Customer Engagement and Net Promoter

I recently worked on a feedback management project for a large local club soccer organization trying to help them assess their relations with members.  In the survey we asked the "Likely to recommend" question and came up with over 50% promoters and an NPS of 23.  Without going into detail about the survey, what struck me was how engaged this club's promoters were in its success.  We asked promoters how often they had recommended the club in the last year.  Over 95% indicated one or more recommendations.  Over half recommended more than five (5) times.  And, about a quarter recommended more than ten (10) times.  Many promoters indicated, via open answers that they were continuing to work on behalf of the club by actively referring people.  Clearly, a very engaged group. 
This particular club is premium priced (2x the cost of many other club programs), operating in a very competitive market and is a relatively new entrant.  So, it seems to me that the engaged-ness of their promoters has largely been the driver of their successful growth. 
  
In thinking about engagement by this group of promoters it occurs to me that the "likely-to-recommend" question is a natural "trigger" question for identifying engaged customers.  But, based on open answer responses from "neutrals" and even "detractors" at the high end of the detractor scale, I think engagement questions should be posed to more than just "promoters".  In this survey, as well as others I've done, I've seen enough similarity in open answer responses from neutrals and "high end" detractors to believe that substantial levels of leverageable engagement exist amongst those customer subsets to at least be asking them how often they are recommending, as well as one or more other questions that indicate how engaged they are. 

The next challenge of course, would be to leverage engagement amongst these "lower tier" engaged customers (i.e. neutrals and high end detractors with similar characteristics to promoters).  Doing that requires Acting on their feedback quickly and effectively to deal with the issue(s) that put them into the neutral or detractor bucket in the first place.  It would, I think, also require that something else be done that encourages "promoter" behaviors they are already partially exhibiting.

Vovici / Verint Merger - Some thoughts

About a week ago Verint Systems acquired Vovici for $76 million.  Verint is a supplier of Workforce optimization solutions for contact centers and has a Customer Analytics platform that it seems Vovici products are going to fit into.

How will this effect the market for EFM products?
 
My opinion, Verint's acquisition of Vovici will be very good for a lot of the other vendors and potentially quite bad for a few.  Almost inevitably, Verint is going to be looking for ways to recapture its up-front cash investment of $56 million as well as it's downstream payments of nearly $20 million.  Vovici has been by far the largest spender on marketing in the EFM space to date.  So, over the next year or two, I would expect lower marketing spend by Vovici, meaning less mind share and ultimately less competition particularly at the middle of the EFM tools market.

Needless to say, I expect the middle market for EFM solutions to be where the largest changes will occur.  Organizations where the annual fees charged by Vovici are between $5k to $45K per year will begin to find that Vovici is less and less inclined to work with them on pricing and support issues as resources are diverted to large account pursuit initiatives based on Verint account relationships.  In addition, the reduced Vovici marketing spend targeted at these accounts means that more organizations will look at non-Vovici solutions.  Companies that are likely to benefit include: Questback, ConFirmIt, Qualtrics, and KeySurveys among others.

The low-end (under $5K/year) of the market shouldn't really be effected at all by Verint's acquisition of Vovici.  Vovici competes here at times largely as a result of old ex-perseus accounts.  But I would expect that Vovici will not devote (and really hasn't devoted) any sales effort to competing with products at these price points any longer.  Beneficiaries will be Zoomerang, SurveyMonkey, QuestionPro and others.

Competition at the high of the market (contracts above $50k/year+) will likely increase substantially.  Satmetrix, Medallia and MarketTools (for its CustomerSat product) will find themselves needing to defend an increasing number of their accounts as the Verint sales organization introduces programs incorporating Vovici into existing Verint customer contracts. 

Vovici also has a well developed partner program.  Consulting groups like Walker and Omega may find that Verint wants a larger chunk of the consulting revenue pie as well as potentially having products that compete with add-ons that they too offer.  This too may open up opportunities for other high end or middle tier competitors. 

All in all, if I had to guess I'd say that all the high end EFM vendors are soon going to be looking for larger partners who operate in the contact center so that they can fight off Verint using their own consolidated contracts and solutions. But, it seems to me that the rest of the vendors at the middle and lower end of the market should find growth easier going forward.

Having said all that though, I've observed and participated in the EFM market for 4+ years and been wrong before.  And, beyond observational acumen, I have no special insights into Verint's plans for Vovici going forward.  So, as usual, caveat emptor.

EFM's Value Proposition Revisited

What is the real value of Enterprise Feedback Management?

Bruce Temkin's recent article titled: "EFM is Dead" (www.customerexperiencematters.com) stimulated a fair amount of discussion in various blogs and forums devoted to Voice of the Customer issues.  His essential point is that Customer oriented feedback and analysis EFM platforms need to evolve so as to assimilate more streams of feedback data than they currently handle (i.e. mainly survey based feedback).  My thought on the matter:  It's a fair point.  And, is likely to prove out as being true for some businesses and application today, as well as going forward for most. 

My issue with Bruce's line of reasoning is its focus on customer oriented applications of EFM. Where admittedly, vendors are working (struggling?) to incorporate new streams of social media based feedback into their feedback management models.  Yet, EFM's value proposition has always been based on more than just customer feedback.  In many businesses, EFM's primary value proposition has more to do with workforce / talent management than it does with customer experience.  So, to say that EFM should become "Customer Insight and Action" (CIA) when EFM is about customer, partner, employee, investor, training and other applications of feedback (as well as the intersection of insights from those different data sources) seems somewhat premature and maybe just a tad parochial, at least to me.

Given the debate about acronyms, I thought it might add something to the dialogue by revisiting the value proposition offered by EFM platforms.

First.  EFM's value proposition to a business is directly proportional to the number of processes where it is employed.  If you employ feedback management only in your VOC process your payback only comes from improvements based on VOC (which of course can be many).  If you employ EFM in lots of processes, the value proposition can come from lots of insights from many parts of your business.  I've included a graphic below (courtesy QuestBack) showing application areas where EFM is applied in business processes (click the image for an enlarged version).

As you can see, EFM can be applied to Sales, Marketing, Admistration, I/T, Training and HR processes.  And, in multiple ways within each. 

Second.  EFM's value proposition is directly proportional to the value of key business relationships.  Obviously customer relationships are important, even critical, for many businsesses.  Yet, for many businesses, partner relationships, regulator relationships, employee relationships, etc. may have equal or even greater value.  The point: What does it cost you as a business when a key business relationship goes sour and especially if you don't know it is souring?  The larger a business gets, the more key relationships it has. Those relationships should be paid attention to regularly.  EFM, and especially closed-loop EFM (C-EFM?) helps you do this.

Third.  EFM's value proposition is enhanced by its ability to take feedback streams from multiple, divergent data sources and put key types of data into concise metric based form.  An example being Customer Satisfaction juxtaposed with Employee Satisfaction and / or Partner Satisfaction.  Most serious EFM platforms have mechanisms that let businesses "see" the effects of changes in one set of metric data on other sets of metric data.

In short EFM may be a dying acronym.  But EFM's benefit set goes way beyond CIA for most businesses.