Five Critical Moments in the Customer Experience

Manage these situations well and customers will be yours forever. 

Veteran salespeople know sales ultimately don't come from a prospect's logical evaluation of a product's features, advantages and benefits. They know people make decisions based on emotions and then use logic to justify them. What matters is not what the product is but what it does and how buyers feel about it. Time and again, what makes top salespeople successful is their ability to link product benefits with the personal impact they make. 

But closing the sale is just the beginning in recurring revenue businesses. Customers must remain subscribers for years before they become profitable. Like experienced salespeople, Account Managers and Customer Success professionals must go beyond software usage, good NPS® scores or satisfactory customer service to influence what makes customers loyal. They must create personal attachment throughout the subscription experience so their customers continue to renew. 

Essential interactions

SaaS companies can systematically build affective bonds with their customers. It begins with knowing how the subconscious brain works, especially when it comes to subliminal needs for safety and security. When managers are attentive to the process and consistently orchestrate the following five encounters, they reduce fear and create ideal conditions for relationships to flourish. Customers are more than satisfied; they become loyal, raving fans. 

1. Moments of Connection. Humans naturally seek commonality. We engage in small talk, chatting about a bad call while sitting next to a stranger at a ball game or talking about the weather on a conference call with new vendors. When we have things in common, we sense we are among friends. We subconsciously gravitate to people like us because we feel safe with them. 

To create stronger connections, SaaS companies must set aside “zero touch support” and corporate façades and create warm, personal interactions early in their customer relationships. When customers feel they can relate to the people behind the brand, suddenly the company has a face. In the beginning, a friendly encounter with someone who seems familiar alleviates the customer’s subliminal anxiety. When a smart mix of personal and electronic communications follows, the relationship builds over time. 

2. Moments of Power. At times we have all felt powerless and out of control. For example, nothing rattles nerves more than driving in winter and sliding on a patch of ice. That gut-wrenching feeling is a natural defense mechanism that evolved over eons. Our emotional programming helps us avoid situations that put us at risk. In day-to-day life we compensate automatically by attempting to control outcomes, making us feel safer.  

SaaS companies can reduce natural anxiety by encouraging autonomy and choice. For example, customers can feel powerless learning how to use a new product. Customer Success Managers can lower tension using an onboarding process that helps customers quickly practice new skills and build proficiency. When the company allows customers options to choose from, customers also feel empowered. And as the adage goes, knowledge is power. Keeping customers informed is another easy way to soothe the psyche. 

3. Moments of Proof. Our deep hunger for certainty is another natural protection from our evolutionary heritage. Subconsciously we want to know what’s going on and what happens next, once again because it’s safer. We are comforted when things go as we expect and anxious when they don’t. 

SaaS companies can increase certainty in many ways, from demonstrating products to hosting quarterly business reviews to displaying system performance statistics. When the company makes promises and keeps them, expectations are met and customers become more confident. And when SaaS companies also prove that the business and personal outcomes they predicted came to fruition, they erase any remaining doubts in the customer’s mind. 

4. Moments of “Wow!” We cherish times when friends and family surprise us with simple acts of kindness, appreciation and gratitude. These occasions happen infrequently, but when they do, they leave profound impressions. Like all social animals, we reflexively evaluate our status and importance relative to others. Rank ensures we maintain a greater share of resources, which in turn increases chances for our survival. When someone surprises and delights us, we feel special and cared for—we find our prestige is greater than expected. 

Solving a problem meets minimum expectations, but going the extra mile on occasion makes customers feel important and desired. For example, resetting a password is a mundane task for Customer Support. But when a technician also takes a minute to check the customer’s system configuration and makes a change that speeds up system response times, the customer is thrilled. Simple acts of kindness pay substantial dividends. 

5. Moments of Truth. Life occasionally involves crises. When we have no choice but to rely on others, we find ourselves in our most vulnerable psychological state. How others respond when we need them most can make or break a relationship. As they say, when the chips are down, you find out who your friends are. 

