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The Business of Social Games and Casino

How to succeed in the mobile game space by Lloyd Melnick

Tag: customer experience

Alchemy: When psychology outmaneuvers rationality

Alchemy:  When psychology outmaneuvers rationality

I am a huge fan of behavioral economics — Dan Ariely is my favorite author — and find it very useful in helping with business issues. Behavioral economics blends ideas from psychology and economics, and it can provide valuable insight that individuals are sometimes not behaving in their own best interests. Behavioral economics provides a framework to understand when and how people make errors. Systematic errors or biases recur predictably in particular circumstances. A colleague recently recommended a book, Alchemy by Ogilvy Vice Chairman and marketing guru Rory Sutherland, that provides many real life applications and insights leveraging behavioral economics.

Alchemy

To use Sutherland’s words, “ there is an ostensible, rational, self-declared reason why we do things, and there is also a cryptic or hidden purpose. Learning how to disentangle the literal from the lateral meaning is essential to solving cryptic crosswords, and it is also essential to understanding human behavior.”

Logic can prompt you to miss great opportunities

Sutherland’s first recommendation is that the first or obvious “logical” answer may not be right or optimal. He explains that the opposite of a good idea can also be a good idea. Even if one course of action makes sense, there may be a better approach.

Logic does not necessarily lead to great, in many ways it drives you to average. If you are being logical, you can assume your competitors are also following a logical course of thinking. By following a logical path, you will end up in a red ocean at a level comparable to your competitors.

Logic can prevent you from creating great. If Steve Jobs and Jony Ive had pursued logic when designing a PC or phone for Apple, at best they would have built a better Dell or Nokia, instead of the most valuable company in the world. As Sutherland writes, “the problem with logic is that it kills off magic.” To quote Jobs, “stay hungry, stay foolish.” If great ideas initially made sense, somebody else would have already discovered them.

Another problem with logic that Sutherlands points out is that it is often used to justify bad decisions. People will use logic to either justify a bad course of action or provide protection from bad decisions, rather than seeking the best decision. Good debaters are great at using logic to justify any position rather than finding the best course of action. Sutherland writes, “business people and politicians do not quite understand this and tend to evaluate decisions by the rigor of the process that produces them, rather than by the rigor with which you evaluate their consequences….To them, the use of reason ‘looks scientific’, even if it is being used in the wrong place.”

This misuse of logic often prompts people to proceed with apparently reasonable things quickly while treating counterintuitive ideas with suspicion. It is easy to defend the reasonable thing if it fails, but people run more risk if they try the counterintuitive idea and it fails. The latter, however, provides the opportunity to separate your business from the competition.

Sutherland offers several examples of counter-intuitive ideas that generated billion dollar businesses. One would be to imagine you are in the boardroom trying to come up with a strategy to compete with Coca-Cola. The conventional answer would be to create a drink that tastes better or is less expensive. What if someone, however, suggested, a worse tasting drink packaged in a smaller container at the same or higher price. The latter is what Red Bull did and created a brand that Forbes estimates is worth almost $10 billion.

Sutherland’s point is that conventional logic is hopeless in marketing, you end up in the same place as your competitors. Even if we cannot explain eloquently why something will work (like a bad tasting expensive soft drink), we should not be blind to the fact that it does.

People are not rational

Not only is the logical and rational path not necessarily optimal, it is also not the one our customers might be pursuing. Another example that Sutherland explains is a marketing test he ran. He showed two advertisements, one a contest where a player could win free energy for a year (worth about $1,500) and another where you could win a cute penguin nightlight (worth about $20). If people react rationally, you would expect an order of magnitude more entries into the contest giving away the energy. Almost the inverse happened, 67,000 people entered to win the energy and 360,000 entered to win the cute animal nightlight. The takeaway here is not only do people not always act logically but also that cute animals are a very effective marketing technique (and you cannot use logic to determine what will be a powerful marketing message).

There are many other examples of how people do not always behave in a way that would be considered rational. The best selling wine at restaurants is usually the second least expensive. That is not because restaurants put their best value there, they will often put a less expensive bottle cost wise in that position. P assume, however, the least expensive wine is lowest quality or are embarrassed to order it for fear of looking cheap, they are not making the wisest (or rational) decision. Restaurants have also found that by offering people still or sparkling bottled water, they increase sales because many people do not ask for tap water. These examples reinforce that consumer behavior is not simply based on people making rational decisions to optimize their happiness.

