February 20th, 2016


Customer Service, new style ...

As readers keeping score on this stuff will know, I've reviewed a couple of Jay Baer's books before (here and here), so when I got wind of his new one, Hug Your Haters: How to Embrace Complaints and Keep Your Customers, I shot off a note to the good folks at Portfolio/Penguin and requested a review copy. This is interesting in that it's a very narrow-focus book – as you might guess, about customer service – based on a research project that Jay had initiated with Edison Research, which Tom Webster (of that firm) notes in his Foreword as being based on two questions:
• How has the proliferation of social media, review sites, and other online fora changed consumer expectations of what “good customer service” really means?
• When interactions between brands and humans are played out on a public stage, how must brands “perform” in order to satisfy not only the customer but the customer's audience?
Frankly, the answers to these ended up going in a direction that Jay had not expected, with the results boiling down to two closely linked realities: “Answering complaints increases customer advocacy across all customer service channels. … Conversely, not answering complaints decreases customer advocacy across all customer service channels.”, which then leads to “The Hug Your Haters success equation”: Answer every complaint, in every channel, every time. Simple, right? Well, off the bat he notes “It takes cultural alignment, resource allocation, speed, a thick skin, and an unwavering belief that complaints are an opportunity.”

The study involved was not huge, but was large enough to be “a statistically valid cross-section of ages, incomes, racial makeups, and technology aptitudes”, I note this because the material in the book tends to circle back to the same set of example companies, ones that I suspect were the topic of the response research. These range from small operations to major internationals, so there's certainly a range of scope involved (one gal, from a 13-unit pizza chain handling all the interactions, vs. whole departments in big companies).

I also kept finding bits to stick bookmarks in for here (a dozen or more), so a lot of this may be quoting from the text. This also has a lot of humor involved, and I found myself literally “laughing out loud” at a few of them (and I was “live tweeting” parts of this as I was reading). One of these was the story about Dave Kerpen (another author I've reviewed previously), who personally responds to every one-star review he gets on Amazon, apologizes, and “offers to refund money spent, plus money for the pain and suffering of having read the book” – as a reader of a lot of books, I've certainly encountered reads that would have qualified for the extra refund!

One of the key points as to why this book is important is that, for many companies, “a 5 percent increase in customer retention can boost profits by 25 to 85 percent”, and while most organizations have a pretty good grasp on how much acquiring new customers costs, few have a solid idea of how many are becoming disaffected and ending up as ex-customers. In a move similar to Kerpen's strategy, the gal from the pizza chain regularly provides gift certificates to individuals leaving complaints on sites like Yelp. This is elaborated here:
So few companies hug their haters today that those that make this commitment are almost automatically differentiated and noteworthy when compared to their competitors. … In today's world, meaningful differences between businesses are rarely rooted in price or product, but instead in customer experience.
“Haters” are defined in two main categories, “offstage haters” who complain in private, and “onstage haters” who complain in public, with the former connecting via email and phone (and possibly letter), with the latter utilizing social media, review sites, etc. (another “LOL” moment came in the suggestion involving something of a “complaint cafe” which would feature old-style desk phones that would provide one, “trembling with aggrieved frustration, the nearly extinct sensation of slamming a real handset into its cradle”). There's an age trend here, with older consumers tending to use “offstage” approaches. Interestingly, the more tech one has the more likely one is going to be a “frequent complainer” – 84% of which have a smartphone, and 94% have a Facebook account (and 43% use it daily). Of course, this raises the somewhat existential issue of what is a “complaint” … something that one is going to take the time to craft an e-mail complaint about might be a lot more serious than a bit of snark tossed off on Twitter.

