Founder XMplify Consulting Ltd
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What research tells us about the key requirements of empathetic service - and its obstacles

‘Empathetic business’ may well be the next competitive battleground, but it will require more than just clever technology or process optimisation.

22nd Oct 2020
Founder XMplify Consulting Ltd
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Most people feel that being treated with empathy is important, but for many businesses it still seems that making a place for compassion is optional, or just a good talking point for public consumption with little quantifiable bottom line impact.

In this article I am going to discuss how recent research conducted by  MyCustomer and Genesys and based on the views of about 500 consumers, shows how well (or not) today’s businesses are catering to their customers’ emotional needs, and how this impacts both customer relationships and business performance.

Why now for corporate empathy?

Over the last decade or so, customer experience (CX) has been the chosen battleground of business, especially as online purchasing and increased global competition made it more difficult to compete in areas like product features or price. Businesses have embarked on becoming ‘customer-centric’, which meant listening to their customers and acting on the findings to improve customer journeys.

However, today CX as a discipline is in crisis – all the obvious improvements to the customer experience that can be made, have been made. To remain a competitive advantage for the future, CX needs to do more than listen to customers or design efficient journeys; it needs to add significant extra value. One way for you to do this is to understand and meet the emotional needs of your customers, as well as their rational and functional ones.

As Dr Natalie Petouhoff, a CX expert and consultant at Genesys says: “Customers want to feel heard, acknowledged, understood and appreciated.”

I have written before about the growing importance of empathy in customer service and it’s a popular subject – a quick internet search on “empathy in customer service” returns over 30 million hits. This reflects a trend that started well before the current crisis, although the impact of COVID-19 has certainly accelerated that trend: the recognition that it is customers who decide whether your business succeeds or not and why.

‘Empathetic business’ may well be the next competitive battleground, but it will require more than just clever technology or process optimisation, it will also require a transformation in the way that businesses motivate and enable their employees and the research report goes a long way to explain why and how.

My big three takeaways from the research

The research report is full of great insights and advice, but for this article, I am going to focus on just three:

1. Empathy is not the sole preserve of live agents.

This is perhaps one of the counter-intuitive findings of the research – that live (voice) agents do not score significantly better than other channels when it came to acknowledging and understanding the emotions of customers. This seems to fly in the face of conventional wisdom, that only humans can truly understand humans, and that most people are better at talking than typing so should have a natural advantage in showing empathy.

It is my belief that some of this may be accounted for by accepting that customers have different levels of expectation for different channels: The customer expects to receive a higher level of empathy from a live agent but presumes a chatbot to have little or no understanding of their emotional state, or that live chat will be a stilted and impersonal conversation. Also, because we expect digital channels to be ‘less human’ than direct contact with an agent, we are more likely to be disappointed by an agent who falls a little short of our expectations, than by a chatbot.

When empathetic customer-centric design is deployed consistently across all channels, the result is a customer experience that feels more humane. Resources can then be devoted to creating an environment where the human agents are enabled to focus on establishing rapport and the AI agents (bots) used to facilitate the service interaction.

2. Almost all the customer respondents said that empathy was important in customer service interactions and yet over a third said that their emotional state was neither understood or acknowledged.

Modern businesses tend to focus on cost-efficient and effective processes, and measure their performance accordingly; with easily quantifiable operational metrics. As a result, service design focusses on optimising operational practicalities, not the feelings of customers.

However, as the research clearly shows, when customers are treated with compassion, they feel far more satisfied; 63% of respondents rated themselves as ‘very satisfied’ when they felt their emotional state was acknowledged and understood. An even greater proportion (73%) said that they felt more positively about the brand as result. Conversely, when customers felt that their emotional state was not acknowledged and understood, the numbers reversed – 61% feeling ‘very dissatisfied’ and 78% feeling more negatively about the brand.

History is clear: when customers are experiencing a gap between what they want and what they receive, an opportunity exists for a competitor to step in and fill the hole. Closing this ‘empathy gap’ is therefore an urgent business need. Disruptors, especially those smaller, nimbler organisations, often achieve success by meeting a need that established organisations have overlooked.

3. Empathetic agents ‘win’ either way – and this is reflected in customer experience scores.

Query resolution is still the most important factor in driving customer satisfaction – when a customer initiates a service call (i.e. when they have a problem), they do so in the expectation that their problem will be resolved, but what about when their query cannot be resolved?

Quoting from the report: ‘Remarkably, those who did not have their query resolved but had an interaction which understood and acknowledged their emotions very well were much more likely to be satisfied than those that had their query resolved but had an experience where they felt their emotions were not understood or acknowledged at all.’

In other words, treating a customer with compassion results in higher levels of satisfaction, even if you cannot resolve their query and that also means that you do not have to spend money attempting to avoid a negative outcome.