Data can be misleading

One area that Sutherland focuses on that is particularly dear to me is how data is often misused. Sutherland writes that “we constantly rewrite the past to form a narrative that cuts out the non-critical points–and which replaces luck and random experimentation with conscious intent…. It is important to remember that big data all comes from the same place–the past…. A single change in context can change human behavior significantly. For instance, all the behavioral data in 1993 would have predicted a great future for the fax machine.”

Not only can data be used to criticize a good decision or justify a bad one, it is possible to construct a plausible reason for any course of action, by cherry-picking the data you choose to include in your model and ignoring inconvenient facts. I have written before about confirmation bias, and more data makes it easier to find support for some spurious, self-serving narrative. Effectively, you can find more pieces to confirm whatever you are arguing. Sutherland argues, “the profusion of data in future will not settle arguments: it will make them worse.”

Related, Sutherland points out, “people who are not skilled at mathematics tend to view the output of second-rate mathematicians with an high level of credulity, and attach almost mystical significance to their findings. Bad maths is the palmistry of the twenty-first century. Yet bad maths can lead to collective insanity, and it is far easier to be massively wrong mathematically than most people realise–a single dud data point or false assumption can lead to results that are wrong by many orders of magnitude….To put it crudely, when you multiply bullshit with bullshit, you don’t get a bit more bullshit–you get bullshit squared.”

Market research is often as unreliable as other data. As well as not always acting rationally, people often do not know what they prefer. Sutherland writes, “the trouble with market research is that people don’t think what they feel, they don’t say what they think, and they don’t do what they say. People simply do not have introspective access to their motivations….It is perfectly possible that conventional market research has, over the past fifty years, killed more good ideas than it has spawned, by obsessing with a false idea of representativeness.”

Market research also can miss what is driving a person’s decision, such as avoiding disaster rather than getting the best outcome. Someone choosing Product A over Product B would say that they thought Product A is ‘better’, even if really they meant something quite different. They may unconsciously be deciding that they prefer Product A because the odds of its being disastrously bad are only 1 percent, whereas the risk with Product B might be 2.8 percent. This distinction matters a great deal, and it is borne out in many fields of decision science. People will pay a disproportionately high premium for the elimination of a small degree of uncertainty.

Once you understand the limitations of data, you can create great outcomes. Following conventional wisdom leads you do what your competitors are doings and metrics prompt you to design for average. Averages (and medians) encourage you to focus on the middle of a market, but innovation happens at the extremes. You are more likely to come up with a good idea focusing on one outlier than on ten average players.

Perception over reality

The other issue with relying on historic data is that it assumes people’s decisions are logical, given they are often not rational that reliance can be a mistake. Sutherland aptly says, “in maths it is a rule that 2 + 2 = 4. In psychology, 2 + 2 can equal more or less than 4. It’s up to you.” At its heart, people do not value things, they value the meaning attached to these things. While the objects properties are determined by physics, what they mean is determined by psychology.

There are multiple examples of how perception forms our reality. Wine tastes better when poured from a heavier bottle or has a French label. Painkillers are more effective when people believe they are expensive. Almost everything becomes more desirable when people believe it is in scarce supply, and possessions become more enjoyable when they have a famous brand name attached.

A great example of the power of psychology is Uber’s success. Uber’s map does not reduce the waiting time for a taxi but simply makes waiting much less frustrating. Travis Kalanick, Uber’s founder, realized people are bothered more by the uncertainty of waiting than by the duration of a wait.

Another example are claims on products, as people often think packaging that implies a product is healthy or good for them (or an app), is less tasty. It does not matter what something tastes like in blind tastings, if you put low in fat or any other health indicators on the packaging, Sutherland shows that you will make the contents taste worse.

Another area where perception is more important to a customer’s satisfaction is price. Why do people love sales, rather than spending the time to find the everyday low price. Sutherland explains “a low price, unlike a discount, does not allow people any scope to write a more cheerful narrative about a purchase after the event–‘I saved £33’, rather than ‘I spent £45’.” Marketing can have a strong impact here, not only justifying a high price but also detoxifying a low one.

The importance of optimizing for perception creates many opportunities to improve your business. I have written several times about customer experience and service, and focusing on perception allows you to create a superior experience. Some ways you can impact the experience, based on Sutherland’s ideas:

  • Small acts of discretionary generosity, such as waiving a charge when a customer ordered a dish they did not like or a complimentary chocolate at the end of a meal are regarded by customers as reassuring indicators of trustworthiness; we correspondingly see the absence of such signals as being a cause for concern.
  • Offering more customer service touch points or opportunities for live contacts. One of the reasons why customer service is such a strong indicator of how we judge a company is because we are aware that it costs money and time to provide.
  • Provide collateral outside of email. Sutherland writes, “bits deliver information, but costliness carries meaning. We do not invite people to our weddings by sending out an email. We put the information (all of which would fit on an email–or even a text message) on a gilt embossed card, which costs a fortune….We notice and attach significance and meaning to those things that deviate from narrow, economic common sense, precisely because they deviate from it. The result of this is that the pursuit of narrow economic rationalism will produce a world rich in goods, but deficient in meaning.”

