It’s all too easy to take for granted the ways that committed employees enrich the lives of their customers. The auto mechanic who spends a few extra minutes chatting with a senior citizen, the grocery clerk who compliments a shy child on a new pair of shoes, the hospital nurse who gives her patient’s hand a squeeze—all manifest a positive purpose.
Small acts of compassion at the right moment come naturally to some people. But companies that earn strong loyalty from customers systematically teach and reward such behaviors. The Net Promoter System℠ has proved very effective at empowering employees and teams to do the right thing (and even show their love) for customers.
Now, though, many businesses have reached an inflection point where digital technologies are replacing face-to-face interactions at a staggering rate. In banking, for example, our NPS Prism℠ benchmarking in 2020 shows that roughly 70% of customer interactions at US banks started in digital channels. This can benefit both companies and customers—better experiences at lower cost—but customers generally have high expectations for this digital front line. Particularly for complex or emotional interactions, they want personalized experiences delivered with the same level of empathy as they perceive in the best employees.
Leading companies in many service industries such as retail, telecommunications, banking, and insurance thus are investing rapidly to build the technology, requisite data, and analytics capabilities to meet customers’ high expectations. In the vast body of work that companies are undertaking to digitize the experience, they rarely ask one important question: How do you teach the algorithms to love your customers?
A crisis of disconnection?
This is not to underestimate how recent advances in data analytics and technology can create unprecedented levels of personalization and even connection with customers. Still, this opportunity comes with a massive risk. As companies build their digital operations and become less reliant on frontline employees, they risk losing the human connections.
Digital metrics often fail to capture friction that annoys customers. And some technologies have unwittingly alienated customers or prospects: Marketing campaigns powered by artificial intelligence have sent inappropriate items to young people, while AI tools deployed by some banks to make credit decisions have wound up perpetuating biases against protected characteristics, such as race, gender, and sexual orientation.
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At a fundamental level, many customers crave connection in their commerce. The surge of people returning to restaurants and stores in the wake of coronavirus vaccinations testifies to the social aspects of purchases. Without a conscious effort to embed humanity in digital experiences, we are headed toward a bleak and joyless world ruled by models that are poor substitutes for the spontaneity and ingenuity of the best frontline employees.
It doesn’t have to be this way. Companies that integrate the best of traditional customer-centered approaches into the digital front line will be able to combine the best of both worlds. They will create experiences that delight customers in ways that were impossible without the fusion of humanity and data. These elements include intensively using data to personalize the experience for customers; a robust feedback system that spurs continuous learning and improvement; a culture that puts the customer’s priorities at the center of every decision; and empowered, engaged employees who view enriching customers’ lives as the core purpose of the company.
Digital with a personal touch
Many transactions can be fully digitized in ways that benefit customers. However, many situations merit a human touch—blended seamlessly with digital.
No industry is more ripe for this opportunity than healthcare. During the Covid-19 pandemic, the use of telehealth accelerated, with digital interactions becoming a standard channel of care. Teladoc combines a telehealth platform with a digitally enabled care management platform, aiming to replicate some of the in-person experience of visiting a doctor. The platforms also allow physicians and therapists to see medical records and prescribe medicine. Patients get on-demand access to a medical professional and instant support for acute care and select specialties.
Online video has made it possible to conduct many visits at a distance, but good doctors know when they need to see patients in person for a high-touch exam. How will companies with less obvious boundaries decide when and how to maintain that human touch? Surprisingly, some digital natives are leading the way.
Consider Chewy, an online pet retailer that has invested in technologies to reinvent the pet category. Chewy’s recommendation engine generates offers based on the information entered by customers in their pet profile, feedback, and ongoing interactions, producing high levels of recurring revenue from existing customers. Core to Chewy’s success, however, is a culture of employees finding new ways to “wow” pet owners. Small gestures that add up to a remarkable experience include sending hand-painted pet portraits to select customers. Chewy’s astute blend of digital and human is one reason it exceeds Amazon’s Net Promoter Score℠ by 28 points in the pet category.
