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The Theory of Jobs to Be Done has the power of shifting perspective in the areas of marketing and consumer behaviour, customer choice in particular: it advocates changing the focus of marketers from consumers as targets to what the consumers or customers wish to achieve by ‘hiring’ their companies’ products or services. The Jobs to Be Done Theory (or Theory of Jobs in short) is the central theme in the book “Competing Against Luck: The Story of Innovation and Customer Choice” (2016) authored by Clayton M. Christensen (with three colleagues). Christensen, a professor of Business Administration at Harvard Business School, passed away in late January 2020 at the age of 67.  His book is one of the more illuminating, and nonetheless captivating, books I have read in the field in recent years; this post is written in tribute to Clayton Christensen and his valued contribution to knowledge and practice.

Christensen is probably known better to many engaged in management for his important, foundational work on disruptive innovation: how enterprises with original and ‘unorthodox’ approaches get to disrupt existing markets and unsettle incumbent companies or non-profit organizations. In many cases the new approach may alter the boundaries defining existing markets. Most often the innovation is technology-enabled, yet it is not all about technology but about a divergent and ingenuine way of thinking. The Theory of Jobs is actually aligned with his previous research: giving an innovative, better answer to a job consumers try to complete, where other solutions failed or disappointed, can cause disruption in a respective market.

Consumers have goals they wish to achieve or tasks they aim to accomplish — a ‘job’ is defined by a task or goal set by the consumer in a certain condition. More punctually, the ‘job’ is the progress consumers are making towards accomplishing their task, or getting the job done. It may often be constituted by a problem the consumer wants to solve. Christensen views consumer needs as something too vague and general, not describing closely enough the issue a customer faces and tries to resolve in a given situation. The job, however, is context-specific, described from the viewpoint of the consumer. The job can have functional, social and emotional aspects or drives that may change with circumstances (e.g., is George driving to work or spending time with his children in the mall? — in each case a milkshake can serve a different job, is Jane looking for something to eat in front of her TV or something to prepare for dinner for her family?)

The approach proposed by Christensen is not entirely new — it is inspired by a concept put forward by Theodore Levitt in the 1960s when criticising ‘marketing myopia’ — it is not the product that is of interest to consumers but what they need it for (e.g., solve a problem) or what they want to do with the product (e.g., people are looking for transportation, not necessarily for trains or cars, one does not buy the electric driller but the hole in a wall that can be made with it, for example to install holders for a shelf). In the same spirit, Christensen suggests that consumers do not buy products or services — they ‘hire’ a product or service to get a particular job done. Furthermore, the job does not dictate any specific type of product — a consumer may consider different types of solutions that lead each to hiring possibly a different type of product or service (e.g., taking a bus, riding a scooter, or walking {shoes}). However, Christensen seems to have evolved such ideas into a much more concrete plan for execution, one that goes beyond abstract needs and preferences to realistic tasks and goals, jobs encountered in specific circumstances in people’s everyday lives.

Customers remain central in the marketing strategies, plans and efforts of companies, but the emphasis of planning and analyses should not be put squarely on the customers and their characteristics (e.g., demographics, personality traits, lifestyles, needs, preferences). From the perspective of Jobs to Be Done, too much attention is given by managers to “who” the customer is, or even to “what” the customer did — the theory is focused  primarily on “why” the customer did something. Marketers have to understand much better the jobs that underlie the eventual choices made by customers. Because if  marketers understand why a certain choice was made, what job led to it in order to make progress, then they (and their associates) might be able to invent or develop an alternative solution (product or service) that customers would consider a better answer for that job the next time it arises. To obtain such understanding, Christensen and his colleagues advise that marketers should observe the behaviour of customers carefully and methodically (with aid of video), and listen to them. They propose five essential elements that should be captured in a struggle of a customer to make progress — what progress, circumstances, obstacles, compensating behaviour, and what makes a better “quality” solution.

A state of struggle is a crucial condition for a company to make impact on a customer’s choice– if a customer does not find himself struggling to get a job done, then one has no reason or motivation to replace his current solution, and is not likely to be open to alternative suggestions and offers. When a struggle does happen, a customer may ‘fire’ a product or service currently in use for the job in progress and ‘hire’ another as a solution to get the job done. Customers may be struggling to complete a job when a product they have so far employed turns out to be inadequate (e.g., terms of the job have changed, not necessarily due to the product’s fault) or its performance is disappointing. The theory seems to be concerned more with situations where the customer is not satisfied by the progress made with available solutions known to him or her and is voluntarily looking for alternative solutions. Additionally, customers may be struggling when they face a job for the first time. Whether a consumer is novice or experienced with a certain type of task or job, he or she may expand the range of product types and brands considered until identifying an apparently suitable solution for completing the job successfully (e.g., from the more usual and familiar options to the more novel and exceptional ones). Customers hire products or services, but may also fire others beforehand, and this can work in favour of a company or against it, thus creating threats as well as opportunities.

Christensen offers five ways where to find and uncover opportunities to create innovative solutions for Jobs to Be Done: (1) Finding a job close to home — gaps may arise in the more essential, daily and ordinary activities and tasks performed by consumers; (2) Competing with nothing — consider non-users who so far avoided tackling an issue or goal they have with available solutions because they believe those to be inappropriate or unsuitable for them — addressing ‘non-consumption’ can awake a new market segment; (3) Workarounds and compensating behaviours — when consumers cannot find a satisfying answer with available products or services offered as solutions they try to improvise and ‘invent’ their own solutions with existing means, often not intended for the made-up application — such cases should be identified to create a ‘tailored’ product-solution; (4) Look for what people don’t want to do — identify ‘negative jobs’ that are necessary but are seen as nuisance or burden (e.g., it comes at the worst time) to offer a relieving service that smoothens or reduces the burden of doing the job; (5) Unusual uses — a product that is consistently and constantly used for a purpose other than intended by the manufacturer may suggest a missing solution for an existing but unrecognised job that may now be fulfilled (this route seems close to the third route above). The five ways are briefly summarised here merely to demonstrate the scope of opportunities that Christensen (with his colleagues) opens up to practitioners to take initiative, not to rely on luck, and create innovative solutions that consumers may appreciate and adopt for their jobs.

The book “Competing Against Luck” is abundant with examples of jobs encountered by consumers and actual products and services developed and created to provide useful (working-functional) and fulfilling (social or emotional) solutions for them. The cases described help to illustrate jobs with different goals and in varying circumstances, and also to demonstrate research and enquiry methods for uncovering the jobs and devising solutions. The products and services cover a wide span of areas and domains for the interested readers to discover (e.g., distant online learning, shopping for matrasses, medical guidance and treatment, lodging, savings for children).

  • A Nugget for Thought: We could contemplate why men are shaving in different ways in the morning. Is M shaving every morning, every other day, or maybe just on weekends? M may be pressed in time for work and he just wants to keep a clean and decent look hassle-free (no time, no cuts, no mess); he can thus leave more time for other duties in the house before going out. His friend L may be keen about a particular look, an exact shape and cut of beard, that fits his self-image or the image he desires to have in the eyes of others (colleagues, friends etc.). We could also think about men who do not shave: N might grow a constant beard for religious reasons, but he may still wish to appear orderly and respectable, maybe even authoritative. The most suitable solution for the job of M may be an electric shaver whereas L may turn to a manual razor; N may be helped for his job by a set of scissors, a trimmer and a small brush. All three men would probably complete their jobs with some form of lotion or cream for their face (and beard). But are there any new devices, toolsets and services that can be made to help M, L, & N get their jobs done to even higher satisfaction and pleasure?

As an exception, I chose to conclude the post with a citation of Clayton Christensen from the chapter of Final Observations in the book “Competing Against Luck”  (p. 231):

I could go on for hours about how the Theory of Jobs helps us see the world in unique and insightful ways. Good theories are not meant to teach us what to think. Rather, they teach us how to think. I encourage you to continue the conversation from here in your home or your office after you put this book down.

I believe that this wish of late Clayton Christensen deserves to be adhered and fulfilled.

Ron Ventura, Ph.D. (Marketing)

Reference: 

Competing Against Luck: The Story of Innovation and Customer Choice; Clayton M. Christensen, with Taddy Hall, Karen Dillon and David S. Duncan, 2016; Harper Business (Harper Collins Publishers).

 

 

 

 

 

 

 

 

 

 

 

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Surge pricing is a variant of dynamic pricing (also known as variable pricing). The dynamics of prices means that prices can now change much more frequently and vary across customers, time and place at ever higher resolution; a price surge or hike at peak moments in demand can be described as an outcome of dynamic pricing. Surge pricing received great attention due to Uber’s application of this strategy, and not least because of the controversial way that Uber implemented it. But dynamic pricing, and surge pricing within it, is a growing field with various forms of applications in different domains.

