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  Esteban Kolsky 01:16:29 am on December 24, 2008 | 1 | # |
  Tags: 2009, customer centric, Customer Experience, LinkedIn, predictions, process, process improvement, process management, social media

  I Spy, I Spy with my Little Eye… a Very Interesting 2009

  I have been feeling odd, weird the last couple of months.  Was not sure why, until I finally realized – I had not written my predictions for 2009!  Seven years writing predictions, year after year, it becomes second nature.  You have to figure out what will happen next year, write it down, publish it, and then become thoroughly humiliated 12 months later when you review your predictions.  Or, in my case, become satisfied of the wonderful job you did predicting the year 12 months before (yeah, right).

  This is going to be a very interesting year.  There are three major forces converging:

  1. Despite what you think or believe, we are deep in the middle of a global recession and no one knows when we will come out of this one.  The effect that this recession will have on all our lives, and our jobs, is not quite clear.  One thing is for sure – there is a financial consideration that will rule most of the decisions you will make in 2009 – regardless of other considerations.
  2. The role of IT in the organization has changed dramatically in the last few years.  While ten and 15 years ago you would have been very hard pressed to find any organization willing to place their IT above any other necessary function – or even call it a necessary function – we are now facing a world run by geeks (pardon the expression, run by technologists).  In addition, the value of IT in the organization has been proven time and time again (even if you choose not to ignore those 5-year, 50-million dollar CRM implementations to nowhere) as critical for the better working of the organization.  Finally, as the amount of data that needs to be processed increased by leaps and bounds with the complexity of the operations of most organizations, IT is not the place where you are likely to see cuts.
  3. Customers are driving decisions. Yes, we have said this many times in the past, almost to make it meaningless… but the social revolution is changing things.  Customers are in control, and they are realizing that.  They know they can make changes happen by blogging, tweetering, and expressing their views.  And they are keen on taking that forward.

  So, where does a business turn in 2009 when it has to use less money, rely on IT, and bow to customers?  There are two things that will happen in my opinion, and both make for a great and interesting year.

  The Corralling of Social Media. Ah social media, the last frontier.  The place where new technologies, at least these days, seem to go.  This is a conglomerate of many things (blogs, tweeter, social networks) and most organizations have taken the blind approach to it.  Either they ignore it or they try something without a real strategy or purpose.  The idea is that it will somehow profile itself better as time goes by, and more organizations will be able to figure it out.  After all, that is the way it has happened so far – right?  Well, this time is different.  See, in all those previous technologies we saw time being an aid since the organization had to discover the technology, figure out how to use it, and then make decisions about implementation.  This time, it is the users who are driving the progress.  Your customers have already adopted blogs, and communities, and social networks, and tweeter and all those technologies – they are now waiting for you to join them.  See, this about truly working with your users – not just saying it.  You dive into the social ether and take charge – and there are rewards.  All you have to do is have a purpose and a strategy.  This is what is going to happen in 2009 – a very large majority of organizations will figure out their purpose and create a strategy for social media.

  The Real Improvement.Really, we are going to change for the better – and that is not just another promise!  I promise (no pun intended, but well achieved).  See, we are getting to the point where we are constantly telling clients how we will change for the better – yet, we never get around to it.  The focus on the organization above the customer (away from customer-centric and customer-driven) means that we will only push so far in improvements, but they tend not to cause a change in either the corporation’s behavior or the customer experience.  And that is not real change, it is lip service.  Smart organizations are beginning to see that delivering on promises to customers, monitoring their needs and providing for them truly pays off by making customers more loyal and resilient to competitors.  The return on not having to regain customers (read my previous blog series), or get new ones to replace exiting ones is invaluable.   Now, in 2009 we will see more and more organizations become smarter about their processes, about their customers’ needs, and about their execution — they will become smarter, flexible, and will truly improve their processes to match their customers’ needs.

  And one more thing.  I keep getting asked whether 2009 will bring drastic cuts across IT, how deep they will be, whether they will be equal to the ones following the Internet bubble explosion.  I truly, honestly don’t know.  However, I know what I learned in seven years at Gartner – two make a pattern, three make a trend.  That means that if any data item is repeated three times or more, then it is likely to be the answer.  Why am I bringing this up?  One of the most valuable services Gartner offers their clients is as a repository of information.  By talking to vendors, providers, consultants, and end-users we get the truth about the market.  Alas, if my conversations with customers, colleagues, and my research through the last few months proves true (and I am way past three similar data items by n0w), then projects with true return on investment (that means, impacting the bottom line directly) will continue to be funded for as long as possible – regardless of the department or process they support.

