People used to pick up the phone to call “the experts” in customer service. The major innovations there have been about using technology to make knowledge accessible to these experts and to cut costs. The latter effort has been the most effective part and the cost savings have been far greater than the improvements in customer satisfaction.
The result is that people now try Google before picking up the phone. Communities spring up around products and services and often answer questions better than the experts. That’s because customers have more experience using products than customer service does. And, this fits well with my belief that communities own brands, not companies.
Now that communities are helping themselves, how can companies add value and help out? They have to listen to the conversations in the cloud (i.e. all the communities), harvest the insights, and report them back to the community so they’re easy to find using tools like Google. The problem has been that the call centers and internal customer service operations have been siloed from the communities. That’s changing.
I hate to sound like poster boy from Salesforce, but they’ve figured out how to connect internal knowledge bases to communities through cloud services. That’s what my previous post was about here. Now that they’re well on their way to cracking that nut, they’re gotten better at explaining why the Saas (software as a service) model is uniquely suited to this environment. Here’s a great video they put together that explains it better than I can:
Customer satisfaction is one of the most important indicators to watch if you’re in charge of marketing for an organization. This post outlines some of what I’ve learned about how to assess customer satisfaction and bring the voice of your customer into your organization. I’ll start with an overview of what a customer service assessment program looks like, then I’ll talk about how it relates to consumer generated media, why marketers are well positioned to do this work, some key assessment metrics, how to make research actionable, and finally how to put together a customer satisfaction strategy. If you’re already familiar with the background, I suggest jumping down to the strategy section.
Before I start in, It’s important to remember that keeping existing customers usually offers a greater return than trying to acquire new ones. Plus, it turns out that satisfying existing customers is often the best way to acquire new ones because of the effectiveness of word-of-mouth marketing. In order to improve customer satisfaction, you have to develop a strong practice for listening to customers.
A Continuous Practice
As the section head suggests, listening to customers is not something that you can budget for in the first quarter of the year and then cross off your list. This is an ongoing practice that must be supported accordingly. Recent studies that show that “customer experience” is increasingly becoming the most important driver of competitive advantage (National Retail Federation, Customer Experience Maturity Monitor) so this is an essential investment core to the marketing function.
One of the challenges associated with developing a continuous practiceÂ is that there are usually existing customer satisfaction assessment programs in place within each organizational silo. This means that customers may be asked the same, or similar, questions from different groups within your organization. Plus, research results may not be shared or available as a resource. This erodes an organization’s credibility by making it appear disorganized, frustrates customers by repeating questions, and ultimately reduces response rates.
The best way to tackle this is to integrate your customer satisfaction practices with your customer relationship management tool (CRM). I talk about CRMs in detail in my earlier post here. This makes doing research easier because you can approach research subjects with a 360Âº view of their experience with your company (i.e. you’ll know if they participated in past research, what products/services they use, if they receive your newsletter, etc). When you demonstrate that youÂ know something about a research subjects before asking them a question, you appear smarter. This, in turn, leads to better engagement.
Consumer Generated Media (CGM)
CGM is an important channel for understanding customers satisfaction and sentiment with regard to your organization. This is one area, however, that it is harder to manage with a CRM. Instead, it’s important to use CGM as a parallel input into your assessment program.
There are excellent third party tools available for doing this, such as Get Satisfaction, and FixYa. Alternatively, you can offer these services through your own site. Either way, it’s important to keep your eye on consumer generated media because it can be the most cost effective way to listen to your community and manage satisfaction issues. Many issues simply bubble up from the community and don’t require formal research. Most importantly, it’s a dialogue, which means you have to share your research outcomes and intervention plans with the community. By doing so, you return value and increase the likelihood of ongoing participation. I’ve written about The Value of User Generated Content here.
Marketing Amplifies The Voice Of The Customer
It is my belief that the marketing staff is best positioned to serve as the voice of the customer within an organization. This is partially because marketers are often the most objective stakeholders when it comes to customer experience. While marketers may have helped develop the product/service,Â they don’t have the biases of the development team. And, while they may have helped sell the product by supporting the sales team, they are not compensated directly on sales as the sales team is.
Marketing teams are also well positioned to coordinate the needs of different organizational silos. Marketing supports sales, so they understand what the sales team would like to know from/about customers. Marketers also work with development teams and often help facilitate the research they conduct. Plus, marketing should run knowledge management through organizational CRM tools, so marketers are set up to transform research into a resource for everyone else. In many cases, they also have the most experience doing such research and can ensure that relevant questions are being asked in the right way. This is essential to tying research back to a customer satisfaction strategy and the actionable interventions that support it.
Three Customer Satisfaction Assessment Metrics
There are a variety of metrics that are used to get a handle on customer satisfaction; I’ll present three of the most common here and briefly explain how they work. I’ve organized them from simplest to most complex. Which method, if any, you should use is really dependent on your specific business.
- NET PROMOTER SCORE – This metric was developed by Satmetrix, Bain & Company, and Fred Reichheld, the concept was first popularized through Reichheld’s book The Ultimate Question. You simply ask “How likely are you to recommend to a colleague or friend?” and ask them to provide a number between zero and ten.
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
- APOSTLE MODEL – Developed in the mid-1990s at Harvard Business School (HBS), this model adds an additional dimension by recognizing that customer satisfaction does not imply loyalty. Thus, one question for loyalty and one for satisfaction. Note that this model has been used with a variety of scales. I prefer the three tier scale because it reflects that fact that the smallest quadrant population consists of apostles.Â Here’s a great article for HBS on why customers defect.
