Customer Delight & SEAGAP

Transcription

1 Customer Delight & SEAGAP May 27 th 2015 Donald C. Barnes Department of Marketing Cameron School of Business

2 Different Perspectives The whole point of my research agenda is to assess the value of customer delight Company Employee Customer Delight Customer 2 2

3 Some of the research I have conducted Research I will cover today What is customer delight? Is customer delight profitable? What causes delight? Does age or gender matter? How do employees view delight? A specific strategy to create delight Other research that I have done (and can talk about if you are interested) Can impact of delight on the employee be modeled? What stops the positive relationship between delight and employee delight? Can delight occur in seemingly utilitarian environments (i.e., self-service)? What creates delight in the classroom? What happens when one customer sees another customer receive delight? Delight as a source of competitive advantage? How brand community impacts delight? 3

4 Introduction Historically To enjoy success firms were told to satisfy their customers. This was achieved by having: Performance Expectations How satisfied were you with service? Just get 4/5 the company will be okay 4

5 However, both practitioner and academic research provided some interesting insight into the outcomes of satisfaction 5

6 From the practitioners perspective: a famous study by Xerox found those customers who circled 5 were dramatically more loyal than those who circled a 4 (5 or 6 times as likely to repurchase) AHA there are different levels of satisfaction From the academic perspective: several studies provided evidence that satisfied customers were not particularly loyal (i.e., they would switch from firms that satisfied them, willing to spend, or to engage in word of mouth behaviors 6

7 What is customer delight? 7

8 Q1: What is Customer Delight What is customer delight? Delight = a profoundly positive emotional state generally resulting from having one s expectations exceeded to a surprising degree What is customer satisfaction? A cognitive evaluation based on a better-then worse-then heuristic Thus, satisfaction is a cognitive reaction and delight is an affective reaction 8

9 Is aiming for customer delight profitable? 9

10 3 studies completed utilizing a descriptive, scenariobased design that manipulated the level of reward (under=dissatisfaction, equal=satisfaction, over=delight) 272 marketing students at a large southeastern university (57% male, mean age 21). 167 non-student respondents (53% female, mean age=37). 210 non-student individuals (54% female, mean age 28) 10

11

12 The Why Equity theory (Adams 1963, 1965) posits that individuals prefer to deal in equitable exchanges When perceived inequity exists, a tension develops which is proportional to the magnitude of the inequity Accurate in all types of environments (prison, retail, relationships, etc.) To alleviate tension individuals can Lower/raise their input/output levels Restore psychological equity 12

13 Managerial Thoughts: 1. Customers who are delighted are significantly different than customers who are satisfied = aiming for customer delight may be a profitable strategy. For SEAGAP 1. Make students believe inequity exists (perceived or actual) 2. If you can create delight when recruiting students they will choose your school 13

14 What causes delight? 14

15 Exploratory research technique customers interviewed Data were collected across high, low and no contact service categories 2 key questions were asked: What delights the customer What is the difference between customer satisfaction and customer delight 15

16 Major Categories Employee Affect Employee Effort Employee Skill Time Issue Core Product Bend Rules/Free Stuff Service Failure Recovery Represents the hedonic interplay between the customer and employee. Behaviors such as being cordial, polite, and welcoming. Behaviors such as smiling, being joyful, being exciting, and being cheerful. The amount of energy put into a behavior by the employee. Attentiveness/helpfulness: the employee is conscientious or helpful. Extra effort: behaviors that are well above the employee s job description. The actual functional process that the employee utilizes in service provision. The employee makes suggestions, provides recommendations to the customer, or knows firm policies. Terrific service quality: gestalt evaluation that everything is good Quickness, speed, or promptness in the encounter. Value inherent in the product/service or the value in the acquisition of the product/service. The customer gets something for free, or the rules are bent for the benefit of the customer. Any type of response that the employee or firm engages in after a service failure.

