Significance Trumps Advertising
The pleading protestations of the Elephant Man, in the movie of the same name, ‘I am not an animal. I am a human being’, are as relevant to 20th century customers as they were to the treatment of the disabled and disfigured in the 1800s.
In mid-2017, I received a ‘form letter’ from Optus, advising me that our internet and telephone were about to be cut off due to unpaid charges. Apparently, we had not paid for the service for 3 months.
While I was appreciative of the fact that they had not cut off there service after such a long period of non-payment, I was also concerned in that they had not sent me an invoice in that period, there was no direct debit set up and It took an hour hanging hold before I could tell this to a representative of the business.
When I eventually got through, I had to answer a series of ‘identifying questions’ and explain in detail, a circumstance that must have surely been addressed in a computer file the staff member concerned had access to. Fortunately, I was able to make the required payment and the service was restored. However, the invoices still did not come, and the problem arose again 3 months later.
So, we did what many others do, we changed service providers. We engaged IINet, a business we had had good experiences with prior to the acquisition of the business by TPG. Fortunately, on this occasion a direct debit system was put in place, so not billing issues arose. Unfortunately, within 6 months we lost the telephone service and after they restored the telephone, we lost the internet.
Sorting out these issues took 6 weeks and cost us a great deal of money, little of which could be recovered. During this period, we made perhaps a dozen calls to IINet and each time we had to answer a series of identifying questions and provide a complaint number. Each time, we spoke to someone different, who offered a different solution over a different time frame.
There was no case manager, and no-one was willing to take responsibility.
Around that time, a TPG representative visited our office trying to sell an upgraded product. When I complained to him about the existing service, he first noted that the service was poor due to low margins, then noted that because of those low margins no one would be ‘any better’. I concluded that he was probably right and may have been the only frank and honest person we spoke to in this whole process.
At the time one of our team suggested that if all of these service providers are the same, we may as well engage the cheapest option.
Based on these experiences, and my previous experiences with Telstra and others, I concluded, that for what-ever reason, telecommunication companies cannot be relied upon to offer a reasonable standard of customer service, even when the toothless Communication Ombudsman is involved.
I also found myself pondering what was so objectionable about the service offered by these telecommunication companies, why it was so objectionable and what the likely implications are.
I concluded that the most objectionable thing about the lack of customer service offered by these telecommunication companies was the feeling of insignificance that it engendered. Certainly, no one enjoys the time they waste on the phone, the number of calls they have to make or the loss of productivity, but, it is the feeling of being insignificant that impacts most heavily on the customer.
Significance is often cited as one of the six primary needs of all human beings, and by not offering a case manager, by not addressing issues quickly, by requiring detailed identification at every contact and because the recipient of the call was so ill-informed about the matter, customers were made to feel completely insignificant. That feeling of insignificance is objectionable.
The implications of this lack of service and feeling of insignificance will have a direct impact on the provider. It must increase significantly their churn rate, reduce the length of contracts and reduce the likelihood of customers buying premium services with higher margins. I may well buy a premium service in the future, but because of the bad service I have received, and the insignificance I felt, it will not be through IINet or Optus.
There is also the flow on effect. Research by Esteban Kolsky found that if a customer is unsatisfied with service standards, 13% tell 15 or more people while 72% of customers who are satisfied with a service experience will tell 6 or more people. Kolsky also found that 67% of all customer churn is related to the service experience, not the product.
Great marketing is all about addressing human needs and being seen to address those needs better than others – or any other business.
Scott Galloway, the celebrated clinical professor of marketing from the Stern School of Business at New York University, had noted in numerous books and speeches about the world’s biggest brands – Facebook, Apple, Netflix, Amazon and Google (the famous FANG) that their success is in no small way the direct result of ‘great products’ that address well established needs and wants.
To develop great products that address human needs and wants better than alternative products, it is necessary to understand human needs and wants. It is very difficult to address what is not understood.
Some consumer needs and wants are general and others are specific to the product category.
