Is Business Getting Better or Are Your Customers Expecting Less?

You may have seen the news that the 2014 Airline Quality Report (AQR) showed a significant drop in passenger complaints, nearly 15%. The study, conducted jointly by Wichita State University and Embry-Riddle Aeronautical University, found that airline quality is at its highest level since the annual survey began in 1991.

If you have flown on domestic U.S. airlines recently, you may find these results, um, counterintuitive. My experience - and that of most people I talk to about flying - is that it is something to be endured rather than experienced. Indeed, some analysts suggest that the flying public simply has very low expectations when it comes to air travel. They have become inured to delays, cramped seating, and being nickel-and-dimed at every point in the journey. One of the survey's authors, Dean Headley, Ph.D., said as much in an article published online by U.S. News & World Report:

The change could be because people have less to complain about, but also because they don't expect as much from airlines when it comes to customer service.
"My expectations are lower than they were two or three years ago," he said. "The best thing I can say about a flight is that it was uneventful. I don't think I'm that far off from what most people's expectations are."

So while some in the executive suites at American, Delta, United and the rest may celebrate the latest AQR results ("Look at us! We're getting better!"), one wonders if anyone is asking the difficult questions. Are people avoiding air travel altogether, in favor of driving or simply traveling less? How many business meetings are held on Webex or Skype or GoToMeeting in order to not only save money but also avoid the hassles of airports?

It is, of course, difficult to prove a negative. But one thing the AQR does suggest strongly is that business performance - at least for the airlines - is a direct corollary of employee engagement. The worst-performing airline is American Eagle, which had the worst on-time performance, increases in lost luggage and overbookings, and customer complaints. Headley pointed out that American Eagle is still recovering from the effects of American's bankruptcy and subsequent merger with US Airways.

Headley... notes that this is due in large part to employees feeling anxious about how changes to the company will affect them directly. "There's going to be a certain amount of angst, and that has a tendency to destroy performance. A lot of it has to do with the perceptions of the front-line people. There's always a group that doesn't feel well-served, so they don't serve well for awhile."

How much angst are your employees feeling? And what is that doing to your business performance? Even if you are not a consumer-facing organization, the way your employees feel about their jobs has a direct impact on how they work with one another and their clients, constituents, students, or patients.

Another Symptom of an Improving Economy - People Are Quitting

I was having dinner with friends the other evening and one asked how my business was going. I replied (truthfully) that I had never been busier. He was surprised.

"With all the people out of work, who needs help recruiting?" he asked.

I explained in general terms the skills gap and the need for talent in specific areas and industries. Now there's additional evidence that the labor market is, indeed, heating up once again.

Recent Bureau of Labor Statistics data show that the "quit rate" (the percentage of workers who voluntarily quit their jobs) has inched upwards to 1.7% of the work force. That doesn't sound like much, but when you consider that the quit rate was at 2.1% before the Great Recession, then dipped down to 1.2% at its nadir, one can see that it has risen back half way to where it was in the booming years of the Aughts.

Economists view this as a positive sign, because it indicates that people are more confident they can find another job in this economy. Employers should take note - it also means that your best talent may be looking elsewhere.

Recent research by McKinsey has established that the classic Brand Funnel - once a staple of business school branding theory - has been replaced by a Brand Loop. Instead of becoming advocates for a brand for life (or until the brand broke its implicit promises), McKinsey found that the constant barrage of information coming at people causes them to re-think their choices of brands continuously. That extends to their choice of employers.

Best practice for employers is to constantly re-market themselves not only to potential recruits, but also to their own employees. If you are not telling your story to your people, some other employer probably is (either directly or by proxy, i.e., through friends and family of your employees).

What's in a (Brand) Name?

"What's in a name? That which we call a rose would
By any other name smell as sweet."

Juliet can be forgiven for not understanding the real connection between names and the things to which they are attached. It was not until nearly a century later that John Locke would formalize the study of semiotics in his Essay on Human Understanding.

Fast forward to the late 20th century, and research began to reveal changes in how humans recognize and interpret brand names. Continuing with the theme from our previous post on neuroplasticity, the study done at UCLA found that brand names are recognized almost as quickly as common nouns.

Even more interesting, when the researchers displayed brand names on the left hand side of a computer screen, recognition speed increased even more. This suggests that brands are more naturally associated with the right-hand - or emotional - side of the brain.

The study, published in the journal Brain & Language, demonstrates that brands are insinuated deeper into our culture than many would suspect. This is somewhat corroborated by a study done by Millward Brown Optimor on the impact of brand names on perceptions of employers. In essence MBO found that better-known employers were perceived as better places to work regardless of whether or not the respondent had any direct knowledge of what it was like to work at any one of the companies tested. Familiarity appears to breed preference.

The lesson is that your employer brand does matter - a lot - when it comes to attracting the right talent. If you are not well known, people will be more suspicious of you as an employer. ("If they're so good, why haven't I ever heard of them?") In today's fast-moving, social media world, can you afford to start the war for talent with such a handicap?

As for Romeo, I wonder if Juliet would have fallen for the same guy named Hiram.

We Continue to Evolve... Whether We Like It or Not

Recent studies have found that human brains are evolving physically in order to cope with the onslaught of data coming their way. The phenomenon is known as "neuroplasticity," which is defined by Wikipedia as "...changes in neural pathways and synapses which are due to changes in behavior, environment, or neural processes." In other words, our brains are changing - evolving - in response to changes in our environment.

Don't take my word for it. Observe what happens the next time you are in a line. It could be at the grocery store check-out. At a ticket counter at the airport. Or the even longer security line. What is everyone doing? Checking their smartphones, of course, for the latest e-mail or Facebook post or stock quote. Ten or even five years ago, most people would be just waiting. Bored out of their minds (or, at the check out line at the store, thumbing through trashy magazines).

Our gadgets have changed how we respond to the simple act of waiting. And changed our expectations for the waiting experience, as well.

How often have you become frustrated because the WiFi signal where you were waiting was too weak? This was never an expectation before recently, but people have begun to view connectivity as a "right." During the 2009 - 10 Occupy movement in San Francisco, the Bay Area Rapid Transit tried to shut down cell signals within the BART system to thwart those planning demonstrations using social media. The hue and cry from the general public forced BART to restore the service within a couple of days.

The point is, people have changed their behavior - and, according to neuroplasticians - their brains have changed along with them. Now the question becomes what have you done to change your employment communications to cope with these changes? Have you made it easy for people to apply for positions using their smartphones? According to the latest comScore report, 67% of Americans have smartphones, up from 55% just one year earlier. If your career information is not mobile friendly, you are missing out on a huge portion of the talent market.

Mobile is no longer an option. You must have mobile capability built into your employment marketing program.