Customer Experience Megatrend #1

Propagating customer insight remains a major challenge for most enterprises.

Bruce Temkin, in his latest publication "8 Customer Experience Megatrends" lists "Customer Insight Propagation" as #1. We agree. In surveys we've done over the last year - in which many of our readers have participated - we've found that a high percentage of organizations report challenges with using customer feedback effectively. Some of these challenges were attributed to customer feedback management process, some to architecture / technology and some to organizational issues with customer feedback ownership.

Temkin's report is available here: 8 Customer Experience Megatrends

It makes a lot of sense to us that Customer Insight Propagation would make the top of the list. Businesses have made large investments in CRM and Data Warehouse technologies, as well as in market research, in order to accumulate customer data on purchase history, preferences, buying process and much more. What often lacks is an ability to combine these stores of customer information dynamically with Voice of the Customer data in ways that make resulting customer insights easy to distill and distribute.

In our opinion, the majority of the value to be had from Customer Feedback comes only after it is filtered or distilled into actionable insights.  Actionable insights that are dynamically distilled from customer feedback are especially value adding, because they are actionable immediately and the benefits of immediate action are often very large. 

A quick note on the value of metrics when combined with dynamic feedback distillation and delivery.

When you have the infrastructure to distill and deliver customer insights dynamically to key internal actors, metrics can be very powerful.  This is the value premise behind Net Promoter and other customer loyalty / advocacy metrics.  They simplify the process of insight distillation by the design of the metric question and answer scales.  By combining a given net promoter answer with other data like customer value, region, products, etc., distillation of feedback gets relatively easy and doesn't require sophisticated statistical analysis to create actionable insight.  Adding "internal actor" information provides someone to deliver insights to for action. 

QuestBack is especially valuable if you don't have infrastructure to distill and deliver customer insights to internal actors.

QuestBack offers an out-of-the-box solution to this challenge. By feeding QuestBack data from your CRM or Data Warehouse prior to launching customer surveys, you can easily contextualize Voice of the Customer information based on any characteristic your data stores contain about your customers. We then provide built in mechanisms to dynamically propagate the insights produced to people in your business that are most able to use the insight.

Note: Temkin Group is not affiliated with QuestBack Boston. We just find a lot of what he says to be really insightful.

To learn more, visit our website at: www.questback.com

Doing Closed Loop Customer Feedback Management Right

Thoughts on doing "Closed Loop" Feedback Right

Lots of "good news" is associated with "closed loop" customer feedback processes.   Loyalty, retention and better insights into customer behavior are high amongst them.  Yet closed loop processes turn out to be stubbornly difficult to implement. In the past I've talked about the 5 challenges enterprises face in trying to implement closed-loop feedback processes. 

1. Corporate hierarchies and information flows.
2. "Ownership" of the customer.
3. Out of context data.
4. Customer survey processes and platforms not designed for "loop closing". 
5. Managing the feedback itself.

All five challenges have to do with managing customer feedback.  Collection of feedback is, today, a given for most enterprises.  So, organizing the business to utilize feedback, designing processes that "close-the-loop" and selecting the tools and technologies to use for feedback management has become the real challenge. 

The new question:  What is the appropriate level of process for your enterprise to ensure the maximum advantage from customer feedback?

The answer:  It depends.  And, some of the dependencies are:

- Size of your customer base
- Value of a customer relationship (revenue, profit, reference ability, etc.)
- Dispersion of customers (Geographic, market vertical, etc.)
- Size of your enterprise
- Diversity of your enterprise (#business units, products, markets served, etc.)
- Dispersion of your enterprise (geographic, market vertical, etc.)

Generally speaking, the less complexity inherent in your customer base and enterprise, the less customer feedback management process you'll need.  As a consequence less resource will be needed for managing customer feedback, as well as for acquiring tools and technology.  The opposite is also true.  More complexity equates to more CFM investment.

How to organize for CFM?

• Define your KPIs, potential actions based on those KPIs, ownership of the actions and tracking of the effect on KPIs based on actions taken. 
• Segment customers based on revenue, geography, profitability, reference ability, and other descriptors you have in your databases
• Segment the people in your enterprise based on role and responsibility so you will know who potential "loop-closers" are.
• Determine who gets what customer feedback
• Design loop-closing actions (i.e. tasks based on specific feedback)
• Monitor your KPIs over time for change

For big, multi-business, multi-product, multi-location enterprises this process is very involved and often facilitated by management consulting firms like Bain, Accenture, IBM consulting and others.  It’s also a very big ticket item. 

For mid-size firms it can be much simpler, though still complex and consulting assistance may or may not be needed.

For smaller firms this process can be an in-house or a vendor assisted effort.

Some additional thoughts

Keep in mind that feedback collection processes may already exist and could be providing much of the data you need.  It may also be that existing data collection processes will need to be revisited.  Many data collection tools (survey monkey, zoomerang, key, and others) stop at data collection and don't really support implementation of loop-closing processes or management of feedback.  If you are using such products now and want more feedback management capability you may want to considering upgrading to more sophisticated CFM platforms.