In business as in life, stuff happens. Sometimes the ball gets dropped, leaving a customer with mess. Other times, issues are widespread, such as the havoc caused by a major outage or security breach. When SaaS companies use an effective service recovery process, one that restores confidence along with service, customers regain trust. How the company responds reveals character and can quickly turn around a bad situation. 

Product value and quality matters, but how SaaS companies create positive emotional experiences over time ultimately tips the scale when customers consider renewing their software subscriptions. Understanding and responding to customers’ deep psychological needs is the first step to building stronger relationships and creating loyal customers. 

Net Promoter and NPS are registered service marks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.

Excel-lens is a publication of Service Excellence Partners. We increase customer loyalty and business performance in the cloud computing industry. Contact us today.

Are CSMs Taking a Critical Process for Granted?

It’s time to view relationship-building from a new perspective 

Studies have shown that people switch vendors for three reasons:¹ 
1. Expectations for quality and value go unmet
2. Customers lack personal attachment to the supplier 
3. It’s easy to switch  

When all three factors are present, churn results. Factor 3 above depends on product complexity, cost to change, and competitive pressures. Customer Success teams address the first factor, building value through software usage, answering questions, and demonstrating the benefits promised during the sales cycle. But the second factor, building personal attachment, rarely gets the attention it deserves, yet it’s a major driver affecting churn.  

Now wait a minute! Everyone agrees that building customer relationships is important. It’s intuitively obvious that better customer relationships lead to greater retention and loyalty. After all, people prefer to do business with people they know, like, and trust. But many companies take relationship-building for granted. They believe it happens on its own—simply hire friendly front-line employees, give customers what they need, and better relationships will somehow result. But if relationships are so important, why leave them to chance? Is there a better way? 

Relationship is a process

Psychologists say relationships have a beginning, middle, and sometimes an end.² Think about how you became friends with someone. You met, discovered you had a common background and shared interests, and you found each other likeable. Something “clicked.” You connected because the person showed empathy and realness, and you immediately felt comfortable with them. After subsequent contacts, your relationship deepened through mutual connection, caring, confiding, and trust. You found you were helping each other achieve goals and deal with daily frustrations. You maintained your relationship through periodic social get-togethers or by enjoying common interests. If you’re fortunate, this person is still in your life. But as you know, friendships can lull when the other person gets busy, goes through life changes, or moves away. Friendships can also abruptly dissolve due to a “falling out.” 

Imagine if all your business relationships could be close friendships. Most will never be, but all relationships follow the same pattern of initiation, maintenance and dissolution. Relationships, like all processes, occur in a sequence of steps, and outcomes obey the laws of cause and effect. The strength and quality of the relationship that develops depends on a number of factors, some of which can be controlled and others cannot. For example, people can't change their basic nature and few will ever become best friends. However, it is possible to become more likeable. Since some relationship factors are controllable, influencing them improves relationships. 

Relationship factors

Subconscious social signals lie at the heart of our relationships. David Rock, founder of the NeuroLeadership Institute, distilled neuroscientific research and social evolutionary theory into a simple model to describe the reflexive behaviors all humans share.³ His SCARF model outlines the core psychological drivers hardwired into our subconscious:

• Status—how we perceive our importance relative to others
• Certainty—our ability to predict the future
• Autonomy—our sense of mastery and control over events
• Relatedness—our connection and sense of safety with others
• Fairness—our perception of equitable exchanges 

These factors influence relationships positively or negatively. For example, consumers who call technical support complain when technicians make them feel stupid. The customer subliminally perceives the interaction as a status threat. In extreme cases, the conversation provokes anger and causes customers to terminate their contracts. “You’re not treating me like a valued customer!” they exclaim. Most of the time provocations are unintentional and subtle, but even minor comments at the wrong time can leave lasting impressions. 

Conversely, SCARF techniques can promote positive encounters that lead to stronger attachments. For example, a Customer Success Manager begins an onboarding call saying, 

“I saw on your LinkedIn profile that you’re from Chicago.” 

“That’s right. I grew up on the South Side, 120th and Pulaski,” the customer says.

