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  Esteban Kolsky 05:29:00 am on February 25, 2009 | 4 | # |
  Tags: CRM, efm, enterprise feedback management, Voice of the Customer, customer loyalty, loyalty, customer acquisition, customer acquisition costs, net promoter score, NPS

  Actions Speak Louder Than Words in Customer Loyalty

  Let me ask you a question: would you recommend me to your friends and family?  Yes, that question… the “L” question.  If you say YES, then you are loyal.  If you say NO, then you are not.  That is an abusive oversimplification of a very, very complex topic – but one that we are able to make mostly because we don’t really understand Loyalty and we do think that everything in this world should be measured.  That question (and its twin sister, “would you use the service or product again?”) supposedly measure loyalty.  Why, there is an entire methodology (NPS or Net Promoter Score) devoted to the study of the answer of those questions.

  Alas, if you have my previous entry on loyalty you know that I think that Loyalty is so badly used in organizations that it is useless.  Thus, asking those questions will not yield any insight into the loyalty of your customers, rather yield some insight into your customers’ ability to answer questions one way – and act a different one.  I have not yet seen any proven correlation between answering those questions and being loyal (sorry Fred).

  Now, let me turn the concept a little bit on its side.  Let’s say for the sake of argument you could measure loyalty.  Let’s say that you want to make sure that your customers would indeed recommend you to their friends and family, or even use the product or service again.  Would you really take their word at face value? or would you rather have some proof, some evidence that they will act as they say they will?  Yeah, thought so.

  Here is the simple way to save yourself the money and not buy into the NPS hype and methodology.  Don’t believe your customers’ words, believe their actions.  Implement frequent shopper or user programs, adopt a referral program – and then see the value of your customers’ actions replace the empty words.  Reward your customers for using you frequently (remember, it costs ten times or more to get a new customer as it does to retain an existing one – use those savings for good).  Pay them, and their friends, for referring new people into your service or organizations.  Make it worth their time to be loyal – and they will.

  What do you think? Take their words or their actions? Have you done this? Want to talk more about it? Leave me some comments or email me.

   

• Esteban Kolsky 06:52:12 am on February 19, 2009 | 3 | # |
  Tags: CRM, culture, customer service, enterprise feedback management, Experience, experience management, feedback, global surveys, satisfaction, surveys, Voice of the Customer

  Writing Global Surveys for Success, Not Failure

  Interesting title, don’t you think?

  Most companies that take on writing global surveys have failed at it.  Some of them did it once and the never again.  Others are still doing it wrong but since the results they get are what they want, they won’t change for fear of actually finding what their customers think of them.

  This is a touchy topic since it is very easy to fall into stereotypes and make generalizations about entire countries or regions, and end up looking like a bigot.  Which, I am not.  Thus, I am not going to point to any specific country or region around the world and say “these people do this” or “those people don’t understand that”.  Instead I am going to point at the more general problems and trends, and we can later work together if you are interested in a specific country or region.

  Four key things to remember when doing global surveys:

  1. Some people are polite.  Some cultures are too polite to really tell you what you want to know.  The best you will get is a polite response saying things are fine, when they are not.  This means you will learn to write the questions in different ways for those groups, and you will use different scales.  I know of at least one case where a client of mine with a 90% satisfaction score had an attrition ration in excess of 26%!  How did we solve it?  We figured out what questions to ask and what were the best scales to find out what customers really meant.  Trial and error works great in these situations.

  2. Some people are brutal.  On the other hand, some people are brutal.  You ask for feedback? no problem, you stink and your product is so bad it hurts me to use it… just like everybody else and all their products!  The key in this situation is to put things in proper perspective.  Sure, the brutal criticism may, just may, be well warranted – but chances are that everybody is getting similar feedback.  So, take the time to put it into perspective.  Try to benchmark your performance against your competitors or even your partners.  Work with a local service provider that can help you understand how your ratings rank in comparison, and work to improve your processes and products, not your scores so much.