A price surge is generally attributed to a surge in demand. In the case of Uber, when the number of customer requests for rides (‘hailing’) critically exceeds the number of drivers available in a given geographic area, Uber enforces a ‘surge multiplier’ of the normal (relatively low) price or tariff (e.g., two times the normal price). The multiplier remains in effect for a period of time until demand can be reasonably met. The advantages, as explained by Uber, are that through this price treatment (1) drivers can be encouraged to join the pool of active drivers (i.e., ready to receive requests on Uber app), as well as  pulling drivers from adjacent areas; and (2) priority can be given to a smaller group of those customers who are in greater need of prompt service and are willing to pay the higher price. Consequently, waiting times for customers willing to pay the price premium will be shorter.  (Note: Lyft is applying a similar approach.)

There are some noteworthy aspects to the modern surge pricing. A basic tenet of economic theory says that when demand surpasses the supply of a good or service, its price will rise until a match is reached between the levels of demand and supply so as to ‘clear the market’. Yet the neo-classic economic theory also assumes that the equilibrium price applies to all consumers (and suppliers) in the market for a length of time that the stable equilibrium prevails; it does not account well for temporary ‘shocks’. Proponents of surge pricing argue that this pricing strategy is an appropriate correction to a market failure caused by short-term ‘shocks’ due to unusual events in particular places. There is room in economic theory for more complex situations that allow for price differentials such as seasonality effects or gaps between geographic regions (e.g., urban versus rural, central versus peripheral). Still, seasonal prices are the same “across-the-board” for all; and regions of different geographic markets are usually well separated. On the other hand, in surge pricing, and in dynamic pricing more broadly, it is possible through advanced technology to isolate and fit a price to a very specific group of consumers in a given time and space.

One of the concerns with surge pricing in ride e-hailing is that the method could take advantage of consumers-riders when they have little choice, cannot afford to wait too long (e.g., hurry to get to a meeting or to the airport) or cannot afford a price several times higher than normal (e.g., multipliers of more than 5x). The problem becomes more acute as surge pricing seems to ‘kick in’ at worst times for riders, when they are in distress [1a](e.g., in heavy rain, late at night after a party). The method seems to screen potential riders not based on how badly they need the service but on how much they are willing to pay. The method may fix a problem for the service platform provider more than for its customers. Suppose hundreds of people are coming out at the same time from a hall after a live music concert. If the surge multiplier shown in the app at the time the prospect rider wants to be driven home is too high because of the emerging peak in demand, he or she is advised to wait somewhat longer until it slides down again. How long should riders wait for the multiplier to come down? Often enough, so it is reported, it takes just a few minutes (e.g., minor traffic fluctuations). But in more stubborn situations the rider may be able to catch a standard taxi by the time the multiplier declines, or if the weather permits, walk some distance where one can hail a taxi or get onto another mode of public transport.

Another pitfall is reduced predictability of the occurrence of surge pricing. Consumers know when seasons start and end and can learn when to expect lower and higher prices  accordingly (though it used to be easier thirty years ago). In public transport, peak hours (e.g., morning, afternoon) are usually declared in advance, wherein  travel tariffs could be elevated during those periods. Since surge pricing is based on real-time information available to the service platform provider, it is harder to predict the occasions when surge pricing will be activated, and furthermore the extent of price increase. Relatedly, drastic price changes (e.g., due to high frequency of updates, strong fluctuations) tends to increase the uncertainty for service users [1b].

The extent of price surge or hike is a particular source of confusion. Users are notified before hailing a Uber driver if surge is on, and a surge multiplier in effect at that time should appear on the screen. The multiplier keeps being updated on the platform. It is sensible, however, for the multiplier to stay fixed for an individual rider after the service is ordered. Thus the rider can make a decision based on a known price level for the duration of the ride (or an estimate of the cost to expect). Otherwise, the rider may be exposed to a rising price rate while being driven to destination — but the rider should also benefit if the multiplier starts to slide down (or entering another area where surge is off). The first scenario resembles more a situation of bidding whereas the latter scenario looks more like gambling. Stories and complaints from Uber users reveal recurring surprises and unclarity about the cost of rides (e.g., claims the multiplier was 9x, a ride of 20 minutes that cost several hundreds of dollars, a claim the multiplier dropped but the total price did not go down in accordance). Users may not pay attention sufficiently to the multiplier before hailing a ride, do not comprehend how the pricing method works, or they simply lose track of the cost of the ride (i.e., the charge is automatic and appears later on the user’s account).

Discontent of customers may also be raised by a sharp contrast experienced between the relatively low normal price rate (e.g., compared with a standard taxi) and the high prices produced by surge multipliers [1c].  A counter argument contends that the price hikes or surges allow for low rates at normal times by subsidising them [2]. More confusion about Uber’s pricing algorithm could stem from reports on additional factors that the company might use as input (e.g., people are more receptive of surge prices when the battery of their mobile phone is low, and customers are more willing to accept a rounded multiplier number than a close non-rounded figure just below or above it (MarketWatch.com, 28 December 2017).

  • Not even a strategy of surge pricing appears to be completely immune to attempts of manipulation. It was revealed in 2019 that drivers with Uber (and also Lyft’s) have tried to game the surge mechanism. The ‘trick’ is to turn off the app at a given time in a coordinated manner among drivers, let the surge multiplier rise, and then turn on the app again to gain quickly enough from the higher rate as long as it prevails. The method seems to have been used especially at airports in anticipation of incoming passengers, based on the knowledge of drivers of several flights scheduled to land during a short interval. The motivation for taking this action: the drivers claim they are not paid enough at normal times by the platform operators (BusinessInsider, 14 June 2019).

Uptal Dholakia, a professor of marketing at Rice University (also see [1]), suggested four remedies to the kinds of problems described above. First, he advised to set a cap (maximum) on surge multipliers and notify customers more clearly about them (greater transparency). In addition, he recommended curbing the volatility of price fluctuations and communicating better the benefits of the method (e.g., reduced waiting times). Dholakia also raised an issue about a negative connotation of the term ‘surge’ that perhaps should be replaced in customer communications [3].

Various forms of dynamic pricing, including surge pricing, are already utilised in multiple domains. It is noted, for instance, that the strategy of Uber was not initiated to resolve problems of traffic congestion; ‘surge’ may be activated as its result but the purpose is to resolve the interruptions that congestion may cause to the service. For dealing with traffic congestion and overload in roads, other types of surge pricing are being used by public authorities. First, a fast lane is dedicated on a highway or autoroute (e.g., entering a large city) for a fee — the amount of ‘surge’ fee is determined by the density of traffic on the other regular lanes. Drivers who wish to arrive faster should pay this fee that is displayed on a signboard as one approaches entry to the lane (a few moments are allowed to decide whether to stay or abort). Second, a congestion fee, which could actually be a variable surge fee, may be imposed on non-residents who seek to enter the municipal area of a city at certain hours of the day.

As indicated earlier, public transportation systems in large cities may charge a higher tariff during peak or rush hours. The time periods that a raised tariff applies are usually declared in advance (i.e., they are fixed). Peak and off-peak rates may apply to different types of travel fares. The scheme is employed to encourage passengers who do not really need to travel at those hours to change their schedule and not further load the mass transportation system. There is of course a downside to this approach for passengers who must travel on those hours, such as for getting to work (employers who cover travel expenses should set the amount according to the cost of the more expensive rate). Using surge pricing in this case would mean that passengers cannot tell for certain and in advance when a higher tariff applies, but the scale of ‘surge prices’ can be pre-set with a limited number of ‘steps’, and thus reduce resentment and opposition.

Other types of dynamic (variable) pricing involve strong technological and data capabilities, including demand at an aggregate level and customer preferences and behaviour (search, purchase) at the individual level. A company like Amazon.com keeps updating its prices around the clock based on data of demand for products sold on its e-commerce platform. A more specific type of dynamic pricing entails the customisation of prices quoted to individual users-customers (i.e., different prices for the same book title offered to different customers). The approach maintains that a higher price could be set, for instance, for books in a category in which the customer purchases books more frequently and even based on search for titles in categories of interest. This form of price customisation is debatable because it aims to absorb a greater portion of the consumer’s value surplus (i.e., how much value a consumer assigns to a product above its monetary price requested by the seller), raising concerns of unfairness and discrimination. The risk to sellers is of making products less worthwhile to consumers to buy at the higher customised prices. (Note: Amazon was publicly blamed of using some form of price customisation in the early 2000s after customers discovered they had paid different prices from their friends; however the practice has not been banned and it is suspected to be in use by companies in different domains.)

  • Take for example the air travel sector: Airlines may use any of these methods of variable pricing: (a) Offering the same seat on the aircraft at different price levels (‘sub-classes’) depending on the timing of reservation before the scheduled flight: the earlier a reservation is made, the lower the price; (b) Changing fares for flights to different destinations based on fluctuations in demand for each destination and time of flight; (c) There are claims that airlines also adjust upwards the fares on flights to destinations that prospect travellers check more frequently in the online reservation system.

