Is being good, good enough?
Many businesses provide what one commentator calls “black box services”. That is to say their customers may understand the inputs and outputs but have no idea what happens in between. Accounting and legal services are classic black box services although there are many other examples including motor garage repair services.
These businesses have customers who are not (generally) sufficiently discerning about the services they receive to know whether the work is of a high or low quality. So while many service providers are proud of the quality of the work they do this does not translate into a meaningful differentiation in their market place. So while being good is a requirement for success it is not sufficient.
Our human brains make judgements about these black box services by making judgments about the things we can make judgments about, often by looking at things on the periphery, and extrapolating to form a view abut the core (black box) service.
A case study
A potential customer of an accounting firm called to make an appointment to meet one of the partners. He had been referred to the firm by a friend. The receptionist booked the appointment and explained that they like to confirm meetings with a “Meeting Confirmation Form” and emailed the form to the potential customer. The form asked about travel plans and dietary requirements as well as a suggested agenda and timing of the meeting. The potential customer emailed the form back and mentioned he was catching a train. The receptionist emailed back train times and platform changes and told the potential customer that someone would be at the station to collect him and bring him from the station to the office and would drop him back to the station after the meeting. This all happened as the receptionist had planned and the potential customer found himself in a smart, clear, meeting room at the accounting firm enjoying his preferred breakfast when the accounting firm partner (with whom he had never before met) walked in. The potential customer stood up to greet the partner with the words …”Let me tell you, you are not like any other accounting firm I have ever met ..”
We form strong views about the quality of a particular firm or business with whom we deal by extrapolating from the peripheral things that the firm does. The potential customer in the case study above was thinking (subconsciously) that …”if this firm can care about how I get here and the food I eat I believe that they will also care enough to get the core services right”. Indeed there is some truth in this in that a firm that goes to such trouble to look after a customer in this way will surely pay attention to the quality of their core services too. Paddi Lund (www.paddilund.com) asserts that when we try hard to get things right on the peripheral things we do we cannot help but influence our care of the core. To quote Paddi it is like “ripples in a pond”.
The human’s brain propensity to extrapolate little bits of information to form an overall view is often referred to as the “Halo effect”. The human brain does not like things that are not consistent with its view of the world and will actively search for information to support its view of the world. For example, when you have formed a positive view of a person or organisation you will look for other information to support this view. Similarly, if you have a negative view of a person or an organisation then you will seek information to support and not contradict that view. We are not as objective as some of us would like to think!
Creating positive halos
Given our brain’s propensity to extrapolate information, and the fact that our clients and customers are not in a position to make judgements about the quality of what we do at the core, there is a strong argument to create positive halos to allow our customers to form a positive view. This is sometimes referred to as “making the invisible – visible”. It is important to remember that when we do this we are not trying to appeal to our customers rational or even conscious thought processes. Many (some argue all) of our judgments are made in that part of the brain which is often called the subconscious part of our brain – sometimes referred to as the back of the head. We may then use the more rational part of our brain to justify the decision we make.
While many business managers acknowledge the importance of building trust with customers, suppliers and employees not so many believe that this is something that can be developed. Trust facilitates more business with existing customers, more referrals to new customers, less staff turnover, reduced costs and quicker processes (see Stephen Covey’s book “The Speed of Trust”). There are many ways organisations can build trust (see also David Maister’s book “The Trusted Advisor”) but many come back to building positive halos and behaving consistently.
Research shows that behaving consistently is very important when trying to build trust.
This applies to all the little things that impact on those with whom we are trying to build trust. Such things as, answering the telephone, returning calls, and dealing with emails. It’s often the little things that make all the difference. Getting organisations to behave consistently to a standard can often be challenging but nonetheless a worthwhile endeavour. Some organisations train their people to work to specific service standards or performance standards. These performance standards become the way the organisation “does business” and in so doing differentiates them from their competitors.
Performance standards don’t just communicate to the outside world, they also send a message to the organisation’s own people. The employees too can take pride in the businesses performance standards and in an orgainsation that has given them a priority.
Whenever people think about performance standards and systems there is often a negative reaction as people fear that they will become robots slavishly following “the system” even if it is inappropriate. We will have all suffered at the wrong end of a system designed with the best of intentions. Telephone scripting and routing are among the most well known examples of systems that don’t work. For this reason great care needs to be taken when designing systems remembering always that the system was designed for the customer and not the customer for the system. Successful implementations of systems are underpinned by good leadership, sound principles (core values) and a strong customer focused culture. There will always be exceptions that the system does not serve but this does not invalidate the system. As Wally Hawryluk was fond of quoting “You systematise the 90% so that you can humanise the 10%”.
Many smaller businesses pursue (often unwittingly) what Treacy and Weirsema call a Customer intimacy strategy. Indeed if Treacy and Wiersema are to be believed this is the only option available to most smaller businesses. Becoming more intimate with customers involves having a better understanding of their needs and building unique solutions in meeting those needs – a classic differentiation strategy ( See Michael Porter). A fundamental need for most customers is to be able to “trust” their supplier. Being consistently good at a number of little things that customers can see and experience goes along way to building this trust and executing a differentiation strategy. Just being good at the core service is not good enough.