tag:theconversation.com,2011:/id/topics/customers-27867/articlesCustomers – The Conversation2023-07-28T12:20:50Ztag:theconversation.com,2011:article/2104322023-07-28T12:20:50Z2023-07-28T12:20:50ZWhy Dunkin’ and Lego rebrands succeeded – but X missed the mark<figure><img src="https://images.theconversation.com/files/539836/original/file-20230727-78107-9s5n36.jpg?ixlib=rb-1.1.0&rect=177%2C0%2C1833%2C1315&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">So far, Twitter's rebrand = X + why?</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/longexposure-shot-shows-both-old-and-new-version-of-twitter-news-photo/1553537563?adppopup=true">Lorenzo Di Cola/NurPhoto via Getty Images</a></span></figcaption></figure><p>Twitter has swapped the <a href="https://apnews.com/article/twitter-x-logo-blue-bird-musk-0689e9a5c3a217afc2fbefeaf0e6d8a8">fluffy bird that used to symbolize the social media platform</a> for a spindly black X. Ditching the company’s well-known logo and changing its name to a letter often <a href="https://symbolsage.com/x-symbol-meaning-symbolism/">associated with danger, death and the unknown</a> is only the <a href="https://www.cnn.com/2022/12/18/tech/twitter-ban-social-media-links">latest user-aggravating</a> step <a href="https://www.theverge.com/2022/10/30/23431931/twitter-paid-verification-elon-musk-blue-monthly-subscription">CEO Elon Musk has taken</a> since he bought Twitter in <a href="https://apnews.com/article/elon-musk-twitter-deal-live-updates-78d68790fb0b9971d6e65b76d97e3670z">October 2022 for US$44 billion</a>.</p>
<p>But it’s the most visually jarring one.</p>
<p>The <a href="https://www.wsj.com/articles/elon-musks-pivot-to-x-draws-strong-opinions-across-twitter-5bc80833">reaction has mainly been a mix of ambivalence</a>, <a href="https://www.newsweek.com/elon-musks-twitter-x-logo-plan-met-ridicule-jokes-1814750">ridicule</a> and <a href="https://www.cnn.com/2023/07/24/media/twitter-x-reliable-sources/index.html">scorn</a>. For the most part, longtime Twitter users are unhappy at what they perceived as another unnecessary change that’s eroding their enthusiasm for the social media platform. It’s hard to find anybody praising the change so far, except perhaps some of <a href="https://www.facebook.com/elonmuskfanpage/">Elon Musk’s most devoted fans</a>. Twitter co-founder <a href="https://twitter.com/jack/status/1683327575517728769">Jack Dorsey signaled</a> that he was finding the uproar overblown.</p>
<p>I’m paying close attention to this corporate pivot because I’m a scholar of <a href="https://scholar.google.com/citations?user=cXqXHpsAAAAJ&hl=en">design who researches social media and brand campaigns</a>. <a href="https://www.thebrandingjournal.com/2015/10/what-is-branding-definition/">Logos and brand names</a> change all the time and rarely cause this much commotion. But because these changes go deeper than most, I believe the risks of damage to the company are greater.</p>
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<h2>X’s clumsy design</h2>
<p>X might strike you as a weird brand name, and the change may seem to have happened out of the blue, but Musk has long been smitten with the letter.</p>
<p>In 2000, the founders of PayPal <a href="https://www.washingtonpost.com/history/2023/07/25/elon-musk-paypal-twitter-x-rebrand/">ousted him as CEO for trying to change its name</a> to “X,” his Tesla models are <a href="https://www.ndtv.com/world-news/as-twitter-is-named-x-a-look-at-elon-musks-s3xy-naming-strategy-for-cars-4238936">famously named</a> S, 3, X and Y – which displayed together basically spell out the word “SEXY,” and one of <a href="https://www.yahoo.com/entertainment/elon-musk-changed-son-name-204701460.html">his many children is named X on his birth certificate</a>.</p>
<p>I would describe the new logo, <a href="https://www.theguardian.com/technology/2023/jul/24/elon-musk-reveals-the-new-twitter-logo-x">submitted by a Twitter user</a>, as a white-on-black, sans-serif X consisting of two strokes. It’s minimal and modern – and a stark departure from Twitter’s iconic blue-and-white bird. That shade of blue makes you feel <a href="https://www.verywellmind.com/the-color-psychology-of-blue-2795815">calm and serene</a>; black <a href="https://www.oberlo.com/blog/color-psychology-color-meanings">conveys sophistication and mystery</a>.</p>
<p>And yet even people who know nothing about design are <a href="https://twitter.com/elonmuskewl/status/1683121154188247046">poking fun at the logo’s simplicity</a> and <a href="https://twitter.com/PopCrave/status/1683551440416165889">unprofessional execution</a>. To me, the logo looks suitable for a metaverse strip club or a dating app for robots. </p>
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<h2>Facebook’s Meta journey</h2>
<p>Oddball branding is hardly unusual for a big tech company.</p>
<p>When Facebook rebranded itself as Meta in 2021, it was part of a comprehensive, strategic and <a href="https://logo.com/blog/facebooks-new-logo">long-term plan</a>. The transformation signified the company’s aspiration to shift from a social media platform to an enterprise <a href="https://theconversation.com/what-is-the-metaverse-2-media-and-information-experts-explain-165731">focused on the metaverse</a>.</p>
<p>While the goal of a vibrant metaverse <a href="https://blockchainmagazine.net/why-is-metaverse-failing-the-top-10-reasons-for-metaverse-fail/">remains more theoretical than imminent</a>, the rebranding still gave Meta some momentum as it now seeks to <a href="https://qz.com/meta-layoffs-2023-jobs-metaverse-ai-1850196575">shift its focus to artificial intelligence</a>. </p>
<p>Meta’s rebranding highlights the importance of staying relevant and embracing innovation. The company discerned the changing landscape and demonstrated a willingness to adapt in response to shifting consumer needs and preferences. When it realized the metaverse wasn’t materializing, the company focused elsewhere.</p>
<p>Perhaps that openness to trying new things explains why the <a href="https://www.quiverquant.com/threadstracker/">rollout of Threads</a>, Meta’s new competitor for the social media platform formerly known as Twitter, <a href="https://www.forbes.com/sites/rogerdooley/2023/07/05/will-threads-be-a-twitter-killer/">is apparently off to a strong start</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/539648/original/file-20230726-15-7heuat.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A metal t and a metal w are piled up on the ground." src="https://images.theconversation.com/files/539648/original/file-20230726-15-7heuat.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/539648/original/file-20230726-15-7heuat.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/539648/original/file-20230726-15-7heuat.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/539648/original/file-20230726-15-7heuat.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/539648/original/file-20230726-15-7heuat.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/539648/original/file-20230726-15-7heuat.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/539648/original/file-20230726-15-7heuat.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A pile of characters removed from a sign on the Twitter headquarters building seen in San Francisco on July 24, 2023.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/TwitterLogo/5a220a8384234fbb86f34740ca413538/photo?Query=twitter&mediaType=photo,video,graphic,audio&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=6881&currentItemNo=6">AP Photo/Godofredo A. Vásquez</a></span>
</figcaption>
</figure>
<h2>From dunking to Dunkin’ and rebuilding Lego’s brand</h2>
<p>When Dunkin’ Donuts trimmed its name to Dunkin’ in 2018, the <a href="https://jkrglobal.com/case-studies/dunkin/">reception was mostly positive</a>. Its customers seemed to get that the company wanted to move away from being closely associated with donuts – a high-calorie pastry with little nutritional value – and toward becoming a “<a href="https://news.dunkindonuts.com/news/releases-20180925">beverage-led, on-the-go brand</a>.”</p>
<p><a href="https://brandsonify.com/case-studies/dunkins-2018-19-rebrand/">That rebrand succeeded</a>, and the company has also stuck with the slogan it adopted a dozen years earlier: “<a href="https://sites.psu.edu/kristenchomosrcl/2019/09/12/america-runs-on-dunkin">America runs on Dunkin’</a>.” </p>
<p><a href="https://www.linkedin.com/pulse/lego-engineered-remarkable-turnaround-its-business-howd-lindstrom/">Lego had another rebranding effort</a> that <a href="https://www.theguardian.com/lifeandstyle/2017/jun/04/how-lego-clicked-the-super-brand-that-reinvented-itself">business school students learn about as a model</a>.</p>
<p>Lego was profitable, popular and beloved for the entire 20th century, but <a href="https://www.lego.com/cdn/cs/aboutus/assets/blte6c97bc4718a1848/Annual_Report_2003_ENG.pdf">around 2003 its sales began to wane</a>. Presumably, kids had too many other toys and digital devices to play with and simply didn’t have the time or patience to assemble small, colorful, plastic blocks anymore.</p>
<p>Undeterred, Lego conducted <a href="https://www.fastcompany.com/3040223/when-it-clicks-it-clicks">extensive market, ethnographic and psychological research</a> to better understand how people in general, and children in particular, play with its wares. The company’s management realized that Lego products can be tied to just about anything.</p>
<p>Lego blocks are used both in original ways – kids make their own creations – and derivative ways, whether it’s recreating a pirate ship or a dinosaur seen in a beloved movie. </p>
<p>So the company began to partner with “Star Wars,” Nintendo, “Jurassic Park” and other brands to market special Lego sets. It also released a movie in 2014 that <a href="https://www.the-numbers.com/movie/LEGO-Movie-The#tab=summary">grossed nearly $500 million</a> – <a href="https://www.bbc.com/news/business-29063790">boosting Lego sales and profits</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/539799/original/file-20230727-15-il508q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="The orange Dunkin' logo see on a big brown building." src="https://images.theconversation.com/files/539799/original/file-20230727-15-il508q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/539799/original/file-20230727-15-il508q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=363&fit=crop&dpr=1 600w, https://images.theconversation.com/files/539799/original/file-20230727-15-il508q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=363&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/539799/original/file-20230727-15-il508q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=363&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/539799/original/file-20230727-15-il508q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=457&fit=crop&dpr=1 754w, https://images.theconversation.com/files/539799/original/file-20230727-15-il508q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=457&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/539799/original/file-20230727-15-il508q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=457&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Dunkin’ brand name and logo no longer includes the word ‘donuts.’</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/the-corporate-logo-for-dunkin-replacing-the-former-name-of-news-photo/1195087289?adppopup=true">Gary Hershorn/Getty Images</a></span>
</figcaption>
</figure>
<h2>BP rebrand crashed and burned; American Airlines had low altitude</h2>
<p>Many corporate rebrands either don’t work or don’t do much to help their companies.</p>
<p>In 2000, BP changed its branding <a href="https://www.smsusyd.com/post/bp-rebranding-in-2000-marketing-campaign-fails-2#">from British Petroleum to Beyond Petroleum</a>.</p>
<p>Despite efforts to reposition itself as an environmentally responsible company, its actions revealed a contradictory truth. While BP reportedly invested <a href="https://www.theguardian.com/business/2000/jul/25/bp">over $100 million in the rebranding effort</a>, it continued to spend billions more on oil exploration than renewable energy initiatives. BP abandoned the campaign a few years after its massive <a href="https://www.mmc.gov/priority-topics/offshore-energy-development-and-marine-mammals/gulf-of-mexico-deepwater-horizon-oil-spill-and-marine-mammals/">2010 oil spill in the Gulf of Mexico</a>. </p>
<p>After <a href="https://simpleflying.com/american-airlines-us-airways-merger/">merging with US Airways</a> <a href="https://1000logos.net/american-airlines-logo/">in 2013</a>, American Airlines rebranded away from its iconic 1968 logo, which had blue and red letters and an eagle between them symbolizing American power and ingenuity, to a sleek red-and-blue stripe with an abstract eagle beak separating the company’s colors.</p>
<p>The company called the new logo a “<a href="https://www.dezeen.com/2013/01/21/american-airlines-debuts-new-logo-and-livery/">flight symbol</a>.” Some design experts <a href="https://www.businessinsider.com/the-new-american-airlines-logo-is-a-travesty-2014-1">dubbed it a travesty</a>.</p>
<p>Despite the contention, the company <a href="https://urbanjungle.ca/2013/02/american-airlines-what-you-can-learn-from-a-failing-attempt-to-rebrand/">retained the new look</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/539807/original/file-20230727-24380-h4r1mh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="An airplane emblazoned with the old American Airlines branding at an airport." src="https://images.theconversation.com/files/539807/original/file-20230727-24380-h4r1mh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/539807/original/file-20230727-24380-h4r1mh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=391&fit=crop&dpr=1 600w, https://images.theconversation.com/files/539807/original/file-20230727-24380-h4r1mh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=391&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/539807/original/file-20230727-24380-h4r1mh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=391&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/539807/original/file-20230727-24380-h4r1mh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=492&fit=crop&dpr=1 754w, https://images.theconversation.com/files/539807/original/file-20230727-24380-h4r1mh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=492&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/539807/original/file-20230727-24380-h4r1mh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=492&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">American Airlines adopted a logo in the late 1960s that endured for decades.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/MiamiAirportTravel/073efb53e9d94d1a8aec20677f11f0fa/photo?Query=american%20airlines%20jet&mediaType=photo,video,graphic,audio&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=369&currentItemNo=213">AP Photo/Lynne Sladky</a></span>
</figcaption>
</figure>
<h2>Ultimate fate of X</h2>
<p>I doubt the X rebrand will succeed – and not just because I dislike the new name and logo.</p>
<p>There are some <a href="https://www.cbsnews.com/news/twitter-trademark-x-com-rebrand/">challenging legal issues</a> with naming a major company a letter of the alphabet. The letter X’s use as a brand is already <a href="https://www.thedailybeast.com/elon-musks-twitter-rebrand-as-x-gets-site-blocked-under-indonesia-porn-laws">banned in certain countries</a> because of its prevalence in pornography branding. </p>
<p>And the <a href="https://mashable.com/article/twitter-rebrand-x-brand-identity-crisis-website">rollout has been messy on the company’s own website</a>. Musk reportedly <a href="https://mashable.com/article/elon-musk-twitter-take-x-handle-from-original-user">swiped the @x handle from its original user</a> without offering any compensation. </p>
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<p>What’s more, many users had already left the platform because of <a href="https://www.theguardian.com/technology/2022/dec/13/twitter-lose-users-elon-musk-takeover-hate-speech">technical glitches and increased hate speech</a>; the switch to X could make them less likely to come back and won’t make others more eager to stick around.</p>
<p>In Musk’s quest to create what he says will become an app that “<a href="https://www.cnbc.com/2023/07/24/elon-musk-risks-more-damage-to-twitter-business-after-name-change-to-x.html">does everything</a>,” I believe that his X rebrand took Twitter one more step toward being good for hardly anything.</p><img src="https://counter.theconversation.com/content/210432/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Matthew Pittman does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A scholar of design who researches brand campaigns critiques the social media platform’s new look.Matthew Pittman, Assistant Professor of Advertising and Public Relations, University of TennesseeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1983612023-01-25T13:24:37Z2023-01-25T13:24:37ZStarbucks fans are steamed: The psychology behind why changes to a rewards program are stirring up anger, even though many will get grande benefits<figure><img src="https://images.theconversation.com/files/505961/original/file-20230123-17-2qnxy0.jpg?ixlib=rb-1.1.0&rect=129%2C64%2C5245%2C3028&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The rewards price to get a free cup of hot coffee at Starbucks is going up. </span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/Starbucks-Prices/753e06140e904010985aa9054221808d/photo?Query=starbucks%20iced%20coffee&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=22&currentItemNo=0">AP Photo/Elaine Thompson</a></span></figcaption></figure><p>Starbucks, the coffee chain giant, is modifying its rewards program, and the news is <a href="https://www.washingtonpost.com/food/2023/01/13/starbucks-rewards-changes">full of stories</a> of <a href="https://www.businessinsider.com/some-starbucks-customers-are-furious-about-rewards-program-changes-2022-12">outraged consumers</a>.</p>
<p>The main focus of their ire is that, starting Feb. 13, 2023, it will <a href="https://www.today.com/food/restaurants/starbucks-announces-big-changes-popular-rewards-program-rcna63589">cost twice as many</a> of the program’s reward points, called stars, to earn a free cup of hot coffee.</p>
<p>When companies pare rewards programs back, there is often <a href="https://www.cnn.com/2023/01/14/business/best-buy-rewards-dunkin-starbucks-ctpr">significant customer pushback</a>. A recent example in the coffee market was seen in the fall of 2022 when <a href="https://www.bu.edu/articles/2022/why-dunkins-rewards-program-angered-people/">Dunkin’ made it harder to get free</a> items <a href="https://fortune.com/2022/10/10/dunkin-donuts-rewards-program-customer-backlash/">with its rewards program</a>, also leading to customer backlash. </p>
<p><a href="https://www.bu.edu/questrom/profile/huseyin-karaca/">We</a> <a href="https://www.bu.edu/questrom/profile/jay-zagorsky/">are</a> business school <a href="http://businessmacroeconomics.com/">professors</a> who study <a href="https://theconversation.com/whens-the-best-time-to-use-frequent-flyer-miles-to-book-flights-two-economists-crunched-the-numbers-on-maximizing-their-dollar-value-194893">frequent flyer</a> and other rewards programs. While we don’t drink very much Starbucks coffee, we are fascinated by the reaction of Starbucks customers – and what they seemed to miss. </p>
<h2>Building loyalty</h2>
<p>Reward and frequent flyer programs are designed to <a href="https://doi.org/10.1108/02634509810199535">build loyalty</a>, as they provide a form of rebate to regulars. They also are seen by consumers as a good way to save money, particularly when inflation is high.</p>
<p>They are also <a href="https://hbr.org/1995/05/do-rewards-really-create-loyalty">meant to lock customers</a> into a particular company or airline. In the case of Starbucks, the rewards program reduces the likelihood that its customers will buy coffee from <a href="https://www.investopedia.com/articles/markets/101315/who-are-starbucks-main-competitors.asp">competitors like Dunkin</a>, <a href="https://bstrategyhub.com/starbucks-competitors-alternatives/">Costa Coffee, Tim Hortons or Peet’s Coffee</a>. </p>
<p>Even though <a href="https://doi.org/10.1016/j.jairtraman.2012.05.003">airline rewards programs have been around</a> for years, rewards programs among large restaurant chains are relatively new. Sandwich chain Subway, for example, <a href="https://www.prnewswire.com/news-releases/subway-to-launch-north-america-loyalty-program-300602627.html">didn’t start one until 2018</a>. Fast-food company McDonald’s <a href="https://adage.com/article/marketing-news-strategy/mcdonalds-loyalty-program-year-old-how-its-doing/2420156">only launched its loyalty program</a> in 2021.</p>
<p>And now, even small businesses <a href="https://www.nrn.com/technology/loyalty-programs-are-leveling-playing-field-smaller-restaurants">are finding it valuable and easier</a> to start loyalty programs, thanks to the acceleration of digital technology in restaurants during the pandemic. About 57% of restaurant chains <a href="https://www.insiderintelligence.com/content/restaurants-double-down-on-loyalty-programs-retain-customers-maximize-revenues">now have a loyalty program</a>. </p>
<h2>Rewards math</h2>
<p>Starbucks, however, is an old-timer, having started its <a href="https://archive.starbucks.com/record/rewarding-our-customers">rewards program all the way back in 2008</a>. </p>
<p>The program, which <a href="https://www.businessinsider.com/best-loyalty-programs-stores-2019-4">had been regarded by some</a> as one of the most rewarding, gained members steadily during its first two decades but <a href="https://s22.q4cdn.com/869488222/files/doc_downloads/2022/11/Q4-FY22-Digital-Dashboard.pdf">exploded in growth during the pandemic</a>. At the end of 2022, about 29 million people were enrolled, <a href="https://www.businessinsider.com/starbucks-rewards-program-changes-explained-2019-4?r=US&IR=T">up from a little over 16 million</a> in early 2019.</p>
<p>The <a href="https://www.starbucks.com/rewards/terms/">rewards program’s rules are quite complex</a>: The legal language runs about five times longer than this article.</p>