In the 1950s Abraham Maslow provided one of the first meaningful insights into the general needs of human beings. He wrote extensively about a hierarchy of needs:
Maslow contended that as one level of needs, say ‘physiological’ (food shelter and clothing) people would move on to the next level, ‘safety’ (personal security, financial security, Health and well-being).
This theory still has currency, although for many consumers, the first four levels have largely been addressed and now the focus is self-actualisation (personal growth and enlightenment), a subject of considerable literature in 2018.
More recently, researchers have identified six basic human needs, all of which fall into what Maslow might have called ‘higher needs’ – connection, esteem and self-actualisation. These are:
Supporters of this framework, including this writer, contend that everyone wants, to be certain that the sun will rise and that their car will start tomorrow, to watch different movies and listen to different music from day to day, to feel that they matter, to have strong long term and casual relationships, to become more today than they were yesterday and to feel they are making the world or their community a better place.
In this paper the focus will be on ‘significance’. Everyone wants to feel important. Everyone wants to feel consequential., Everyone wants to feel that they matter. No one wants to feel that they are a number, or an animal. Further, this need for significance feeds directly into the need for ‘connection’ and to a lesser extent’ certainty’. Significant people have relationships and significant people know that those relationships will bring an element of predictability.
The central proposition in this paper is a simple one:
- Significance trumps advertising and indeed any form of communication
Consumers want to feel significant and that significance if established will translate into increased initial sales, repeat business, referrals and increased margins.
Aligned with this first proposition is a second proposition:
- If customers are to feel significant, the staff servicing them must feel significant
For a staff-member to feel valued, they must first feel valued themselves. A staff member who feels they are not important to the business, will struggle to make a customer feel important.
Finally, it is proposed that:
- If staff feel significant they will deliver superior customer service
- If customers feel significant they will embrace the service they receive
Put simply everyone wants to feel significant and will be more likely to behave in the desired manner if they feel significance. Furthermore, significant leads to greater connection and certainty, this addressing three of the critical needs of all consumers.
Despite this, research suggests that few staff and even fewer customers feel significant. All too often customers feel they are being treated more like an animal that a human being.
Compare the Experiences
Never mind the discount focused meerkats imploring consumers to ‘compare the market’ in the hope of securing a cheaper insurance policy or finance arrangement, compare the experience of this consumer when it comes to service.
Within an east walk of where I live when I am in the city, there are two cafes at which I could partake of breakfast on a Saturday morning. I have tried both.
The first, I visited four times initially, thinking it might be the better of the two. Each time I had to go up to the counter to order. Each time while I was assisted by the same staff member, she never acknowledged that I had been there before. After ordering, I was handed a number and invited to find a table, upon which I was to place the number and await delivery of the food, and it was a long wait. The cost of eggs and tea was $20.00
After four weeks of this, I tried the other café. I walked in and was approached by a staff member inviting me to take a table. She brought me a bottle of water, gave me a menu and asked if I wanted tea or coffee. There was no number and my order arrived promptly. By the third time I visited this café, upon showing me to a table, the staff member was asking, ‘would you like a pot of tea, English breakfast wasn’t it?’ I have been going to this café ever since and will never return to the first one. The cost of eggs and tea was $20.00
In the first café, I was a number, an ‘animal’. In the second café, I was a customer, a ‘human being’. In the first café, I was insignificant – just another face to feed, while in the second café, I was significant, a potential long-term source of income. Perhaps the only shortcoming for the second café was that they did not charge more. I would certainly have paid more.
These are experiences most consumers and most readers of this paper have had.
Research suggests that ‘significance’ is one of the six general needs common to all consumers. It may well be the most important given its flow on impact on ‘connection’ and ‘certainty’. But what is ‘significance’? What does it mean for a consumer to feel ‘significant’?
Google defines ‘significant’ as follows:
- sufficiently great or important to be worthy of attention; noteworthy
Significance in terms of the six consumer needs has been defined as:
- feeling important, respected, special, needed, wanted and/or unique
Another worthwhile definition of significance in this context is:
- feeling like a human being, not a number or an animal
I walked past a restaurant the other day and saw a line of around 20 ‘animals’ standing outside waiting to be admitted as soon as those inside had paid their bill. Not matter how good the food, this is one restraint that this writer will never go to.