  What did we learn in the last downturn that is proving valuable this time? That life continues and you have to continue funding your mission-critical processes.  In other words, make sure the projects you undertake next year have an impact on the bottom line and document (through continuous improvement, measurement and metrics) before, during, and after.  I know that is sounds simple and basic – but are you doing it?

  What do you think?  Am I wrong?  Of course, I don’t think so… but would love to hear what you have to say… did I miss something?
   

• Esteban Kolsky 09:16:18 am on November 11, 2008 | 0 | # |
  Tags: Architecture, business, business models, Communities, emerging technologies, future technology, LinkedIn, self-organizing, tech, technology, Web 2.0

  Welcome to the Real World, Neo

  Yeah, yeah, yeah.  I’ll admit it – I love”The Matrix” (not the sequels as much as the original).  It can be used in so many ways to explain technologies and trends.  I am not talking about the aesthetics of “bullet time”, nor whether it could possibly exist.  I am talking about the actual world where the movie takes place.  Sure, there are plenty other metaphors for life as well, but the one that interests me the most is how that alternate universe explains so well where we are going today with our technologies.

  Let’s say that Web 1.0 was about the infrastructure.  We put together the servers, we built the connections, we laid the “pipes”, and we created an amazing infrastructure to connect virtually everyone in this world to everyone else.  We, in Thomas L Friedman’s words, flattened the world. Problem was, we did not know what to do with it.  Sure, we had the standard ecommerce applications, some self-service solutions, interactive connection to easy applications, we created and used static, non-leveraged content.  The basics that you would expect to find in any other connected world.  Except for a sense of community, smarts, and automation. The “sharing” was not real, it was just accessing some static content (or partially dynamic static content) via a dumb-down interface.  Better than what we had, but not the best.  In Matrix-terms, this were the individual machines that were plotting to take over the world.

  Now, let’s fast forward to Web 2.0.  There are lots of definitions out there for Web 2.0 – almost as many as startups trying to make it in it. Tim O’Reilly is credited with coining the term and describing it initially.  We use lots of new technologies, new models, and new applications.  Web 2.0 is about leveraging the infrastructure.  We are moving away from the static content, come-and-find-me model we created in Web 1.0 and we are creating dynamic applications, using distributed architecture models, dynamic and useful content, access and integration levels never before used or seen.  We are, in short, using the network.  Making the network become the application, and the content itself.  We are, in matrix-terms, beginning to create the matrix itself.  Alas, we still don’t’ have intelligence built into the system to self-regulate, auto-manage, or self-organize.  Yet, Web 2.0 (and Enterprise 2.0 by extension) is about using content to make the infrastructure useful.

  Of course, there is a futuristic state of the world that is Web 3.0.  No, it is not defined anywhere that I know, nor am I creating a new term (come on, I just grew the version number by one, how hard is that to do).  I am presenting my version of a likely model we will use in the future of the Internet, applications, content – and how we interact with them and each other.  We built an infrastructure, we created the content to populate it – now we are making it useful.  Truly useful.  We are talking about self-organizing systems, ultimate automation, self-categorization – even intent-driven systems (Michael Maoz and I wrote about this back in the Gartner days).  Think the way computers worked in “Star Wars”, think the way the Matrix operates.  A neural network that realizes there is no corner to far-fetched, no content unusable, no connection impossible.  This – Web 3.0 – is the core of the Matrix.

  Now, I am not proclaiming that we are all going to be batteries in 20-25 years or any time after that.  But, the model fits well to where we are taking our technology world.  As we continue to evolve, you will see some of the things we thought impossible even five years ago become reality.  Self-managing, automated, independent systems that perform flawlessly without us noticing them.  Secret Customer Service (another concept I worked on while at Gartner) finally emerges.  Self-organizing, dynamic communities form ad-hoc to tackle each and every problem.  Computers become more independent, and we become more advanced as a group.  We become a global tribe that has its own heartbeat, and interacts with technology to simplify our lives.

  Sounds interesting? Welcome to the real world – you.
   