<p>Briefly, customers earn credits by spending money. Each dollar spent on food or drinks earns one star. However, preloading money onto a Starbucks gift card or mobile app earns two times the stars.</p>
<p>Stars can then be spent on drinks, food or merchandise. Under the current program, the <a href="https://www.starbucks.com/rewards">simplest and cheapest reward</a>, for 25 stars, is adding a free shot, dairy substitute or flavoring to a drink. The highest cost items, for <a href="https://www.ncesc.com/starbucks-400-stars-merchandise-the-ultimate/">400 stars, are merchandise</a>, like a branded cup or a bag of ground coffee.</p>
<figure class="align-center ">
<img alt="Several hands hold two clear plastic cups of iced coffee on a table" src="https://images.theconversation.com/files/506117/original/file-20230124-25-5kl32r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/506117/original/file-20230124-25-5kl32r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/506117/original/file-20230124-25-5kl32r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/506117/original/file-20230124-25-5kl32r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/506117/original/file-20230124-25-5kl32r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/506117/original/file-20230124-25-5kl32r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/506117/original/file-20230124-25-5kl32r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Iced drinks have become Starbucks’ most popular beverage – even in winter.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/couple-has-iced-coffee-drinks-at-a-starbucks-coffee-shop-in-news-photo/89988724?phrase=Starbucks%20iced%20coffee">Chris Hondros/Getty Images</a></span>
</figcaption>
</figure>
<h2>Consumer friendly?</h2>
<p>Starbucks <a href="https://www.restaurantdive.com/news/starbucks-updates-rewards-program/639478/">announced changes</a> to the <a href="https://www.starbucks.com/rewards/terms-coming-soon/">terms and conditions</a> of its rewards program in December, adjusting the “price” for some of its items. </p>
<p>The change that received the most attention was that the cost of a cup of plain hot coffee or tea would double from 50 stars to 100. </p>
<p>At first glance, Starbucks’ modification to its rewards program might be perceived as bad for consumers. But there is more to this change than meets the eye. What went less noticed is that the company is also lowering the price to get a free iced coffee or tea from 150 points to 100.</p>
<p>To an unsuspecting consumer, the points reduction for iced coffee may not mean as much against the points increase for hot coffee. The coffee business, however, has radically changed over the last few years. The change is best summarized by a recent New York Times headline, “<a href="https://www.nytimes.com/2022/09/08/style/iced-coffee-starbucks.html">Does anyone drink hot coffee anymore?</a>” Iced or <a href="https://www.grandviewresearch.com/industry-analysis/cold-brew-coffee-market">cold-brewed coffee is now the rage</a> – even in winter – and <a href="https://www.ncausa.org/Industry-Resources/Cold-Brew">growing quickly</a>. Cold beverages <a href="https://www.nytimes.com/2022/09/08/style/iced-coffee-starbucks.html">have accounted for at least 60%</a> of Starbucks’ total sales every quarter since early 2021, thanks in part to the popularity of iced drinks among Gen Z customers. </p>
<p>This means that for a large share of Starbucks customers, one part of the rewards program is actually getting more generous. </p>
<p>So why the uproar, if one of the more popular items on Starbucks’ menu is getting cheaper? </p>
<p><a href="https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/loss-aversion/">Loss aversion</a>, a key concept in behavioral economics, provides a simple explanation. Loss aversion means people perceive something they lose as a bigger deal than something equivalent they gain. People who need to spend 50 more stars from now on to get a hot coffee feel more pain than customers who will spend 50 fewer stars to earn a free iced coffee. This extra pain leads to more complaints from those hurt and little praise from those benefiting.</p>
<h2>Rewarding customers</h2>
<p>Starbucks, for its part, <a href="https://customerservice.starbucks.com/app/answers/detail/a_id/6910">explained the new rewards system this way</a>: </p>
<blockquote>
<p>“This change allows us to improve the health of our program while making member favorites like iced coffee easier to earn.”</p>
</blockquote>
<p>While its critics may disagree about the reason for the decision, ongoing research by <a href="https://www.bu.edu/questrom/profile/huseyin-karaca/">one of us</a> conducted into a tea chain suggests retailers have a profit incentive to make their rewards programs more generous. The reason is simple: When rewards are easier to earn, customers become more motivated to collect points, especially as they <a href="https://home.uchicago.edu/ourminsky/Goal-Gradient_Illusionary_Goal_Progress.pdf">approach a reward</a> they can redeem. This is why airlines see some customers <a href="https://thepointsguy.com/guide/how-why-mileage-run/">doing mileage runs at the end of the year</a>, just to earn better status. </p>
<p>From the company’s perspective, the benefits from customers shopping more frequently can surpass the costs incurred by providing more rewards. And so for companies and consumers, rewards programs can benefit everyone.</p><img src="https://counter.theconversation.com/content/198361/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Many Starbucks customers are irked by recent changes to its popular rewards program. But they may not have as much to complain about as it seems.H. Sami Karaca, Professor of Business Analytics, Boston UniversityJay L. Zagorsky, Clinical associate professor, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1980532023-01-22T13:33:11Z2023-01-22T13:33:11ZChatGPT could be a game-changer for marketers, but it won’t replace humans any time soon<figure><img src="https://images.theconversation.com/files/505216/original/file-20230118-24-1r7n63.jpg?ixlib=rb-1.1.0&rect=164%2C0%2C4513%2C2812&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A new AI chatbot could revolutionize marketing for businesses.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/chatgpt-could-be-a-game-changer-for-marketers--but-it-won-t-replace-humans-any-time-soon" width="100%" height="400"></iframe>
<p>The recent release of the ChatGPT chatbot in November 2022 has generated <a href="https://www.forbes.com/sites/ariannajohnson/2022/12/07/heres-what-to-know-about-openais-chatgpt-what-its-disrupting-and-how-to-use-it/?sh=190d38d92643">significant public interest</a>. In essence, ChatGPT is an AI-powered chatbot allowing users to simulate human-like conversations with an AI. </p>
<p>GPT stands for Generative Pre-trained Transformer, <a href="https://doi.org/10.1017/pds.2022.185">a language processing model developed by the American artificial intelligence company OpenAI</a>. The GPT language model uses <a href="https://www.nature.com/articles/nature14539">deep learning</a> to produce human-like responses. Deep learning is a branch of machine learning that involves training artificial neural networks to mimic the complexity of the human brain, to produce human-like responses. </p>
<p><a href="https://openai.com/blog/chatgpt/">ChatGPT</a> has a user-friendly interface that utilizes this technology, allowing users to interact with it in a conversational manner.</p>
<p>In light of this new technology, businesses and consumers alike have shown great interest in how such an innovation could revolutionize marketing strategies and customer experiences.</p>
<h2>What’s so special about ChatGPT?</h2>
<p>What sets ChatGPT apart from <a href="https://doi.org/10.1007/978-3-030-49186-4_31">other chatbots</a> is the size of its dataset. Chatbots are usually trained on a smaller dataset in a rule-based manner designed to answer specific questions and conduct certain tasks.</p>
<p>ChatGPT, on the other hand, is trained on a huge dataset — <a href="https://hai.stanford.edu/news/how-large-language-models-will-transform-science-society-and-ai">175 billion parameters and 570 gigabytes</a> — and is able to perform a range of tasks in different fields and industries. 570GB is equivalent to over 385 million pages on Microsoft Word. </p>
<p>Given the amount of the data, ChatGPT can carry out different language-related activities which includes answering questions in different fields and sectors, providing answers in different languages and generating content.</p>
<figure class="align-center ">
<img alt="A picture of the OpenAI website showing a passaged describing ChatGPT" src="https://images.theconversation.com/files/505033/original/file-20230118-20-byvv2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505033/original/file-20230118-20-byvv2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505033/original/file-20230118-20-byvv2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505033/original/file-20230118-20-byvv2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505033/original/file-20230118-20-byvv2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505033/original/file-20230118-20-byvv2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505033/original/file-20230118-20-byvv2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">ChatGPT is a chatbot that was launched by OpenAI in November 2022.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
</figcaption>
</figure>
<h2>Friend or foe to marketers?</h2>
<p>While ChatGPT may be a tremendous tool for marketers, it is important to understand the realistic possibilities and expectations of it to get the most value from it.</p>
<p>Traditionally, with the emergence of new technologies, consumers tend to go through <a href="https://doi.org/10.1016/j.techfore.2016.04.005">Gartner’s hype cycle</a>. In essence, Gartner’s cycle explains the process people go through when adopting a new technology. </p>
<p>The cycle starts with the innovation trigger and peak of inflated triggers stages when consumers get enthusiastic about new technology and expectations start to build. Then consumers realize the pitfalls of the technology, creating a gap between expectations and reality. This is called the trough of disillusionment. </p>
<p>This is followed by the slope of enlightenment when consumers start to understand the technology and use it more appropriately and reasonably. Finally, the technology becomes widely adopted and used as intended during the plateau of productivity stage.</p>
<p>With the current public excitement surrounding ChatGPT, we appear to be nearing the peak of inflated triggers stage. It’s important for marketers to set realistic expectations for consumers and navigate the integration of ChatGPT to mitigate the affects of the trough of disillusionment stage.</p>
<h2>Possibilities of ChatGPT</h2>
<p>In its current form, ChatGPT cannot replace the human factor in marketing, but it could support content creation, enhance customer service, automate repetitive tasks and support data analysis.</p>
<p><strong>Supporting content creation:</strong> Marketers may use ChatGPT to enhance existing content by using it to edit written work, make suggestions, summarize ideas and improve overall copy readability. Additionally, ChatGPT may enhance search engine optimization strategy by examining ideal keywords and tags.</p>
<p><strong>Enhancing customer service:</strong> Businesses may train ChatGPT to respond to frequently asked questions and interact with customers in a human-like conversation. Rather than replacing the human factor, ChatGPT could provide 24/7 customer support. This could optimize business resources and enhance internal processes by leaving high-impact and sensitive tasks to humans. ChatGPT can also be trained in different languages, further enhancing customer experience and satisfaction. </p>
<figure class="align-center ">
<img alt="ChatGPT chat bot screen seen on smartphone and laptop display with Chat GPT login screen on the background" src="https://images.theconversation.com/files/505214/original/file-20230118-7914-goif4e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505214/original/file-20230118-7914-goif4e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505214/original/file-20230118-7914-goif4e.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505214/original/file-20230118-7914-goif4e.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505214/original/file-20230118-7914-goif4e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505214/original/file-20230118-7914-goif4e.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505214/original/file-20230118-7914-goif4e.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">It’s important to understand the realistic possibilities and expectations of new and emerging technologies.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
</figcaption>
</figure>
<p><strong>Automating repetitive marketing tasks:</strong> <a href="https://blog.hubspot.com/marketing/marketers-routine-tasks-data?utm_campaign=blog-rss-emails&utm_source=hs_email&utm_medium=email&utm_content=24874134">According to a 2015 HubSpot report</a>, marketers spent a significant amount of their time on repetitive tasks, such as sending emails and creating social media posts. While part of that challenge has been addressed with <a href="https://www.igi-global.com/chapter/benefits-of-customer-relationship-management-on-customer-satisfaction/195162">customer relationship management software</a>, ChatGPT may enhance this by providing an added layer of personalization through the generation of creative content. </p>
<p>Additionally, ChatGPT may be helpful in other tasks, such as product descriptions. With access to a wealth of data, ChatGPT would be able to frequently update and adjust product descriptions, allowing marketers to focus on higher-impact tasks.</p>
<h2>Limitations of ChatGPT</h2>
<p>While the wide range of possibilities for enhancing marketing processes with ChatGPT are enticing, it is important for businesses to know about some key limitations and when to limit or avoid using ChatGPT in business operations.</p>
<p><strong>Emotional intelligence:</strong> ChatGPT provides a state of the art human-like response and content. However, it is important to be aware that the tool is only human-like. <a href="https://web.archive.org/web/20200324010211id_/https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1448&context=amcis2018">Similar to traditional challenges with chatbots</a>, the degree of human-likeness will be essential for process enhancement and content creation. </p>
<p>Marketers could use ChatGPT to enhance customer experience, but without humans to provide relevancy, character, experience and <a href="https://doi.org/10.24018/ejbmr.2020.5.4.483">personal connection</a>, it will be challenging to fully capitalize on ChatGPT. Relying on ChatGPT to build customer connections and engagement without the involvement of humans may diminish meaningful customer connection instead of enhancing it.</p>
<p><strong>Accuracy:</strong> While the marketing content may appear logical, it is important to note that ChatGPT is not error free and <a href="https://openai.com/blog/chatgpt/">may provide incorrect and illogical answers</a>. Marketers need to review and validate the content generated by ChatGPT to avoid possible errors and ensure consistency with brand message and image.</p>
<p><strong>Creativity:</strong> Relying on ChatGPT for creative content may cause short- and long-term challenges. ChatGPT lacks the lived experience of individuals and understanding the complexity of human nature. Over-relying on ChatGPT may limit creative abilities, so it should be used to support ideation and enhance existing content while still allowing room for human creativity.</p>
<h2>Humans are irreplaceable</h2>
<p>While ChatGPT has the potential to enhance marketing effectiveness, businesses should only use the technology as a tool to assist humans, not replace them. ChatGPT could provide creative content and support content ideation. However, the human factor is still essential for examining outputs and creating marketing messages that are consistent with a firm’s business strategy and vision.</p>
<p>A business that does not have a strong marketing strategy before integrating ChatGPT remains at a competitive disadvantage. However, with appropriate marketing strategies and plans, ChatGPT could effectively enhance and support existing marketing processes.</p><img src="https://counter.theconversation.com/content/198053/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Omar H. Fares does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While ChatGPT has the potential to enhance marketing effectiveness, it can’t replace human creativity or form meaningful connections with customers like humans can.Omar H. Fares, Lecturer in the Ted Rogers School of Retail Management, Toronto Metropolitan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1869052022-07-18T01:54:42Z2022-07-18T01:54:42ZThe downside of digital transformation: why organisations must allow for those who can’t or won’t move online<figure><img src="https://images.theconversation.com/files/474447/original/file-20220717-20-bx2iji.jpg?ixlib=rb-1.1.0&rect=7%2C7%2C4865%2C3601&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Getty Images</span></span></figcaption></figure><p>We hear the phrase “digital transformation” a lot these days. It’s often used to describe the process of replacing functions and services that were once done face-to-face by human beings with online interactions that are faster, more convenient and <a href="https://www.mckinsey.com/%7E/media/mckinsey/industries/public%20and%20social%20sector/our%20insights/transforming%20government%20through%20digitization/digital-by-default-a-guide-to-transforming-government-final.pdf">“empower” the user</a>.</p>
<p>But does digital transformation really deliver on those promises? Or does the seemingly relentless digitalisation of life actually reinforce existing social divides and inequities?</p>
<p>Take banking, for example. Where customers once made transactions with tellers at local branches, now they’re encouraged to do it all online. As branches close it leaves many, <a href="https://www.stuff.co.nz/business/123302983/asb-set-to-close-another-23-branches-as-customers-move-online">especially older people</a>, struggling with what was once an easy, everyday task.</p>
<p>Or consider the now common call centre experience involving an electronic voice, menu options, <a href="https://theconversation.com/sorry-i-dont-understand-that-the-trouble-with-chatbots-and-how-to-use-them-better-171665">chatbots</a> and a “user journey” aimed at pushing customers online.</p>
<p>As organisations and government agencies in Aotearoa New Zealand and elsewhere grapple with the call to become more “digital”, we have been examining the consequences for those who find the process difficult or marginalising.</p>
<p>Since 2021 we’ve been working with the <a href="https://www.cab.org.nz/">Citizens Advice Bureau</a> (CAB) and talking with public and private sector organisations that use digital channels to deliver services. Our findings suggest there is much still to be done to find the right balance between the digital and non-digital.</p>
<h2>The ‘problematic’ non-user</h2>
<p>The dominant view now suggests the pursuit of a digitally enabled society will allow everyone to lead a “frictionless” life. As the government’s own policy document, <a href="https://www.digital.govt.nz/dmsdocument/193%7Etowards-a-digital-strategy-for-aotearoa/html">Towards a Digital Strategy for Aotearoa</a>, states:</p>
<blockquote>
<p>Digital tools and services can enable us to learn new skills, transact with ease, and to receive health and well-being support at a time that suits us and without the need to travel from our homes.</p>
</blockquote>
<p>Of course, we’re already experiencing this new world. Many public and private services increasingly are available digitally <a href="https://www.theguardian.com/public-leaders-network/2014/jan/07/new-zealand-uk-digital-revolution">by default</a>. Non-digital alternatives are becoming restricted or even disappearing.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/the-digital-divide-leaves-millions-at-a-disadvantage-during-the-coronavirus-pandemic-133608">The digital divide leaves millions at a disadvantage during the coronavirus pandemic</a>
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<p>There are two underlying assumptions to the view that everyone can or should interact digitally.</p>
<p>First, it implies that those who can’t access digital services (or prefer non-digital options) are problematic or deficient in some way – and that this can be overcome simply through greater provision of technology, training or “nudging” non-users to get on board.</p>
<p>Second, it assumes digital inclusion – through increasing the provision of digital services – will automatically increase social inclusion. </p>
<p>Neither assumption is necessarily true.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1540002625155805185"}"></div></p>
<h2>‘Digital enforcement’</h2>
<p>The CAB (which has mainly face-to-face branches throughout New Zealand) has documented a significant increase in the number of people who struggle to access government services because the digital channel was the default or only option.</p>
<p>The bureau argues that <a href="https://inclusioncampaign.cab.org.nz/">access to public services is a human right</a> and, by implication, the move to digital public services that aren’t universally accessible deprives some people of that right.</p>
<p>In earlier research, we refer to this form of deprivation as “<a href="https://onlinelibrary.wiley.com/doi/10.1111/isj.12306">digital enforcement</a>” – defined as a process of dispossession that reduces choices for individuals.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/digital-inequality-why-can-i-enter-your-building-but-your-website-shows-me-the-door-182432">Digital inequality: why can I enter your building – but your website shows me the door?</a>
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<p>Through our current research we find the reality of a digitally enabled society is, in fact, far from perfect and frictionless. Our preliminary findings point to the need to better understand the outcomes of digital transformation at a more nuanced, individual level.</p>