Significance for the customer is all about the organisation and its team saying by way of their behaviour (and not just words):
- You matter to us and we value your custom
- We will deliver value on your hard-earned cash
- You are an individual with individual needs
The Benefits of Significance
Consumers want the feel significant. Staff also want to feel significant.
In the crudest commercial terms, the benefits of customers feeling significant include:
- Increased average expenditure
- Potentially increased margins
- Increased repeat business rates
- Increased referral rates
Customers who feel important will tend to stay longer and spend more. They often develop, in response to the respect shown towards them, a desire to respond positively to suggestions from staff. A ‘reciprocal relationship’ often develops.
When a customer feels valued, they are very often prepared to pay more. Research has demonstrated time and again that many customers are prepared to pay a premium for superior service and the feeling that they matter.
Customers who are respected and perhaps called by name, want to return to the business. They often develop a connection with the business. Once again, a reciprocal relationship can develop, and can customers feel an obligation to be loyal.
Customers who feel special, are more likely to recommend the business to others, in the hope that they might also feel special. They might even take them to the business in the hope of leveraging their won significance. Reciprocity may be in play.
There is evidence to suggest that increasing the average expenditure of customers, increasing margins, increasing repeat business rates and increasing referrals, will make customers more forgiving of other short comings in the service offering. Consumers are more inclined to forgive those that make them feel important and valued. Customers are also more likely to offer feedback that businesses can act on to improve service standards.
Most importantly, increasing the average expenditure of customers, increasing margins, increasing repeat business rates and increasing referrals, reduces the need for advertising and contributes directly to an increased return on investment and profitability
It is staff that make customers feel significant. To do so, staff also need to feel significant. The first benefit of staff feeling significant is therefore that they will be more likely to make customers feel significant.
The other benefits of staff feeling significant include, increased dedication, making their job their own and generally improve commitment and therefore productivity. Staff who feel significant are happier in their work
Recent research in the United States found that businesses with happy employees, outperformed those with unhappy employees by 20%.
Another study found that:
- Happy employees produce 12% more
- Unhappy employees produce 10% less
Significance is a critical issue for both consumers and staff.
My experience suggests that shopping a Myer is very unlikely to leave a customer feeling important, valued or in the least bit significant. My experiences at Myer suggest that the staff don’t feel important, valued or in the least bit significant and that as such they are very unlikely to make customers feel that way.
More often than not, in my experience, Myer customers and the customers of many retailers in Australia, are made to feel that in asking for service (it is rarely offered) they are interrupting staff that would rather continue a stock take, tidy up the counter, tidy up the last transaction or reorganise a display.
Surely this creates an opportunity for other retailers to establish a competitive advantage by implementing a strategy that ensures customers feel significant. Zara and others have embraced that opportunity.
Unfortunately, one of our business accounts is with Westpac. Once or twice a month I have to go into a bank to get cash for parking and other services. I have never been into a branch and not had to stand in line with the other ‘animals’. There is rarely enough tellers and when I get to the teller, he or she rarely recognises me or my requirements which are always the same.
That said, there is one teller who always recognises me and my requirements and always addresses those requirements with a smile, that helps to make up for having to line up like an animal.
We also have accounts with Macquarie Bank, where the experience is very different. My experience there is never a line, all staff greet customers with a smile and great emphasis is placed on ensuring that all customers are made to feel important. Certainly, the service is not always optimal, but the focus on customer significance makes this much more acceptable.
It strikes me that there is a real opportunity for other banks to emulate Macquarie.
Online shopping is growing in popularity. Indeed, completing all manner of business on line is increasing in popularity. Despite this growth, one of the short comings of online commerce is its failure in most cases to make customers feel like anything other than a number. Indeed, this failure very often contributes to the lack of trust that many people have in e-commerce.
There is surely, a real opportunity to better leverage recognition tools, cookies, memberships, data recording capabilities and other strategies to make online customers feel more important, more valued and more significant.
This is an issue I am currently addressing in an online business in which I am a shareholder.
The opportunities in a range of industries to ensure that customers feel significant and leverage that significance to build profitability are substantial.
