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Customer Relationship Status: It’s Complicated

Customers appreciate the speed and convenience of digital transactions, but to earn their long-term loyalty, enterprises must build emotional affinity.

When online commerce burst forth in the mid-1990s, followed by the heady years of dot-com mania, marketers believed they had reached nirvana with the speed, convenience, selection, and plain cool factor of online stores.

Digital technology revolutionized the way companies interacted with customers by making the research and purchasing processes more convenient. Yet research shows that companies have a long way to go in effectively using digital technologies to engage with their customers. Just 49% of consumers say their experiences using Web sites on desktop and laptop computers are excellent, while a mere 18% of consumers say the same for shopping with mobile Web sites or apps, according to research by IBM (see “Omnichannel Opportunities to Create Emotional Affinity and Trust” below).

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The reason behind the failings of all this great technology is that loyalty is driven by positive emotions not just by efficiencies. Ninety percent of purchasing decisions are made subconsciously, according to Caroline Winnett and Andrew Pohlmann of The Nielsen Company. Meanwhile, neuroscientist Antonio Damasio has found that for patients with brain damage affecting their abilities to feel emotions, making any decision at all is difficult.

Improving emotional affinity in digital requires a culture that’s hyper about monitoring and pleasing customers.

By developing a concerted strategy to foster positive emotions in digital, companies can reduce churn, lower customer acquisition costs, and grow revenues per customer. “It’s getting harder and harder to put your message in front of customers effectively and efficiently,” says Tim Peter, founder of Tim Peter & Associates, an e-commerce, Internet marketing, and business strategy consultancy. “If you can get them once, you will more likely reengage them. My clients see emotional engagement as a differentiator.”

How does a company move from the robotic, unfeeling interface of technology to an experience where the customer can sense the people and brand behind it all? There’s no single method here; improving emotional affinity in digital requires a culture that’s hyper about monitoring and pleasing customers. It also begs for a hybrid approach of merging human experiences with digital, investing in omnichannel integration, and developing more creative approaches to online branding. Here are five approaches to building stronger emotional affinity to your brand both on- and offline:

1. Create the hybrid experience

Digital offers speed and convenience. To add emotion, companies need to bring in a human element so customers can get answers to  questions faster or interact with an agent while they’re browsing or  conducting a transaction online. That hybrid experience can pay off when e-commerce fails to deliver the satisfaction it once did. The e-commerce experience is particularly frustrating when a customer seeking a specific item sees thousands of results, and that frustration can have devastating results: 89% of customers surveyed by Harris Interactive said they started doing business with a competitor after a negative customer experience. Bringing in a human being—and knowing exactly when to do it—is the key to preventing negative emotions from sabotaging the overall experience. There are several ways to do it, including:

Start a conversation at the right time—and keep it going. Click-tracking technology can sense when a customer can’t find something and can initiate a click-to-call-me or chat box. Another idea: Loyalty programs typically reward customers with a few bucks back after spending large amounts of money. Instead, give loyal customers a gift of premium support on every channel they visit.

Put a face to the conversation. In the business world, Skype video calls and Google Hangouts have brought meaningful face-to-face interaction to the remote work a high percentage of people are doing these days. Why not do the same with customers? A solution called LiveShop offers video technology that allows customers and agents to see each other. The company’s philosophy is that eye contact helps the customer complete a task faster and leaves no room for confusion. “This is about showing customers that you know them and that you care,” says Joseph Pine, co-founder of Strategic Horizons LLP and author of The Experience Economy: Work Is Theatre and Every Business a Stage.

Show them how. In a similar vein, companies could be making better use of tools such as video demonstrations and animation-based training to educate existing customers and gain new ones. Pine likes Blendtec’s Will It Blend? video series, for an entertaining, visual experience of a product’s potential. The humor doesn’t hurt, either. In a 2011 interview, company founder Tom Dickson said that since launching the videos, sales have shot up 500%.

2. Create an empowering employee culture

Empathetic, empowered employees are a company’s best asset. These are people who are service oriented, friendly, and calm during moments of stress and who can use technology and information to help customers at their moment of need. But such employees don’t just materialize. Companies need to provide the building blocks for success, which starts with motivation.

While boards regularly reward their top executives for their successes, the people who interact with customers every day sit in cubicles, earning just their salary or wage. “It’s been my experience that those frontline people who are out there facing the client every single day will provide the pull upward, if you can communicate to them how they fit in,” says Donna Peeples, a customer experience consultant and former chief customer experience officer at AIG. “Reward them for the differences they’re making, create career paths, and pluck the most talented out so they can help continue to drive the change.”

Companies must empower employees at the point of interaction by giving them access to the best possible information on customers: profiles, order history, customer service history, feedback, and preferences. Measure employees on customer outcomes—was the problem resolved quickly and to the customer’s satisfaction?—not on shortsighted, cost-centric metrics like call times.