<p>Reasons vary as to why a significant number of people find accessing and navigating online services difficult. And it’s often an intersection of multiple causes related to finance, education, culture, language, trust or well-being.</p>
<p>Even when given access to digital technology and skills, the complexity of many online requirements and the chaotic life situations some people experience limit their ability to engage with digital services in a productive and meaningful way.</p>
<h2>The human factor</h2>
<p>The resulting sense of disenfranchisement and loss of control is regrettable, but it isn’t inevitable. Some organisations are now looking for alternatives to a single-minded focus on transferring services online.</p>
<p>They’re not completely removing call centre or client support staff, but instead using digital technology to improve <a href="https://deloitte.wsj.com/articles/at-contact-energy-digital-powers-human-centric-cx-01643821371">human-centred service delivery</a>.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/sorry-i-dont-understand-that-the-trouble-with-chatbots-and-how-to-use-them-better-171665">'Sorry, I don’t understand that' – the trouble with chatbots and how to use them better</a>
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<hr>
<p>Other organisations are considering partnerships with intermediaries who can work with individuals who find engaging with digital services difficult. The Ministry of Health, for example, is supporting a community-based Māori health and social services provider to establish a <a href="https://www.health.govt.nz/our-work/digital-health/digital-enablement/digital-enablement-stories/digital-health-hub-supports-taranaki-whanau-access-services-closer-home">digital health hub</a> to improve local access to health care.</p>
<p>Our research is continuing, but we can already see evidence – from the CAB itself and other large organisations – of the benefits of moving away from an uncritical focus on digital transformation.</p>
<p>By doing so, the goal is to move beyond a divide between those who are digitally included and excluded, and instead to encourage social inclusion in the digital age. That way, organisations can still move forward technologically – but not at the <a href="https://www.theguardian.com/commentisfree/2022/jun/23/the-guardian-view-on-digital-exclusion-online-must-not-be-the-only-option">expense of the humans</a> they serve.</p><img src="https://counter.theconversation.com/content/186905/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Angsana A. Techatassanasoontorn has received funding from Internet NZ, Auckland Council and MBIE for the 2017 World Internet Project New Zealand Survey. </span></em></p><p class="fine-print"><em><span>Antonio Diaz Andrade is affiliated with the Digital Inclusion Alliance Aotearoa and has received funding from InternetNZ, MBIE and Auckland Council for the 2017 World Internet Project New Zealand Survey.</span></em></p><p class="fine-print"><em><span>Bill Doolin and Harminder Singh do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Research shows a significant number of people still struggle with the digital transformation of government and business. But throwing more technology at the problem is not necessarily the answer.Angsana A. Techatassanasoontorn, Associate Professor of Information Systems, Auckland University of TechnologyAntonio Diaz Andrade, Professor of Business Information Systems, Auckland University of TechnologyBill Doolin, Professor of Technology and Organisation, Auckland University of TechnologyHarminder Singh, Associate Professor of Business Information Systems, Auckland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1756632022-01-31T13:48:18Z2022-01-31T13:48:18ZMobile money service quality: what’s important to customers in Ghana<figure><img src="https://images.theconversation.com/files/443150/original/file-20220128-15-x94t4h.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Mobile money has deepened financial inclusion in Ghana</span> <span class="attribution"><span class="source">Wikimedia Commons</span></span></figcaption></figure><p>Mobile money is an essential retail financial service offered by telecommunications and other financial institutions in sub-Saharan African countries. The region recorded 159 million active users of mobile money in 2020 and <a href="https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2021/03/GSMA_State-of-the-Industry-Report-on-Mobile-Money-2021_Full-report.pdf">US$490 billion</a> in transaction value. People use the services to send money to each other, pay bills, disburse funds in bulk and pay merchants. Users can receive, save, send and spend money via their mobile phones without directly involving a bank or owning a bank account. </p>
<p>A <a href="https://web.worldbank.org/archive/website01523/WEB/IMAGES/IC4D_2-4.PDF">study</a> by the World Bank indicates that mobile money services have a positive impact on poverty reduction. Poverty is not just about lack of money, but also lack of access to formal financial systems. Mobile money services can enhance financial inclusion by providing <a href="https://web.worldbank.org/archive/website01523/WEB/IMAGES/IC4D_2-4.PDF">access to</a> savings, credit and insurance services. </p>
<p>In Ghana, mobile money services are provided by telecommunications companies like MTN Ghana, Vodafone and AirtelTigo. The Bank of Ghana <a href="https://www.bog.gov.gh/wp-content/uploads/2021/03/Summary-of-Economic-Financial-Data-March-2021.pdf#page=13">reports</a> that the cheques cleared for mobile money transactions amounted to US$2.82 Billion for January 2021. The Bank of Ghana also <a href="https://www.bog.gov.gh/wp-content/uploads/2021/03/Summary-of-Economic-Financial-Data-March-2021.pdf#page=13">reports</a> that in 2021, there were 40.9 million registered mobile money accounts and 17.5 million active accounts.</p>
<p>The International Finance Corporation reports that Ghana is the <a href="https://www.gsma.com/mobilefordevelopment/blog/mobile-money-can-drive-the-financial-inclusion-of-persons-with-disabilities-in-ghana/">fastest growing market</a> for mobile money services in Africa. </p>
<p>Though these services clearly have a lot to offer, there is more to learn about their growth potential and how to develop it. </p>
<p>Improving the quality of services is <a href="https://www.sciencedirect.com/science/article/abs/pii/S0969698912001257">known</a> to be an effective way to promote the patronage of services. Better quality gives a service provider a sustained competitive advantage. </p>
<p>As marketing researchers, we undertook a <a href="https://www.researchgate.net/publication/357788037_Determining_mobile_money_service_customer_satisfaction_and_continuance_usage_through_service_quality">study</a> to evaluate the factors that might influence service quality in the mobile money context in Ghana. Essentially, we wanted to know what customers want from mobile money services.</p>
<p>We found that customer satisfaction and continued use of a service were influenced by different factors. These findings may assist mobile money service providers and policymakers in planning services that will increase customer satisfaction and retention.</p>
<h2>Study of frequent users</h2>
<p>The study used a quantitative research method based on 494 frequent users of mobile money services. Of the respondents, 159 (32.2%) were men and 335 (67.8%) women. The age group of 25–40 made up the bulk of the sample (70.9%). Most respondents had degrees (64.4%). And 57.6% of the respondents had used the service for more than three years.</p>
<p>We assessed mobile money service quality in these terms: </p>
<ul>
<li><p>people’s perception of service availability</p></li>
<li><p>expertise of service employees</p></li>
<li><p>facilities that help in delivering the service</p></li>
<li><p>availability of network operators</p></li>
<li><p>responsiveness of the service provider</p></li>
<li><p>continued usage of services. </p></li>
</ul>
<p>We found that the availability of services, facilities, and security influenced customer satisfaction. The expertise of the service provider, the operator’s network system, and responsiveness influenced the continued use of mobile money services. </p>
<h2>Customer satisfaction</h2>
<p>The analysis revealed that the expertise of mobile money vendors, operator network system service quality and responsiveness of the service were important to customers. It is notable that, since vendors and other employees providing mobile money services represent the service provider, their knowledge and ability affect customer satisfaction. </p>
<p>But this did not influence customers’ continued use of the services. Our analysis showed that people continued to use services even if they were not satisfied with the facilities, the service available or the level of security provided. </p>
<p>Our study revealed that unavailable services prompted users to switch to another mobile money service provider. Therefore, users need convenient access to vendors to perform transactions. These touch-points will ensure mobile money services are provided without delays. Vendors will thus help the service providers to keep their service promises, which would enhance user satisfaction and the continued usage of the service. </p>
<p>Network availability in the mobile money services context is vital to ensure user participation and effective service delivery. For instance, if a service provider’s network is not fully functional for hours, this could affect the quality of mobile money services offered. Such network problems are frequent and interrupt service delivery. </p>
<h2>Improving service quality and usage</h2>
<p>The results of our survey suggest several ways that service providers could do better and reap the benefits of satisfied customers.</p>
<p>Service providers should improve on their ability to provide information and tools on the mobile money platforms for users to access. They need to train mobile money vendors across the country to ensure high standards and empower them to resolve customer complaints.</p>
<p>Services should be offered at convenient locations. There should be a regular and stable network to avoid interruptions and deliver services fast.</p>
<p>Service promises should be met without delay. Access to services should be unlimited and involve less effort for customers. This can be done by increasing service points and finding innovative ways to deliver services across many other technological platforms.</p>
<p>Service providers should pay close attention to the environment for mobile money transactions. Issues like ventilation, waiting lines and the appearance of staff need attention.</p>
<p>Mobile money service providers should ensure maximum security for all mobile money transactions. When there is a security breach that leads to loss of money, users are likely to stop using the service. Security can be improved through robust verification of identification for all transactions. Users also need timely information about transactions.</p><img src="https://counter.theconversation.com/content/175663/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Mobile money service providers are on the path to find new ways of growing their customer base and keeping them.Kojo Kakra Twum, Post Doctoral Researcher, Presbyterian University CollegeAntoinette Yaa Benewaa Gabrah, PhD Candidate, University of Professional Studies AccraEbenezer Nyarko Assabil, Invited User, Presbyterian University CollegeJohn Paul Basewe Kosiba, Lecturer, Marketing, University of Professional Studies AccraRobert E. Hinson, Acting Director, Institutional Advancement, University of Ghana, University of GhanaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1706152021-11-26T13:58:55Z2021-11-26T13:58:55ZHow customers and workers can give business strategy a badly needed boost<figure><img src="https://images.theconversation.com/files/433458/original/file-20211123-19-1upl6o1.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4520%2C2994&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fresh faces.</span> </figcaption></figure><p>COVID forced companies around the world to urgently review their business models. Restaurants switched to <a href="https://www.cbc.ca/news/canada/kitchener-waterloo/restaurants-pivot-to-selling-groceries-during-covid-shutdown-1.5544244">selling groceries</a>, passenger airlines <a href="https://www.pymnts.com/coronavirus/2020/covid-19-airlines-shift-from-passengers-to-cargo/">moved cargo</a>, and car manufacturers <a href="https://www.independent.co.uk/news/health/coronavirus-ventilators-fiat-nissan-general-motors-ford-latest-a9420381.html">produced ventilators</a>. The pandemic highlighted the importance of fresh thinking in the corporate world. </p>
<p>Now the business world faces its next serious challenge: to move on from finding a temporary fix in a pandemic to forging a more permanent path ahead. In a <a href="https://openstrategy.info/">new book</a>, co-authored with Stephan Friedrich von den Eichen, we propose a radical new approach to moving forward. </p>
<p>Put simply, we recommend that businesses should break away from the traditional method of relying on their senior executives to develop strategies. Instead, they should embrace the knowledge and insights of customers, frontline employees, and experts from outside the company – not with feedback surveys or focus groups, but by directly involving them in making important decisions. </p>
<p>It is a system of business development in which people far removed from the company boardroom are involved in crafting detailed plans. They have a much stronger voice, and the companies actually <a href="https://books.google.ae/books?id=LzESEAAAQBAJ&printsec=frontcover&dq=open+strategy&hl=en&sa=X&ved=2ahUKEwjHtsaVrLX0AhVlnVwKHe8KCPwQ6AF6BAgGEAI#v=onepage&q=open%20strategy&f=false">listen to it</a>. The <a href="https://hbr.org/2021/11/balancing-open-innovation-with-protecting-ip">two distinct advantages</a> it brings are fresh ideas and a better chance of employees accepting new plans. </p>
<p>We found many companies are choosing to develop in this way, from innovative small firms like Saxonia (a software specialist), which invites all employees to join regular strategy meetings, to major organisations like Ericsson, which uses an online forum to involve frontline employees in strategic questions. </p>
<p>Others <a href="https://hbr.org/2021/11/balancing-open-innovation-with-protecting-ip">already doing it</a> include IBM, which set up an online conference with over 150,000 participants from over 60 companies and <a href="https://sloanreview.mit.edu/article/an-inside-view-of-ibms-innovation-jam/">resulted</a> in the investment of US$100 million (£75 million) in ten new businesses. A similar approach meant the retail arm of Barclays found a way to bring a 325-year-old bank into the digital age by involving 30,000 employees in their discussion. The bank used their input to create a successful <a href="https://books.google.ae/books?id=LzESEAAAQBAJ&printsec=frontcover&dq=open+strategy&hl=en&sa=X&ved=2ahUKEwjHtsaVrLX0AhVlnVwKHe8KCPwQ6AF6BAgGEAI#v=onepage&q=open%20strategy&f=false">mobile app</a> that now has 9 million users. </p>
<p>The sports giant Adidas involved people from different industries in strategy workshops, including a research scientist from the MIT Media Lab and founder of several start-ups, as well as the chief executive of an <a href="https://www.klickrent.de/">online platform</a> for sharing construction equipment. Together they developed radical new business plans for a more efficient <a href="https://classic.qz.com/perfect-company-2/1145012/a-german-company-built-a-speedfactory-to-produce-sneakers-in-the-most-efficient-way/">manufacturing process</a>. </p>
<h2>Connections and commerce</h2>
<p>This openness to new and numerous ideas is at the heart of all kinds of progress. In his book <a href="https://www.goodreads.com/book/show/16043549-seeing-what-others-don-t">Seeing What Others Don’t</a>, the psychologist Gary Klein claims that 82% of the biggest discoveries and inventions in history were made when people connected the dots after being exposed to different concepts. </p>
<p>He cites the example of neurobiologist <a href="https://www.scientificamerican.com/article/breaking-down-barriers-martin-chalfie/">Martin Chalfie</a> attending a lunchtime talk in 1989 where he learned how jellyfish produce light and are capable of bioluminescence. Chalfie could hardly wait for the end of the seminar, realising how this knowledge could affect his own research. </p>
<p>It was an insight that <a href="https://www.universityofcalifornia.edu/news/how-basic-research-jellyfish-led-unexpected-scientific-revolution-old">revolutionised science</a>, won Chalfie a Nobel prize, and is now used to observe the spread of viruses or the migration of breast cancer cells. </p>
<p>In the corporate world, the same kind of openness to new ideas results in cross-fertilisation, fresh thinking and an ability to spot anomalies that are easily overlooked by executives sitting in echo chambers. </p>
<p>The higher the level of diversity, the greater the chances for ideas to collide. Customers and employees approach questions from a different perspective and should be seen as a valuable resource. </p>
<h2>Boosting morale</h2>
<p>By involving staffers, external partners and customers in the planning phase, the odds of generating ideas that people can use go up quite dramatically. In a survey of senior executives <a href="https://books.google.ae/books?id=LzESEAAAQBAJ&printsec=frontcover&dq=open+strategy&hl=en&sa=X&ved=2ahUKEwjHtsaVrLX0AhVlnVwKHe8KCPwQ6AF6BAgGEAI#v=onepage&q=open%20strategy&f=false">70% told us</a> that opening up the strategy process to others increased their employees’ commitment to a particular strategy. </p>
<p>Participating provides everyone with an opportunity to think through issues that affect them directly. How can they adjust their operations? What needs to change? Who are the people they need to interact with? The apprehension – often twinned with objection – is replaced by a sense of ownership. </p>
<p>Involving people in the plans that will affect them works outside of business, too. For example, <a href="https://www.bbc.co.uk/programmes/b08hnly0">Kinari Webb</a> is an American doctor who set up a successful programme to stop illegal logging in Indonesia. In remote communities in Borneo, she engaged in what she calls “radical listening”, asking local communities what they would need in return for not cutting down trees.</p>
<p>It turned out that most of the logging happened because locals had no means to cover emergency medical costs otherwise. By providing affordable healthcare for these communities, combined with training them in organic farming, logging was reduced by 68%. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/eM7Hqyyz4Mk?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>Of course, companies could – and many surely will – develop plans in the way most have always done, by bringing a small selected group of executives together. But <a href="https://psycnet.apa.org/record/1997-36918-010">many studies</a> have shown that small groups of people – particularly homogeneous ones – are subject to several biases that prevent them from developing promising fresh ideas. </p>
<p>Biases are especially dangerous to lone strategists and tightly knit groups, since they don’t have others around to point out their blind spots. To avoid this, it pays to open up. Involving customers and staff in making important decisions provides a more solid foundation for the future.</p><img src="https://counter.theconversation.com/content/170615/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kurt Matzler owns shares in IMP</span></em></p><p class="fine-print"><em><span>Christian Stadler and Julia Hautz do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Breaking out of the boardroom brings in fresh ideas.Christian Stadler, Professor of Strategic Management, Warwick Business School, Warwick Business School, University of WarwickJulia Hautz, Professor of Strategic Management, University of InnsbruckKurt Matzler, Professor of Strategic Management, University of InnsbruckLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1525172021-01-25T13:32:06Z2021-01-25T13:32:06ZYes, customers do like it when waiters and hairdressers wear a mask – especially if it’s black<figure><img src="https://images.theconversation.com/files/379559/original/file-20210119-13-sp5y0v.jpg?ixlib=rb-1.1.0&rect=26%2C0%2C3000%2C1994&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The authors didn't examine diners' perceptions of polka-dot masks specifically. </span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/VirusOutbreakCalifornia/a31f7dcd4bb34e858c9ff38ef0d0b3fd/photo?hpSectionId=879083fa405d449fa332cbf742e7d609&st=hpsection&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=340&Query=restaurant%20AND%20mask&currentItemNo=16">AP Photo/Ringo H.W. Chiu</a></span></figcaption></figure><p><em>The <a href="https://theconversation.com/us/topics/research-brief-83231">Research Brief</a> is a short take about interesting academic work.</em></p>
<h2>The big idea</h2>
<p>Customers perceive a better quality of service, feel less anxious and exhibit more trust in businesses when waiters and other service workers wear a mask, according to a new study we just submitted for peer review. And we found this to be especially true when the mask was black.</p>
<p>We surveyed about 4,500 Americans through <a href="https://www.mturk.com">Amazon’s Mechanical Turk</a>, showing each of them a random picture of a service employee, with or without a mask, in either a grocery store, bank, hair salon, hotel or restaurant. We included photos of men and women who were either Black, white or Asian. Further, the masks were in one of five color schemes: white, black, blue, multi-colored or clear.</p>
<p>We then asked participants to record their impressions of the service workers and subsequent perceptions, emotions and behavior. </p>
<p>We found that customers consistently expected higher quality of service from workers who wore masks compared to employees who weren’t wearing face coverings. We also found that participants tended to become less anxious when they saw a service person with a mask. </p>