Creating A Sense of Significance
Ensuring that customer feel significant involves two critical steps:
- Creating a culture in which staff feel significant
- Creating a culture in which staff make customers feel significant
The behaviour of staff towards customer will determine the extent to which customers feel significant. That said, staff are unlikely to behave in a way that makes customers feel significant if they, the staff, do not feel significant.
For this reason, it is an essential first step to ensure that staff feel significant. To feel significant, staff need must feel:
- Recognised by their managers and the organisation as individuals
- That they are important to the achievement of business objectives
- That they are valued members of a team doing important work
- Listening to what they say and responding constructively
- Demonstrating respect and a willingness to be flexible
- Making the tasks they do as meaningful as possible
- That their efforts and achievements are recognised and valued
- Rewarded for their contributions and supported when struggling
Staff members who feel these things will understand and embrace their responsibilities while recognising that it is in everyone’s best interests for them to make customers feel significant.
There are many behaviours that can contribute to making customers feel significant. These behaviours will vary from business to business, market to market and situation to situation. They might include the following:
- Accept people as they are, respecting individual differences
- Show appreciation and thanking people for their business
- Be agreeable and demonstrating a genuine desire to help
- Demonstrate respect and where appropriate admiration
- Paying attention and noticing the small things that matter
- Avoiding any negative comments, criticism or condemnation
- Being courteous and polite, trying to say yes, and help
- If they are repeat customers, recognising them, using their name where possible
- Approaching them promptly, listening closely and responding promptly
There are so many things that can be done to make customers feel significant, and much of it boils down to valuing their custom, recognising that they are spending hard earned money and treating them as the staff member would want to be treated in the same circumstance.
Critical to ensuring that staff and customers feel significant are:
- Knowing them
It is important to know staff and customers well enough to know:
- That they want to feel significant
- What makes them feel significant
It is important to recognise that culture is the key to staff and customers feeling significant and that:
- Significance needs to be taken into account in framing core values
- Prioritising significance reflects the culture and will be reflected in the brand
The culture-brand continuum, address in previous paper is highly relevant here.
A Question of Equality
Years ago, I used to consult to a car dealer who saw an opportunity in equality.
Our firm used to ‘shop’ his sales staff each month to identify issues that might need to be addressed in training, opportunities for improving conversion rates and firm protocols that were not being followed. One of the protocols this dealer was not interested in was the equal treatment of men and women, some thing he viewed as being uncommon in the automotive industry.
Male, and female ‘shoppers’, presenting as singles and couples, were asked to pay particular attention to whether, upon entering the yard, men and women were approached and greeted in the same way and that the sales person offered his had to both the woman and the man. They were also asked to monitor how questions from the male and female were addressed, who the salesmen directed conversation to and whether men and women were offered equally, the opportunity to test drive the vehicle of interest. Finally, they were expected to keep an eye out for questions of women on their own, like ‘would you like to show your husband?’.
Some salesmen (and they were all men) did well and others had to explain their sexist behaviour to the dealer principle.
While this deal was interested in equality, he was more interested in significance. He wanted all parties to the decision to feel significant. He wanted any purchaser to feel valued and that their opinions were valued. He wanted all parties in a sale process to feel like a human being rather than an insignificant appendage.
While, there is no doubt, this approach was not the only reason for the staggering success of this dealer, I have no doubt that it was a contributing factor. The available evidence suggested that it was received very well by women and significantly increased the number of women customers (as the word spread) and conversion rates.
Everyone wants to feel significant.
Human beings need certainty and variety. They seek personal growth and to feel they are contributing. They need also need to connect and feel significant.
Making customers feel significance is a potential competitive advantage, given have few businesses engender this feeling. Delivering a sense of significance will ensure a superior customer experience and inspire brand loyalty. Delivering a sense of significance will attract sales, repeat sales and referrals. Customer who feel significant will be more inclined to forgive mistakes and service related short comings.
Customers who feel significant will also feel more connected and a greater sense of certainty.
Staff make customers feel significant and for staff to do this, they need to feel significant. This in turn requires a culture that values staff and customers and their respective needs and wants.
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