It is also important to stress that it is not immoral to build a product or service to appeal to customer’s perceptions rather than logic. The Greeks did it first. There is barely a straight line in the Parthenon, the floor curves upwards in the middle, the sides bow out and the columns swell in the middle. This shape is because it is not designed to be perfect, instead it is designed to look perfect to a human standing about a hundred yards away.

Effectively, we want to make people happier and feel better. This can be achieved by improving their perception of their situation. It’s similar to a doctor who can help cure a patient either by giving a placebo or actual medicine. If the placebo serves the same purpose, it is in the patient’s interest to get the placebo (as it potentially has less side effects). As Sutherland says, “we should be researching this rather than decrying it.”

Social context is critical

Another key insight in Alchemy is the importance of social context. Sutherland explains that the context in which someone experiences something is the key to how they perceive it. According to Sutherland, “our very perception of the world is affected by context, which is why the rational attempt to contrive universal, context-free laws for human behavior may be largely doomed.”

There are many examples of where context determines how something is perceived. A hospital might have brilliant doctors, but if the reception area has old magazines we are likely to complain. If you go to a restaurant, your perception will be driven less by the food, the real value lies in social connection, and status. If you see a movie star at the table across from you and a line of Bentleys outside, you will probably end up telling your friends about an incredible dining experience. Sutherland points out, “we make far more positive comments about a dish’s appeal and taste when it is garlanded with an evocative description: ‘A label directs a person’s attention towards a feature in a dish, and hence helps bring out certain flavors and textures.’ Never forget this: the nature of our attention affects the nature of our experience.”

Less is more

I have written before how making a product simpler and less functional is one of the key ways you can build a superior product – from Uber to Monzo
to hypercasual games– and Sutherland reinforces this hypothesis. With new products or games, you can always add, but while this makes the new offering more versatile, it also reduces the clarity of its affordance, making it less pleasurable to use and quite possibly more difficult to justify buying. Sutherland explains, “the jack-of-all-trades-heuristic, whereby we naturally assume that something that only does one thing is better than something that claims to do many things.”

Sutherland pointed to the success of the Sony Walkman. Sony, by removing the recording function from Walkmans, created a product that had less functionality, but a far greater potential to a change behavior. By reducing the possible applications of the device to a single use, it clarified how people could use the device. As Sutherland says, “it is surprisingly common for significant innovations to emerge from the removal of features rather than the addition.”

How to make it work

Given that logic or date or research cannot predict much behavior, you need to find an alternative to benefit from Sutherland’s findings. It comes down to testing different approaches and trying creative ideas. Sutherland suggests, “the only way you can discover what people really want (their ‘revealed preferences’, in economic parlance) is through seeing what they actually pay for under a variety of different conditions, in a variety of contexts. This requires trial and error–which requires competitive markets and marketing.”

In addition to testing, think creatively. Sutherland suggests we spend “20 per cent of conversational time … for the consideration of alternative explanations, acknowledging the possibility that the real ‘why’ differs from the official ‘why’, and that our evolved rationality is very different from the economic idea of rationality. If we could resist the urge to be logical just some of the time, and devote that time instead to the pursuit of alchemy, what might we discover? Quite a lot of lead, I suspect. But a surprising amount of gold.”

Key takeaways

  1. People often do not action logically so you should not base decisions on expecting your customers to act logically
  2. The key is someone’s perception, not the reality. While in math 2+2 = 4, in psychology it could equal 5 (or 6 or 3), so we need to anticipate how the context will drive the perception.
  3. The best way to create innovative solutions is by testing different options and thinking creatively.

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Author Lloyd MelnickPosted on March 17, 2020March 16, 2020Categories Analytics, behavioral economics, General Social Games Business, General Tech Business, Lloyd's favorite posts, Social Games MarketingTags behavioral economics, Consumer behavior, customer experience, marketing, Rory Sutherland1 Comment on Alchemy: When psychology outmaneuvers rationality

Customer experience best practices from the best

Customer experience best practices from the best

Earlier this year, I wrote about how to create a customer experience that improves retention, and thus profits. Given the importance of the customer experience on retention, I have since discovered additional best practices in delivering customer WOW. The New Gold Standard by Joseph Michelli shows how the Ritz-Carlton hotel group delivers fantastic customer service.