<p>Interestingly, we found that the color of the mask worn made a difference. People who wore black masks got the highest ratings, followed by white, multi-colored and blue. The clear mask – even though it allows customers to actually see facial expressions – was rated the lowest by respondents.</p>
<p>While we didn’t ask participants about their political leanings, we did learn where they reside. And we found that those based in the West had the most positive reaction to mask-wearing, followed, in order, by people in the Southwest, Northeast, Southeast and Midwest.</p>
<p>We found no meaningful differences in terms of the respondents’ age, race or educational level. </p>
<figure class="align-center ">
<img alt="Six different images show various people wearing masks of varying colors, including one without a mask." src="https://images.theconversation.com/files/376825/original/file-20201230-15-1ehuvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/376825/original/file-20201230-15-1ehuvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=335&fit=crop&dpr=1 600w, https://images.theconversation.com/files/376825/original/file-20201230-15-1ehuvr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=335&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/376825/original/file-20201230-15-1ehuvr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=335&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/376825/original/file-20201230-15-1ehuvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=421&fit=crop&dpr=1 754w, https://images.theconversation.com/files/376825/original/file-20201230-15-1ehuvr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=421&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/376825/original/file-20201230-15-1ehuvr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=421&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">These are six of the pictures that participants in the survey randomly saw.</span>
<span class="attribution"><a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Why it matters</h2>
<p>President Joe Biden’s <a href="https://www.wsj.com/articles/bidens-first-day-orders-will-include-mask-mandate-blocking-keystone-pipeline-11611136804">first acts as president</a> included requiring masks be worn on all federal property and on <a href="https://www.nytimes.com/live/2021/01/21/world/covid-19-coronavirus?type=styln-live-updates&label=coronavirus%20updates&index=0&action=click&module=Spotlight&pgtype=Homepage#biden-rolls-out-full-scale-wartime-coronavirus-strategy-including-requiring-masks-on-some-planes-trains-and-buses">planes and trains</a>, and <a href="https://www.aarp.org/health/healthy-living/info-2020/retailers-require-face-masks-coronavirus.html">most businesses already expect their employees</a> to wear face coverings while working. While the primary reason for this is to <a href="https://theconversation.com/masks-help-stop-the-spread-of-coronavirus-the-science-is-simple-and-im-one-of-100-experts-urging-governors-to-require-public-mask-wearing-138507">mitigate the spread of the coronavirus</a> and protect workers, little is known about how mask-wearing can affect customer perceptions of service quality. </p>
<p><a href="https://www.theatlantic.com/politics/archive/2020/04/america-asia-face-mask-coronavirus/609283/">Wearing a mask in Asian cultures</a> has been a socially accepted practice for years. In the United States, however, wearing a mask became common only last year as the pandemic worsened in the spring. The practice <a href="https://theconversation.com/masks-and-mandates-how-individual-rights-and-government-regulation-are-both-necessary-for-a-free-society-150819">remains controversial</a> among some people who claim it violates their civil liberties or isn’t actually effective, though health officials have consistently endorsed their use.</p>
<p>Although there have been many reports of <a href="https://www.nytimes.com/2020/06/30/style/mask-america-freedom-coronavirus.html">altercations</a> when workers asked a customer to wear a mask, our research shows most people appreciate it when waiters and hairdressers cover their own faces. </p>
<h2>What’s next</h2>
<p>We plan to also study other effects of wearing masks. For example, are the perceptions of service staff members affected when customers and fellow employees wear a mask or not? What’s the impact on a customer if a mask carries a logo of a company or branding message? Do servers who wear masks receive higher tips?</p>
<p>[<em>You’re smart and curious about the world. So are The Conversation’s authors and editors.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=youresmart">You can read us daily by subscribing to our newsletter</a>.]</p><img src="https://counter.theconversation.com/content/152517/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The positive reaction to service workers wearing masks varied by region, with those in the West on the high end and people in the Midwest at the low end.Cihan Cobanoglu, Professor of Hospitality and Tourism, University of South FloridaFaizan Ali, Assistant Professor of Hospitality and Tourism, University of South FloridaKhuraman Shahtakhtinskaya, Financial Analyst and Researcher, University of South FloridaLuana Nanu, Ph.D. Student in Hospitality Management, Auburn UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1406192020-07-23T12:14:42Z2020-07-23T12:14:42ZLow-wage service workers are facing new emotional hazards in the workplace during COVID-19<figure><img src="https://images.theconversation.com/files/349012/original/file-20200722-24-1xam6xj.jpg?ixlib=rb-1.1.0&rect=169%2C177%2C4752%2C3099&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Service workers are often tasked with enforcing company mask and social distancing policies. </span> <span class="attribution"><span class="source">AP Photo/Nati Harnik</span></span></figcaption></figure><p><em>The Research Brief is a short take about interesting academic work.</em></p>
<h2>The big idea</h2>
<p>Low-wage service workers increasingly are facing new physical and emotional hazards in the workplace as a result of the coronavirus pandemic, according to interviews with workers we conducted in April. We found that in addition to being afraid and anxious about their own health and possible exposure to COVID-19 while working, these employees said dealing with unpredictable customer emotions was taking an additional toll. </p>
<p>The workers we spoke with reported that interactions with customers were becoming emotionally charged over issues such as mask requirements and other safety guidelines. Workers of color said they were experiencing increased racial harassment. </p>
<p>Exposure to these emotional hazards was widespread among the workers we interviewed and was also spilling over into their home lives. A grocery worker with underlying health conditions told us her son “was super worried, like borderline tears, because he didn’t want me to go [to work] because he knows it’s not safe. And I felt horrible because I didn’t want to go, but I knew that I had to.”</p>
<h2>Why it matters</h2>
<p>As states and businesses try to reopen <a href="https://www.nytimes.com/interactive/2020/us/states-reopen-map-coronavirus.html">with a mix of safety guidelines and protocols</a>, workers have often been on the front lines of enforcing health measures such as requiring customers to wear a mask or maintain social distancing. Some <a href="https://www.oregonlive.com/business/2020/06/retail-rage-**is-new-reality-for-workers-in-age-of-coronavirus.html">customers have even turned violent</a>, which adds a threat of physical harm to workers who are already <a href="https://www.americanprogress.org/issues/economy/news/2020/04/08/482881/federal-government-can-protect-essential-workers-fight-coronavirus/">disproportionately exposed</a> to a lethal virus.</p>
<p>The experiences of the workers in our study, most of whom worked throughout the shutdown, reveal the need for government and companies to address these new emotional hazards and protect them from customer harassment. <a href="https://www.heraldmailmedia.com/news/nation/michigan-gov-whitmer-calls-for-federal-mask-mandate-biden-says-shes-still-in-running-for/article_92e4ccb1-66c9-56c2-b462-676d45ec7cdf.html">Without clear governmental safety mandates</a>, for example, workers easily become the targets of harassment as they tried to enforce their companies’ policies. Workers also said their companies often had weak enforcement mechanisms, frequently adjusted their policies and didn’t provide support in dealing with intense interactions with customers. </p>
<h2>What’s next</h2>
<p>These results are part of a series of ongoing studies we’re conducting with essential workers in a variety of roles, such as home care and food processing, to examine how they are navigating these new emotional risks during the pandemic. We are also looking at efforts by workers to organize to demand better protections and how these challenges are affecting their families. </p>
<h2>How we do our work</h2>
<p>As a team of sociologists at the University of Oregon, we rely on rich qualitative data from in-depth interviews, focus groups and participant observation. Our results here come from interviewing dozens of workers in Oregon’s hospitality, retail and food services industries whom we first met in 2019 as a part of an ongoing longitudinal study.</p><img src="https://counter.theconversation.com/content/140619/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lola Loustaunau and this research team has received funding from the Ford Foundation, United Food and Commercial Workers Local 555, the United Association for Labor Education, the University of Oregon Sociology, and the University of Oregon Labor Education and Research Center.</span></em></p><p class="fine-print"><em><span>Ellen Scott receives funding from UFCW555, UALE, the Ford Foundation, and the University of Oregon.</span></em></p><p class="fine-print"><em><span>Larissa Petrucci receives funding from Ford Foundation, United Food and Commercial Workers Local 555, United Association for Labor Education, University of Oregon Sociology and University of Oregon Labor Education and Research Center.</span></em></p><p class="fine-print"><em><span>Lina Stepick and this research team has received funding from the Ford Foundation, United Food and Commercial Workers Local 555, the United Association for Labor Education, the University of Oregon Sociology, and the University of Oregon Labor Education and Research Center.</span></em></p>A new survey found that dealing with emotional customers over issues such as wearing a mask is taking an increasing toll.Lola Loustaunau, Ph.D Candidate, University of OregonEllen Scott, Professor of Sociology, University of OregonLarissa Petrucci, Research Assistant at the Labor Education & Research Center, University of Oregon , University of OregonLina Stepick, Labor Policy Research Faculty, University of OregonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1381832020-05-27T16:41:32Z2020-05-27T16:41:32ZCoronavirus recovery: Small businesses must focus on easing employee, customer fears<figure><img src="https://images.theconversation.com/files/337664/original/file-20200526-106862-19osnmy.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3000%2C1854&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A boutique owner in Montréal arranges clothes at her store on May 24, 2020 as she prepares to reopen amid the COVID-19 pandemic.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Graham Hughes</span></span></figcaption></figure><p>A small business has been <a href="https://www.cbc.ca/news/business/covid-surcharge-retail-1.5580307">given the green light to reopen amid the COVID-19 pandemic</a>. What does it need to consider for employees and customers? </p>
<p>Small business owners are reorganizing physical space to account for continued distancing requirements and rethinking supply chains to deliver products and services in new ways to meet changing demand patterns. </p>
<p>But they must not forget the hearts and minds of employees and customers.</p>
<p>That doesn’t mean replacing a focus on the bottom line, but it helps address the need for a new set of expectations and ways of communicating in terms of product or service offerings, delivery methods and real-time feedback. </p>
<p>Based on our expertise in organizational behaviour and past research we’ve conducted, we provide a set of recommendations to help small businesses thrive in our new COVID-19 economy by looking after the hearts and minds of the people most important to businesses — employees and customers. </p>
<h2>Fear, anxiety</h2>
<p>One of the biggest outcomes of living amid the COVID pandemic is the fear, anger, sadness and vulnerability many people are feeling. Even very loyal customers may have suddenly short fuses when a favourite product or service is delayed. </p>
<p>Both old and new customers may feel hesitant to enter shops or restaurants, unsure of how to engage with employees safely and afraid of unknowingly getting infected or infecting others. </p>
<p>Employees, although likely relieved to be able to earn a pay cheque, may have similar fears, and wonder how to control potentially unsafe situations or customers who aren’t adhering to social distancing protocols. </p>
<p>Overall, engaging the hearts and mind of both employees and customers means recognizing that they’re probably feeling emotions differently than they were before COVID-19. In particular, they may experience more ambivalence — a mix of emotions that can feel uncomfortable or even alien — as they grapple with discovering, experimenting and understanding what a “new normal” means.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&rect=332%2C691%2C5299%2C3323&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=403&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=403&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=403&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=506&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=506&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337222/original/file-20200524-124855-5is5v7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=506&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Owner Rosanna Petan wears a face shield and Jack Willis wears a face mask as she cuts his hair at Frank’s Barbershop, in Vancouver, on May 19, 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span>
</figcaption>
</figure>
<p><a href="https://doi.org/10.5465/annals.2014.0066">Research</a> shows this kind of emotional complexity can lead to a host of outcomes, including vacillation, disengagement and even paralysis — at least partly explaining why employees and customers may seem like deer in headlights during the first days of a business reopening. </p>
<p>Yet <a href="https://doi.org/10.1016/j.jesp.2012.12.017">our previous research</a> shows that ambivalence can actually be helpful, increasing people’s problem-solving abilities by opening their thinking to alternative perspectives. </p>
<h2>Redirecting emotions</h2>
<p>That means rather than avoiding ambivalence because it feels uncomfortable, small businesses must help their employees redirect these feelings into brainstorming creative solutions for engaging customers, updating websites and soliciting and incorporating customer feedback. </p>
<p>Doing so will have the added benefit of helping employees and customers feel more in control over the situation — a basic human need that has been drastically reduced during the pandemic.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=435&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=435&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=435&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=547&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=547&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337224/original/file-20200524-124840-wv2nbv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=547&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Grounds crew do maintenance as they prepare to open Piper’s Heath Golf Club during the COVID-19 pandemic in Milton, Ont., on May 13, 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Nathan Denette</span></span>
</figcaption>
</figure>
<p>Coupled with emotional complexity is the loss of beloved everyday rituals, from shaking hands to being able to stand close to help a customer decide on a haircut, new clothes or specific menu items.</p>
<p>As businesses reopen, addressing this loss of tradition and predictability in employees’ and customers’ minds will be crucial. </p>
<p><a href="https://doi.org/10.5465/amj.2010.57318388">Our research</a> on
the role of rituals in institutional maintenance shows that common rituals bind people together, anchoring our sense of identity and structuring our lives in comfortable and predictable ways. </p>
<p>In short, rituals create the sense of normalcy that is now lost. </p>
<p>But to form new rituals and traditions, businesses must first re-establish trust. When trust is fragile and old rituals must be abandoned to make way for new practices, business leaders need to consider multiple approaches in how to work and interact with employees and customers. </p>
<h2>Start a dialogue</h2>
<p>The first approach is to engage in dialogue.</p>
<p>Reopening costs do not solely pertain to sanitizing workplaces and providing personal protection equipment, but also to the amount of time it takes to discuss and address concerns. </p>
<p>Important questions to employees and customers include: </p>
<ul>
<li><p>What are your concerns about being here? What can we do to make things safer? </p></li>
<li><p>What do I need to know about you that could help me work with and serve you better? </p></li>
</ul>
<p>Companies should use this feedback to create new rituals and workplace norms together with employees and customers. </p>
<p>Customization, in fact, will be increasingly important as both employees and customers have unique needs and circumstances. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&rect=0%2C89%2C3988%2C2119&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=394&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=394&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=394&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=495&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=495&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337223/original/file-20200524-124855-18idi05.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=495&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Two women have drinks on the patio of a restaurant in Vancouver, on May 19, 2020. British Columbia has begun reopening its economy.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span>
</figcaption>
</figure>
<p>According to local small business owner Lisa Arbo of Salon 296 in Kingston, Ont.: “A large part of success going forward will be about being sensitive to everyone’s reality.” This type of empathetic co-creation is likely to reduce uncertainty and give everyone a healthier sense of emotional and physical comfort and control. </p>
<h2>Manage perceptions</h2>
<p>The second approach is to manage perceptions. Small business owners are <a href="https://doi.org/10.5465/annals.2016.0122">the custodians</a> of the trusted relationships between their companies, employees and customers.</p>
<p>Even as business owners adapt to this new, emotionally complex and less predictable world, their employees and customers are looking for them to communicate clearly, succinctly and often about what is both possible and not possible, and what the new expectations are at all levels of the social contract. That includes everything from physical distancing rules to standards for customer satisfaction. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=421&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=421&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=421&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=529&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=529&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337225/original/file-20200524-124855-s7486x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=529&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">People wait in a line for the cashiers, separated by their carts and a corral made of tape to allow for physical distancing, at a garden centre in Ottawa on May 23, 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span>
</figcaption>
</figure>
<p>By recognizing and finding ways to incorporate employees’ and customers’ emotional complexity and sense of loss for beloved traditions, small businesses can actually make this challenging time an unexpected opportunity to thrive. </p>
<p>Uncertainty, change and customization are key elements of the new business reality and embracing them, while difficult, will yield success. Businesses that excel will be the ones that effectively learn to engage the hearts and minds of their employees and customers.</p><img src="https://counter.theconversation.com/content/138183/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>M. Tina Dacin receives funding from the Social Sciences Humanities and Research Council of Canada. </span></em></p><p class="fine-print"><em><span>Laura Rees does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As small businesses reopen, they’ll need to engage the hearts and minds of both employees and customers by recognizing that they feel emotions differently than they did before COVID-19.M. Tina Dacin, Stephen J.R. Smith Chaired Professor of Strategy & Organizational Behavior, Queen's University, OntarioLaura Rees, Assistant Professor of Organizational Behaviour, Queen's University, OntarioLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1286712019-12-19T13:51:06Z2019-12-19T13:51:06ZWhy bad customer service won’t improve anytime soon<figure><img src="https://images.theconversation.com/files/306893/original/file-20191213-85428-1qol2vg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Bad customer service is increasingly good for companies who use it.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hand-client-show-feedback-bad-smile-1145358584">Sichon/Shutterstock.com</a></span></figcaption></figure><p>Some of the most hated companies in the U.S. are also <a href="https://www.bloomberg.com/news/articles/2013-12-17/proof-that-it-pays-to-be-americas-most-hated-companies">the most profitable</a>.</p>