17 Employee Affect (29%) Employee Effort (21%) 78% related to employee Employee Skills (18%) Time Issue (10%) Customer Delight Core Product (9%) Bend Rules/Free Stuff (7%) Service Failure Recovery (6%) 17

18 Employee Affect Employee Effort Employee Skill Caring (57%) Friendly (43) Attentiveness/ Helpfulness (53%) Extra Effort (47%) Expertise (50%) Overall Service Quality (50%) I went to the bank to transfer money from one account to another and I did not have any trouble. What really made it special was that I had the feeling that the employees seemed to care about me The server at the restaurant was not only cheerful and helpful but fun to be around. The ladies who worked in both of the stores that we visited were very helpful. They made us feel as if we were important and that they wanted to do anything they could to help us. They did not make us feel rushed in making our decision. We were not given a limit on how many dresses we could try on. They did everything they could to help us. I had an abscessed tooth over a weekend, and the dentist came into the office after hours to perform a root canal and relieve the severe pain that I had been experiencing for several days. The attendant brought me other outfits that she thought I might enjoy based on things I was already trying on. I walked into Mia Salon and was immediately greeted by Mrs. L. She asked me what I wanted, and I gave her a brief idea. After less than an hour, she was finished. She was very quick, was easy to talk to, and fixed my hair perfectly the way I wanted. 18

19 According to customers what is the difference between satisfaction and customer delight? 19

20 Delight vs. Satisfaction Customer Response (25%) Employee Effort (20%) Employee Personality (15%) Need to get an emotional reaction 44% directly tied to the employee Employee Skill (9%) Core Product (8%) Exceed Expectations (8%) Time Issue (6%) Free Stuff (4%) No Difference (4%) A majority (96%) of customers believe there is a difference between the two 20

21 Managerial Thoughts: 1. To create delight encounters between employees and customers need to be carefully managed. 2. Human resource management may be a key route to customer delight hire the smile, train the skill. In other words start with employee delight. 3. Customers see a difference between satisfaction and delight 4. Key goal is to create an emotional reaction within the customer as this is what distinguishes satisfaction and delight For SEAGAP 1. Frontline employees who deal with students must be trained 2. Student ambassadors are probably your most important asset 3. Need to enable situations where affect transfer can happen (breakout sessions, etc.) 21

22 Do age and gender matter for the major categories just discussed? 22

23 Categories Across Age Category Subcategory Millennials Baby Boomers Total Employee Affect Employee Effort Caring Friendly Attentiveness/ Helpfulness Extra Effort 12.7% 17.3% 14.6% 17.8% 10.7% 15.0% 15.3% 9.4% 12.9% 6.4% 8.4% 7.2% Employee Skill Employee Expertise 10.2% 14.0% 11.7% Terrific Service Quality 2.9% 3.3% 3.0% Time Issue 12.7% 8.4% 11.0% Free Stuff/Bend Rules 9.9% 9.8% 9.8% Service Failure Recovery 5.1% 11.2% 7.6% Core Product 7.0% 7.5% 7.2%

24 Category Employee Affect Employee Effort Categories Across Age and Gender Caring Subcategory Friendly Attentiveness/ Helpfulness Extra Effort Female Millennials Female Baby Boomers Total 12.9% 19.2% 15.5% 21.8% 11.1% 17.4% 17.6% 8.1% 13.7% 6.2% 8.9% 7.3% Employee Skill Employee Expertise 8.3% 14.1% 10.7% Terrific Service Quality 2.6% 3.0% 2.7% Time Issue 11.4% 8.9% 10.4% Free Stuff/Bend Rules 10.4% 8.9% 9.8% Service Failure Recovery 4.1% 12.6% 7.6% Core Product 4.7% 5.2% 4.9%

25 Managerial Thoughts: 1. With your advertising or positioning strategy you need to account for gender and age. 2. Collect data on what delights your customer as well as collecting data on age and delight to see where patterns exist market accordingly For SEAGAP 1. Female and male students differ on what delights them. In other words, schools should not offer a single marketing campaign to both 25

26 What do employees think about customer delight? 26

27 Same exploratory technique as previous research (interview employees this time instead of customers) Employees were asked for a time they had delighted their customer 400+ employees from various industries surveyed 27

