Page 93 - Exceptional Service, Exceptional Profit: The Secrets of Building a Five-Star Customer Service Organization

74 Exceptional Service, Exceptional Profit

customer make sophisticated service or purchasing decisions by analyz-
ing the preferences of past customers who have behaved in the same
ways as the current one, as well as taking into account how the cus-
tomer himself has behaved in earlier interactions on the site.

The Netflix online video rental site is an example of an unusually
sophisticated, algorithm-based procedure. Netflix’s algorithms are based
on millions of previous customer actions. The algorithms allow Netflix
to accurately predict which movies will appeal to a particular customer
as soon as that user begins selecting and rating movies. The software can
even make rather impressive educated guesses before a customer makes a
first selection by weighing such variables as the customer’s gender, zip
code, and initial ‘‘search style’’ on the website.

Humans appear to be wired to respond appreciatively to anticipa-
tory service. That’s why Netflix’s ability to figure out a customer’s pref-
erences feels so impressive. Indeed, regular customers describe a sense
of having a ‘‘relationship’’ with the Netflix website; it feels to them as
though the site ‘‘knows’’ them personally. That’s how Netflix creates
intense customer loyalty—it’s one of the best-loved customer service
sites on the Internet—despite providing customers with not even a sin-
gle moment of direct human interaction in the course of a typical en-
counter.

But before you rush to become the Netflix of your industry, re-
member our discussion in Chapter Five of how easy it is to cross a line
from ‘‘ultra-functionality’’ to ‘‘creepiness’’ online. Given the creepiness
factor, should online retailers make personalized purchase suggestions
based on the behaviors already traced to a customer’s IP address, or
should they wait until the customer has voluntarily logged in? It’s
tempting to push the envelope, isn’t it? After all, if you logged and
analyzed all of a customer’s behaviors on your website, you could prob-
ably make your website more relevant for them.

But consider the downside: Do your customers want to have their
behavior tracked even before they log into your site? And do you want
to risk potential side effects, such as inadvertently offering children sug-