<p>Much of this consumer resentment <a href="https://research.wpcarey.asu.edu/services-leadership/2016/05/13/seven-effective-practices-for-preventing-customer-rage/">may stem from poor customer service</a>. In fact, most Americans have fought with phone menus, desperately seeking a live service agent to seek a refund.</p>
<p>In 2013, Americans <a href="http://business.time.com/2013/01/24/you-probably-spent-13-hours-on-hold-last-year/">spent an average of 13 hours</a> disputing a purchase or resolving a problem with customer service.</p>
<p><a href="https://www.marshall.usc.edu/personnel/anthony-dukes">As professors</a> <a href="https://carlsonschool.umn.edu/faculty/yi-zhu">of marketing</a>, we have examined why customer service continues to be so unsatisfactory even at many profitable companies.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/306894/original/file-20191213-85376-r2l8hb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/306894/original/file-20191213-85376-r2l8hb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/306894/original/file-20191213-85376-r2l8hb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/306894/original/file-20191213-85376-r2l8hb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/306894/original/file-20191213-85376-r2l8hb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/306894/original/file-20191213-85376-r2l8hb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/306894/original/file-20191213-85376-r2l8hb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Comcast customer Carmel Booth claimed to have received such bad service that she forced city officials to hold a public meeting about it.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Broadband/401eddd2a05b4ae99eead2c46ebd0445/10/0">AP Images/John Amis</a></span>
</figcaption>
</figure>
<h2>Is good customer service unattainable?</h2>
<p><a href="https://doi.org/10.1287/mksc.2019.1149">Our research</a> focuses on the structure and incentives of various customer service centers to explain why consumers perpetually experience hassles when seeking refunds.</p>
<p>What we found is not encouraging.</p>
<p>Many complaint processes are actually designed to help companies retain profits by <a href="https://hbr.org/2019/02/why-is-customer-service-so-bad-because-its-profitable">limiting the number of customers</a> who can successfully resolve their complaints.</p>
<p>The process involves a tiered structure in which all incoming inquiries start at “Level 1.” Level 1 may be a call center operator who listens to a complaint but acknowledges that there is nothing he can do.</p>
<p>Only by insisting to talk to a manager or threatening to leave the company do consumers come closer to obtaining a refund.</p>
<p>Forcing customers to talk to a computer, circulate through phone menus or sit on hold “while serving other customers” serves the same deterring role as that Level 1 call-center agent.</p>
<h2>Saving money with smart tech</h2>
<p>By design, Level 1 agents are <a href="https://abcnews.go.com/Business/customer-service-representatives-deliberately-making-experience-worse/story?id=29926935">limited in their authority</a> to compensate customers.</p>
<p>For example, one Indian call center that we visited forbade Level 1 agents from offering any monetary refunds.</p>
<p>Consumers may have noticed that companies’ call centers increasingly use automated chatbots to serve as Level 1 “agents.” The caller can talk with a human agent – at Level 2 or even higher – only after the chatbot’s AI technology recognizes that a customer is sufficiently unhappy with the process.</p>
<p>These smart technologies determine the caller’s level of anger by <a href="https://www.wsj.com/articles/everyone-hates-customer-service-this-is-why-11564804882">remotely monitoring the tone and pace of voice</a>. If the level of anger reflects a chance the customer may leave the company, then the call is transferred to a more experience operator to handle the complaint.</p>
<p>This allows companies to exploit customers’ individual differences in age, race and gender so that only the “<a href="https://www.forbes.com/sites/blakemorgan/2016/12/05/a-squeaky-wheel-gets-the-grease-and-why-it-pays-to-be-an-angry-customer-2/#182eb03e610e">squeakiest wheels</a>” are compensated.</p>
<p><iframe id="UzQbw" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/UzQbw/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Who struggles with bad customer service?</h2>
<p>Not surprisingly, <a href="https://www.forbes.com/sites/christopherelliott/2018/08/27/chatbots-are-killing-customer-service-heres-why/#e2f232113c5a">surveys show that chatbots are not improving customer service</a>. This is especially true for certain segments of consumers above others.</p>
<p>Consumers experience hassles in different ways. For instance, navigating an online complaint process is generally harder for <a href="https://www.softwareadvice.com/resources/demographics-impact-live-chat-customer-service/">older people</a>.</p>
<p>Additionally, <a href="https://www.ftc.gov/reports/combating-fraud-african-american-latino-communities-ftcs-comprehensive-strategic-plan">African American and Latino</a> customers are less inclined to complain than college-educated whites.</p>
<p>In addition, <a href="https://www.consumerreports.org/cro/news/2011/06/women-get-more-annoyed-than-men-with-aspects-of-bad-customer-service/index.htm">women get more annoyed</a> than men when dealing with bad customer service.</p>
<p>This all suggests that the tiered process may hit vulnerable groups in our society harder. Therefore, elderly customers and some minority groups will be less inclined to obtain a refund.</p>
<h2>Bad customer service doesn’t harm profits</h2>
<p>It seems puzzling, therefore, to see companies repeatedly pledge that they are committed to great customer service.</p>
<p>For example, Comcast states that “<a href="https://corporate.comcast.com/comcast-voices/our-new-head-of-customer-experience">Our customers deserve the best experience every time they interact with us</a>,” but consumers are <a href="https://fortune.com/2018/05/23/hate-cable-tv-comcast-frontier/">increasingly unsatisfied</a> with their service.</p>
<p>Even United Airlines, whose poor customer service inspired a <a href="https://www.youtube.com/watch?v=5YGc4zOqozo">song and video</a> with nearly 20 million views, claims to offer a “level of service to our customers that makes [United] a leader in the airline industry.”</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/5YGc4zOqozo?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">United Airlines customer service inspired this video on YouTube.</span></figcaption>
</figure>
<p>But our research suggests that in markets without much competition, companies are more likely to implement a tiered complaint process and profit from the reduced payouts to customers.</p>
<p>This explains why <a href="https://www.theverge.com/2015/4/1/8321437/maps-show-why-internet-is-more-expensive-us-europe-competition">internet service providers</a>, <a href="https://www.travelagentcentral.com/running-your-business/stats-flight-prices-set-to-rise-2-9-2019">airlines</a> and <a href="https://www.usatoday.com/story/money/media/2018/01/05/tv-rate-hikes-why-cable-bills-rising-again-and-what-can-you-do/1006639001/">cable companies</a> consistently receive <a href="https://www.customercaremc.com/insights/2017-us-customer-rage-study/">the ire of survey respondents</a>.</p><img src="https://counter.theconversation.com/content/128671/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Dukes receives funding from the Marketing Science Institute. </span></em></p><p class="fine-print"><em><span>Yi Zhu receives funding from the Marketing Science Institute and 3M Non-Tenured Faculty Grant.</span></em></p>Bad customer service is actually good for companies’ bottom lines.Anthony Dukes, Professor of Marketing, University of Southern CaliforniaYi Zhu, Associate Professor of Marketing, University of MinnesotaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/953552018-04-23T22:33:17Z2018-04-23T22:33:17ZAeroplan’s troublesome ‘purity of the country’ survey is nothing new<figure><img src="https://images.theconversation.com/files/215989/original/file-20180423-94115-i5g2zd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Aeroplan's recent survey on consumer habits became a scandal for the company after people complained the questions normalized intolerant attitudes about immigration and male dominance over women.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>Aeroplan, a popular Canadian loyalty program, <a href="https://www.huffingtonpost.ca/2018/04/02/aeroplan-survey-national-purity-male-dominance_a_23401048/">found itself in hot water recently</a> after launching a survey that asked participants about contentious issues, such as whether immigration “threatens the purity of the country” or whether men have a “natural superiority over women.”</p>
<p>CROP, the marketing research company that designed the survey for Aeroplan, <a href="https://www.crop.ca/en/blog/2018/228/">defended the practice</a>, stating that learning about consumers’ values can help companies predict their preferences and choices. </p>
<p>The loyalty program apologized and <a href="http://www.cbc.ca/news/business/aeroplan-survey-crop-immigration-1.4599686">announced it was deleting all the data</a> collected through the survey. But the move is not likely to placate consumers who are already angry with the company.</p>
<p>As a marketing professor who teaches consumer behaviour and researches loyalty programs, I believe consumers perceived the survey to be backwards on several distinct levels. </p>
<p>First, the scope of the questions seemed out of line with the mission of a travel rewards program. </p>
<p>Second, the questions were offensive to many respondents because they appeared to normalize intolerant views. </p>
<p>And third, there is the concern that simply asking such charged questions can change respondents’ attitudes and render them more xenophobic, prejudiced and sexist.</p>
<h2>All information is precious</h2>
<p>To many, these questions seemed completely irrelevant to Aeroplan’s mission and business model. </p>
<p>As a coalition reward program, Aeroplan sells its miles to a very diverse set of partners like Costco, Esso and TD. The partners hand out the points to their customers as a token of appreciation for their business and as an incentive to remain loyal. </p>
<p>Finally, the customers swap the miles they have accumulated for rewards offered by Aeroplan, like vacation packages or merchandise, thus closing the loop.</p>
<p>Consumer research has a long tradition of using rich, varied information that’s not limited only to dry demographic data to understand customers and their needs and preferences. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/215990/original/file-20180423-94126-1x71cfu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/215990/original/file-20180423-94126-1x71cfu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/215990/original/file-20180423-94126-1x71cfu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/215990/original/file-20180423-94126-1x71cfu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/215990/original/file-20180423-94126-1x71cfu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/215990/original/file-20180423-94126-1x71cfu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/215990/original/file-20180423-94126-1x71cfu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Hemmorhoid problems could say something about your taste in beer? Apparently so, according to market research in the 1960s.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
</figcaption>
</figure>
<p>Back in the 1960s, researchers would use information <a href="http://www.jstor.org/stable/1249408?origin=crossref&seq=1#page_scan_tab_contents">ranging from the number of airplane trips one took to whether customers used hemorrhoid remedies</a> to build consumer profiles for two competing beer brands. </p>
<p>Some of the apparently irrelevant characteristics turned out to distinguish between consumers with different types of lifestyles — somebody who spends a lot of time outdoors, for example, versus somebody who travels abroad frequently. </p>
<p>Furthermore, a consumer’s lifestyle was correlated with their propensity to drink one of the two beers — hence the relevance of the questions that seemed to have nothing at all to do with the product.</p>
<p>Different lifestyles, values, attitudes, interests and preferences tend to be clustered together — for example, <a href="https://www.emeraldinsight.com/doi/pdfplus/10.1108/00070701111116437">Swiss consumers who are price-insensitive to wine</a> tend to be older, well-informed, live in a single household and are more likely to prefer both Italian and German wines than other consumers. </p>
<p>The fact that different lifestyles are associated with clusters of attitudes and consumption patterns means that seemingly irrelevant details about a person can be diagnostic of their preferences in a wide variety of contexts. No surprise, then, that <a href="https://www.theguardian.com/technology/2018/mar/17/facebook-cambridge-analytica-kogan-data-algorithm">Cambridge Analytica was so keen on gathering apparently benign and trivial information</a>, such as one’s Facebook likes. </p>
<p>In the era of machine learning, marketing researchers not only need more data, but they need <a href="https://hbr.org/2018/04/if-your-data-is-bad-your-machine-learning-tools-are-useless">more diverse, comprehensive data</a> that contain new, non-redundant information. The contentious questions in CROP’s survey were precisely designed to tap into a fresh pool of insights.</p>
<h2>No question is neutral</h2>
<p>The contentious questions were framed in the affirmative, asking respondents about the extent to which they agreed with the statements. They could have just as easily been presented in the negative — for example, “immigration does not threaten the purity of the country.” </p>
<p>It may seem a superficial difference, but research shows that people are prone to <a href="http://journals.sagepub.com/doi/pdf/10.1177/0049124192021001003">acquiescence bias</a>. That is, they tend to agree, rather than disagree, with statements presented in surveys. So the framing of the question will impact the way people respond to it. </p>
<p>Furthermore, respondents expect that <a href="https://www.tandfonline.com/doi/pdf/10.1080/00223980.1954.9712954">“agree” is the correct answer</a>, the one that questionnaire’s designers expected. Applying this logic to Aareoplan’s case, it appears that the company is implicitly backing the statements and thus legitimizing them.</p>
<p>We also know that measurement tools like surveys or interviews that are commonly used in social sciences can <a href="http://dx.doi.org/10.1037/0021-9010.73.3.421">interfere with and change the attitudes that we are trying to measure</a>. The concern here is that by floating these statements, the company may actually contribute to the creation and proliferation of bigoted and narrow viewpoints. </p>
<h2>Humans like consistency</h2>
<p>For example, if someone has no clear attitudes towards immigration, they might be more likely to agree with the statement that immigration threatens “the purity of the country” due to the way the question was framed and to acquiescence bias. </p>
<p>Since humans also like to maintain a consistency across time, the tiny act of having answered in the affirmative to this question may lead them to perceive themselves as the type of person who disagrees with immigration-friendly policies. </p>
<p>Of course, the chain of events I just described is probabilistic — based on a theory of probability and so subject to chance. But applied to a large number of respondents, the effects may still be material.</p>
<p>In the era of artificial intelligence, companies can capitalize on any type of information they gather on their customers or prospective customers. At the same time, consumers are becoming more sensitive about the data they share with merchants and also to the specific questions they are being asked. </p>
<p>It’s not a zero-sum game: Sometimes consumers can benefit by letting companies know more about what they really want. But finding that sweet spot where companies can learn about consumers without invading their privacy or offending them is not easy.</p><img src="https://counter.theconversation.com/content/95355/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alina Nastasoiu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The recent Aeroplan survey offended many consumers with questions they felt normalized intolerant views. But consumer research has a long history of learning about customers’ values.Alina Nastasoiu, Assistant Professor, McMaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/929962018-03-07T05:25:15Z2018-03-07T05:25:15Z‘Down down’ and ‘cheap cheap’ are gone gone: why supermarkets are moving away from price<figure><img src="https://images.theconversation.com/files/209274/original/file-20180307-146691-1t7au5j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Coles was once the market leader thanks to its 'down down' low pricing marketing. </span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>On January 26, 2011, Coles fired the first shot in what would soon be dubbed the <a href="http://localejournal.org/issues/n2/Locale%20n2%20-%2007%20-%20Keith.pdf">“supermarket price wars”</a> by reducing the price of its own-brand milk to A$1 per litre. Woolworths fired back, triggering seven years of intense price competition. </p>
<p>But now Coles has waved the white flag, indicating a move away <a href="http://www.afr.com/business/retail/coles-shows-its-softer-side-as-living-costs-bite-20180306-h0x2gc">from price-based marketing</a>, to a focus on other attributes, such as sustainability, local produce and community. </p>
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<figcaption><span class="caption">Coles’ new ad campaign.</span></figcaption>
</figure>
<p>Research shows if price is the main selling point, <a href="https://www.canstarblue.com.au/food-drink/stores/supermarkets/">shopper loyalty decreases</a> and customers become more conscious of price. Price wars are also <a href="https://theconversation.com/predicting-the-last-brand-standing-in-the-supermarket-price-wars-32556">costly for retailers</a>.</p>
<p>While operational costs (wages, rent, bills) remain fixed or go up, prices can’t keep coming down. You eventually run out of margin.</p>
<p>Coles recent <a href="http://www.wesfarmers.com.au/docs/default-source/asx-announcements/2018-half-year-results-announcement.pdf?sfvrsn=0">half yearly results</a> reflect this, with a drop in earnings of 14.1% from A$920 million to A$790 million. </p>
<p>In contrast, Woolworths announced an 11.1% increase in earnings for <a href="https://www.woolworthsgroup.com.au/icms_docs/189600_2018-half-year-results-presentation.pdf">their supermarket business</a>. But Woolworths dropped their “cheap, cheap” price cutting campaign <a href="https://mumbrella.com.au/woolworths-ditches-cheap-cheap-in-favour-of-new-always-at-woolworths-tagline-325378">nearly two years ago</a>. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/down-down-but-not-different-australias-supermarkets-in-a-race-to-the-bottom-48151">Down, down but not different: Australia's supermarkets in a race to the bottom</a>
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</em>
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<p>Other retailers also get caught in the cross fire of price cutting. Case in point is Aussie Farmers Direct, which fell into administration this week <a href="https://www.aussiefarmers.com.au/">saying they were</a>:</p>
<blockquote>
<p>…no longer able to compete against the domination of the major two supermarkets.</p>
</blockquote>
<p>While it may be overly simplistic to blame the two big supermarkets for the downfall of Aussie Farmers Direct, price conscious consumers and thin grocery margins certainly contributed. </p>
<h2>How this strategy came about</h2>
<p>Supermarkets are now looking beyond price to stand out. </p>
<p>Both Coles and Woolworths are very similar in the brands they offer, prices, layouts, weekly specials and online channels. The move away from price gets shoppers thinking about what is unique to each chain. </p>
<p>So, rather than price, the focus has shifted to <a href="https://www.woolworthsgroup.com.au/page/media/Press_Releases/Free_Fruit_for_Kids_at_Woolworths/">service quality, social programs</a> and <a href="https://www.coles.com.au/sfs/assets">connecting with the community</a>. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/unit-pricing-saves-money-but-is-the-forgotten-shopping-tool-61379">Unit pricing saves money but is the forgotten shopping tool</a>
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<p>Shoppers who are continually exposed to loyalty program logos, may eventually stop noticing these logos, or “switch off”. This is because of a behavioural tendency called <a href="https://www.verywellmind.com/what-is-habituation-2795233">“habituation”</a>. </p>
<h2>What these new strategies are trying to sell</h2>
<p>So, if Coles are no longer selling themselves on price, what are they selling?</p>
<p>Coles’ new approach is more subtle, selling themselves through aspirational stories and employing <a href="https://www.designsociety.org/publication/34585/a_theory_of_affective_experience">classic advertising techniques</a> to do it. </p>
<p>These techniques are used in advertising to convey positive feelings and emotions associated with a particular experience. A simple way to achieve this in advertising is to feature people telling their own stories – as seen in the new Coles advert launched this week. </p>
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<figcaption><span class="caption">Woolworths ad campaign.</span></figcaption>
</figure>
<p>With the Commonwealth Games near, both supermarkets are also featuring sports stars in their marketing. Woolworths <a href="https://mumbrella.com.au/woolworths-features-apple-hungry-wheelchair-athlete-in-first-commonwealth-games-ads-500319">new campaign features</a> athletes and their connection with fresh food, positions the company, once again, as “Australia’s Fresh Food People”.</p>