More companies in additional sectors are expected to join by applying varied forms of dynamic pricing. Retailers with physical stores are expected foremost to use dynamic pricing more extensively to tackle the growing challenges they face particularly from Amazon.com in the Western world (e.g., supermarkets will employ digital price displays that will allow them to change prices more continuously during the day and week according to visitor traffic levels). Restaurants may set higher prices during more busy hours at their premises, and hotels are likely to vary their room rates more intensively, taking into consideration not only seasonal fluctuations but also special events like conferences, festivals and fairs (e.g., see “The Death of Prices”, Axios, 30 April 2019).

Dynamic pricing, and surge pricing in particular, is the new reality in pricing policy, with applications getting increasingly pervasive. As technological and analytical capabilities only improve, the pricing models and techniques are likely to be enhanced and become furthermore sophisticated. Moreover, methods of artificial intelligence will improve in learning patterns of market and consumer behaviour, expected to enable companies to set prices with greater specificity and accuracy. At the same time, businesses need to take greater caution not to deter their customers by causing excessive confusion and aggravation. The question then becomes: What bases of discrimination — among consumers, at different times, and in different locations — would be considered fair and legitimate? This promises to be a major challenge for both enterprises that set prices and for the consumers who have to judge and respond to the dynamic prices.

Ron Ventura, Ph.D. (Marketing)

Notes:

[1a-c] “Uber’s Surge Pricing: Why Everyone Hates It?”, Uptal M. Dholakia, Government Technology (magazine’s online portal), 27 January 2016

[2] “Frustrated by Surge Pricing? Here’s How It Benefits You in the Long Run”, Knowledge @Wharton (Management), 5 January 2016. A talk with Ruben Lobel and Kaitlin Daniels at Wharton Management School at the University of Pennsylvania.

[3] “Everyone Hates Uber’s Surge Pricing — Here’s How to Fix It”, Uptal M. Dholakia, Harvard Business Review (Online), 21 December 2015

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Interfaces of knowledge management (KM) systems can be applied to support and empower customer service via two key channels: (1) directly — used by customers (e.g., adjunct to self-service utilities, web-based or mobile app), or (2) indirectly — used by employees (customer service representatives [CSR]) to help them provide a better service to customers (e.g., more effective, timely, and accurate). These channels have some very different implications in form, scope and intensity of use of KM capacities.

The ‘library’ of a KM system should provide the customer with relevant background information that can help him or her make decisions (e.g., choosing between product attribute options, selecting among investment assets). The knowledge resource may also assist in completing technical tasks at one’s home or office (e.g., setting-up a software or device).  The content may include explanations on specific concepts or procedures, product reviews, and articles on related topics (e.g., an overview of a technology, medical condition, class of financial assets).

A crucial question is how the customer gets exposed to information relevant for the task at hand. General search queries often lead to many and spurious results requiring the customer to work hard to find and collate relevant information. The system has to do better than that in recommending truly useful information, to bring the user more precisely and quickly to a set of relevant knowledge sources. The customer may start by filling a short questionnaire that lets him specify his interests and goals. But as the customer accumulates more experience in using a KM portal and accessing some documents, the system can learn from his or her behaviour and update its recommendations. Alternatively, references to a KM resource may be embedded within a self-service facility (e.g., application for travel insurance) so that the system can refer the customer to supplementary information based on his or her progress in the service process (e.g., explanation of healthcare procedures in the country of destination, recommended features of coverage for the planned trip). As the system learns it may add a visual display of relevant statistics for guidance (e.g., distribution of options chosen by similar customers or in similar situations). Furthermore, a company can use its discretion to provide premium customers secured access to resources available only to its employees within the organisation.

Knowledge management portals for customers are not so common. References are more likely to be implicit, such as being embedded within the self-service platform of the company. More companies now provide an interface for interaction (chat) with an intelligent virtual agent (IVA) to get assistance. Such a robotic agent may give a brief answer and perhaps add a single resource for further reading; if the customer insists on asking a follow-up question, the agent may refer the customer to 1-3 more documents. Sometimes this kind of help is not sufficient and the customer has to make extra effort to drill more useful information from the IVA (a face wearing a smile to the customer is not always comforting). In more complex, sensitive and risk-prone domains, it is advisable to accompany the IVA with a portal that will display more resources in a coherent and viewer-friendly format, explicating what each resource would be most helpful for.

Having said that, there are circumstances in which the customer cannot manage on his own and needs to talk to a skilled person to resolve an issue. It may be because the customer encounters difficulties in fulfilling the task using the computer-based self-service tools or because the domain at issue is relatively complex and involves more significant personal implications (e.g., financial investment, insurance, medical conditions, sophisticated technological products). Researchers Shell and Buell of Harvard Business School suggest in a recent working paper [1] that having customers know that access to human contact is available to them for assistance, even without their taking advantage of it, can improve their feelings, particularly mitigating anxiety, and in turn recuperate their satisfaction and confidence in decisions they make during a self-service session; this will show especially in situations of heightened anxiety. Hence, making notice of access to human contact salient is essential.

Of course in some cases customers will choose to actually turn to a human agent for assistance and guidance; on many other occasions, however, merely knowing that human assistance is reachable may instill some more confidence and encourage the customer to continue independently to the extent that he or she can avoid calling for assistance (i.e., knowledge that human contact is available acts as a safety net). A company can offer human assistance from an agent by phone or chat (not an IVA/chatbot), yet as Shell and Buell propose, the company may also enable customers to get advice from customer-peers (though with more limited effect). Mitigating anxiety through offering human assistance as needed can help to reduce negative effects of customer anxiety on choice satisfaction and subsequently on trust in the company.

The utilisation of knowledge management portals by company’s CSRs aims to work at a different, professional level, to enable the CSRs address concerns and issues raised by customers in a more proficient and timely manner. For instance, it should save CSRs the time and effort of referring to a number of platforms (e.g., marketing, CRM, product) by bringing together different types of relevant and practical information onto one place from which the human agent can access it more easily and quickly. A KM portal display may integrate most recent history of interactions with the customer, relevant offers of products or service packages, or links to additional background articles (e.g., product profiles, technical materials). The KM portal may include essential customer information (e.g., identification and key flags) but it may not free the CSR completely from turning to a CRM system for more information (e.g., previous purchases); likewise, it may not free the CSR from turning to the billing system or a product database resource. The challenge of a KM system is to pull together those portions of information deemed most relevant and useful to the issue at stake from the broad knowledgebase of the company and lay them closer to the service agent (e.g., in a portal or dashboard display). An agent who listens to the ‘story’ told by the customer can give the KM system more clues to allow it to make the best recommendations. Information may be presented explicitly or as links to recommended documents and other external resources. This is expected to be part of the future mode of operation of contact centres, and it is already in motion.

It is important, nevertheless, to take into consideration the time a human service agent needs to review some of the information proposed in the KM portal, in relation to a customer’s enquiry during a live interaction with the customer. The CSR may have to trace, learn, judge and extract relevant information before delivering his or her insight, recommendation or solution to the customer, and all that within a few minutes. Some of the knowledge may be included, as suggested above, in resources like articles that the agent should access and read — think for instance of an article on a new travel insurance offer: the agent has to understand the terms before communicating it to the customer, and being able to answer questions. Three observations are in order on this matter:

  1. Human service agents (CSRs) should receive adequate training on choice, comprehension and evaluation of materials from the company’s knowledgebase, and also should be allocated paid “off-duty” time for reviewing new and updated content (e.g., products and service offers, technical support procedures) to reduce learning ‘time-breaks’ during customer interactions;
  2. The CSR agents should be ready and willing to learn and assimilate information they utilise as their own knowledge, together with experiences they accumulate, to be able to use that knowledge again with subsequent customers without having to process information from the KM portal every time and again — a KM system will be much less effective if CSRs rely heavily on what they see on the screen in every event, rather than using it as an aid and supporting tool;
  3. A key capacity of KM systems is to allow employees share among them experiences, lessons and information they have learned which proved pertinent to the service events they have been treating — by adding notes or updating a special forum, service agents can turn implicit knowledge into explicit knowledge that can help their colleagues in handling similar events in their own future customer encounters.

According to a research report by Aberdeen Group [2], companies that have a formal agent experience management programme gain a higher rate of annual increase in customer retention, above two times more than in other companies (12% versus 5%). These companies can also expect to benefit from about two times higher rates of year-over-year increases in revenues and customer satisfaction. At the same time, agent productivity is also likely to be better with a formal programme for supporting and enhancing the agent working experience (11% annual increase versus 7% in other companies without such a programme). Greater service agent satisfaction is linked to greater customer satisfaction; it requires that the agents feel they can do their work serving customers more easily and successfully with proper guidance and direction.