- AMERICAN CUSTOMER SATISFACTION INDEX (ACSI) – ACSI was developed by the National Quality Research Center (NQRC)Â at the Stephen M. Ross Business School at the University of Michigan. It is a set of causal equations that link customer expectations, perceived quality, and perceived value to customer satisfaction (ACSI). Satisfaction, in turn, is linked to key outcomes, defined as customer complaints and customer loyalty. This methodology is significantly more involved than the above options and is often used to analyze economic/industry trends.Â The ACSI interviews about 80,000 Americans annually and asks about their satisfaction with the goods and services they have consumed. Respondents are screened to cover a wide range of business-to-consumer products and services. Quarterly reports are issued by the NQRC through their bookstore. The ASCI score is derived from three questions, each rated on a different 1-10 scale:
||Falls short of your expectations
||Exceeds your expectations
|Performance vs. the ideal
||Not very close to the ideal
||Very close to the ideal
- Customer Expectations – Customer expectations is a measure of the customer’s anticipation of the quality of a company’sÂ products or services.Â Expectations represent both prior consumption experience, which includes some nonexperiential informationÂ like advertising and word-of-mouth, and a forecast of the company’s ability to deliver quality in the future.
- Perceived Quality – Perceived quality is a measure of the customer’s evaluation via recent consumption experienceÂ of the quality of a company’sÂ products or services. Quality is measured in terms of both customization, which is the degree to which a product or service meets the customer’s individual needs, and reliability, which is the frequency with which things go wrong with the product or service.
- Perceived Value – Perceived value is a measure of quality relative to price paid. Although price (value for money)Â is often very important to the customer’s first purchase, it usually has a somewhatÂ smaller impact on satisfaction for repeat purchases.
- Customer Complaints – Customer complaints are measured asÂ a percentage of respondents who indicate they have complained toÂ a company directly about a product or service within a specified time frame. Satisfaction has aÂ negativeÂ relationshipÂ with customer complaints, as the more satisfied the customers, the less likely they are to complain.
- Customer Loyalty – Customer loyalty is a combination of the customer’s professed likelihood to repurchase from the same supplier in the future, and the likelihood to purchase a companyâ€™s products or services at various price points (price tolerance).Â Customer loyalty isÂ the critical component of the model as it stands as a proxy for profitability.
It might help to think of assessment in terms of human vital signs. Measuring heart-rate/pulse gives you an immediate sense of stress, temperature might point to longer-term issues, and respiration rate may indicate some additional dimension. Don’t rely on one method alone, but take a holistic approach to the process. For example. try pairing one of the above metrics with ethnographic research.
Starting With Strategy
Before you build a continuous practice that is tailored to the needs of your organization, it’s important to establish a customer satisfaction strategy. The above information is really a backdrop to set the stage for developing this strategy. From there, you can implement the tactical research initiatives to support your plan. Here’s an exercise to get started:
Start by identifying the opportunity space for improving customer satisfaction and list out all the projects that might improve it. To make sure your list is thorough you can reach out to your customers, look at the competitive landscape, and do some generative ideation exercises with your team. The best ideas arise when you produce lots of ideas, so don’t be afraid throw your crazy ideas into the mix.
Once you have a strong list, create a table so that you can assign each idea a feasibility and importance ranking. Give yourself a budget of points to assign each column. In the example below, I’ve given each idea an average allotment of 5 points. I have seven ideas, so that gives me a total of 35 points to distribute in each column. Using a point budget is essential to the prioritization process and represents underlying financial constraints.
In reality you may only be able to afford to pursue on or two of the ideas so it’s important to select the best ones. Once your chart is complete, graph your results to visually represent which ideas offer the greatest potential. This exercise can be conducted with research participants, internal teams, or individually. If you are handy with Excel it may be helpful to compare sample sets of data to understand internal vs. internal perceptions of customer satisfaction.
So now you have a strategy in place, you’ve got systems in place to communicate with your customers, and you’ve got a handle on where they sit with respect to satisfaction. As you pursue the tactical implementation of your strategy, you may have to conduct additional research. Based on what you already know about your customers’ experience with your company (through your CRM) you can make sure that your research questions tie directly to specific implementation challenges. The first intervention opportunity occurs as soon as you interact with a customer who is not satisfied.
You should have a plan about how to respond to these customers immediately. They’ve just gone out of their way to help your company improve your products and services, so make sure to start by thanking them. From there, set clear expectations about how their input will be factored into future product/service development. Provide them with resources where they can learn more and/or participate. Finally, consider doing something to show your commitment to their patronage. If you haven’t offered some form of compensation for participating in the research study you might offer these participants some sort of discount. It’s best to set up some sort of matrix of offerings based on their answers (i.e. it doesn’t make much sense to compensate Defectors on the Apostle metric). You might even ask them an additional question about what they would view as fair compensation in exchange for continued support. Get creative, and take this as an opportunity to reconnect.
Bringing It All Back Home
This is a good time to return to the topic of consumer generated media because this is the place where customers can express themselves openly about your company. Of course, this is also the place where you can express what’s working and what’s not working on behalf of your company.
This is also a great way to celebrate individuals and teams at your organization who are doing a great job. And, there is an opportunity to highlight specific customers who have made significant contributions to your company. Again, this shows customers that your are listening and returning value. Doing this well will earn respect, establish credibility, and ultimately support loyalty.
Thanks for reading and I look forward to hearing about what’s worked for you!