<p>Meanwhile, Coles have partnered with Uncle Toby’s for their <a href="https://www.coles.com.au/sfs/assets">Sports for Schools</a> campaign. Their advertisements feature an array of young, fit, attractive and successful athletes linking the athletic success with the purchase of products from Coles.</p>
<p>By moving away from price and focusing on a story telling strategy, both supermarkets can engage consumers with a process called <a href="https://books.google.com.au/books?id=gWfVlJAp31wC&pg=PA292&lpg=PA292&dq=Internalization+endorser%E2%80%99s+position+on+an+issue+as+their+own&source=bl&ots=etMsCJ8v2H&sig=SSVql3GEe9bYINgh1T0TDjOYjA8&hl=en&sa=X&ved=0ahUKEwiG86fNmNnZAhWoiVQKHRkmCXsQ6AEIJzAA#v=onepage&q=Internalization%20endorser%E2%80%99s%20position%20on%20an%20issue%20as%20their%20own&f=false">“internalisation”</a>. This is where people accept the endorser’s position on an issue as their own. </p>
<p>Internalisation is a powerful psychological mechanism because even if the source used in the campaign is forgotten, the internalised attitude usually remains. Price doesn’t create this effect. </p>
<p>While food prices won’t necessarily go up any time soon, consumers shouldn’t expect to see any further significant price drops. Instead, Coles and Woolworths will draw attention to other important attributes. </p>
<p>Faced with the expansion of Aldi <a href="https://corporate.aldi.com.au/fileadmin/fm-dam/pdf/Press_Release/2016/ALDI_Media_Release_2016_Business_Update_311016__for_website__11_.pdf">across South Australia and Western Australia</a> and <a href="https://www.smartcompany.com.au/industries/retail/kaufland-australia-hiring-local-staff/">the entry of German supermarket Kaufland</a>, Coles has recognised they can’t keep fighting a battle on price alone.</p><img src="https://counter.theconversation.com/content/92996/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Coles plans to compete with competitors by moving away from low prices to a focus on other attributes, such as sustainability, local produce and community.Gary Mortimer, Associate Professor in Marketing and International Business, Queensland University of TechnologyLouise Grimmer, Lecturer in Marketing, Tasmanian School of Business and Economics, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/808762017-07-23T20:08:55Z2017-07-23T20:08:55ZThe economics of the money-back guarantee<p>“Returning the product to Amazon ASAP!” <a href="http://www.amazon.com/gp/review/R26ID4FRKTZPUF?ref_=glimp_1rv_cl">complained one disgruntled</a> Amazon customer as they gave a one-star review for a digital camera on the company’s site. This is despite the same product having an average rating of four-and-a-half stars out of five from 242 other customers.</p>
<p>Companies like Amazon aren’t just ignoring these disgruntled customers and their product-returning ways. In fact, retailers are increasingly offering extra services such as warranty plans, free shipping and guarantees to reassure them. Selling with the “money-back guarantee” is a prime example of this.</p>
<p>This is because the economics of the money-back guarantee can work for retailers. These businesses allow customers to return products that do not meet their expectations — as a result of poor quality or a mismatch in taste — for a full or partial refund. Essentially offering their customers an insurance against the perceived risk of the product. </p>
<p>And <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1937-5956.2012.01394.x/full">research</a> shows these retailers make a profit with this type of guarantee, given specific conditions. <a href="http://psycnet.apa.org/record/1987-12227-001">Other research also shows</a> the money-back guarantee increases customers’ feeling of satisfaction with their purchase experience, making them likely to return to the store. </p>
<p>This type of guarantee is particularly important for retailers who sell products online or through mail-order catalogues. This is because customers can’t enjoy the benefits of the traditional “touch-and-feel” shopping experience, to reassure them they are making the right decision. </p>
<h2>Customers rorting the scheme</h2>
<p>Customer returns cost retailers more than <a href="https://nrf.com/media/press-releases/retailers-estimate-holiday-return-fraud-will-cost-22-billion-2015">US$260 billion</a> (equivalent to 8% of total retail sales) annually in the United States alone. The return rates vary significantly by category, and by channel type. It can reach as high as 35% for high fashion apparel sold in <a href="http://pubsonline.informs.org/doi/abs/10.1287/mnsc.1060.0522">traditional stores</a>, and the rates are higher again for <a href="http://www.iqmetrix.com/blog/how-e-tailers-personalize-outfits-to-customers-taste">internet and catalogue sales</a>. </p>
<p>However, in most cases, the returned products are not defective. Customers <a href="https://www.mprnews.org/story/2013/12/17/retailers-lose-billions-when-shoppers-return-products?refid=0">abuse</a> the money-back guarantee, so much so that buying a product with the intention of returning it has become a trend known as wardrobing or barrowing. In the US, fraud associated with returns costs retailers around <a href="https://nrf.com/media/press-releases/retailers-estimate-holiday-return-fraud-will-cost-22-billion-2015">US$2 billion</a> during the holiday season alone (US$9 billion annually). </p>
<p>Retailers try to get around this by offering partial instead of full money-back guarantees for products. The refund is usually less a “restocking fee” charged for returns. </p>
<p>For example, compare the 30 day money-back guarantees from two Australian furniture retailers, Zanui and Rogerseller. <a href="https://www.zanui.com.au/shipping-returns">Zanui</a> offers a full refund, whereas <a href="http://www.rogerseller.com.au/returns/">Rogerseller</a> charges its customers a 15% restocking fee (it pays back only 85% of the selling price rather than the full amount). </p>
<p>In most cases, restocking fees can range between 10% and 20% of the original purchase price, <a href="https://www.thebalance.com/the-hidden-costs-of-restocking-fees-939836">some even as high as 50%</a>. </p>
<p>A <a href="http://www.solari.net/e-newsletters/documents/accenture-no-trouble-found-returns.pdf">survey</a> by professional services company Accenture reported that in the computer electronics industry, most customers returned their products because they simply “did not meet expectations.” More specifically, for 68% of returns, there was “no trouble found” by the customers; 27% of the products were returned due to “buyer’s remorse”. </p>
<p>And only 5% of the products returned were truly defective. However, regardless of the reason, returned products cannot be sold as “new,” even though the product could be new in the sense that it was never used. </p>
<p>Major consumer electronics retailers such as <a href="http://www.bestbuy.com/site/outlet-refurbished-clearance/open-box-electronics/pcmcat748300666861.c?id=pcmcat748300666861">Best Buy</a> and <a href="https://www.walmart.com/c/kp/open-box-electronics">Walmart</a> restock these returned items and sell them as “open-box items” at discounted prices. Open-box simply means the product is marked as being opened or used previously. A retailer’s ability to sell returned products as open-box creates an opportunity to attract more price conscious consumers. </p>
<p>The downside of such product differentiation is that open-box products can have a negative impact on the demand for the new products in a store. The retailer might also have to incur additional costs for handling returns and repackaging them as open-box. </p>
<h2>Making or losing money on the money-back guarantee</h2>
<p>Balancing the benefits and costs of the money-back guarantee is a delicate task for retailers. <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1937-5956.2012.01394.x/full">In studying the guarantee</a> we worked out how retailers could use it to increase sales and profits. </p>
<p>We looked at product pricing, refunding and inventory stocking decisions in money-back guaranteed sales. We took into account uncertainty in demand, the possibility of a customer’s dissatisfaction with the product after purchase, as well as the lower value customers place on an open-box product, relative to brand new products. </p>
<p>Using this model, we figured out the best prices retailers could use reselling returned products and the restocking fees to encourage or discourage returns, for the highest possible net profit.</p>
<p>Even though reselling returned products meant less stock for the retailer it also reduced inventory-related costs adding to profits. In essence, retailers can claim back at least some of the costs associated with return fraud, with reselling. </p>
<p>In areas of retail with higher risk of returns, the temptation is to tighten returns policies, to limit them. This is especially true for highly innovative products, new technologies, or fashion-driven products (especially high-end ones). </p>
<p>Interestingly, our study shows that reselling returns complements the money-back guarantee. So these type of high-risk products are likely to give retailers the most benefit, when they are resold after being returned. </p>
<p>Retailers also feel the benefit of reselling when there are more price conscious customers who are more inclined to buy a product that is being resold, because it’s at a discount.</p>
<p>So the economics of the money-back guarantee can work for retailers by improving brand value and through reselling via open-box products.</p><img src="https://counter.theconversation.com/content/80876/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The economics of the money-back guarantee can work in retailers’ favour, in certain circumstances.Yalcin Akcay, Professor of Operations Management, Melbourne Business SchoolTamer Boyaci, Professor of Management Science, Michael Diekmann Chair in Management Science, and Director of Research, ESMT BerlinLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/801722017-07-10T16:35:56Z2017-07-10T16:35:56ZUsing data visualisation to beat the call centre curse<figure><img src="https://images.theconversation.com/files/177337/original/file-20170707-23720-q96r8o.jpg?ixlib=rb-1.1.0&rect=22%2C35%2C2941%2C1908&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"></span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-vector/isometric-office-cubicles-men-women-working-230150206?src=AUIZWsnHIiEeDHyVz2ktyw-1-87">Jesus Sanz/Shutterstock</a></span></figcaption></figure><p>Have you ever found yourself locked in a circular conversation about a missing bolt for your barbecue? Have you ever listened to classical hits for ten minutes while you wait to argue about a discrepancy on your bank statement? If so, then you will understand the pain of the call centre. The good news is that a dive into call data can help make the pain go away. </p>
<p>The past two decades have seen a massive expansion of the call centre industry. In the UK alone, there are now an <a href="https://www.unison.org.uk/at-work/energy/key-issues/call-centres/">estimated 5,000 in operation</a>, employing about a million workers and <a href="https://www.statista.com/forecasts/397597/united-kingdom-call-centers-revenue-forecast-nace-n8220">generating revenue of £2.3 billion</a>.</p>
<p>Some <a href="http://www.bbc.co.uk/news/magazine-12691704">liken call centres</a> to the modern equivalent of factories; the public face and first contact in an economy now dominated by the services industries. Long wait times and extended conversations where customers are bounced from operator to operator have the potential to create negative, long-lasting impressions. These are situations everyone wants to avoid. </p>
<p>But how to make sense of all the calls? Across the UK, over <a href="https://www.unison.org.uk/at-work/energy/key-issues/call-centres/">a quarter of a million calls</a> provide more than 4m data points (or so-called “call events”) every day. When data is recorded at this scale, it is easy to get lost in the weeds and lose sight of the bigger picture.</p>
<h2>Call and answer</h2>
<p>But when we visualise this data, there is a way to sift through this massive amount of information to reveal larger trends and find trouble spots. We find ways to help callers and managers smooth the whole experience.</p>
<p>Our team created software to build images from 24 hours of anonymised call centre activity data of over 200,000 calls from a local company, QPC Ltd, which has a range of clients including Vodafone and Virgin. The sample image below may look complicated, but it shows how hot spots can be easily identified and targeted. Each tiny, individual rectangle represents a single phone call. And each rectangle, or cell, is ordered by the time at which the call started. The size and colour of the cells represents the length of each call.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/176090/original/file-20170628-31284-43amhv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/176090/original/file-20170628-31284-43amhv.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=464&fit=crop&dpr=1 600w, https://images.theconversation.com/files/176090/original/file-20170628-31284-43amhv.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=464&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/176090/original/file-20170628-31284-43amhv.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=464&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/176090/original/file-20170628-31284-43amhv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=583&fit=crop&dpr=1 754w, https://images.theconversation.com/files/176090/original/file-20170628-31284-43amhv.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=583&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/176090/original/file-20170628-31284-43amhv.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=583&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Sample image generated using the software. Red spots indicate problematic areas that users can zoom in to inspect.</span>
</figcaption>
</figure>
<p>These images can be modified to focus on call length, wait times, resolved calls and so on. And we can zoom in and out to get either a high level view or a detailed inspection of a particular record. The information gets broken down into more meaningful blocks of information. So each hour is broken into into six ten-minute blocks, and each call split into the period when the caller is listening to a pre-recorded message, the time queuing, and the time talking to an actual human.</p>
<p>If you have ever dialled in to a call centre you’ll know that there can be multiple times that all of these happen on a single call. And so we gave each of these “events” their own time stamps so we could better gather detailed information. </p>
<p><a href="http://cs.swan.ac.uk/%7Ecsbob/research/callCenter/treemap/roberts16interactive.pdf">This approach</a> is a simpler way to gather insights for those managing the call centre and trying to handle the huge flow of calls. Call centres can find patterns in caller behaviour and spot any outliers. They can identify when we, the callers, abandon ship and hang up in frustration. They can work out how to filter calls more sensibly, and discover the moments when wait times increase and decrease.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/EOieJLjVxUA?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<h2>Beating the odds</h2>
<p>Perhaps more importantly this data visualisation offers some simple tips to make callers lives easier too. Next time you grit your teeth and dive into a world of hold music and apologetic recorded messages, consider these three simple pieces of advice.</p>
<p><strong>Don’t call at lunchtime.</strong> Not only are you on your lunch break, so are a number of staff at the call centre. Expect to wait. Or to give up.</p>
<p><strong>Avoid evening calls.</strong> The rate of abandoned calls increases during the day and peaks in the evening from 8pm. </p>
<p><strong>Bite the bullet and call early.</strong> Our visualisation shows early morning calls yield the shortest queue and call times. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/6g4dkBF5anU?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>There are some <a href="http://dx.doi.org/10.2312/stag.20161370">worthwhile insights</a> behind this advice. Using the visualization software, we can observe a dense cluster of abandoned calls typically between 1.10pm and 1:15pm. Perhaps these are the callers who thought they could get everything done while unwrapping a ham sandwich, but who soon think better of it.</p>
<p>The number of abandoned calls is clearly linked to wait time. You might wonder who is calling in between midnight and 8am, and they might be thinking twice too, as callers during these hours are twice as likely to abandon as those that dial in during normal business hours. We also get impatient after 8pm, when the percentage of callers who abandon takes another sharp rise.</p>
<p>One reason that those evening calls start to clog up the system might be that this is when the furious are calling in. Staff at QPC Ltd identified a special group which calls in the evening, waits longer than 15 minutes to talk to an agent, and then speaks to the agent for up to 15 minutes. It thought this is indicative of dissatisfied customers, prepared to wait to get the point across, and stick around until they get results. The normal average call length is a little over five and a half minutes. </p>
<p>Just be thankful you are not in that small but unfortunate group which suffers more than five “queue events” and ends up speaking to the agent for more than an hour. The only hope is that the call centre managers can spot these outliers in the data and call them back to check the pain was all worth it.</p><img src="https://counter.theconversation.com/content/80172/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Timing your call can be crucial to fend off frustration.Robert Laramee, Associate Professor in Data Visualization, Swansea UniversityRichard Roberts, PhD Candidate in Data Visualisation, Swansea UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/762692017-04-20T00:08:47Z2017-04-20T00:08:47ZHow companies like United and Wells Fargo can win back consumer trust<figure><img src="https://images.theconversation.com/files/165974/original/file-20170419-2408-1e6p387.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Trust is hard to win back once lost.</span> <span class="attribution"><span class="source">Handshake via www.shutterstock.com</span></span></figcaption></figure><p>It’s every CEO’s worst nightmare: For whatever reason, the CEO’s company is engulfed in negative publicity that threatens to damage its brand name, harm sales and alienate customers for months or even years to come.</p>
<p>The negative publicity can hit suddenly, seemingly out of the blue, or it can come in relentless waves, over a prolonged period of time, like a series of storms battering a coastal area, one after another. <a href="http://fortune.com/2017/04/13/wells-fargo-report-earnings/">Wells Fargo</a> and <a href="http://www.nbcnews.com/news/us-news/doctor-dragged-united-flight-stands-gain-lawsuit-experts-say-n746186">United Airlines</a> have both been facing such an onslaught in recent weeks and months.</p>
<p>How does a company respond? How does it go about repairing a damaged brand name and winning back customers?</p>
<p>While I know very little about these particular situations apart from what I’ve read, seen and heard via various media outlets, I know how difficult it is to change consumers’ minds about a company and its products – and how winning back “trust” is easier said than done. </p>
<p>Five years ago, my colleagues – Gui Liberali of the Erasmus School of Economics in Rotterdam and Glen L. Urban at the MIT Sloan School of Management – and I jointly published a study, “<a href="http://www.sciencedirect.com/science/article/pii/S0167811612000742">Competitive information, trust, brand consideration and sales: Two field experiments</a>.” Here’s what we learned. </p>
<h2>Regaining customer trust</h2>
<p>Over two years, we closely tracked four marketing field experiments by an American automaker whose brand had suffered from decades of negative publicity over the quality of its products. The experiments focused on company actions to earn back trust.</p>
<p>In one experiment, the automaker provided an opportunity for potential customers to test-drive competitors’ cars so that they might compare them with the company’s own lineup. Another experiment provided an unbiased internet recommendation system to help customers find the car that met their needs, even if that car was not made by the automaker. </p>
<p>Other experiments included customized relationship management and a moderated community to enable customers to speak to one another about all the cars they were considering. </p>
<p>The theory, and it was a good one, was that the new offerings by the automaker were much better than customers perceived them to be. The automaker believed it would win in a fair match-up and set out to enable customers to make the comparison. </p>
<h2>Why they succeeded</h2>
<p>What we found is that it’s simply not enough to tell consumers that they can and should trust a company. It’s critical to actually prove, again and again, that a company and its products can indeed be trusted – and customers must be provided with tangible, observable proof that a company has changed its ways and the quality of its products.</p>
<p>The automaker’s experiments enhanced trust, which – more importantly – led customers to consider and purchase its cars.</p>
<p>Today, this automaker works to provide competitive information to customers when there is good news and when it is cost-effective to do so. For example, customers are encouraged to test drive cars for longer periods of time. Dealers hold targeted competitive test drives for selected customers, sometimes renting competitive vehicles to make the test drives possible. </p>
<p>For the automaker, establishing genuine, observable trustworthiness wasn’t enough. Skeptical customers, who would not even consider the automaker’s cars, needed to be won over. The company found cost-effective ways, such as targeted marketing campaigns and digital marketing, to encourage these skeptical customers to pay attention and seek information. </p>
