Though it does not pre-assign seats or provide onboard meals and at times has a lengthy wait and check in process, consumers year in and year out rank Southwest Airlines at the top or near the top of customer service.
Why is Southwest consistently near the top?
There are many reasons. The most significant being alignment of customer experience to both their brand and customer expectations; however, I believe a key component of Southwest success in customer service is the emotional intelligence of their employees.
What is Emotional Intelligence?
Emotional intelligence is defined by four personality characteristics:
- A strong sense of self-empowerment and self regulation;
- A positive outlook;
- An awareness of feelings (both their own and customers); and
- A master of fear and anxiety and the ability to tap into selfless motives.
Each of these characteristics provide a clear benefit to the customer experience:
|Personality Characteristic||Benefit to the Customer Experience|
|Self-Empowerment and Regulation||Make Decisions in the Moment
|Constructive Responses to Challenges|
|Awareness of Feelings||Empathy and Better Communication with Customers
|Master of Fear/Anxiety and Selfless Motives||Express Feelings of Empathy and Caring|
Leading customer experience brands position the employee to constructively respond to challenges, make decisions in the moment, empathize with customers, and perhaps most important, not only feel but express feeling of care, concern and empathy to customers.
Much of the benefit of emotional intelligence is derived in “moments of truth” where some experiences in the customer journey have far greater importance than others. These moments of truth represent increased risk and opportunity to leave a lasting emotional impression on the customer; a lasting impression with significant long-term implications for both customer loyalty and wallet share. Perhaps the most common moment of truth is when something has gone wrong, the customer is unhappy or scared, and the relationship is at risk.
How do we build emotional intelligence?
First of all, emotional bonding cannot be scripted. Attempting to script such a connection will inevitably come off as hollow and insincere lacking authenticity and empathy, completely undermining the desired customer experience. Rather, emotional bonding must be a result of a spontaneous series of events that emerge from the emotional intelligence of employees.
The obvious starting point in building emotional intelligence is hiring frontline employees with the requisite emotional intelligence skills. Emotional intelligence can also be learned. However, it is a “soft” skill, unlike “hard” skills such as math; it can’t be taught in structured sessions. Rather, emotional intelligence is learned like almost all other human behaviors primarily though observation, experience and imitation.
Four Steps to Build Emotional Intelligence
Give people meaning in their work: Inspire frontline employees with a purpose beyond a paycheck. This clarity of purpose should include both what they are supposed to do and why they are supposed to do it.
In empowering frontline employees to serve customers, brands should arm them with statements of general principles and values rather than scripted procedures, which undermine empowerment. Reinforce these principals often so in the instant, when they are in a moment of truth with a customer in need, they have an appropriate framework from which to resolve the issue – and bond the customer to the brand.
Most frontline employees want to help customers; however, their motivations may be varied. Leading customer experience brands allow their employees to discover their own motivations for looking out for the customer’s best interests.
Create learning opportunities through experience: Humans are programmed to learn through self-discovery. Self-discovery reinforces the learning process by instilling a sense of accomplishment or pride. These positive feelings associated with self-discovery are a strong psychological reward, which reinforces the learning process. While self-discovery is not a top-down process, managers can foster self-discovery through feedback, encouraging employees to reflect on their own successes and failures, and anecdotes about other employees. Case studies are not just for MBA students.
Align customer experience systems and processes: It is imperative that systems and processes support the emotional skills desired from employees. Systems and process must constantly reinforce the overall message of emotional intelligence and emotionally connecting with customers. In empowering employees to respond to moments of truth, management must strike a balance between financial considerations and the things that matter to the customer. Good customer experiences are not good because they are good; they are good because they are profitable; however, there is no benefit to being penny wise and pound foolish. Finally, processes need to be streamlined to give employees both the time and ability to rise to the situation.
Enlist leaders and mentors: Emotions are learned through modeling. Children don’t learn to react to certain stimuli just because a parent tells them what to feel. We learn how to react to certain situations through trial and error and observing role models. First, it is imperative that all managers and leadership model appropriate emotional skills. How can you expect emotional intelligence from the frontline if it doesn’t exist in leadership? Second, identify employees with the appropriate emotional skills and position them as role models within the organization.
Key to success of any customer facing brand is alignment of the customer experience to both the brand promise and customer expectations. Most of time, this is not difficult. Appropriate systems procedures and even automated delivery channels can achieve this end. However, in moments of truth, where there is a high degree of risk associated with the outcome of the experience, leading customer experience brands rely on an emotionally intelligent frontline staff to align the experience and bond the customer to the brand.
