How Middle Market Companies Can Create Amazing Customer Experiences




10/30/2017 | Chuck Leddy

Chip Heath is co-author of the new book “The Power of Moments: Why Certain Moments Have Extraordinary Impact.” Heath is a Professor of Organizational Behavior at the Stanford Graduate School of Business. Chip and his brother Dan have co-authored four bestselling business books. We recently caught up with Chip Heath to discuss how middle market companies can create memorable experiences for their customers. 

Does it matter whether you’re a startup, a Fortune 100 company, or a middle market company in terms of delivering memorable customer experiences?

Heath: The psychology from the customer’s standpoint is identical in each case. I think it’s harder for larger organizations to deliver memorable moments. As organizations get bigger, they become more standardized and bureaucratic. Middle market companies are actually in a great position. They have enough resources to devote to thinking about great customer experiences, but they’re not so entrenched in bureaucracy and standardization as Fortune 100 companies. 

What moments are people more likely to remember?

Heath: The psychology says we don’t remember everything. If you think back to your last vacation, you’re only going to remember two or three really positive events and a couple of negative events, but you won’t remember the day to day stuff. When asked what they remember from their college years, 40 percent of people’s memories are in the first six weeks of freshman year, because that’s when you’re discovering what it’s like to be in college. Nobody remembers junior year. Basically, what people remember are beginnings and ends. Those are the transitions between different phases of life. People also remember highlights and lowlights.

Can you explain what makes a “defining” moment?

Heath: Defining moments have a sense that they’re more vivid than normal moments. They’re heightened sensory experiences. A birthday cupcake is a perfect example of a tiny moment of elevation, because it’s got sugar, fat and filling all in one. Moments that people talk about as defining are moments of pride, when they’ve achieved something. They’re moments where we realize something about the world or our industry or how we’re doing a job. They’re also moments of connection; things that bring us together with the people we’re closest to. For example, birthday parties are great at creating elevated moments. We’ve got cupcakes and connection with our kids. 

How might middle market companies transform service failures into positive customer experiences?

Heath: Research shows that a quarter of the peak moments people list actually started off as service failures. Remarkably, if somebody messes something up, but then recovers really well, people will recall it as a peak moment instead of a pit. I had a friend who was taking a redeye flight and had important meetings in New York City. He got in and called ahead to make sure the hotel would have his room ready. But the room was not ready. My friend was tired from the flight, he needed a shower, but the person behind the desk said, “I’m going to have them fast-forward the cleaning of the room. And let me give you a coupon for breakfast at the restaurant.”  The hotel person gave my friend a $150 voucher. Even if you ordered every menu item, how can you spend $150 on breakfast? But the gesture certainly made my friend feel much better, because the hotel person was working so hard to satisfy him. 

Why might it be better for middle market companies to focus on creating more peaks, those high points, rather than just offering “error-free”/neutral service?

Heath: Research says that you’re nine times better off, in terms of generating revenue, moving somebody from a neutral experience to a really positive experience, compared to moving them from mildly negative to just neutral. What we’re probably not doing if we’re spending our time making service error-free/standard, is thinking about the upside of creating really positive experiences. 

Pret A Manger gives its customer-facing employees the right, at any time, to give away free coffee or food. If a customer looks grumpy, why not give them a free coffee? If somebody has been wonderful to the staff, give them a free pastry. Building these random moments of surprise into an experience is very effective, because people often remember the surprises relative to the standard script.  Southwest Airlines will do funny flight safety announcements where they actually tell jokes. Just this act added more than a hundred million dollars to the bottom line of Southwest.

How can middle market leaders go about “flipping the script” to create memorable customer experiences?

Heath: What you want to do first is understand the standard script. We all know what the script is for a restaurant interaction. We’re met by a greeter. They seat us at the table, they bring menus, and there’s a set of things that unfolds all the way through receiving the check, paying the bill, and exiting. That becomes the default; what surprise requires is that we break that script and play with the expectations. Suppose that when you sat down, they brought you a surprise appetizer. It doesn’t have to be expensive or fancy. Just the surprise alone is going to count to the restaurant’s credit. I went to a restaurant that gave me a cookie wrapped up to go and I was ecstatic because I wasn’t expecting that. Play with the script and break it in appropriate ways. 

Why is employee engagement so vital to creating amazing customer experiences? 

Heath: To deliver amazing service experiences, you need flexible, creative employees. They don’t have to be geniuses at customer service, but they do have to be flexible enough to tailor something towards the customer. How many times have you gone into a hotel and they asked you how your trip was? It almost doesn’t matter what you say, because they’re not really listening. But suppose you said, “ugh, my trip was pretty rough” and the hotel employee says, “let me get you a cup of tea. Just sit down and I’ll take care of your reservation. I’ll bring you the key to your room.” That would be an outstanding moment of customer service because of the consideration it shows. You don’t see that very often and engaged employees are required for delivering that level of service. 

What else would you like to say to middle market leaders about “The Power of Moments”?

Heath: It’s liberating and terrifying simultaneously to think about designing for a memorable moment. We don’t have to get everything perfect every single time, but we do have to get some moments right. That’s really terrifying because we don’t have the technology for thinking about how to create positive experiences. What we try to do in the book is to bring together stories of the people who have done that systematically and created really positive customer experiences. The book gives you a framework as a leader for thinking about creating those for yourself. 

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