Customer service wins and win-wins
As we have discussed, any service improvement that a company invests in must also return value for the company through some kind of improvement in customer acquisition, monetization, cost savings, or retention. The SQI model establishes that there is no such thing as a free lunch; any investment in service improvement must be accompanied by profit improvement. This makes sense especially in the context building a sustainable business in the long term.
But service improvements must also be win-win. The SQI model not only demands return for the company but reframes the customer relationship to emphasize that it is not a zero sum game between customer gain and company gain.
The company examined in my class, Progressive, provides two services worth noting for how they better serve customers while also capturing value for Progressive.
The first one, their price comparison tool, is an easy example in that it provides customers benefit by allowing consumers compare insurance company rates so they can find the company that helps them save the most. While this tool might mean that some would-be customers will bounce from Progressive for savings at another company, it also means that more consumers will come to Progressive first before making a decision thus introducing the potential for significant decreases in customer acquisition costs (especially if Progressive’s rates are the most favorable). In addition, because consumers can very readily grasp the benefit to them and the cost to Progressive, Progressive gains a reputation among consumers for trust while still building a stronger customer relationship that goes beyond price.
The second example of Progressive providing immediate roadside inspections for car accident claims is perhaps even more interesting to examine. Progressive provides immediate roadside inspection of car accident claims for customers. The customer benefit is more obvious here: it satisfies customers by allowing them to move past a traumatic event quickly and effectively. What is more subtle is that it also helps Progressive reduce costs from fraudulent claims leading to better rates; when Progressive can inspect a car immediately at the scene of the accident, their claim inspectors are better able to identify fraud. This is again a win-win: customers gain convenience and expediency while Progressive reduces costs from fraud. Here it is interesting to consider how consumers would feel if they knew this fraud reduction element (especially if they conceived it might make it more difficult to get a legit claim approved). But it is never presented in that manner and that brings us to our next point.
We can improve the satisfaction customers get from service by improving how we frame our customer solutions. And so as important as it is to provide a win-win, it is just as important for customers to see it as a win for them. This gets to the issue of what we talk about when we talk about service improvement.
There is a relativity to customer experiences. Substance drives perception, but shaping perception can change consumer behavior. We can improve service not just by massive monetary investments but by restructuring how customers remember their customer experience. We can consider this “restructure” of customer experience as a trick of memory as we discussed in class how making the patient fill out their own forms as a way for them to feel like they are wasting less time waiting, but I also think what we are talking about is how we can find opportunities to shape consumer habits and perceptions.
And this excites me because I think what we are truly talking about now is not about buying a consumer’s obedience but finding new frames to make them open to reshaping their habits and perceptions.
One very expert player here is Google. Google offering free internet in New York and using balloons to provide internet to rural areas? Are they trying to democratize internet access for all or just get more people more addicted to using internet and generating searches that create more advertising dollars for Google? It is both and consumers don’t mind because the benefit to them is clear and not overshadowed by other concerns they might have.
Now Google might not be so much improving behavior as expanding on a behavior, but that sort of thing is going on. One example is American First Lady Michelle Obama’s initiative to have healthier menus in school cafeterias. It is generating a great deal of grumbling, but schools are implementing these new nutrition approaches and despite the groans, school children are eating healthier. And maybe that is what is needed. Even if they remember it as horrible and disgusting, these school children are being acclimated to healthier diets. And yet at the same time, we have to consider if there is a way to have couched this with more finesse (and perhaps better execution) that maybe increases this program’s odds of longer term behavioral change.
