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Emotional Value

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Today's consumers demand not only services and products that are of the highest quality, but also positive, memorable experiences. This essential guide shows how organizations can leapfrog their competitors by learning how to add emotional value -the economic value of customers' feelings when they positively experience products and services -to their customers' experiences.
Janelle Barlow and Dianna Maul, with more than forty years combined experience in the service industry, detail five practices for adding emotional value to customer and staff experiences.

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PART ONE: BUILDING AN EMOTION-FRIENDLY SERVICE CULTURE

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The greatest revolution in our generation is the discovery that human beings, by changing the inner attitudes of their minds, can change the outer aspects of their lives.

—William James

Emotions influence every aspect of our thinking life: they shape our memories; they influence our perceptions, our dreams, thoughts, and judgments—and our behaviors, including our decisions whether to return to a place of business, how much we are willing to pay for a product or service, and what we tell our family and friends about our experiences. Emotions are more than mere cognitive processes and indeed more than just feelings.

Emotions influence human reasoning. Emotions shape judgment. And emotions shape behavior. When “customer” is added to these last three statements, they read: Emotions influence customer reasoning. Emotions shape customer judgments. And emotions shape customer behaviors. Given this, it is a very good idea to pay close attention to customer emotions and attempt to influence them in the most positive manner.

 

CHAPTER ONE: THE CUSTOMER IS ALWAYS EMOTIONAL

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Customers are not always right. They make mistakes; they forget things; they get confused. But customers are always emotional. That is, they always have feelings, sometimes intense, other times barely perceptible, when they make purchases or engage in commercial transactions. Some people dread shopping of any kind. Others define their lives by their purchases. Entertainment for them is a big shopping mall. Indeed, some people spend their vacations at the Mall of America in Minneapolis, Minnesota. They even get married there!

No one is entirely neutral about consuming.

One thing is certain: no one is entirely neutral about consuming. In part this is because money is involved with consumption. British psychologists Adrian Furnham and Michael Argyle, in The Psychology of Money, summarize the complex variety of issues surrounding people’s emotional attachment to money: “Money is publicly disavowed, and privately sought after; and simultaneously, is the most important quality in the world, but spoken of as having little value.”1

 

CHAPTER TWO: MANAGING EMOTIONS BEGINS WITH ME

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In order to deal effectively with feelings, everyone needs to be aware of his or her own full range of emotional states. This will help one to avoid being trapped or hijacked (to use Daniel Goleman’s term) by emotions. Goleman, in his bestselling book, Emotional Intelligence, defines self-awareness as “a neutral mode that maintains self-reflectiveness even amidst turbulent emotions.”1 The term “awareness” is closely linked to both eastern and western philosophical traditions. Socrates, considered by many to be the father of the field, summarized philosophy with the simple phrase “Know thyself.”

Customers come to our businesses riding in on the ship of their own emotions. Service providers join them on that ship. By being aware of the emotional connections within this transaction, service providers can help guide the ship in the best direction for everyone concerned. This requires both self-awareness and other awareness. It also demands involvement and objectivity, control and reaction, self-focus and outer focus.

 

CHAPTER THREE: POSITIVE EMOTIONAL STATES ARE AN ASSET

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Even though books, audiotapes, and speakers on the power of positive thinking have become a regular part of modern life, it has become almost stylish to poke fun at motivational speakers, “positive thinking” authors, and their ideas. The motivational industry is a billion dollar market in the United States alone, and one of the best-selling books of all time is Norman Vincent Peale’s The Power of Positive Thinking. Yet the disparagement of positive thinking continues.

Part of the reason for this is that most academic studies of psychology have focused on negative emotions. Positive emotions are considered lightweight, yet without positive emotions we have little hope of attracting and retaining customers. A new body of research, recently summarized by psychologist Barbara L. Fredrickson at the University of Michigan, has started a credible and serious discussion of positive emotions, such as joy, interest, contentment, and love.1 The bottom line of Fredrickson’s argument is that positive emotions open up the mind to think in more directions, which means the positive thinker has more choices and resources available to him or 48her than the negative thinker. The applicability of this idea to customer service and consumer spending is stunning.

 

PART TWO: CHOOSING EMOTIONAL COMPETENCE

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We see things not as they are.
We see things as we are.

—Anais Nin

Organizations have a choice about how they view their service relationships. Some see service as little more than a necessary evil, while others view service relationships as the magnet that keeps customers coming back over and over again. Some see service as emotional labor; others choose to view it as emotional competence.

