4 Customer Experience Lessons from 2009

Its been the year of "Customer Experience"

Enterprises have been investigating, testing and piloting programs to assess and improve the customer experience. And, some best practices are emerging. Here are four "lessons" that we've distilled from the literature and our experiences this past year.

#1 - Start small and take the "long view".

In a recent report, Gartner Group predicted that only about half of the companies implementing Enterprise Feedback Management (EFM) systems will succeed in operationally using customer feedback. In our experience, the data generated by even limited CEM monitoring can be overwhelming. Acting on the insights produced can be even harder. Tip: Don't try to do too much, too soon, in order to justify large investments in EFM technology.

#2 - Choose appropriate metrics and begin to survey customers systematically.

Measuring customer experience requires an appropriate metric. A number of good ones are available including NPS and ACSI. Tip: Survey all (or as many as possible) of your customers and then track how different subgroups score you based on your metric. It will be clear over time if your experience improving efforts are having an effect (you'll have data from "control groups").

#3 - The right feedback management process will help you improve customer relationships while providing a positive customer experience.

Feedback management systems help to manage the feedback process and to "close the loop" with customers after they provide feedback. Tip: "Close the loop" with as many customers as possible and especially with those that matter most to you. Doing so really pays off in happier customers who know you are listening to them.

We've talked about one of our customers - AIFS - and how they were able to leverage feedback with their "promoters" in ways that helped them increase sales (If you'd like a copy - use our request information link). They reached the right customer subgroup at the right time, closed the loop in the right way and produced powerful results.

#4 - Where Customer Experience is concerned, short term actions impact the long term.

Focus short term effort on areas with immediate needs but long term benefits. An example would be to quickly follow up a survey by individually contacting each customer that expressed any dissatisfaction. Solve their problems and gain their loyalty! Tip: Start with discrete customer subgroups that closely link to your "success" as a business.

This approach limits scope (and cost) of organizational effort, offers opportunity for fast payback and provides crucial learning opportunities for later, broader based, efforts.

Convert Loyalty Insights into Account Strategy Action

Optimizing sales effectiveness is a goal shared by all sales organizations....

By categorizing customers based on their combination of loyalty characteristics and revenue profile, you create a new tool for determining where to invest resources and what kinds of efforts to apply in given accounts. By applying loyalty enhancing or loyalty leveraging strategies to your accounts you improve sales effectiveness.

Objective: Migrate accounts towards the "Emulate" Quadrant. These accounts have high loyalty and high revenue value to your business. Who doesn't want more large and highly loyal customers?

"Emulate" accounts should be leveraged and promoted through references, PR, marketing and social media. Identify their loyalty drivers and your best practices for them and then replicate where possible in other accounts.

"Problem" accounts are low loyalty but have high revenue value. They are at risk. Diagnose and repair any issues. Pay close attention to their feedback and act on what they say. Doing so will improve loyalty and help protect revenue.

"Growth" accounts are your potential new revenue stars. They are low revenue but high in loyalty. Look for ways to expand your revenue footprint here.

"Decision" accounts are always a challenge because they require resources to make more loyal but don't currently offer the revenue to justify an effort. Future revenue potential (indicated by bubble size) should be used to influence action.

Convert Loyalty Insights into Account Strategy Action with QuestBack

Few Sales organizations effectively deploy customer feedback as a primary input to their account management process. By combining QuestBack with a loyalty metric, you can create effective account strategies that produce higher sales over time.

Many firms struggle to convert customer feedback into actions that will have measurable impact on customer relationships. QuestBack's product and service offerings are designed to help with this challenge. All are focused on making customer feedback processes highly effective for improving customer relationships - and the bottom line.

With QuestBack its easy to set up a "closed loop" feedback management process. And, research shows, asking customers for feedback and then acting on it increases loyalty. Here's a simple QuestBack based survey process you could use to incorporate loyalty feedback into your account management strategy.

