Five Marketing Myths and Service Slips

John Goodman
Posted: 07/19/2010

As we all know, myths have a way of becoming more than they are.

The same is true for marketing and service, so we offer the following list of conventional wisdom, beliefs and marketing clichês…some have a solid empirical basis, but have been carried too far. Others are just wrong.

Myth 1: The key to market success is to exceed customers’ expectations, delighting them whenever possible.

Fact: Delight customers only when cost is reasonable, cost and payoff is significant.

Everyone wants to exceed customer expectations. While this is a nice general idea, all actions to produce delight do not cost the same and all delight experiences do not produce the same increase in loyalty. TARP has found that many labor-intensive heroics will only result in a 12-14 percent increase in the percentage of customers who will definitely recommend a company, while other less labor-intensive actions (such as a friendly 90-second conversation or a hint regarding how to avoid problems) will result in two or three times more customers becoming advocates.



Lesson: Measure the cost and impact of different types of delighters and only exceed expectations where it is cost effective.

Myth 2: Answer the phone really quickly–any time on hold makes people mad.

Fact: It is more important what happens after you answer the phone than how quickly you answer.

TARP’s data shows that, in most environments, you can keep customers on hold or answers can be delayed for more than 30 seconds (and often up to a minute!) if, when you answer the phone, you completely handle the customer’s issue. If the problem is completely handled to the customer’s satisfaction there is no discernable impact on satisfaction due to the 30-second delay.

Lesson: Answer in less than a minute and then make sure you handle the call to completion on first contact.

Myth 3: Everyone wants to talk to a human; Web and automated service are always less satisfactory.

Fact: Web and automated service are preferred in some cases and by some customer segments.

For example, one investment company found a large segment of their wealthy clients never wanted to talk to a human being and always wanted to interact by Web and e-mail. Likewise, customers are often happy to check an account balance online or a package delivery via IVR, but, if there is an unpleasant surprise, then they will want to talk to a human.

Whether companies damage customer relationships with self-service depends on who the customer is, what the customer is calling about or looking for and the effectiveness of the tools and information you provide to use the automated systems.

Lesson: Ask customers about their preferred communications channel for issue category and transactions.

Provide a range of channels so they can pick. Provide good directions, like printing the IVR menu wherever you print the phone number.

Myth 4: The customer is always right–don’t ever say no.

Fact: The customer is not always right, and you can say no.

It is alright to say no to the customer or give bad news as long as you give the customer a clear, reasonable explanation regarding why the request is not possible. For example, explaining that the flight will be delayed due to a leak in the hydraulic system will not make customers happy, but will keep them safe–and thankful to be on the ground.

Lesson: Train your staff that it is fine to say no, but arm them with clear, believable explanations regarding why the policy is in place or why the situation occurred. Be flexible to take special action for valuable customers.

Myth 5: If complaints are going down, things are getting better.

Fact: Fewer complaints often mean fewer people are complaining because they’ve given up.

In the last three years, TARP has recently observed a significant decline in complaint rates due to customers feeling that complaining will do no good.

Lesson: Monitor complaint rates at least every other year–go to a random sample of customers and ask what problems they’ve had and if they told you.

John Goodman
Posted: 07/19/2010

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