<p>The bottom line: There’s promised “trust” and then there’s genuine “trustworthiness.” And the only sure way of getting to that trustworthiness stage is to make genuine internal changes – and then to get customers back into dealership showrooms, in the automaker’s case, or into Wells Fargo bank branches or on to United airplanes. That’s the only way consumers can determine for themselves whether a company and its products are again “trustworthy.”</p>
<h2>Winning over skeptics</h2>
<p>When customers are skeptical, and even when they are not, it is good marketing for a company with superior products and services to provide competitive information about a company’s products versus its competitors’ products – with all the pluses and minuses involved in making such comparative information available to customers.</p>
<p>If a company has indeed changed and is producing a better-quality product or service, providing competitive information can be an effective way of winning over the highly skeptical customer and creating a much-coveted “virtuous cycle” of trust and loyalty.</p>
<p>I don’t know the details of Wells Fargo’s controversy and marketing plans for the future, or, for that matter, those of United. But if whatever they convey to the public isn’t targeted and backed up by tangible, trustworthy services and products, it probably won’t win back as many customers as desired. In both cases, it is important that the firms listen to customers and provide high-quality services.</p>
<p>Trust is earned over many years by providing to the customer the products and services that fulfill customer needs. Trust is earned by listening to and respecting the customer’s voice.</p>
<p>Trust me on this: Being trustworthy matters.</p><img src="https://counter.theconversation.com/content/76269/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Hauser receives funding from the American automaker that is listed anonymously in the article.. </span></em></p>Wells Fargo and United Airlines have both been facing an onslaught of negative publicity and will have a tough time restoring trust with their customers. Here’s a good place to start.John Hauser, Professor of Marketing, MIT Sloan School of ManagementLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/704002016-12-14T06:01:30Z2016-12-14T06:01:30ZBusiness Briefing: when robots and customers meet<p>When you call up a business, you might get an automated customer service giving you options and helping you to do whatever it is you need to. This is a digital robot.</p>
<p>It’s common to see digital robots in these types of roles because the technology is getting cheaper and better, says Mary-Anne Williams, founder and director at UTS’ Innovation and Enterprise Research Lab.</p>
<p>Williams researches how humans interact with different types of robots, in customer service roles. She says because digital robots can access vast amounts of data about certain customers, these bots can provide a more specialised and customised service, similar to that of the good old days.<br>
<a href="http://robotic.media.mit.edu/wp-content/uploads/sites/14/2015/01/Lee-etal-FPCS-13.pdf">People have fewer problems dealing</a> with digital robots than humans because machines don’t make emotional or ethical judgements about customers that make them uncomfortable.</p>
<p>However, when it comes to physical robots in customer service roles, our reactions can be very different. In research on these robots, there is a concept called “the uncanny valley”. This is where the closer the robot is to human form or face, the more uncomfortable or eerie we feel. So there’s that to overcome.</p>
<p><a href="http://www.smh.com.au/business/property/robots-to-make-shopping-easier-20161205-gt410e.html">Experiments students at Williams’ lab have conducted</a> in a shopping mall show that these physical robots have to work hard to attract our attention and we’re easily underwhelmed by them, compared to the ones we see on TV or movie screens.</p>
<p>The next big frontier for physical robots in business is to get them to empathise with customers, to understand the context around questions and interactions. And with the speed of innovation, this may be closer than we think, Williams says. </p>
<hr>
<p><em>The business briefing podcast will return with a new format in 2017. If you’ve got any feedback you’d like to pass on, please email it to: ask@theconversation.edu.au</em></p><img src="https://counter.theconversation.com/content/70400/count.gif" alt="The Conversation" width="1" height="1" />
Customers might prefer digital robots who don't judge for now but physical robots with empathy may be the customer service workers of the future.Jenni Henderson, Section Editor: Business + EconomyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/695542016-11-29T09:32:37Z2016-11-29T09:32:37ZACCC rejects the banks colluding to bargain on Apple Pay<p>The Australian Competition and Consumer Commission (ACCC) <a href="http://www.accc.gov.au/media-release/accc-proposes-to-deny-authorisation-for-banks-to-collectively-bargain-with-and-boycott-apple-on-apple-pay">is planning to deny</a> the Commonwealth Bank of Australia (CBA), Westpac, National Australia Bank (NAB) and Bendigo and Adelaide Bank (the banks), petition to collectively bargain with and boycott Apple on Apple Pay.</p>
<p>Justifying the decision, ACCC chairman Rod Sims said that the likely benefits of allowing the banks to collectively bargain does not outweigh the potential negative affects.</p>
<p>The banks are desperate to get access to Apple phones, not least as ANZ <a href="http://www.smh.com.au/business/banking-and-finance/apple-payled-surge-in-anz-card-customers-drives-rival-banks-to-renegotiate-20160509-goppf0.html">recently claimed a surge</a> in applications for their credit and debit cards after striking a deal with Apple. This shift in consumer behaviour could potentially reduce the customer base of the other banks, simultaneously increasing both ANZ’s customer base and the use of its payments services. </p>
<p>But Apple imposes fees and restrictions that the banks currently find prohibitive.</p>
<p>The banks wanted to bargain with Apple over two key issues. The first is access to the Near-Field Communication (NFC) controller in iPhones, which would enable them to offer their own digital wallets to iPhone customers (in direct competition with Apple’s digital wallet), bypassing Apple Pay. The second is to remove the the restriction Apple imposes on banks, preventing them from passing on fees that Apple charges for the use of its digital wallet.</p>
<h2>It’s all about negotiating power</h2>
<p>At the moment only consumers with certain cards issued by ANZ, American Express and card issuers using Cuscal Ltd as their collective negotiator, are able to use Apple Pay. It’s been <a href="http://www.smh.com.au/business/banking-and-finance/apple-payled-surge-in-anz-card-customers-drives-rival-banks-to-renegotiate-20160509-goppf0.html">reported that ANZ agreed to share with Apple some of the fee</a> it charges to process payments in exchange for access to Apple Pay</p>
<p>If the ACCC had decided in favour of the banks they could have, in theory, used their combined negotiating power to strike an even better deal with Apple. Not only would they have been bargaining from a stronger position, they could also have threatened to boycott Apple Pay for up to three years. </p>
<p>The ACCC argued this have would reduced the competitive tension between the banks in their individual negotiations with Apple, which could also reduce the competition to supply mobile payment services for iPhones. The threat of a boycott could also mean a significant period of uncertainty and would result in decreased choice for the consumers whose banks are involved. The other digital wallet options for the banks are Android Pay and Samsung Pay, both of which are available in Australia, but the iPhone popularity with consumers makes Apple Pay very attractive to both consumers and banks. </p>
<p>The ACCC may have decided against allowing the banks to bargain collectively, as this would also have set a precedent for any future disputes between the banks and their service providers. The banks may have over played their hand by also threatening a boycott against Apple.</p>
<h2>Reduced competition could have knock-on effects</h2>
<p>Another deciding factor in the ACCC’s decision was that digital wallets/mobile payments are still in their infancy in Australia and consumers are already using their contactless cards to do “tap and go” payments. A rash decision now to allow collective bargaining with Apple could distort the mobile payment market and further delay the adoption of this technology.</p>
<p>The use of tap and go payments has risen greatly in recent years, <a href="http://www.smh.com.au/business/retail/110bn-australias-contactless-boom-20160805-gqmg7j.html">accounting for up to 75% of all Visa transactions</a>. This has caused many consumers to question, exactly what the advantages are of digital wallets over contactless cards. The absence of an obvious advantage over other payment methods like contactless cards has slowed the adoption of mobile payments in Australia. Any reduction in competition could stall this even longer.</p>
<h2>What next for Apple pay</h2>
<p>The ACCC’s decision is just a draft at this stage and there’ll be further public consultations. It plans to release its final decision on March 2017, but in the meantime there will be further uncertainty about the adoption and use of digital wallets in Australia.</p>
<p>The banks now have two distinct choices. They can either continue to act collectively and seek to persuade the ACCC that the draft decision is not the correct one, or they can independently approach Apple to see if they can negotiate a better or at least an equivalent deal to that already struck by ANZ.</p><img src="https://counter.theconversation.com/content/69554/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Steve Worthington does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The banks could have used their collective bargaining power not only against Apple for Apple Pay but also stall the adoption of mobile payments in Australia.Steve Worthington, Adjunct Professor, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/694732016-11-28T05:26:39Z2016-11-28T05:26:39ZCooling-off periods for consumers don’t work: study<figure><img src="https://images.theconversation.com/files/147697/original/image-20161128-22751-nbhmvf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">"Cooling-off" periods for purchases made in high-pressure selling situations like door-to-door sales don't help consumers, research shows. </span> <span class="attribution"><span class="source">image from shutterstock.com</span></span></figcaption></figure><p>When customers are offered a “cooling off” period, they don’t change their minds, even when the alternative is considered subjectively better, our <a href="http://consumeraction.org.au/wp-content/uploads/2016/11/161104-Headline-findings.pdf">research</a> finds. We also found that some consumers (around 30%) only responded when contacted by the seller and asked if they would still like to opt in.</p>
<p>Under current Australian consumer law, Australians have a 10-day cooling-off period on any sale that was unsolicited – usually through door knocking or telemarketing. The idea of a cooling-off period exists partially because external forces, such as high-pressure selling, can have a significant influence on the choices that consumers make. </p>
<p>It’s not simply a case of telling consumers to read the terms and conditions, and then leaving them to their own devices, particularly when business (and their salespeople) use tried and true methods to get customers to buy products that may not necessarily be the best option for them. </p>
<p>The problem with the current cooling-off periods is that they operate after a customer has taken ownership of something or signed an agreement. Our research finds cooling-off periods simply don’t overcome many of the inherent biases of human behaviour.</p>
<p>Dr Josh Newton and I, from Deakin University’s <a href="https://www.deakin.edu.au/business/research/centre-for-employee-and-consumer-wellbeing">Centre for Employee and Consumer Wellbeing</a>, tested how 759 consumers responded when presented with cooling-off and opt-in alternatives as part of an online survey. </p>
<p>A number of behavioural theories, such as the <a href="https://www.princeton.edu/%7Ekahneman/docs/Publications/Anomalies_DK_JLK_RHT_1991.pdf">endowment effect</a>, the <a href="https://www.hks.harvard.edu/fs/rzeckhau/SQBDM.pdf">status quo bias</a> and <a href="https://www.researchgate.net/profile/Robert_Cialdini/publication/232541029_Preference_for_Consistency_The_Development_of_a_Valid_Measure_and_the_Discovery_of_Surprising_Behavioral_Implications/links/0a85e53b2ea96b5713000000.pdf">consistency theory</a>, show that once a person “owns” something, they value it more and are less likely to give it up – at least in the short term. This is particularly the case if they have put mental, physical or social effort into their decision. </p>
<p>Similarly, many agreements require customers to “imagine” what the service will be like. This is simply because when we buy something from a unsolicited sales process, we haven’t really had time to process what the purchase actually means. We all tend to imagine that our lives will be better with something new, because our current reality is real, whereas the future is abstract. </p>
<p>There’s also a power imbalance between a customer who has been targeted in an unsolicited context and a salesperson who has had training, significant sales experience and sometimes a <a href="https://www.moneysmart.gov.au/borrowing-and-credit/borrowing-basics/avoiding-sales-pressure">script</a> to anticipate our responses. </p>
<p>In the context of cooling-off periods (and thus changing our minds), <a href="http://s3.amazonaws.com/academia.edu.documents/38441488/Harrison_et_al_2014_-_Beyond_door-to-door.pdf?AWSAccessKeyId=AKIAJ56TQJRTWSMTNPEA&Expires=1480301401&Signature=G2ddWnsvc5L5us0uaLRHUuWo5%2FI%3D&response-content-disposition=inline%3B%20filename%3DBeyond_Door-to-Door_The_Implications_of.pdf">research shows</a> it takes a significant amount of cognitive resources to admit we made a mistake. Again, this is not a conscious use of resources, but happens regardless of how rational we think we are. The role of our ego is to protect us, so out of our conscious reach, our ego creates defences, including apathy, that restrict us from changing our mind after we have become endowed with something.</p>
<p>These behaviours were also shown <a href="http://consumeraction.org.au/wp-content/uploads/2012/04/Shutting-the-Gates.pdf">in my 2009 research</a> into in-home sales. I found once consumers had actually signed a large financial contract for a pretty poor educational software package, their likelihood of cancelling that contract within ten days (which until recently was the cooling-off period in Victoria) was remote. </p>
<p>In early 2017, Australia’s consumer protection agencies will deliver a review of the current laws, including these cooling-off periods. However, what should get more attention under these laws is the idea of an opt-in clause. This would give consumers a real chance to change their minds after they’ve had time to think.</p>
<h2>How an opt-in clause works</h2>
<p>The opt-in clause works in two parts. It’s based on the principle that we should give consumers, under certain circumstances, more time and resources to think about the consequences of a purchase. </p>
<p>We suggest that after a consumer has signed a sales agreement in their home, it does not take effect until the consumer then “opts in” (confirms) some time between 24 to 48 hours after first signing the agreement, by contacting the company and confirming that they wish to continue. If the consumer does not opt in, the contract lapses. </p>
<p>Our research shows that an opt-in clause would work most effectively if the seller is unable to contact the consumer during the opt-in period. The consumer would then be able to make their choice free of pressure-selling technique. The opt-in approach would empower Australians to make purchases free of predatory sales tactics — the contract is only final when you re-contact the trader after two days.</p>
<p>This approach would help to overcome the <a href="https://faculty.washington.edu/jdb/345/345%20Articles/Baumeister%20et%20al.%20(1998).pdf">pressure and the psychological biases</a> during the sales process. And the idea makes logical (and perhaps, business, sense) – if the product is good and the customer wants it badly enough, they will opt in. The sales process does not rely on predatory tactics, but on good products and good communication between the seller and the customer. </p>
<p>What this approach will do is force businesses to target the right consumers, design better products and undertake more honest sales processes, rather than relying on the high-pressure selling techniques – often targeting vulnerable people – that are common in some of these sectors.</p><img src="https://counter.theconversation.com/content/69473/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul Harrison receives funding from Consumer Action Law Centre, Australian Communications Consumer Action Network, Australian Securities and Investment Commission, and Monash Health. He is a director of the Telecommunications Industry Ombudsman (TIO), and advisory panel member of the Essential Services Commission. </span></em></p>Customers who make purchases under pressure don’t use the usual 10-day cooling-off period given under law, new research finds.Paul Harrison, Senior lecturer, Deakin Business School; Director, Centre for Organisational Health and Consumer Wellbeing, Deakin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/684182016-11-17T23:46:06Z2016-11-17T23:46:06ZThe emotions at play when customers con businesses<figure><img src="https://images.theconversation.com/files/146342/original/image-20161117-13380-1fzxehb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Customers are more likely to behave unethically when they are angry.</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>Customers who are fearful are more likely to be ethical in a tricky situation as the stakes increase, while angry customers will behave unethically no matter what the stakes, <a href="https://www.researchgate.net/publication/304747110_Anger_Strays_Fear_Refrains_The_Differential_Effect_of_Negative_Emotions_on_Consumers'_Ethical_Judgments">our research shows</a>.</p>
<p>In our study, we emotionally manipulated people to either feel angry or fearful. Participants were asked to write about three or four experiences or situations from their past that had made them experience the specific emotion (anger or fear).</p>
<p>Following this, they were asked to pick the one situation that made them most angry/fearful and to describe in detail the emotions and feelings they experienced during that situation. Participants in the control group were asked to write about their daily routine. </p>
<p>We studied these two emotions specifically not only because anger is estimated to be one of the <a href="http://projects.iq.harvard.edu/files/lernerlab/files/lerner_tiedens_2006.pdf">most often experienced emotions</a>, but also because there is an interesting contrast with these two emotions, although both are negative. <a href="http://emotionresearcher.com/wp-content/uploads/2015/08/SE1985.pdf">Anger is associated with certainty and control</a> about what has happened or might happen, whereas fear is characterised by a lack of certainty and control.</p>
<p>Once the participants were made to feel either angry or afraid, we presented them with a scenario where a customer receives an incorrect amount of change in a retail outlet. The amount of incorrect change (the stakes) increased from US$1 to US$10 and US$50.</p>
<p>Our results showed that these two emotions led to different patterns in ethical judgement in the scenario. While fearful individuals show restraint, angry individuals go ahead and confidently, act unethically. </p>
<p>A successful marketplace works because of the implicit assumption that both retailers and customers will follow moral and ethical norms. Past research has largely focused on unethical behaviour on the part of the businesses, for example child labour in developing countries, following environmentally unfriendly manufacturing practices, and not being socially responsible. However, an often overlooked and understudied aspect involves unethical behaviour on the part of customers.</p>
<p>Unethical behaviour by consumers can include shoplifting small consumer goods, using a coupon for merchandise not purchased, and consuming a product in-store and not paying for it. While in many instances these items are worth just a couple of dollars, the impact on businesses can be surprisingly substantial when tallied up. </p>
<p><a href="https://nrf.com/resources/retail-library/national-retail-security-survey-2015">According to a report</a>, shoplifting causes 38% of the retail shrinkage in the United States. It <a href="https://www.theguardian.com/business/2010/oct/19/shoplifting-costs-retailers-consumers">costs an estimated £12 million a day</a> in the United Kingdom (with a third of this attributed to employees). </p>
<p><a href="https://www.qut.edu.au/business/about/news/news?news-id=53042">In Australia, it’s responsible for the loss</a> of items worth A$7.5 billion per year. At 39%, shoplifting was the leading cause of retail shrinkage in Australia in 2015. What makes it worse is that these costs are then passed on to other customers. <a href="https://www.insideretail.com.au/blog/2015/11/05/shoplifting-and-employee-theft-hurting-retail/">Current estimates put</a> the cost of retail shrinkage (due to shoplifting and employee theft) at more than A$424 to the average Australian household.</p>
<p>Misbehaviour towards a business can be expected or justified if the customer is experiencing emotions that arise because of a bad experience (for example, anger arising because of rude server or bad service). It’s less obvious as to how and why incidental emotions (for example, you are angry because of an incident in the parking lot at work) should impact unrelated judgements and decision making.</p>
