Fellow marketing professionals, I have a quiz for you: What costs US companies $62 billion annually and fuels 99.9% of the angry, misspelled tweets you hate answering?
If you replied with "poor customer service," you win.
Digital technology was supposed to make customer service fast and seamless. Instead, it made service slow, impersonal, and dissatisfying. Still, by ensuring that you retain more customers than your competitors, your customer service can double as marketing.
First, let's better understand the problem.
Infinite Ways to Fail
There are endless ways to scare away a customer, but limited ways to keep one. Today, without much effort, you could make 20, 2,000, or 2 million of your customers disappear; it's much more likely, though, that you're losing customers one conversation at a time.
In the tech industry especially, people don't contact Customer Service because they're abounding in joy. Interactions usually begin with a frustrated, distressed, and stymied customer. When service leaders talk about "delighting" customers, I call BS—unless they plan to give away product.
More realistically, you're dealing with a human powder keg and trying to prevent it from igniting. Sometimes, people pre-ignite on social media, and there's nothing you can do other than damage control.
Modern conceptions of customer service are naïve and deny the inherent unpleasantness of solving a problem neither you nor the customer wanted; let's reframe the concept with a dose of reality.
Redefining the Craft of Service
Online and over the phone, a customer service interaction is an unwanted, unexpected dialog that occurs on a spectrum from severely disappointing to pretty good. Exceptions occur when a company does something unwarranted and extremely generous.
So, the goal is to retain frustrated customers because acquiring new customers can be 5-25 times more costly.
To achieve high retention levels, we need to name the challenges of remote service.
1. Time Inequality
When you imagine a service interaction in a department store, it probably illustrates time equality. You find a store staffer in a few seconds. Together, you return an ill-fitting shirt, make an exchange, or solve whatever other problem you may have. You both expend equal amounts of time.
Time inequality occurs when one party—the company's rep or the customer—spends more time on the problem than the other. In a good service interaction, the rep expends more time than the customer. Unfortunately, the opposite tends to happen online.
Let's say a customer spends 35 minutes reading knowledge base and forum articles in attempts at DIY troubleshooting. After finding no solution, she then spends another five minutes navigating a robotic call tree, then 10 minutes waiting on hold (all the while being told her call is very important and to remain on the line), and finally 10 minutes on the phone with a rep. That's an hour lost. Notice that your rep spent one-sixth of that time dealing with the problem.
Time inequality angers customers because they feel they've taken the brunt of a problem they didn't cause—all to save your company money.
Maybe that approach brings down the monthly cost of their subscription, but good luck making that case to an angry user.
2. Narrative Accumulation
Think of each service engagement as a story—not the kind people would ever want to hear... but, still, the kind that has characters, conflicts, a beginning, middle, and end, etc. There's an accumulation of narrative until there's a resolution.
In the physical world, the narratives accumulate in relationships. My car's "check engine" light switches on, so I visit the mechanic. He services the car and documents the repair work he completed. I pay for the service. If the "check engine" light comes back on, this mechanic and I have an established relationship; we each have a memory and documentation of what occurred, which enables us to take the next step without rehashing the narrative.
Narrative accumulation is less common with remote service. If my laptop breaks down and I call support, the rep will ask questions and try to solve the problem. If the problem persists and I call back, generally I must re-navigate the call tree, answer all the same questions, describe the problem and solutions we attempted, and then continue the narrative. If my warranty has expired, some companies will charge me $45 for the privilege of speaking to a rep: If they're trying to improve my warm and fuzzy feelings toward the company, that won't do it.
Narrative accumulation suffers online because, unlike the mechanic, the tech company has a multitude of reps in unknown locations who don't have a memory of what occurred or a record documenting it.
The lack of narrative accumulation drives customers nuts. It also contributes to time inequality by forcing customers to repeat stories in which they don't want to be a character in the first place.
3. Service Relativity
We established that the best a service interaction can be is "pretty good"—unless you give out free stuff or do something outrageously kind. Costco, for example, raised the bar by refunding the cost of a Christmas Tree that was returned because it died—in mid-January!
But how does a person distinguish "pretty good" from the spectrum of other experiences? By comparison.
Let's say you buy shoes from an e-commerce site, and they don't fit. You want to exchange them for the proper size. The timer has begun, the narrative is accumulating, and you somehow connect with Customer Service to make the exchange.
As you go through the experience, you'll make comparisons and imagine counterfactuals. Would it have been easier to buy shoes at a local store versus online? Had I ordered from Zappos, Amazon, or another popular shoe retailer, would the exchange have been quicker? Is this exchange free, or am paying for shipping? Can I trigger the exchange online, or must I call someone?
The shoe exchange prompts comparison with other shoe sellers—not with banks, health insurers, or other unrelated businesses. If you have a bad experience with a local business, you may have some alternatives depending on where you live. If you have a bad experience online, you have many alternatives no more or less accessible than the company that failed you.
Back in 2010, one survey found that 82% of consumers had stopped doing business with a company because of bad service. That means they had and pursued alternatives (or didn't need what the company offered, after all).
Your company is interchangeable because barriers to change are no longer insurmountable; they're just a mouse click.
A Winning Formula
A company that offers better time inequality and narrative accumulation relative to its competitors creates better impressions, retains more customers, and therefore has an edge in marketing. The edge may come in the form of word-of-mouth, lowered acquisition costs, reputation, and other benefits that are harder to measure.
Naturally, you might ask, "What's the winning formula? How do I improve time inequality or narrative accumulation?"
Some of it's not rocket science. Invest in a good knowledge base. Automate common service requests. Use a record-keeping system and protocol for service interactions so that anyone can pick up the narrative.
However, I'd be remiss if I just tossed out googleable ideas knowing next to nothing about your company, its competitors, and the modes of service you rely on. How many "do-this" tips that you find on the Internet pan out for you? Most lack context, and most probably aren't backed by real experiences.
The "formula" lies hidden in your service data, in interviews with customers, in your competitor's social feeds, and in other places where you can find clues to the puzzle.
The concepts of time inequality, narrative accumulation, and service relativity apply to any industry. If you set out to optimize those variables, you'll find the means.
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