How Care Became the New Commerce

Kellogg School faculty show how marketers can build relationships that elevate customer experience to competitive advantage

By Glenn JeffersMarch 6, 2018

The traditional workday is dead. For many companies, customers are a constant presence.

The shift in how products and services are distributed — from brick-and-mortar stores to e-commerce websites to m-commerce over smartphones — has transformed buying and selling into a global, 24-hour, 365-day experience, fueled by impulse and convenience. It’s a paradigm that has become the norm as companies leverage these technological advances to drive the production and delivery of goods and services closer to the point of demand.

As Robert Wolcott, management, has said of the shift: “It unlocks resources to satisfy consumer wants and needs more quickly than the old solution, and brings many more people and resources to bear on the problem.”

While that “cut-out-the-middleman” approach seems lucrative, it also imposes challenges: when a customer calls about a mobile app purchase at 2 a.m., she expects immediate service.

“Online channels are becoming the first port of call,” says Mohan Sawhney, the McCormick Foundation Chair in Technology at the Kellogg School of Management. “We’ve been seeing a progressive evolution of digital and social channels through which customers increasingly have been researching and buying products and services as well as interacting with companies for care and support.”

The future of customer engagement means more than just having a responsive social media presence. It means being proactive with customers before, during, and after their purchases. As online customer communities develop across platforms, companies must find ways to be continually interactive.

“You need a unified presence,” says Sawhney. “You’ve got 26 social media channels, and it’s becoming challenging for companies to make sure they have a single platform for customer engagement so that the memory of the customer interaction is all in one place — a single version of the truth, without which you get an uncoordinated customer experience.”

A poor customer experience can immediately affect a company’s bottom line.

According to a 2015 report by the consultancy firm ThinkJar Research, 66 percent of consumers who switched brands did so because of poor service. Companies understand this: a Deloitte survey found that 62 percent of companies regard their customer contact centers as vital competitive differentiators and look to turn that competitive edge into market share.

Finding the Right Platform

To do that, a company’s first step is to build a customer experience management (CXM) platform, a system that connects a customer’s interactions across departments (sales, marketing, commerce) and channels (social media sites, email, and any other platforms). This omni-channel system allows the company to track all aspects of a customer’s journey and engagement with the firm’s products, including purchases and comments made online. The platform then provides an individualized ID that lets the company customize future experiences.

That personalization is crucial to customer engagement, says Sawnhey. It provides a unique experience for customers and gives the company that singular “version of the truth” that can help improve products and services.

CXMs also allow companies to respond almost instantly and to provide self-service tools for customers who don’t need a representative but just, for example, a PDF of an owner’s manual. Research firm Gartner predicts that by 2020, customers will manage 85 percent of their relationships to companies without human aid.

“If a human being is not needed,” says Sawhney, “people don’t want to talk.”

How Big Brands Keep in Touch

While the CXM platform works for smaller companies, larger brands must manage millions of customer engagements daily. AT&T and other service providers can find themselves responding to questions about net neutrality. General Motors may have to handle a vehicle recall. Here, too, success means being proactive and anticipating why customers might reach out, says Derek D. Rucker, the Sandy & Morton Goldman Professor of Entrepreneurial Studies in Marketing. “You have a lot of brands that have developed social media teams whose job is to monitor information and be ready to respond to consumer excitement, enthusiasm, and disappointment,” he says.

Rucker cites Target and Gatorade as brands with dedicated social media teams, using social media management programs to help search across platforms for conversations about their products. Other brands create their own sites or build public pages to facilitate conversations. Rucker considers this a necessity if they are to have any hope of responding quickly to complaints.

“Large brands have it tougher,” he says. “They have to manage those online efforts and those engagement efforts along with everything else they do. A small brand could focus just on that piece of the equation when it comes to advertising and brand strategy.”

Because of their greater visibility, bigger organizations are also likely to be more susceptible to reputational damage if those responses are not caught and quickly processed. “There’s a larger incentive for a brand to get hold of the situation before it goes out of control,” says Rucker, “because everything is visible online.”

Still, strategic rules are needed for responding. Large brands lack the bandwidth to respond to every customer. One hotel chain limits responses to three interactions; if the customer is still dissatisfied after these attempts, the hotel ends the conversation. In Rucker’s view, “They feel like ‘if we can’t appease the consumer after three tries, then we’ve done our best.’”

Making Brands Attractive to Customers

Being proactive is not limited to how companies address customer issues. It also means understanding how brands stir passions within those customers, says Rima Touré-Tillery, marketing, whose research focuses on customer behavior.

Products and services should motivate customers by being approachable and relatable while offering a seamless experience. Touré-Tillery cites the laid-back, informal policies at Southwest Airlines or the comforting baritone of Allstate insurance pitchman Dennis Haysbert. This kind of approachability focuses on “making it easier for people to accept your brand,” she says. Other companies invest
in the customer experience: Amazon provides various channels for customer access, while Zappos doesn’t time its service calls, giving its representatives ample opportunity to resolve issues.

The company’s Twitter handle has grown to some 2.2 million followers, gaining more than 300,000 followers last January after its send-up of an announcement that McDonald’s would stop using frozen meat in some of its hamburgers. The handle has earned a reputation for its sassy retorts, especially when aimed at competitors. Consumers who feel like they fit that persona will gravitate to that chain. “People tend to think of brands in terms of human characteristics,” says Touré-Tillery. “If your target segment can relate to that characteristic, then it makes them want to associate with your brand.”

These front-of-the-house tweaks “will enable companies to give customers an almost spa-like experience,” says Sawhney, one where they feel comfortable and excited about buying with little worry about potential problems.

“Care is the new commerce,” he says.