Monday, March 27, 2023

The FTC's Proposed “Click to Cancel” Could Help or Hurt Your Brand. Which Will It Be?

Photo by Markus Winkler on Unsplash
My peer, Ben Bloom, raised a provocative question: Will the proposed Federal Trade Commission “click to cancel” rule help or hurt brands? Like virtually everything in business, I believe the answer depends on a brand's customer-centric culture, the customer understanding it has or collects, and its commitment to #CustomerExperience. It's clear how this proposal could hurt some brands, but smart brands can beat (and should already be beating) the FTC to the punch with a winning #CX.

If you're not familiar with the proposed “click to cancel” rule, it is a simple idea that all of us will applaud as consumers: It would require businesses to make it at least as easy to cancel a subscription as it was to start it. For example, if you can sign up online, you must be able to cancel on the same website in the same number of steps.

The fact “click to cancel” must be forced upon companies is a sign of how difficult it is to achieve customer-centric decisions in a company, particularly at the moment of customer abandonment. For a new or loyal customers, the advantages of experiences that encourage satisfaction and loyalty are evident, but what's the value of making it easy for customers to depart? The business benefit of keeping customers is immediately evident (revenue!) while the dangers of poor CX at the moment of churn are less so (damaged reputation and a reduced chance to recapture the customer). You can almost hear brand leaders thinking, “Well, if cancelers are pissed off to begin with, then what's the danger of more frustration?”

But, let's face it--this should already be a no-brainer for brands. You and I both know this policy is a painfully obvious idea in the customer side of our brain, yet business leaders will likely fight this proposal rule tooth and nail. Any resources and effort your organization may be inclined to dedicate to lobbying against the rule really ought to go into making the rule superfluous for your brand. Brands can win with a thoughtful, customer-centric approach.

Today, it's too easy to tell customers they have to call your company to cancel, placing the retention burden on call center employees. That not only frustrates people and risks brand damage, it is also a terrible, frustrating employee experience as well. But if customers must be able to cancel as easily as they purchased or subscribed, smart brands will: 
  • Listen more and resolve drivers of dissatisfaction and churn. If some brands face an impending cancelation Armageddon, the first and most obvious course should be to minimize and eliminate the reasons customers want to leave. Many companies do a lousy job of listening to customer feedback and investing to resolve causes of customer friction. Often, this is because the economic value of doing so isn't evident, but this new FTC policy tips the cost/benefit equation and makes the financial benefits more evident.
  • Identify and react to customer warning signals. The prior suggestion was about understanding and fixing the top aggregate reasons for churn; this idea is more about identifying and proactively reacting to customers most at risk of churning. Some customers will abandon brands unexpectedly, but for most, there will be signals: Reduced usage or frequency, declining engagement, more customer care interactions, and dissatisfied survey responses. Brands should be monitoring and proactively responding to these abandonment signals rather than waiting for the cancelation request. An offer of a free month to someone threatening to end a subscription can seem a desperate, too-little-too-late brand ploy, while a surprise offer of a free month to an existing (albeit declining) customer can be a loyalty-building delight.
  • Consider customer personas to improve the overall experience and offer the most powerful retention offers. Brands tend to rely on the negotiating skills of employees to prevent abandonment, turning each instance into a one-on-one negotiation. “Click to cancel” will force brands to automate this process, which means they need to understand each customers' persona. A budget-minded customer struggling to make ends meet will be responsive to an offer of reduced subscription fees, while a more value-oriented customer may be encouraged to stay by adding services that would otherwise require additional payments. Or, think of Netflix: Knowing which fan is into scifi versus romantic comedies can help the brand promote the most desirable upcoming content to try to keep customers.
  • Implement a constant test-and-learn approach to finding the best retention offers. The solution isn't to find the one-and-only best offer; instead, constantly test what effectively retains customers. This should be a ceaseless process because today's answers may not be the same as next year's, depending on changes in the economy, competitive landscape, and your brand's offerings.
  • Finally, earn the right to keep in touch. If the customer is committed to abandoning, then do what you can to improve your future ability to recapture the lost customer. Don't assume you can continue to spam lost customers; instead, ask for permission to keep people on your email list and offer options. For example, a lost customer probably won't want your daily marketing message but might be interested in a once-a-month update on improvements you've made to your product or service.
“Click to cancel” could help or hurt a brand. Do the right things to prevent churn, earn loyalty, respond to cancelation requests, and ease the path to continued engagement and recapture, and your brand can snatch victory from the jaws of defeat and minimize abandonment.

Monday, March 20, 2023

GPT-4 and AI Can Enhance or Kill Your Brand--Which Depends On What You Do Next

Photo by Andy Kelly on Unsplash
A lot of digital ink has been rapidly dedicated to what ChatGPT, GPT4, and AI means to Customer Experience. Inevitably, these articles focus on how AI can increase the efficiency of or replace employees in touchpoints on the customer journey. The fact this is the first thing so many think of when it comes to AI is thoroughly disappointing. I think the real story of the future of AI and CX is more troubling, complex, and important. 

AI Is Only the Latest Evolution in the Brand-Customer Journey

We must start by appreciating how the relationship between brands and customers has always been unequal in different ways. On the one hand, brands (literally) profit from these relationships. For all the humanizing talk of brand love, trust, loyalty, and other terminology marketers borrow from the language of human relationships, this remains a commercial relationship that exists only for one party to extract money from the other. The best brands get their CX so right that customers don't mind--in fact, loyal customers want their trusted, valued brands to be profitable, healthy, and sustainable.