“No kidding!” the CSM exclaims. “I’m from Orland Park!”

The CSM is building relatedness right from the start, sending a subliminal signal that she’s a friend, not a foe. After the small talk, she says she will help him get his account set up and it will take only fifteen minutes. This creates a sense of certainty in the customer’s mind. By proactively sending these and other signals, the CSM produces warmer, friendlier interactions.

In a similar manner, CSM leaders should look closely at how interactions occur throughout the customer lifecycle. They can do this by mapping the experience from the customer’s perspective and by identifying the customer’s practical (effective) and emotional (affective) needs at each step. Then, executives can close performance gaps by implementing process improvements and measuring the impact on customer churn. Often simple changes in the right places can make significant improvements through training, website revisions, and e-mail edits. 

SaaS companies tend to take the process of building relationships for granted. Like all processes, however, those better designed and managed produce better results. CSMs should be more mindful, both in what they do and how it impacts the customer’s brain. Proactively and systematically creating the conditions for friendly attachment leads to stronger relationships and reduces churn.  

Excel-lens is a publication of Service Excellence Partners. We increase customer loyalty and business performance in the cloud computing industry. Contact us today.

Sources:

1. Gremlera, D. and Brown, S. (1996) Service Loyalty: Its Nature, Importance, and Implications, University of Idaho and Arizona State University, USA
2. Blieszner, R. and Roberto, K. A. (2003). Friendship across the lifespan: Reciprocity in individual and relational development.  Also in F. R. Lang and K. L. Fingerman (Eds.), Growing together: Personal relationships across the lifespan (pp. 159-182). Cambridge, U.K.: Cambridge University Press.
3. Rock, D. (2012) “SCARF: a brain-based model for collaborating with and influencing others.” Neuroleadership Journal

Software Adoption is a Matter of Habit

Six tips to increase user adoption by capitalizing on human nature

In the SaaS industry, customer retention rates depend heavily on the extent to which customers engage with their product, especially during the early stages. The more they use it, the more value they find in it, which increases the chances that they will continue to subscribe. In fact, data from Scout Analytics indicates that customers who use their new software at least once per week over the first six months of their subscription are about 50 percent less likely to churn.¹ Understanding this well, most Customer Success operations focus their churn reduction efforts on encouraging product usage. However, this approach is insufficient by itself because it overlooks human nature, the most influential factor of all. SaaS companies must change customer habits before product adoption is fully realized.

Creatures of Habit

How many times have you driven to work, but upon arriving, had no memory of the commute that got you there? Clearly, driving is complicated. You get into your vehicle, fasten your seatbelt, apply the brake, start the engine, put the gear selector in reverse, look behind you, back out, turn the wheel, apply the brake, close the garage door, put the car in drive—and that’s just getting out of your driveway. You process thousands of stimuli, decisions, and actions in a typical commute, yet it can all be done without much conscious thought.

How can something so complex become second nature? Our magnificent brains help us simplify life. Because cognition demands so many resources, our subconscious creates habits to increase efficiency. Although the brain accounts for only 2 percent of body weight, it consumes 20 percent of the body’s total energy.² To streamline, the basal ganglia recognizes patterns and creates shorter neural pathways to get the same job done faster and with fewer resources. The brain automatically rewires itself, enabling reflexes to perform tasks that once required more cognitive power. This subconscious rerouting happens all the time. By some estimates, about 40 percent of what we do every day is habitual.³

The Habit Cycle

Habits are made up of four things: a cue, a routine, a reward, and an underlying craving.⁴ A cue is something in the environment that triggers the behavior, the routine is the action, the reward is the positive outcome, and inner cravings are the motivation.

Let’s say you want to start exercising habitually. We’ll assume you want to shave off a few pounds because you don’t like how you look in the mirror. A better self-perception is your underlying craving. Next, to create the new habit, you follow a cue-routine-reward cycle. First, you set up a recurring reminder in your calendar (cue) and then go to the health club every time you schedule it (routine). After the first few workouts you'll start to notice newly toned muscles (reward). It may be difficult to repeat the cue-routine-reward cycle, but if you stay disciplined and patient, your brain rewires itself. Pretty soon, exercising regularly will be automatic. Simple enough.

