Have you been to the Congo? If not, can you describe the weather? How about the vegetation?
Now tell me why you thought that? Did you see a movie or read a book about the Congo? Did you travel to a nearby country and guess that the Congo was probably a similar experience? Did you or someone you know someone who went to the Congo?
Now, to be clear, there isn't a wrong answer here. You could have gone to the Congo even. The point I am getting at is that all of us have expectations about the Congo that came from somewhere, whether it was a personal experience or reading Joseph Conrad's Heart of Darkness in secondary school. These expectations are also an example of a reference point.
A reference point is your standard for evaluation. In other words, reference points help us compare things. My colleague Professor Ryan Hamilton of Emory University discussed reference points in our recent podcast and how they are fundamental to the idea of customer expectations. Where we are coming from is how we determine or judge where we are. For example, if you go from bright sunlight into a darkened theater, you might think the theater is darker than if you entered the theater at night. If you come from a warm airport into subzero temperatures, you will curse the cold that much more than when it is only a touch brisk outside.
Your customers have expectations, too.
The way we evaluate everything is comparing it to something else, including customer experiences. In other words, I may never have bought insurance from a particular company, but I have dealt with an insurance company before, so I expect something similar based on that experience. You automatically put those past experiences and expectations on what you are going to experience with the new insurance company In this way, your previous experience with an insurance company becomes your reference point, and we measure our present experience with it.
Reference points teach us the first step to keeping up with customer expectations is to know what experience to which your customers are comparing it. Is it their last experience with you? Is it to your competitors' experiences? Is it to a service that is like yours, but a different category (i.e., comparing the cable guy to the plumber)?
Now, the concept of reference points is simple, but when you consider whether or not the customer is aware of their reference point--meaning they are conscious of where they are getting that baseline for comparison--it gets complicated. Customers are not always aware of the origin of every reference point they have. Our subconscious mind is taking in all kinds of information all the time, and sometimes it kicks it up to the conscious mind, but sometimes it doesn't. Nevertheless, the information gathered by the subconscious can still influence a customer's expectations.
Some people will expect a particular price for a car before they ever walk on a lot (or Google it online). The expectation comes from many different influences, but the brand is one of them. The car vendor is another. The same people also have a hope of the car buying experience before they ever walk on a lot (or Google it online). Brand and vendor also exert significant influence here.
I used a car example here, but you could add in just about any good or service, from insurance to medical care to Manhattan real estate. Suffice it to say there are numerous subtle cues your subconscious is picking up and interpreting into expectations no matter what you are buying.
So, How do you keep up?
Customer expectations serve as a reference point for the evaluation of your customer experience, so it would be to your benefit to understand how to keep up with them. Here are a few bits of advice to that end:
Do your research. One of the best ways there is to be well-informed on your customer expectations is to do your research. Check out the competitors and take an outside-in approach to your experience, so you know exactly how the experience feels to a customer. Customer feedback and surveys can help with this, with the caveat that customers might not always be a reliable source, particularly when the influences are subconscious.
Keep doing it. Too many times I have clients tell me that they are running their customer experience program based on research they had done several years ago. Research from your customers is only ever a snapshot in time. If it has been several years, odds are there have been some changes to customer expectations over the years. Customers' tastes will change with time.
Listen to what the research says. Sometimes companies do research and then ignore it. Back when I worked at British Telecom, I was guilty of this, too. I remember when a company called me out on it, saying, "You have undertaken this research for four years, but you never change anything!" We finally did do something about it and the customers were happier than before we took action. The moral of this story is that if you take the time to do the research, you bloody well better do something once you have it!
We all use a reference point when we compare things. It's human nature to do so. Therefore, when you are evaluating your customer experience and what your customers are comparing it to, you must understand the origin of your customers' reference point as well, and, preferably, uncover this information on a regular basis. Perhaps most importantly, you should use this information to improve your customer experience. If you don't do anything with the information you gather, you may as well research the Congo instead for all the good it will do your customer experience.
Are you aware of the reference points that you have used when going in to a new experience? As a business owner do you carry out research and always act on it?