The Customer Service Solution: Managing Emotions, Trust, and Control to Win Your Customer’s Business: Managing Emotions, Trust, and Control to Win ... to Win Your Customer's Base (BUSINESS BOOKS) - Hardcover

Dasu, Sriram; Chase, Richard B.

Hardcover

ISBN 10: 0071809937 ISBN 13: 9780071809931

Publisher: McGraw Hill, 2013

Synopsis

Understand Consumer Psychology to Drive Profits and Growth

Want to know exactly what’s driving your customer's behavior?
NOW YOU CAN!

The Customer Service Solution explains how consumers perceive services and shows you how toenhance the customer experience--every time.

In this economic climate, the customer service experience is more critical than ever. Most leading service firms advocate the TLC mantra: Think Like a Customer. That's a good practice, but first you have to understand what your customer is thinking and feeling. Today's business leaders cannot afford to neglect the psychological principles that govern customer satisfaction and long-term loyalty.

What are the factors that really determine customer satisfaction? Two of the nation's leading authorities on service psychology, Sriram Dasu and Richard Chase, have written this groundbreaking guide that identifies and demystifies the psychological triggers behind customer behavior. You'll go where customer satisfaction surveys, mystery shoppers, and focus groups can't--and learn exactlywhy customers respond and behave the way they do.

With findings drawn from behavioral science research, this book provides all the tools you need to evaluate your current service platforms and design future strategies to enhance customer perceptions positively and drive your sales.

The Customer Service Solution illustrates whyeven companies with high levels of satisfaction are missing tremendous opportunities by neglecting the emotional elements that govern consumer interactions.

This book will show you how to:

• Shape and manage customer perceptions
• Understand implicit versus explicit outcomes
• Develop the roles of control and choiceamong buyers
• Design emotionally intelligent processes
• Build trust among customers

Whatever your business may be--healthcare, hospitality, financial services, e-commerce, and more--this book is an essential tool to help you increase profits by leveraging your company's customer experience.

PRAISE FOR THE CUSTOMER SERVICE SOLUTION:

"Harnessing the power of emotions will help to drive an exceptional customer experience creating customers for life to help your business thrive. Finally, a guide tohelp us better understand how to do this." -- James Merlino, MD, Chief Experience Officer, Cleveland Clinic

"Required reading for anyone designing a service encounter." -- James Heskett, Professor Emeritus, Harvard Business School, coauthor of The Service Profit Chain and Service Future

"I have always known that our customers shop with us because they want to, not because they have to. How to make them want to is the secret that this great bookunlocks." -- Kevin Davis, President and CEO, Bristol Farms

"[Dasu and Chase] share easy-to-understand ideas and guidance to operations managers who typically do not think about the psychology of customers in designing their services." -- Mary Jo Bitner, PhD, Professor andExecutive Director, Center for Services Leadership, W. P. Carey School, Arizona State University

"Dasu and Chase provide an excellent set of ideas for delivering emotional customer service experiences through systems and operations." -- Rodolfo Medina, Vice President, Marketing & Commercial, Rock in Rio

"This book provides valuable insights to managing and molding the customer's emotional journey, leading to ultimate satisfaction and sustainable loyalty." -- Ali V. Kasikci, Regional Managing Director, Orient-Express

About this title

About the Author

Richard B. Chase is Director of the Center for Operations Management Research and Education at USC. He is widely published in both books and academic journals and is considered one of the top service "gurus" in the field. He is on the Editorial Advisory Board of the Journal of Operations Management, an Advisor to Production and Operations Management journal, and a Fellow of the Decision Sciences Institute.

Excerpt. © Reprinted by permission. All rights reserved.

THE CUSTOMER SERVICE SOLUTION

Managing Emotions, Trust, and Control to Win Your Customer's Business

By Sriram Dasu, Richard B. Chase

McGraw-Hill Education

Copyright © 2013 Sriram Dasu and Richard B. Chase
All rights reserved.

ISBN: 978-0-07-180993-1

Contents

PREFACE
ACKNOWLEDGMENTS
CHAPTER 1 CUSTOMER SERVICE SOLUTIONS: LEVERAGING CUSTOMER PSYCHOLOGY TO 
DESIGN SERVICE OPERATIONS
CHAPTER 2 DESIGNING EMOTIONALLY INTELLIGENT PROCESSES
CHAPTER 3 ENGENDERING YOUR CUSTOMERS' TRUST
CHAPTER 4 SHAPING YOUR CUSTOMERS' PERCEPTIONS OF CONTROL
CHAPTER 5 SEQUENCING THE EXPERIENCE
CHAPTER 6 TIME WARP: DURATION MANAGEMENT
CHAPTER 7 ATTRIBUTION: ENSURING THAT YOU GET YOUR DUE
CHAPTER 8 PUTTING THE CONCEPTS TO WORK
ENDNOTES
INDEX