The problem is that old habits are notoriously stubborn. This is because our brains always take the path of least resistance. Having been more efficiently converted and stored in the subconscious, habits become easier for the brain to recall and execute. Once neurons have been wired together during the learning process, the connections become permanent, so the brain must now expend more energy to substitute a new habit. Conscious repetition causes neural connections to strengthen, forcing the subconscious brain to eventually choose the new wiring over the old. If repetition is lacking, the brain simply defaults to the old reflexes. That’s why reinforcement is so important for creating habits and why change is so difficult. The more entrenched our behaviors, the harder and more frequently our brains must work to replace them.

Making Product Usage Habitual

You should view software adoption within the context of changing habits. Upon subscribing to your service, customers are essentially trying to replace one behavior with another, such as using your online database rather than an Excel spreadsheet to track their information. Your customers’ brains are wired to repeat their former behaviors, so the key to success is to be patient and vigilant, while smoothing their path to change. The following six tips can help:

1. Promote the Motivation—People ultimately change their behaviors because they are inspired to do so. In cases where a department head makes the software purchase decision, it is likely that many users won’t feel personally connected to the motivation behind it. Be sure to repeatedly reinforce your benefits with all users. Cultivate their desire to adopt new habits, such as explaining how the new software saves them significant time and effort.

2. Chunk Large Processes into Small Cue-Routine-Reward Cycles—Any process can be reduced to a series of repeatable steps, and stringing together smaller routines allows the brain to learn, adapt, and reuse skills more efficiently. Running a new financial system is a daunting task, but “paying a bill,” “reconciling a bank statement,” and “running a month-end report” are more accessible and easier for the brain to make into habit.

3. Implement Recurring Cues—Recall that every habit needs a sensory cue to initiate the autonomic behavior. You can provide simple triggers through e-mail reminders with embedded links to start transactions. For example, Facebook and LinkedIn constantly send updates to revisit their website and reconnect with friends, family, and business associates. If you identify and map the routines involved in using your product, you can associate a cue to enact each step.

4. Reward Frequently— Don’t leave progressive adoption to chance.  It is essential to track, display, and reward it at every turn. Recognize customer successes via web pages or e-mails when new users accomplish milestones. Note their “moments of proof,” drawing attention to the improvements that using your software yields. Be sure to recognize both initial and repeat successes to promote habit formation.

5. Leverage the Support of Others— Rewiring the brain is difficult and takes conscious effort. Use your cohort’s shared experiences to encourage fellow users. Whenever possible, train people in groups and let them interact. Just like Alcoholics Anonymous and Weight Watchers, social groups provide a safe environment and unmatched support for people undergoing changes in habit. User groups also increase perceived value and builds affective bonds between the company and its customers, which further reduces churn.

6. Be Mindful—Above all, be patient. Experts estimate a new habit can take from 22 to 60 days to form, depending on complexity, entrenched current behaviors, level of motivation and reinforcement frequency, and even the age of people involved. It’s a process that requires intense focus in the beginning, and typically includes false starts and frustrations along the way. Once the habit is established, however, it tends to stay for the long haul.

Software adoption is about changing habits. To maximize usage and minimize churn, your SaaS company should look a step beyond software features, focusing more on the human beings who use the product and the new habits their brains are attempting to form with it.

Excel-lens is a publication of Service Excellence Partners. We increase customer loyalty and business performance in the cloud computing industry. Contact us today.


Sources:

1. Scout by ServiceSource blog. 
2. Swaminathan, N. (2008) “Why does the brain need so much power?” Scientific American.
3. Duhigg, C. (2012) The Power of Habit: Why We Do What We Do in Life and in Business. Random House, New York. ISBN 978-0-679-60385-6
4. Ibid.

Customer Loyalty Problem Solving

A three-level model helps focus improvement efforts. 

