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

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]

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

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]

The UK Goverment's Flawed Consumer Gamble

So, in response to the economic woes our country is facing, the UK government has decided that it will reduce the rate of VAT on consumer purchases from 17.5% to 15%.

This, it thinks, will encourage consumer spending and help fend off a nasty recession. They're also slashing the bank base rate too.

It strikes me that their gamble is destined to fail because they have totally failed to understand the prevailing consumer mindset.

Reducing VAT might have helped stimulate the economy, were it not for the fact that, at the time they announced it, they also reeled off a list of the taxes they intend to increase in the near future to recoup all the tax they're going to lose (at a time that they're increasing spending).

The UK government has been forced to admit that it is going to borrow money like never before (on account of it having wasted the money it received during a lengthy period of economic growth).

So, let's look at this from a consumer perspective.

• At a time when lots of people are finding out the hard way that borrowing heavily is a risk that comes back and bites you on the backside, the government's answer is to borrow heavily.
  
• Over the past few months fuel and food prices have increased dramatically. Even though they are starting to drop again this had the effect of sensitising people to how much they were spending on products that they previously bought without consideration.
  
• They are afraid about what their (economic) future has in-store.
  
• The only thing they can be sure of about the future is that the government is going to come back demanding more money within a couple of years (not just their hand-outs back, but a lot more besides).

Personally, I don't believe this is a winning formula. Consumer confidence won't be increaed by a 2.1% saving that is flagged as a "save now pay us back more later". All this will do is compound fears about economic pain in the future and encourage greater caution.

People will (probably quite rightly) work on the assumption that the unknown future pain will be significant.

I'm not suggesting that this will be a conscious process. The adaptive unconscious mind is concerned with protecting us from avoidable pain. It logs the warning signs, pays particular attention to what's going on with our friends, and guides our feelings about how to act accordingly.

The situation isn't helped by the fact that many people's mathematics skills aren't able to appreciate that a reduction in VAT of 2.5% translates to a price decrease of 2.1%. These people have been primed to expect more than they get and are faced with an instant disappointment when they realise the reality.

What didn't seem like a huge number to begin with has now got smaller and, since we judge things in relative not absolute terms, it can feel like quite a lot has been lost. The difference between 2.5 and 2.1 is significant proportionately!

I fear things are going to get worse before they get better.

Philip Graves [Consumer Behaviour Expert]

Consumers Take It Lying Down: Thailand Airport Closed by Protestors

As you've no doubt heard the political unrest in Thailand has led to the closure of Suvarnabhumi (Golden Land) International Airport by Thai people angry at the government in their country and demanding the prime minister's resignation.

I can't help but think that, whilst this protest may be effective in achieving their goal of getting an already beleagured PM to step down, it's not going to help their country in the longer run.

Thailand's economy is more dependent on tourism than any other Asian economy (around 6% of GDP). Tourism consumers have been very forgiving of the countries political unrest over recent years, but that will probably change now.

Holding your visitors to ransom is not a good plan.

If I was stuck in that airport I would start a peaceful protest; making sure that all the journalists reporting from it had people holding placards in their photos and film: "Don't visit Thailand".

The people trying to get home have paid for a product they aren't getting, and have also invested a little as consumers of the country they visited. They deserve to be treated far better.

Philip Graves [Consumer Behaviour Expert]

A Fatal Obsession with Value: Walmart Worker Dies on Black Friday... Who Did It?

A number of people have asked me about the tragic incident in America yesterday, where a Walmart worker was trampled to death by a crowd of shoppers streaming into a store to grab bargains.

As a psychologist and consumer behavior expert they ask me how people can behave in the way they did? How could this have happened over shopping?

Well, the first point to make is that this isn't the first time this type of tragedy has occurred. Anywhere that very large numbers of people are gathered, and particularly when they are all trying to go in one direction, there is the possibility that people can get hurt.

There have been several instances of crush deaths at music concerts and a major tragedy at a soccer stadium in Sheffield (Hillsborough) where 96 people died in 1989.

This is partly a matter of flow dynamics (the funnel created by entrances or stages that people are trying to reach) and partly human psychology.

With the Walmart Black Friday Sale the psychology is a by-product of the environment: these sales are competitions. There are limited numbers of heavily discounted items so people know they may lose.

This triggers one of the most powerful unconscious drives - the fear of loss (loss aversion): our unconscious is always on the look-out to see if a situation might lead to us feeling bad. It does what it can to direct our actions so that we can avoid this outcome.

Accompanying this, such sales are designed to attract people with a powerful psychological desire to save. This is an important evolutionary behaviour and one that retailers can trigger by telling us discounts are available. The extreme event of Black Friday is only going to appeal to those people who really feel that desire to save strongly.

Others, who have a weaker drive to save, will decide the stress and discomfort aren't worth it - they will have a higher drive of a different type that motivates their behavior.

So with this psychologically selected subset of people competing to avoid feeling bad what is it that leads to tragedy?

Well, it only takes one person to push forward into a small space somewhere towards the back of the cue to prompt a couple of people around that space to feel aggrieved.

They, in turn, move defensively to protect the small space near them - conscious that "people" are pushing in. Of course, at this stage it was only one person that moved into a gap.

In turn, the two people who have noticed the 'space invader' and have moved cause four people around them to get concerned.... and so it goes on. An exponential increase in pressure is created towards a relatively narrow point at the front of the queue.

The self-selecting, competing pool of people who feel a powerful desire to save, the high stakes created by the limited nature of the discounts on offer, the fear of missing out, and the sheer number of people attracted to an unregulated queue, are a recipe for disaster.

At the heart of it all, the fact that we are essentially a herding animal, means in circumstances like these we unconsciously react to the rest of the pack around us - just as sheep would. People responded instinctively to protect themselves, not thinking that their actions would be having a ripple effect with the people ahead of them.

The irony is that very few of the people going out to save money would have bought the item or items they end up purchasing were they not being discounted. So whilst they tell themselves they are saving $200 on the TV, they are spending $400 that they otherwise wouldn't have.

So who is to blame for this tragedy?

Ultimately it's an accident. It's not really fair to point the finger at the first person to push forward into a space at the back of the line. He or she was only reacting to an unconscious drive that had been triggered by Walmart.

Walmart were only perpetuating a long held tradition of a discount day that has not been associated with tragedy in the past.

Hopefully lessons will be learned and more regulated queues will be in place in the future.

Philip Graves [Consumer Behavior Expert]
The Consumer Behavior Research Resource