I often get asked in media interviews about the effects of artificial intelligence on customer service. So many people bemoan the seemingly soul-less interaction we have with chat bots online. But we we prefer them. And so do our customers.
Customers prefer knowledge 87% over presentation 13%
Customers prefer knowledge 59% over warm customer service 41%
Customer prefer knowledge 59% to cleanliness 41%
Ai in telecommunications
I recently heard a keynote by the head of artificial intelligence at Optus telecommunications at the Google Cloud summit in Sydney. The Optus executive said that customer net promoter scores (NPS) were higher when they interacted with artificial intelligence then when they interacted with humans.
They also stated that artificial intelligence bots can now handle up to 75% of all enquiries.
This tells me it’s only getting better. We want knowledge above all else and artificial intelligence is the best tool to give us that. And it can give us the knowledge we need instantly.
Now that the technology is getting to the point where it is useful, we will NOT look back fondly on the days we had to wait 20 minutes or 2 hours on the phone to speak to a representative about a mobile phone issue. Will be able to login and get it dealt with within 10 seconds or a minute.
I like shopping instantly online, rather than waiting for someone. I like not having to wait for someone to come fill my car up for me. I like not having to wait for a checkin persona at the airport.
Automated customer service improves service, not diminish it.
I don’t care that I’m dealing with the machine. I just want my question answered and I don’t want to wait.
Are you meeting this challenge with your customers or still reminiscing about the good old days – which were not so good.
(This begs the question about the role of people, but that’s a whole other topic)
July 02, 2019 /
Comments Off on Surveys don’t tell the whole picture
I was just completing a report for a new banking client and noticed two measurements heading in opposite directions. Their mystery shopping scores were low, but their customer satisfaction from exit surveys was high.
So what’s going on?
This highlights the problem with reliance on one measurement. The customers are woo’d by the nice branch, and super polite staff who are expert and reiterating what the client asked for.
They also get a nice farewell. But here’s the problem. The staff are not doing the things that make the sale.
Two critical aspects of a home loan are to:
1) determine the customer’s needs (so they staff don’t go into boring sales spiels), and
2) follow-up after the sale (a big driver of making a sale) Both scored poorly.
The branch is polite and presents a professional environment. So the customer walks out thinking the service was “nice” but buys nothing. This is common, and it’s dangerous if you just listen to customers.
September 18, 2018 /
Comments Off on The biggest (and hidden) reason customers leave.
Dan Kennedy, the king of direct marketing explained the reason as follows.
Customer leave for one of the following reasons:
1% die. There’s not much we can do about this one.
3% move. Offline, this is due to geography; online, it’s due to shifting interests. You must do all you can to hold the attention of your audience. Some loss is acceptable over time, but stay remarkable and you will minimize the losses.
5% switch to something else due to a friend’s recommendation. There is no more valuable referral than that from a friend. Yet, if your customer is truly happy with your product or services, the odds of them leaving are slim.
9% switch to a better product or service. The best way to fight this is to make sure your products, services, and offers are simply the best around.
14% leave for general dissatisfaction. Again, it’s a good idea to trim the tribe, as you’re never going to please everyone. However, if a customer leaves, make sure you did everything within reason to keep them.
Altogether, those five reasons only add up to 32%. A staggering 68% of customer loss is due to indifference.
If I don’t like a service or it’s not as expected, I don’t argue, I don’t make a scene, I don’t tell them how to fix it. I just don’t go back.
Customer surveys won’t help, the indifferent will either ignore your request for feedback or just answer with “ok”. You’ll never know the problems.
Indifference kills loyalty.
A simple way to avoid indifference is to change it up – change the interaction in simple ways. Give the customer small surprises (eg occasionally upgrade a frequent flyer to business class, or change the store layout).
If you can’t change it up, don’t wait for complaints, or compliments to act – incorporate Mystery Shopping. it remains the best way to get operational insights.
Although a store may spend $10,000 a month on rent, it seems incredulous that a $100 per month spend on mystery shopping (1% of the rent) needs to be justified with ROI. If salaries and running expenses are taken into account (roughly to equal the monthly rent), then $100 per month equates to 0.5% of the operating expense of a site.
