Setting and Managing Your Customers' Expectations

If a man can write a better book, preach a better sermon, or make a better mousetrap than his neighbor, though he build his house in the woods, the world will make a beaten path to his door Such was the state of the art of customer relations in 1871, at least as it was understood by Ralph Waldo Emerson, the author of that famous passage. Although the world has changed considerably since Emerson's day, the notion persists that there is a fixed relationship between the quality of the product or service you offer and the enthusiasm those products or services generate in your customers. In reality, the relationship between those two values is far from fixed. Moreover, persistent misunderstandings about the relationship between quality and customer satisfaction cause endless confusion and countless mistakes on the part of businesses that want to provide killer customer care--but seem to consistently fall short despite their best efforts. A Telling Scenario The following hypothetical scenario will illustrate the issue a bit more clearly for you. I've told this story to hundreds of business owners and managers in dozens of workshops and seminars. The result I get is always the same. Imagine you're in the market for a certain used car. You know exactly what you want--the exact make, model, and year of the car that's the object of your desire. As a careful shopper, you've researched your choice and have found the price range for your car of your choice is somewhere between $20,000 and $23,000, depending on mileage, condition, and other variables. In the classified ads in your local newspaper you read a listing for a car that seems to fit your requirements exactly. You call the number and make an appointment to see the car, which is being sold privately. You consider yourself to be a fair negotiator and before you get to your appointment, you decide that if the car's in pristine condition (as the ad indicates it is), you'll shrewdly offer something like $17,500 and allow the seller to barter you up to $20,000, or even a bit more if the car is as nice as it sounds. The sellers turn out to be an older couple, and the car turns out to be a real cream puff. It's in great condition; it's got low mileage; and it seems to have been meticulously maintained. You're determined to stick with your negotiating tact, however, so you make a showy inspection of the car, trying your best to convey the impression that you're aloof and dispassionate. After an appropriate amount of time kicking the tires and looking under the hood, you turn to the sellers and make your offer. "It looks all right but not great. I'll give you $17,000 for it." In your mind, you're preparing a counteroffer for their anticipated rejection of your obviously lowball offer.The couple confer with each other in a few perfunctory whispers, then turn to you and say, "That would be fine." So, how would you react in that scenario? Chances are good that at least one of two different thoughts would come to mind: I should have started lower. I could have gotten the car for a better price. Something's wrong with this car. When I describe this scenario in seminars, about 45 percent of the participants report their reaction included both of these responses, and 95 percent say they had one or the other. What Happened? Let's look at the objective reality here. You got exactly the car you wanted. It was well maintained, in good condition, and it had low mileage. And, as an added bonus, you found an opportunity to buy the car of your dreams for $3,000 less than you were prepared to pay, at least $3,000 less than what you knew to be the fair market value of the car. Any objective analysis of the situation would dictate you should have been delighted with the result of your negotiation. However, the "real world" reaction the overwhelming majority of people have in this situation is distinct discomfort. Clearly, there's a dynamic at work here that is not strictly a function of the objective quality and value of the deal. Your understanding of this dynamic has profound implications for your business's ability to deliver killer customer care in interactions with customers. The Delta Principle The discomfort that most people feel in the used car scenario comes from a psychological mechanism I call the Delta Principle. This principle states that the quality of your customers' experiences is not a direct result of the objective quality of your products or services. Instead, customer satisfaction is a more a function of how closely your customers' experiences with your business conform with their expectations. As we saw in the used car scenario, the delta between expectations and reality don't have to be negative to produce a poor result--although that is, to be sure, a less common situation. Customers' Expectations Are Not Always Obvious The other significant lesson to be gleaned from that scenario is that there are usually many elements of an interaction--not just the obvious one--that contribute to its quality. In the used car scenario, the price and condition of the car are the most obvious variables in evaluating the quality of the transaction. If those were the only elements, however, then this scenario would produce a uniformly positive reaction, which it doesn't. The buyer wanted something else from this transaction. He was probably not aware of it even after he realized the seller's response gave him a bad feeling. And it's even more important to note that the sellers obviously had no clue about this "hidden expectation" that the buyer brought to the transaction. In addition to a quality car at a good price, the buyer in this scenario was looking for the satisfaction of "winning" in the negotiation. He had done his homework and taken the time to set the stage for the negotiation by putting on a show as he inspected the car. For this buyer, an important element of satisfaction was to be derived from his ability to prevail at the negotiating table. The quality of the interaction was diminished by the fact that he wasn't allowed to do so. Although it seems counterintuitive, this buyer's level of satisfaction might very likely have been enhanced if the seller had provided some stiff resistance in the negotiation. The buyer would have felt better about a somewhat higher price he'd worked for than he did about the lower price that came too easily. When it comes to customer expectations, then, the three elements of delivering killer customer care are:

