Do You Involve Your Customer Rather Than Just Getting Their Feedback?
Clicktools welcomes John Goodman, customer experience expert and author, as a guest blogger on our site! We encourage you to buy his new book, Customer Experience 3.0: High-Profit Strategies in the Age of Techno Service, on Amazon.
A new Forbes/ASQ global study of 2100 companies highlighted a subtle but important mistake that three quarters of companies are making. While most get customer feedback, only 24 percent say they actively involve customers in quality discussions. This number doubles for companies delivering world-class customer experiences.
What is the difference and why should you care?
Almost all Voice of the Customer processes are viewed as extensions of market research, primarily consisting of surveys with an icing of complaints, which cause three problems:
- First, market research tends to be aimed at getting new conquests – customer research ascertains the pros and cons of the current customer experience.
- Second, while surveys and complaints are very useful, they ignore two other data sources that are often more accurate, namely your operations and CRM data and employee input. More to come on those later.
- Third, surveys and complaints are not conversations; they tend to be one way dumps at a point in time from the customer. You often do not get feedback from the same customer on whether your solution really helped.
Involving your customer solves all three of these problems.
My new book, Customer Experience 3.0, suggests that experience is more than wowing the customer and more than tailoring the sales offer to the customer. It entails being proactive, preventive and engaging across the entire experience. Each of these three terms has huge implications for both costs and the top line.
Being proactive means taking action rather than waiting to respond to a problem. If you know the customer is going to have an unpleasant surprise, communicate to them first. Bad news does not get better with age! If you are proactive, you look smart and concerned and you often can reduce your costs by two thirds.
Being preventive means educating the customer on how to avoid problems. While marketing hates talking about problems, my research shows preventive education is one of the most powerful delighters producing a 30 point lift in willingness to recommend – customers feel, “you cared enough to warn me in advance.”
Being engaging means having a conversation with the customer and showing you care. Creating emotional connection can take as little as 40 seconds via a quick exchange about something other than the transaction. It also includes communicating with the customer to understanding their expectation and telling them how you will use their input. You can have further impact if you reach back out and tell them what you did and ask if they have seen improvement. This conversation is what I mean by involving the customer.
To be proactive, preventive and engaging, you must go beyond surveys and complaints to operations and CRM data as well as employee input. A quick example will illustrate.
A delivery company has a delay at its hub so 500 packages miss a flight. The next morning, it gets 100 phone calls from unhappy customers. Two days later it gets 40 surveys back saying the customers were unhappy. The company has operational data ten hours in advance of the first phone call telling it that the packages missed the flight. The CRM can identify exactly which 500 customers are about to have a problem. Further employees are aware of it and can notify the destination well in advance.
- This advanced knowledge can be leveraged to be proactive and engaging with the customer, developing recovery actions that mitigate or resolve the problem.
- Also, the operations data that says 500 packages missed the flight is a much more timely and accurate estimate of the size of the problem than either the contact or survey data.
- The CRM data can show the entire sequence of events including the impact on future purchases assuming it is linked via a common customer identifier to the rest of Big Data.
In my experience, fewer than 10 percent of companies leverage any of these data sources.
Why should you care?
- Customer involvement allows you to understand the root cause of problems, they are usually NOT employee errors but broken processes, customer error or incorrectly set customer expectations.
- A customer problem, on average across all industries, decreases customer loyalty by 20 percent. This means that for every five customers who have problems, one will be lost the next time they make a marketplace decision. For every five problems you prevent, you retain one customer who would otherwise be lost. Problem prevention is much cheaper than winning new customers.
- Being proactive, preventive and engaging enhances margins and allows you to charge a premium. One problem doubles customer sensitivity to price and a second problem doubles it again.
- Being engaging and involving customers enhances word of mouth. Companies with great word of mouth have dramatically lower marketing expenses. The Cheesecake Factory, Harley Davidson and Chick-Fil-A have marketing expenses less than one third that of their competitors due to great word of mouth.
Leverage the data you already have!
- Go talk to IT and identify how to tap the existing data describing the customer experience
- Involve a few customers in a long-term conversation, sharing your quality metrics and asking them if they see the same reality – you might be surprised.
- Pick one ongoing problem and start to be proactive, preventive and engaging and carefully measure the impact of these actions. You’ll quickly win over your CFO.
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