• Design your survey questionnaire using "likely to recommend" (loyalty) questions
• Attach your customer profile data to the questionnaire (make sure it has a revenue categorization for each survey recipient)
• Launch the survey
• When data comes in, segment respondents (using filters) based on the combination of "likely to recommend" and revenue category, which you loaded into the survey from your customer database
• Take action. You'll know which of your customers fit in each category and actions will be almost self-evident based on the responses to survey questions
• Repeat and trend the data
• Compare with sales trends, the use to formulate account strategies and action plans

If you would like to learn more about QuestBack click on the link below and we'll be glad to contact you.

https://www.questback.com/demo_nash_stewart_qbbostonusa/please_contact_me/

You Are What You Measure

In Customer Experience Management (CEM), You Are What You Measure

An interesting recent article in CRM Magazine describes some stages of Customer Experience Management (CEM) practice, or commitment, and some key characteristics of each. The labels are:


1) The Self-Centric 2) The Lip-Servicers
3) The Crowd-Followers 4) The Differentiators

Essentially, if a firm finds itself in any of the first three categories, they are either not sincere about CEM, and/or not getting nearly the benefits that are possible from effective CEM. The Differentiators, on the other hand, are using CEM to build long-term competitive advantages.

QuestBack has first-hand experience with companies that are serious about measuring and managing the Customer Experience. By systematically gathering, analyzing and acting on customer feedback, and using metrics like Net Promoter to guide their actions, they are able to continually improve their products and service offerings. They are "moving the needle" for customers, and it shows up in the measurements!

High Return on Investment (ROI)

One QuestBack customer's experience illustrates the power of being a Differentiator. Using a Net Promoter approach to measure and segment customers by loyalty, they designed marketing outreach programs to contact and engage their strongest advocates to generate increased sales from referrals. At last count, based on a significant increase in referral sales alone, they calculated an ROI of over 900% on their investment and use of the QuestBack system. And, this comes on top of the general continuous improvement benefits that they are seeing from really measuring and managing the customer experience.

Click the link to access CRM Magazine article: "You Are What You Measure"


Convert insights to action with QuestBack

Many firms struggle to convert customer feedback into actions that will have measurable impact on customer relationships. QuestBack's product and service offerings are designed to help with this challenge. All are focused on making customer feedback processes highly effective for improving customer relationships - and the bottom line.

How QuestBack Can Help:

1. An effective, proven and easy-to-use feedback management product for gathering, analyzing and acting on customer feedback.

2. A range of services designed to help your organization become an effective practitioner of Customer Experience Management.

• Assessment your current feedback processes, methods and tools.
• CEM program design, tailored to your specific needs and circumstances.
• Help with creating optimized survey questionnaires, to get the data you need with minimum time demands on customers.
• Help setting up action triggers and follow up processes that will delight your customers (and your management team).
• Help determining how to best use your own customer data in combination with customer feedback for maximum insight and impact.
• Training and assistance in the analysis / reporting processes so you'll have professional quality data to share (and act on).

Customer Feedback Practices Survey Results

We recently surveyed a population of composed of mainly Sales, Marketing and Customer support people to collect some data on their Customer Feedback Management practices. We found some interesting data points. For instance:

• Understanding and Influencing Customer Loyalty & Satisfaction was the top priority (75% of respondents) for customer feedback.


• Yet respondents often (30%) reported difficulties in translating customer feedback into actions that support business priorities.
  
• 72% report using some type of manual approach for translating customer feedback into action (using MS Excel or a Statistical analysis tool).


• 24% report using their CRM system to help them act on customer feedback

Our Opinion:

Too many organizations pay lip service to the idea of metrics based customer feedback. Meaning that they track some type of metric (NPS, ACSI or "customized loyalty metric") but do not use the metric to manage their reactions to feedback that customers give them.