• Esteban Kolsky 06:41:01 am on November 5, 2008 | 2 | # |
  Tags: best practices, CRM, customer service, email, erms, LinkedIn

  Using Email for Customer Service? Here’s How to do it Well

  I must confess, I created most of the content for this post for a presentation I did at the last SSPA conference in Vegas.

  It was a very interesting conference to be honest.  I was afraid no one was going to be at my presentation, but I ended up with standing-room only, and lots of questions.  My fear came from the fact that John Ragsdale, the VP of Research and SSPA and a great analyst, keynoted with a presentation talking about the end of email for customer service.  My presentation was called “The Second Coming of Email in Customer Service”.  Yeah, just like that.  He did a great job on his.

  So, what is there to say about the second coming of email in customer service? lots and lots.  Please remember that I was with Gartner for seven years, sometimes it is hard to let old habits die.  So, I am going to talk in the same way I did at the conference – the Gartner Hype Cycle.  In case you are not familiar with it, the short version is that all technologies have lots of hype and few implementations initially.  The hype grows faster than the knowledge of what to do with it.  Eventually, the hype brings more adopters – yet we still don’t know much about what to do with it.  With time, and now that we have lots of people using it, we learn how to take better advantage of it and eventually get to use the technology productively, and that causes the second wave of adoption: knowing how to use it.

  So, my contention is that email for customer service (or ERMS – email response management systems) is now climbing the slope and becoming more productive.  We are learning how to use it better, and how to make it work for us while generating revenue or saving us money.  This is the good part, because now we can not only tell new adopters how to use it better – we can go back to existing users and show them how to optimize it.  That is my passion, taking something that is not performing as well as it should, use best practices and lessons learned, and make it work better.  And, that is where we are today with the use of email for customer service.

  We are, finally some would say, learning how to make it work as expected, how to save money using it for customer service, and how to do it well.  That is what my presentation dealt with – using best practices to improve the use of email in customer service.

  I don’t have lots of time to explain in detail how this works, so I am going to summarize here the six best practices I highlighted in the presentation and prompt you to watch it onlne to see the rest.

  1) Choose the best transactions to use with email

  2) Automate the low-level interactions

  3) Create and Maintain SLAs that are appropriate for the channel and interaction

  4) Change your tracking metrics to effectiveness, not efficiency

  5) Implement and use feedback on the value to customers

  6) Hire, Train, and Maintain the proper skills for email interactions

  I welcome comments, questions, and concerns. Please reply in the comments below, or email me directly (ekolsky [at] evergance (dot) com).  BTW, SSPA, KANA, and eVergance are planning a really cool webcast together to discuss the topic of Email in Customer Service.  We don’t have the final details yet, but is going to be on December 4th.  Send me an email, or leave me a comment, and we will add your name to he distribution list for it.

  Thoughts? Comments? Complaints? Please let me know…

   

• Esteban Kolsky 05:24:19 am on October 30, 2008 | 1 | # |
  Tags: CRM, Customer, customer acquisition, customer relationship management, customer segments, LinkedIn, segmentation

  Segmented Customer Acquisition Costs Save the Day

  (Part 2 of 3)

  Part 1 – Is It Really More Expensive to Get New Customers?

  Well, I hope you have read the previous entry in the series, if you have not – follow the link above and read it.  Yes, it is necessary to set the proper background for this one.

  Let’s dig a little bit deeper into customer acquisition costs.  In my previous entry I talked about a model where each customer carried its own acquisition cost.  You kept detailed records for each customer and how they become your customer.  You use these numbers to make customer-related decisions – satisfaction, loyalty, segments, etc.

  Of course, I can already hear the first complaint – what about if we cannot do that.  I would not expect you to go beyond your normal course of business to find out, but I’d expect your systems to be setup in a way that will allow you to capture that information.  If you do carry out a promotion or campaign, you know whom it went out to, and you tend to have unique identifiers (name and address, name and email, etc.).  Same thing with  leads captured, you know where they all came from.  You also know the costs for each of those events.  Presto!  you have the information you need.

  First, create a unique identifier for your prospects, make sure you collect the necessary data, and retain for each prospect what the costs have been for you to reach out to them.  Then calculate a cost per customer for each customer you already have in your database (if you don’t want to go through the trouble, average them – not recommended but doable).

  Second, change your new account creation process so it accomplishes two things: one, captures the latest marketing campaign or event that convinced the new customer to sign up; two, look into past campaigns to determine whether another marketing effort was aimed at this customer in the past – to see if you have a prospect cost for them. This way when you create a new customer, you already have their personal customer acquisition cost.

