Millennials are a generation that values experiences over products. According to research from Eventbrite, nearly one in four millennials are more likely to pay money for an experience than a product. For brands in today’s market, this changes the game entirely. This is especially true for brands in the service industry as customer service is becoming more integral to delivering a premium experience.
In order to adapt, brands are embracing new models for measuring and improving service delivery. One business that has started to rethink its approach to service in order to enhance the experience is Hand and Stone, a spa and related services brand.
According to Todd Leff, franchise Chief Executive Officer of Hand and Stone Massage and Facial Spas, technology has been a driving factor of this evolution. However, that is only a piece of the puzzle. The real difference for brands in the service industry is the ability to develop and maintain a personal relationship with a customer the second they walk through the door.
“Our philosophy is Welcome, Connect, Empower,” said Leff. “We train staff to offer their name in the greeting and address the customer by their name. That one simple step, that is often overlooked in today’s rushed society, has lead to industry leading scores when we measure how welcomed and relaxed customers feel when they come to Hand and Stone Spa.”
In order to learn more about the evolutions in the service industry, I interviewed Michele Vance, Vice President of Customer Engagement Service Management Group.
Jeff Fromm: What does today’s modern consumer expect in a service experience?
Michele Vance: Ability to research down to the individual service provider (i.e. massage therapist, hair stylist, technician) based on reviews, with an Uber-ized expectation of frictionless scheduling, followed by an interaction where their preferences are remembered and followed. That doesn’t mean that the basics no longer matter. Making a personal connection with a consumer, even if it’s just the simple act of greeting and thanking them, still goes a long way. Despite appearing in nearly every brand’s training program, it doesn’t happen with consistency. And it’s amazing how often ‘friendliness’ becomes a key driver in our service profit chain.
According to the 2015 Economist Intelligence Unit, an overwhelming majority of consumers indicate a willingness to pay more for a better experience. However, only 5% of global executives claim to offer a seamless experience across all channels.
Fromm: What’s the price of admission for a service brand?
Vance: At minimum, establish a customer feedback loop so you can track and monitor solicited and unsolicited feedback from customers at individual locations and within each of your channels. This is important, because it separates successful brands from the rest. According to The Huffington Post, 70% of companies that deliver best-in-class customer experiences rely on customer feedback, compared to just 50% of all companies and 29% for customer experience laggards.
It’s also key to take that next step and turn feedback into specific behaviors that are correlated to financial metrics. This gives your organization a clear and direct connection between the customer experience and financial growth.
Finally, leveraging real-time access to customer feedback, particularly when it’s app-based, will allow managers to actively coach and reinforce behaviors that are consistent with customer expectations. This ensures your brand promise is reliably executed across the entire organization, which is something only 16% of marketers surveyed by the CMO Council feel their customer experience consistently supports.
According to Todd Leff, measurement of consumer feedback is imperative to his business model. In 2012, the spa implemented a voice of the customer program where customers shifted from a contract-based membership to a month-by-month membership. This helped Leff and his team measure any changes in attrition rates.
“The tool allowed our spas to see in real time what customers felt about the experience and what were the most important variables related to retaining members for the long term,” Leff said. “The system was so well received that spas starting using the scores as a basis for employee compensation and changing staff behavior. The result – our attrition levels declined across our 300 locations nationwide even though members were no longer bound to long term contracts”
Fromm: What will create high levels of engagement/loyalty?
Vance: One service company experienced a 10-point increase in their overall satisfaction scores when customers mentioned their service provider by name—proving relationships still matter! Coaching your front-line staff to develop personal connections with their customers will drive up your loyalty metrics and support your company’s path toward better financials.
According to Forrester, only 22% of companies share customer experience metrics with every employee across an organization thus many employees are flying blind. Without access to candid feedback, the employees who would benefit from this data don’t always know what or how to improve. The good news is it’s relatively easy to overcome this. Just make a concerted effort to bring customer experience metrics to the forefront of your corporate communications.
Fromm: What will hurt loyalty?
Vance: Our research shows that one of the biggest reasons customers do not return to a service provider is due to unwanted sales pressure. Of those customers who reported experiencing this pressure, 56% said it was focused on the service price and 34% cited repeated upsell attempts. However, we also know that when knowledgeable service providers, who can confidently explain the reason for their recommendations, present additional services the provider sees increased revenue as well as higher marks for overall satisfaction, likelihood to return, and likelihood to recommend.
Fromm: What differences—if any—do you see with millennial consumers?
Vance: Countless studies reference Millennials’ lack of loyalty to specific brands, so service providers can no longer count on a bank of goodwill from previous positive experiences. In fact, even those Millennials who say they love a brand won’t hesitate to publicly shame them via social media after a bad experience. And if that bad experience was with your brand, you better have a way to capture the feedback and respond quickly. According to CGS, 88% of consumers are less likely to buy from a company that leaves a social media complaint unanswered.
So the simple formula is to actively solicit and listen to customer feedback, provide verbatim results to everyone in the organization, and be prepared to take action—sometimes publicly—when they respond. This will help you outperform your competition and, according to research from the Temkin Group, make customers 5.2 times more likely to purchase from you.
This article was written by Jeff Fromm from Forbes and was legally licensed through the NewsCred publisher network.