  3. Languages are all different, literal translations are bad.  Asking someone if they are satisfied with the bad behavior they received from the last interaction is not a good question to lead off a survey.  Alas, I have seen it.  When you construct questions in one language, literal translations sometimes change the meaning of the question in a different language.  The more diverse the languages and differing their grammars and syntax rules, the worse it is.  Do it right, craft new questions with similar meaning in different questions.  However, they don’t have to ranked or rated the same way, nor be the exact same question – why?  See point 4.

  4. Reporting should be detailed, not generalized. Here is the biggest thing about doing global surveys, which I hope you gather from what i said before: each survey should target specifics for each region or country, and as such should be reported separately.  So, even if you use the same questions and scales, do not mix the results of two different locales in the reporting.  Let me say it again – do not mix results.  You probably already knew that, or probably figured out from the earlier points I made – so I won’t preach it again.  OK, just one more time – don’t mix results from different places.  Why? two words: skewed results.

  Bottom Line: write your surveys for each region or country in the region or country, using local resources.  Don’t cross-tabulate as scores don’t mean the same in different parts of this world. And make sure you report for each region or country, not across all of them in a single, global score.

  Need more? Got something to add?  That is what comments are for… feel free to let me know what you think.

   

• Esteban Kolsky 02:04:52 am on January 25, 2009 | 5 | # |
  Tags: CRM, Customer Experience, customer experience management, customer satisfaction, customer satisfaction surveys, customer service, customers, enterprise feedback management, Experience, feedback, surveys, Voice of the Customer

  Surveys Done Right – Part 2 – Customer Satisfaction

  I have been dreading writing this entry since I came up with the idea for the series (have you read part 1 yet?).  It is not that I don’t know what to say, or that I don’t want to do it.  It is simply that my fear of providing “sample” survey that will later become “real surveys” for all people without customization or personalization really, really takes hold in this arena.  I mean, who has not had to write a customer satisfaction survey in the past?  It is probably the most used, misunderstood, and poorly implemented of all surveys out there.

  If we go by the surveys that I have seen, customer satisfaction surveys should only have one question since that is what most people care about anyways: “overall, how satisfied are you with us?”.  It seems that if the customer says they are overall satisfied then there are no problems.  Further, as long as we get a sufficient number of customers to say they are satisfied (somewhere in the mid-70s to mid-80s), and the number remains consistent or (gasp) even grows a little  we are perfectly set from the customer experience, loyalty, and satisfaction point of view.  After all, if 80% of people are satisfied – isn’t that good?  Well, yes and no.  I wrote about how you can ensure you will get a 90% of more in customer satisfaction surveys in the past (second most popular post in this site).  It is possible to score high – even increase your scores, and not be doing a good job.

  So, before we jump into the description of the survey and the sample questions (and before I beg you again to personalize and customize them), let’s make sure we understand one thing about this survey.  This “sample” survey is not intended to tell you how many people like you.  It is intended to, historically, provide a trending line of your customer satisfaction overall – but more important it is intended to give you real answers to partial satisfaction questions (e.g. were satisfied with the speed of the answer?) in accordance to your strategy (you do have one of those right?).  Finally, consider that I used these questions for customers that have customer satisfaction as a key metric and part of the insight.  I still believe that customer satisfaction is too flawed as a metric to be used reliably (also read this one), but a trending report cannot hurt – as it wouldn’t with any other metric.

  Too many words to get here, so here are the the essentials of a customer satisfaction survey (part 3 of this series, best practices for writing surveys – stay tuned!):

  • First, the most important part – KISS (keep it short and simple).  I use the rule of 5+/-2 (five, plus or minus two), with five being the magic number, and three and seven the limits.
  • Second, you MUST personalize the questions to the specific items you want to measure satisfaction on – which is why there are some questions below to use, but they may not fit what you are looking for.  Tie your questions to your strategy
  • Third, send them out every business cycle (varies by industry and function), and make sure you use panel management tools so you won’t keep sending them to the same person over and over (we know what they think – no one should get more than one a year), and that you don’t send them to people who won’t respond.
  • Fourth, statistical significance is great for market research or election day polls, not so much on customer satisfaction.  Make sure you get a large enough number to make it varied (I suggest at least between 3-4% of the population) and I am talking responses – not invitations.
  • Fifth, make sure you use the same questions the next time you send them out (yes, exactly the same wording) so you can keep historical trends.  Remember, customer satisfaction is an OK metric to keep as long as you use it as a historical trending metric, not a KPI