  OK, now there is one more wrinkle.  Some organizations, not all of them, will require an additional “plus” to be added to each account.  If you have a very large organization, and you spend some money in branding or marketing, spreading your name and making sure you remain in people’s mind, then you need to account for that as well as part of acquisition cost.  This is another shifting number, but not really hard to pin down.  Take your marketing or branding budget from last year, divide it by the total number of new customers you had last year – you have your “plus” number.   Add that number to each customer’s acquisition cost number – for last year only.  Make sure you update it every year for prospects and new customers that you reach out to for that year – even if they were there the year before.  Now you have a complete cost for acquisition for each customer.

  Yeah, I know.  Not everyone will have access to all this data.  True.  But you may be able to get some.  You may also be able to capture the data you don’t have today and start storing it for future use.  Further, you may be creating an excellent customer acquisition cost for use next year, or the following and you want to add these calculations.  Whichever way, you can see how useful it will be to have this. Now you can make better decisions on retention, customer maintenance, and <gulp> firing them.  Yep, now it  becomes a real simple business equation.

  If you dare to dream, think about benchmarking this and comparing yourself to your industry, across industries, across geographies – anywhere.  Once you create and embrace a model that others use as well, comparisons are easy.

  What do you think? Some food for thought? Care to try any of these in your organization?

  PS – stay tuned for a discussion on how to calculate a better customer maintenance cost…

   

• Esteban Kolsky 07:00:49 am on October 27, 2008 | 13 | # |
  Tags: CRM, customer acquisition, Customer Experience, customer relationship management, customer retention, customer satisfaction, LinkedIn, loyalty

  Is it Really More Expensive to Get New Customers?

  I don’t have the answer to this question mostly because it changes from industry to industry and organization to organization.  However, the question is valid.  As long as I have been in business (including time in college) I’ve heard a statement that goes something like “it costs [insert favorite number here] more times to get a new customer as it does to retain one”.  I have repeated it, as well as probably every one else in the world, as an unchangeable mantra of business. There have been studies that have confirmed this for different organizations or industries.

  Yet, in all the work I have done in the last few years with plenty of organizations, no one has taken the time to make sure this did apply to their business model.  I can probably count in two hands the number of organizations that have used accurate customer acquisition costs and customer maintenance cost when making decisions on CRM, CEM, and Loyalty programs.  I prefer not to tell you how many of those calculations were updated periodically as business changed.

  Even though we prefer to say it is cheaper to retain customers, it may not be.  A few things to consider.

  Customer Acquisition Costs.  No matter how much you try, you won’t have a single acquisition cost model for your organization.  Each time you generate new business, you will have incurred different expenses. Where did the leads come from and how much did they cost? How did we reach out to prospects? What were the costs of the campaign? How much did we really spend internally – including training, systems alterations and customization – attempting to get new customers?  Each time you run a campaign the assumptions will change, and the calculations will change.  What if the prospects were already part of another campaign — are your going to add the costs for both campaigns??  It gets messy and complicated really fast, and without those calculations you don’t have a real cost of acquisition per customer.

  Customer Maintenance Costs.   I have never met anyone who did a good job of calculating customer maintenance costs.  There are so many variables for each customer – even for each segment – that most organizations take a more “democratic” approach: the total cost of customer service operations divided  by the total number of customers.  Calculations should be done at the individual level, and consider each interaction, request, inquiry and final disposition for each interaction in relation to each customer.  While it is true that some customers will be virtually maintenance free, there are many others that are not.  Each time a new channel or service program is added, each time a customer contacts the organization for service or support the calculation should change. You cannot assign an average cost for all customers or you will miss the diamonds in the rough.

  Finally, once you have your customer acquisition and maintenance cost for each customer you must use them to make your on service plans.  How?  We will talk about that in more detail in future blog entries… stay tuned!

  Let me ask you first… what do you think of individual customer calculations? Are they worth doing?

   

• Esteban Kolsky 01:19:00 pm on October 14, 2008 | 5 | # |
  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 07:00:07 am on September 4, 2008 | 1 | # |
  Tags: CRM, customer service, feedback, Feedback Management, LinkedIn, Voice of the Customer

  The End of the Hype for Feedback

  I had it.  I keep reading all over the place how organizations measure their NPI Score and how to survey your customers.  I keep hearing talk about customer-centricity as if the mere act of pretending to care about your customers can get you there.  The words EFM, surveys, customer satisfaction, loyalty and NPI Score seem to be interchangeable in almost any business publication or blogs.  People are talking, and for the most part they don’t know what they are saying.

