[We’re pleased to welcome Anika Kolberg, Postdoctoral Research Fellow at the Ruhr-University of Bochum in Germany. Dr. Kolberg recently collaborated with Sven Mikolon, Till Haumann and Jan Wieseke on their article entitled “The Complex Role of Complexity: How Service Providers Can Mitigate Negative Effects of Perceived Service Complexity When Selling Professional Services” from Journal of Service Research.]
We all have, at one time or another, wondered how something actually works – and then finally given up trying to understand it. The feeling that results is anything but satisfying.
From a customer perspective, this is basically what happens when customers are confronted with a complex yet necessary service: They have to understand it, because otherwise they cannot make a sound decision. However, understanding is hard and oftentimes frustrating. Services which can be described as “complex yet necessary” are so-called professional services, like financial, insurance, or legal services. Most customers lack the specific knowledge necessary to completely understand these services. For example, they may not know how interest rates might develop or how to interpret laws and regulations.
What happens when customers lack knowledge and therefore have trouble trying to evaluate different service offerings? If customers are mentally exhausted during service encounters, they feel unfairly treated, as it should be the service provider’s job to help them understand the service. Therefore, customers will be less satisfied, less willing to return to the service firm in the future, and less likely to recommend the service.
Usually, one would expect that the more complex the service, the more customers feel mentally exhausted. In our research we uncover that this expectation is true for low to moderate levels of service complexity only. However, if service complexity is especially high customers feel less mentally exhausted. This is because at a certain level of complexity the customer decides “This is too much”, gives up trying to understand, and thus saves mental energy. Given that customers are less mentally exhausted at high levels of complexity – can’t we simply raise complexity further to avoid negative implications for customer satisfaction and loyalty?
The answer is “No, we can’t!” Why not? There are two more problems linked to high complexity:
First, even though customers tend to mentally “switch off” to save some of their mental energy when things get too complex, they do not completely avoid mental exhaustion. They still have to take a decision. Thus, although at high complexity mental exhaustion is lower than at moderate complexity, it is still higher than at low levels of complexity. Second, above and beyond the role of mental exhaustion, high complexity per se also leads customers to be less willing to return and recommend.
How can these negative consequences be avoided? One solution is, of course, to reduce service complexity. For example, while most professional services are highly customized, offering more standardized solutions can simplify decision making for the customer. At the same time, highly savvy customers who do not regard the service as complex, can be offered more customized solutions. Educating customers, for instance in customer seminars or with the help of newsletters, can also reduce complexity for the customers.
However, for many services complexity can hardly be reduced. Another solution therefore is to weaken the consequences of high complexity. Our research shows that adapting the presentation to the customer can mitigate the detrimental effects of high complexity. More specifically, you can help your customers to easily understand a service despite its complexity by paying attention to these steps:
- Is my customer overtaxed?
In an interaction with a customer, you should be able to determine whether the customer is mentally overtaxed. Look for signs of fatigue and mental exhaustion like yawning, increased blinking, squirming and fidgeting. Also, get some more information about the customer’s knowledge of the service. Savvy customers are usually not as easily overtaxed as novice customers.
- How should I approach my customer?
Based on what you know about the customer, you should adapt your selling approach accordingly. That is, if a customer lacks specific knowledge and will easily be overtaxed, you should help him to more easily understand the service. Use simple language instead of technical terms, illustrative language instead of hard facts, and adjectives instead of numbers. Put differently, if a customer has trouble making sense of a complex service, the solution is not to provide more information, but to provide information in a different way. For instance, when selling an investment product, a sketch showing how capital builds up over time is much easier to understand than verbal explanations.
- What type of other information does my customer need?
Oftentimes customers also receive other information, like company brochures or information brochures on certain services. As is the case of personal encounters – this type of information should be adapted to the specific type of customer. You should have available at least two types of information brochures – one version in an easily understandable language, using tangible examples and illustrations for novice customers; a second version using more technical terms, numerical examples, and more detailed technical information for expert customers.
To summarize, highly complex services can easily overtax the customer. Since this results in decreased customer satisfaction and loyalty, service providers should adapt their way of providing information to help the customer understand the service more easily.
Anika Kolberg is Postdoctoral Research Fellow at the Sales & Marketing Department, Ruhr-University of Bochum, Germany. She received her PhD in 2014 from the Ruhr-University of Bochum. Her research interests focus on personal selling in service contexts, stereotyping at the employee-customer interface, as well as behavioral pricing. Her work is forthcoming in the Journal of Service Research and the Journal of the Academy of Marketing Science.
The article The Complex Role of Complexity. How Service Providers Can Mitigate Negative Effects of Perceived Service Complexity When Selling Professional Services featured in the post was co-authored by Sven Mikolon (Imperial College London, United Kingdom), Anika Kolberg, Till Haumann, and Jan Wieseke (Ruhr-University Bochum, Bochum, Germany). It is available ahead of print at Journal of Service Research website. Journal of Service Research is the world’s leading service research journal that features articles by service experts from both academia and business world.
Republished with permission. The original post was published on the Center for Services Leadership blog.