28 Employee Examples of Delight Category In-Role Performance Extra-Role Performance Comp. Offering Empathy Service Failure Recovery Brief Description The employee provides the expected service with skill and knowledge Service encounter where the employee goes well beyond what the customer or service firm could expect Service encounters where the customer receives something above and beyond what was paid For Caring and individualized attention that employees provide to their customers Recovery after service failure that leads to customer delight 28

29 Employee Examples of Delight Category In-Role Performance (51%) Extra-Role Performance (27%) Comp. Offering (11%) Empathy (7%) Service Failure Recovery (4%) Example A lady told me she has a daughter that has health problems and that she could not get life insurance for her I informed her that my company has a policy especially designed for this situation... There was a group of about 16 men that had come to play golf. It was kind of a messy day weather wise and there was no one to work in the snack bar Some of them requested a hot dog or sandwich, so I made some for them A few weeks ago I gave a woman a haircut. She had really long hair and we cut four inches off. She loved the haircut and the end results so I offered to give her a free sample of the hair products I had used on her When a customer comes in having a bad day, I try and get on a personal level with them. A customer called and said their product had been damaged in transit. They were upset because they needed the product. They were overwhelmingly delighted when I told them we would overnight ship them a replacement product for no charge 29

30 Major Categories from customer s POV Employee Affect Employee Effort Employee Skill Time Issue Core Product Bend Rules/Free Stuff Service Failure Recovery Represents the hedonic interplay between the customer and employee. Behaviors such as being cordial, polite, and welcoming. Behaviors such as smiling, being joyful, being exciting, and being cheerful. The amount of energy put into a behavior by the employee. Attentiveness/helpfulness: the employee is conscientious or helpful. Extra effort: behaviors that are well above the employee s job description. The actual functional process that the employee utilizes in service provision. The employee makes suggestions, provides recommendations to the customer, or knows firm policies. Terrific service quality: gestalt evaluation that everything is good Quickness, speed, or promptness in the encounter. Value inherent in the product/service or the value in the acquisition of the product/service. The customer gets something for free, or the rules are bent for the benefit of the customer. Any type of response that the employee or firm engages in after a service failure.

31 Employee Feelings After Providing Delight Category Description Example Delight Contagion (57%) The tendency of the employee to mimic the emotions of the customer who has been delighted...the feeling of helping others made me feel good about myself knew I was going to have a positive day because of that customer. Sense of Accomp. (33%) Indifferent (6%) Future Benefits (4%) Positive emotions that arise within the employee after providing delight No difference reported after the delightful encounter Positive emotions that the employee has over the possible future benefits that the employee may receive A sense of pride can be attained from the completion of a job like this one... I really didn t care. It is my job. I am just there for the paycheck... It made me feel great because I felt she would be a return client and possibly buy the new product next visit.

32 Managerial Thoughts: 1. Employees must be taught to evaluate customer delight from the customer perspective. In-role does not equal delight (remember it is about creating an emotional reaction) 2. Free stuff is not the key path to delight 3. Employees connect self-concept to the services they provide thus, an unintended benefit of customer delight may be employee delight (other research I have completed shows this empirically) For SEAGAP 1. If delight is the aim schools must train their employees on what delight is! 32

33 What is an example of a strategy to create delight giving a suggestion to the customer (or student)! 33

34 An experiment was completed that evaluated the impact of employee recommendations on customer delight 3 possible situations Ask for a recommendation Given an unsolicited specific recommendation Given an unsolicited general recommendation 2 possible outcomes (good vs. bad) 34

35 Expectations Employee Recommendation Customer Delight When the outcome was bad, there was no difference between the conditions with regards to customer delight customers blame themselves for taking the recommendation But, when the outcome is good, those with higher expectations experience more delight

36 The Why Self-fulfilling prophecy customers can still experience delight when they have high expectations Essentially I tell you this will be great and you rank it as great all else equal 36

37 Managerial Thoughts: 1. Raising expectations may stimulate a self-fulfilling prophecy 2. GIVE AN UNSOLICTED SUGGESTION as an employee there is no downside and you evoke the SFP For SEAGAP 1. Don t be bashful about how good the school is telling students will provide a SFP 37

38 Questions? Thank you for listening 38