Customer retention is critical for companies with business models that rely on recurring revenue. The “leaky bucket” that is customer defection robs 

companies of precious revenue and profit. In cloud computing, cutting customer churn in half over the typical customer life cycle doubles company cash flow and gross margin.¹ Even a small churn reduction pays off in the long term when millions of dollars in revenue are in play.

Obviously, improving customer loyalty is the key, but how? Where should managers start? I propose a simple, three-level model to concentrate on the customer benefits that lead to loyalty: Implicit, Explicit, and Experiential.

Implicit Benefits

Customers take certain things for granted, such as reliable wireless phone service, accurate bank statements, and bug-free software. People assume basic attributes come with the service, and when companies fail to deliver on these minimum expectations, customers have little patience. Chronic problems providing what quality expert Dr. Noriaki Kano calls “must-be” quality² leads to customer defections in every industry. In Software-as-a-Service (SaaS) companies, churn can lead to the loss of half of a firm’s customer base during each renewal cycle.

This is why managers must make delivering the fundamentals a company’s first priority. In cloud computing, that means system uptime, secure data, error-free code, and basic product support. SaaS executives must get and maintain control of their technology development and operations processes or prepare for a rapid demise.

Explicit Benefits

Companies promise things during the sales cycle. When deciding between competitive options, customers evaluate each company’s “value proposition” and choose the best option. If promises don’t materialize, customer expectations go unmet. For example, a SaaS company may state that their software creates a certain type of report, but the customer later discovers it can’t. Customers may not return if the issue is severe and the dissatisfaction high enough. If a competitor offers comparable benefits, and changing providers is simple and cheap, potential for churn grows.

Marketing masters Michael Lanning and Lynn Phillips say companies should make strong value propositions their strategic foundation.³  First, managers must choose a winning value proposition, one that focuses sharply on a target market and offers a compelling alternative. Second, executives must deliver the chosen value proposition by translating it into design requirements, bringing it to market, and then providing it in day-to-day operations. Finally, the company must communicate the value proposition clearly and consistently in marketing, sales, and customer service. When promise-making and promise-keeping are in close alignment, customer expectations are reliably met and churn is reduced. An effective strategic management system ensures value propositions aren’t empty promises.

Cloud computing companies competitive in delivering Explicit and Implicit benefits will typically retain 80-85% of their customers from one renewal cycle to the next. But to raise performance to world-class levels of 95% or higher, companies must become proficient delivering a third type of benefit.

Experiential Benefits

Customers prefer to do business with people they know, like, and trust. How a company does business is as important to customers as the product or service they receive from them. When customers have lackluster experiences, churn increases. Just one unhelpful tech support interaction can end a business relationship, especially when the customer feels ignored, devalued, or unfairly treated. On the other hand, service companies that form strong relationship bonds enjoy significantly higher customer loyalty.⁴

Customer Experience Management (or Customer Journey Management) is a technique used to analyze and improve customer interactions. Managers collect data on myriad customer “touch points” (website visits, phone calls, e-mails, blog entries, social media, etc.) and plot each interaction against time. Patterns emerge where gaps and problems exist, and managers can use process improvement techniques, such as Lean Six Sigma, to resolve them.

While addressing functional gaps is the first place to start, research suggests a more mindful approach is the secret to achieving the highest levels of customer loyalty. Underlying all human

relationships are reflexive responses to subtle, social cues that can have a profound effect on conscious feelings and decisions.⁵ For example, our subconscious mind is sensitive to certainty, the ability to predict the future. When a Customer Success Manager begins an onboarding call by saying, “We’ll have you up and rolling in just fifteen minutes,” she provides subliminal assurances to the customer, producing a rewarding dopamine burst in his brain. If additional, beneficial cues accumulate during the call, the brain assigns a positive marker to the memory.⁶  Later, the brain reactivates the marker as it recalls the experience, allowing subliminal emotions to “weigh in” on the evaluation. When companies understand and proactively manage simple social cues through employee training, refined user experience (UX) design and other means, the resulting positive interactions lead to richly satisfying relationships and more loyal customers.

