Recently we spoke to Customer Experience (CX) legend Maurice Fitzgerald, the former VP of Customer Experience at HP, author of 4 books on the subject of customer experience strategy and Net Promoter Score, and global keynote speaker.
These are the highlights from our webinar with Maurice, “How to combine science and emotion for CX success”. With over 10 years of experience at HP leading their CX, he shares his learnings from his time there and his overall career.
What are the top 3 priorities for a CX leader?
“You can have all the customer intelligence you like and all the fancy operational processes, but unless you’re able to communicate the different initiatives effectively throughout the company, and clarify why they are important, it’s pointless.”
Best books on customer experience?
So, if you’re a busy customer experience professional, or a CEO, on holiday right now (we can always dream, can’t we?), what are the best books you should pick up?
“The two books that set the foundation for my understanding are “Thinking, fast and slow” by Daniel Khaneman, who won the Nobel Prize in Economics; and “Predictably Irrational” by Dan Ariely, which demonstrates that humans think in a predictably irrational way”. He gives us some interesting Behavioural Economics examples.
“The essence of Daniel Khaneman’s principles is that humans have two ways of thinking, which he calls System 1 and System 2.
System 1 is intuitive, irrational and the part of us that jumps to conclusions.
System 2 is rational thinking, how to build up an argument, analyze numbers and so on. What his research showed very convincingly is that when our minds jump to an intuitive conclusion, System 2 doesn’t engage at all.”
As an example, see this bat and the ball image:
“Just about everybody who sees this image will think the answer is “10 cents”. But, guess what? That’s wrong.
Because if the ball costs $0.10, and the bat costs $1 more than the ball, then the bat costs $1.10. So, then the ball has to cost $0.5.
“There was some recent research on this that stated that even after it is explained, “something like 20% of people who have had this explained to them, still do not believe the correct answer”, says Maurice.
“Understanding the correct answer requires you to engage System 2. But for some people, as soon as System 1 has jumped to the wrong conclusions, System 2 will never get engaged. It just shuts down.
Why does Behavioural Economics matter to customer experience?
Let’s look at an experiment below that compares System 1 and System 2 communication.
These two statements are functionally identical. The issue is, and here is when we get to one of the crucial points of Behavioural Economics, that at an emotional level, they are not, in fact, identical at all.
How loss aversion impacts taking action?
So – it’s all about loss aversion.
The issue is, far fewer people (and remember these are doctors, who we think of as “smart” people) would want to prescribe the medicine when the message was about the mortality rate, then the survival rate. The doctors that were told about the survival rate were far more willing to do it.
The moral of the story: people hate losing anything. So, if you want to prevent action, phrasing something as a loss is an effective way of doing it.
As a real-life example, see this infographic.
Says Maurice: “This is the way I would have communicated in the past, before I understood Behavioural Economics. Graphics with lots of numbers, nicely presented. Most of us would tend to communicate in this type of way.
As an example of a company that would use this: How do you discuss problems with security software? Suppose you’re in a situation where your company has security software and your customers have problems.”
“This type of communication just didn’t work as a method of communicating – because it took too long.
What you need to do instead?
So, I took a different approach and it looked like this:
“You need to appeal to emotion. This isn’t a photo of the actual person in the security software example, but Tomas Novak is a real person.
“It says ‘Meet Tomas, we lost his data – and because we lost his data – he lost his job’. And that grabbed people, it got them extremely excited about the whole subject, and wanting to know more. Of course, you can’t scatter these things around randomly – the data and the facts need to be behind it”, explains Maurice.
So, the moral of the story is that, you can start with an emotionally based story and then present the infographic. “Because once people have jumped to the correct System 1 conclusion, generally they’re very receptive about hearing your System 2 discussion, about how big of a problem it is, how much money it’s going to take and how many resources it’s going to take to fix it”, confirms Maurice.
“I used the example of a person’s loss instead of a win on purpose”.
“I don’t know why, but humans are more attracted to reading about the negative stuff.”
“Sources like Gartner and Forrester have also mentioned this in some of their research previously, where they say things like ‘American companies are losing $440 million annually because of bad customer service.’
“I could take the same story and say, ‘American companies are making an additional $440 million annually because of good customer service.’ Because if you think about it, the $440 million didn’t disappear – it just stopped being spent with the bad customer service company and started to be spent with the good customer service company.