The Aberdeen report identifies three top factors influencing the agent experience. First, the prospect agent should bring to the job good technology knowledge and skills as well as strong communication skills to be fit for the job assigned. Second, the company should provide on its part the means in technology tools that will facilitate the ability of agents to perform their day-to-day tasks. A smart and effective knowledge management system that can quickly and pointedly lead agents to relevant information (e.g., instructive articles) should have a great role to play in improving the agent experience. Making agents spend extended valuable time seeking background knowledge and insights and delaying their handling of customer enquiries are key deterrents to agent productivity; it may be added that these impediments also are likely to lead to increased agent frustration. Nevertheless, side by side with the skills agents bring with them and the information and technology tools the company provides, agents should be given more autonomy while interacting with a customer (e.g., offer discounts, account credit, free shipping etc.). Aberdeen describes this third factor as providing agents the “sense of empowerment in addressing customer needs”. Employees-agents could be made to feel empowered when respecting their judgement in utilising knowledge resources and allowing them leeway in deciding how best to help the customers.

A knowledge management system incorporates knowledge resources with different types of information and technology tools to access that knowledge. The tools are expected to become powered more extensively by artificial intelligence and machine learning capabilities, to enable users to access relevant and practical information or knowledge more quickly and precisely. However, it should be appreciated that knowledge is most often what people make of information made available to them, and also the knowledge they can return and add to the system for the benefit of others. Whether the interface is used by any company’s service agents or the customers themselves (e.g., applying self-service facilities), the support and guidance of a KM system can enhance the service quality in important ways.

Ron Ventura, Ph.D. (Marketing)

Notes: 

[1] “Mitigating the Negative Effects of Customer Anxiety Through Access to Human Contact”; Michelle A. Shell & Ryan W. Buell [2019]; Harvard Business School Working Paper 19-089 (unpublished paper).

[2] “Agent Experience Management: Customer Experience Begins with Your Agents”, Aberdeen Group [Omer Minkara], September 2017

 

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When going through a surgery, the surgery itself would almost unquestionably be the major and focal treatment of the patient during hospitalisation. However, there is an envelope of procedures, treatments and other activities that make up the experience of the patient at the hospital. Furthermore, pre-surgery and follow-up procedures can also be accounted for in the whole experience. Patient experience is receiving increasing attention and greater weight in managing healthcare systems in recent years, side by side with the clinical demands of medical care. Although we cannot fully equate the status of ‘patient’ with ‘customer’ because of the highly specialised aspects and requirements of the medical domain, there are many activities and moments of interaction in which it is fair and right to view the patient as a customer.

Healthcare services are not immune to the growing power of consumers and their higher expectations, as customers, that have become omnipresent in many fields of services and products. Consumers expect greater awareness of their needs and respecting their rights. Yet there are unique challenges in adopting a ‘customer-centric’ approach with medical patients because clinical considerations come first in the responsibilities of medical professionals.  It is a challenge, for instance, to convince doctors and nurses that improved patient experience is more than ‘nice but not necessary’ or that this is not ‘a luxury given their tight schedules’. Another challenge is balancing between the undoubted authority of medical doctors in their domains of clinical specialisations and the need of patients to be informed, assured and comforted about treatments they should receive. How a clinical treatment is communicated and delivered to a patient can influence considerably his or her experience in a positive way; moreover, there are many less critical procedures and interactions through which doctors, nurses and assisting care providers can further improve the patient experience.

A commonly accepted definition of patient experience developed by the Beryl Institute defines it as “The sum of all interactions, shaped by an organization’s culture, that influence patient perceptions across the continuum of care“. First, having a supporting culture is paramount to the successful assimilation of a patient experience approach. Second, there is a recognition among researchers and experts that patients’ experiences should be addressed through their perceptions reflecting what has happened to them (e.g., during clinical procedures, interactions with doctors); measures of satisfaction are inadequate because satisfaction is construed relative to individuals’ prior expectations, without informing what might have to be corrected. Third, steps along a whole journey or continuum of medical care of the patient should be accounted for (e.g., from hospital admission to discharge, covering care given within and outside the hospital walls). A customer-centred approach in the context of healthcare is recognised as Patient-Centred Care which focuses on improving patient experiences.

In a special report of the NHS Confederation (UK) on patient experience, the authors note the complexity of improving patient experience on top of striving to provide high-quality clinical care. In addition to the latter, it should be acknowledged that “Experience is also determined by the physical environment the patients are in and how they feel about the care they receive, including the way staff interact with them“. The report authors state punctually: “Improving the experience of all patients starts by treating each one of them individually to ensure they receive the right care, at the right time, in the right way for them” (boldface highlight added)[1].

Improvements in patient experience in a hospital ward (e.g., cardiology, orthopaedic) seem to happen in small steps, in small details; the staff may not fully appreciate their value to patients and their family relatives . Better experience may arise from greater awareness of the worries, concerns or inconveniences of patients by doctors, nurses and assisting caregivers. It may be achieved by listening to the patients and being more patient and soft with them. It is not an easy demand: the staff may have two or three dozens of patients to attend to in the ward, and yet the staff has a duty to help and make the hospital stay as easy as possible for each patient. One should not overlook the importance of an emotional touch, feelings shown by and with patients. Keeping a peaceful and calm atmosphere in the hospital ward also contributes to patients’ experience and prospects of healing. Doctors in particular can help to improve the patient experience by willing to explain and inform a patient (and family) in plain words and empathy about his or her condition and treatments required, especially upon request (i.e., respecting the right of a patient to be informed). Additionally, doctors should not leave patients out of decisions made about them, where the patient demonstrates interest and capacity in being involved.

Much of the conduct described above can be seen happening more frequently than say five or ten years ago. One may encounter specific members of staff who make an extra effort to help, talk with a patient a little longer, answer questions at the nurse counter or in the patient’s room, and they do it kindly and voluntarily. Yet there is also observable variability where some members of staff appear less committed to providing a better treatment to patients with dignity, compassion and respect; patient experience does not seem to concern those staff members. Efforts in hospitals to increase awareness and training of staff about forms of conduct that improve patient experience, and their value to patients, have to address remaining pockets of inconsistency.

We should also look at processes in administering care to patients as they may have further impact on patient experience in addition to the quality and safety of medical care. For example, it is greatly important to pass and share information about patients between nurses and doctors within a shift and between shifts. Understandably, medical staff may not be able to give a full detailed update about every patient in the brief during change of shifts. But even during a shift there may not be enough time to pass information between staff members (e.g., a change in treatment for a particular patient). It is therefore crucial that staff members update patient records in the computer information system regularly and consult the records frequently to make sure information is not lost, forgotten or missed by the next staff member attending to the same patient. It can matter, for instance, when the patient or family inform staff about medication the patient is taking regularly (or should avoid), or regarding any change ordered in medication administered during hospitalisation. More generally, it would help to avoid situations where staff members ask patients or family the same question several times. Failure to record and pass customer information is a problem well-known and documented in customer service, yet in this case shortcomings in passing patient information can have more critical consequences. Therefore, ensuring that information is available to administer the right treatment at the right time would improve the quality and safety of patient care and thereby his or her personal experience.

Improving patient care and experience by physicians relies on better understanding of patients’ needs which could be achieved by working on three key priorities: competency, teamwork, and compassion; being successful would help in driving loyalty of patients to physicians (James Merlino, MD, an expert advisor with Press Ganey Associates in an interview with Micah Solomon of Forbes, 11 May 2017). It sounds, nonetheless, that this trio of priorities is fundamental and could contribute in multiple settings to patient care by physicians with the mentioned benefit to individual physicians, their clinics or hospital wards (private or public). [Note: Merlino suggests also incorporating patient segmentation and nurturing caregiver engagement as requisites to improving patient experience.]

A study of patient interviews at Royal Bolton Hospital in the UK, cited by the NHS Confederation report, identified two themes that appear to relate to pivotal concerns of many patients: “no needless pain” and “no feelings of helplessness”; the researchers were able to sort interviews along these two leading themes and later held discussions with hospital staff on the issues raised in the interviews. In another example given, the report refers to relationships built with patients and their families, and among staff and executives: a data-driven methodology, Patient and Family Centred Care, developed at the University of Pittsburgh Medical Center assesses different care pathways where each care pathway is studied and an ideal patient experience is outlined respectively. A project is developed in collaboration between professional staff and management to carry out these experience-oriented care plans.

As suggested above, a calm and pleasant atmosphere in the hospital ward can have a positive effect on patients’ feelings (e.g., soothing, relaxing). Contributors to the desirable atmosphere are the behaviour of medical and assisting (nursing) staff but not least also the design, furnishing and atmospherics of the physical environment in a hospital ward. Colours, windows and the sunlight they allow into rooms, warm materials (e.g., wood) and ergonomics, artwork hung on walls, and even pleasant odour should help in generating an atmosphere conducive to better healing (e.g., stronger improvement in the clinical condition of the patient, shorter hospital stay). In fact, research supports positive effects of the environment and ergonomics on healing of patients but also on staff sentiment and conduct (e.g., by reducing fatigue and stress).

According to a review of literature prepared by the Economist Intelligence Unit, sponsored by Siemens Healthineers (healthcare division), improved patient experience has been shown to have positive impact on clinical outcomes and care delivery for patients, financial outcomes for hospitals (efficiency, cost reduction), and morale and productivity of staff. The review further supports the importance of improving patient experience throughout the continuum of care: before, during, and after hospital admission; it should also engage patients, staff, system and interfaces inside the hospital and outside (e.g., pre-surgery and follow-up treatments and clinical examinations may be provided by the hospital and complemented in other clinics)[2].