CHAPTER 1

CUSTOMER SERVICE SOLUTIONS LEVERAGING CUSTOMER PSYCHOLOGY TO DESIGN SERVICEOPERATIONS

I know what I have given you. I do not know what you have received.—Antonio Porchia, Voces

Many service firms advocate the mantra TLC—think like a customer—in designingtheir service interactions. The problem is that they don't have a good handle onhow customers really do think and as a result miss opportunities to become trulyexcellent. Indeed, while most successful service companies address the obviousthings that affect customers' psychological attitude toward the service, such ascourtesy and responsiveness on the part of their employees, they could do muchmore if they understood customer psychology at a deeper level.

The developed world's economies are dominated by service firms. This has comeabout not because of their excellence, but rather through a combination ofmarket demand and creative development of new services. While the technologiesthat underlie service have evolved at a rapid rate, the approaches to designingand managing how the customer experiences the everyday delivery of serviceremain almost primitive.

Typical approaches to improving the service experience include analyzingcustomer satisfaction surveys, engaging in mystery shopping, and conductingfocus group feedback sessions. These are all good, of course, but unfortunatelycustomers cannot always articulate what shapes their perceptions and judgments,nor can company experts read between the lines to find out what drivescustomers. The result is often disappointing levels of customer satisfaction ingeneral, even for companies that by all the standard criteria seem to be doingthings right.

IMPLICIT OUTCOMES ARE IMPORTANT FOR YOUR CUSTOMERS

The first step in raising customer experience levels is recognizing theimportance of implicit outcomes from a service encounter. The focus of serviceorganizations is often on explicit outcomes, such as on-time flight arrivals orthe time to resolve a customer's call. However, subjective or implicit outcomes,like emotions and feelings generated by a service encounter, are rarelyconsidered. Did the passenger walk out of the airport happy? Did the customertrust the advice received by the service agent? Does the patient feel motivatedenough to comply with the doctor's recommendation? At the end of the baseballseason, is the fan sufficiently excited to renew her season tickets? When anaccident victim calls his automobile insurance agent, does he feel more incontrol of his life?

A common assumption is that as long as the explicit outcomes are well managed,the customer experience will be great. Consider the following examples:

• Think about two rounds of golf in which your overall score is par. In oneround on the eighteenth hole you shoot a double bogey, and in the other roundyou shoot a birdie. The outcome was the same, but wouldn't how you feel at theend, what you would recall about each experience, and how you summarize theseexperiences be very different?

• Jim and Mary are two longtime customers of a catalog retailer. The lastpurchase made by Jim was a bad experience, while Mary's was unremarkable. Thenext time Jim and Mary call the retailer, would they be paying attention to thesame elements of the conversation?

At the core of our idea is that similar service encounters with identicalexplicit outcomes can be perceived very differently.

TYPES OF KNOWLEDGE NEEDED FOR DELIVERING IMPLICIT OUTCOMES

Explanations abound for why the delivery of service has not really moved beyondexplicit outcomes. The most common explanation is that service encounters areintangible and that people-intensive processes are inherently unpredictable andhence uncontrollable. Thus by extension they are "undesignable." This view hasbeen accepted and abetted by management books and articles that discuss servicemanagement as an art. Our current system of service delivery also has beenallowed to prevail because a few exemplars have excelled at creating positiveservice cultures: friendliness and helpfulness at Apple Stores, the "everybodyis a cast member" joyfulness of Disneyland, and the "ladies and gentlemen serveladies and gentlemen" decorum of Ritz Carlton.

We hasten to point out that this cultural imprinting is no mean feat. Rather itis the bedrock of any effective service business. Unfortunately, most serviceexecutives don't recognize that what has been seen up to this point as theentire service experience is merely the platform, the necessary context forhandling behavioral aspects of service. Getting to the next level calls for anunderstanding of service interactions that matches in depth and rigor theunderlying goods production, or in the service sector, something akin to amedical procedure.

Carefully reengineering processes using techniques such as Six Sigma and leanenables firms to improve explicit outcomes and reduce costs. In other words,firms can achieve better quality at a lower cost. Those of us who have been inthe quality business for many years no doubt recall the phrase "quality isfree." Just as deeper understanding of systems dynamics and process analysisforms the bedrock of traditional process engineering techniques, findings frombehavioral decision making, cognitive psychology, and social psychology canpoint service providers to ideas for redesigning the psychological or implicitaspects of service encounters.