But people are so afraid of losing that they’ll read the headline about loss first.”
How to combine Behavioural Economics with data-driven insights?
Often what we do at Thematic is find examples of what a company could do that would drive their Net Promoter Scores (NPS) up and how they can improve their score.
For one of our customers, we found that their “customer service” is a positive theme driving the score up by 4 points but “loyal customers” was one of their top 5 negatives contributors.
The Head of Customer Experience for this particular company was given the data and tasked to communicate it to the CEO, who is very much averse to spending any money on improving customer experience. But he needed to make a case.
Maurice explains: “You’d be rationally communicating that you’re making a special offer to attract new customers and somehow you think that the existing customers won’t see these offers. But they have friends, who can tell them about it. Or, if your company is a B2B, these people might be going to the same types of conferences. The emotional level outcome for the existing customers is that you’re “cheating” them.
“So as the Head of CX, you could use an example of a customer from this company (similar to the Tomas Novak example), use her photo and say ‘This is Mary Smith. We cheated her. Now she wants to leave us’. Maybe that’s not completely fair, but it grabs attention. And people want to know how we cheated her.”
To make your audience truly hear you, Maurice’s point is that you need to bring it back to the basic emotion. Talk about what the person who’s writing the comment must be feeling, and completely avoid the discussion, initially, of, for example, ‘how it could reduce our NPS by 0.5%’.
Don’t talk about it as you initiate the discussion. Talk about the emotions they’re going through first. Then, if your audience does not believe you, you can show them the quote, which you can get in, for example, the Thematic text analytics system.
Maurice continues: “If your audience are people who are pedantic ‘number’s people’ you can show them the impact that the comments have on your numbers, if you’ve had a good lifetime customer value model, that relates to NPS. People could do the System 2 calculations if they want to but maybe the System 1 argument is enough, so you could do something similar to the ‘we cheated Mary’ story.”
How to get sponsorship as a CX professional?
The question that is very common for Customer Experience professionals is “how can you maintain sponsorship for your work”?
Step 1: Do senior leaders talk about customer experience?
“If they do not, you’re not going to get any sponsorship.”
Step 2: Name your CX initiative well
“The second thing I found out in a very unpleasant way, was that if you’re going to have CX initiatives, the name should be very intuitive.”
“What happened in HP, just before we acquired EDS, was that the company went through a restructuring. This lead to a set of finance people, and I know 2 of them personally, basically sitting together in a conference room in Palo Alto, going through the list of company spending. At the time, there was a major corporate CX initiative called “The Diamond Programme”, a very attractive, shiny ‘diamond’.”
“What happened was, the (exclusively) finance people went through the corporate spending on a list and said something like: “next on the list are all these millions being spent on The Diamond Programme. Does anybody know what that is? Nobody did.
So: ‘delete’. If it would have been called the Customer Happiness programme, at least they would have gone back and said ‘Hmm, I don’t think we should delete this without finding out what it is, if it has the words Customer Happiness in it’.”
“Moral of the story: it matters that the project name makes sense at that level.
Step 3: Can you deliver something every quarter?
“Something is bound to change in the environment that will prevent the project from being delivered. So you’re better off being certain that you can deliver something meaningful every quarter or more frequently, and that alone is worth those investments made in that quarter.”
Step 4. Can you communicate it?
“I used to think that these 3 steps were all that mattered in CX.
“And then Leo Apotheker became the CEO of HP, he had previously been the CEO for SAP. Leo was brilliant about making sure that the senior leadership team was well equipped to talk about what he wanted to accomplish.”
“He had project names that made sense, his COO at that time was of the thinking that it’s crucial to make certain we can deliver something meaningful every quarter.”
“And yet he failed. So why did he fail? Turned out, he had what was then called the “Leo trap”.
None of it has any value if you’re not able to communicate it effectively.
“Some of it was because he had pure System 2 communication and some of it because changed his mind too frequently and it wasn’t clear why he was changing his mind.”
In essence, you have to be able to communicate what you’re up to effectively and that requires leading with the intuitive System 1 communication, and backing it up by System 2 science.
Watch out for our upcoming webinars on customer experience, AI and more!