We’ve all heard about the pent-up demand that has led to increased spending lately and which is a major factor in the inflation we’re experiencing currently. That increased spending has been particularly noticeable in the travel category. Flights have been full and prices for transportation and accommodations have risen sharply.
In recent focus groups about travel, we asked frequent travelers if they intend to continue the increased pace of travel. The answer was a resounding “no.” Almost all participants had postponed travel plans during the pandemic and finally made those trips this year. Now that those trips have been made, they are planning to go back to their normal travel frequency.
In other research, we’ve been talking to consumers about inflation and the impact on their spending. While many talked about accepting higher prices and adding higher tips during the pandemic, now consumers are being more careful and looking to spend less. My own personal experience: I was going to order a pizza online from a local restaurant, which I planned to pick up myself, until I noticed they added a “pickup fee.” For me, that just crossed a line, and I decided to order somewhere else. A few weeks later, I ordered from that restaurant again, and the pickup fee had disappeared.
What does this mean for marketers? It may be time to return to emphasizing value and offering promotional deals. Let’s find out how your customers feel about spending. Email me at info at bureauwest.com.
Many companies’ approach to customer experience focuses on eliminating negatives (“was your customer service rep knowledgeable? Was your hold time acceptable?) rather than increasing positives or “delighting” the customer.
Of course, it’s important to ensure customers don’t have a terrible experience. But a great deal of research has shown that focusing on customer delight has significantly greater return on investment than eliminating negatives.
In their book “The Power of Moments: Why Certain Experiences Have Extraordinary Impact,” Chip Heath and Dan Heath examined data from Forrester and found that elevating positive experiences creates nine times more revenue than eliminating negative experiences.
Another Forrester study found companies that prioritize customer experience grow their revenue 1.7 times faster than companies that don’t, and they also increase their customer lifetime value by 2.3 times more.
Watermark Consulting looked at thirteen years of stock performance of companies that are customer experience leaders and found that customer experience leaders outperformed the broader market, generating a total return that was 108 points higher than the S&P 500 Index and they generated a total cumulative return that was 3.4 times greater than that of customer experience laggards.
In “The Power of Moments,” the Heath brothers provide two great examples of companies who have profited significantly from customer delight:
You know the funny safety announcements that sometimes happen on Southwest Airlines? (E.g., “the smoking section on this airplane is on the wing.”) The company was able to calculate the impact of hearing a funny flight announcement on customers’ likelihood of flying Southwest: they flew an average of half a flight more over the next year than did similar customers who hadn’t heard one. They calculated that if Southwest could double the number of customers hearing a funny flight safety announcement, the result would be more than $140 million in revenue per year.
Sharp Healthcare made a significant investment to improve the patient experience. Beyond the medical care patients received, they wanted to improve the service experience. For example, caregivers stopped talking over patients and actually introduce themselves and explain their roles. In the five years since starting the effort, net revenue increased by half a billion dollars.
Figuring out how to elevate the customer experience requires investing some resources and some creative thinking – but the result is clearly worth the investment.
How can you delight your customers? Let’s talk to them and find out! Email me at info at bureauwest.com.
We are currently conducting research on the topic of luxury travel and have been asking people about what elevates an experience to the level of luxury. I’ve been struck by the fact that their answers can all be boiled down to one thing: superior customer experience.
But here’s the “secret:” providing superior customer experience isn’t limited to the luxury category; mainstream companies can do it, too! To do so, many companies need to shift their focus. Rather than just focusing on getting good scores in customer experience surveys, they need to look beyond that and figure out how to improve the customer experience.
Let me give you an example: our website and email stopped working recently, so I called our web host’s tech support. It turned out there was a technical issue, and they didn’t know when it would be fixed. Afterward, I received a customer experience survey asking me about the rep I talked to. She was polite and pleasant, so I gave a rating of five out of five. The technical problem certainly wasn’t her fault. But does that mean I was happy? No! One thing that would have made me happier: if I could have found the information about the technical problem on the host’s website, rather than having to make a call. Or imagine if the rep had told me that she would move our website to a different server, so that we could be back up and running immediately. I don’t know if that’s technically feasible, but if it were, I would have been ecstatic and would have told everyone I know! But I wasn’t asked about what could be improved.