In the survey data we found many instances of organizations reporting that they use metrics, statistical analysis tools, "are very systematic about gathering" relationship feedback, yet are receiving lower than average value from their customer feedback towards improving customer loyalty (their highest priority). Our interpretation of this finding is that:

• The data these companies receive for action taking is tied to a transaction and thus not useful for guiding relationship "fixing" actions; and /or,


• Mechanisms don't really exist in the feedback management systems these companies use to convert data about problem relationships into relationship "fixing" actions.

One additional data point from the survey supports this conclusion.

• Roughly 70% of respondents report using feedback only tools (i.e. the systems they use to collect customer feedback are, by definition, data collection only toolsets).

When combining feedback only tools with manual processes for converting customer feedback into action, its no surprise that many organizations really aren't able to easily act to repair a damaged customer relationship before a sales person trips over it on a new sales cycle.


The data behind this post can be seen at:


https://webreports.questback.com/isawebrep/webreporter.aspx?auth=D5D38D6AE02DB3D327F1CD14EB4316686C52668B&rid=1511507

Jumpstarting a Customer Experience Management Program

The QuestBack Boston Customer Experience Management (CEM) Jumpstart

Creating and deploying an effective program to manage customer feedback is not rocket science. And, it doesn't have to cost a fortune. It does take some dedicated organizational effort. The ingredients of CEM success are well known. Boiled down, they are:

• Leadership - true customer centricity starts at the top.
• Commitment - to the goal of getting good at managing customer feedback.
• Resources - financial and human (usually a team).
• Tools - to collect and analyze feedback, to help develop follow up action plans.
• Knowhow - QuestBack Boston has developed a service offering to rapidly put in place a turnkey Customer Experience Management program.

At QuestBack Boston we have the experience, programmatic knowhow and the tools to help you quickly create and jumpstart an effective customer feedback process. It can be up and running in a short timeframe and for a modest investment. Best of all, we "teach you how to fish". So once your program is up and running you can manage it internally, with support from QuestBack only as necessary.

Customer Feedback Management within a net promoter framework

We have released another new White Paper discussing how to deploy customer feedback management within the framework of a net promoter based methodology. The white paper discusses how to do this using QuestBack's feedback management toolset. The executive summary follows and a downlink is included at the end of the summary. Comments are welcome

Executive Summary

Making effective use of customer feedback can fuel an organization’s continuous improvement efforts and drive customer retention and growth - to name just a few key benefits. The programs and effort necessary to systematically gather and utilize feedback are sometimes seen as complex, expensive and difficult to implement. This paper demonstrates that this does not have to be the case and presents some practical, clear examples of powerful uses of customer feedback. By taking advantage of an established conceptual framework like Net Promoter, and combining this with a feedback management platform like QuestBack, any organization can create a powerful and practical framework for turning customer feedback into tangible benefits.

Three high-impact customer feedback applications are described (from QuestBack customer experiences):

• A Survey “Hotline” Process to spot problems in the customer base that are expressed in relationship surveys and to take quick, direct actions to prevent customer defections.
• Identify & Engage Your Promoters. Use survey results to identify and segment your best “promoters” or “advocates” for the purpose of engaging them in the marketing mix and stimulating more referrals.
• Create a Dialog through Follow-up. Follow-up your customer surveys by sharing some information about the results and planned actions with all customers. This creates a two-way dialog dynamic with customers and demonstrably strengthens customer relationships.

With an approach guided by the Net Promoter loyalty management concept and implemented with the QuestBack feedback management platform, any organization can easily and cost effectively duplicate the success of these examples and gain the tangible benefits from the effective use of customer feedback.

To view the entire white paper click the link below:

http://docs.google.com/fileview?id=0B0M0bj3iQjmjYzAxYzQ3MmEtMDBkZC00MmNjLWJmMzAtMWFkNmM0NDhlN2Nk&hl=en

White Paper: The Role of Customer Feedback Management in Business Today

QuestBack Boston has recently authored a new white paper on Customer Feedback Management. I've posted the executive summary here and included a link to the white paper if you would like to read it in its entirety.

