them to me and I don't give them a second thought. Do I know to the nearest thousand how many I have or what I could get with them? No, I haven't got a clue.

Quite what they plan to do with this data I have no idea, but I do know it's junk data.

Next came a somewhat random question... "How concerned are you about threats to your personal privacy?" Whoaa there.

I'm extremely concerned about threats to my personal privacy - aren't you? Do I think that my personal privacy is threatened? Not in any way I can do much about - the government seems to do a good job of losing the nations private data and I can't do much about that. I shred financial correspondence, does that make me paranoid or is it a practical
action? I don't know and they didn't ask.

I can only assume that someone in the company has decided to introduce some extra level of data protection and is looking for consumer data to justify it. They should have no problems getting their justification from this question.

But will consumers flock to whatever the product is? I sincerely doubt it.

Perhaps the most entertaining question was this one:
"Most companies today want to know about the individual interests and lifestyle of their customers so they can tailor their information services and products to each customer's personal preferences. In general, do you see such personalization more as a good thing, designed to help provide you the things you want or do you see it more as an
invasion of your privacy?"
  • Good thing
  • Invasion of privacy
  • Pointless exercise in respondent post-rationalisation and projection that has absolutely nothing to do with how they'll actually behave, and tailoring your information services (whatever they are) and products to this information is dumb.

OK, perhaps I added in one of those answers.

The UK market research industry is valued at £1.3bn. I suspect at least £0.5bn of that is a complete waste of money.

Philip Graves
[The Consumer Behaviour Research Resource]

Monday 12 January 2009

When Customer Service Gets Lost

As an expert in consumer behavior, I take a professional interest in customer service. I like to think this helps me be more appreciative of the good; I realise how much effort goes on behind the scenes to train and equip the people I'm talking to.

But I also see through the bad experiences I have with something of an appreciation for what the company concerned is doing.

Often dysfunctional customer service stems from organisations forgetting that satisfying consumers is what it has to do above everything else.

When an organisational restructuring takes place (whatever size the company) the first question should always be, "How will this affect our customers' experience with us?".

When such decisions are taken for organisational process efficiency or cost efficiency without consideration for the customer problems often arise.

I'm in the process of moving house... Wednesday is M-day (move day).

Because internet access is so important to my work I was on the ball with the internet service switch over. My internet provider (Zen, who delight in employing clever people who like understanding stuff and solving problems and are a great example of how British people can provide excellent customer service) advised me to get a simultaneous move code from my phone line provider so that there would be no loss of service.

I got the code gave it to Zen and all was well until an email arrived saying that the company who had given me the code had declined it. My internet wouldn't be available for at least a week.

This wasn't ideal. I was a teensy bit cross.

So I picked up my phone and rang the phone provider.

BT.

BT. A company that would still be my internet provider if they had been able to transfer my account from BT Business to BT Connect instantly. Instead they could transfer it to a competitor instantly but not, it transpired, to another division of their own company. !?!

Except it wasn't as simple as picking up the phone and dialing BT.

The first person I spoke to - after I'd put in the phone number to identify who I was and selected the only option on the phone menu that fitted the bill - said I needed to speak to someone else on a different number. BT - a telecommunications company - couldn't transfer my call.

So I rang a new number, entered all the same information, and spoke to the next person. This person wasn't the right person either. But they too knew who was and transferred me to someone else.

Only that person wasn't the right person either.

Nor was the person she transferred me to.

Nor was the next person, who confidently transferred me to someone else. A nice chap in India.

He wasn't the right person either. He knew who the right person was though, or so he said, but he couldn't transfer me. He gave me another number, naming a department I was sure had come up before on my telecommunications travels, but with a different number.

This person was the right person to speak to. At last. Except that she wasn't. She told me that BT Openreach dealt with the code but that they weren't a customer facing business.

So I asked who I could speak to who was "customer-facing". "No one".

"But," I pointed out, "someone had given me the code, they had "customer-faced me. Could I speak to them."

"No. That person was just passing on the number. We're essentially just a customer of BT Openreach."

Feeling that the name of the company was a clue I suggested that BT and BT Openreach were actually part of the same company.

"No, they're not" she said.

This seemed unlikely. So I rephrased my question. "If I was a shareholder in BT - an entirely hypothetical point - wouldn't I own both BT and BT Openreach in the same share?"

"No, they're separate companies." She then tried to give me an example involving a retail entrepreneur who owns a football club. A totally different situation where one man does own two different companies.

Whilst I'd been talking I had Googled BT Openreach and found them described as "a BT Group Business" on their home page.

I pointed this out.

I was put on hold for a long time.

"Yes", she said, "we are part of the same company, but they still aren't customer-facing so they won't speak to you."

"But they will speak to you won't they? You can ask them why they declined the code they gave you to give to me?"

"No. They won't speak to us."

So, half an hour older but no wiser I went back to Zen to see what they could do.

I went straight through to someone who found my details and offered to help. He tried to get the person who'd been dealing with it already to speak to me but he was on another call. So he took my number and said he would look into it in the meantime, but would get the original chap to call back.

Total call length two minutes.

The person I'd spoken to called me back within fifteen minutes. He had sorted out the problem and my internet connection change-over was back on track.


This is the second time I've run into BT's ridiculous organisational structure. They have divided their business into operations that their own employees don't understand.

They have created sub-brands that mean nothing to customers.

The biggest advantage of having an all-encompassing supplier is lost; the different divisions pass customers between them.

One issue from a customer perspective involves several elements of the organisation (which is fair enough). But does the customer have to live through each part of the process with different people?

The only conclusion I can draw is that it is far better to select specialist suppliers because with the large organisation you get no benefit. Instead you get an absence of responsibility, the difficulty of identifying which part of the massive group is the part you need, and people who know they are anonymous: Sherlock Holmes would struggle to track down "Lynn" through eight redirected calls and across several thousand employees at multiple sites in multiple continents.

Philip Graves
Consumer Behavior Expert

www.philipgraves.net

Thursday 8 January 2009

Why We See Economic Escapism During Recession

History shows that each time economies really start to struggle (in a recession or depression) a pattern of consumer behaviour emerges.

Yes, people cut back and reduce their spending significantly, but spending on escapist pursuits holds or even increases. People spend more on things like going to the movies, buying popular upbeat music, low-cost indulgences (like delivered pizza) and products that deliver enjoyment (rather than utility).

So what's going on in consumer's minds that drives this behaviour? What's the psychology of a consumer mind in a recession?

Firstly, temperament is largely pre-set psychologically, rather than environmentally triggered. Some people will always gravitate towards the positive.

In combination with this it's important to recognise that we have a sort of emotional homeostasis (or equilibrium). Whilst we tend to tell ourselves (consciously) that winning the lottery would make us eternally happy or that the death of a partner would trigger never-ending misery, in fact people usually settle back into their own emotional position within a relatively short space of time.

Next is the issue of mirror neurons. It's well established that we apes are psychologically geared up to copy one another. What's less well known is that brain imaging research has shown that seeing someone do something causes our brains to create the same patterns as if we were doing that action.

The classic example is if we see someone yawn (or sometimes just reading the word yawn) we yawn too, even if we aren't tired or bored at the time.

Engaging with something very positive (like an upbeat song), watching sporting success or buying something that's positioned as being very pleasurable all trigger a psychological feeling of happiness (dopamine) in the short term.

So putting these elements together, many people are unconsciously looking for a way to restore their emotional balance and buying into a positive (escapist) product proposition is a way of achieving this - at least in the short term. Businesses who can meet this consumer need or adapt to do so can flourish during these difficult times.

Philip Graves [Consumer Behaviour Expert]