Effectively setting expectations for customers' experiences

Understanding all of the expectations your customers bring to their transactions

Delivering on your customers' expectations explicitly Effectively Setting Expectations For Your Customers' Experiences The process of setting customer expectations begins with the very first element of contact. Often, this is an advertisement or some sort of marketing piece. Occasionally, it is a news item or other public relations-generated mention of your company, product, or service in the news media. Unlike referrals, these are communication vehicles over which you have a considerable, or even total, amount of control. The messages that are contained in these communications are almost always crafted with the objective of driving customers to your business--and most often they're targeted toward new customers. But these communications can sometimes do long-term damage if they set unrealistic or inappropriate expectations. They might be successful in getting customers into your business, but in doing so, they can inadvertently undermine your ability to generate an experience that satisfies the new customer. Such a result is unnecessary. A little more thought, along with an understanding of the Delta Principle, will allow you to craft a highly effective advertising/marketing message that supports, rather than undermines, your long-term killer customer care objectives. When it's time to craft an advertising, marketing, or public relations message for your company, consider the questions discussed below. Is this communication congruent with my standards statement? In Chapter 3, we discussed the creation of a standards statement for your business that communicates your particular vision of customer care. Every marketing communication you create should reflect the values of that statement, or at the very least, not contradict them. Am I explicitly promising anything in this communication? Obviously, every promise you make in an advertisement creates a clear expectation on the part of your customer. When you do this, two critical elements are involved in making certain your marketing message hasn't become counterproductive by the time your customer leaves your business. The first is to make certain everyone in your organization is aware of everything being promised. If a customer has to spend even a few minutes waiting for someone who's familiar with your business's current promotion, it can significantly diminish the quality of that customer's experience.The second fundamental principle in fulfilling your marketing promises is to do so as quickly as possible, without the customer having to ask for what you have promised. When you are forthcoming with whatever it is that your customer expects, your credibility shoots up while your customer's anxiety level drops down. If you can execute these two techniques flawlessly, explicit promises are a highly effective tactic for setting customer expectations. Am I implicitly promising anything in this communication? Marketing and advertising often can convey distinct impressions to customers without actually making any overt commitments. This is a natural part of the process of romancing your company's products and services. Customers automatically "discount" what they see and hear to a certain extent, but there can be times when your marketing message conveys an impression so disconnected from the reality of doing business with your company that it creates a real problem for you downstream. If your television ads depict all of your salespeople as young, thin, and attractive, but they're not, that is an impression that could plausibly be called artistic license. On the other hand, if you run a print ad that gives the impression your company offers same-day service when your most aggressive turn-around time is three or four business days, then you are positioning your customer for disappointment and creating a situation that will not allow you to offer killer customer care. Understanding All the Expectations Customers Bring to Transactions As we saw in the used car scenario, customers bring many different kinds of expectations to a transaction. For almost every business, a whole set of these unconscious or "hidden" expectations affect the quality of its customers' experiences. If you focus only on the most explicit expectations, then your customers' experiences will almost certainly be much less satisfying than possible. Sure, you must address your customers' primary expectations, but you should also be tenaciously trying to understand all of your customers' expectations--especially the hidden ones--and then exploring ways to address them all. Customers are seldom entirely satisfied with a transactional business relationship. In addition to your product or service, your customer will sometimes be looking for a friend and confidant; sometimes, he will be seeking an authority figure, even a surrogate parent; and sometimes your customer will be looking for some kind of status or validation. In any event, your ability to deliver killer customer care often depends on how well you can identify and address these ancillary expectations. Delivering On Your Customers' Expectations Explicitly In many ways, the procedure for setting and managing your customers' expectations follows the basic pattern of the three-part adage often shared with would-be speechmakers and essayists: 1. Tell them what you're going to tell them. 2. Tell them. 3. Tell them what you've told them. It's