  Those are the basic rules for these surveys, but more will arise as you begin to implement them.  Of course, best practices for EFM and Surveys apply, so those are to be considered as well.  Now, without further ado, the list of questions I’d like to propose for your consideration:

  1. Overall, what is your satisfaction with Company XYZ? (hate this question, but it is an easy one to answer)

  Now, this question is to be answered in a numerical scale, I favor a scale of 1-4, you can use whatever works for your objectives.  A scale of 1-10 is popular with people who endorse NPS (Net Promoter Score), but I don’t buy into that.  A different way to ask this questions, which I prefer, is:

  1. Overall, would you say you are satisfied with Company XYZ?

  This question is answered with a simple YES-NO.  Why do I like this question? Two things, first the wording predisposes the respondent to say yes (which is a positive score).  Second, you can setup your scripts to react in the case of a negative answer – and since the question predisposes the respondent to say yes, when someone says NO they really mean it.

  From the following questions, pick some of the ones that reflect your objectives, vision, strategy, and purpose for this survey.  Remember, personalization and customization are highly encouraged – so if these don’t fit your needs go ahead and change them accordingly.

  2.1.  What is your satisfaction with Company XYZ web site / self-service solution?

  2.2. What is your satisfaction with Company XYZ representatives on the phone?

  2.3. What is your satisfaction with Product ABC from Company XYZ?

  2.4. What is your satisfaction with Company XYZ return policies?

  2.5. What is your satisfaction with Company XYZ use of email for customer service?

  Well, you get the idea.  Keep in mind that how you ask the question is going to depend on the answer, and see Q1 above to see some examples of different ways to write the questions.  Needless to say, again, the questions you chose for the second part are related to your specific, strategic goals and are bound to change for your survey.

  This is the longest post I wrote since we started this blog, but I wanted to make sure it was clear and explicit.  There is, of course, lots more to read and write about customer feedback, customer service, customer satisfaction… well, anything dealing with customers.  You will read more and we move along – but how do you like this post?  Interesting? Are you using it?  Please let me know your thoughts and experiences… and thanks for reading!

   

• Esteban Kolsky 06:14:49 pm on January 15, 2009 | 8 | # |
  Tags: CRM, customer service, enterprise feedback management, feedback, surveys, Voice of the Customer

  Surveys Done Right – Part 1 – Point-of-Service Surveys

  I am going to break some very old rules of mine to write this post.  Ever since I introduced the three-layer model for surveys while at Gartner (point-of-service, customer-satisfaction, planning) I have been getting requests for “sample questions”.  I have maintained, and continue to do, that I cannot provide sample questions since all questions need to be created according to the situation, respondent base, strategy and vision for your feedback initiative, as well as the standards and rules you set for your surveys.  Of course, they also have to be personalized to respondent and situation, and be written to match delivery and collection channel.  This is as basic as it gets when writing surveys.  My concern / problem is that when someone gets “sample questions” they become “THE questions” without further tinkering, and that is just wrong.

  So, the counterpoint to that is that I have seen the concept implemented (point-of-service surveys) with some truly horrendous ideas.  I have experienced “short” surveys of 10 questions asking all sorts of things, and questions so badly written that it is almost impossible to answer.  Thus, as a public service (yes, I know I am a selfless philanthropist when it comes to surveys) I am going to break the rule and make this post about two things: a reminder of how point-of-service surveys should be done, and a set of sample questions (which I will regret for a long time, and possibly my grand-kids will as well).

  First, how does this work.  Point-of-service (also called point-of-delivery) surveys are SHORT (yes, needs to be shouted), 2-3 questions surveys aimed to discover the efficacy (not the efficiency) of the service interaction.  In other words, did we do a good job delivering service and was it what you needed.  It is intended to spot any problems during delivery, and to fix them before they become customer service issues or lead to customers not being satisfied.  Simple, huh?

