Say “yes” to speak with a representative — service automation frustrating customers
Have you tried to apply for a mortgage lately? If so, you might have some rather unpleasant memories of filling out endless forms and – if you had a question — trying to navigate through a voice recognition telephone system that didn’t understand you. If you were able to actually reach a real person, that employee might have been more focused on the procedure than actually listening to you. What is the result of this automation of processes? Not surprisingly, it’s disconnected and frustrated customers.
This is dangerous for companies, especially as the business world is becoming more volatile. Not only is there economic instability around the world, but customers’ needs and preferences are changing faster than ever. Firms need to be able to listen to customers and quickly adapt to these changes.
Some companies have found a successful strategy we call softscaling to combine an emotional connection with customers with the optimization and automation of business processes. The mechanism that links these right brain/left brain areas together is empathetic use of data. When firms need to decide between going with emotions or the process, they can see what the data says. They can’t just rely on the processes or they’ll end up with those irritating voice response systems with no emotional response systems.
In research conducted in India, we studied five top-performing companies and found that all of them use this approach. It has enabled the firms to grow an average of 25% a year over the past five years and take advantage of emerging market opportunities and expand internationally. I don’t expect this would have been the case had they used more traditional western approaches.
A good example is Tata Motors, which has a history of blending emotion with optimization and data. This practice began by sending plant workers and production engineers to local tea shops to talk to customers about Tata’s products, turning the workers into advocates for the customers. Now, with digitization, over four million cell phone text messages are exchanged every month with customers, ranging from complaint responses to reminders for service to customer satisfaction polls.
Another example is India’s largest home mortgage company, HDFC, which has an extremely low default rate of only .9%. Its success can be attributed to a combination of optimized operations on the back end and empowered local loan officers on the front end. The officers handle both lending and collecting money so if a customer needs to miss a payment in order to pay for a daughter’s wedding, the officer can approve an override in the system. This strategy works because customers are satisfied by this emotional connection to the bank and consequently motivated not to miss additional payments.
While this strategy would benefit many western companies, there are a few already implementing it like USAA, which has categorized its products by life events. If you click on the site that you want to buy a car, it brings a series of products to your page that are all connected, such as help negotiating the price, financing, and insurance. USAA is one of the quintessential companies in the U.S. that uses informed empathy (data) to link optimized processes with the nurturing of emotional connections with customers.
For many other companies, though, the clock is ticking. Look around and you’ll find evidence of increasing volatility. The natural reaction is to circle the wagons, but actually you want to open the fences and connect more. That is counterintuitive for a lot of managers, but it’s going to be increasingly critical in today’s business ecosystem.
Read more at MediaPostNews, Marketing Daily
and at Sloan Management Review
Peter Weill, a senior research scientist and chair of the Center for Information Systems Research (CISR), is a coauthor of a CISR research briefing on softscaling with Ritu Agarwal of the University of Maryland.