Standin’ on a Mountain Top

... song by Seals & Crofts. However, on this July day, the only music you can hear is the cling-clang, cling-clang of cowbells from a herd of cows, which I am admiring on a sunny mountain top. Very authentic, but it is blocking my hike up the mountain. Suddenly, I find myself feeling uncertain. Can you just push your way through a herd like this one? Oh well, just another case of a city-dweller lost in nature. Luckily, my mobile rings at that very moment. It is my financial adviser.

I am relieved she called. For two reasons. The first is quite sad – I am simply not comfortable walking through a herd of mountain cows – so I am extremely grateful to have an excuse to stay put. The other reason is that I would like my financial adviser’s opinion on whether I can feel confident in my choice of mortgage loan. I am in the middle of purchasing a home, and I need to get a mortgage loan quickly. But, did I make the right decision when choosing between fixed or variable rates? Luckily, in this area, I am no hapless city-dweller lost on a mountain. No, here I am like most others.

After all, it is perfectly natural that we as people (and hence also as customers) seek the advice of others when we feel insecure, uncertain or when an important decision has to be made. And this greatly impacts our customer satisfaction. Research confirms this. Shell & Buell, two researchers from Harvard Business School, published an article with a somewhat academic title and a very interesting message:

Mitigating the Negative Effects of Customer Anxiety through Access to Human Contact.

Shell & Buell base their research in psychology, where it is a recognised phenomenon that people seek advice from others when they feel uncertain. This human trait can prove to be a challenge when so many customer experiences today are based on online self-service.

Therefore, the two researchers carried out an experiment, which was conducted out in the field as well as in the laboratory. The experiment examined how overall customer satisfaction was affected by self-service situations where customers felt uncertain or insecure – and whether customer satisfaction could be affected by the opportunity to receive advice from another person. They found evidence for two interesting results:

1. Customers who made investments themselves through their online bank and lost money in the process are (naturally) very unhappy with their own investment choice, but at the same time, they have less confidence in their bank, even though the loss is not the bank’s fault. However, if a customer had access to personal advice from the bank when the unsuccessful investments were made, the dissatisfaction with their own choice is reduced and their confidence in the bank increases. In the experiment, the financial adviser therefore had no actual impact on the result (that the customer lost money on the investment) – and yet the satisfaction of the customer increases.
2. Having access to the financial adviser is what makes the difference, as customers who had access to an adviser during the experiment only chose to make limited use of said adviser. Therefore, this seems to indicate that the reason the group with access to an adviser was more satisfied than the one without was simply due to the peace of mind of knowing that the option was there.

Shell & Buell found evidence for the same phenomenon within mortgage loans. A customer who applies for a mortgage loan through a self-service solution is likely at a critical point in their own life, which in itself leads to a sense of uncertainty, and this uncertainty is amplified by the prospect of having to take out a large loan. I remember that BGG, in a report from 2017, found evidence of a corresponding phenomenon in a global study involving 42,000 banking customers: Even in countries where online self-service had come a long way, the customers still preferred to have the opportunity to speak with a person when taking out a mortgage loan. Only a small percentage of mortgage loans (or the corresponding thing in other countries) were taken out solely using self-service.

Is it thus possible to transfer their results to other industries? I think so. There is nothing in their research which indicates that this is an isolated matter within finance, savings and loans. The point is that something is at stake. This is when we need to have contact with another person.

When I rummage around my backlist of old articles on customer experience, I can see that there is a wealth of surveys that fully or partially points in the same direction.

Even back in 2011, Gartner predicted that before 2020, 85% of customer relations would be handled electronically without direct human contact. And actually there are a lot of surveys that indicate that we often prefer self-service instead of calling a call centre. But – and naturally there’s a but: The more complicated a situation, the more we prefer human contact.

My opinion is that when you work with creating good customer experiences, you must not forget when it is necessary to include people. Self-service using digital solutions does improve the quality of the customer experience by offering easy, standardised processes and 24/7 availability. However, this is not necessarily the only type of quality that leads to a good customer experience. This is why, in my view, many of the future’s digital solutions will not just be about transforming more customer interactions into something that can be based on self-service or automation. The future will also be about how to develop and invest in digital solutions that enable more and better human interaction in the situations where it is needed.

Last Friday, I was at the bank and met my financial adviser – for the first time. Until that point, I had only spoken to her by phone, and the call on the mountain top had been cut off when clouds suddenly appeared, replacing the warm, sunny weather with cold and rain. Thinking about it, the meeting was actually nothing more than an informal chat, and I wondered afterwards why I had actually agreed to it. In the end, I simply wanted to look her in the eyes, since she is the one whose advice I have to trust when it comes to my personal finances.

Article: Mitigating the Negative Effects of Customer Anxiety through Access to Human Contact, Michelle A. Shell & Ryan W. Buell, Harvard Business School, 2019

P.S. Concerning the mountain cows: I did in fact turn around and go back down the mountain.