Executive Summary

Executives intuitively understand the value of customer feedback and collect it for good reasons. They realize that customer perceptions have a strong impact on their business relationships. Customers can choose with whom they do business. If customers have perceptions that are less than positive, they will go elsewhere. So companies collect customer experience data across numerous touch points, including service events, general attitudes, and relationship data. The goal is to improve the overall customer experience by taking action in response to feedback.

Why, then, do so few companies make truly effective use of the feedback they gather? A 2003 Gartner Group study noted that 95% of all businesses collect some form of customer feedback but only 10% actually act on the feedback they collect. This is not surprising to many front-line managers tasked with putting feedback data to use. Fundamentally, most customer feedback data remains un-acted-upon because most companies lack an organized, systemic, and metrics-driven process for making use of the data. This white paper discusses why this occurs, why it matters, and what to do about it.

You can view the entire white paper here:
http://docs.google.com/fileview?id=0B0M0bj3iQjmjYTM2N2FhNjgtYTBiZi00MTVjLWIzNWEtM2ZiMWI4MjQxZTMy&hl=en

The Death of Advertising

One of my favorite websites is www.netpromoter.com. Lots of useful information about how to use customer loyalty in different ways to build a better business.

Since its necessary to know who your loyal customers are and why they're loyal, before taking action to leverage that loyalty, customer feedback management dovetails very closely with loyalty initiatives. In fact you need feedback management in order to accurately identify loyal customers.

At any rate, one of the netpromoter.com blogs talks in depth about how advertising is failing to produce desired results these days and how loyal customers seem to be the one group where advertising still seems to have an effect. It seems to me therefore that targeting marketing and especially direct marketing towards customer segments with higher loyalty makes a lot of sense. By doing so it would save on marketing spend at a minimum and potentially could provide a boost in business generally.

The entire article can be found at:

http://www.netpromoter.com/netpromoter_community/blogs/richard_and_laura/2009/04/22/how-to-win-customers-and-influence-buyers

Reving Up Your Referrals Engine with Customer Feedback

One of our customers - AIFS has deployed our EFM solution in an extremely effective and profitable (for AIFS) manner. I thought briefly outlining the story would add some value to the EFM discussion. Following are a couple of quotes to set up the story outline, then the outline follows.

"The only path to profitable growth may lie in a company's ability to get its loyal customers to become, in effect, its marketing department"

Fred Reicheld, Harvard Business Review - The One Number You Need to Grow

"The activities that have been directly enabled and facilitated by our use of QuestBack have driven our referral-based growth this year"

Sr. VP Marketing, AIFS

AIFS uses the QuestBack feedback management tool in some very innovative ways to engage with customers and create force multipliers for their marketing efforts. As a result they've significantly increased referral-driven leads and the conversion rates of those leads - a great combination for building sustainable growth.

Building a referrals engine - 5 Proven Steps to More Referral-Driven Sales

1. Identify your "promoters" (aka "apostles" or "raving fans") - the people who love your offering and tell other people how great you are. Identify them through surveys which permit segmentation by product or service used, geography, etc., so that you can feed this data to your CRM (QuestBack makes this easy).

2. Understand your promoter's willingness and degree to which they will engage with you in your marketing activites. How? Ask them in the surveys! Those that self-identify as promoters get a series of questions about their willingness to talk to the media on your behalf, be quoted, speak to prospects as references, join you at marketing events, etc.

3. Engage your promoters creatively as part of the marketing mix! They've agreed to help! They are your best advocates.

4. Create CRM processes to support leveraging your promoters. For example - to locate a promoter based on geography, industry, common social networking contacts or other characteristics.

5. Continuously refresh and grow your promoter pipeline (promoters often beget more promoters). Continue to solicit their participation in your sales / marketing processes, and seek creative new ways to engage them.

