Tony Houghton, BT Exact guru on Expectation Shock!! kicks off a monthly column of views on the rapidly evolving world of communications technology, customer relationship management and above all the customer experience.
This month, he describes the origin of Expectation Shock! and the importance of customer perception versus expectation. Further detail can be found in his whitepapers, presentations and articles some of which are on InsightExec, and others on his site. In the next few months, he will be discussing customer related issues ranging from the global customer to the importance of fun. Real life case studies will address ‘Sweating the Asset’ or making the most of your existing technology, to leveraging the huge opportunities offered by new technology from IP to fixed mobile convergence. But don’t worry, Tony is not a technology freak. He never forgets for one moment that – it's not fundamentally about technology at all – it's about people!
What is Expectation Shock!!
The term Expectation Shock!! was inspired by the verbatim comment of a Telco customer who was:
‘Surprised or even pleasantly shocked by the …immediacy of the response…dealing with someone who knows what they’re talking about… who knows the customer history and products…has done their homework... and who will take ownership and deal with it efficiently’ verbatim comment 1
Expectation Shock!! is where customer perception greatly exceeds customer expectation. Let me dissect this: Perception is the experience of a new product or service, viewed in the light of Expectation. Expectation itself is the accumulation of experiences, direct or indirect, of a service or a product, built up over time. So our customer had a very positive perception which in this case greatly exceeded expectation – an Expectation Shock!!
Accompanying this Expectation Shock!! was a spectacular increase in sales conversion rate – which was what drove me to look at this phenomenon more closely.
But…doesn’t the customer have a right to expect this level of service anyway?
Of course! But mostly, they don’t: The customer is likely to be a long suffering victim of technology in general and CRM in particular. In consequence, the customer has a LOW expectation of technology and CRM. The expectation is more along the lines of:
‘Amazed…and absolutely gobsmacked!!!!’…when you press 1 for this…2 for that…and you get a message…please hold…our operators are busy at the moment… but you are very important to us…you’d think with all this new technology we wouldn’t get that!? verbatim comment 2
So when they actually receive good service, they are…’surprised and pleasantly shocked…’.
It was the same with the take-off of Japanese cars in the 1970’s. Customers received an Expectation Shock!! Up until then, customers had a low expectation of new cars: They were expected to have, at best, just a few teething troubles. However, the perception of the Japanese cars was different - ‘just worked’. They were perceived as reliable at a time when other new cars were not expected to be so. This perception expectation gap had another effect, which we’ll come back to later – it made people Loyal: they repurchased…and told others.
The WAP story shows the classic counter case - High expectations, fuelled by overhyped marketing, were impossible to meet or exceed - with a low customer perception - and the rapid demise of the WAP service.
Contrast this with SMS - No expectation, no marketing whatsoever – high customer perception unfettered by any expectation - exponential growth.
In fact, the SMS story is the ultimate expectation shock! The bottom line is that we have to exceed customer expectation.
Nice in theory, but surely we should just focus on: ‘Keep the customer satisfied’to quote Simon and Garfunkel. That’s hard enough!
No. Admittedly there is a lot of ‘CRM speak’ about customer care and delight from organisations who do not even deliver the basics. There are also those wickedly counterproductive ‘comfort messages’ telling us how important we are as we wait interminably in the call queue.
But there is considerable academic customer theory and also research in my own company to show that the satisfied customer is always in danger of deserting to the competitor. We must do something more, something that ‘pleasantly shocks’ the customer, in order to keep them. This can be very simple. My friend Paul tells of his Tesco supermarket nappy experience: Having bought the wrong nappies, he goes back hoping to change the Tesco nappies for the upmarket Pampers brand. The nappies were ‘upgraded’ without question and an offer to pay the difference gracefully declined. Two things now happen: He goes back to Tesco…again and again…; He can’t stop telling others
That’s what we’re trying to achieve with Expectation Shock!!, same as Japanese cars, same as SMS – repeat purchase/use of the service, and tell others by word of mouth.
Great! But wouldn’t it be nice to predict an Expectation Shock!!,What customer service enhancement, which will give an Expectation Shock!! or Where’s the new SMS!?
The next SMS may be a little optimistic, but we can certainly go some way to predicting and anticipating an Expectation Shock!!…and making recommendations to make that happen.
The approach is based on a Customer Lifecycle Analysis using a toolkit including statistical analysis, customer behaviour questionnaires, interviews, focus groups and cost benefit analysis. Research over two years has identified ten factors which drive or inhibit the flow from Potential to Aware to Informed to Buying customers…to Loyal customer. Why is the Loyal customer so important? Because, as we have seen with SMS, Japanese cars and Tesco nappies, it is the Loyal customer who will make repeat/cross sales, and also by word of mouth enhance the brand image and encourage friends or associates to make purchases themselves.
Next month, I’ll describe how the Customer Lifecycle Analysis was used to identify this spectacular increase in sales conversion rate – and also the ‘Why’ of the Loyal customer – because it is the combination of ‘How much’ and ‘Why’ which enables us to predict.