The impact of conformity on customer service

Have you ever wondered why a company tends to have consistent service levels amongst all its employees? Sure, there are exceptions here and there, but a company known for poor service tends to be consistent. A company known for great service tends to be consistent too.

Why is that? One explanation could be the pressures of social confirmity. Employees may give in to social pressure to behave the same way other employees do. This means that if the culture supports poor service, otherwise good employees may lower their own performance rather than feel ostricized by their co-workers.

I've discovered some interesting psychological studies on conformity while conducting research for my book, The Unnatural Act of Customer Service. Here are a couple of short and entertaining YouTube videos that highlight some of the results:

This one recreates the famous Asch conformity experiment:

Can't see the video? Click here.

This one is a funny bit from an old Candid Camera episode:

Can't see the video? Click here.

So, what do you think? Can a good customer service employee turn bad in the wrong environment?

How Netflix should have handled their price increase

Netflix alienated a lot of customers when they announced a 60% price increase on July 12. They had previously offered a plan where customers could stream unlimited movies online and rent unlimited DVDs one at a time by mail for $9.99 per month. Starting in September, Netflix will offer a DVD-only plan for $7.99/mo and an online only plan for $7.99.

Subscribers found out via email but the story soon took on a life of its own online. Netflix was flooded with angry Tweets, Facebook posts, and blog posts. Several news outlets conducted informal polls of Netflix subscribers and reported that as many as 70% were thinking of cancelling or reducing their subscription. Investors haven't been too happy either as Netflix's stock price has dropped more than 15%.

Now that I have had a few weeks to calm down and weigh my options, I can see why Netflix raised their prices. I can also think of three things they should have done that they didn't. 

Be honest and open.
It's important to be honest and open when you make a business decision that will adversely impact your customers. The economics behind the Netflix price increase actually make sense. so why not come clean? They chose to ignore the issue entirely by essentially telling customers, "Hey - here are your new prices." I still don't think many customers would be happy with a 60% price increase, but they might have been more forgiving if they knew why. (There's a great overview on Yahoo that explains the business drivers behind this decision.)

Share something positive.
Netflix should have timed their price increase around some exciting news, like an agreement to add more movies that are available for streaming online. Their strategy includes moving more customers online since streaming movies is much cheaper than shipping DVDs. Making more titles available online would let customers know where some of that price increase was going and get more customers to use the streaming service. A bit of misdirection? Yes, but we customers tend to focus on what you put in front of us. All I have to look at right now is an email says I'm have to pay 60% more for the same service.

Emphasize your strengths.
Netflix missed a chance to emphasize that they are still the best deal in town. Their announcement caused many customers like me to shop for alternatives, but the alternatives either cost more money or offer a much smaller selection. Why not point this out? Heck - why not save us the time and put a nice little chart together that illustrates how Netflix offers the best selection, service, and price even after a 60% price increase? Everyone likes to think they are getting a good deal and Netflix should have made this clearer in their announcement.

Assuming the price increase was a foregone conclusion, what else could Netflix have done better?

Good, bad, and ugly ways to handle the same problem

My wife, Sally, and I recently returned from a tour of several of California's wine regions. We are huge wine enthusiasts (check out our wine blog!) and used the trip as an excuse to stock up on wine.

Most of our wine was delivered without a hitch but we did experience a problem with orders from three wineries. Each winery chose to handle the problem in a different way. Only one succeeded.

The experience proves that mistakes can and will happen, but it's how you solve them that counts.

The Good - Van Ruiten Family Vineyards
I called the winery to check on our order after a shipment didn't arrive as expected. The person I spoke with explained that the order was delayed because it took extra time to locate two bottles that were in limited supply. She was very apologetic for not contacting us about the delay and promised to get our shipment out immediately. Just as promised, our wine arrived a few days later. The winery included an extra bottle of their delicious Chardonnay along with a handwritten note thanking us for our patience. Just like that, disappointment was turned into delight.