Fortunately, we don't have to start from scratch. We have a virtual treasuretrove of behavioral research findings. In this book we take these findings andfor the first time discuss how firms can apply them systematically to the designand management of service processes.

The flavor of what we are talking about is captured in the following example.Danielle, a pediatric dental hygienist, has almost finished cleaning Spencer'steeth. Spencer is a skittish six-year-old who suffers from a mild form ofgingivitis and has several cavities. He is a frequent visitor to the clinic.Danielle suddenly finds that she has scraped a particularly sensitive spot. Shestill needs to clean two more teeth, which she is sure are not as sensitive. Shecould either terminate the procedure and resume on the next visit or completethe cleaning today. If she were to continue, she would subject Spencer to morediscomfort, although significantly less than what just transpired.

In addition to medical concerns, there are other factors Danielle must considerin making her decision. How will this decision influence Spencer's perception ofthe cleaning experience and his behavior on subsequent visits? Wouldn'tcontinuing increase the total pain and therefore render the experience even moreunpleasant?

Findings in behavioral research suggest that continuing the procedure at lowerlevels of pain may actually cause people to have a less negative recall of theexperience. In this case, Spencer would remember the little incident, of course,but also that the pain "wasn't so bad at the end." If Danielle applies thesecounterintuitive findings in behavioral science to shape the service encounter—lengthenthe experience and end with less pain—she will improve Spencer'sperception of the appointment.

This brings us to the issue of why understanding customer psychology helpsmanagers deliver better service. First it helps them understand what shapescustomers' perceptions and how customers summarize and recall experiences. As wesee in the example above, customers employ heuristics and rules that they cannotalways articulate. Second, in other cases the feelings and emotions that drive acustomer's perceptions might be obvious if the firm had processes in place todetect them. Take for instance the example of Jim and Mary, who had differentprior experiences with a catalog retailer. If the customer representatives wereaware of the caller's history, they could adapt their responses accordingly.This could make a difference to Jim in particular because his previous call didnot go well. Even the customer service agent will benefit if he or she knewbefore answering the call that Jim may be angry or annoyed. The third reason isthat managing service interactions can be very complex because of the largenumber of employees involved in delivering a service or because there areseemingly too many factors that may shape the implicit outputs. MGM Grand andFarmers Insurance each employs tens of thousands of employees, and theseemployees interact with millions of customers in a wide variety of situations.In other settings, such as healthcare, the customer often enters the systemhighly flustered with a complex set of emotions. The employees are trained tofocus on taking care of the explicit concerns, in this case health-relatedissues, and may not have the skills, knowledge, or motivation to address theimplicit concerns, such as the anxiety and stress of the customer.

The purpose of this book is to identify the rules that customers employ tosummarize experiences—the factors that shape their perceptions—and presentmethods for systematically designing service processes to deliver implicitoutcomes. We accomplish this by leveraging findings in social sciences,cognitive sciences, and behavioral decision making.

PARSING THE SERVICE ENCOUNTER

A service encounter consists of a customer interacting with an organization forthe purpose of achieving some goal. The interaction may be either face-to-faceor through telecommunications. It could be a single interaction, such as buyingan airline ticket, or one of a series of interactions that is required tocomplete the service, such as airline check-in, flying, retrieving luggage, andso on. Encounters also occur over extended periods of time, such as multiplevisits with a real estate agent when people are buying a new home or meetingswith an obstetrician during various stages of a woman's pregnancy.

The issue is how to improve such encounters. A major inhibitor to achieving thisgoal is the lack of precision in scientifically defining the fundamentalelements that take place during the encounter. The problem lies in the wordservice itself. It is a blanket term that means different things to differentpeople. If we say we had great service at a bank, it doesn't tell us what wasgreat about it. Usually it is a combination of things working well together, butwithout further analysis, the term service fails to make the importantdistinction between the work required to provide the service and the attitudesof service personnel who deliver it. To address this problem, as well as otherssurrounding services, we need to do what every other science does: establishoperational definitions that permit focused analysis of cause and effect. Auseful such categorization is the three Ts (see box).

IT IS ALL ABOUT YOUR CUSTOMERS' PERCEPTIONS

Ultimately what matters is how customers perceive a service encounter. Eachservice consists of a core task. How this task is executed shapes ourperceptions of the encounter. We want to reemphasize that the core task canalmost always be accomplished in multiple ways and that the perceived experiencecan be very different from customer to customer. In the foregoing example,Danielle could have achieved the same medical outcome in a number of ways. Shecould have, for example, deferred the most painful part of the procedure to theend, assuming that she could let the child go immediately after. But whateverher choice, it would have had considerable bearing on little Spencer'sperceptions of the experience. Even though it doesn't seem like extending painwould be better for the customer, this is just another nonintuitive rule forsummarizing experiences.