CRM systems can play a valuable role in managing customer feedback.  But, they also present a set of challenges when combined with CFM tools.  Specifically integration.  And, often the CRM system itself will need redesign (new fields for feedback data, new processes for tasking).  The CRM system will likely need to be adapted to accept specific data streams from your feedback process and then kick off tasks for the people assigned to close the loop.  You should expect to use a fair amount of I/T support if you plan to use CFM in conjunction with CRM.

QuestBack and some other vendors - offer CFM systems that perform data collection, analysis, and action assignment / management capabilities.  These vendors offer a less complex and typically more cost effective approach to upgrading data collection processes to CFM processes.  They are especially valid for smaller firms with less complex customer profiles and organizations, less I/T capability, and smaller budgets.

A final thought

To be successful with CFM, like with any other business process, it's important to understand what you want to achieve within the context of who you are and your existing capabilities.  Selecting relevant KPIs is also important.  Much has already been written about CFM KPIs (see anything on Net Promoter), so I won't go into that here.  But, if you think through your customer feedback needs, your ability to manage using feedback and the capabilities of your CFM tools, you can overcome the challenges and begin closing the loop with your customers more often and to good effect on business growth. 

Contextual Insight - The Basis for Taking Action on Customer Feedback

Don't do statistical analysis based Customer Feedback Management. 

Every now and then someone produces a really insightful analysis that is both relevant to business managers  and captures the essence of your particular company's solution, in this case QuestBack.  Bruce Tempkin of Forrester Research - via his Blog, Customer Experience Matters, has done just that. 

In the post below, Bruce makes the point that contextually relevant customer feedback doesn't necessarily need to be proven statistically significant to be both highly valuable and immediately actionable.  In fact his point is that contextually relevant feedback, when delivered to precisely the right individual, is both very valuable for its insight and immediately actionable, without any statistics based analysis focused on key drivers.  It's a great read.  I encourage you to visit his blog for the whole article.

http://experiencematters.wordpress.com/2010/02/08/market-research-needs-less-statistical-analysis/


"Contextual Insight" - The Key to effective feedback management systems

Bruce Tempkin - The respected Forrester Research analyst coined this term in a February post on his blog - "Customer Experience Matters".   He defines it as:

Business Context + Relevant, timely data = Actionable insight

Some examples of contextual insight might be:

• An indicator on an information request form suggesting a short term need by a prospect, when delivered to a salesperson
• A "detractor" rating given by a client on a net promoter survey and delivered to an account manager
• An "unsatisfied" rating given by a visitor to a web-site, when viewed by the web master

Contextual insight is always feedback, filtered by some characteristic in the data giving it business context. It is always insightful to a specific role in your enterprise, if delivered in a timely fashion to that person.

Achieving Contextual Insight without in depth statistical analysis.

Customer insight has typically been the province of market research organizations. But, market research organizations aren't often equipped or structured to rapidly generate and deliver highly granular, context relevant, data to business end users. In fact their processes often mitigate against doing so.

But, Business still needs actionable, context relevant and timely insights about customers and prospects.

Feedback Management technology makes Contextual Insight actionable. It allows businesses to pre-determine who should receive specific of feedback and when. Techniques include automated role notification (alerts) and CRM based task assignment. Most feedback management applications include some analytics capabilities which enable rapid, though not automated, action taking on feedback. Most feedback management applications dovetail with more traditional market research tools. And, therefore can be viewed as complementary to the marketing research function.

Some applications (like QuestBack) include the ability to synch up survey based feedback with customer profile and actor profile information.  This allows really powerful alert processes to be fully automated once a survey process is in place.

The Loyalty Effect from Customer Surveying

Research shows, experience validates: Systematically surveying customers and then "Closing-the-Loop" increases customer loyalty

A QuestBack user that regularly surveys their large global customer base found in a recent survey that for those customers who had responded to prior customer surveys, Net Promoter Scores were 19 points higher than for customers who were 1st time survey participants.  We have long believed that a multiple cycle and action supported customer feedback process based on e-mail delivered customer surveys would have loyalty enhancing effects.  Our experience with this process validates a number of earlier research efforts undertaken by different groups.  Our customers' NPS score differentials are in the chart below.  Other research is listed and attributed further on in this post.

The Feedback Management process implemented by this client included action taking based on daily reports during the duration of the survey, which routed dissatisfied customers - i.e. those dissatisfied with various elements of the customer experience - to appropriate internal actors (Support Staff, Account Managers, Product Managers, etc.) at the client for follow up.

Prior surveyed participants had all experienced some form of "loop closing" action in response to their earlier feedback. In this case, surveying and "closing the loop" clearly helped to build a more loyal customer base.

Some research these results appear to validate:

In the second year of a two-year study conducted by Development II, Inc. of Woodbury, CT, researchers found a noticeable increase in the top-box overall satisfaction scores from those customers who took the survey again in the second year when compared with new customers. For repeat customers who received a follow-up call after the first year’s survey, satisfaction levels in their second year increased to 24%. Respondents who believed the company is taking substantive action based upon their feedback, total satisfaction increased to 41%.