Our luxury travel research provides some clues about where companies can look when it comes to improving the customer experience:
People love personalization. A guest at the Ritz in Bali received specific flowers in her room with a note saying the staff saw her admiring the flowers in the lobby. While mainstream companies don’t have the staffing for that level of personalization, they can use digital tools to keep track of customer preferences. Or it can be even simpler: United Airlines flight attendants recognize passengers in Premium Economy by name. Customers are surprised and gratified (since that usually only happens in business class), but it’s relatively simple for flight attendants to do, since they have passenger names on the manifest.
People hate waiting. Luxury providers find ways to change the experience of waiting. For example, a cruise provider might take passengers’ registration information while they’re waiting to check in, or a restaurant might provide drinks and hors d’oeuvres while diners wait for their table. Mainstream companies can look for ways to occupy customers while they wait… and may even discover additional selling opportunities!
People want their problems solved. High-end providers empower their employees to fix customers’ problems. The Ritz Carlton is known for allowing employees to spend up to $2,000 to solve a customer’s problem without manager approval (note: they rarely spend that much). While mainstream companies usually can’t spend that kind of money, they can empower employees to solve problems and make exceptions to rules when appropriate.
We encourage our clients to go beyond asking their customers to score their customer experience and instead research the experience itself and look for opportunities to make customers happier. Email me at info at bureauwest.com and let’s discuss how to do that!
Generation Z, people born between 1997 and 2012, make up 20% of the US population, and are the next important group for companies to consider, both as prospective customers and potential employees.
Clockwise from top left: James Charles, Chloe Kim, Greta Thunberg, Billie Eilish,Lil Nas X, and Zendaya. (https://www.sfweekly.com/culture/who-is-gen-z-really/ Photo Credit: Grace Z. Li/ DFree/ Tinseltown/ Kathy Hutchins/ Live Oeian via Shutterstock)
I was at the QRCA Annual Conference last week – it was great to see my fellow qualitative researchers in-person! – and I attended a presentation and panel led by Jamin Brazil about Gen Z. Whenever people talk about characteristics of cohorts, I wonder whether those characteristics have to do with the cohort specifically, or the life stage they’re in. I still remember, at the beginning of my research career, people saying that Generation X were “slackers.” Then, a few years later, they said “we were wrong, they’re actually hard workers!” That’s because when they were college students they weren’t as hard working as when they got married and had kids!
Having said that, there do seem to be some characteristics that really are specific to Gen Z. These came up in the presentation and were confirmed by the Gen Z attendees sitting with me during the session, as well as in research interviews I’ve been conducting with members of the cohort. Marketers and employers should consider these characteristics if they want to appeal to Gen Z:
They are digital natives: That is, they have always lived with social media and smartphones. As a result, they are quite experienced and savvy when it comes to inauthenticity and digital scams. When it comes to purchasing decisions, they rely on influencers (people on social media regarded as experts or taste-makers in a specific area) more than other cohorts.
They are pragmatic: In contrast to Millennials who were raised by Baby Boomers and who tend to be idealistic, Gen Z were raised by Generation X parents – and saw their parents struggling during the great recession. They tend to focus on saving money.
They are diverse: 49% of Gen Z identify as non-white, more than any cohort before them. They are more likely to have grown up amid diverse family structures – whether in a single parent household, a multi-racial household, or a household in which gender roles were blurred. As a result, they are less fazed than previous generations by differences in race, sexual orientation or religion.
The above has implications not just for marketers and employers, but also for researchers. We are finding that Gen Z members are more difficult to recruit as research respondents. They are mistrustful of traditional recruiting and worry about data security. Research recruiters are finding greater success recruiting through social media and word of mouth, rather than traditional methods. And Gen Z members are demanding higher research incentives, thinking of research participation in much the same light as a “side hustle.”
How can you appeal to your Gen Z prospects? Let’s ask them! Email me at info at bureauwest.com.
