Wednesday, November 19, 2014

Getting emotional with customers

Science has shown that humans remember information better when their emotions are involved.

As early as 1890, psychologist William James observed that emotions “leave a scar upon the cerebral tissue.”  Since then, the number of studies on the connection between emotion and memory has skyrocketed.

Only a small fraction of the business world, however, applies this widely accepted psychological concept to customer service programs. When a customer has an emotionally pleasing experience, it almost always goes to his or her long-term memory. Of course, the opposite is also true: an emotionally traumatic customer service experience won’t soon be forgotten - service failures stick like glue in customers’ memories.

The link between emotion and memory is critical when we come to Customer Engagement and brand loyalty. Trust plays a huge role in building loyalty, however, trust is one emotion that can be built or lost in a flash. Just one five-minute interaction might be enough to entrust a customer to your company for years to come - or to demolish any trust they had in you, and even drive them to complain about you to friends and family.

So what should companies do to take advantage of the fact that customers never forget? Committing to and delivering on their service promise is critical. This includes having an effective and responsible complaints handling process.

Collecting feedback that seeks to measure customers’ emotional response is useful including how customers are responding to the brand on a real time basis. Net Promoter is a customer loyalty metric developed by (and a registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. It was introduced by Reichheld in his 2003 Harvard Business Review article "The One Number You Need to Grow".

Companies obtain their Net Promoter Score (NPS) by asking customers a single question on a 0 to 10 rating scale: "How likely is it that you would recommend our company to a friend or colleague?" Based on their responses, customers can be categorized into one of three groups: Promoters (9-10 rating), Passives (7-8 rating), and Detractors (0-6 rating). The percentage of Detractors is then subtracted from the percentage of Promoters to obtain a Net Promoter score.

Proponents of the Net Promoter approach claim the score can be used to motivate an organisation to become more focused on improving products and services for customers. This is something that we use at BIE and it has produced some interesting results.

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