Feedback from customers has always been a valuable source of information for the average business. Knowing where you got it right and where you can potentially improve is always very welcome. However, in this age where we can use the right systems and processes to draw a rich store of information, we find ourselves having to deal with an even greater challenge of how to use the information productively. Companies are known to collect feedback by the millions per year through surveys, focus groups, phone-in follow-ups, and a range of different methods.
Industry experts have observed that there is a chasm between owning the information and making it count. They cite several obstacles including conflicting data, limited analytical skills, lacking the right systems for analysis and communication, and insufficient clout by the Voice of Customer (VoC) group to drive action. Eric Sumda, VP Customer Insights at the Avis Budget Group, pursued the quest to shift focus from data collection to action. His team redesigned and shortened a dozen questions that could be answered easily on a mobile phone and within a space of 15 minutes would alert local managers promptly based on critical survey questions. Experts are unanimous in their opinion that Customer Experience (CX) winners are mainly differentiated by a bias towards action.
They caution over-reliance on data and systems. CX veteran Krista Sheridan of TELUS strongly recommends having more conversations to fully understand issues and develop action plans. According to her, “If I could go back in time to when I first started in CX I would definitely tell myself to always measure less and talk more. Not to be lured into spending the majority of the time on measuring and analysis which can be an easy trap to fall into. No matter what point you are at in your CX journey – just starting, a few years in, or a seasoned expert – I believe that the conversations are still the most important part of the work.”
Five key actions are recommended to help in building intimacy with customers. These include; acting on feedback from customers, understanding the drivers of customer satisfaction, being recognized as market innovators, building long-term profitable relationships in your chosen market, and monitoring and tracking Customer retention and repurchase intention.
Acting on feedback from customers
The ‘outside-in’ approach as opposed to the ‘inside-out’ focus is the preferred course of action for strategy development. It starts by putting in place mechanisms to collect customer feedback and deliver real insights into customer needs and expectations. As an organization, it is important for you to seek to develop a dynamic listening competency. Many organizations do this by employing a range of methods such as traditional market research methods namely, surveys, focus groups, online interviews, and phone surveys, including the latest addition to this lot, social media market research. To generate more meaningful analysis, by using a combination of these methods you are better able to analyse the information productively to gain rich insights into the customer.
Leverage these with the benefit of Customer Relationship Management (CRM) systems that can generate a highly detailed analysis of customer behaviour by capturing data at various points of interactions augmented with purpose-built IT systems, you are presented with a very effective way of monitoring customer issues systematically. Best practice organizations consistently record review and use these pieces of information to drive changes in products, services, and ways of doing business.
Understanding the drivers of customer satisfaction
This means that you derive customer insights by avoiding the easy approach of reliance on intuition to ‘know’ customers and ‘understand’ what they are seeking, and focusing on developing a curiosity about seeing matters from the customer’s perspective.
The concept of value is crucial to customer intelligence and is best envisaged as a set of concentric circles (shown in the above figure). In the centre are the factors that maintain value for
|The value concept Source: New Consumer Marketing, Susan Baker, 2003 (Wiley)|
the customer (or end-user). They are referred to as ‘Hygiene’ factors, or the core features and attributes that all competitors must offer to be considered players in a particular marketplace. These are surrounded by the ‘value enhancer’, the key discrimination factors that set the organization apart from competitors in the eyes of the customer. They may become talking points, creating word-of-mouth marketing. Organizations offering ‘value enhancers’ will build market share quickly, rearranging the competitive forces in the marketplace as they do so. The next set of factors are those that diminish and destroy value in the customer’s eye. These are simply ‘turn-offs’, we must identify these quickly and eliminate them from the offering. I had this experience quite recently when I walked into a bank to transact some business. Due to social distancing, we were made to wait outside for the managed numbers inside to whittle down.
We became impatient as our wait was very prolonged and it appeared that it was going to take some time to reach the teller’s counter. Some of us complained and were immediately attended to. I hope the bank took note of this ‘turn-off’. They are potential value destroyers and may not count for much from our perspective as a business but can certainly influence decision making by customers and may cause them to eventually ‘vote with their feet’. By identifying these components of value that factor in the customer’s perception of value the organization needs to understand its exact meaning for customers.
