If you have spent any time dealing with AI digital entities to solve your brand problem, you will not be surprised to learn that we, customers, are totally frustrated with customer service. The Wall Street Journal recently wrote about our unhappiness with customer service. The title of the article is “American Customers Are Madder Than Ever.” After all, we can buy things and hold them in our hands on the same day of purchase. But we are stymied by the firewalls brands build around their human customer service advocates.
It is not only the difficulty in actually reaching a human being. The fact is that AI digital entities are not very intelligent and cannot always provide the necessary support. But a customer needs to “jump through hoops” to speak with an actual person.
Case in point: ADT. The ADT digital entity can address minor issues. But, on occasion, the answers are glaringly unintelligent. When a customer’s ADT+ app was not working, the digital entity indicated it could help. It suggested that while the customer was on the phone, they should power down the phone, turn it off, then power it back up. Perhaps this would solve the problem. When the customer reminded the digital entity that if the phone were powered down, there would be no phone call because the phone would be shut off, the answer was: “Oh, you’re right.”
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The issue of frustrating customer service in today’s digital environment is detrimental to brands. What is worse is that all the seminal work of the 1980s and 1990s on customer service has been completely forgotten. All the data showing how customer service affects profitability is probably filed in some AI database as useless, old stuff. If you are unaware, the 1980s and 1990s focused heavily on the impact of customer service, engaged employees, and profitability.
Please, do your brand and yourself a favor and read the data. Ask your intelligent entity to find copies of 1) Heskett, James L., Sasser, W. Earl Junior, and Schlesinger, Leonard A., The Service Profit Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction, and Value, The Free Press, 1997 and 2) Heskett, James L., Sasser, W. Earl and Wheeler, Joe, The Ownership Quotient: Putting the Service Profit Chain to Work for Unbeatable Competitive Advantage, Harvard Business School Press, 2008.
The Service-Profit Chain
There was a time when happy employees who engaged with customers were believed to have significant implications for enduring, profitable growth.
Recent data show how important the human link is in customer service. Brands need brand loyalty. Loyal customers are profitable customers. Loyalty is a bond. A bond – by virtue of being a bond – requires connections. Without the humanity of connections, there is no bond. Data show that a loyal customer will pay a premium for “their” brand, whereas deal-loyal customers will not. Break that bond, and your valuable customers start loving other brands.
There was a time when brand managers and the C-suite hailed customer service as essential to the business, regardless of whether it was B-to-C or B-to-B. The service-profit chain led by laying out all the necessary conditions.
The service-profit chain is “… a management brand framework that connects the internal health of an organization to its external success. The service-profit chain connects employee satisfaction and brand loyalty, which, in turn, drive profitability and growth. The service-profit chain demonstrates where investments in employee well-being and internal service quality improve employee satisfaction and productivity, leading to higher customer satisfaction, greater customer loyalty, and ultimately, higher profits.”
The service-profit-chain-links highlight 1) Internal service quality, which means having high-quality internal support, tools, and policies that help perform up – or beyond- to expectations; 2) Employee satisfaction and loyalty, whereby satisfied and loyal employees become more productive. This means employees become more committed to their work and the brand; 3) Service value, meaning that satisfied employees create better branded service. Customers perceive a better branded service as a higher value; 4) Leading to stronger customer satisfaction and loyalty. Customers receiving branded service they perceive as high-value service are more satisfied and more loyal. More loyal customers lead to repeat business and referrals, leading to high-quality revenue growth; and 4) High-quality revenue growth leads to profit and growth.
Branded service; not just service. The AI proponents of digital customer service forget that the service the AI entities provide is branded service. If it goes wrong, is too frustrating, or the AI entity becomes a barrier to a human connection, the brand takes the hit.
In its recent article, The Wall Street Journal cites data from various sources.
“The Customer Experience and Communications Consumer Insights survey showed seventy-one percent of U.S. and Canadian respondents think most companies need to improve their customer experience, a record high, according to the seventh annual study conducted in August and published in November by fintech company Broadridge Financial Solutions.
“And the research and advisory firm Forrester in June found that U.S. and Canadian consumer perceptions of the customer experience have dropped for a fourth consecutive year, with brands’ average score reaching a record low of 68.3 out of 100. The index reflects consumers’ attitudes across six metrics, including how easy a brand is to deal with and how the brand feels to interact with.
“People are partly upset over their feeling that it is much easier to buy products and services than it is to get help when there is a problem, according to Scott Broetzmann, the president and chief executive of Customer Care Measurement & Consulting, which conducts the National Customer Rage Survey with the W.P. Carey School of Business at Arizona State University.”
OK, the fact that there is actually a National Customer Rage Survey should be a wake-up call for brands. What is the internal issue that makes brand managers believe that a non-human talking bot can make customers feel that they are receiving high-quality service? The data – longitudinal data and current data – show otherwise.
“Many companies now are turning to artificial intelligence to field complaints, steering customers to online chatbots before they can reach human staff. Companies say the technology helps solve simple problems faster and allows representatives to spend more time on more complex issues. But most National Rage Survey respondents gave AI chatbots ambiguous or modestly unfavorable ratings as tools for complaints.”
During the first McDonald’s turnaround in which our two-person team played a key role, creating i’m lovin’ it service was critical. Working with the head of HR, we helped design the booklet “learnin’ it, livin’ it, and lovin’ it” to describe the employee behaviors and attitudes aligned with the idea that McDonald’s was a lifestyle brand and that customers understood the spirit behind how McDonald’s fit into their lives. Do the AI entities have any association with the brand other than saying the brand name and “I’m here to help”?
At IHG, the massive hotel group conglomerate, service is a prerequisite for doing business. Great service was essential to the brand’s goal of Great Hotels Guests Love. In one of the IHG Trends Reports, we wrote,
“Employees play a powerful role in shaping brand perceptions through positive communications with all brand stakeholders. Proud employees communicate well beyond their workplace. Proud employees’ advocacy for the brand enhances brand perception among both external and internal stakeholders. Employee pride translates into job satisfaction, meaning customers will be treated well.”
The Brand-Service Disconnect
Yet somehow, brands have defaulted on service. A Verizon study finds that nearly half of those interviewed are frustrated by the lack of human connection in customer service. Harvard Business Review stated, in their article Emotional Engagement Leads to Customer Loyalty:
“Customers are more likely to remain loyal to a brand when they feel emotionally connected. A Harvard Business Review study found that emotionally engaged customers are more than twice as valuable as highly satisfied customers. This means: They spend more money.”
In 2013, the Economist Press published a book by Iain Ellwood titled Marketing for Growth. Here is an end-thought that apparently brands, in their desire to do something/anything with AI, have forgotten. And by ignoring the service-profit chain, brands are throwing away their enduring profitable growth because of the allure of AI and its ability to help with cost-cutting.
“… delivering great service experiences provides an opportunity to increase customer loyalty and profitability.”
The Ritz-Carlton and Nordstrom built their businesses on the understanding that great service generates great loyalty and revenue. Enduring profitable growth is the endgame for all brands and businesses. Customers do not care about your brand’s cost-cutting or AI strategies. Customers want problems solved. Customers want a human connection. Brands need both quantity of growth and quality of growth. Otherwise, there will be no enduring profitable growth.
Contributed to Branding Strategy Insider by: Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
At The Blake Project, we help clients worldwide, in all stages of development, define and articulate what makes them competitive and valuable at pivotal moments of change. Please email us to learn how we can help you compete differently.
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