Start with attitude

To provide a customer experience that will generate loyalty and engagement and prevent churn you first need to have a message everyone in your company is aligned with. Great customer service begins with a clear and consistent organizational focus. For the Ritz-Carlton group, the phrase “the answer is yes; . . . now what is the question?” crystallizes the attitude throughout the company. This message conveys that if the service Ritz employees offer does not surpass the expectations of guests, then the splendor of the hotel becomes far less meaningful. Michelli quotes Ritz leadership as saying, “the amenity that matters most to our guests is not a fancy chocolate on the pillow but a dedication to service that never wavers.”

Once you have developed a message that conveys the experience you want your team to provide, the approach and behaviors will flow from it. Going back to the Ritz example, by starting with “the answer is yes” everyone knows that there is never any such thing as saying “That’s not my job.” When it comes to providing a service to a guest, the word no is not in the vocabulary of those who work at Ritz-Carlton.

This attitude then guides people not only in their interactions with customers but also with each other. Richelli writes, “this spirit of wanting to serve not only our guests but to lend an extra hand to fellow staffers is how the Ritz-Carlton culture of caring permeates all of our lives.” Thus, the service message becomes an operating principle throughout the organization.

Hire right and set them up to succeed

Once you have aligned your company with a message that conveys the customer service experience you want for your customers, you need to build the team to deliver it. When I wrote about creating a great customer experience, one of the keys I highlighted was the need to align hiring with creating a great experience. You can’t teach emotional intelligence, so it is critical to hire people who can radiate warmth, friendliness, happiness and kindness. Ritz-Carlton takes the same approach, believing that excellences starts with the right raw talent instead of attempting to manage employees to overcome talent deficits.

Having people who can deliver a great customer experience does not end with hiring the right people, though, you also have to dedicate the time and resources to train them properly. Training is important not only to provide your people with the tools to create a great experience but also to ensure consistency. You want the experience someone enjoys in Paris to be as good as the experience they would enjoy with you in Sydney. Even in the online world, you want the experience someone gets when talking to an agent about a purchase issue to be as good as when they are dealing with a VIP host about a sale. With the Ritz, all managers undergo three weeks of training. The first two days cover the typical Ritz-Carlton orientation; day 3 involves the expectations of leadership including how to treat their colleagues. On Day 21, after becoming certified in the operational standards of their positions, staff members are given a forum to discuss openly the positives and negatives they have encountered in their first three weeks. It is this training, coupled with openness and feedback, that ensures all customers enjoy a consistent Ritz experience.

Empower the team

Once you have the right people with the right training, you need to empower them to give a great experience. At the Ritz, they “empower through trust…Ritz-Carlton leadership sends a clear message that every staff member has the full authority to use his or her discretion to produce grand experiences for guests…. Every person, including a member of housekeeping and an employee working in the laundry, is empowered to use judgment, without seeking permission from a supervisor, to spend up to $2,000 on each guest each day!”

Creating a great experience depends on the employees, not the leadership. If a Ritz-Carlton employee sees a problem, they own it and are expected to fix it. The job of leadership is to empower people to create that experience. With Ritz, it’s not only the $2,000 budget but also the mandate that it is up to people on the front line to generate unique and memorable experiences. Leadership at the Ritz-Carlton believes “you just can’t micromanage unique and memorable outcomes.”

Part of empowering your people is giving them the freedom to modify their work to respond to customer needs, not just giving them a budget. If a guest has a problem or needs something special, Ritz-Carlton staff will should break away from their regular duties, address and resolve the issue. This action is only possible by not micro-managing the staff or basing their performance evaluation on hard metrics (i.e. tickets responded).

Empowering your team, and giving them the needed resources, not only leads to Wow experiences but is also cost effective long-term. An analysis of manufacturers helped leadership at Ritz-Carlton appreciate that the longer defects went undetected, the more expensive the defects were to repair. Additionally, the longer a defect remained in place, the more that defect caused other errors. When problems are not resolved satisfactorily, they not only create customer churn (for the engaged Ritz-Carlton customer, this lifetime value can be in excess of $ 1 million) but they also produce people who are vocally negative about the brand.


A Ritz-Carlton leader said, “I’ve come to learn that the least costly solution is the one that happens immediately. The longer and higher a customer complaint lives in an organization, the more it grows. By the time a complaint hits senior leadership, what could have been resolved by getting the guest the amenity he or she requested with a slight enhancement turns into resolutions on a par with an upgraded night on the Club Level (an elevated service experience affording access to a lounge serving multiple daily complimentary food offerings and the ready assistance of concierge staff).”

