Know your customer: How to use empathy as a business strategy

Bruce Rosengarten has been responsible for defining and delivering customer service experiences for some of the biggest brands in the world.

The general manager of marketing for Caltex Australia is a former president of Weight Watchers Asia-Pacific, global vice-president of retail marketing for Shell, managing director of World 4 Kids, and a general manager with Myer and Grace Bros department stores.

Across these different sectors, Rosengarten says the customer service ethos, and how companies develop strategies around that ethos, is “very similar”.

Customer service leaders, whatever the sector or size of the business, have one thing in common: “They are professional empathisers.”

“To make an impact on the customer, to create a positive difference and provide a better choice than your competition, you need to understand the customers in your market – not just your customers, all of them,” Rosengarten says.

“When you understand what’s happening in the customer’s world, when you can step back and see things from their perspective, you can have real impact.”

How you gain this knowledge can be as sophisticated (and expensive) as customer insight metrics, data mining and market research, or as straightforward (and not so expensive) as talking to customers – current, prospective and those that got away.

The customer journey

Rosengarten, who wrote the business book Passionate Leadership, talks about the “customer journey” as an indicator of customer service excellence.

“How easy is it for customers to buy what they want from you? Have you done everything you can to make the journey as easy as possible? Are you delivering the service that the customer expects? The more difficult it is to do business with you, the more likely a customer will change supplier,” he says.

And if the customer experience does break down, that should be taken as an opportunity to revive it. Meet their expectations, Rosengarten says, even when they no longer have any.

“Whether it’s a bricks-and-mortar business or an online business, it’s exactly the same: when something doesn’t go right with the customer, you correct it,” he says.

“The recovery process is an important part of customer service excellence. How well you can recover, particularly when the complaint is around emotional issues, is critical. It’s one thing to be dealing with facts, but how do you respond to emotion? To what degree to do you display not just competency, but empathy?”

One of the advantages that smaller businesses have over their much larger competitors is that they are much closer to their customers and the entrepreneur’s customer service ethos can be directly imparted to staff.

That relationship with customers can fuel growth, but growing businesses can become disconnected from their customers – particularly as more complex systems and processes are introduced, and the number of employees per sale grows.

The people a company recruits and the training it provides are critical. It’s also up to the leaders of a business to champion customer service excellence. Ultimately, Rosengarten says, customer service has to be a tangible part of the business.

“It’s important to have the passion, but it’s not enough to simply say ‘we believe in customer service’,” he says.

“You have to be able to define what customer service in your organisation looks like, then you must deliver it and continually track the customer journey,” he says.

The bottom line

Customer service is sometimes seen as a soft or imprecise discipline; a business cosmetic rather than a business essential. But research consistently shows customer service drives growth, provides brand differentiation and can make or break a business in markets characterised by commoditised products and services.

A report from US technology giant Oracle, entitled ‘Why Customer Satisfaction is no Longer Good Enough’, found that 81% of European consumers surveyed would pay more for superior customer service. Research for business software provider Mitel last year found 74% of UK consumers would change supplier over a poor customer experience.

The 2012 American Express Global Customer Service Barometer found Australians’ perception of customer service is bleak. It found 65% of consumers had not made an intended purchase in the previous 12 months due to poor customer service; 40% felt their expectations as consumers were not met; and 38% believed companies don’t care or take their customers’ business for granted.

If anything, that’s a gap to be filled for companies prepared to go the extra mile.

Think of debtor and invoice finance – often the last roll of the dice for businesses teetering on the edge – and customer service may not be the first phrase that comes to mind. But Peter Langham, the chief executive of Scottish Pacific Debtor Finance, which services the SME sector, is an unlikely champion of customer service excellence.

Langham believes in customer service and he makes sure that his managers and staff do too. A service-oriented culture means that staff frequently make themselves available after-hours or on weekends to approve funding when cashflow-strapped clients need quick decisions.

“For us, given the nature of what we do and who we do it for, we have to stop ourselves thinking that all we do is supply money,” Langham says.

“We actually change people’s lives. How you handle that decision isn’t just about the numbers, there’s a very personal aspect as well. The decisions we make aren’t just business decisions, they affect people and families.”

Like Bruce Rosengarten, Langham believes empathy is essential when dealing with clients. Starting his own debtor finance business in Perth in 1998, which he merged with Scottish Pacific in 2007, gave him the perspective that informs his commitment to customer service.

“The defining journey for me was when I started my own business and I realised how lonely it can be as a business owner,” says Langham, who is now based in Sydney.

But empathy does not mean suspending the fundamentals of business.

“If we can’t [do business], we explain why, and we understand their reactions. Sometimes we have to make decisions the clients are not happy with and they say ‘that wasn’t good customer service’, but even though we believe the customer always comes first that doesn’t mean we always say yes,” Langham says.

What it does mean is staff will often work with unsuccessful applicants to seek alternative sources of finance or strategies for taking the business forward.

A regular mantra at Scottish Pacific is Langham telling managers and staff: “Remember why we exist; it’s for the customer.”

Scottish Pacific uses the Net Promoter Score to measure customer satisfaction.

“Customer service is not just a motherhood statement for us; when you measure it, you become accountable,” Langham says.