  Now, the main point of doing this is preventing service issues from becoming problems.  Thus, the critical part is not doing the survey, but actually having processes in place to reach out to customers and fix their problems when either of these questions returns a negative answer.  This is where most companies fail, they don’t have documented, specific processes in place to take care of negative answers quickly (yes, speed matters).  The reason I am bringing this up, even if you copy the questions from the bottom of this post – please, please, please make sure you have the necessary processes in place before doing these surveys.

  Final point I want to make, then we move to the actual questions.  Channel of delivery matters.  If at all possible, try to keep the survey in the same channel where the transaction took place, and to follow the interaction immediately.  If the customer called, make the survey an IVR-driven survey post-call (no, don’t have another call for follow up… it does not work that way).  Email came in? email going out (as quickly as possible, not 2-3 days later).  If you cannot maintain the channel of service be the channel of delivery (or you cannot make it immediately following the transaction) then your best bet is using email surveys.  No, not email with links to online surveys — email surveys.  The questions are within the email and they can answer simply and quickly.  OK, getting off the soap box now (yes, I am passionate about this “stuff” being done well).

  CAVEAT: I know I said this before, but please, please, pleaseeeeee customize these for your situation and personalize them. Please?

  Question 1 (this one should never change): Did you receive the answer you needed?

  Question 2 (choose from the three below based on what else you need to measure):

  Q2.1: Did we do a good job delivering the answer? (my favorite, but a little broad in meaning)

  Q2.2: Was our service cordial and polite? (in other words, who needs some training or talking to)

  Q2.3:Was our representative knowledgeable? (again, training or knowledge management issues)

  Q3.3: Was our representative prompt to answer your questions? (do they know what they need to know?)

  You get the idea, depending on what part of the interaction is critical you can change the second question.

  So, please don’t let me down. Customize, personalize and (more important) let me know how it goes…

   

• Esteban Kolsky 06:07:36 am on January 2, 2009 | 4 | # |
  Tags: 2009, Communities, customer service, enterprise feedback management, Voice of the Customer

  The Top Five New Year’s Resolutions for Customer Service

  This new year, 2009, is going to be a difficult year – no questions about it.  I wrote an article for Loyalty.com sometime back (which they said they would have published by now — oh well, maybe next year) that discussed why good customer service is critical in these economic times.  If you are interested in reading it just let me know, be glad to send you a copy so you can be the cool person in the office to have it.

  When this whole mess began to become public there was a lengthy discussion between bloggers and twitterers on whether marketing was something you spent on or cut back during tough economic times.  The idea being that the funds spent on marketing where not sure to give you a similar return when there was no money, so why bother – spend the money more wisely elsewhere.  Of course, that argument is made by people who don’t know what they are talking about… any mission-critical process for your organization should be continued regardless of what it is.  I wrote about it in my previous blog (the predictions for 2009).  And, the data points that I am getting from clients are confirming it – proven projects that affect the bottom line will be funded through this downturn.

  So, after the long introduction… here are the top five resolutions for customer service in 2009:

  Resolve to be more patient.  This is simple.  Your customers have more stress, less money – or less desire to spend it.  They are bound to contact you to try to free some cash.  They may even contact you to get out of a contract or commitment.  In either case, your patience pays off in the long turn.  Helping them now, and even changing some rules to make it so, will make them more loyal in the long run.  Yes, even if they leave you, they are bound to come back.  To achieve this resolution you should  empower your agents to do more, give them more freedom to bend or change some rules – and make sure your customers know about it.

  Resolve to get in better shape.  This is a great time to examine what you are doing, how and why – then look for better ways to do it.  In a lot of instances the fix will be free or very low cost — but it will pay long-term dividends by having better processes and integration between them.  To achieve this resolution you must analyze, prioritize, and fix your processes, then implement the changes and continuous performance improvement programs to ensure they are constantly optimized.