In an earlier post we explored how customers experience all aspects of their relationship with a brand through the lens of their emotional state, and observed that all brands must be prepared to meet each customer in their specific emotional state – be they happy, excited, depressed or angry.
Research has determined that, not surprisingly, people are motivated to maintain positive moods, and mitigate negative affective states. When feeling good we tend to make choices that maintain a positive mood. Customers in a positive mood are more loyal, and more likely to interpret information favoring a current brand. Meanwhile, people in negative affective states make choices that have the potential to change or, in particular, improve their moods.
A key to maintaining positive moods is arousal, or more specifically, the management of arousal. Let’s take a look at how arousal management influences consumer choice. Consumers in a positive mood prefer products congruent with their state of arousal. Excited or happy consumers want to stay excited or happy, while relaxed and calm consumers what to stay relaxed and calm. Consumers in a negative mood prefer products with the potential to change their level of arousal.
In considering the role of customer emotions in their relationship to a brand, it is important to understand the implications of customer emotions on design of the customer experience. It is impossible, of course, to plan every customer experience or to ensure that every experience occurs exactly as intended. However, brands can identify and plan for the types of experiences that impart the desired emotional state on the customer. It is useful to group these experiences into three categories of interaction with the customer: Stabilizing, Critical, and Planned.
Stabilizing interactions promote customer retention, particularly in the early stages of the relationship.
New customers are probably in a positive state of valence, with either a high state of arousal (happy/excited) or a negative state of arousal (relaxed/calm). Remember, people are motivated to maintain positive moods, therefore, the objective of these stabilizing interactions is to maintain this positive mood.
The keys to an effective stabilizing strategy and maintaining these positive moods are education, competence and consistency.
New customers are at the highest risk of defection. As customers become more familiar with a brand they adjust their expectations accordingly. It is important that expectations be set appropriately to eliminate conflict with reality. Conflict between expectations and reality early in the customer relationship runs the risk changing the customer’s mood from positive to negative. They are more likely to experience disappointment, and thus more likely to defect.
Education influences expectations, helping customers develop realistic expectations. It goes beyond simply informing customers about the products and services offered by the company. It systematically informs new customers how to use the brand’s services more effectively and efficiently, how to obtain assistance, how to complain, and what to expect as the relationship progresses. In addition to influencing expectations, systematic education leads to greater efficiency in the way customers interact with the company, thus driving down the cost of customer service and support.
Critical interactions are service encounters that lead to memorable customer experiences. While most service is routine, from time to time a situation arises that is out of the ordinary: a complaint, a question, a special request, a chance for an employee to go the extra mile. We call these critical interactions “moments of truth.” The outcomes of moments of truth can be either positive or negative – they are rarely neutral.
Because they are memorable and unusual, moments of truth tend to have a powerful effect on the customer relationship. We often think of moments of truth as instances when the brand has an opportunity to solidify the relationship – earning a loyal customer, or risk the customer’s defection. Positive outcomes lead to positive states of valence (excited, happy, relaxed, calm) with greater wallet share, loyalty, and positive word word-of-mouth endorsements; while negative outcomes generate negative states (anger, frustration, depression); and result in customer defection, diminished share of wallet and unfavorable word-of-mouth.
We are in an era of automated channels. Automated channels are essential for meeting customer expectations and reducing transaction costs, but technical solutions are not, by themselves, able to drive an emotional connection between customers and the brand – particularly in moments of truth. Employees, emotionally intelligence employees, empowered to resolve the issue are critical in driving an emotional connection. In a future post, we will discuss the concept of Emotional Intelligence of frontline employees in handling moments of truth.
An effective customer experience strategy should include systems for recording critical interactions, analyzing trends and patterns, and feeding that information back to the organization. Employees can then be trained to recognize critical opportunities, and empowered to respond to them in such a way that they will lead to positive outcomes and desired customer behaviors.
Planned interactions are intended to increase customer profitability through up-selling and cross-selling. These interactions are frequently triggered by changes in the customers’ purchasing patterns, account usage, financial situation, family profile, etc. CRM analytics combined with Big Data are becoming quite effective at recognizing such opportunities and prompting action from service and sales personnel.
Customer experience managers should have a process to record and analyze the quality of execution of planned interactions with the objective of evaluating the performance of the brand at the customer brand interface – regardless of the channel.
The key to an effective strategy for planned interactions is appropriateness. Triggered requests for additional purchases must be made in the context of the customers’ needs and permission; otherwise the requests will come off as clumsy and annoying. By aligning information about execution quality (cause) and customer impressions (effect), customer experience managers can build a more effective and appropriate approach to planned interactions.