Patients themselves also believe in the positive effect that better experience can have on their healing prospects. A consumer survey (2018) conducted by Beryl Institute found that 69% of consumers believe a good experience contributes to their healing / good health outcomes. It was also learned from consumers that being listened to, communicated to them in a way they can understand, and being treated with dignity and respect are the three most important factors to them influencing their (patient) experience.

Patient experience cannot be separated from the overall programme of care they receive in the hospital; it embodies all that happens to them, the treatments they receive and interactions they have with members of staff, and how they feel about it all. As healthcare professionals increasingly appreciate, it would be wrong to brush away this subjective and emotional viewpoint of patients on their experience in the hospital or see it as inferior to the clinical aspects of medical care. They go hand-in-hand, and as research has shown improved experience of patients is likely to have a positive impact on their clinical condition and healing prospects. A broad perspective on patient experience is nonetheless necessary, encompassing any components of care that are part of hospitalisation or tied to it; involving different types of staff (doctors and nurses, assisting caregivers, and administrative staff as well); and it could take a step forward and consider care given inside the hospital and outside it. Improvements in patient experience can already be discerned in the past decade; yet this is an area of continued work and effort where more can be done to create even better and more consistent patient experiences.

Ron Ventura, Ph.D. (Marketing)

Notes:

[1] “Feeling Better? Improving Patient Experience in Hospital”, The NHS Cofederation, 2010

[2] “Improving Patient Experience”, Siements Healthineers Global, 13 June 2018 (Whitepaper)

 

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When evaluating a restaurant, the quality of food is not like other factors considered — it has a special status. The same goes quite as much for other food establishments like coffee-houses. The customers or patrons may trade-off several factors which include the food, service, venue, price and location, yet food quality usually gets a much greater weight than the other attributes, suggesting that the decision process is practically not fully compensatory. The quality of the food, its taste and how much we enjoy it, is a “pre-condition” to dining at a restaurant. However, the balance with other attributes is important; in some cases, failure on those other attributes can be detrimental to the willingness of consumers to return to a restaurant or a coffee-house.

  • Some coffee-houses effectively function as ‘coffee-restaurant’ establishments by serving meals of a variety of food items suitable for every time of day (from eggs, salads and toasts to soups, pasta, hamburger or chicken-breast schnitzel with supplements).

Suppose that Dina and Mark, a fictional couple, are dining at a restaurant and find the dishes served to them being well-prepared and they enjoy very much the food’s taste. However, they are very unhappy with the sluggish service they get and inappropriate answers of the waiter, and feel the atmosphere in the restaurant is not pleasant (e.g., too dark or too noisy). The experience of Dina and Mark can be greatly hampered by factors other than food. How superior should the food be for our diners to be ready to tolerate bad service or a place they do not feel comfortable to be in for an hour or two?

On the other hand, Dina and Mark would likely expect the food (e.g., a dish like ‘risotto ai funghi’ [with mushrooms]) to uphold to a certain gratifying standard (i.e., that the ingredients are genuine, the texture is right, and the dish is overall tasty). If the food is not perceived good enough and diners do not enjoy it, this takes out the point of considering dining at the restaurant altogether. But if the food is good though not so special or great, yet the patrons Dina and Mark feel the staff truly welcome them, treat them warmly and cater to sensitivities they may have, they could still be happy to dine at such a restaurant again, and again. When the food is already satisfactory, additional facets of the experience such as great service and a pleasing ambience can increase substantially the desirability of a restaurant or coffee-house as a place consumers would  like to patronize. We may be looking at a decision process where at first food is a non-compensatory criterion, yet above a certain perceived threshold the balance customers-patrons strike between food and other attributes of their experience becomes more intricate and complex.

Browsing reviews of restaurants that are shared on TripAdvisor’s traveller website can provide helpful clues on how customers-patrons relate to food and additional factors in their appraisals of their experiences at restaurants. Reviews were sampled of Italian and Asian restaurants in Tel-Aviv and London (members-reviewers may be city locals, national and international travellers — examples are quoted anonymously so that reviewers and the specific restaurants they review are not identified by name).

Reviewers most often open by referring to the food they have had at the restaurant; next they may give their assessment of the service they have received, design and atmosphere, price or value, and location of the restaurant. Thus, a review may start by appraising the food as good / great / delicious, and then stating that the service was good / nice / efficient. Nonetheless, it is not uncommon for diners-reviewers to open with an assessment of the service they have received at the restaurant. There seems to be a greater propensity to open the review with service when it is superb, but also on the contrary when it is terrible. Occasionally a review will refer firstly to the atmosphere in the restaurant, which is formed by aspects such as interior design or décor, lighting, music and overall ambience. Atmosphere will appear first or at least early in the review particularly when it is superior or inferior.

Additionally, we can distinguish between reviews that are composed of a few short argument-like statements about the food, service and other attributes, and reviews that tell a story (i.e., a narrative-like review). There are diners-reviewers who go especially into detail of the dishes or items of food they, and possibly their companions, have ordered, and their opinion of the food. Yet reviewers may also describe how they were treated by the serving staff, particularly when they felt exceptionally welcome and cared for or annoyed and undesired. Reviews that have a narrative give a stronger impression of the course of dinner to the reader who can more easily visualize it.

It seems that when diners-reviewers say the food is ‘good‘, they do not throw it out of hand; they do mean that the food is truly good, fresh and tasty. This appraisal should be interpreted as a base threshold for being satisfied with the food. When the food is more than ‘good’, reviewers explicitly express it with adjectives like ‘great’, ‘delicious’, ‘fabulous’ or ‘amazing’. Conversely, descriptions of the food as ‘average’, ‘OK’, and moreover as ‘mediocre’, are certainly not compliments, more likely suggesting the food was barely satisfactory. Unless there was something else especially good about the experience in that restaurant like its service or venue, the reviewer would probably have little motivation to return.  Consider for example a reviewer who said about an Italian restaurant in Tel-Aviv: “The ONLY redeeming factor is, in my opinion, the ambience, which is really cozy and relaxed. Too bad they don’t serve food to match” (capitals in origin, rating: 2 ‘rings’ out of 5). Similarly, a reviewer of an Asian restaurant in London complimented it for its “friendly and attentive” waiting staff, but concluded: “So there were a lot of positives about this place, but I’m afraid the food just wasn’t good quality. It was very bland and boring” (rating: 2 ‘rings’). On the other hand, a review of an Asian restaurant in Tel-Aviv offers the opposite case wherein the reviewer states “AMAZING food, OUTRAGEOUS service” (title, capitals in origin), and ends with the conclusion “basically terrible service which was definitely the opposite of the wonderful tasty food we were served” — the rating for this restaurant experience: also 2 ‘rings’.

  • A prospective diner who looks for a restaurant to try for the first time may find the choice task confusing and daunting when reviews of the same restaurant are quite the opposite of each other in their content. Still, it usually does not take too long to realise the ratio of positive to negative reviews given to a restaurant, in addition to the chart of distribution of ratings it received.

Service appears as the second most important factor after food in a restaurant. Patrons want the waiting staff to be friendly and respectful (this of course is a two-way street), be attentive and not letting them feel forgotten, and to be flexible and kind enough to accommodate their personal sensitivities or preferences (e.g., less spicy, nuts-free, replace polenta with rice as supplement). Less pleasant or efficient service will not necessarily make diners-reviewers reject the restaurant if its food is excellent, but they could drop one grade off its rating (e.g., from 5 to 4). Inversely, when the diners-reviewers are happy with the quality and taste of food, then also meeting a warm and helpful waitress — or sitting in comfort in a beautifully designed venue — can make the whole experience so much better. Reviewers repeatedly emphasise when, on top of their pleasure of the food, they are impressed by a waiter or waitress who smiled to them, was friendly, attentive and helpful, and made them feel at home. A reviewer of an Italian restaurant in London explains why it is her favourite: “Quite simply, the food is absolutely gorgeous. Wonderful ingredients and very well cooked. But most of all the welcome that we received and service that we got from everyone is great” (rating: 5).

A particular aspect of service is the length of time a customer has to wait either to be seated at a table or while dining. Many restaurants take table reservations, but not all do. Not taking reservations is legitimate, but it is far less acceptable and even offensive when staff at a restaurant (including coffee-restaurants) run a waiting list at the doorstep and appear pleased with letting prospect customers gather and wait outside as if to show around how popular their establishment is; if you complain they may even hint at you how much they do not really need your patronage. Such past experience may have made a British reviewer visiting an Italian restaurant in Tel-Aviv be thankful when: “The staff were very pleasant and found us a seat on a very busy afternoon without behaving as if they were doing us an enormous favour”. In a different case, at an Asian restaurant in London, a reviewer commented: “Long wait to be seated, despite the place being half empty, as the servers were running around serving tables but not seating people”. Considerate restaurant proprietors may keep seats reserved for people waiting (e.g., next to the bar), and may even offer them a free drink if waiting is extended.