In today’s world, high-tech companies charge for service, even offering different packages for different levels of service. Airlines have long done this with coach-class, business-class, and first-class distinctions. The assumption these companies make is that service competency has intrinsic value and can be charged for. While businesses may not be able to advertise a specific charge for added emotional value in the same way that high-tech companies can enumerate a price for twenty-four-hour service or airlines for the lay-back seats in first class, it is a memorable component of the customer experience and therefore has value.

 

CHAPTER FOUR: EMOTIONAL LABOR OR EMOTIONAL COMPETENCE?

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Maureen O’Hara sits in an old-fashioned office chair, dressed all in black, looking resolute as she is interviewed for the brisk-selling business magazine The Fast Company. Dean of faculty at San Francisco’s Saybrook Graduate School and postmodern psychologist par excellence, Dr. O’Hara makes a strong case for the necessity of emotional skills at the turn of the twenty-first century.

Everyone must become a student of human nature in all its glorious complexity. Exercising new psychological muscles—tolerance, flexibility, empathy— becomes part of developing competence at work.1

Exercising new psychological muscles—tolerance, flexibility, empathy— becomes part of developing competence at work.

Contrast this message with that of Arlie Russell Hochschild in The Managed Heart, as she discusses emotional labor:

This [emotional] labor requires one to induce or suppress feelings in order to sustain the outward countenance 64that produces the proper state of mind in others—in this case, the sense of being cared for in a convivial and safe place.2

 

CHAPTER FIVE: MANAGING FOR EMOTIONAL AUTHENTICITY

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“Synthetic compassion can be more offensive than none at all.”

Twenty-five years ago, in his book Bureaucracy and the Modern World, Victor Alexander Thompson described a phenomenon most people instinctively recognize as the major challenge for the service/experience economy: “synthetic compassion can be more offensive than none at all.1 Authentic exchanges are noticeably different from synthetic communications. Authenticity has to be felt and driven internally, and unless one is a very, very good actor, faked attempts at authentic communication are quite obvious.2 This raises an obvious question: How do organizations get their service providers to deliver authentic customer service when they can’t command it?

Senior-level managers who are reading this book know this task is not easy. In fact, it is so amorphous, so difficult to measure, that many do not consider it at all. They also are aware that coaching “authentic” service workers necessitates a revised set of supervisory skills. Yet some do look at these challenges. An AT&T executive describes the emotionally competent 84supervisor’s role in the new economy as essentially absorbing uncertainty for staff, something that most of us are not very good at.3 Author and president of Edventure Holdings, Esther Dyson, underscores the point that emotional skills are even more critical for today’s leaders than ever before:

 

PART THREE: MAXIMIZING CUSTOMER EXPERIENCES WITH EMPATHY

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A high degree of empathy in a relationship is possibly the most potent factor in bringing about change and learning.

—Carl Rogers

We place two interrelated questions on the table. One, do customer satisfaction surveys reliably measure anything that is meaningful? That is, do they give us any kind of consistent data? Generally not. Two, do satisfaction scales tell us anything about what an organization should do once it has measured customer satisfaction? Almost never, in any precise, meaningful way.

In order to better understand our customers, we need to get closer to their emotional reactions, and satisfaction surveys simply don’t tell us enough about emotional reactions to guide organizations in the experience economy, let alone in the service economy. The entertainment industry has understood this from the beginning. Entertainment is about emotional reactions. Only now do other industries seem to grasp how critical this element is in their businesses as well—even for those businesses that do not sell an “exciting” product. Such businesses, nonetheless, are eliciting emotions as they “create” their customers.

 

CHAPTER SIX: SATISFACTION ISN’T GOOD ENOUGH— ANYMORE

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Setting goals to increase customer satisfaction is essentially meaningless.

It doesn’t take long before you realize that Michael Edwardson is saying something important, something different, something almost startling in the field of customer service. Yet as a listener, you find yourself accepting his thesis from the very beginning. Edwardson, a tall, articulate Australian on the faculty at the University of New South Wales, says point-blank that setting goals to increase customer satisfaction is essentially meaningless.

That, of course, is exactly what countless numbers of organizations do. This focus on customer satisfaction, according to Edwardson, “seriously limit[s]… our discovery and understanding of the total consumer experience.”1 In terms of creating loyalty, the most important aspect of customers’ experiences is emotional rather than satisfaction based. Harvard researchers Thomas Jones and Earl Sasser put it in operational terms: “ Customer satisfaction surveys cannot supply the breadth and depth of information about the customers needed 112to guide the company’s strategy and product innovation process.”2 This statement is pointedly relevant for the experience economy.