Deliver WOW

All of these elements should come together to deliver WOW. A Wow experience hinges less on the inherent exhilaration of the product and more on delivering service that appeals to both the thinking and feeling aspects of your customer. Michelli writes “operating from this understanding that customer engagement is linked to the consumers’ wanting ‘to feel a rush, Ritz-Carlton leadership calls this desired memorable and emotional connection a ‘Wow experience’ and encourages staff to personally affect guests to achieve this level of emotional intensity…. Wow starts with a commitment to a culture of extraordinary service. Ingenuity brings it to life…. Extremely satisfied customers emerge through memorable and emotional connections forged between them and a business.”

Some of the greatest opportunities for wowing customers occur when breakdowns happen. Earlier this year I wrote that “mistakes are one of the best things that can happen in the customer experience world. Players remember the way mistakes are handled much more than the mistake and often more than the actual gaming experience. Mistakes provide an opportunity to create a great memory and a connection with your customer.” Breakdowns will occur despite the best intentions to provide flawless service. Empathy, quick attention, and a willingness to go beyond the resolution will salvage a bad situation and turn it into a winning outcome. Although many businesses go out of their way to deny responsibility for guest problems, the staff of Ritz-Carlton typically acts responsibly, without ascribing blame, through targeted corrective action.”

Hold the team to high standards and measure, measure, measure

Once you have the right people and they are trained and empowered, you need to ensure they are delivering on your core message and it is resonating with customers. If people are set up to succeed, then it is also their responsibility to create a great customer experience. You must monitor your team and make sure they are creating Wow experiences for your customers.

Not only should you work with them individually, you should look at how well your customers are responding. Start with monitoring NPS (Net Promoter Score). Net promoter score is very straightforward. It is the answer to one question, on a scale of 1-10: How likely is it that you would recommend the company to a friend? Those who are answer with a 9 or 10 are considered loyal enthusiasts who will keep buying and refer others. Those who answer 7 or 8 are passives, satisfied but unenthusiastic customers who are vulnerable to churning. Those with a score of 0-6 are considered detractors, unhappy customers who can damage your brand and impede growth through negative word-of-mouth. While target NPS scores are dependent on your industry and audience, you can monitor your team’s performance by looking at the trend, whether your NPS is improving or deteriorating.

The Ritz-Carlton takes measurement to the next level and that provides a great way to move from providing excellent customer service to delivering Wow. At Ritz, they focus on customer engagement using a methodology developed by the Gallup organization:

  1. How satisfied are you with Ritz-Carlton?
  2. How likely are you to continue to choose Ritz-Carlton?
  3. How likely are you to recommend Ritz-Carlton to a friend or associate?
  4. Ritz-Carlton is a name I can always trust?
  5. Ritz-Carlton always delivers on what they promise?
  6. Ritz-Carlton always treats me fairly?
  7. If a problem arises, I can always count on Ritz-Carlton to reach a fair and satisfactory resolution?
  8. I feel proud to be a Ritz-Carlton customer?
  9. Ritz-Carlton always treats me with respect. 10. Ritz-Carlton is the perfect hotel for people like me?
  10. I can’t imagine a world without Ritz-Carlton?

By looking at NPS and customer engagement, you can measure how well you are delivering a great customer experience. Most importantly, look at the trends and see if you are maintaining a strong experience, getting better or deteriorating. Once you understand how your customers feel, you can then work with your team to improve. Transparency is the key, at Ritz, once the data is collected, results are posted monthly, and an 18-month rolling average is used to place each hotel in a green, yellow, or red zone. You should use this data to adjust swiftly what you and your team is doing to enhance the emotional bond with your customers.

Treat your staff like you treat your customers

The final key to creating a great customer experience is treating your team the way you want them to treat your customers. Leaders need to lead by example and this includes helping people see how they should treat others. At the Ritz-Carlton, the philosophy is that everyone is as important as everyone else, from the CEO to the housekeepers and clerks. Michelli writes that “by not confusing title with importance, leadership at Ritz-Carlton understands that creating an environment of respect universally results in a respectful service….I knew the guests were very important. But a few months later I realized that the maître d’ I watched every day was just as important because every guest was proud when he talked to them. Why? Because he was a first-class professional. He was somebody special—because of the excellence he created for the guests.”

This attitude also should translate into protecting your team when necessary from customers. If a customer is disrespectful, that is no more acceptable than an employee being rude to a customer. You need to empower your team to fire customers gracefully to reinforce the importance of treating everyone well.