However, if ROI needs to be justified, it can be done as follows. Note, the resultant ROI number is so high that it seems unbelievable. There are few (if any) investments that can return a 3,600% ROI.
Imagine a store with:
5,000 people walking through per month
80% of people buy
Average price of $60
The store also has the following statistics found from the mystery shops:
Greeting customers 68% of the time
Commitment to purchase is asked 32% of the time
Up-selling 34% of the time
Let’s do the math to calculate the ROI:
5,000 customers x 80% who buy x $60 = $240,000 sales per month.
Here’s what happens if the store increases each of the three mystery shopping categories by 10% and 10% of the customers now buy (e.g., customers who were asked for a commitment to purchase increases 10% from 32% to 42%, and conservatively, only 10% of that 10% who asked to commit to a purchase actually made a purchase).
3 categories x 10% x 10% = 3% increase in sales
Old sales of $240,000 is improved 3%, being $7,200 increase in sales.
If the mystery shop expense was $100 per month ($1,200 for one year) and it took 6 months to get the 10% improvement, then there are 6 months of the $7,200 increase in sales ($43,200), then there is a return of $43,200 for a $1,200 expense, an ROI of 3,600%.
There is perhaps no greater opportunity for an investment with 3,600% return. It’s an investment worthy of the front page of every newspaper, yet it remains hidden in plain view.
Peter Drucker famously said, “If you can’t measure it, you can’t manage it.”
Extract from my book – Mystery Shopping Mastery
Time and time again I see companies trying to fix problems they have imagined while ignoring the problems that need fixing. Sure, management is an art and skill, but good measurement provides direction to apply that art and skill.
Hard skills are easy to measure, such as average sales, staff costs, and even foot traffic. But soft skills seem only to be measured anecdotally because anecdotes are easy. If executives ask their middle managers about customer service, they provide a sterilised view. If they ask the customers, they only get extreme views.
The only voices heard from customers are complaints from the disenfranchised or comments from raving fans. Sure, this information is important, but it’s equally important to get information about the “normal” experience. How do you serve the 99%?
The following example is a true-life story of how a simple measurement completely transformed a company’s strategy. Our client was a mortgage broking company selling loans into the retail market. The problem was that the advertising was wildly successful, but the advertisements were not being adequately converted to sales.
Their strategy was to employ older, more experienced mortgage bankers, and the advertising reflected their experience by suggesting customers “shop with experience.” The mystery shopping zoomed right in on the problem of poor conversions. Although customers were reacting positively to the “experience” angle in the advertising, the delivery by the mortgage brokers was very different. The mortgage brokers were selling based on price. This created a huge disconnect between what attracted the customer and what was being delivered.
The solution for the client was simple and difficult. Either change the strategy to reflect the current culture or change the culture to reflect the strategy. The company spent a fortune trying to improve sales tools, redefine the marketing, and even speed up computer systems. But all of that was wasted because the problem was simply that the sales people were doing something completely different to the strategy.
This is a common story. Management wastes money on misdirected sales and service training programs and fancy board level re-alignments. But, the problem is often as simple as the staff not executing the current strategy. And it might not be the fault of the front-line staff.
Extract from my new Book – Mystery Shopping Mastery
Let’s start with an extract from a mystery shopping report:
The store was in immaculate condition with all the clothes put away and neatly stacked. But I waited eight minutes to be served. The staff were busy talking to each other but I couldn’t hear what they were saying. I grabbed some clothes and took them to the change rooms. I was close to the staff and could overhear their conversation.
The three staff members were talking about their recent night out. One of them was getting very specific about how she got drunk and what she did with a guy she picked up at a bar.
The gutter language was terrible. Normally, I would say something, but I was conducting a mystery shop, so I kept to myself.
I stuck my head out of the change room to ask a question only to see one staff member recreating events from her night out, like a pantomime. It was disgusting. I asked for help and another staff member turned around abruptly to tell me she was busy and would be with me in a few minutes.