Loyalty troubleshooting is easier when managers focus on Implicit, Explicit, and Experiential benefits. When customer turnover is high, executives should attend to the basics. When it’s moderate, the priority becomes clearly articulating and consistently delivering competitive distinction. And when managers strive for world-class loyalty, being mindful of the customer experience is the path to success.

Excel-lens is a publication of Service Excellence Partners. We increase customer loyalty and business performance in the cloud computing industry. Contact us today.

Sources:

1. Skok, David (2013). “SaaS Metrics 2.0 – A Guide to Measuring and Improving What Matters,” For Entrepreneurs blog
2. Adapted from Noriaki Kano, Nobuhiku Seraku, Fumio Takahashi, Shinichi Tsuji (April 1984). "Attractive Quality and Must-Be Quality" (in Japanese). Journal of the Japanese Society for Quality Control 14 (2): 39–48. ISSN 0386-8230. 
3. Lanning, M. and Phillips, L. “Building Market-Focused Organizations,” (Gemini Consulting White Paper, 1992).
4. Gremlera, D. and Brown, S. (1996) “Service Loyalty: Its Nature, Importance, and Implications,” University of Idaho and Arizona State University, USA
5. Rock, D. “SCARF: a brain-based model for collaborating with and influencing others,” NeuroLeadership Journal.
6. Damasio, A. R. (1996) “The somatic marker hypothesis and the possible functions of the prefrontal cortex,” Philosophical Transactions of the Royal Society B, 351, 1413-1420. 

Will Kindle Fire's Mayday Spark a Service Revolution?

Amazon warms up the customer experience

One of the hottest Christmas gifts this season is Kindle Fire HDX. It’s a souped-up tablet that includes a new feature garnering a lot of attention. It’s the Mayday button, and it connects you to a live customer service agent over a video link. Press the button, and within fifteen seconds an agent appears on your screen offering help. You can see and hear them, but they can only hear you. The agent has full access to your device, so they can view screens, take control, demonstrate capabilities, or troubleshoot problems. Mayday is available 24/7, 365 days a year, free of charge, and with no time limits on how long you and the adviser chat. Amazon CEO +Jeff Bezos says the company goal with Mayday "is to revolutionize tech support."¹

It’s a smart move, and only part of Kindle’s simple three-part strategy.²  Amazon’s first strategy is to sell premium products at non-premium prices, and the second is making money when people spend on Amazon books and videos. In other words, give away the razor but make it up on the razor blades. The third strategy is fostering customer delight with Mayday. It becomes an important differentiator, especially with Kindle’s target buyers—older, less tech-savvy, avid readers. Amazon handles the burden of helping tech-challenged users, so the new Kindle just may be Santa’s perfect gift for an elderly mom or dad.

The devil is in the details

But along with innovation comes ironing out operational wrinkles. Generally reviews are very positive, but some customers report technical glitches, while others are suspicious about agents having full access to everything, including passwords (Amazon notes screen sharing can be paused).³ Sharing privacy concerns, many corporate IT departments have disabled Mayday links on company Wi-Fi’s to prevent Amazon agents from seeing potentially sensitive documents.⁴

A variety of other issues have yet to reveal their consequences and only time will tell. Christmas Day customer service demand will likely be off the charts as new customers unwrap and try their new toys, which means Amazon may be hard-pressed to meet their promised 15-second service level response time. It’s also not clear how Amazon will deal with multiple languages or serving the hearing impaired. Then there’s the issue of creepy customers, although Amazon says agents are trained to terminate sessions that go off track. Will being telegenic become a job requirement for technical support?⁵ Not all agents have the stunningly good looks of the actors portrayed in Amazon’s TV spot, and unlike call centers, agents’ facial expressions and body language are suddenly under scrutiny on every interaction. How does all this play with labor laws and employee feedback?

