… a surprisingly simple way to get people to value you more!
Dan Ariely, a professor of psychology and behavioral economics at Duke University, relates a story of meeting a locksmith. The fellow complained that when he began working as a locksmith he would often take a long time to open the lock, and sometimes in the process break it, requiring the customer to purchase a replacement. Regardless, customers would happily pay his bill, as well as tip him for his efforts. As his proficiency grew, he could now effortlessly open locks in a minute without damaging the mechanism. But instead of praising his expertise he now found his clients complaining about the bill, without anyone offering a tip!
What’s to blame for this lack of gratitude?
… the customer’s perception of value is based on the service effort expended for the price paid.
What’s to blame for this lack of gratitude? It’s simply the customer’s perception of value is based on the service effort expended for the price paid. Ariely quips that in the beginning customers were really rewarding the locksmith for his incompetence. But, because they saw the level of effort he was expending, they were all too happy to pay his bill as well as tip him.
Wait times can be a good thing
In the service industry, it is a commonly held belief that reducing customer wait times increases customer satisfaction. But professors Ryan W. Buell and Michael I. Norton of Harvard Business School argue that customer happiness may be greater if they know HOW their wait time is being expended to deliver the final output. They call this operational transparency. Surprisingly, this holds true even if it’s only the appearance of effort.
In an experiment they conducted, test participants booked a trip through two simulated travel websites. One site would deliver the booking search results instantly, while the other forced them to wait as long as a minute while it VISIBLY showed each airline being queried, with an animation of fare comparisons as they were “found”. Test participants were then asked the following questions to gauge their satisfaction:
- Do you believe this is a high quality service?
- Is this a service that you would want to use?
- What would you be willing to pay for this service?
- Would other people approve of this service?
Across all of the different versions of this experiment, when asked which travel site they preferred the vast majority of testers chose the VISIBLE efforts of the slower site. Now remember, the slower site also had access to the travel data instantaneously, it was just programmed to deliver it in a slower, visibly laborious manner.
But it may not work for dating sites
You went through all that work and this is who you came up with?
However, operational transparency only works to increase satisfaction if you are delivering good results. In another experiment, Buell and Norton set up a simulated online dating site. In the versions of this experiment, the majority of people who received attractive matches preferred the slower, operationally transparent site vs. instantaneous search results. But when they were paired with unattractive matches, they disliked the slower service. (“You went through all that work and this is who you came up with?”)
Here’s how to put operational transparency to work
- In proposals, detail the step by step tasks required to accomplish a specific result. If this gets unwieldy, place this section into an appendix. (Use good judgment to determine the extent of the detail presented.)
- Allow customers to witness the operational back end of your company. You can do this with an animation, video, or an in-person tour.
- Demonstrate the proficiency of your service staff. This can be done by displaying their educational attainment, certifications, relevant experience, and watching them demonstrate their expertise.
- When presenting a report, detail the efforts that led to the recommendations and resist the urge to offer just an executive brief. (People really do appreciate the “thump” a heavy report makes when it lands on a desk.)
Clients want to know that you expended the appropriate effort for the price they are paying. Show them.