Be recognised as market innovators
The word innovation comes from the Latin word innovare, meaning to renew or alter. Organizations can potentially step up their game by creating new value-producing resources or endowing existing ones and enhance their potential for yielding profits. Instead Professors Kim and Mauborgne suggests that products and services offering only incremental improvements are likely to generate lower sales and substantially less profitability than truly pioneering innovations. They describe organizations that make competition irrelevant and who create new markets by focusing on what value to be produced as ‘value pioneers’.
Rackspace a hosting company offers what they term fanatical support to customers. They have devised a chat facility that connects visitors directly to a Rackspace team member. Any visitor to the site is likely to see a window pop up with a friendly welcome typed in real-time by a named individual. The visitor can then directly engage in a conversation with the team member. The feel of personalised support is always a heart-warming experience. Many organizations believe that adding more technology to a product or service will result in value-adding innovation. On the contrary, what customers want from technology is new or enhanced value ‘that will extend their abilities and provide them with greater ease of use and convenience.’ M-PESA, a product spearheaded by Vodafone in Kenya, enables customers to send, receive, and store money safely and securely via a basic smartphone. They provide customers with a digital platform to manage their M-PESA accounts and make faster purchases at merchant points.
Build long-term profitable relationships in your chosen market
Best practice organizations turn customer intelligence into marketing through the process of segmentation. They take a mindful approach to their market in contrast to those who accept any customer as a good customer. The reality of today’s consumption-led economy is that customers unwittingly form loose groups whose members seek similar sets of value factors. Customers segment their market and form subgroups with their own sets of requirements. Leveraging customer intelligence through the process of segmentation primes the organization to understand the market in which it operates. It is thus able to answer simple but strategic questions such as ‘What business are we in?’ Drucker’s 5 important questions for any business offers us great insights here. You would typically be asking key questions notably, what have we learned and what do we recommend? where should we focus our efforts? what if anything should we do differently? what is my plan as an individual to achieve results for the business/responsibility area? What is our plan to achieve results for my organization?
By building customer databases through loyalty card schemes, such as those provided by the major supermarkets, you can provide a rich source of information on customer motivation. Note however that a segmentation analysis built solely on this sort of data reflects the motivations of existing customers. Meaningful segmentation analysis takes a lot more into consideration e.g different types of data. Using CRM more effectively will enable your organization to take a dynamic approach to segmentation. Melcom with its loyalty card scheme has handed itself a boost in determining thousands of serviceable segments. Tesco is notable for this strategy with the use of its Clubcard scheme. Chairman David Reid could not have said it any better when he claimed that ‘If you took our loyalty cards away from us it would be like flying blind.’
Monitor and track Customer retention and repurchase intention
The way forward for any business is to establish long term, mutually trusting, and profitable relationships with customers. ‘Relationship Marketing’ evolved as a response to the constrained economic environment of the 1970s and a series of oil crises. In mature markets where the rate of growth has slowed or even stopped, it has become more difficult for organizations to pursue a strategy of gaining market share. To increase product appeal
With the pool of new prospects diminished, marketing attention to increasing product appeal, differentiation, and value for money, many have augmented their product offerings by incorporating a service element. Consequently, this has spawned the development of services marketing as a business function. Measures of marketing success have turned from numbers of customers (market share) to share of customer expenditure (share of ‘wallet’) and potential customer value (customer lifetime value). The theory behind CRM is that managing customer relationships is an integrated business process involving the consolidation of individual customer data from multiple sources to create a mutually valuable proposition.
|The Writer is the Managing Consultant at Capability Trust Limited a People and Learning Organisation serving the market with Talent Acquisition and Management, Leadership Development, HR Outsourcing and General HR Advisory, Training and consulting services. He can be reached on 059 175 7205, [email protected]/ www.linkedin.com/in/km-13b85717|