I am pretty certain more or less everyone has heard the statement that 80% of companies think they deliver excellent service and that only 8% of customers agree. We’re all convinced that those numbers reflect the reality, yet there hasn’t been much improvement since 2005 when Bain&Co published the research results.
I can’t help but wonder why is it that companies aren’t shifting towards greater customer satisfaction despite declarative customer-centricity. Perhaps everyone hopes they’re in the 8%? Make no mistake, every single company strives to deliver excellent service. Not once in my life have I heard anyone say “let’s create something useless”. The goal is always to create solutions that customers would love. But that rarely ever happens.
After nearly 10 years of academic research on value perception, I can confirm that this mismatch comes from the fact that customers and businesses have a dramatically different basis of service evaluation. Here are three practical steps that companies can take (according to science) to move closer towards delivering services that “wow” their customers.
1. Don’t focus on continuously improving functionality
It may seem counterintuitive, but functionality is not the primary element based on which customers evaluate products or services. For users, the fact that the offering does what it’s supposed to do is a hygiene factor, meaning — one naturally expects that to happen. Other than that, it doesn’t impact the customers’ value perception if the functional job is done well or very well. For the company, on the other hand, that “extra mile” might cost a significant effort that does not pay off.
2. Design services for the irrational needs
“How do we want our customers to feel?” is not a question you hear in the boardrooms too often. For the customers, however, the emotional component of the service experience is unconsciously far more important than the functionality. Who hasn’t heard a friend telling you how they are staying with a phone service provider or a bank that charges much more just because “I have a contact there that is such a nice person” or “I feel that they really have a personal approach”? Intangible and irrational matter far more than the functional aspects. More to it: if emotional needs are met well, but the functional delivery fails — customers tend to forgive service providers easily for the shortcomings and, in some cases, even take the blame for the failure themselves.
3. Eliminate the unnecessary
It might appear that giving your customers multiple options to choose from creates a perception of personal touch. But people hate to make complicated decisions. Most companies have a long list of services, options, and bundles that in all honesty are designed to create value but cause nothing but confusion. If you want to impress — strip it down to a bare minimum amount of choices but make sure they are the right ones. By no means it is an easy task, but it is worth it. You will be positively surprised by how reducing the variety might boost sales.
Long story short — it’s not rare that aiming to do good companies achieve the opposite effect by complicating and overengineering their products and services. Creating a “wowing” customer experience is actually easier than one might think if you focus on the right stuff.