 

CHAPTER SEVEN: THE CHALLENGE IN MEASURING CUSTOMER EMOTIONS

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Successful organizations understand that quantitative feedback concerning customer judgments about service quality is essential for assessing whether customer needs are being met. Recent and improved technologies have made it relatively easy to measure tangible indices such as telephone hold times, the number of times a customer calls, numbers of abandoned calls, average talk times, and so on. However, because emotions also affect customers’ judgments, it would be advantageous to measure and understand their strength in the service equation.

Unfortunately, customer emotional indicators are difficult to quantify and measure. Consider the examples in column 2 in the following chart:

See Table

Obviously, it is a better idea to measure important customer data than to measure less important business data. Unfortunately, because column 2 factors are difficult to measure, even though they are important, companies tend to have limited data on these metrics. You may also note that they are primarily emotional in nature.

 

CHAPTER EIGHT: THE GIFT OF EMPATHY

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Years ago, Janelle was on an extended business trip that took her around the world, beginning in Hong Kong then continuing to Denmark before returning to the United States. Six hours before she was to return to the United States, she discovered her hotel room had been robbed. Cash, credit cards, passport, and all identification had been stolen. Believe it or not, this was the third robbery she had experienced on this trip—once in Hong Kong, where a pickpocket also got her cash, credit cards, passport, and airplane tickets, and twice in Denmark! In a panic, she called the U.S. Embassy very early in the morning. She was told to go to Copenhagen and talk with the embassy duty officer.

Based on how she looked and her accent, Janelle was given a letter indicating that she was a U.S. citizen, that her passport had been stolen, and that the airlines should allow her to return home. Getting through Kastrup Airport in Copenhagen was no problem. However, she had to transfer planes in Heathrow, London’s extremely security-conscious main airport. Janelle was pulled from every line she entered and interrogated by 134several very unhappy Brits before passing on to the next checkpoint. It took her two hours to move from one plane to the next.

 

PART FOUR: VIEWING COMPLAINTS AS EMOTIONAL OPPORTUNITIES

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Progress flows only from struggle.

Louis Brandeis

Complaining customers can be converted into loyal customers who engage in less negative word of mouth. As a result, treating complaining customers well is, in many ways, a simple economic decision. It has been estimated, as a general ratio, that it costs five times more to get a new customer than to keep an existing one.1

Effective complaint handling can make a major difference to customer retention rates—even after service failures. According to a Technical Assistance Research Programs, Inc. (TARP) National Consumer Survey study, if customers experience minor problems and their complaints are resolved quickly, 95 percent will repurchase from the same organization; 82 percent will buy again even if the problem is major. If the complaint is resolved, but not quickly, only 70 percent will repurchase if they had a minor problem, while 54 with a major problem will repurchase. If the complaint is not resolved at all, 46 percent will repurchase with a minor problem and 19 percent with a major problem.2 Clearly, there is a lot to be gained in terms of speedy, effective complaint handling.

 

CHAPTER NINE: COMPLAINTS: EMOTIONAL OPPORTUNITIES

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Most customers don’t complain lightly; in fact, most don’t complain at all.

No aspect of customer service is so replete with emotions as when customers complain. Most don’t complain lightly; in fact, most don’t complain at all according to dozens of research studies. Consider the emotions expressed in the following poorly handled complaint situation, in which a customer is trying to get his telephone service repaired.

Service Representative (SR): As long as it is trouble that is outside, we do take care of that for you at no charge. Are you going to be there tomorrow, or is there a number to reach you back tomorrow?

Customer (C): No, I have to work. There is a work number where I work. I went through this one time with you people.

SR: Sir, I don’t have any control over that. I just report it.

C: I know, but I just want you to know, I paid my money. The second time they came out, they paid for it because they 168found out it was their fault. I just had this thing transferred. I don’t want to go through this again. It is too expensive.

 

CHAPTER TEN: FUNDAMENTALS OF COMPLAINTS

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The last thirty years has seen a blossoming of research about complaints, some conducted by consulting firms and a great deal more by marketing university professors (see Appendix D). Results definitely vary from one research study to another. Nonetheless, common patterns present themselves throughout the multitudinous studies. These patterns, which we discuss in this chapter, include the following:

Customers talk about bad service to just about everyone, but they rarely complain formally.