Those frontline people who are out there facing the client every single day will provide the pull upward. Donna Peeples, customer experience consultant

Train workers, survey customers, refine strategy, and then train again. After all, customers change over time; therefore customer service and customer experience strategies must change, too. By focusing on employees first, customers will benefit. For instance, the empowered employee culture can:

Capitalize on negative experiences. When someone goes on social media and blasts a competitor for shoddy treatment, take advantage by reaching out on behalf of your company with a kind message to help. When Arizona Public Service blew out a transformer in the middle of summer, executives knew there’d be trouble. Rather than resort to the typical silent treatment during the outage, the utility started a social media campaign, encouraging customers to help by conserving energy until the equipment was fixed, according to Curtis Bingham, executive director at the Chief Customer Officer Council. “Show that customers are being heard and are part of the solution.”

Give customers a job.  Forget online discussion rooms. Give jobs to your customers—ones they’ll happily do in exchange for a stronger voice in company direction. UK mobile phone carrier giffgaff entices customers with no contracts and has a following of passionate customers who take part in a number of operational activities. They handle customer support requests, create ads, and even provide input on strategy and pricing.

“By involving customers in your business, be it in resolving issues or refining strategy, you create far more powerful emotional affinity—and stronger customer engagement,” Bingham says. “This engagement goes beyond loyalty, a mere intent to repurchase.”

Stop treating service as a cost center. When Zappos was preparing to launch its e-commerce site in 1999, people thought the company was foolish to sell shoes online, says Jon Wolske, culture evangelist for Zappos Insights, a division that provides cultural training services and events. “But the strategy was if we make returns easy and free, it alleviates a lot of the frustration of going to the mall,” he says. “Our approach since the beginning has been about making shoe buying a positive experience.” The company gives its agents the freedom to do whatever is needed to wow the customer.

That means no limits on call times and the ability to throw in a perk—such as one-day shipping—when the situation warrants. “Most companies look at service as a cost center,” he says. “But Zappos invested in customer experience and that has driven loyalty, and then viral marketing comes from that.”

Make customer experience core to hiring.

Zappos reports that 40% of new customers to its Web site have been referred by a friend. The company provides many ways to search for products, free shipping in five days or less, real-time inventory so the customer will never order something that’s not in stock, and a policy not to backorder items. The culture of delivering great customer experience is a core value in hiring, Wolske says. “We look for candidates who are naturally customer oriented, not someone whom we think can change.”

(The same principles apply to external partners who are at the front line of service delivery. Read “Brand and Deliver” in this issue to learn more.)

3. Use branding and stories to drive emotional affinity

Madison Avenue has long tried to appeal to customers’ emotions, but mobile app and Web site designers have taken a traditional IT approach: functionality and speed rule. Given the power of multimedia and social networking, though, there’s no reason why digital marketing should be stuck in the past.

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One company that gets the possibilities is Coca-Cola, which has filmed dozens of videos that have gone viral on YouTube, spreading Coke’s simple emotional message of happiness, for a nominal investment compared to TV advertising, says Pine. In one video, travelers at Dubai International Airport on their way home for the holidays receive a surprise of extra luggage tags from Coca-Cola so they can bring home gifts and supplies to friends and family.

Some ways to develop emotional affinity to your brand through digital include:

Segment messaging. Tim Peter, who works frequently with hospitality customers, suggests creating categories such as repeat versus one-time guests, and business travelers versus leisure travelers. Then tell a distinct, emotional story to engage each segment and drive more business, he advises

Understand the emotional impact behind the message.  The companies that do a poor job of digital storytelling aren’t clear on how their messages really make customers feel. Consider the controversial Super Bowl ad by Nationwide Insurance, “Make Safe Happen,” in which a boy ponders the life that he will never have, since he died in an accident. The link to insurance, which was tenuous at best, was overwhelmed by the negative emotions generated by the ads.

Use humor. An upstart has a lot to prove, particularly in a commodity market such as razor blades. Dollar Shave Club sells blades for a dollar and uses tongue-in-cheek videos to throw water in the face of high-tech blade manufacturers. One memorable segment: “Are our blades any good? No. Our blades are [expletive]-ing great!

Shock when appropriate. Sometimes, audiences will give permission to be shocked and saddened, but only when the situation merits it. Consider the award-winning spots for TV, print, and online by the Meth Project, a nonprofit foundation that relies on donations and volunteers to fight meth use. The campaigns show images of teens with blistered mouths and lifeless eyes and emergency room scenes with phrases like: “No one thinks they’ll end up here. Meth will change that.”

4. Bring joy across the omnichannel experience

In retail and consumer goods industries, delivering perfectly executed processes for the customer is critical for gaining market share. There’s too much competition to screw up the order process or to have surly, poorly trained employees working your cash registers and phones. Expectations have risen so high, and switching from one merchant to another online is so easy, that the slightest hiccup can frustrate customers enough to leave you. They don’t think in terms of separate channels such as mobile apps, e-commerce, and catalogs; it’s all the same to them and it had better be awesome, everywhere.

Maple --- Image by © Randall Fung/CorbisConnecting the emotional dots across channels starts with tracking what customers are doing and determining which actions might signal frustration. Rethink interactions from the customer perspective. Let’s say a customer calls a company after browsing its Web site and not finding what she wants. The agent should be able to shadow the customer on the site, point out items that she might like and, if dealing with a repeat customer, recognize her and suggest other ideas based on past history.

