Five ways to screw up feedback
Customer feedback is employed by most companies as part of their strategies for focusing on the customer. When you look at the numbers, it’s not difficult to understand why. Research by Accenture puts the cost of churn at $6.4 trillion. If churn was a country it would be the third biggest in the world, topped only by the United States of America and China! That is a massive number but when you consider that 70% of buyers will cut ties with a company because of poor experiences, it’s easy to see how churn is such a brake on a company’s growth. If feedback could help head off 10% of that churn, that would increase revenues by $640,000,000! If that’s just too generic for you, calculate the value of a 10% reduction in churn for your company. I bet it’s a number big enough to get your CEO excited.
With such staggering numbers involved, I am still amazed at how some get feedback wrong. Here are my top five pet peeves.
- Feedback = Surveys.
I started a feedback company and, as part of what we do, we help companies with their surveys. But I know that customers make their voices heard in many different ways. Whilst the traditional channels still dominate customer contact preferences, change is in the air and new channels are growing – do not ignore them. Companies need to make it easy for customers to share their views on social media, visit review sites, or just leave a message. It is then incumbent on companies to bring these different perspectives together to get to the essence of the customer’s perspective.This is my favorite piece of feedback and just goes to show that even if you don’t provide the means to give feedback, customers will find a way.
- Focus on the wrong tasks.
Many companies spend their feedback time doing the wrong things. Poor processes mean they spend time building and cleaning lists from multiple sources and sending surveys. And when they have the results, they have to manually export/import that data into other systems. This takes away from the real work of understanding the results and taking the actions needed to improve the experience. Collecting and basic reporting are necessary admin; understanding and taking action are where the ROI comes from. I will return to the action part of feedback later.
- Ask the wrong questions.
Our decision-making process is hard-wired into the structure of our brains. Decisions follow the red, yellow, and green areas of the brains in the diagram below. Put simply we make our decisions emotionally before we rationalize them. Feedback often fail to test for these emotional aspects and thereby fail to get to the heart of performance in what drives buying intent and loyalty.
- Bad surveys.
Despite all the experience and advice, companies still inflict awful surveys on their customers. This is in part because everyone thinks they are a survey expert and cheap tools abound. They build surveys that lack branding, relying on canned themes, include questions that have no relevance to the customer, and ask too many questions, some of which they know the answers to already. The experience is more akin to a cure for insomnia than a meaningful attempt to improve the customer experience. Until companies recognize that the act of gathering feedback is part of the customer experience, response rates will continue to fall and customers will question their commitment to CX.
- Chase the number.
Lots of people talk about measuring customer satisfaction but that is not the goal. Improvement is the only meaningful goal for feedback – that is measurement with a purpose. Forget benchmarking, that won’t change the customer experience and is often done for senior managers to brag about their number. That’s going to have no impact on the customer. Despite this, research shows that turning feedback into action is one of the biggest areas of concern for the majority of companies.Successful feedback drives action at three different levels. Transactional feedback drives both service recovery (attempting to retain a dissatisfied customer) and process improvements. Relationship surveys and/or aggregations of transactional results, inform account or segment management. The piece that many companies miss is using feedback to understand the broader market and how that shapes the strategic agenda. Part of this includes getting feedback from people in the target profile that aren’t customers. Why are they are not buying from you?
Those are my favorite five failings of feedback. What are yours?