Slide1

A story to create WOW

Integrating best practices from the Ritz-Carlton with the way Danny Meyer created a restaurant empire, it becomes clear that building a great customer experience is not about one thing (a catchy slogan, a big CS team, etc.) but about a process. First you need to create the appropriate mentality across your organization, then hire the right people, train them consistently and focus on (and measure) delivering what the customer does not even realize they want. With these elements in place, you will create a customer experience that accelerates engagement and retention of your customers and translates into higher profits.

Key takeaways

  • Ritz-Carlton, one of the most profitable hospitality groups, leverages creating a great customer experience to build its competitive position
  • To provide an exceptional experience, you need a message that your organization can rally around; for the Ritz-Carlton it is: the answer is yes; . . . now what is the question?
  • You then need to build a team focused on delivering that experience, from hiring correctly, to training and then empowering.

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Author Lloyd MelnickPosted on February 18, 2020February 15, 2020Categories General Social Games Business, General Tech BusinessTags customer experience, customer service, ritz-carlton, wow2 Comments on Customer experience best practices from the best

Creating an experience that retains players

Creating an experience that retains players

Slide2

One of the most useful book I read last year had nothing to do with tech or the gaming space but was Danny Meyer’s Setting The Table, about how he created an incredibly successful restaurant empire. Meyer, who is not a chef, has built arguably the most successful restaurant business in the hyper-competitive New York market and is one of the founders of Shake Shack. Meyer built his empire not on creative dishes but creating a fantastic customer experience, which resulted in very high customer retention.

setting the table.jpg

Given the importance of retention to game companies, creating a great customer experience is critical to retaining your players. While the product contributes to the experience, there are many other factors. When you go to a restaurant, the food is important but a key reason whether you return (are retained) is the overall experience. You might have great food, but if the waiter is surly, you have an issue paying the bill or even the cloakroom attendant is rude, you might not come back and will probably leave a bad Yelp or TripAdvisor review. Thus, the restaurant industry provides great lessons on how to create a superior customer experience, and Danny Meyer is probably the best restaurateur at delivering a fantastic experience. By extrapolating Meyer’s philosophy into a more general strategy, you can build a roadmap for improving almost any business.

The Golden Rule

Creating a fantastic customer experience begins with the Golden Rule, “do as you would be done by.” In effect, you should treat your customers the way you would want to be treated (and spoken to). If you do not want to get a call at 5 AM, do not try to call your customers at 5 AM because they are more likely to answer. If you would not want to have to answer ten stupid questions to cash out from a casino, do not ask your customer ten stupid questions. In all situations, put yourself in your customer’s perspective and ask how you would want to be approached or treated.

You are as strong as your weakest link

While your core product offering may be fantastic, customers are going to remember the worst part of their experience. If you are in a hotel, you may have a beautiful room with a very comfortable bed but if when you check out you are charged for a bag of cashews from the minibar that you did not take, that is what you are likely to remember. If you go to the hotel restaurant and the food is bad, that is what you will write about on TripAdvisor. It also does not matter to the customer if the restaurant is owned by the hotel or licensed to a third party; the customer will probably be more irate if you try to blame someone else. The key lesson is if you are spending time and money creating a great game or product, do not neglect all the other ways you interact with your customer or player.

Create a connection

One of the strongest motivators for people is seeking connections. As I wrote last week, after satisfying physiological needs and safety, people focus on needs of belonging and esteem, so if the organization is focused on building connections with customers that focus creates tremendous value. Meyer writes, “business, like life, is about how you make people feel….Service without soul is quickly forgotten.” Creating this connection and sense of affiliation builds trust and leads to repeat business.

To create a connection, the first step is to make your players feel important. They should not feel like a number or one of many players (you are number 800 in the queue, please hold on). Every customer should feel like a VIP, they should feel important and loved by the company. According to Meyer, “everyone goes through life with an invisible sign hanging around his or her neck reading, ‘make me feel important.’” If everyone dealing with customers treats them (and considers them) VIPs, you will build a long-lasting connection that keeps the customer from churning and probably improves engagement.

Customer’s time is money

Many companies fail to realize that a customer’s time is more valuable to them than money. All game and gaming companies at their core are entertainment companies, people are choosing between playing your game online or watching the latest episode of the Witcher, land based casinos have learned the Bellagio is competing not only with the Wynn but also with a trip to Hawaii. Your customer facing team must realize it is as important to save customers’ time as how much money they are spending.

Withcher

Optimizing your customers’ time is also critical in ensuring their experience is better than their next best option. If you are using your customers’ time, you need to provide value (to them, not you) in exchange. Meyer writes, “what mattered most to me was trying to provide maximum value in exchange not just for the guests ’ money but also for their time. Anything that unnecessarily disrupts a guest’s time with his or her companions or disrupts the enjoyment of the meal undermines hospitality.”