While at the table, diners dislike when waiters appear to forget them behind or somehow miss sight of them (e.g., waiting for menus, for taking order and bringing courses ordered, for the cheque). A reviewer in Tel-Aviv was critical pointedly of servers who “it seems lost interest”, and started chatting with their colleagues or playing on their phones. Waiting staff are expected to stand by, being ready to answer requests or voluntarily enquire if diners need anything. An American reviewer at another Italian restaurant in the city, coming “late one night”, appreciated that “my waitress made an effort to check on me regularly”. At an Italian restaurant in London, a reviewer noted that on arriving early for a meeting, “I was offered a newspaper to read while I waited which I thought a rather nice touch”; overall, he commended the service whereby “the staff proficiently and effortlessly ensured everyone felt special and were looked after”. Seemingly little touches matter!

In restaurants of fine cuisine it seems justified to wait patiently longer for an order (e.g., 20 minutes for a main course) as it could mean that the dish is freshly prepared with care for you in those very moments from start to finish [an advice received from my father]. In many ‘popular’ or casual restaurants, however, it would be much less the expectation, though it could depend on the type of food and how complicated it is perceived to prepare the dish. Furthermore, the sensitivity of customers-patrons to time spent could be subject to the occasion (e.g., meeting and dining leisurely in the evening vs. a pre-theatre dinner or a lunch break).

Reviews tend not to address directly the time until a dish ordered is served but more generally relate to the waiting time at any stage while being at the table. Some relevant references were traced in reviews of Asian restaurants in London: (a) A reviewer noted that “service can be slow” and “a bit hit and miss” (although the food and atmosphere were good); (b) Waiting for food was raised by a reviewer as an issue for concern: the waitresses seemed “understaffed” and having “stressed looking faces”, with the result that “We sat around with no food or drink for over 20 minutes before we could grab a waitresses’ attention” (the food was “fantastic” and the rating given could otherwise be 5 rather than 4 — the reviewer “would defiantly” return); (c) A reviewer who was overall happy with the friendly and efficient service and “freshly cooked and tasty delicious” food particularly remarked that the “food came quickly”.

The aesthetics of interior design of a restaurant or coffee-house can also have an impact on consumers’ attitude towards the place and on their behaviour. The style, materials, colours, surrounding decorations, furnishing, lighting etc. are instrumental in the way the design helps to create a certain atmosphere and mood (e.g., cold or warm; traditional or top-notch modern; quiet, ‘cool’ or energetic).

John Barnett and Anna Burles of ‘JB/AB Design’, a London-based agency specialising in design of coffee shops, offer six instructive guidelines on the ways design on different levels can contribute to brand experience. They start with creating a happening in the coffee shop (‘The shop is a stage’), followed by using appetizing imagery of food (‘customers eat with their eyes’); being authentic and relevant; persuasive visual merchandising; creative ambience; and giving customers good reasons to come and ‘gather around a table’ in  the coffee shop. Their recommendations sound mostly if not all adaptable to more types of food and drink establishments, including restaurants. In setting an authentic design, they advise to ‘say it like you mean it’ all round the shop : “The whole shop is a canvas for imagery and messaging that forms the basis of a conversation with your customers”.

Reviewers-diners talk less frequently of aspects of interior design and description of the space of the venue; broader references are made to atmosphere or ambience. In the case of an Italian restaurant in the Tel-Aviv area with an elegant modern design, three different reviewers noted it has “a very nice décor”, that it is “very spacious and modern”, and the “interior is beautiful, a lot of air”. A reviewer relating to an Italian restaurant in London wrote: “The décor seems a little dated, but there were some fun touches”. This reviewer also addressed music played in creating a pleasing atmosphere (“alternated nicely between Frank Sinatra and Luciano Pavarotti — perfect!”). A reviewer-diner mentioned earlier, who was impressed by the newspaper gesture, also said of that Italian restaurant: “The ambience was extremely relaxed and the décor is comfortable, plush and smart”. An Asian restaurant in Tel-Aviv was described by a reviewer as “pleasant, with very informal atmosphere, soft background music, and industrial/downtown décor”.

Some appraisals of design and atmosphere sound somewhat more reserved though still positive. For example, a reviewer said of a luxury Asian restaurant in London that it is “very dark inside, but somehow it is also very cooling place”. A reviewer in another luxury Asian restaurant was very impressed by a modern-futuristic design yet felt uncomfortable with it: “The place is playing with your perception, slightly disorienting with its colours and stairs and reflecting surfaces”. The reviewers quoted above were largely very happy with the food as well as the service. In just one case observed, a reviewer of an Asian restaurant in Tel-Aviv became very upset with the food and proclaimed “Sorry! But when we decide to go to the restaurant, we wish to have a good meal, NOT ONLY a trendy design” (capitals in origin, rating: 1). In this case the “rather nice designed place” could not compensate for a poor food experience. Customers-patrons welcome inspiring and modern designs, but the design must also feel pleasing to the eye and comfortable — be creative with designs but not be excessive.

A top priority for restaurants, and to a similar degree also for coffee-houses, remains taking the most care of the quality and taste of the food they serve. However, it is essential to also look after additional factors or facets that shape the customer’s experience such as service, design and atmosphere, price or value. The kind of service customers-patrons experience is especially a potential ‘game-changer’. Additionally, consumers may not be coming to a restaurant or coffee-house for its design but if it looks appealing the design and atmostphere can make the stay more comfortable and enoyable, and encourage patrons to stay longer, order more, and return. Food is a central pivot of customer appraisals, yet other facets of the experience can tilt it either way: spoil and even ruin the experience or instead support and enhance it.

Ron Ventura, Ph.D. (Marketing)

 

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‘Where do I find umbrellas?’ ‘How do I get to the shoe department?’ Questions like this are likely familiar to many consumers when visiting large department stores. Walking long pathways on a floor and moving between floors in a quest to find a needed product can be time-consuming and annoying. Signposts often are too general and lack useful instructions for direction. Mobile mapping applications (‘apps’) of indoors environments, an evolving technological development of the last five years, can make the shopping experience in large stores more smooth, convenient and enjoyable for consumers. A mapping app can be useful not only in department stores but also within large supermarkets, fashion, toys or DIY stores, to give just a few examples. Moreover, navigating in complex structures like shopping malls, airports, hospitals etc. may be made much easier with a mapping app.

Over the years large physical floor maps have been installed in some department stores (e.g., hung on the wall near a lift) — the problem is that the shopper has to try to keep in memory the route to pass to a desired destination. Signage of product directories placed in front of escalators may help the shopper to find on what floor a particular type of product (or a brand) is placed, but one may be left again to stroll a widespread floor until locating the product requested. Signs hung above aisles (e.g., in supermarkets) may not be seen until one approaches the relevant aisle. Some retailers and operators of shopping centres provide printed maps on cards or leaflets to guide their customers on the premises; the map is usually accompanied with index lists and codes for reference, and regions on the map diagram may be printed in different colours to facilitate navigation. Holding a map in the shopper’s hands can be a great relief. Holding a dynamic and interactive map displayed on the shopper’s mobile phone seems as an even greater step forward.

Mapping applications of enclosed environments aim to provide people with spatial information and tools similar to those that facilitate their navigation on roads and in the streets of cities. One can search for an address, a business or an institute, and the mapping utility will show the user its location on the map. Additionally, when used on a mobile device, smartphone or tablet, the application can show the way and follow the user until he or she gets to the destination. In-store, the ‘address’ would typically be a product. An in-store mapping app may show the shopper the location of the product in the store, and perhaps give instructions step-by-step how to get there, yet it will not necessarily be able to follow the user to the destination — an additional layer of technology, a physical infrastructure, is required to locate the shopper on the map and automatically “advance” the map on display as he or she walks in the store.

  • A web-based mapping utility of Heathrow Airport (London), for example, allows a prospect traveller to look for a starting point and a destination in any of the five terminals and their facilities and the online service will provide instructions in text and over the map diagram how to get there.

The GPS technology that usually allows the positioning of users on a map of an outdoors space, and follows the user until he or she gets to a destination, stops working when one enters an enclosed environment of a building. It is additionally not accurate enough to pinpoint the location of a person in a relatively small area, and especially is impractical in distinguishing between floors in the building. Therefore, this technology cannot be applied in mapping applications either in shopping centres or in-store. Alternative technologies have been tested and utilised for indoors mapping: more notable is Bluetooth technology applied with beacons, but there are other options in the field, including Wi-Fi and LED light bulbs for signalling and transmitting location information. Effective positioning of shoppers is said to require a dense network of devices (transmitters) throughout the store, oftentimes an expensive enterprise. Therefore, retailers appear to be more interested in implementing select functions of in-store mapping applications (e.g., orientation, promotions) but are less in a hurry to adopt also the capability of positioning shoppers on a map of the store.