Obviously positive recollections of past experiences encourage customers to comeback. Therefore, the more managers understand the science behind how we evaluateexperiences, why we attribute blame or credit, and how memories are created andrecalled, the better they know what constitutes a positive experience and themore effective a job they can do in the design and management of serviceencounters. In the design area, for example, such knowledge is useful forplanning the number of stages of the service, the sequence in which eventsoccur, the duration of the events, the frequency of "touching" customers asservice unfolds, the types of information shared, the nature of theinterpersonal interaction, the layout of service facilities, and the technologyrequirements. In the management area, this knowledge, coupled with behavioralfindings on communication and culture, can help managers with staff selectionand training.

FACTORS THAT SHAPE YOUR CUSTOMERS' PERCEPTIONS

We have identified six closely interrelated factors that shape perceptions. Thefirst is the sequence in which the events unfold; the second is the duration ofdifferent events and our perception of time; and the third is the degree ofcontrol and choice given to the customer. These first three factors can bedirectly incorporated into the design of the service system. These influence thenext three factors, trust, emotions, and the attribution of blame or credit fora bad or good experience (see Figure 1.1).

Often the customer and server have to work together to create the output. Whateach player observes and how he or she reacts and cooperates depend on thedegree of trust they have in each other and on their emotional states. Theoutcome of each event in turn influences trust and emotions. These two factorscan be thought of as platforms on which the service encounter takes place.

Once the service is completed, customers attribute success or failure. The finalfactor we explore is the heuristics used by consumers to lay blame or givecredit.

Factor 1: Sequence of Events

All service experiences consist of series of events that occur over time. Thetendency of laypeople is to focus on a strong start and assume that things willsubsequently take care of themselves. At the other extreme we have servicefolklore that suggests that every minute is significant. Neither belief isaccurate. In fact, a few pivotal moments have a disproportionately large bearingon how we summarize and recall an experience; one of those pivotal moments, aswe have seen above, is the end of the transaction.

To illustrate this idea, consider a 7-hour drive from San Francisco to LosAngeles, during which the first 45 minutes are in stop-and-go traffic and therest of the journey is at the speed limit. Compare this to another 7-hourjourney between the same cities, during which only the last 45 minutes are instop-and-go traffic. Are the two journeys perceived the same way? The personhitting traffic at the end of the journey will likely have stronger memories ofthe negatives of the trip, while the person who got the pain out of the wayfirst will come away with stronger feelings that the overall trip went wellbecause it ended well.

Does this mean the start does not matter? Take, for example, a third 7-hour tripfrom San Francisco to Los Angeles that begins with 25 minutes of bad traffic,the middle of the journey at the speed limit, and the last 20 minutes of badtraffic again. The initial 25 minutes set the precedent for the traveler topossibly add stronger negative feelings to the traffic at the end of the trip.

The main point is that the sequence in which events unfold and the key momentssuch as highs, lows, and endings have a bearing on how we perceive anexperience. We find that managers rarely pay attention to the sequence effects,in particular the role of the ending. In the chapter on sequence effects, wedelve into the following questions:

• How can firms alter the sequence of events to improve perceptions of anexperience?

• Does the sequence effect apply to all types of services, including grocerystores, retail banking, rock concerts, and obstetrics? Or is it only limited tosome types of services?

• How important is a peak event? Should firms ensure that all moments areequally good, or is it optimal to invest in a unique highlight?

Factor 2: Duration of Experiences

Time is an integral part of any service, and service managers do worry aboutduration. Much of traditional process improvement efforts are directed atreducing processing and waiting times. Nevertheless, waiting is unavoidable. Notevery chore can be done instantly, and all good things do come to an end. Thisbrings us to perception of time. To illustrate the psychology of time, considertwo situations. In the first, you wait 20 minutes for a radiology report, andthen have to wait another 20 minutes for a blood analysis report. So youexperience a combined wait of 40 minutes for both reports. The two situationswould likely generate different levels of dissatisfaction. Further, how wouldyour perception of time be affected if patients who arrived after you wereserved before you?

(Continues...)

Excerpted from THE CUSTOMER SERVICE SOLUTION by Sriram Dasu, Richard B. Chase. Copyright © 2013 Sriram Dasu and Richard B. Chase. Excerpted by permission of McGraw-Hill Education.
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Edition details

• Publisher: McGraw Hill
• Publication date: 2013
• Language: English
• ISBN 10: 0071809937
• ISBN 13: 9780071809931
• Binding: Hardcover
• Number of pages: 240