Customers talk about bad service to just about everyone, but they rarely formally complain. Complaint statistics, which differ depending upon the research study, are all bad and suggest 174that somewhere from 40 percent to 96 percent of customers do not speak up to someone who can actually do something about their complaints. The percentage range depends upon the type of customer, the severity of the problem, and the accessibility of complaint opportunities—and whether customers believe anything will happen as a result of their complaints. Even when extreme dissatisfaction is experienced, many customers do not complain: 49.6 percent for nondurable products; 29.4 percent for durable products, and 23.2 percent for services, according to one study.1 It can become almost pitiful. Megafax, a New York research company, surveyed thirty thousand utility companies between 1991 and 1995. Some were so bad at complaint handling that customers wouldn’t even call to say that they had lost power!2

 

CHAPTER ELEVEN: STRATEGIES FOR HANDLING COMPLAINTS

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This chapter suggests ten strategies for working with the emotional dynamics of complaints so effective handling can strengthen connections with customers.

Complaint handlers are best advised to phrase their initial responses to complaining customers with emotional words.

In their book, A Complaint Is a Gift, Barlow and Møller recommend that complaint handlers shift their paradigm about complaints and see them as “gifts,” rather than as nuisances, attacks, or whatever other negative views are held about complaints. When people are given gifts, they typically say “Thank you,” whether they like the gift or not. Barlow and Møller, in their eight-step “Gift Formula” (see Appendix E), advise service providers to first thank customers for their feedback and then offer an apology. In other words, complaint handlers can be more effective if they phrase their initial responses to complaining customers with emotional words. The complaint 180handler should then, and only then, proceed to gather whatever information is necessary to solve the customers’ issues.

 

PART FIVE: USING EMOTIONAL CONNECTIONS TO INCREASE CUSTOMER LOYALTY

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Good words are worth much, and cost little.

—George Herbert, English clergyman and poet

Using emotional connections to increase customer loyalty requires a carefully thought-out “emotion” retention strategy that every employee understands. It signifies a level of sophistication where staff grasp that the entire purpose of improved service is not simply to make tasks faster, more accurate, or less costly for the customer, but ultimately to honor customers by caring to meet their needs. An article in US Banker supports this notion by recommending a mind-set change that we earlier called the Customer Impact Job Description:

The mind set of bank employees must change. If tellers think they’re there to cash checks rather than helping customers realize their financial dreams, they’ll act accordingly. There will be little eye contact or personal warmth, because all the tellers see are tallies against their daily transaction quotas—and customers know it.1

Throughout this book we have suggested numerous applications related to becoming emotion friendly, embracing emotional competence as a service model, maximizing customer experiences with empathy, and viewing complaints as emotional opportunities to deepen relationships. If implemented, these practices will positively impact customer retention rates. In this final part, we recommend four additional strategies to retain customers:

 

CHAPTER TWELVE: LOYALTY IS A BEHAVIOR WITH ITS ROOTS IN EMOTIONS

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Most customers would prefer to be brand loyal. It makes their lives so much easier; shopping is quicker because they don’t have to ponder which products to purchase; they can feel positively secure about their choices. They have no hesitation about encouraging others to follow their lead. They know they are receiving value for money, and they can trust a business when it asks them to purchase a more developed product or return for another experience. They know if they have problems, they will be helped quickly and with integrity.

Loyalty obviously implies a positive attitude. Perhaps the positive attitude is only about low prices offered or about the organization’s incentive programs. Even when prices are rock-bottom, however, customers will still leave if they are treated badly enough. Likewise, incentive programs work well to ensure loyalty, but they are not “loyalty-proof.” Airlines know that even their most profitable high-mileage passengers will switch to other carriers if airline personnel are unresponsive to customer needs.

 

CHAPTER THIRTEEN: STRATEGIES FOR RETAINING CUSTOMERS

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This chapter suggests four emotion-friendly strategies to increase customer loyalty.

Companies need to focus their energies in a coordinated way on the customers who are already most loyal.

If companies are to benefit from loyal customers, they need to focus their energies in a coordinated way on the customers who are already most loyal. This requires being able to identify your loyal customers, seeking out what they have to say, and then implementing what they value. The ultimate goal is one in which service value and relationships are so positive that loyal customers feel they cannot get their needs met anywhere else. This necessarily involves personal and emotional connections with your customers.

Here is the advice of the British SJB Services, which studies customer loyalty metrics: “Choosing the most profitable customers and accurately targeting them and nurturing them, while virtually deselecting the least profitable customers, is one way of vastly improving bottom-line profits.”1 If too many resources are used to gain new customers or to win back those that have left, there will be fewer financial and staff resources remaining to heighten or maintain loyalty.224

 

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