  Resolve to fix broken relationships. You have some hurt feelings among your customers.  Even if you don’t know it – some of them are not happy.  You have to find out about it, and fix their problems – or at the very least make the decision that there is nothing you can do.  Chances are your feedback program is not capturing the proper feedback from the right customers to make sure you know what is going on with them and what they feel – and want.  Just by the mere acting of knowing what is broken – not even fixing it – and letting your customers know you know you can move forward.  To achieve this resolution you must look into your existing feedback strategy, or create one if you don’t have one, and make sure it is capturing the critical feedback you need from the customers you want to measure.

  Resolve to try something new. How is your customer service doing with Tweeter department? Blogging? Communities? These new “things” (actually channels of mass communication and a pillar of the community service I described in a previous blog entry) are not going away.  They are growing.  Fast.  Remember when email first came into the customer service radar?  Well, that is where we are with the new social media channels.  This is one of my two predictions for 2009.  To achieve this resolution you must catalog and plan for all the new technologies, tools, and solutions that have come across your desk and you considered deploying for customer service.  Good news, most of them are still free to try.

  Resolve to listen better. Your customers are talking – are you listening? Really? This resolution is like an aggregation of the ones above, but nevertheless a valid one.  I have seen many predictions already calling 2009 the “year of feedback”.  I agree, without the marketing phraseology, that feedback is going to become a key component of corporate strategies as we move forward and that loyalty is closely tied to feedback (if you don’t believe me, just think of any relationship outside of a commercial one – and you’ll understand how listening and adopting the feedback from the conversation will make a difference).  To achieve this resolution you have to become customer-driven.  Check out my previous blog entry for that.

  So, have you made your resolutions for 2009? What are they?

   

• Esteban Kolsky 05:58:58 pm on December 16, 2008 | 5 | # |
  Tags: Communities, CRM, enterprise feedback management, feedback, Feedback Management, social media, Voice of the Customer

  Shifting Priorities, or How to Become a Customer-Driven Organization

  So, how tired are you of hearing me — what’s the right word here… oh yeah — “emphasize” the need for customer centricity?  I wrote about it before in this blog, and I wrote and preached about it for over seven years at Gartner.  It was almost like a battle-call, each time I talked to a customer we always started with a discussion on customer-centricity.  So, with that in mind — how sad would you be if I were to tell you that customer centricity is a thing of the past?  How about if I told you that customer-focused organizations are not likely to make it either?  Shocking, I know… but let me explain.

  We are entering a state of business that is way different that we have seen so far.  Until now, and for the most part still continuing for the vast majority of organizations, our approach to business has been us versus them.  Company versus customers.  Come on, be honest – even when you talked about customer-centricity you were still trying to figure out how to create the best possible solution for your organization – not your customers.  Still there are plenty of verticals where this is the norm rather than the exception.  We are, by nature, trained to seek our own benefit above others.  That was fine –  until now.

  See, among the changes brought by social media (you know, that whole feedback-driven, blog-centric, twitter-infused model of businesses) came the recognition that customers are strong. not one by one, but as a group.  There are plenty of examples of businesses that either took advantage (Comcast) and reaped the rewards, or failed to notice it (Motrin) and paid the price.  The social media “revolution” has actually managed to change the world of business for those astute companies that noticed it.  The new world is no longer customer-centric — it is now customer-driven.

  Converting your business to customer-driven means that what you do is what your customers want you to do, and tell you to do.  You make the decision, of course, to engage in that business model.  However, if you do – their feedback drives your organization.  There is no more ignoring what they tell you or what they need – instead those demands become your driving force.  The reward for that? Loyalty and repeat business.

  Are you still with me? Still interested?  Good, here is what you need to do.  You don’t have to change that much what you do, just how you react.  See, the core principle of customer-driven businesses is feedback.  No, you are not getting away from that so easy.  You have to create your feedback strategy (and I am not just talking about surveys here), deploy it, collect feedback and constantly analyze it and implement changes based on it.  If you cannot make your organization move dynamically, this is not for you.  If you cannot quickly react to changes in what your customers need and want, then don’t bother.  This is for dynamic organizations that want to hear what their customers have to say – and react to it.