This type of report is shocking to a client but unsurprising when you run a mystery shopping business. In the world of customer service measurement, we get to see what really happens, whether a client likes to hear it or not. We reveal the truth.
Unfortunately, companies tend to believe their own rhetoric. They believe the stories told to them by everyone in the service chain. Anecdotal evidence seems to trump reality.
The truth can lead a company to water, but it can’t make them drink. Sometimes the truth is so big and scary that it gets either ignored or pasted over in an effort to be seen to be “doing something.”
October 06, 2016 /
Comments Off on Episode #19 Customer Service is overrated
Guess what. Customer service is NOT necessarily the most important driver of sales.
That might sound strange coming from someone running a Mystery Shopping company, but I see it time and time again. Companies focusing on the wrong things.
Sure service is important, but it’s also important to ensure that:
1) your products are on the shelves
2) the promotions are correctly displayed, and
3) that the product is recommended.
Our research shows that on average there are 53 item categories missing in a single big box grocery store.
We’ve also found that on average there are 13 categories missing from the dairy section alone.
As for recommendations, we recently did a study for a manufacturer distributing in a hardware chain, and found that their product was first recommended 31% of the time. Sounds OK, except they only have one competitor.
For complex products, consumers will still lean heavily on the recommendation.
If the product is not there, or not recommended, you’ve lost before you start.
Ask the right questions and discover the truth.
June 01, 2016 /
Comments Off on Episode #18 – Mystery Shopping is not a Customer Service Measurement
Everyone seems to confuse Mystery Shopping with Customer Service measurement. The typical Mystery Shop involves sending a pretend customer into a store, call centre or a website/app. They then evaluate different aspects of the service experience.
But measuring aspects of the service experience is NOT a measure of customer service.
Mystery Shopping takes measurements as often as once a month. You can’t measure customer service with one measurement in a month.
So – what is it?
Mystery Shopping is a measure of strategy execution. It’s a measure of whether the staff are doing what you need them to do. It’s a measure of operations.
If the operations are running well, then you can predict that you’re providing good service.
Let’s go back a step.
The Board and Executive team decide on a strategy. Management execute the strategy with tools such as staff training. But are staff implementing the strategy? Mystery Shopping shows the truth, the truth of whether the strategy is being executed at the front-line.
After all, if the strategy is not being implemented, then why have a strategy? And if you don’t know if it’s being implemented, you can’t answer that question.
Customer service measurement through Surveys and Net Promoter Score have their place, but you can’t only ask the customer.
We often hear clients say, “our surveys show good results, but we are unsatisfied with our service”.
You see, customers often have low expectations. A smile, speed, and a little knowledge is often enough to make them happy.
It may be OK for a customer to be greeted with a big broad smile and “G’day, howz it goin’ bud”. But that might not be good enough for you as a Brand. You might be trying to build something different – like a five star hotel.
The customer may tell you what’s comfortable, but not necessarily where you need to go. Only you can know that.
If you are trying to move your brand towards more speed, then asking customers if they got served quickly enough may not give the right answer. The customer might be happy to be served as fast as everyone else serves, but you may want to smash through the industry norm.
Customers mightn’t rate what you decide is critical.
It may be critical to you that staff capture contact details for a sales follow-up. But a customer will never rate this as being important. If it doesn’t happen, it would never enter their universe, and they may rate the service at 100%, but to the company, failing to get follow up details may constitute a total fail in service delivery.
Almost all companies insert process into the service chain which are invisible to the customer (so it seems seamless). The customer can’t judge the invisible.
And this is where you use Mystery Shopping.
With Mystery Shopping, you set the standards, and then measure precisely against them.
“How long did it take to be first greeted?”
“Did the staff member introduce themselves with their name when they greeted you?”
“Did the staff member ask for your contact details?”
Customers can be clouded by personality and product and price. They may be happy, but it’s not enough for you. You may want to raise the bar.
If you want to measure how the customer feels about the experience, then use Net Promotor Score, Surveys and Focus groups. If you want to measure whether you are executing your service strategy, then use Mystery Shopping. Don’t confuse them.