Loyalty. There is almost universal agreement that it is an objective – if not the objective – of customer experience management. It is highly correlated to profitably. It lowers sales and acquisition costs per customer by amortizing these costs across a longer lifetime – leading to extraordinary financial results. In retail banking a 5% increase in loyalty translates to an 85% increase in profits.
Loyalty is Emotion Driven
Banks often see themselves as transaction driven; delivery channels are evaluated on their cost per transaction. As a result, there is a lot of attention given to and investment in automated channels which reduce transaction costs and at the same time offer more convenience to customers. Win-win, right? The bank drives costs out of the transaction and customers get the convenience of performing a variety of transactions untethered by time or space. However, while transaction costs and convenience are important, loyalty is often driven by an emotional connection with the institution. An emotional connection fostered by interaction with actual employees at moments of need for the customers –moments with a high level of emotional importance to the customer – moments of truth.
Moments of truth are atypical events, where customers experience a high emotional energy in the outcome (such a lost credit card, loan application, or investment advice). In one study published in McKinsey Quarterly, positive experiences during moments of truth led to more than 85% of customers increasing wallet share by purchasing more products or investing more of their assets (Beaujean et al 06)
Impersonal alternative channels lack the ability to bind the customer to the institution. It’s the people. Effective handling of moments of truth requires frontline staff with the emotional tools or intelligence to recognize the emotional needs of the customer and bind them to the institution.
Previously we discussed the concept of “moments of truth” where some experiences in the customer journey have far greater importance than others. These moments of truth represent increased risk and opportunity to leave a lasting emotional impression on the customer; a lasting impression with significant long-term implications for both customer loyalty and wallet share. The purchase and sales experience is one such moment of truth. One study published in McKinsey Quarterly has determined that the purchase experience of financial services motivated 85% bank customers to purchase more financial products or invest more assets with the institution. (Beaujean et al 06)
We also introduced the concept of defining emotions using two dimensions of mood: valence (positive or negative) and arousal. Again, as we previously observed, modern research into brain activity during the decision process suggests that decisions are made within the brain before we are consciously of them. Emotions provide a short cut to acting on decisions, and rational thought appears to justify decisions after they are made on the subconscious level.
So…given that emotions play a key role in financial decisions, what are the emotions bankers encounter as part of the sales experience?
The emotions financial service customers experience vary by customer, financial need, circumstance and product/service sought, however the emotions a prospective customer may experience include:
• At Ease/Satisfied
So…what do we do with this enlightenment?
First, knowing that people are motivated to maintain positive emotional states and change/mitigate negative emotional states, it is important for the banker to recognize the prospective customer’s emotional motivation and offer solutions which will achieve either of these ends.
Kinesis has conducted research into purchase intent as the result of financial service sales presentation which may be instructive. Click here for this research.
Time and time again, in study after study, we consistently observe that purchase intent is driven by two dimensions of the customer experience: reliability and empathy. Customers want bankers who care about them and their needs and have the ability to satisfy those needs. Specifically, our research suggests the following behaviors are strongly related to purchase intent:
Interest in Helping
Discuss Benefits & Solutions
Promised Services Get Done
Friendly & Courteous
Both empathy and reliability require employees with Emotional Intelligence. These are employees with a positive outlook and a, strong sense of self-empowerment; self regulation; awareness of feelings (both their own and customers); master of fear and anxiety and the ability to tap into selfless motives.
Sales presentations are moments of truth with the potential to leave a lasting impression on the customer with significant long-term implications for both customer loyalty and wallet share – with obvious financial benefits for the institution. We’ve found that branches with above average frequencies of behaviors associated with reliability and empathy experienced a 26% stronger three-year branch deposit growth rate than branches with low frequencies of these behaviors.
Next, we’ll take a look at moments of truth in the context of problem resolution.
In an earlier post we introduced the concept of defining emotions using two dimensions of mood, valence (the extent to which the emotional state is positive or negative) and arousal (the extent to which the energy mobilization of the emotional state is experienced). In this post we postulated that understanding customers’ innate desire to maintain positive and mitigate negative moods has far reaching implications for the customer experience.
Before we explore these implications for the customer experience let’s explore the role emotions play in customer decisions.
Humans evolved in a complex world and our ancestors lacked our ability for cognitive reasoning. They used emotion as a decision tool to motivate action. Fear motivated their fight or flight response. Happiness informed them of an absence of threat. Emotions are deeply rooted in our evolutionary history, from an evolutionary standpoint our cognitive ability is relatively new. As such, our brains are wired to experience emotions as a way of informing decisions.
Like our ancestors we live in a complex world; uncertainty is part of life. Emotions inform decisions and motivate action when there is not enough information or time available to consider the “right” choice. Emotions are responses to outside stimuli and serve as short cuts to action.