  Here is an example of a customer-driven business model.  Egg Bank in the UK heard their customers’ complaints about the lack of a specific type of account.  They thought it would be a good idea to create it, but they also wanted to make sure they delivered it exactly the way their customers’ wanted.  They implemented a series of short surveys to collect input on how to deliver that service.  They put out the survey for just three days and collected all sorts of feedback.  They later analyzed the information collected and within a week they had created a new product, conforming to their customers needs and desires, and it was an instant success (guess where the initial marketing list came from… yep, the people who provided feedback).

  Are you ready to let your customers drive your organization?

   

• Esteban Kolsky 12:11:17 am on November 14, 2008 | 5 | # |
  Tags: CEM, Communities, community, CRM, Customer Experience, customer experience management, customer service, enterprise feedback management, feedback, Voice of the Customer, Web 2.0

  Customer Service is Dead — Long Live Community Service!

  I have had lots of requests lately dealing with social media, and how to make good use of this for Customer Service and CRM – even broadening the scope into the entire enterprise.  Of course, this is related to the “explosion” in twitter, plurk, Facebook, blogging and related tools.  But, is there something else there? is there value in implementing communities?

  Yes, yes, yes, and yes.  This is the future of customer service.

  I have been working with communities, back then called collaborative customer service or forums, for some eight years.  Of course, back then we had little to go on – some forums, communities were nascent at best -  and we could not see how it would work best.  I wrote about it as the intermediate step between Customer Interaction Hub and Secret Customer Service.  Got some interest, did some strategy work, small lab-based deployments but almost no one at that time even attempted to take on it fully.

  Fast forward to today: communities are the rage – an integral part of Web 2.0. We still don’t have a clear path or a well defined purpose, but lots more is happening.  Now if the perfect time to get started – once the concept of community service becomes mainstream (12-18 months from now) it will move very, very fast for you to play catch up.  You can do this now and be prepared.

  The benefits of implementing community service are astronomical.  There are plenty of case studies (Mercury Interactive, Cisco, Microsoft, and more) that have moved either part or their entire support structure to communities or forums and have increased their customer satisfaction, reduced their costs of customer maintenance – even found new ways to increase revenue!  All this by switching from traditional customer service models to community service.  So, how do you make the move?  Three things to get started:

  1. Make sure your customers want it – Quite simple, there ain’t no community without people.  If your customers are not going to participate, nor do they feel they can get value out of it then the community will not succeed.  This is independent of topic, theme, method of operation or anything else.  Plenty of failures exist of communities launched without checking with customers first. Best way to start? start a community alongside the rest of your support structure.  Advertise it. Make it attractive. Populate it with good content. Commit time and resources to grow it.  then you start shifting people over slowly, finally make it the channel of choice.  Sounds simple; it is simple.

  2. Make sure your company can support it – Despite claims to the contrary, the most successful examples of community service are those where the company commits time, resources, knowledge and participants to them.  If your experts are involved in the community, take interest in it, answer questions and receive feedback from customers the community will grow and become useful to you.  If no one from your company ever enters the community, and it builds with its own content and resources, if you seem not to care about the feedback and knowledge built in it, then it will be a failure.

  3. Let it be – I know this is hard to understand, but you have to let the content be free.  Monitoring content, censoring entries, and controlling what goes where and how it flows through your community is not the way to go.  Think Wikipedia and self-regulating content.  It is likely that you will have to do some policing to get it started, but go lightly and err on the side of freedom.  Once the community is up and running, make sure you use reputation tools built into them so the people that matter the most (engineers and outside experts as an example) can be recognized.  Communities center around self-elected leaders and they are the ones that will control the content and quality of the community. Feel free to court them – but try not to control them.

  Final word of advice.  If you read my blog on customer experience management you know that I will advise you to integrate your community into your CEM strategy.  Yet, I will also advice you to make sure that you treat communities as the most important link between you and your customers since there is nothing that can replace the direct link you can have with them – and the free flow of information both ways.

  Are you working with communities? How is it going?  Do you see yoursefl replacing customer service with community service?