And there is the 2002 Study by Dholakia & Morwitz - Published in the Harvard Business Review titled:   "How Surveys Influence Customers"

The research shows that simply asking customers their opinion can increase their profitability over the long term.

The full article is available at:
www.neokoncept.com/onlineSurvey/pdf/How_Surveys_Influence_Customers.pdf

Some excerpts from the article:

• Marketers have long appreciated that surveys engage people; a single yes-or-no question on a direct-mail envelope can induce them to look inside. But can a company survey influence customers’ loyalty or buying habits? Research over the past two decades has shown that it can, but the studies have been narrow–looking at how surveys affect attitudes in the short term or influence one-time behavior, like a single purchase.  We set out to study the scope of this survey effect, and we were astonished by what we found.
• A year after the survey was conducted, the customers we surveyed were more than three times as likely to have opened new accounts, were less than half as likely to have defected, and were more profitable than the customers who hadn’t been surveyed. These differences reached their maximum levels several months after the survey was done and persisted throughout the year. Even at the end of the year, surveyed customers continued to open new accounts at a faster rate and defect at a slower rate than the people in the control group.
• Several theories of consumer psychology might apply. The simplest is that satisfaction surveys appeal to customers’ desire to be coddled, reinforcing positive feelings they may already have about the surveying organization and making them more likely to buy its products. Surveys may also increase people’s awareness of a company’s products and thereby encourage future purchases.  More subtle is the idea that the very process of asking people their opinions can induce them to form judgments that otherwise wouldn’t occur to them–that they really do like a company’s estate-planning services, for example.  These so-called measurementinduced judgments, the theory holds, can influence later behavior.
• Our findings may dismay marketing researchers, who strive to gather information untainted by their survey instruments.  But they raise the compelling possibility for marketers that conducting surveys, especially when customers are satisfied with the organization, can also enhance loyalty and profitability.

5 Reasons "Closing the Loop" on Customer Feedback is Hard to do

In practice, it turns out that "closing the loop" with customers who provide feedback is often a challenge.


In this post, we hope to provide some insights on why.

Some data from our recent survey:
87% of respondents chose "customer loyalty /satisfaction" as the #1 (75%) or #2 (12%) priority for their customer feedback.

• 74% say "closing the loop" is "Critical" or "Important" for their business' success.
• 54% rank "prioritizing customer feedback for follow-up action" as their Top or 2nd biggest challenge with respect to "closing the loop" with customers.
• 44% rank "determining the appropriate type of follow-up to provide" as their Top or 2nd biggest challenge with respect to "closing the loop" with customers.

Clearly, survey respondents believe their customer relationships are key to being successful. Yet, they often report struggling with using customer feedback to generate relationship improving actions. We think there are several reasons for this, some which are institutional and some more practical. Our thoughts follow.
5 Reasons "Closing the Customer Feedback Loop" is a challenge.
Five contributors to customer feedback not being employed optimally for improving customer relationships.

• Corporate hierarchies. Known as inhibitors of information exchange. Information flows up the hierarchy from analyst to manager to executives. When it flows back down the hierarchy, it's usually in summary form and attached to some new Standard Operating Procedure. Hierarchies tend to remove the individual, actionable, components of customer feedback. And they also add a timing element the process that inhibits relationship improving action taking. It takes time for information to flow up and down the hierarchy, which often delays or makes irrelevant subsequent actions.
• No centralized "Ownership" for customers. Enterprises often organize around functions like accounting, marketing or operations. Customer feedback collected by these business functions tends to be "silo-serving" and not necessarily about the broader enterprise need to holistically understand the customer relationship. Information collected within silos often stays there, or is presented in such a way as to make it difficult to interpret and act on outside the silo.
• Out of context data. For example, many enterprises - and especially those with automated CRM platforms - collect much of their customer feedback based on transactional surveys. To conserve resources they try to measure customer relationship quality using the same survey and process. Data collected in this way is often biased by the transaction. Even worse, "ownership" for action is often unclear when the feedback is not about a transaction. Out of context data is also a characteristic of silo based customer feedback.
• Customer survey processes and platforms that are not designed for "loop closing". Many organizations use web-based survey tools that are not designed to enable "loop closing" and when deployed make it needlessly challenging. These tools often lack embedded analytics, mechanisms to identify customers, necessary workflow automation, etc.
• Management practices. Perhaps the biggest challenge of all. Most organizations don't currently align management incentives with customer relationship quality. Therefore customer relationship is always subordinate to other operational metrics, as well as typically being "someone else's" problem.

What you can do to implement "Closed Loop" Customer Feedback processes:
Some of our thoughts....

1. Be sure to look at customer relationship in a broad context.
2. Establish executive ownership for the customer relationship.
3. Choose a customer relationship metric like: Loyalty, Satisfaction, etc.
4. When designing your customer surveys, plan for "loop closing" based on combinations of response and customer profile attributes.
5. When planning for loop closing activities - determine internal ownership for the various types of loop closing activities that you will undertake.
6. Use a survey platform that enables and facilitates the necessary analytics and workflow your loop closing activities will require.

Many firms need help establishing a "Closed Loop" Customer Feedback process. It's what we do at QuestBack, so if you'd like help please call us.