Indeed, my own experience is that whilst ‘customer satisfaction’ may appear to be an intangible benefit (i.e. difficult to quantify in monetary terms) it does influence loyalty, increase revenues, and decrease costs and so affects the bottom line.

What it will take to deliver empathic customer service

  1. Develop a culture and a mindset that fosters empathy – your whole organisation needs to understand and embrace a cultural philosophy that treating customers with compassion is not just the right thing to do, it’s vital for business survival.
  2. Listen to your employees and your customers - understand what they want and why, then determine how you can address their needs. Empathy is based on a shared understand and appreciation of how the other party is feeling, it is impossible to deliver a truly empathetic service without it.
  3. Close the empathy gap - by developing your organisation’s ‘empathetic musculature’ (a term used by Adrian Swinscoe in the report). Most people are born with an innate ability to empathise with others but, like a muscle, if they do not exercise it regularly it will atrophy.
  4. Adopt new measures of performance - some operational measures are at odds with delivering a service with compassion; when agents feel pressured to end a call quickly they may not take the time to establish rapport with the customer. As Richard McCrossan of Genesys says: “Move away from cost-centric measures like average handle time. Move to customer-centric measures like NPS. And perhaps consider gamifying your agents so that their bonus is tied to empathy measures.”
  5. Give your people the tools they need to deliver an empathetic service - which means aligning your processes and technologies with your customer service agents. Technologies like AI (bots), are key to enabling agents and customers to accomplish what needs to get done. Processes too need to be re-examined to ensure that they serve your business, your agents and your customers and across all channels.
  6. Put the customer at the centre of service design - finally, as the research shows, digital channels are now a vital part of customer service and they can be the first encounter your customer has with your customer service function. So take the time to design them around the needs of the customer and to ensure that they present a consistent experience.

Challenges you may encounter

To orchestrate all of this in an operational environment is going to need AI, but not all Artificial Intelligences are created equal. AI at the centre of human-centric design needs more than just data and analytics, it needs the benefit of years of insight into how to serve the needs of both organisations and their customers to put into context.

Many business leaders tend to think of themselves and their organisations as logical and rational. If you are to measure the contributions of agents differently – balancing operational needs (e.g. minimise cost) with relationship needs (e.g. active listening to establish rapport), you will need new performance measures as well as be able to demonstrate how empathy quantifiably contributes to the bottom line.

Speaking of AI, it can only ‘learn’ from data – data about your organisation and your customers. To persuade customers to give you access to their data, you are going to have to demonstrate how doing so adds value to them

Finally, expect best practice guidance and regulation to appear. A number of international institutions and regulators are already aware of the power of AI and its potential for misuse, and are responding accordingly. If in doubt, work with a partner who can help you avoid some of the potential pitfalls ahead.

The future of empathy in customer service

Right now we are on the cusp of new era in customer experience and customer service. Cloud-based platforms are democratising access to the kinds of technologies and processes that used to be only available to the largest of organisations, but they need to be used intelligently.

Attention is also shifting from just delivering an efficient and effective service (which your customers now expect anyway) to true personalisation that is consistently and empathetically delivered across all channels.

AI can only ‘learn’ from data – data about your organisation and your customers. To persuade customers to give you access to their data, you are going to have to demonstrate how doing so adds value to them.

Furthermore, as high bandwidth connectivity becomes ubiquitous (customers being ‘always on and always connected’) you can expect an increase in demand for immediate and personalised services on the customer’s terms, irrespective of time or location.

Also, I expect to see the emergence of collaborative ecosystems, where multiple vendors cooperate in delivering efficient and empathic ‘whole journeys’ for customers – based on common cloud-based platforms.

As these technologies continue to evolve, AI will play an ever-increasing role in orchestrating customer and employee journeys, augmenting the best of what humans can deliver.

Conclusions

First and foremost, resolving a customer’s query is still your highest priority and the biggest contributor to customer satisfaction, but doing so with empathy is also critically important and affects how they feel about both the service interaction and your brand.

Delivery empathy in customer service is not a ‘nice to have’, it is a ‘must have’ for your business; when your customers are treated with compassion, it builds loyalty that translates into greater life time value through increasing tenure and revenues and lowering costs.

When your customers are emotionally charged, how you treat them will be reflected in what they say publicly about their experience – good or bad. Humans like telling stories to each other and when they do, they often focus on how they feel.

Companies and agents that can display empathy cannot ‘lose’ – they will always be perceived as ‘better’ by customers, even when you cannot give the customer what they want or resolve their query.

“Empathetic agents ‘win’ either way – and this is reflected in customer experience measures and business results.”

Finally, although not explicitly referenced in the research, I want to add that operationalising corporate empathy is not just an option for large enterprises: modern cloud-based platforms, combined with human-centric design allows even small and medium enterprises to compete on empathy.

Next steps

If you haven’t already, read the research, it is full of data and insights that should influence your thinking about how to deliver an outstanding customer service interaction

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