Want loyal customers? Use social theory to design IT services
Customer loyalty thrives on companies rolling out IT services designed by the people at the customer coalface, and sociology theory tells us how, says Gerhard Conradie, MD at Evolv Networks.
A senior figure from a German organisation was returning home after a successful trip, and wanted to send a note of thanks and support to his American counterpart. His message never arrived, because his telecoms company did not have an agreement with the telecoms provider of the American recipient. The German was livid, and went to his boss, who kicked off a global effort to wrest these communications from private technology companies and put them under international government control, permanently putting politicians in charge of making the decisions regarding how swathes of technology work.
The boss was Kaiser Wilhelm II, it was 1902 and the message was from his ambassador (and brother), Prince Henry of Prussia to Theodore Roosevelt. You could call it the first total customer service failure by a technology company. This company put its commercial interests ahead of customer service, and ultimately destroyed its business.
The technology to send messages long distances using wireless was new at the time, and the global leader was Marconi Wireless Telegraph Company. Its station operators were forbidden from sending on messages to competitor companies (https://bit.ly/2Skzzcj). The IT service (Morse code telegraphs) it delivered through its customer-facing users (wireless operators) was defined by how the company wanted to dominate the market, not drive customer loyalty. The wireless operators sitting in front of angry customers had their hands tied.
The customer service failure here would never have happened if Marconi had understood what we do now: the users of technology provided by their company should be involved in how it is designed, and how it is delivered, says Gerhard Conradie, Managing Director, Evolv Networks. To many executives in the IT department, the people at the coalface interacting with customers are merely "consuming" value in the IT systems.
IT users at customer coalface have powerful tools, but no power
They are given tools, and they must just use them. However, if the tools provided don't suit the needs of servicing the end customer, it creates an internal us-vs-them struggle. Staff struggling with the company IT systems will either curse IT in silence, or have to wage a battle to get reluctant IT departments to make changes.
Much of this failure for businesses to grow loyalty among their customers is that they try create loyalty through "top down" programmes. An exec has a brainwave, or reads the latest book, and tries to execute on it. Analyst firm Gartner puts it bluntly (https://bit.ly/2DhlCl9). Says Gartner: Don't try "delight" customers, mostly it leads to small new bright spots, but the fundamentals are overlooked. Don't focus on being a radical innovator; being reliably good at what you do is better than being first with a new trick. Don't over-analyse market research data looking for a hot button; it leads to "choice sprawl" where customers get dazed by too many options.
The C-suite shoots out bold new plans to delight their corporate customers. The IT department then tries valiantly to implement these in IT systems. The system users get caught between top-down IT deployment and bottom-up customer dissatisfaction.
Take a step back, design IT services with users
Perhaps it's time to take a step back when designing IT services. First look to the people directly engaged with the customers. The users of the systems could co-produce technology with the IT department. They understand best what the business' customers need, and they understand best how it meshes into existing business practices.
We must get the interaction between IT and the business' users right, because then we can truly impact the satisfaction and loyalty of the business' end customer. This is where we look to sociology theory to help IT executives build a productive relationship with their users. We need to understand how social capital works, and how it fits into an ITSM strategy.
Using sociology to drive ITSM programmes
There are three dimensions of social capital: structural, cognitive and relational. All three elements are important, but just two are imperative for user satisfaction.
For readers not versed in social theory, a quick recap. Social capital is all the actual and potential resources derived from the network of relationships between individuals or teams. Structural social capital is the patterns and connections between people, who you reach, and how you reach them. Cognitive social capital is the understanding between people, the shared interpretations and meanings. Relational social capital manifests as trust, reciprocity in obligations, and mutual identification as being on the same team.
There is a lot of academic study in this field, but well worth reading is: "User satisfaction with information technology services" (https://bit.ly/2WGzcay) by a team of researchers from China and Hong Kong. They looked into how several large financial services companies deliver IT services to their staff, and how this translated into customer satisfaction.
Their findings were illuminating. Firstly, regular interaction between users and their IT department is critical. The more people communicate, the more they build relationships and a shared understanding of each other's language, what their respective jargon means.
Regular interaction also leads to trust... where one group believes in and is willing to depend on another party. It leads to reciprocity: if you help me, I help you. This means people will share more, get more actively involved, because there is less feeling of risk in "sticking your neck out".
The research is in: build relationships first
Now, here is where the research gets interesting. The researchers found that, unsurprisingly, cognitive capital (shared language) correlated very strongly with improved satisfaction. Relationship capital (interpersonal relationships) was also highly correlated. What was unexpected was that structural capital (communications methods, role definitions, procedures) did not make a major impact, unless the other two elements were already highly developed.
When you think about it, this makes sense. You can try enforce all sorts of ways for people to act, blast them with communications, spend fortunes on social media tools. But, if they don't trust each other and share a common language, all that counts for very little.
To drive customer loyalty, users need their IT systems to help them deliver great service. They need accurate information and fast processes. The IT department needs these users to feed back requirements, so IT systems can be developed accordingly.
Social capital before capital expenditure
This means focusing heavily on building social capital, with a relentless focus on the cognitive and relationship aspects; the structural aspects can follow. Key to ITSM success is more open discussions at more levels of the organisation. The IT department must demonstrate it is listening, and the business units must show they're making the effort to communicate their wants and needs.
This allows IT systems to find natural alignment with the business needs, rather than being force-fit from above. Meshed with a sound ITSM strategy, where service design and service operation by the IT team meets users' requirements sustainably, and you have a winning recipe. Technology and sociology, unlikely bedfellows, but the key to unifying the business needs and the technology strategy for long-term customer loyalty.