that last part of the process that can make the difference between failure and success when it comes to your customers' perceptions of whether or not their expectations have been met. Often, the best way to ensure customers feel their expectations have been addressed is to simply tell them they have. This is particularly true when specific representations were made in your advertising and marketing. Let's say you ran a newspaper ad promising a 50 percent discount on the purchase of a certain brand of widget. If you automatically and unceremoniously rang up the widget at the cash register with the discounted price, you fulfilled the terms and conditions of your promise, but it's likely you didn't address your customers' expectations. In fact, if you've ever tried that approach, your cashiers were almost certainly accosted by several customers who wanted to know if they were being charged the right price. A better approach would be to program your point-of-sale software to show the original price of the widget along with the discount promised in your ad. In this way, you explicitly demonstrate to your customers that you've met their expectations. Albertson's, the large supermarket chain, is one example of an organization that doesn't leave the customer's perception to chance. The chain's point-of-sale software automatically notes the regular price of an item, then makes appropriate deductions for sales pricing or other discounts on an item-by-item basis. Then, when the receipt is printed out, it not only specifies the total price of the order but also includes an item on the receipt indicating exactly how much money was saved on that particular order. This approach explicitly demonstrates to customers that their expectations for saving money are met with each and every visit to the store. Albertson's takes this principle one step farther, however, into the realm of killer customer care by training each of the chain's cashiers to follow a specific technique when handing a receipt to a customer. Instead of just putting the receipt in a bag somewhere with the groceries, the cashier takes the receipt and circles the amount of money saved by the customer with a red pen. Then, the cashier hands the receipt to the customer and says, "You saved $xx on your visit to Albertson's today. Thank you and please come again." Every customer who buys something leaves with a clear and explicit understanding that his or her expectation of saving some money has been met. The customer's perception of savings is met and managed because the store makes those savings obvious. Whenever you do something to meet your customers' expectations, don't leave it to chance that they will realize what you've done. Follow through with the final piece of the process by delivering on your customers' expectations explicitly. Looking Ahead For most businesses, killer customer care requires more than just a few people working to address customer expectations. For your business to perform at its highest level, it requires that everyone function as part of a team. But teamwork doesn't happen by accident. In the next chapter, we'll explore specific techniques for encouraging your employees to function effectively as members of a team that shares your goals and values. Don't Create Discord Here's a hint: One common thread that runs through the unconscious expectations of most customers is that their experience with your business be congruous. No single aspect of the experience should seem discordant with the rest. Consider, as an example, the prospect of a new, deep-discount retailer that, in its advertising and marketing, positions itself as having prices competitive with, say, Sam's Club. What kind of reaction do you think a customer might have if she visited the retailer and found a store with meticulous aisles and displays, a business merchandised more like Nordstrom's than Costco? Chances are that customer would never feel as though she were getting the best prices, regardless of how this retailer's prices objectively stacked up against the competition. That's because the merchandising of the store does not conform with the customer's unconscious expectations. Using the Delta Principle The key to utilizing the Delta Principle effectively lies in framing your customers' expectations skillfully and then delivering on those expectations clearly and reliably. Of course, killer customer care means you can and should exceed the basic expectations your customers bring to the transaction, but you must do so in a way that is congruous with those expectations. The used car scenario is something of anomaly, but it is instructive nevertheless. As we've already seen, it demonstrates that a complete disconnect from a customer's expectation can lead to an unsatisfactory experience, even if the details of the disconnect are favorable to the customer. Market on Customer Care If your standards statement is predicated on exceptional customer care, then a marketing message emphasizing aggressive pricing will attract customers who are looking for something different from what you're offering. Those customers' expectations, are unlikely to ever be met. Conversely, if your standards statement positions you as the value leader in your marketplace, then a marketing message that emphasizes customer service will create a comparable problem. Being the low-cost provider in your market seldom provides enough available margin to support an extensive customer service infrastructure. Remember, the point here is not to argue for the relative merits of either approach. The point is that the expectations you've created for your customers with your advertising and/or marketing message should match the experience they actually have with your business when they get there. George Colombo is an authority on the use of technology in sales, marketing, and customer care. In addition to Killer Customer Care, he is the author of Sales Force Automation and Capturing Customers.com. Contact him at george@killercustomercare.com