The Demand Solutions Blog

Just before a 29-year-old friend of mine was due to stay in a fairly upscale hotel recently, the staff texted her before check-in and suggested that she join the loyalty program, hinting that it would be beneficial during her stay.   

She did, and the hotel upgraded her to a suite instead of a room and also gave her a card for a free glass of wine. My friend was thrilled and the hotel earned a customer for life. 

They accomplished that by making her feel like she and her hard-earned money were valued. My friend, who is a millennial and a journalist, isn’t making a lot of money now, but her income is likely to increase in the next few years. When she can afford that suite herself, she’s very likely to book at the same hotel. 

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Today, customers want an experience, not just a transaction. In fact, they expect it. They get it in their interactions with many other companies, e.g., Amazon, Uber or Lyft, Nordstrom, etc., so they expect it from you. Design and innovation company, Fjord Accenture refers to this new world where customer’s drive expectations for one business based on what they experience with others as “liquid expectations.”

If you ask virtually any multifamily employee or executive, they’ll tell you they care about the customer, want to provide rewarding customer experience and value customer satisfaction. Despite the lip service paid to customer experience, in our interviews with associates and residents, we still see many missteps in how multifamily operators are pursuing these aims.

For years, this was not a significant business issue. As the real estate ethos states, if you paid attention to location, location and location, and added a focus on managing costs you’d be profitable. Besides, your competitors weren’t providing a much better experience, so it was easy to think it made little difference. Today the tide is shifting and if your company does not pay attention you will miss out. Here are the most common and vital mistakes we see operators make when focusing on the customer experience.

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With all the attention on the recent series of airline service mishaps, we thought it would be a good idea to talk a bit about the difference between “customer service” and “customer experience.”

Harvard Business Review defines customer experience as “the sum of all interactions a customer has with a company.” This covers everything from when someone becomes initially aware of a company, through their purchase process, use of the product and re-purchase experience. The Disney Institute refers to “the critical moments—what we call touchpoints [their emphasis]—that create an organization’s overall customer experience.” It reminds me of Jan Carlzon’s seminal book Moments of Truth in which he defined his airline (SAS in the 1980s) not as a collection of airplanes, gates and routes, but rather as the sum of all of what he called “moments of truth” (hence the book title). These are the individual interactions between company associates and customers. In the digital age, we would add interactions through technology (for airlines, think of the online booking engine, airport check-in kiosks, auto-notification of delays and gates changes, etc.). As personal aside, this has always been a passion as I wrote my master’s thesis as a case study of the cultural change Carlzon led at SAS in the 1980s.

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Ask any group of multifamily operators what they worry about or what keeps them up at night and occupancy will be at the top of their lists. Every day an apartment sits empty represents a lost revenue opportunity that can never be recovered.

Being in an industry where demand is typically driven by things outside of their control, it is important for multifamily operators to focus on what they can control to keep occupancy rates optimized. Retaining residents is one of those areas of focus.

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A popular buzzword in the multifamily industry today is customer experience. It’s actually something many industries are talking about. Identifying and improving your customer experience is a proven way to increase loyalty, referrals and renewals and is the way to success.

But what does customer experience really mean, and how is it different than customer service – something we’ve focused on for many years? To answer that question, I sat down with my friend and colleague, Joanne Reps-Chapman from Effective Leadership Solutions, LLC, to discuss how the two are different, how they relate, and why it is important for multifamily operators to understand the difference.

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We know that a customer’s experience impacts their purchasing behavior.  In fact, in a 2014 study, Accenture found "two-thirds (64 percent) of consumers...said they switched providers in at least one industry due to poor customer service." The good news is, this doesn’t have to be the case as there are lots of ways we can impact the customer's experience in a positive way:

1. Ask customers for feedback. You might already offer surveys at your community, but consider opportunities you have to ask for 'real time' feedback during conversations with customers.  Create opportunities during daily interactions to ask customers about their experience, and if there is anything you can do to improve it.  Ensure you listen to their responses and then follow-through with any items where you can help.

2. Be honest and remember it's okay to say "I don't know." Many people feel that if they are asked a question they must have an exact and perfect answer in that moment.  It's perfectly acceptable to respond with "I don't know the answer, but please allow me to find out and follow up with you.". Customers would prefer to hear that response and receive a follow-up at a later time than the alternative!

3. Build a sense of community. Ask residents for a list activities or events they would like to see offered at the community and then enlist the help of those residents in getting the word out.  If budget is an issue, focus on events that won't break the bank such as potluck meals or a game night.  These are perfect ways to encourage residents to get to know one another and help build a sense of community.