Despite the challenges, putting a live, smiling face on customer care is revolutionary. Seeing faces, even those of total strangers, affects us in subtle but profound ways. Neuroscientists have known for years that our first skill as babies is to recognize faces, but they’ve recently discovered that our brains are wired far more extensively for social connection than they previously thought. Experiments show our brains activate reward centers when we see photographs of people who want to chat with us online. Surprisingly, the effect holds true even if the people are total strangers and we’re not that interested in talking to them.⁶ Experts believe our hunger for human connection is a primary driver in how we think, feel, and act, and simply viewing faces satisfies some of those needs. Tapping this deep psychology and delivering a helpful service experience creates a uniquely positive memory with the device and the brand. Amazon’s step toward replacing impersonal call centers with Mayday’s new paradigm could indeed raise the bar on a key factor that drives customer loyalty.

Mayday catches fire

While some techies scoff, saying it is nothing more than a sales gimmick, others think Mayday opens up new frontiers in customer service. They see it as a new era of data integration that will enhance the customer experience.⁷ Software help desk tool vendors are already buzzing about imitating Mayday-like capabilities in future releases.⁸ And industry watchers are thinking about Mayday as a method to collect customer feedback, encourage usage, offer advice, and upsell.⁵

Assuming Amazon can work out the details, making customer care more personal with video can have profound effects on customer loyalty by connecting with our basic human nature. Whatever the outcome, the new Kindle Fire HDX has set the service world ablaze imagining the possibilities.  

Excel-lens is a publication of Service Excellence Partners. Our unique approach helps founders at early stage companies better scale operations and manage growth. Contact us today.

Sources:
1. Dan Seifert on September 25, 2013, “Amazon launches Mayday, a virtual Genius Bar for the Kindle Fire HDX: Amazon is including live tech support with its new tablet, no pants required” The Verge. 
2. Todd Bishop on September 25, 2013. “Jeff Bezos explains the next step in Amazon’s strategy — the ‘hardest and coolest’ part” Geekwire. 
3. Timothy Stenovec on October 2, 2013. “The Mayday Button May Actually Convince You To Buy The Kindle Fire HDX” Huffington Post. 
4. Matt Hamblen on September 26, 2013. “New Kindle Fire HDX's tech support button could push IT to yell 'Mayday!'” Computerworld. 
5. Software Advice, December 11, 2013, “Is Amazon’s Mayday Support Model Right for Your Organization?” CSI: Customer Service Investigator. 
6. Matthew D. Lieberman (2013). Social: Why our Brains are Wired to Connect, Crown Publishers, New York. ISBN: 978-0-307-88909-6
7. Neal Schact on September 29, 2013. “Did Amazon Just Fire Another Shot Heard 'round the World?” Nojitter. 
8. Joe Panettieri on November 26, 2013. “Amazon Kindle MayDay Button: Can MSP Help Desks Respond?” MSPMentor 

Tech Check: Is Facial Recognition the Next Frontier?

Affectiva, an MIT-linked SaaS startup, uses technology to observe and analyze physical responses to determine emotional states. Positioned for media testing, Affectiva’s Affdex product uses webcams and facial recognition technology to test advertising spots for large clients. Gone are expensive and inconvenient test labs agencies use to evaluate TV ads—participants just watch from their computers while Affdex records their reactions. The company uses sophisticated algorithms to interpret expressions and head movements, ascertaining emotions and their level of intensity in real-time.

Sounds like Madison Avenue marketing hooey, right? It turns out greater emotional response leads to better business results, and the science backs it up. In a 6-week case study, AOL used Affective technology to test a new online media advertising format (IAB portrait) versus traditional online advertising formats. The results were impressive in how the audience reacted:

·         Portrait format attracted attention 35 percent faster than competing formats, created 81 percent more attention, and 95 percent more fixation time

·         Live media metrics showed interaction rates rose 4.5x – 7x

·         Facial recognition analysis showed Portrait format lowered negative emotions by almost 40 percent, with less user frustration, and fewer frowns

And in business results:

·         Users indicated they would visit the Brand site/Facebook Fan page 49 percent more often

·         Users indicated they would recommend the brand or product 46 percent more often

·         Purchase intent rose 263 percent

What does this have to do with cloud computing? Researchers have proven emotions are a primary driver in customer loyalty and retention, so new emotional response measurement approaches may be critically important. Many cloud computing companies already collect information on what customers think (via satisfaction surveys), what they say (via text analysis on social media sites), and how they behave (via application monitoring tools), so understanding how they feel may not be far away. All of these attributes, especially used in combination, can create powerful customer churn prediction models. When lowering churn even a few percentage points dramatically increases customer lifetime value and per-customer profitability, understanding and addressing the causes of churn depends on good measurements.