   

• Esteban Kolsky 01:19:00 pm on October 14, 2008 | 4 | # |
  Tags: CRM, customer service, enterprise feedback management, feedback, granularity, LinkedIn, surveys, Voice of the Customer

  The Uselessness of Granularity in Feedback Management

  Warning, we are embarking on another of my pet peeves: granularity.  What?  You don’t know what I am talking about about? Let me explain myself.  Granularity is how detailed of a scale you use when ranking feedback.  For example, you could use a simple Boolean scale, like Yes or No.  You could also use numeric scales, say between one and five.  Finally, you could use word scales, like Horrible, Bad, Neutral, Good, Excellent.  Either way, the concept is that you give the respondent a scale of choices to base their response to a specific feedback question.

  What could possibly be wrong with that?  Well, it is not the concept, but the implementation that gets me.  Same as with customer satisfaction and loyalty (you could click on these links for my previous rants on loyalty and satisfaction). The concept of giving people choices is good, as it creates way for them to express opinions on any topic.  It allows organizations to prioritize their efforts and focus on those that need more attention — a Horrible rating needs more attention than a Bad one.  Same thing for Good and Excellent.  See, the logic is good

  The most common used scale until recently was one through five.  That is not that bad, really, except for the odd number of options (more on this later).  However, some “genius” somewhere decided that five options is not enough.  We need to give the customers a scale from one to ten for them to grade us.  They call that granularity and the flawed assumption is that more options will give the organization a deeper understanding of the true feelings of their customers.  There are two problems with this logic:

  First, there are too many options. Customers are already hard to reach for qualified feedback, do you really want to add time to the survey – and so many choices for each question?  Consider a typical, not a good, customer satisfaction survey.  It has 12-15 questions.  Let’s assume that only nine of those questions have granular scales for answer.  In the time it takes a customer to decide whether questions number four and six deserve either a six or a seven the most likely outcome is that they will abandon the survey, or choose an answer without cause.

  The worse part of this, when you get the responses you cluster the answers because there is no real difference between six, seven, and potentially eight – they all become one!  So the time you asked your customer to take to choose the best granular-scale response was wasted, and the decrease in response rates is actually justified.  Customers realized long before you did the uselessness of granularity – and they stopped responding to granular-scale questions.  Not really worth the unlikely benefit of getting better definition of their needs and demands.

  I know what you are asking yourself: what scale should I use then?  A four-option, word scale: Poor, Bad, Good, Excellent.  Why four?  Remember when I said you did not want to have an odd number of options?  If you give customers five options, they will pick number three more often than not.  This is called, informally, fence-sitting and fulfills the purpose for customers to give you feedback but not take a position.  Was my service good? It was Neutral…what does Neutral mean?

  Anyway, I am now getting off my soap box.  Let me part with some statistics.  Among the people I recommended using this scale, and adopted it, customer satisfaction was up an average of 8 points, and response rate scored consistently higher – not with just one survey, but over time with returning customers.

  What do you think?  Are you going to try this?  Let me know your thoughts…

   

• Esteban Kolsky 07:00:38 am on September 12, 2008 | 2 | # |
  Tags: CRM, customer centric, customer satisfaction, customer service, enterprise feedback management, feedback, Feedback Management, Voice of the Customer

  How About Feedback From Passive Customers? Huh?

  I have been working on some research this week, trying to improve my three-layer model for feedback management which relies on point-of-delivery, customer-satisfaction, and planning feedback events.  See, for the most part I have been using it with clients to help them deploy feedback management strategies, mostly for support scenarios (it can be adapted to many situations, more on that another day).  We have been assuming all this time that if we survey the people who interacted with us, we actually have a very good representation of the issues and feelings from our customers.

  Now, this has worked very well in the past for lots of clients I helped.  Their improvements in retention, delivery effectiveness, and (gulp) loyalty have been impressive (I did not recommend the loyalty measurement – sorta snack in).  However, I could not stop from thinking in the back of my mind I was missing something.  Well, today as I was reading several articles, blogs, and journals about satisfaction, loyalty, feedback management, etc. when I had THE epiphany — I have been ignoring passive customers.