Discover, a US credit card company, started down this path 30 years ago and has been enjoying the benefits ever since. Discover offers round-the-clock access to local agents, charges no fees on credit cards, and continuously makes decisions that put customers’ interests first. It has raised the digital intensity of the experience, so that across all credit card episodes, 84% are handled digitally, according to our recent NPS Prism benchmarking. And the share of interactions that go through human channels for Discover is less than half that of competitors.
Because there are so many fewer interactions requiring human intervention, Discover is able to ensure they are handled by skilled agents who are well trained to handle complex customer problems and other moments of truth. When customers interact with Discover, their needs are met at the first contact around 80% of the time.
The results have been impressive. Discover has been an NPS® leader in credit cards for several years. And the company has outpaced competitors in its total shareholder return over the past decade.
Wanted: Empathetic data scientists
Data scientists, programmers, and designers will play critical roles in enabling the digital front line. But an affinity for delighting customers is an anomaly for most tech-intensive roles. Few data scientists have a customer orientation on a par with that of a Ritz hotel concierge.
That’s why training these employees, and finding other ways to maintain the customer connection, such as gathering and listening to customer feedback, is so important for understanding not just what customers do, but also how they feel. The digital front line should have the same level of personalization, empathy, and engagement as human channels.
Stitch Fix, for instance, is marrying machine learning with human judgment to deliver personalized styling services to customers. The company’s advanced algorithms use customers’ fit feedback and purchase histories to evaluate the likelihood that the customer will love a particular style. The algorithms make recommendations to a stylist who finalizes selections from the inventory list and adds a personal note to the customer with styling tips. Algorithms also assign the optimal supply chain depending on customer location, warehouse inventory, and other factors.
But it doesn’t end there. Continuous responses from customers feed the machine learning software, which enables the company to better recommend items to all customers and intelligently inform its own private label design. This highly personalized experience was not created by a marketing team, but by a team of more than 100 data scientists. The company “humanizes” the algorithms with consistent feedback from customers, using data science to augment, rather than replace, what employees do.
In the race to rapidly digitize even more elements of the customer experience and meet customers’ ever growing demand for simple, easy, and personalized digital experiences, it’s tempting to rely largely on the promise of big data and AI-driven algorithms as a panacea. But they are only one piece of the puzzle. Better products, delivery—indeed, the entire experience—depend on constantly reading the data and also listening to customers to understand their needs and feelings. Especially in complex or emotional interactions, there is no effective substitute for human interactions and human judgment.
What does it take for companies to keep the human spark alive as they seize opportunities to build out the digital front line? Key elements of the traditional Net Promoter System remain essential, particularly using feedback to create a customer-centered culture among highly engaged employees. Combining that culture with the right data and technology will power the next generation of loyalty leaders.
At the highest level, company leaders should ask how they can maintain and embed the human touch in their interactions with customers, and what role employees play. To get started in this context, leaders should consider some key questions:
- Does our culture allow us to embrace technology in ways that make it easy to act in the best interest of our customers?
- Is our product and experience truly differentiated, clear, and compelling, whether delivered through a human or a digital front line?
- Are we upgrading NPS and other feedback systems to include operational and other signal data (such as predictive NPS) and competitive benchmarks?
- How can we break down silos between digital, marketing, and customer experience functions so they collaborate to deliver the right offer or message at every customer touchpoint?
- Which specific use cases for digital engagement or personalization should we choose first for testing and learning?
Roblox-style fully virtual consumer commerce might dominate in the distant future, but not soon. Even if that scenario does eventually occur, winning companies will learn from digital pioneers such as Chewy and Stitch Fix, which blend human ingenuity with the most advanced data and technology to deliver exceptional experiences.
The authors thank their Bain & Company colleagues who helped develop this brief: Basma Abdel Motaal, Srijan Bhatnagar, Manish Dabas, and Hamish Nairn.
Net Promoter®, NPS®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.
NPS Prism® is a registered trademark of Bain & Company, Inc.