4. Designate an evening for a team meet and greet. For new or existing residents, these events provide an excellent opportunity for the team and the residents to get to know each other. It can also serve as a venue for residents to ask questions or offer valuable feedback. 

5. Celebrate special occasions. Just like you celebrate with your teams when they have a birthday or a special event in their life, extend that same opportunity to residents.  Residents have many happy occasions to celebrate and receiving a card, or a 'happy birthday' message as they are walking down the hallway is always a nice treat. 

6. Learn your residents’ names. Remembering someone's name is a wonderful way to make them feel important and underscores that the people who work there really know who they are.  Teams might even have a contest to see how many names they can remember to help build recognition quickly.

7.  Don’t forget the furry friends! Provide designated areas for pet owners to walk their pets, and encourage pet owners to get to know one another. Plan social events for pets and their owners such as 'yappy hour' where everyone can meet and mingle.  This getting to know you activity has a side benefit; it helps create a sense of pride within the community. When pet owners know one another, they interact in more positive ways and even go out of their way to help maintain the pet areas.

It’s easy to positively impact your customers’ experiences. Hopefully this list helps you get started today!

 

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Companies are hungry for information and eager to learn what their customers’ value; to learn more, many are offering surveys. One popular method is the Net Promoter Score (NPS) concept. NPS is a methodology that comes from the service industry, and is described in detail by Fred Reichheld in his book The Ultimate Question 2.0. The beauty of the NPS methodology is the simplicity as customers respond to one question; on a scale of 0-10 “How likely is it that you would recommend [your company] to a friend or colleague?” The score is calculated by subtracting the detractors (the percentage of respondents who scored 0-6) from the promoters (those who scored 9-10).  Respondents are typically also offered a chance to further explain their response and offer feedback to the organization in free text field.

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It seems like surveys are everywhere these days and after virtually every interaction customers are offered an opportunity to comment on their experience.  Some organizations are so interested in getting feedback that they even offer money or gifts for customers’ valuable words of advice.  But after the feedback is received, what do organizations do with it?  And, how do they use the feedback in a strategic way to help shape their processes and the behaviors of their associates?  

We know that feedback is one part of the equation, but what an organization does with the feedback and how they equip their associates to deliver on the expectations of the customer is what truly differentiates them from the competition.  Companies who listen to their customers and respond to their feedback have a clear advantage over those who either don’t ask or ask but don’t respond.  But truly world-class organizations diminish customer service problems and reduce the impact of those that happen through three simple tactics:

1. They empower their associates – organizations that understand their customer’s expectations and communicate those expectations to the associates who serve them have a clear advantage.  When associates understand customer’s expectations, and are empowered to fix a problem ‘in the moment’ they demonstrate confidence in the company and their brand.

2. They define a specific recovery process – no matter how well an organization plans for enjoyable customer experiences sometimes things happen. Equipping teams with solutions for what to do when the unexpected occurs gives them confidence and ultimately allows them to better serve the customer.

3. They establish specific escalation guidelines – customers want a solution, and sometimes they are not satisfied talking to the person standing in front of them. It is important that customers are provided with phone numbers and names of leaders when they want to talk. Asking questions and listening goes a long way, and organizations that understand the value of proving customers with contact information to escalate an issue proves their commitment to service.   

The combination of the three tactics above creates unique and differentiated experiences for everyone who makes a purchase, and for those who work there.  

Why, you ask, does this matter? Should we do this just because “it’s the right thing to do?” That would be pleasing to those with a desire to serve, but that may not be enough to convince the C-suite to invest in trusting their associates.

The reality is that creating loyal customers has many benefits, including increased profits, and the numbers prove it.  In “The Value of Customer Experience Quantified,” Harvard Business Review showed that "after controlling for other factors that drive repeat purchases in transaction-based businesses, customers who had the best past experiences spend 140% more compared to those who had the poorest past experience.”  These best experiences take time and effort to create and leaders of companies sometimes believe that the cost of investing in creating a customer experience is too risky or the ROI is not as transparent as other investments.  

The reality is there is more expense in not doing anything.  The data shows that unhappy customers cost more money as "they are likely to return products [aka “early terminate” in our world] or more likely to require support" but "delivering great experiences actually reduces the cost to serve customers from what it was previously.” Customer loyalty matters, but creating an intentional experience does not happy by accident.

Interested in learning how to create loyal customers for your organization?  Click here to read the 7 Must-Haves for Effective Customer Service Programs.  

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