A retailer can deliver via a mobile app promotional offers (e.g., digital coupons) to shoppers as well as updates on new products, services and events. A retail app may  include a bundle of services such as tools for mapping and managing a shopping list for the benefit of the customers. Some retailers already use a location functionality in their stores, independent of mapping, to improve the timing when offers are sent to shoppers during their visit, specific to their location in the store. But this functionality usually utilises fewer devices (e.g., beacons) than would be necessary for a full positioning capability. The mapping tools can produce several advantages: (1) deliver a helpful service to shoppers (e.g., using a shopping list with a map); (2) enhance navigation by location of the shopper on a dynamic map; (3) give a better incentive to shoppers to authorise an app to track their location in the store; (4) mount ‘flags’ of promotional offers for various products on the map near the relevant aisles or display shelves, particularly as the shopper approaches nearby (as a benchmark for illustration, think of information [icons & text] mounted on maps of Google or in an app like Waze).

The map is meant to provide first of all spatial information. Should mapping applications also be visuospatial, that is, display a visual image of the store’s appearance? It would be like making a virtual simulated tour of the store. The experience could be more entertaining (e.g., like gaming) but would it be more informative and useful? If the shopper is already in the store, he or she should not really need the enhanced display — it could be more confusing (screen and reality may interfere with each other) and time-consuming to navigate with such a display. The enhanced imagery display may be useful for planning a visit before entering the store, or perhaps for online shopping in a virtual store. Yet, once a shopper is at the physical store, a visuospatial display should be made an option as a matter of discretion by the shopper while the main display better be a map diagram that matches the actual layout and organisation of the store.

  • Mobile marketing company aisle411, which specialises also in indoors mapping for retail stores, created in co-operation with Google’s Project Tango a 3D imaged environment (“3D mapping”) of a supermarket store with features of augmented reality (e.g., product information. rewards and coupons). [BusinessWire.com, 25 June 2014, see video demonstration — note that the application is operating on a tablet mounted on the shopping cart]

A study published last year (Ertekin, Pryor & Pelton, Spring 2017) sought to identify perceptions, attitudes or personality traits that could motivate consumers to use mobile in-store mapping applications (*). The study focused on consumers from generations X (born in 1961-1979) and Y (born in 1980-1999 — adults likely to be familiar with and orientated to using computer technology and its applications). Actually 80% of the respondents in the sample were of generation Y. All respondents (n=258) had a device that can connect to the Internet (57% had a mapping application downloaded to their smartphone). The researchers considered factors regarding the use of technology of in-store mapping applications and how it would affect the shopping experience (30% of respondents reported trying an in-store mapping application before).

The degree of ease-of-use of an in-store mapping app was found to have a positive effect on intention (or ‘propensity’) to use it while shopping. Perceived ease-of-use was defined as the “degree to which a person believes that using a particular system would be free of effort” (e.g., easy to use, clear and understandable, flexible to interact with). Usefulness of the app pertains specifically to the act of shopping, helping to enhance the ‘job performance’ (effectiveness) of shopping with the map. As expected, perceived usefulness also had a positive effect on the intention to use such an app.

In addition to those functional or utilitarian benefits of the application, the researchers addressed the app’s ability to make the shopping experience emotionally more entertaining (particularly inducing excitement associated with novelty of the technology). Entertainment benefits (e.g., enjoyable learning about stores, fun, or merely a good pass time when bored) also strengthen the intention to use an in-store mapping app.

The willingness to use a mobile in-store mapping app is diminished by greater concern of consumers about sacrificing their security when using a network computing application (i.e., emphasis on protection from malicious software or stealing personal information). Conspicuously, however, reference to data security is only hinted and the sensitive matter of privacy is not properly covered, particularly the reluctance of consumers to let their moves being tracked. If the mapping app provides the user more perceived benefits of the types cited above, they may be less resistant to allow the retailer to track them.

A result that would probably be of interest to retailers shows that consumers who exhibit a stronger deal proneness are more intent on using an in-store mapping app. In other words, consumers who are more leaning towards buying on discounts and deals are more likely to be attracted to the mapping app in hope of finding there promotional offers, easy to locate in the store. Yet retailers should be careful about this finding because if they are too focused on delivering promotional offers through their apps, then they will get shoppers more interested in deals and reward points more frequently than other shoppers. In order to encourage shoppers to extend their in-store visits longer and make more unplanned purchases, promotional offers should be put forward on the app more closely in accordance with the store sections or aisles the shoppers access, when they pass through; where feasible, generate offers in association with products on a shopping list the shopper fills-in on the app (i.e., help a shopper find more easily the products on his or her list while adding products that are more likely to be perceived as complements to them).  Promotions are only one of the ways to encourage consumers to shop more, and that is true also for the ‘package’ offered in a retail mapping app.

The model analysed in this study did not provide support for a positive effect of being pressed in time on intention to use an in-store mapping app  (i.e., apps are not associated enough with saving time or those pressed in time are interested in the mapping app no more than others with more free time). It does not seem to give ground to a concern of retailers that such an app might allow shoppers to shorten their shopping trips, but as suggested above, if needed there are ways to circumvent such behaviour. The model also did not support the hypothesis that consumers who like to gather more market information (e.g., products, prices, innovations) and share their knowledge with others, to advise or actually influence them, are more inclined to use an in-store mapping app to accomplish their goals.

The study makes early steps in investigating consumer behaviour pertaining to using retail mapping apps. It confirms that functional as well as emotional benefits are drivers of consumer use of a mapping app in-store. But the investigation has to proceed to validate and refine those findings and conclusions. While the study targeted young consumers of relevant generations Y and X, the sample consisted of university students (hence probably also the vast majority of millennials). It may be sufficient for establishing relations of the tested factors to the use of mapping apps, but further research should go beyond a student population to cover consumers of these generations to validate the relations or effects. Additional analyses and models (beyond the regression model applied in this study) will have to examine effects more thoroughly or with greater scrutiny (e.g., causality, mediators). Furthermore, consumer disposition towards the mapping apps has to be examined through actual experience and behaviour, for example by letting shoppers perform their shopping ‘naturally’ with an app or by giving them specific tasks to perform with a mapping app in their shopping trip. The study of Ertekin, Pryor and Pelton would serve as an instructive and helpful starting point.

Consumers may utilise a mental map of a store site that they hold in memory to guide them through locations in the  store as in an auto-pilot mode. Mental maps are possible to construct, however, for stores that shoppers visit frequently enough or regularly. Digital mapping apps may change how consumers construct and utilise their own mental maps, stored in their long-term memory. People tend to favour digital information sources and rely less on their own memory. A shopper may need no more than a graph as a spatial model to perform his or her shopping job, or perhaps a more detailed mental model of a drawing similar to a map. Yet the extent to which people also use picture-like mental imageries of the site depends on how useful is the visual information for performing their task, because visual imagery requires greater resources. So visual imagery may be re-constructed more selectively as needed — think of ‘photos’ of specific locations of importance or interest to the shopper (e.g., shelf displays of ‘target’ products) pinned to the mental drawing at the relevant places. A conception like this may be emulated in the digital in-store maps of mobile applications.

Mobile in-store mapping applications present a significant, promising development in re-shaping consumer shopping experiences. It could play an important role in the future of retailing, but there is still ambiguity about the extent to which large retailers would choose to implement mapping features and capabilities, particularly the real-time positioning of shoppers inside a physical store. Mapping applications for retail indoors sites may impact, for example, the balance in preference of consumers between shopping online and offline (i.e., in brick-and-mortar stores).

Ron Ventura, Ph.D. (Marketing)

(*) An Empirical Study of Consumer Motivations to Use In-Store Mapping Application; Selcuk Ertekin, Susie Pryor, & Lou E. Pelton, 2017; Marketing Management Journal, 27 (1), pp. 63-74.

 

 

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Transparency; reliability; trust: These key terms are rehearsed and highlighted many times in textbooks and business books, academic and trade articles about managing customer relationships. Holding up to them is based, for example, on being honest, truthful and fair when making product or service offers to customers and in any other dealings between a company and its customers. However, those concepts that are good in managerial and marketing theory are too often lost when it comes to practice.

In addition, experts, technology consultants and other advocates of digital marketing are praising the capacity gained by companies to know so much about the behaviour and personal characteristics of their customers. One of the great benefits of this customer knowledge is in enabling companies to construct offers that will closely fit the needs, preferences and consumption or usage habits of their customers. Again, a gap emerges between what companies are supposedly capable to do with digital technologies available to them, including information and tools, and what they actually do. More accurately,  oftentimes companies are not doing enough in utilising those technologies to the intended purpose of creating better fitting offerings and messages.

The present post is based on a true story of a troubling journey to acquire an iPhone from a mobile telecom service provider (it will be called here ‘WM’). But this post is not just about the case of a particular company. Similar forms of problematic conduct are likely to be encountered at competing mobile service providers as well as other telecom service companies such as TV (cable and satellite), telephony (voice and data) and Internet providers. Moreover, at least some of these types of flawed conduct will be familiar to the reader from interaction with service providers in other domains (e.g., banking and finance, credit cards, insurance, healthcare, travel and tourism). In essence, this conduct refers most typically to providers of contractual services, and particularly when services extend over months and years.