Recent experiments with fMRI machines, which measure blood flow and oxygenation levels in the brain, have determined we make decisions before we are even aware of the choice. Cognitive reasoning does not drive decisions, rather it leads us to conclusions. Emotions motivate us to action, reason, on the other hand, leads us to conclusions. Before we are even aware of a decision, we make an automatic, often unconscious, assessment of the situation. Emotion serves as a necessary short cut for acting on these unconscious decisions.
So what are the implications for managing the customer experience?
As a short cut for decisions, emotions are interpreted in the context within which they occur. Many brands only assess their performance, evaluating the execution of the customer experience, without assessing the emotional response the experience evoked. It is incumbent on managers of the customer experience to include a measurement of the customers’ emotional response to the experience.
When measuring the customers’ emotional response and motivations for their behavior it is important to understand that there is often a disconnect between what people say is important to them and what actually drove their behavior. As a result, customer experience researchers must explore motivations beyond just asking the customer what their motivations were.
Not all experiences along the customer journey are equal. In every journey there are specific “moments of truth” where customers form or change their opinion of the brand, either positively or negatively, based on the experience. Moments of truth can be quite varied and occur in a skilled sales presentation, when a shop owner stays open late help dad buy the perfect gift, or when a hold time is particularly long.
These moments of truth influence the emotional response to the brand long after the event. They form an emotional halo effect that influences the entire relationship with the brand. As a result, emotional responses to a brand do not occur in silos. Customers do not form judgments about discrete portions of the customer journey solely as a result of the specific experience, rather they judge each service encounter with a brand within the broader context of their entire experience with the brand – regardless of whether they are consciously aware of it or not.
Customer experience managers need to be aware of these subconscious influences, both when designing the customer experience and interpreting measurement of the experience itself. In a future post we will examine the implications of this emotional halo effect on customer experience measurement.
Additionally, In future posts we will explore the effect of these moments of truth on everything from customer acquisition, problem resolution, loyalty, wallet share, and customer experience measurement.
Customers experience all aspects of their relationship with a brand through the lens of their emotional state. Be they happy, excited, depressed or angry all brands must be prepared to meet each customer in their specific emotional state. It’s a challenge – but also an opportunity. Ultimately, loyalty is emotionally driven. Brands that can react to and manage customer emotions stand to reap the rewards of customer loyalty.
To understand the role of the customer’s mood in managing the customer experience, it is instructive to consider how two affective states work together to define mood. The following model tracks mood across valence (the extent to which the emotional state is positive or negative) and arousal (the extent to which the energy mobilization of the emotional state is experienced on a scale of active to passive or aroused to calm).
Together, these affective states of valence and arousal can define all human emotions. States of positive valence and high arousal are excited or happy; negative valence and low arousal are bored or depressed. States of positive valence and low arousal are calm and relaxed, and negative valence and high arousal are angry or frustrated.
Here is a detailed map of a variety of emotions across these two dimensions.
Research has determined that, not surprisingly, people are motivated to maintain positive moods, and mitigate negative affective states. When feeling good we tend to make choices that maintain a positive mood. Customers in a positive mood are more loyal, and more likely to interpret information favoring a current brand. Meanwhile, people in negative affective states make choices that have the potential to change or, in particular, improve their moods. For example, researchers have demonstrated a preference for TV shows that held the greatest promise of providing relieve from negative affective states. People in a sad mood want to be comforted, anxious people want to feel control and safety.
Key to maintaining positive moods is arousal or more specifically the management of arousal. Let’s take a look at how arousal management influences consumer choice. Consumers in a positive mood prefer products congruent with their state of arousal. Excited or happy consumers want to stay excited or happy, while relaxed and calm consumers what to stay relaxed and calm. Consumers in a negative mood prefer products with the potential to change their level of arousal. For example, in an experiment, participants were offered the choice of an energy drink or iced tea. The following chart illustrates participant’s preference by the state of arousal and valence:
Participants in a positive mood, preferred the drink congruent with their level of arousal, those in a positive low-arousal state preferred iced tea, and those in a positive high-arousal state preferred an energy drink. On the other hand, those in a negative mood preferred a drink incongruent with their energy state, those in a negative low-arousal state preferred an energy drink, and those in a negative high-arousal state preferred iced tea.
Understanding the role of arousal management in customers’ innate desire to maintain positive moods and mitigate negative moods has far reaching implications for just about every element of the customer experience from sales, to problem resolution, to customer experience design, hiring, training and customer experience measurement. In future posts we will explore these implications for each of these elements of the customer experience.