If you have a great game, say an online casino, that they enjoy but have to spend half their time dealing with technical issues or trying to cash out, it effectively reduces their enjoyment 50 percent. Even if they get 10 percent more pleasure in your online casino then they would watching the Witcher, by forcing them to waste 50 percent of their time you make the Witcher, your competitor, a superior option.

Agents over gatekeepers

Creating a great customer experiences requires agents to act as advocates of the customers, not as gate-keepers. In every business, there are employees who are the first point of contact with the customers (attendants at airport gates, receptionists at doctors’ offices, bank tellers, executive assistants). Those people can come across either as agents or as gatekeepers. An agent makes things happen for others. A gatekeeper sets up barriers to keep people out. They need to represent the customer’s interest, fight for the customer and thus understand the customer’s concerns. As Meyer writes, “hospitality is present when something happens for you, it is absent when something happens to you.”

Mistakes are an opportunity

To me, mistakes are one of the best things that can happen in the customer experience world. Players remember the way mistakes are handled much more than the mistake and often more than the actual gaming experience. Mistakes provide an opportunity to create a great memory and a connection with your customer. Meyer writes, “The road to success is paved with mistakes well handled. Business is problem solving. As human beings, we are all fallible. You’ve got to welcome the inevitability of mistakes if you want to succeed in the restaurant business — or in any business. It’s critical for us to accept and embrace our ongoing mistakes as opportunities to learn, grow, and profit.”

Meyer identifies five elements for effectively addressing mistakes, fortunately all start with the letter A:

Slide1

  • Awareness. Knowing that a mistake has been made.
  • Acknowledgment. Admitting that a mistake was made. It is incredibly frustrating having to argue with a company that they made a mistake. I remember a recent business trip to Sydney where the Internet in my room was not working. I had to argue with the front desk, then with a maintenance worker, both assumed that I did not know how to connect my phone to the Internet. Long story short is the wireless access point in the room was broken but their refusal to acknowledge the problem quickly ended up in my cancelling a stay the following month and not staying during visits every quarter. That is the cost of not acknowledging a mistake.
  • Apology. Saying you are sorry is an important step in turning a mistake into a good experience for your customer.
  • Action. Fix the mistake. Say what you are going to do to make amends then follow through. Make sure that the issue is resolved to the customer’s satisfaction and that you take care of it, do not put the resolution of the problem on the customer (remember to value their time).
  • Additional generosity. Do not simply make good for the mistake, provide more than you have to. Turn the bad experience into a great one. If a diner has a bad experience at one of Meyer’s restaurant, not only would they probably not be charged for the meal, but they might get a bottle of wine or champagne.

Another area to leverage mistakes is to turn a customer’s mistake into your mistake. Rather than fighting with a customer, accept responsibility even if it was not your fault. If you stress the customer made a mistake, either they will be mad at you or mad at themselves (if they do not believe you). Either way, they are not having a good experience. Instead, turn the mistake into your mistake and make them happy. That will drive additional engagement.

You need to align hiring with creating a great experience

To create a fantastic experience for your customer or player, the people responsible for dealing with them must have the right mentality. To have the right people, you need to hire the right people. As Meyer stresses, “you can’t teach emotional intelligence.”

You can have scripts and processes for dealing with customers but unless your team members can radiate warmth, friendliness, happiness and kindness, you will not be able to create great experience. Thus, you need to hire warm, empathetic people who have an excellence reflex. The excellence reflex is a natural reaction to fix something that is not right or to improve something that can be better. Not all hiring is perfect, so if you end up with some people who are not empathetic or have an excellence reflex, then you need to find them a new home. Otherwise, you will not be able to create great customer experiences.

You also need to ensure your people can control their moods. We all have bad days, but the customer does not care. You need people with personal mastery, team members aware of their moods and able to keep them in check.

Hiring is the key. As Meyer explained, “Over the years, the most consistent compliment we’ve received and the one I am always proudest to hear, is ‘I love your restaurants and the food is fantastic. But what I really love is how great your people are. ‘ The only way a company can grow, stay true to its soul, and remain consistently successful is to attract, hire, and keep great people.”

Customer experience is the key to success

While it is very challenging to build an organization with great customer experience, it is critical to engaging your players and preventing churn. Meyer’s success using customer experience as the key differentiator in building a restaurant empire in New York City, one of the most competitive and saturated markets, shows how this feature can help companies in other industries (like gaming) stand out and succeed.