An upgrade of a customer’s mobile phone is often accompanied by a modification of his or her service package; it is justified especially when a large generation gap exists between the previous and the new model. Two-part and three-part tariff schemes have been common in mobile communication for many years, splitting the price of service between fixed and variable components. Usage possibilities and patterns have changed, however, with smartphones, pertaining in particular to the online flow of data and the use of mobile applications (‘apps’). Service packages more frequently combine bundles of included (‘pre-paid’) units — minutes (voice), messages (SMS), and data MBs/GBs (mobile websites and apps); the weight of variable cost (i.e., based on price per unit), drops vis-à-vis a fixed cost component.

Subscribed customers are encouraged to pre-commit to ever larger bundles or unit quotas, some of them could constantly be left unspent each month. At least in one category it is sensible for mobile service providers to ‘give away’ a large quantity of messages amid the expanded messaging by customers via free chatting apps (e.g., WhatsApp, Facebook’s Messenger). The marginal cost per unit of any kind could be much lower now for the mobile network companies to make it economic for them to offer larger bundles, and thus attract customers to their ‘great value’ plans (i.e., the customer gets lots of ‘free’ units). Albeit, if customers do not utilise large enough portions of their quotas, they could end up paying for units they never get to benefit from.

A service plan was offered with the new phone purchased, including 10GBs of data, 5000 minutes and 5000 messages per month. This volume signalled a dramatic increase from my previous consumption levels. No doubt the new smartphone could support a huge data volume not possible with the previous semi-smartphone model, but also a volume hard to imagine how it may be used. Nor was it perceivable how to use anything near 5000 SMS. That is the magic of large numbers — they can be fascinating and captivating, yet meaningless at least in a short to medium term. The sales representative at the store and service centre of WM promised that it will save up to 45% of my bill so far. With the service package I get also ‘marvellous high-fidelity’ wireless-Bluetooth earphones, supposedly as a bonus or gift. No other plan was suggested. The relation of the earphones to the discount was not explained. Protesting that I do not really need those earphones did not help. It was awkward, but then it seemed that the enlarged traffic volume, that one might learn how to take advantage of, with a reduction in monthly cost could be worth it. The value of the earphones was negligible to me (but apparently not to WM). That is probably where System 1 got the hold of me. When not feeling on solid ground, swapped with documentation, and distracted, one may fail to pose difficult, intelligent questions;  System 2 remains dormant or blocked. It was a combination of desire to believe the offer is good for me, and to trust the company that it will treat me fairly.

The secret behind the earphones was revealed in the next monthly bill. If paid in cash, their price was about $150 vis-à-vis $900 for the iPhone. I agreed to pay for the iPhone in 12 credit installments (adding  5% in cost). However, the additional and unexpected payment for the earphones was set to be spread over 36 months (+65%! added to price in cash). The discount on service was for 12 months. The payments for the earphones would “eat” much of the discount during the first year. Furthermore, they will drag for another 24 months while the cost of service package returns to its previous level, though of course with a much greater usage allowance. Lesson: Beware of ‘free gifts’ and make sure to get all the details (see more in the section below on contracts).

This has brought me promptly back to the service centre — the staff refused to take their earphones back and gave me another nice demonstration of their performance. However, with the help of a kind supervisor we agreed that payments for both iPhone and earphones will be changed to 6 instalments with no interest (see more in the section on execution).

The Bluetooth earphones may well be a good product and the representatives were right to offer it, but it is wrong to impose the earphones as a ‘bonus’ or incentive if the customer is not interested and declines the offer. Furthermore, at least one other package option should have been recommended that would be more aligned with previous usage in recent months. A smart system should know how to use past behaviour of the customer as a benchmark and propose a reasonable expansion of usage levels of minutes, messages and data. First, it would make the customer feel that the company knows him or her (e.g., needs and usage patterns) and is trying in accordance to provide the most suitable personalised solutions. Second, when the quota of units posits a sensible ‘ceiling’ to the customer it may serve as a goal or an aspiration level to gradually increase his or her usage towards it, and then upgrade the service plan. Otherwise, the customer may be just lost, having no appreciative reference for scaling one’s personal usage levels (perhaps that is the objective, to let customers with less self-control carry away, but that is beyond the scope of this story).

Signing contracts to purchase products or receive services is frequently a sensitive matter and a host of potential pain points. This happens because customers usually cannot fully or even adequately read the contract and comprehend it at the time of transaction, and they are not sufficiently encouraged to spend the time reading and asking questions. The contract for my smartphone included, for example, the terms of payment, basic support, terms of usage,  liability and warranty, etc.. On each desk at the store and service centre of WM stands a tablet in portrait position. Regularly, it displays ads for services and products. However, WM saves on paperwork and employs the screen also to display contracts that can be signed digitally (later sent by e-mail). Reading the contract from the screen is not very convenient and the customer also cannot control the display to the pace of his or her reading. One is quickly brought to the place for signing. The contract for the earphones was separate in origin from the iPhone’s (later corrected); when the representative came to it, he jumped to the signature position which incidentally fell at the top of the screen. When asked to see what comes before, he said this is simply to confirm that I accept the earphones. At that point I wanted to trust him and WM. This turned out to be a mistake. Lesson: Never agree to sign a contract on a screen without seeing the previous screen pages (as you should not do when signing a paper contract). The tablet screen may appear informal and friendly but the contract is binding.

  • In fact, by returning to the issue of service plans, the tablet already on the desk can be used cleverly for displaying service options to a customer while taking into account his or her personal usage patterns. That is, the company can show the customer what would be the cost implication of a proposed service plan given current usage levels, and how it may change if usage levels increase by X%.

On top of all, bad execution of proceedings can temper even actions taken in good faith. It may happen as a result of neglect, lacking proficiency by the staff (e.g., how to use the computer system), or flaws in computer software (e.g., poor execution of instructions). Here are two examples — no attempt is made to guess what has caused them:

As told above, the payment arrangement was changed with special managerial consent to six instalments with no interest, as an option in the contract allows, for both the iPhone and earphones. Unfortunately, a notice from the bank as well as the credit card monthly bill soon revealed that the whole amount was charged in a single payment. The trap is apparently in the phrasing of the contract (translated): “The sum of $$$ that will be charged in one payment (or up to six payments to the choice of the customer at the time of acquisition)”. The phrase ambiguously does not specify in how many (equal) payments, up to six, that (cash) price will be charged. This ambiguity has led to practically ignoring the content in parentheses and what was agreed accordingly. It is noted that a statement on an option of payment in instalments with interest explicitly indicates the number of payments and amount of each one. The phrasing of the first statement must similarly be fixed for that option to have any validity.

In the second case, the company left in place a monthly charge (~$6) for a quota of 70 SMS from my previous service package. Obviously, this number is negligible relative to the new allowance of 5000 SMS a month in the new service plan with the iPhone. They should have automatically removed this obsolete component together with other components from the older plan. The customer service representative at the call centre argued that I should have asked it to be cancelled. That is, instead of apologising for an honest mistake, and possibly reimbursing me for the past month, she made it look as if I may have wanted a non-significant addition of 70 SMS to 5000 SMS (>70:1 ratio). That was already infuriating because it made no sense at all. Lesson: Always check your bills carefully.

The customer journey to purchase an iPhone evolved into a kind of chain of pitfalls, acts of malpractice, and errors of unknown source or cause. It must be emphasised that the troubles are concerned with the envelope of services that enable using the iPhone and not the device itself. It is a story of failure of sales and service representatives to listen, a tendency to repeat answers regardless of the customer’s response (i.e., lack of sensitivity or rigidity forced from above), and possibly a skill problem in retrieving information and instructing their computer systems correctly. Where supervisors or managers do try to fix things, organisational and technological pitfalls may stand in their way. Nonetheless, the more disturbing moments of the experience surface when a customer feels an attempt to manipulate has been made (e.g., by diverting attention or hiding information). Being manipulated generally feels uneasy, because among other things it infringes on a consumer’s autonomy to make a decision in one’s own good, but it is all the more damaging when done just to serve the manipulator’s interest (e.g., make a sale)[*].

Companies and customers alike can help in minimising negative encounters that can spoil customer journeys. Consumers can be more vigilant, pay more attention to details, and ask questions when offers do not sound or look right. Yet in the real world consumers cannot avoid being off guard, erring in judgement, or being complacent — much of the time humans are driven by the intuitive and instinctive System 1 mode of thinking. Companies can make greater effort to ensure customers have the relevant information and comprehend it; be attentive to what customers ask or argue; and overall show respect to customers and refrain from egregiously exploiting their cognitive vulnerabilities — perhaps naïve, but not illegitimate to expect.

Ron Ventura, Ph.D. (Marketing)

 

[*] Further reading: “Fifty Shades of Manipulation”; Cass R. Sunstein , 2016; Journal of Marketing Behavior, 1 (3-4), pp. 213-244.

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