Web 2.0 provides us with an opportunity to improve our relationships with our clients by focussing on the interactions that are important them and on the way our employees interact with clients.
Mature companies with many points of contact with their strategic clients — banks, investment houses, IT companies, telecom providers — devote a great deal of money and effort to retaining their current customers because the costs of doing so tend to be much lower than those of acquiring new ones. The success of this strategy depends on expanding the breadth and depth of client relationships and on translating the resultant loyalty into higher sales, as well as a healthier bottom line.
However, although companies are investing in traditional loyalty programmes, CRM technology and service-quality improvements, most of these initiatives do not return the expected investment. What’s missing is the sparkle between customers and employees that transforms people into strong and committed brand followers. No where is this more apparent than during interactions when clients invest a high amount of emotional energy in the outcome (for example, a lost order or a cancelled flight).
Companies struggle to transform the way employees respond to its clients. Some assume that the quality of emotional responses — what Daniel Goleman calls an employee’s “EQ or emotional intelligence”1 — is impossible to influence. Others script what “spontaneous” conversations, removing authenticity from the clients’ experience. Still more underestimate the importance of employing employees who are mature enough to understand the clients’ world and the impact of poor service on it. This makes it difficult to foster appropriate behaviour and enhance the intrinsic emotional intelligence of employees, across the whole customer facing employee network.
There are a number of practical ways to overcome these challenges. In any industry that offers a service, there are moments when the long-term relationship between a business and its clients can change significantly. By supporting and developing the emotional intelligence of its employees, it can ensure that those moments have a positive outcome.
High emotion, high performance
What is the link between emotionally charged interactions and the purchase decisions of customers? McKinsey research has identified the existence of “critical moments” for customers as well as the companies that respond appropriately to them.2 These moments occur when the customer has a problem or receives advice, either good or bad. By contrast, routine transactions (such as collecting a credit card) don’t offer the same opportunity to create an emotional bond with the customer. Many companies make the mistake of over-investing in routine transactions but fail to differentiate themselves in the customer experiences that really matter.
McKinsey’s research demonstrated clearly the impact of emotional intelligence on the bottom line. After a positive experience, more than 85% of customers increased their value to the bank by purchasing more products or investing more of their assets; more than 70% reduced their commitment when things turned sour. More worrying, this isn’t necessarily immediate or visible, it takes the form of shifting part of a client’s business to another institution, or a willingness to talk to the competitor.
Given the clear link between positive interactions and share of wallet, every customer-facing business should identify the points of interaction that are relevant to its industry. In insurance, for example, there are many of these potential service interactions, from shopping for quotes, to claims procedures and claims handling. All offer the potential for something to go so badly wrong that a customer defects. Only a few can provide positive moments — opportunities to intensify the customer’s loyalty to a carrier.
Then, having identified the “critical moments” for their industry, they need to build a support mechanism into the employees’ environment for them to acquire the EQ and behave in a way that is relevant to the clients’ needs.
Why behaviour is the key
Standard responses to eliminate human error (IT systems, mechanistic CRM approaches and complex protocols) may smooth simple customer interactions. But pure technological solutions can never strengthen the emotional connection between employee and client.
Technology falls short when it is designed to standardise processes rather that support the employees through collective sharing, for example by taking into consideration the three elements that largely govern human behaviour: thoughts and feelings, values and beliefs and personal emotional needs. These are not acquired through a standardised process, but through collaboration and communication.
Web 2.0 technologies facilitate a two way communication between the employee and the organisation and employees and each other. This was recently demonstrated in the Awareness Report, released in late 2007. They noted some incredible results in terms of the positive external impacts of the application of web 2.0 customer relationship applications such as customer engagement was increased by 68%, brand awareness & loyalty improved by 64% and additional revenue that was generated went up by 39%.
Employees can succeed with the right skills and competencies and while most companies understand the importance of building capabilities (through training etc.), many ignore the mind-sets of their client facing employees.
If employees believe that they are the guardians of the client’s well-being, they feel confident in what they sell and in their ability to communicate. This mind-set makes it easy to have successful conversations with clients, to understand their emotional and financial needs, and to perform well during interactions. They have the positive feelings, values and individual needs; the emotional intelligence required to connect with and help clients at key moments.