Key takeaways

  • The key to strong retention is creating a great customer experience outside of the actual product, ensuring that customer contact is extraordinary.
  • To create a great experience for customers, everyone dealing with them needs to treat customers as they would want to be treated.
  • It is also critical to ensure you have no weak links in your interaction with customers, you create a connection with your player, your people act as agents for the customers and not gatekeepers, you treat mistakes as opportunities and you hire for emotional intelligence.

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Author Lloyd MelnickPosted on January 14, 2020January 9, 2020Categories General Social Games Business, Lloyd's favorite posts, Social CasinoTags customer experience, customer service, Danny Meyer1 Comment on Creating an experience that retains players

Use smart CRM to avoid being dumb

I recently read an interesting book, Smart Customers Stupid Companies by Michael Hinshaw and Bruce Kasanoff, that made an excellent case on why you should make your CRM (customer retention management) systems more sophisticated. The underlying idea is that customers, players, users, etc., are very connected, they regularly use mobile devices and tablets, have easy access to a computers and thus can find almost any data quickly (ever hear of Google?). As customers have and take advantage of instant access to information, they thus expect the companies they deal with to be equally sophisticated.

Consumers and businesses alike research, connect, and purchase online and over their phones. As Hinshaw and Kasanoff write, “[w]ith these tools come radically higher customer expectations. Higher expectations of experience. Greater demands for personalization and customization. Lower tolerance for mistakes, for running through inane hoops, or for interactions that require mindless repetition.”

What are smart customers?

Customers these days have immediate access to almost all information, with Google, Wikipedia, Angie’s List, etc., literally in the palm of their hands. Customers can outwit salespeople, easily spot misstatements by customer service reps, and have near-instant access to the accumulated knowledge of human civilization. The trend is continuing to accelerate; with each new generation of devices people have access to more information.

Customers are also getting less patient, and younger customers never had much patience to begin with. Anyone 20 or younger has never known a world without the Web. The oldest of this generation are now adults, soon to graduate from college and start households of their own. Continue reading “Use smart CRM to avoid being dumb”

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Author Lloyd MelnickPosted on January 22, 2015January 29, 2015Categories General Social Games Business, General Tech BusinessTags CRM, customer experience, customer service, segmentation, smart CRM, smart customers, smart customers dumb companies1 Comment on Use smart CRM to avoid being dumb

Lifetime Value Part 20: What others are doing to optimize lifetime value

There was an article recently that cited a study from Econsultancy and Sitecore that highlighted what companies and advertising agencies are doing across multiple industries to increase customer lifetime value. I have written many times about the importance of lifetime value (LTV), and how it is the core of whether your company or product is successful. The article points out that 75 percent of global company marketers agree that LTV is crucially important. I think it is important to understand what companies in other industries are doing to optimize lifetime value so rather than just following your peers, you can build an advantage over them.

A single customer view

The most common response when asked, “What is the most effective tool to optimize LTV ?” was a single customer view. The recognition that key insights are being missed also supports recent findings showing that marketers are struggling to develop a holistic view of their customers. For example, you may have data from inside your product how consumers act, survey data from your users, focus test results and feedback from customer service. What you may not be doing is integrating all of this data to understand the customer experience and their frustrations. Many companies just look at the in-product metrics but by looking at the data holistically you are more likely to find the levers to optimize best your product. Continue reading “Lifetime Value Part 20: What others are doing to optimize lifetime value”

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Author Lloyd MelnickPosted on July 2, 2014August 20, 2014Categories General Social Games Business, LTV, Social Games MarketingTags cross-selling, customer experience, customer service, customer view, lifetime value, LTV, personalized interaction, up-selling1 Comment on Lifetime Value Part 20: What others are doing to optimize lifetime value

Get my book on LTV

The definitive book on customer lifetime value, Understanding the Predictable, is now available in both print and Kindle formats on Amazon.

Understanding the Predictable delves into the world of Customer Lifetime Value (LTV), a metric that shows how much each customer is worth to your business. By understanding this metric, you can predict how changes to your product will impact the value of each customer. You will also learn how to apply this simple yet powerful method of predictive analytics to optimize your marketing and user acquisition.

For more information, click here

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Lloyd Melnick

This is Lloyd Melnick’s personal blog.  All views and opinions expressed on this website are mine alone and do not represent those of people, institutions or organizations that I may or may not be associated with in professional or personal capacity.

I am a serial builder of businesses (senior leadership on three exits worth over $700 million), successful in big (Disney, Stars Group/PokerStars, Zynga) and small companies (Merscom, Spooky Cool Labs) with over 20 years experience in the gaming and casino space.  Currently, I am on the Board of Directors of Murka and GM of VGW’s Chumba Casino

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