The Bad - Anglim Winery
Like Van Ruiten, I called the winery to check on a shipment that hadn't arrived. I was told that the wine hadn't been shipped yet because it had been hot and there was concern that the heat would hurt the wine. The definition of poor service is failing to meet expectations. I would have been grateful if I had received a call or email asking if it was okay to delay shipment so the wine wouldn't get too hot. Instead, I was disappointed that I had to wait and then had to call. No apology was offered which disappointed me even more. Fortunately, the wine was finally delivered about a week overdue.

The Ugly - Heitz Cellars
I called Heitz after I received a shipment with only one of the four bottles I had ordered. The person agreed to send the missing bottles but a week went by and they hadn't arrived. I called a second time and was told the missing wine had been shipped a couple of days before and would be delivered the next day. A delivery was made the following day, but the package contained only one of the three missing bottles. I called a third time and calmly explained the situation to someone who clearly seemed annoyed. Finally, she agreed to overnight the missing bottles to me. (We'll see if I actually receive them.)

Anyone can make a mistake, but here are all the errors that Heitz made after the initial problem.

• They waited five days to ship the missing wine. It should have been shipped the same day.
• I had to call a second time when the wine still hadn't arrived a week after my first call.
• The second shipment didn't contain all of the missing bottles.
• I had to call a third time to check the status of my missing wine.
• The person I spoke with on the third call was rude.

Van Ruiten provided a great example of how to strengthen customer loyalty by handling a problem with grace and style. Anglim exhibited a lack of caring that hurt their chances of a repeat order. Heitz demonstrated a mind boggling level of incompetency that is almost certainly driving up costs and losing future business.

Frequent software updates = poor customer experience

It's getting harder and harder to imagine a world without all the cool apps and software programs that help run our daily lives. At the same time, I wonder if software companies are paying attention to the frustrating consumer experience of the app update?

Here's an example.

I sat down for a quick lunch the other day and fired up my iPad to read the Wall Street Journal. The current edition didn't open. Apparently, I needed to update the Wall Street Journal app on my iPad before I could read the paper. Didn't I just do that a few weeks ago?

Apple's App Store required me to login and then acknowledge an updated user agreement before continuing. I like to read what I sign so I know what I'm getting into, but I noticed the agreement on the screen said "Page 1 of 41".

Sheesh - 41 pages? Really? Call off the lawyers, Apple. It's not like I'm buying a house or setting up ponzi scheme. I just want to download an update for an app.

I just clicked "Agree". Hopefully, there wasn't a murder confession or a promise to pay Apple $1 million buried in that voluminous user agreement. 

Finally, the Wall Street Journal app started to update. Slowly. It finished up just as I ate the last bite of my lunch.

Here's what I wish software companies like Apple would consider.

• It's aggravating when you can't use your software immediately because of a required update.
• The amount of legalese in these user agreements is ridiculous. Seriously, do your lawyers get paid by the word? Trim it down and make them simple.
• The annoyance factor has exponentially multiplied as more and more companies launch frequent updates with horrendously long user agreements. 

Ignoring little red flags is a big red flag

Someone who is passionate about customer service should always be on the lookout for red flags in their organization. Here’s a red flag from a hotel that I recently stayed in:

This room service basket sat in the hall for two days.

Specifically, this is a room service basket that sat in the hallway for two days. It was a little surprising that it sat there for that long, but it didn’t do a lot to diminish the quality of my stay. 

However, the more I thought about it, the more I realized it was one of many small signs of poor service. A front desk agent breached etiquette by verbally announcing my room number when she checked me in. The bellman passed me in the hall several times without making eye contact or saying hello. The housekeeper made up my bed with a duvet that had a stain on it.

In the big picture, all of these red flags combined told me the hotel's staff wasn't passionate about service. And to think, I probably wouldn't have thought about all of this if I didn't have to pass by that basket everytime I left my hotel room.