  What are passive customers? Glad you asked In all customer populations there is a small group (between 5-10 percent usually) that you almost don’t know you have.  These are the companies (B2B scenarios), or customers (B2C) that bought your product or service, use it all the time, and never require service (or self-support themselves through your self-service initiative).  These are the non-squeaky wheels – the ones no one pays attention to.  In words of loyalty and satisfaction, these are satisfied, loyal, long-term customers that we have no risk of losing unless we totally screw up — and even then, they are likely to call and get their problem fixed, since they never called before.  These are your safe customers.

  Since you know me, you also know I am going to say something different.  Something like “these are not safe customers”, or “you cannot take them for granted just because they don’t interact directly”.  Alas, I wont’ say anything like that.  What I will do is ask you a question: what is the value of these passive customers to you?  What?!?!?? You don’t know?  Tsk-tsk-tsk… shame on you.

  See, these passive customers for the most part don’t matter much to your organization.  They tend to be content with the product or service, they will upgrade or make incremental purchase decisions mostly on their own, and they just want to have a peaceful existence with what you offer.  In other words, they do tend to be safe,  Hard to lose them – unless you are trying.  However, their value to you is what you really need to know.  One by one, you need to know whether they are a top-tier customer or not, and what would their departure mean to you.  Then, you need to get their feedback – find out what makes them stay, what would make them go, and what you need to do to keep them where they are.  It is easier than you think, all you have to do is ask — we will cover in my next entry how to ask.

  Are you taking care of your passive customers? Huh?

  PS: don’t forget to request the EFM resource guide!

   

• Esteban Kolsky 06:44:10 pm on July 24, 2008 | 17 | # |
  Tags: CRM, customer loyalty, customer satisfaction, customer service, enterprise feedback management, feedback, LinkedIn, loyalty, satisfaction, Voice of the Customer

  First, apologies to Mel Brooks for partially stealing the line from his movie “Blazing Saddles“.

  That is the truth – organizations that focused on customer loyalty are taking the wrong path to customer retention.  Mea culpa, I was one of those people who saw Customer Loyalty as the end-all for customer service.  If you could just achieve high levels of loyalty, the idea goes, you won’t have to worry about customer retention.  I have since learned through work I have done with several clients, that loyalty carries no reward with it.  There is no higher wallet-share, there is no higher likelihood of repeat purchases — there is nothing that foretells that Customer Loyalty helps an organization, and plenty to show otherwise.

  Maria Palma wrote in her blog (Customers Are Always) a couple of days ago that Bargains and Deals may just trump customer loyalty.  I commented in that blog that loyalty only brings up your cost of customer maintenance, and it does not provide you with the benefits you expect.  Let me expand on that.  Customer Loyalty and Customer Satisfaction are similar concepts: they rely on feelings that are not easy to manage or control, are expensive and cumbersome to measure appropriately, and they have not really shown any correlation between what they cost and the benefits they bring.  It is just another way to look at a customer feeling about a company, instead of a product or experience, that cannot be used to predict future behavior.

  In the movie “Nothing in Common” Jackie Gleason plays an older salesperson who prides himself in having the best relationships with his clients.  They all admire him, respect him, and have great loyalty towards him.  Early in the movie, a brash young new VP of sales calls him into his office to discuss his performance.  He is truly impressed by the relationship he has with his clients, but when he looks at the performance he is dismayed.  Abysmal sales numbers have been trickling in for the last few years.  Turns out all his clients are now buying from the competition because they have better shipping policies and cheaper prices.  So much for loyalty, and for Jackie’s job.
  

  I said it before, and I will say it again.  Don’t focus your metrics on your customer’s feelings.  Instead, focus on what matters. There are three things you can do to ignore customer satisfaction and customer loyalty and come out ahead:

  1.  Build a solid infrastructure (technologies and processes) to deliver great customer experiences across channels.

  2.  Extend it to include feedback, sales, marketing, operations, and to create end-to-end commendable customer experiences

  3.  Ensure that the delivery of your experiences meet customer expectations, and use expectations to improve your delivery

  Then, you won’t have to worry about loyalty, satisfaction, or anything like that.  Then you will be able to simply focus on doing the best possible job for your customers – and get rewarded for it.

  Are you focusing on the right metrics? Are you doing the right thing?
  

   

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