Monday, November 30, 2015

Keep Your Customers Happy, and When You Don't, Find Out Why and Make It Right

Good morning
"And the beat goes on………………"


Recognizing that satisfied customers are a critical variable in success, all businesses are increasingly concerned with service delivery, and when that delivery falls short (service failure) that taking steps to "make it right" are essential to maintain customers and avoid a situation where service failure negatively impacts future business.

The nonprofit arts are no different.  It is incumbent on all arts organizations, and particularly on performing and visual exhibition organizations to provide their customers with satisfying experiences at all points where the customer interacts with the organization - from initial contact all the way through.
Smart businesses now engage in trying to figure out what the expectations are of customers at those various points, and as, or more importantly, what needs to be done if there is a breakdown at any one of them. Invariably, things don't always go as envisioned and things happen that disappoint, annoy or even anger customers, and that experience, absent an earnest and successful attempt to make it right, threatens to harm the business.  And even little things can create negative experiences.  While we talk about the transformational experience with the arts, it's the little things that sometimes are more important to the customer.

According to an Abstract Paper by Christine Ennew and Klaus Schoefer on Service Failure (defined as "when a service fails to live up to what was promised, or what the customer expected"), and Recovery in the Tourism Industry, "customers who experience a service failure are of three types:  They complain, they spread negative word of mouth, or they elect not to repurchase (or again patronize the offending seller)."  They go on to state that "there are three types of service failure: 1) unavailable service, 2) unreasonably slow service, or 3) other core failures - including unexpected behaviors by a company's employees, including level of attention, unusual actions, cultural norms, gestalt and adverse conditions."

The authors note that "understanding the type of service failure is important in designing the appropriate response."  And that, according to a framework proposed by Day and Landon (1976), dissatisfied customers engage in:  "redress seeking, complaining to others, and personal boycotting."

Which customers are likely to complain and by which means, helps to understand the whole area of service failure.  Thus, for example, customers who believe complaining yields desired results, are more likely to complain.

Today, it is commonplace for businesses to engage in market research to identify customer expectations, to compare those expectations against what the business sees as realistic to deliver, and to assess and analyze that delivery and where it fails.

For arts organizations, the customer experience starts before they walk in the door, first with knowledge of the arts organization and what it offers - from advertising and promotion to websites leading to ticket purchase.

There are several expectations people have irrespective of the nature of the business.  As to information, they want correct and reliable information, and they want that information to be easily and quickly available - whether dealing with a product or a service.  Failure to provide that information may end the potential customer relationship before it really even starts  With exhibit or performing organizations that's not only the what, when, where, and how much, but the ancillary information of site directions, parking, and more.  Moreover, they want a sales message as to why they should be interested in the art that is concise and convincing.  These 'needs' bear on the website and its ease of navigation; ticket office knowledge, responsiveness; and the staff treatment on arrival.  It also involves the point of entry to the physical site, to such things as building appeal, layout, signage, and more.  There are many things that can go amiss and disappoint arts organization customers before they get in the door.

Then, of course, there is the experience of the exhibition or performance itself.  And the aftermath of that experience.  Of course, not every exhibition or performance will please an audience, but there are elements of lighting, audio sound, comfort (including for performances seating, temperature control, et. al) amenities (cafe, bar) that audiences will take into consideration in judging service delivery.

So when something goes wrong, and invariably it's common that something may go wrong, what is to be done?

Businesses know that it is critically important to know when something goes wrong.  It is understood that you need to take corrective action and move to placate disappointed or upset customers, and you can't do that unless you know they are unhappy. There must be some mechanism to hear customer complaints.   So businesses have developed various approaches and tools so that there is built into the system means for them to discover and identify problems.  There must be some mechanism or process for people to register their dissatisfaction.  If you don't have a means to register complaints, you can't assess them or deal with them.

Tools ranging from audience surveys, and phone or internet complaint points,  to focus groups are used to try to find out at what points service delivery has been, or may be, service failure.  One of the tools businesses use is a Walk Through Audit.  James and Mona Fitzsimmons in their work: Service Management (McGraw Hill International), suggest the audit "can be a useful diagnostic instrument for management to evaluate the gaps in perception between customers and managers.  Customers visit a site less frequently than do managers, and thus, are more sensitive to subtle changes (e.g.,peeling paint, worn rugs) than are managers who see the facility every day and who are likely to overlook gradual deterioration of the supporting facility.  The quality of customer service can also deteriorate and be less noticeable to employees as well as to managers."

A sample Walk Through Audit for the Helsinki Museum of Art and Design, included everything from asking if it was easy to get to the museum, were the operating hours convenient, to questions about ticketing, information (signs, language, available, friendly staff) to the experience of being in the museum (lighting, clear paths, background noise, to questions about the facility (toilets, cafe, gift shop etc.)  Such a detailed feedback response allows the museum to "evaluate the service experience from the customer perspective."  The best way to administer such a survey is thought to be immediately after the customer's service experience, and offering a future discount or gift certificate helps to increase participation.  Fitzsimmons and Fitzsimmons op cit.

Once a service failure has been identified, then it is essential to have ways to make it right for the customer.  Companies have developed all kinds of ways to address service failure so as to minimize the damage done to their businesses - and have employed devices ranging from unconditional guarantees, warranties, refunds, future discounts, free replacements and letters of apology.

The literature suggests that customers are primarily interested in: "1) early acknowledgment of the service failure: 2) an apology, and by a real person; 3) a willingness to quickly offer some remedy, to make it right; 4) some kind of "symbolic atonement" or form of compensation; 5) a follow up; and 6)  a sincere promise to remedy the problem for the future."

Binder et. al. (1990) suggested that "it is not necessarily the failure itself that leads to customer dissatisfaction, as most customers do accept that things can go wrong.  It is more likely the organization's response (or lack thereof) to a failure that causes dissatisfaction.  They suggested that for a successful service recovery an organization's response should include four key elements: 1) Acknowledgment of the problem; 2) Explanation of the reason for the failure; 3) An apology where appropriate; and 4) Compensation."

An organization must also watch out for a kind of double dissatisfaction where there is not only a service failure, but the attempt at a service recovery is also perceived as a failure.

And it isn't just the dissatisfied customer.  Research indicates that one dissatisfied customer will tell as many as 10 people of their negative experience, and that can result in the loss of potential customers.  On the other hand, successful responses (service recovery) can have a positive impact on word of mouth.

According to Christine Ennew and Klaus Schoefer, "the potential benefits of effective service recovery include improvements in cumulative satisfaction, increased loyalty, repurchase and positive word of mouth."

The question is:  To what extent do our arts organizations understand the true critical nature not only of superior service delivery, and have moved to make sure of that superior delivery quality - at every step of the customer interaction - but have also created and implemented means to identify when a service failure does occur (encouraging customer complaints), and have developed means to respond to that failure in a way so as to minimize the negative consequences.  We're talking about systemic mechanisms that are ongoing.

I believe that all our arts organizations ought to review the procedures they have for welcoming complaints so they can be assured that when a service failure arises, it comes to their attention. And then I think they ought to establish and employ means to immediately deal with those service failures so that they minimize the loss of customers.  There ought to be formal policies and established mechanisms and all of that ought to be reviewed periodically.  And staff people at all levels should be trained to handle customer complaints.

Meet your customer's expectations, and, if you don't, know that and find out why.  Then make corrections.  That's a business requirement for everybody - including us.

Have a great day.

Don't Quit

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