Another concept introduced here is the “Hatrix” (which I noted could be construed as a “Matrix” knock-off, good performances in hockey, or some more-hostile relative of Harry Potter character Bellatrix … depending on how you wanted to pronounce it), an infographic of which is supposedly available for download on the book's companion site (http://HugYourHaters.com), although I wasn't able to find it there. This deals primarily with response time and expectation on different channels … where nearly 90% of complaints aired via email or phone expected a response, only around 50% of on-line complainers expected a response, however of those who did, nearly 40% expected that response within 60 minutes … versus the 63% of responses that come within 24 hours. There's a ton of data that's been teased out of these surveys, way too varied to even touch on here, but I guess all that's laid out in that infographic.

An additional idea that's put forth here is that “customer service is a spectator sport” … as all those “on-stage” complaints are out in public, and your company's response is being seen by way more than the individual making the complaint. One of the dangers in this game is the big “meh” category, those customers, ex-customers, or potential customers who don't care enough to get involved, but are interested enough to pay attention to how you're treating the ones who are complaining. This is complicated because of costs involved:
      Handling a customer interaction in social media costs less than one dollar, on average, compared to two and a half to five dollars for an e-mail interaction, and more than six dollars to provide telephone customer service.
      Every time a customer wants to interact with your business and selects an onstage channel instead of an offstage channel, the stakes are raised because the interaction is public. That's the challenge. But if you save five dollars every time a customer chooses to interact publicly, isn't it worth it to handle your business out I the open?
Again, Hug Your Haters is chock full of stories about good and bad (and really bad) customer service … but, generally speaking, each needs a lot more backstory than makes sense to include in this review. However, there was another “LOL” moment here that is related to one of these stories, so I'll sketch it out to you. In this instance, a florist provided really crappy product for a special event. The recipient complained with a detailed (albeit not hostile) email, to which the florist responded a rather curt “Don't ever contact us again.”, and when the customer escalated all this info up into social media channels, the florist began making threatening phone calls. The author notes: “Yes, you should answer customer complaints, but, for the record, stalking customers and threatening them with bodily harm is not part of the Hug Your Haters success formula.” (!) This is part of the “5 Obstacles” section which provides ways of looking at one's corporate culture and customer service team to make sure things work smoothly (and not counter-productively). Another “wake up” factoid that's provided here is that business spends WAY more on “getting customers” than “keeping customers”, with $500 billion spent globally on marketing, versus only $9 billion on customer service. Often companies think they're doing “customer service” but are actually doing “marketing research” … the author notes a post-stay survey by a hotel in Las Vegas (which he got into trying to complain about something), which involved 50+ pages of questions, with only a comment field at the very end to actually complain

Now, regular readers of these reviews will know that I'm not a big fan of mnemonic acronyms, but Jay introduces a couple here, one for dealing with offstage haters, and one for onstage haters. First there is “HOURS” for the offstage haters, which is derived from “Be Human, Use One Channel, Unify Your Data, and Resolve the Issue with Speed”, then, for the onstage haters, “FEARS” which comes from Find All Mentions, Display Empathy, Answer Publicly, Reply Only Once, Switch Channels”. I'm not sure these would help me remember this, but “your mileage may vary”. He has a chapter based on each of these, with more details involved.

Finally, there's a thing in the Afterword that I thought I'd pass along … it's the “three most important things” the author learned while writing the book (and, again, the results of the research went off in a completely different direction than he'd anticipated when starting the project):
  1. Customer service is more complicated that ever, but the formula for success is knowable and achievable.
  2. Interacting with your customers, especially when they're upset, is 100 percent worth the effort.
  3. You need to answer every complaint, in every channel, every time.
I really appreciate books that do what Jay does in the appendix – putting in an “executive summary” of the book, hitting the high points in just 6-7 pages. It's always nice to be able to go back to something for a “refresher” and not have to start at the front!

As noted, Hug Your Haters is (at this writing) still not released (although it's only got about two weeks to go), so you can either go to the online big boys and pre-order it, or order it directly from the companion web site, where you'll get “bonuses” to sweeten the deal. I really enjoyed this book for the stories, for the humor, and for the fascinating info … if you have any interest in business (or human behavior), you'll probably get a lot out of it too.

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