<p>In our study, we found the difference in ethical behaviour is because of the level of perceived control that a consumer feels in the situation, especially when the stakes are relatively large. A fearful person incorrectly attributes the lack of control from the emotion situation onto the ethical scenario, and becomes more careful and ethical in the unrelated situation. </p>
<p>By contrast, angry individuals experience an increased sense of control because of the emotion and overlay it on the ethics situation. This in turn lowers their ethical judgement in the situation, regardless of the stakes involved.</p>
<p>Fear appeals might be more successful in countering customers’ unethical behaviours in situations where stakes are naturally high, such as medical and insurance fraud. But a different approach might be necessary in the normal retail setting. </p>
<p>Given that a large amount of unethical customer behaviour occurs in low stakes situations (worth a few dollars) where the loss to the retailer is perceived to be small and insignificant, the trick will be to amplify the stakes while inspiring fear. Campaigns would be more successful in curbing unethical consumer behaviour if the marketing is designed in a way that upped the stakes for unethical behaviour so that they are perceived to be high. For example, this could be done by highlighting the huge cost of small unethical behaviour by customers.</p>
<p>At a broader, policy level, the strategy of encouraging more “ethical, moral” behaviour by elaborating on the downside of seemingly minor transgressions which could potentially have a huge, downstream impact, could be particularly useful in social marketing campaigns.</p><img src="https://counter.theconversation.com/content/68418/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nitika Garg does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Customers who are angry are more likely to behave unethically, no matter how high the stakes, new research shows.Nitika Garg, Associate professor, Marketing, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/677742016-10-27T06:16:30Z2016-10-27T06:16:30ZPhantom brands haunting our supermarket shelves as home brand in disguise<p>There was a time when shoppers could easily differentiate between supermarket private labels and proprietary branded products, however <a href="http://foodstrategy.co.uk/brands-aldi-crossroads/">new “phantom brands”</a> appearing on supermarket shelves are clouding the waters. These are private supermarket label products without any reference to the supermarket’s brand or logo.</p>
<p>Despite significant improvements in the quality of private label ranges, supermarkets still face the challenge convincing customers of value perceptions. While supermarket private label ranges generally offer low price; low price is <a href="http://www.marketing91.com/price-quality/">frequently associated with lower quality</a>, and therefore less value.</p>
<p><a href="https://www.marketingweek.com/2014/08/21/where-next-for-tescos-venture-brands/">Phantom brands</a> are a way for supermarkets to overcome this challenge. While this strategy provides significant benefits to supermarkets, it comes with the inherent risk that shoppers may feel duped into buying a brand, which is not really a brand.</p>
<p>How supermarkets communicate the introduction of these new brands will be vitally important to their success.</p>
<h2>Woolworths the latest to try this</h2>
<p>The introduction of phantom brands <a href="https://www.retail-week.com/sectors/grocery/analysis-woolworths-australia-launches-phantom-brand-in-battle-with-aldi/7009930.article">by Australia’s largest food retailer, Woolworths</a>, is a strategic move away from the deepening price wars and offers many commercial benefits. Firstly, such brands will attract a new shopper who is seeking value and willing to pay a little more for a better quality product, while <a href="http://www.woolworthsholdings.co.za/media/news_display.asp?Id2=377">existing Woolworths Essentials products</a> will continue to satisfy the budget shopper. </p>
<p>Secondly, new brand names like Your Majesty Cat Food, Apollo Dog Food, Bell Farms and Baxter’s will give the impression there is a greater choice within the store. Supermarkets expect shoppers will welcome more choice and these new brands. </p>
<p>Thirdly, as these new phantom brands are essentially supermarket-owned brands, higher profits should be achieved. It also allows Woolworths to capture a larger slice of category sales where private labels have <a href="https://hbr.org/1996/01/brands-versus-private-labels-fighting-to-win">traditionally had little penetration</a>, like health and beauty, haircare, pet food and baby needs. </p>
<p>The risk Woolworths will face is in communicating the launch of such brands. While shoppers understand the Aldi offer, brands that aren’t really brands, they may feel with Woolworths they’ve been dudded into buying a brand. </p>
<h2>Why phantom brands work</h2>
<p>As grocery shopping remains a mostly low involvement, routine shopping task, consumers will employ simple strategies to reduce time and cognitive effort. This involves often referring to only brand or price, to <a href="http://www.acrwebsite.org/volumes/7967/volumes/v23/NA-23">determine quality and value and aid in selection</a>.</p>
<p>Supermarket shoppers presented with proprietary brands think higher priced means excellent quality and good value. At the other end of the spectrum, shoppers also encounter supermarket private label products and reason that lower price means acceptable quality and better value.</p>
<p>Phantom brands combine these two different sets of logic. Priced a little higher than supermarket private labels, but under national branded products, shoppers will perceive this new brand as moderately priced, quality comparable to the leading brand and therefore, excellent value.</p>
<p>Aldi provides an excellent example of this strategy at work. Aldi’s private label ranges do not carry the Aldi moniker, instead a wide <a href="https://www.aldi.us/en/grocery-home/aldi-brands/">range of “exclusive” brand names</a> like, Lacura Skincare, Choceur Finest European Chocolate, Belmont Biscuits and Mamia Baby. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/143409/original/image-20161027-11260-bbzaam.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/143409/original/image-20161027-11260-bbzaam.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/143409/original/image-20161027-11260-bbzaam.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=425&fit=crop&dpr=1 600w, https://images.theconversation.com/files/143409/original/image-20161027-11260-bbzaam.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=425&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/143409/original/image-20161027-11260-bbzaam.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=425&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/143409/original/image-20161027-11260-bbzaam.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=534&fit=crop&dpr=1 754w, https://images.theconversation.com/files/143409/original/image-20161027-11260-bbzaam.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=534&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/143409/original/image-20161027-11260-bbzaam.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=534&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Two brands of cereal, one phantom brand, one name brand.</span>
<span class="attribution"><span class="source">Choice/Allprices.com.au</span></span>
</figcaption>
</figure>
<p>Aldi’s private label ranges mimic the packaging of nationally branded products – take a look at Aldi’s copy of Kellogg’s Nutri-Grain called Power-Grain or its Sunny Crumpets, that look remarkably like Tip Tops’ Golden Crumpets. Such phantom brands infer perceptions of quality as packaging is comparable to the proprietary brands. Aldi’s low prices then create the perception of value. </p>
<h2>Private label growth and its challenges</h2>
<p>Australian shoppers have warmed to the supermarkets’ private label products. <a href="http://www.canstarblue.com.au/food-drink/stores/supermarkets/private-labels-vs-brand-names/">Research by market research company Canstar Blue</a> earlier this year found the number of Australians who purchased private label groceries rose from 44% to 65% in the space of just six months.</p>
<p>Market <a href="http://www.nielsen.com/au/en/insights/news/2016/up-for-grabs-grocery-retailing-growth-opportunities.html">research firm Nielsen estimates</a> supermarket revenue growth will come mostly from private label products. In comparable markets like the UK, the <a href="http://www.mcbride.co.uk/leadership-in-private-label/growth-markets">proportion of private label sales is almost at parity</a> with national branded products and across Europe. </p>
<p>Despite shoppers’ apparent <a href="http://www.nielsen.com/au/en/insights/news/2014/our-penchant-for-private-label.html">appetite for private label products</a>, there is still a stigma attached to buying private label. Much of this <a href="https://www.scribd.com/document/23369430/perceptions-of-generic-products">stigma stems from history</a>, as supermarket private labels evolved from no name generic products.</p>
<p>Ultimately, there <a href="https://hbr.org/1996/01/brands-versus-private-labels-fighting-to-win">are supermarket categories where private label simply doesn’t work</a>, like confectionery, baby food, health and hygiene, haircare. Such categories are dominated by market leaders, Coke <a href="http://clients1.ibisworld.com.au/reports/au/industry/majorcompanies.aspx?entid=1859#MP25">(with 53% market share)</a> and Cadbury <a href="http://www.roymorgan.com/findings/5615-chocolate-block-consumption-cadbury-and-lindt-december-2013-201406012329">(with 30% market share)</a>. Phantom brands will fill this space between private and proprietary brands. </p>
<p>Aldi’s entry into the Australian market in 2001 changed the way shoppers looked at private label products. While Woolworths Homebrand and Coles Smart Buys were generally seen as cheap, if not cheaper than similar Aldi products, consumers considered the quality of these <a href="https://www.scribd.com/document/23369430/perceptions-of-generic-products">no-name generics to be substandard</a>. </p>
<p>As a result, <a href="https://www.choice.com.au/shopping/everyday-shopping/supermarkets/articles/choice-supermarket-special">supermarkets implemented a “good, better, best”</a> strategy for private labels. This is all despite the recent efforts of the big two supermarkets to <a href="http://www.smh.com.au/business/retail/woolworths-makes-homebrand-homeless-in-private-label-shift-20160327-gns0p2.html">re-launch their private label ranges</a> by essentially removing this bottom rung of no-name generics. </p>
<p>Even the supermarkets’ very best offers, Select and Finest, are still adorned with the supermarket brand and logo. Where these current private label ranges fall short of convincing skeptical shoppers of quality and value, phantom brands will succeed.</p><img src="https://counter.theconversation.com/content/67774/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>More supermarkets are starting to stock “phantom brands”- private label products without any reference to the business’ brand or logo.Gary Mortimer, Associate Professor, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/676972016-10-26T06:29:22Z2016-10-26T06:29:22ZBusiness Briefing: being funny with customers<figure><img src="https://images.theconversation.com/files/143244/original/image-20161026-11275-vb66y0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Joking around with customers can improve satisfaction, as long as its the right jokes!</span> <span class="attribution"><span class="source">Zeetz Jones/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>As part of a research team, Christine Mathies from the University of New South Wales Business School stood outside a suburban retailer (who had volunteered to be part of the study) and quizzed customers who came out on their experience and satisfaction. They knew one of the employees was a bit of a joker, and were trying to see whether humour made a difference to customers.</p>
<p>It turns out humour can be useful in increasing customer satisfaction, even if your customer is a grouch. But it’s only certain types of humour, Mathies says. If an employer jokingly brags or jokes about something else like the weather, that has better outcomes than making self-deprecating jokes. </p>
<p>In separate research, they also found humour can be good for the employees themselves, as it relieves tension in difficult situations and the stress of constant interaction with customers. </p>
<p>However, when it comes to service failures, they discovered employees should steer clear of using any jokes when offering apologies or compensation, as it comes across as inappropriate.</p><img src="https://counter.theconversation.com/content/67697/count.gif" alt="The Conversation" width="1" height="1" />
New research shows that humour can relieve tension for employees and increase customer satisfaction, just don't make jokes when it comes to offering apologies!Jenni Henderson, Section Editor: Business + EconomyLucy Majstorovic, Editorial Intern, The ConversationLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/591322016-05-27T13:14:04Z2016-05-27T13:14:04ZWhat customer service disasters tell us about the companies in the firing line<figure><img src="https://images.theconversation.com/files/124301/original/image-20160527-874-a8oe7g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Get ready to wow them...</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/s/customer+angry/search.html?page=3&thumb_size=mosaic&inline=204124255">CREATISTA/Shutterstock</a></span></figcaption></figure><p>You can’t put a price on good customer service. But it turns out you can when things go bad. <a href="http://www.telegraph.co.uk/business/2016/04/26/100000-scottishpower-customers-in-line-for-compensation-after-18/">Scottish Power was fined £18m last month</a> by energy regulator Ofgem after the company received more than 1m complaints from June 2013 to December 2015. It works out at about 1,500 complaints every working day for 18 months. No wonder it was lambasted for failing to provide even a basic level of service and failing to treat customers fairly over a sustained period of time.</p>
<p>Scottish Power, which blamed its turbulent 18 months on IT issues and bedding in a new system, is not the first to take a hit from letting down we poor consumers. In 2015, mobile network firm EE <a href="https://www.theguardian.com/business/2015/jul/03/ee-fined-1m-ofcom-misleading-customers">was fined £1m</a> for failing to comply with rules on handling customer complaints. In the wake of the 2008 crisis, the financial regulator found that banks kept customers waiting for months, standard letters were sent and staff were poorly trained, perhaps most tellingly they <a href="http://www.thisismoney.co.uk/money/saving/article-1693202/Banks-face-massive-fines-for-poor-service.html">failed to learn from previous complaints</a>. </p>
<p>Surveys suggest that customers who receive poor service <a href="http://www.unitiv.com/intelligent-help-desk-blog/bid/64134/New-Survey-Shows-Unhappy-Customers-Spread-the-Word">will provide negative word of mouth</a> and many will stop doing business with the company altogether. TalkTalk’s <a href="http://uk.businessinsider.com/talktalk-full-year-cyber-attack-bounced-back-2016-5">latest set of results</a> revealed a dramatic impact from the effects of a cyber-attack last year which prompted disgruntled customers to jump ship. </p>
<p>The age of social media has made it easier than ever for customers to quickly advertise poor service, but while reasonable customers will accept that things occasionally go wrong, they will still judge a company on how they handle the matter. This provides the biggest indication of the nature of the organisation in question.</p>
<h2>The rain in Spain</h2>
<p>Having worked in the travel industry both overseas and in the UK, I have dealt with many customers who believed they had a complaint. Take the woman in Mallorca who presented me with a brochure and demanded a refund because it said: “come to sunny Mallorca” and yet it had rained non-stop since she got there.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/124305/original/image-20160527-900-470jue.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/124305/original/image-20160527-900-470jue.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124305/original/image-20160527-900-470jue.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124305/original/image-20160527-900-470jue.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124305/original/image-20160527-900-470jue.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124305/original/image-20160527-900-470jue.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124305/original/image-20160527-900-470jue.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124305/original/image-20160527-900-470jue.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Not as advertised.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/vinothchandar/8124440079/in/photolist-dnVSZ6-5pCwZL-5uv2wJ-d2X7XC-fS167L-aj3R7R-fMiX31-8kikup-aQohcz-9iHvgw-ftU5Vb-qmSwmy-p4AHuL-9iHvAJ-czUtrj-7w37p2-dpWF5B-5BAUzD-nacm8f-dgSViM-eWdiyu-eVtuDs-fdYk6x-9UUcph-eTU4Y1-71z2N7-Bcj3AG-bpJtWB-fpFVmJ-9c9Bnk-8jCtfH-9W5zwP-6o3zq-8nN41N-DABN4z-6bbpH-9iEnW8-DJT1MB-cfyQQh-cD38NQ-Fb7t72-EtgbMi-atVMLL-7nJYDL-frzRkV-9iEnBR-9iHvRJ-BRcSGW-9URnoz-9iHuP3">Vinoth Chandar/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>There were however times when something did go genuinely wrong. These customers wanted to be listened to above all else and know that someone was trying to help them. In response to the <a href="https://www.instituteofcustomerservice.com/research-insight/uk-customer-satisfaction-index">semi-annual index of customer service</a> provided by the Institute of Customer Service, chief executive Jo Causon said: “Challenger brands are gaining on their larger competitors by offering straightforward, personal, seamless and quick service experience.”</p>
<p>Providing quick and straightforward service in today’s age of technology has to be a given. The woman in Mallorca wouldn’t approach me with a brochure today, she would simply tweet a picture of the rain and provide an instant bad review on any number of travel websites.</p>
<p>There is a message here for all organisations when things go wrong. Don’t see complaints as something negative. Mishaps are in fact a rare chance to provide exceptional service at a time when customers are becoming ever more distanced from the companies they buy from. The trick these days is to “wow” your customers so much so that they forget that you hurt them, and turn them into what management expert <a href="http://www.toolshero.com/toolsheroes/ken-blanchard/">Ken Blanchard </a> calls “raving fans”. Better still don’t wait until things go badly wrong before you “wow” your customers. </p>
<h2>Light and shade</h2>
<p>US sunglass manufacturer Oakley have provided me with a great example of this. I had a pair of shades for more than two years which eventually cracked and I sent them off to be repaired. Oakley didn’t just repair them they sent me a new pair free of charge because, as they said, even after two years the crack shouldn’t have appeared. So “wowed” was I that to this day I am a raving fan of Oakley sunglasses. I might even mention them in an article I write about how best to manage customer service issues.</p>
<figure class="align-center zoomable">
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<span class="caption">Hello?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/leejordan/2374175175/in/photolist-4BNgyK-nPSjYs-9rJ4G2-dAZCEc-j6eppP-dB63YU-fRReVL-Gzf3pK-esk4P5-2fvtbU-skwtKd-egbDZR-eghp6y-5ZxekZ-poPvMa-eeNEbe-5j5qeT-xW2qK-fCgU7n-hqLs7z-bxJdcY-GfY5sm-fCi8pk-4tpXGz-fCgNVB-7i4XAx-fCykVm-oa87J-9kyWvj-dAZBQ4-FKH4pX-bNBdin-6Q5qkc-fCi6hV-dAZAXT-2pwEE-j2KLC4-fCibHp-oa87W-7nmL5L-6oy2rJ-fCi45D-5uMkSz-ekiwaQ-7JYH2a-a94tRX-5LA3Y4-aUWw56-eghpuC-aUWovB">Lee Jordan/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
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<p>Sainsbury’s supermarket managed something similar when a three year old wrote (with some help from her parents) to ask why tiger bread was so called when it <a href="https://www.helpscout.net/10-customer-service-stories/">looked more like a giraffe</a>). Sainsbury’s wrote back to the girl and such is the power of social media that millions were exposed to the great service and caring nature on display after her mother posted the letter on a blog.</p>
<p>So when presented with the chance to “wow” a customer or ignore them, what does the response tell us about the company? For many of them it is indeed easier to ignore and hope that people are too busy to notice. This didn’t quite work for Scottish Power though. In his work on culture, <a href="http://www.managementstudyguide.com/edgar-schein-model.htm">Edgar Schein referred to</a> “espoused values” (those displayed on a corporate website for example) and “values in action” (those lived, breathed and displayed by employees). </p>
<p>This has echoes of <a href="http://www.brainyquote.com/quotes/quotes/b/benjaminfr103731.html">Benjamin Franklin’s famous quote</a>: “Well done is better than well said”. <a href="https://www.scottishpower.co.uk/customer-services/complaints/">Scottish Power</a>, <a href="http://ee.co.uk/our-company/about-ee/our-vision">EE</a> and other large businesses have sections of their websites which promote in glowing terms their commitment to the customer, but it is the actions or reaction of a company which says so much more.</p><img src="https://counter.theconversation.com/content/59132/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Greenan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While some companies get fined £18m, others have learned to “wow” the punters when things go wrong.Peter Greenan, Senior Lecturer and CMI Programme Director, University of HuddersfieldLicensed as Creative Commons – attribution, no derivatives.