A practical application may be using Affdex as a training tool with willing new customers enabling their webcams during the onboarding process. Imagine recording new customer orientation sessions with Customer Success Managers to provide feedback on how to improve their critical first customer interactions (see “What Starts Right, Stays Right”). Managers and staff could then optimize customer engagement and ensure they begin the relationship on a very positive note.

What Starts Right, Stays Right

More cloud computing organizations are “onboarding,” implementing processes to ensure customers experience a smooth transition to their technology product or managed services right after the sale. Managers intuitively recognize the need to begin new customer relationships on a positive note.

Their instincts are well-founded. Research shows creating and maintaining positive customer experiences, especially at the very beginning, pays dividends. Ruth Bolton studied customer satisfaction and churn in the cellular phone industry¹ and found:

·         Negative experiences in the beginning are a major factor in short-term customer exits

·         The longer people have satisfactory experiences, the less likely they are to churn

·         Customers who have many months of positive experiences weigh cumulative satisfaction more heavily than any occasional, negative experiences that occur later

Researcher Ho Huy Tuu confirmed that specific factors affect the satisfaction–loyalty relationship in a combined and interactive way: ²

·         Involvement: an individual’s long-term evaluation of importance and significance consuming a product

·         Ambivalence: an individual’s emotions towards consuming a product (Tuu proved ambivalence was negatively correlated, i.e. Caring is the factor in satisfaction)

·         Knowledge: a person’s evaluation of their familiarity, expertise performing a task, and consumption of a product in a specific transaction

·         Certainty: the consumer’s confidence evaluating their satisfaction with a product

Tuu also verified that actively mitigating customer’s perception of risk is essential. Fear, he demonstrated, trumps positive loyalty gained from high satisfaction.

What’s more, along with Svein Ottar Olsen,³ Tuu confirmed the effects between satisfaction and loyalty are nonlinear—at high levels, small increases in satisfaction have a disproportionate impact on customer loyalty. That means there’s no point of “diminishing returns” when it comes to continuous improvement; above certain levels, loyalty impact from customer satisfaction multiplies. They suggested offering ‘delight’ or ‘exceeding expectations’ explains these nonlinear loyalty behavior effects.  

Research shows cloud computing companies are on the right track; onboarding is indeed an important strategy for reducing customer churn. An effective process engages the customer, increases their knowledge, and gives customers reasons to care about the product and the people behind it. Orientation should not simply be a “data dump” of technologies and product features—feelings matter! Companies should pay close attention to allaying customer fears, such as emphasizing data security, privacy, system reliability, and responsive support. To put the customer experience into orbit, companies should surprise customers, showing them extra benefits in exceptionally positive, personal interactions. First impressions linger, and maintaining and improving service increases customer certainty, reducing the potential for customer churn down the road.  

Footnotes:

1.       Bolton, Ruth. “A Dynamic Model of the Duration of the Customers’ Relationship with a Continuous Service Provider: The Role of Satisfaction.” Marketing Science, Volume 17, No. 1, 1998

2.       Tuu, Ho Huy. “Moderators in the Relationship between Satisfaction and Loyalty of Vietnamese Fish Product Consumers,” a thesis for the degree of philosophiae doctor, University of Tromsø, February 2011.

3.       Tuu, Ho Huy, and  Olsen, Svein Ottar. “Nonlinear Effects between Satisfaction and Loyalty: An Empirical Study of Different Conceptual Relationships,” Journal of Targeting, Measurement and Analysis for Marketing Vol. 18, 3/4, 239–251. 2010 Macmillan Publishers Ltd. 0967-3237