Obstacles to using Feedback in business processes

A brief note I've excerpted out of one of our recent e-mail marketing pieces. But none-the-less valid in the context of understanding barriers to effeective use of customer feedback in business today.

4 Reasons firms don't profit from Customer Feedback

"Companies often spend the bulk of their time / effort trying to get feedback, and not nearly enough time figuring out what to do with it" - CRM magazine, April 2009

Most companies collect customer feedback. Very few make good use of it. There are a number of reasons, but most stem from the approaches and tools used today for feedback management. Some common obstacles to effectively using customer feedback include:

1. Difficulty tying customer feedback to customer data (necessary for segmentation based on customer variables)


2. Identifying the appropriate actions for different customer segments (requires analysis of results vs. segments)


3. Getting the correct feedback data to the right people so they can actually act on it (requires an ability to route segmented feedback to internal "actors")


4. Validating that actions taken are impacting customer experience (requires an ability to trend feedback data over time)

QuestBack solves all these problems with an integrated system for feedback gathering, monitoring, analysis, profile utilization and follow up actions. Because it can integrate with CRM systems each feedback loop desired can be easily implemented.

Winning True Customer Loyalty and Trust in a recession

From MyCustomer.com - A blog I subscribe to....

I really enjoyed this article because it reaches down to the "gut" level in customer loyalty. The article discusses the role of "Trust" in customer loyalty.

Here's a great quote from the article:

"Loyalty is a misused term. Most organisations think that it is about customers being loyal to them when it should be the other way round."

Lots to think about. I encourage you to read it.

http://www.mycustomer.com/cgi-bin/item.cgi?id=134190

Customer Feedback - Near Term Value Impacts

Tough Business Environment? Try Customer FeedBack for Short Term Impact!
By Cedric Nash

Key Points

1. Reinforce relationships with your most valuable, core customers.
2. Identify immediate action situations & opportunities:

- unhappy customers at risk

- new sales opportunities.

3. Create a positive customer experience simply by asking for feedback.
4. Send a clear signal to employees about what’s important and being measured.

Most business managers would agree on the value of systematically collecting and using customer feedback. Few would argue that it’s not a good thing to know as much as possible about your customers’ perceptions and attitudes about your firm’s products or services. So why then don’t more firms make the effort and relatively modest investment to systematically monitor, measure and act on customer feedback?

Some smaller firms simply don’t see the need. They feel that their informal mechanisms and personal contact with customers provide a stream of feedback. Other firms understand the potential value but aren’t ready to make the commitment to both regularly gathering customer feedback and following through with appropriate actions. And they realize that a sporadic effort, or one with no commitment to follow-through, can actually be worse than none at all because false expectations are created.

Yet another reason is that feedback management programs are often viewed as investments with long-term ROI horizons, taking years to deliver quantifiable value to the firm. And in tough economic times they get pushed aside by more urgent budget priorities. This is a misconception. While it’s true that gathering and managing customer feedback does indeed deliver great strategic value when done systematically over time, even beginning the process can deliver tangible and significant short term benefits. This article discusses how.

1. Reinforce relationships with your most valuable, core customers

For many businesses the 80/20 rule applies when it comes to customers. 80% of revenue/profits come from 20% of customers. This 20% is the critical core of your customer base and you need to do everything possible to retain them when acquiring new customers may be difficult. In other words, you need to assure that they are completely, 100%, satisfied with your products/services, ideally to the point of being willing to recommend you. And if you find that any of them aren’t you must take quick action to address the source of dissatisfaction.