On the other hand, customers can often have unreasonable expectations of brands, and in particular, employees. I'm not talking here about how customers will always want their products and services to be cheaper, faster, and better--that's inevitable--but how customers treat (or mistreat) the employees with whom they interact. You can't spend any time in social media without seeing a video of a customer physically attacking or screaming invective at an unlucky retail or hospitality employee. My wife worked in customer care for years, and it infuriated me that people felt perfectly free to abuse her using slurs I cannot share.

Brands want employees to be more empathetic to customers while increasing productivity. Customers want more, faster and better from employees. And caught in the middle of this battle of unequal expectations are human employees. Now, along comes AI with a seeming solution.

AI Can Seem Like the Perfect Customer Experience Solution, But Is It?

On the one hand, the tech promises to give the accurate, immediate answers that customers demand and to do it without all the mess and expense of PTO, unplanned absences, benefits, hiring, and churn. And on the other hand, customers can hurl insults at an AI to their heart's content, and the AI won't get flustered or have its feelings hurt.

AI replacing humans feels like the inevitable conclusion of a situation where parties on both sides of the brand-customer relationship collude to treat employees less like humans and more like inanimate objects. Employers frequently speak of employees as “family” while treating them more like PCs that can be easily replaced, discarded, or updated. And customers too often pretend the target for their frustration isn't a human being but a robot or kiosk. Why not replace workers with tech, since we pretend that's all they are, anyway?

So, I guess all of our problems are solved! AI to the rescue--blazingly fast and efficient, endlessly scalable, (probably) more accurate, and infinitely patient. Problem solved! Or, is it? How often has new tech promised to solve a problem only to create new ones? The answer is always, but that doesn't mean that adopting technology isn't the right and inevitable answer. So, what difficulties are we likely to create as AI not merely enhances but replaces employees?

The Potential Problems of AI Are Both Obvious and Not

The most obvious concern with AI replacing humans is that humans still need employment. I've focused in this post on customer care because those employed in these jobs best exemplify the workers caught in the brand-customer paradox, but AI obviously doesn't stop there. While customer service accounts for 2.9 million jobs in the US, digital transformation imminently threatens other categories. In just the past week, GPT-4 has already:

I wish I had a solution to offer, but the potential economic and societal risks must be considered by brighter minds than mine. What I can focus on, however, are the other potential issues brands may have as they integrate AI into their customer journeys.

For example, one issue that business leaders forget time after time is that new tech often starts looking like a solution for corporations but inevitably has a profound impact on customer expectations. Brands welcomed the Internet but didn't immediately foresee how it would change customer expectations of the 24/7 availability and speed they get from corporations. Brands welcomed social media as a new “free” channel to reach customers before appreciating that customers would more talk ABOUT them than WITH them.

And so it is with AI. The same tech that makes it easy for corporations to improve productivity in their customer interactions will also make it easier for customers to negotiate lower prices and better deals. My peer, Penny Gillespie, is researching a future that isn't human customers talking to your brand's AI, but customer bots and brand bots negotiating the brand journey with brutal efficiency and speed. The outcome will be more pressure for your brand to offer competitive pricing, customize offerings, and be ready for any and all customer needs (or else their customer advobots will shift to competitors in nanoseconds.) How will brand loyalty be shaped when customer decisions are made by machines and not people? Find out by reading a new book, “When Machines Become Customers,” by my Gartner peers Don Scheibenreif and Mark Raskino.  

The CX Solution Is To First Understand Where, When and How AI Will Be Valued By Customers

Despite all the enthusiasm by VCs, startups and brand executives, we still don't know how much customers will be willing to replace humans with machines at every touchpoint. We have decades of experience with “the Uncanny Valley”, including everything from the creepy, dead-eyed characters of the movie, “Polar Express” to the rigid, frustrating interactions with corporate IVR (A/K/A “voice jail”) systems. Do we really think that an AI expressing it “understands why that would be frustrating” to customers will do more good than harm?

Some corporate executives will be quick to foresee a future of infinite self-service (and endless cost savings) by replacing employees with AI. Smarter leaders will move quickly but cautiously to understand not just where AI brings value to business results, but where customers value AI and where they value human interactions in the customer journey. Deploying AI to the right customers in the right places at the right time will separate brands that improve their customer experience and relationships from those that do not.

The first step in our AI future isn't to rapidly digitize every customer experience. Instead, you must start by understanding the customers you serve and their expectations, needs, and wants. What customers are more open to greater self-service and interactions with bots, and which are not? If you can't tell the difference, you aren't ready for AI-managed CX. That's just the first question of many: In which touchpoints are humans most valued?
  • In which touchpoints will customers most appreciate AI experiences?
  • How will you proactively recognize the best digital or human journey to orchestrate?
  • How will you recognize what the customer wants and needs at the moment and match that to your available products, services, and experiences?
  • How will you change the development of your products, services, and experiences to allow for greater real-time response and customization?
  • How will you grant customers to control the type of experience they want?
  • How will you recognize when AI experiences require a human escalation?
  • How will you measure the impact of AI customer experiences, not just to your costs but to perception and loyalty of your customers?

Before you start worrying about the state of your tech stack and data, these are the questions you must first answer. The answers will tell you where to focus your energies to strengthen customer relationships rather than simply create better margins.

The thing to remember about AI is that it must first serve humans. Using AI with a customer-centric lens is the future to strong customer relationships and brand success. But corporations that only adopt AI with a brand-centric viewpoint will simply find very efficient, effective, and speedy ways to destroy their customer satisfaction, reputation, and relationships.

This post was written manually without any assistance from an AI, which is probably evident because of any grammatical mistakes I made. Please forgive any human foibles.