Seizing the moment: How managers can help
McKinseys believe that emotional intelligence in business settings typically manifests itself through 4 intertwined characteristics:
- A strong sense of self-empowerment and self-regulation, which together helps employees to make decisions right on the spot if that should be necessary;
- A positive outlook, promoting constructive responses to the challenges of work;
- An awareness of your own and other people’s feelings, creating empathy and facilitating better conversations with customers
- A mastery of fear and anxiety and the ability to tap into selfless motives, which make it possible for employees to express feelings of empathy and caring
These can be intrinsic features of a human being’s personality. Even so, companies — particularly those with far-flung networks of thousands or even tens of thousands of employees — can take practical steps to encourage and enhance them using web 2.0.
Naturally companies should begin by hiring emotionally intelligent frontline employees in the first place; a business starts with an obvious advantage if it can attract people with the right emotional instincts for frontline employment.
Recruitment is only part of the story. If companies understand and act on three key “environmental” levers, they can significantly influence the front line’s emotional intelligence. Activities inspired by these levers must be mutually reinforcing and they create a workplace where excellent customer service can blossom and key moments of truth are handled deftly and successfully.
The levers are:
- Creating meaning and clarity of purpose for client facing employees, thereby addressing their thoughts, feelings, values, beliefs and emotional needs. This could, for example, be supported by an interactive Intranet where employees are enabled to communicate with the organisation about how the organisational values translate into the way they do their work
- Improving the capabilities of employees and influencing their mind-sets so that they acquire the right emotional skills. Once again a 2.0 enabled Intranet with an effective mentorship programme could harness the benefits of collaboration to enhance employee EQ
- Putting structures, reward systems and processes in place to back up these changes. An Intranet that uses social media technologies to make rewards and recognition explicit to all employees would support these changes.
Get meaning into people’s work
Employees deliver exceptional customer service and perform well at critical moments if they know clearly what they are supposed to do and why. The “what” part addresses their competencies they were employed for and the “why” addresses their motivate them to work.
Efforts to help employees understand the “what” can be complex, but they are more successful when the material is presented as simply as possible. Companies should use general statements of values and principles, repeat them regularly and avoid the extensive protocols that undermine empowerment. The interactive technology offered by 2.0 enables the employees to communicate with the organisation and translate these general principles into specifics which guide their behaviour. Employees are unlikely to react spontaneously, or emotionally intelligently, if they feel the weight of a lengthy and detailed policy document, designed remotely by head office. An engaging intuitive system of communication is more likely to support emotionally intelligent responses to clients.
A range of motives drives human beings: from the purely selfish to the more creative, altruistic and personally fulfilling. Successful companies enable people to discover their motivations themselves. These companies believe that most frontline employees actually want to help customers and to gain their goodwill. Once again 2.0 technologies enable employees to discover their motivation for themselves through working closely with the organisation and collaborating with each other through two way communication.
People work hard when they are given the freedom to do the job the way they think it should be done, when they treat customers the way they like to be treated. When you take away their incentive and make their work rules based you kill their passion.
Align structures, systems, and processes
Employees respond positively if structures and systems reinforce the message. It is necessary to create rewards for behaving in certain ways and for demonstrating an ability to behave in new ways.
Companies should modify their performance-management systems to strike a balance between financial results and things that really matter at critical moments. Web 2.0 technologies provide us with the opportunity to create an employee environment that guides the right behaviours, empowers employees, enhances performance management and simplifies processes because they are based on the human aspects of networking and communication.
Simplifying frontline processes is a key priority; it gives employees time to perform more effectively at moments of truth and reinforces the vital sense of empowerment. Employees often resist change because new initiatives come on top of their existing responsibilities and overwhelm them. They won’t understand why the new initiatives are being deployed, unless the organisation engages with them on a meaningful level. Web 2.0 technologies should be designed to be intuitive, attractive to use and most of all seen as useful by employees.
Emotional intelligence may be inborn, yet companies can take concrete steps to improve the EQ of their customer facing employees. Doing so can pay off in improved interactions and more profitable relationships with customers.
1 Goleman, D. Emotional Intelligence: Why It Can Matter More than IQ, NY: Bantam, 1997
2 Marc Beaujean, Vincent Cremers, and Francisco Pedro Goncalves Pereira, “How Europe’s banks can profit from loyal customers,” The McKinsey Quarterly, Web exclusive, November 2005.
About Digital Bridges
Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.
Digital Bridges is technology agnostic and partners with great technology companies in order to ensure that our solutions are fit for purpose and deliver on organisational strategy.
Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia. Her skills include innovation and growth through marketing, communication, collaboration, knowledge management, human capital, performance management, process engineering and BI.
Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.
To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on firstname.lastname@example.org.