So how do you do this? If you have a “customer feedback” program or “customer experience “ program in place, chances are you already measure and know the current satisfaction/loyalty levels of your core customers. But if you don’t, starting such a program can quickly deliver actionable information about customer’s satisfaction and loyalty levels. And if done with the right tools, you can easily segment the data from your “key” customers and focus your efforts on this critical core. Where problems are identified you have the ability to reach out and correct them. So concerning your core customers, the result of initiating a customer feedback program has multiple near-term benefits:

• You get solid data indicating the satisfaction/loyalty levels of key customers at a point in time.
• For already satisfied customers, you’ve just provided further evidence that you value their business and respect them enough to ask for their feedback.
• For dissatisfied customers, you have the ability to identify them and directly reach out to them to “Save” them before they leave you for a competitor.

2. Identify “ Immediate Action” Situations/Opportunities

One of the nearly immediate benefits of launching a survey-based customer feedback program (with the right tools), is that some customer situations are typically identified which call for immediate action. If your survey tool supports feedback segmentation and “follow-up”, you can then take direct and immediate action with these customers. These situations tend to fall into two categories:

• Very unhappy customers who have clearly expressed their dissatisfaction. By openly expressing dissatisfaction in a survey customers are providing good-faith feedback. If you take quick advantage of this opportunity while the survey experience is fresh, you can often solve the problem and “convert” this customer to fully satisfied with a little effort. Being this responsive to customer dissatisfaction is unusual and it takes some preparation, but such a direct and rapid response shows serious concern about your customers and can have an immediate and positive impact on the customer base.
  
• Satisfied customers who are looking to buy more from you (that you were unaware of).
  Another opportunity for immediate action are those customers who express or somehow indicate in the survey that they have additional needs or would like buy more from you. By asking for feedback you are coincidentally uncovering new sales opportunities that you may not otherwise have found out about for some time.
  
• Quickly surface problems in your processes, products, etc., that are impacting your customers. Most problems will eventually find their way to your attention, but how many customers will have left you in the meantime? Asking for direct feedback will get you direct feedback – problems and all, and finding problems early before customers defect is like finding a solid gold nugget.

3. Create a positive customer experience simply by asking for feedback

What if you could contact all your customers in a non-sales mode, demonstrate how you value and respect them, and also portray your brand in a positive manner? In other words creating a positive customer experience that you control. This is an immediate by-product of initiating a survey-based customer feedback program. With a carefully crafted and branded online survey, you are creating a positive customer experience at the same time you are gathering vital data about your customers. Each time you do it (assuming reasonable intervals), you reinforce the notion that you value your relationship enough to ask for feedback. You can also create even more value by sharing some of the survey findings with customers and explaining how their feedback influenced your product or service decisions. It’s a real show of respect to close the loop this way, and it reinforces the collaborative nature of your relationship. Some survey tools make this easy to do.

4. Signal to your employees what’s really important (and being measured)

One of the major near-term benefits of initiating a feedback management program is that it sends a very clear signal to everyone in the organization that customer perceptions are critically important. This may involve some employee education and communication efforts to disseminate the information, but the gist of the message to employees is simple and clear:

• Customers’ perceptions of their experience matter! They pay the bills and if they’re not happy they can easily go elsewhere. The success of the organization is potentially at risk!
• Since customer perceptions affect the entire organization, everyone should be concerned about the customer experience reflected in feedback. Some may have a more direct impact on the customer experience than others, but it’s critical to the firm and therefore everyone’s concern.
• It’s important enough to management that it will be measured regularly and systematically! In other words, the firm is asking the customers to give them a regular “report card” on critical elements of the business. If problems surface they will get management attention and will be addressed.

Conclusion

Customer feedback management or customer experience programs designed to measure and quantify your customers’ opinions and attitudes are often incorrectly perceived as “long-term” efforts which don’t deliver near-term benefits. Its true that the “best of class” feedback programs are ongoing efforts which provide long-term strategic value to the organization. However, even getting started with a customer feedback initiative can provide surprisingly quick opportunities to positively influence your customers, and your bottom line. In fact, in a weak economic environment it’s more important than ever that you make customer feedback a basic part of your operation. You will typically see some very real short term benefits that will help assure that you’ll be there for the long term.