T-Mobile agents are trained to follow a customer from one channel to another, such as from a Twitter exchange to a phone call. This eliminates the aggravating ping-ponging between agents and the need for a customer to re-explain the problem to a new person. It requires integrated call-center software so that the agent can click between channels on one screen while viewing customer history. It also requires employees to have the skills to navigate those multiple channels effortlessly.

Here are three ways to build emotional affinity in an omnichannel experience:

Treat the customer the same everywhere. An online promotion should also be available in a physical store and vice versa. Brands need to be consistent and understand who their customers are, end to end.

Create a frictionless process. Sometimes the strongest positive emotion is generated when everything works perfectly and expectations are exceeded. “Amazon has digitally replicated the perfect customer interaction and by doing so has all but eliminated the need to talk to anyone,” says Bingham. “It’s anticipated buying needs with ratings, reviews, and social proof, and it has provided readymade solutions to the most common problems.”

Integrating data from CRM and marketing systems, social media feeds, e-commerce and accounting systems, and trend data and analytics provides the foundation for doing so. It enables the right context for meeting a customer’s needs.

Real-time integration of systems can also prevent frustrating experiences, such as a customer ordering a product needed now, only to discover later that the item is backordered. A frictionless process would, for example, alert customers of inventory status prior to purchase and ease the often-painful chore of returning products and confirming refunds.

Look for moments of truth. Determining what exactly customers want in a digital experience is challenging. “Focus on improving what you can really change,” says Denis Pombriant, a CRM analyst and author of Solve for the Customer. He suggests using surveys, social media, and journey-mapping tools to discover the most important moments of truth for customers. Having someone tweet that they hate a company might present an opportunity to connect and create a positive interaction, for instance. Pombriant explains: “It’s filtering all these conversations using the tools we have and relating them back to the business.”

5. Determine whether personalization will make a difference

Marketers have been touting the nirvana of one-to-one marketing and personalization for years. It’s unclear, though, which customers actually care about this. Some consider it a borderline privacy invasion when a company tracks their every move and pushes offers based on something they looked at, downloaded, or purchased recently.

Pale Gray Paper --- Image by © M. Angelo/CORBISAs well, personalization isn’t always appropriate. When online shoppers were simply looking at a product category, ads that matched their prior Web browsing interests were ineffective, an MIT study found. Yet after consumers had visited a review site to seek out information and were closer to a purchase, personalized content became more effective than generic ads.

A study by Pedro Coelho and Jörg Henseler published in the European Journal of Marketing found that personalization didn’t make a huge difference to a customer unless the individual had low levels of satisfaction with the brand.

Yet companies can strike a chord by being more relevant with communications based on someone’s customer profile and past behavior or by making purchasing processes easier (such as by prepopulating forms for the customer based on previously collected data). Too often, customers share data only to receive coupons and recommendations for things they never buy. First, understand better exactly what your consumers would buy based on past purchases. Then offer something that they hadn’t thought about purchasing but might consider based on an intelligent analysis of their profile, interaction, and order data.

Timing is also critical. Instead of spamming customers and prospects with messages when they’re not ready to buy, wait for them to come back to your site or app, recognize them, and then deliver something new and exciting.

Given the lower costs for processing and storing terabytes of data, companies can now feasibly combine and crunch all the customer data points needed to drive relevant interactions. Start with in-memory technology for fast processing, and then add a repository to store all the transactional, mobile, sensor, and Web data points detailing every customer interaction. Such a system should contain line-item data to make correlations, such as the fact that Customer X always buys Product A and Product B together. This level of detail provides the ability to predict what the customer might buy next and when or offers an insight into why the customer didn’t buy.

Ideally the repository will connect with inventory systems so that the company is confident that it can serve up a particular offer at a given point in time. Large companies with legacy systems and disconnected processes will have a harder time doing this, and at considerable expense. Yet someday soon a connected customer activity platform will be table stakes for doing business online.

Massachusetts, USA --- Woman paying for clothing on mobile payment dongle --- Image by © David Shopper/Corbis

Emotions Never Stop

Answering the question “what do customers want?” is a never-ending process. Clearly customers don’t just want a product or service quickly and for the right price. Customers return to companies because they have superb emotional experiences: Starbucks isn’t the only company that makes tasty gourmet coffee drinks, but it’s always pleasant to walk into a Starbucks store and buy a drink. Customers return to restaurants, hair salons, and car repair shops because of the people—and the subliminal feeling that those people actually care about them as a person.

In digital, the emotional connection is harder to establish but it’s just as important. Customers everywhere are pressed for time, money, and patience. According to Peeples, achieving that emotional connection requires a company-wide commitment to the customer experience. She observes: “It must be clearly communicated that it’s not a one-time thing. It’s a campaign not unlike a political campaign, and companies have got to push the message down from the top.

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Executive Quarterly, Q4 2015, Feature 3