  It is true you have to collect and analyze your customers’ opinions.  It is totally true that there is more to feedback than just doing surveys.  Alas, it is also true that most organizations don’t know, or completely ignore, those facts. As well as the fact that there is total lack of understanding of what EFM stands for, how to implement it, and what are the advantages versus something like — say, surveys. Or analytical CRM.

  So, the question emerges… how to get EFM under control and understand the facts – not the hype?  Glad you asked… Since I had some time free last couple of weeks, I created a compilation, brief of the main points of EFM.  It is called the “Resource Guide to EFM”.  I know, catchy and original – thanks.

  In this guide you will find the basics of EFM, including the history, the definition, the components, the strategy, and the first steps to take into implementing it.  You will also get some best practices, advice, and recommendations… and when you are done with it, it self-recycles and comes back as a butterfly. Seriously, this is a nice, short (just four pages) document that will allow you to get the basics of EFM under your hat.

  My goal in releasing this is to create a level playing field; a common ground.  I want to be able to continue my diatribes about loyalty, satisfaction, and feedback management in a way that will make sure you get what I am saying, where I am coming from.  The only way to do that is to define what it is I am  talking about.  Would you like to get a copy?  No problem.  Simply send us an email and we will get it to you.  Of course there is no charge.

  The only requirement, make sure to come back and post a comment on your thoughts, or send me an email and either ask me what I meant, tell me I am wrong, or tell me what was good about it.  My email address is first-initial-last-name at evergance-dot-com (HA! try to spam that address).  Speaking of SPAM, we will not use your email address for SPAM, so no worries on sending the email to us.

  What do you say?  Are you interested?

   

• 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?
  

   

• Esteban Kolsky 02:37:46 pm on July 17, 2008 | 6 | # |
  Tags: customer satisfaction, customer service, enterprise feedback management, feedback, Feedback Management, LinkedIn, metrics, satisfaction, Voice of the Customer

  Lots have been said about customer satisfaction see at the end of this entry for entries on this blog about customer satisfaction).  Organizations struggle to get their customer satisfaction scores under control, they “need” or want to get them to a certain number (for some reason, 76% seems to be the magical number most of them are trying to reach today, slightly lower than the 80% we saw couple of years ago).

  Tons of money, time, and resources are piled into these projects.  None of them realize the poor value of customer satisfaction as a stand-alone score.  I have been saying for quite some time that customer satisfaction does not rank very high in the list of metrics you should follow — yet, I get more and more requests everyday on how to calculate it and use it.  As a Public Service I am going to give you four secrets on how to score higher in customer satisfaction surveys:

  1. Know who to survey. what happens if you ask someone who is disgruntled or unhappy? there goes your customer satisfaction score down the drain. Know your customers, segment them, and pick the segment that is likely to return higher scores.  Survey them.  In any customer base there is always a 8-10% that would give you high scores regardless of what you do, another 10-15% or so will never like you no matter what.  There is also 20-30% that don’t like to give low scores in surveys.  Find out who the first and last group are and try to survey them and not the others.

  2. Select the words for your questions carefully. There are many books written on how to ask questions for surveys, comparing the different words you use and the results you get.  You see this being used in political surveys all the time: using support vs. agree, think vs. feel, and many more.  Truth is, how you write the question will bias the answer you get.  People react different when you use “think” instead of “feel”.  Psychologically, they feel that feelings are more private and their reaction is to guard their feelings by lowering scores so you don’t know how they feel.  They tend to give you higher scores when you ask for their thoughts.

  3. Change the scale for your metrics. Feedback “experts” will tell you that using smaller scales (e.g. from one through five)  will give you less granularity into your answers.  It will also give you higher scores.  Customers are not inherently out to give you poor scores, but the more choices they have the more likely they are to split hairs.  In smaller scales it is easier to get to an 80% of satisfaction, since that is only 2 out of 5 scores, than in a larger scale where it is 3 out of 10.  Using numbers instead of words (such as agree or disagree with their different variations) will give you higher scores; call it human nature, but we don’t like to agree.

  4. Coerce higher scores. If you offer a prize or a drawing as a result of the feedback your customers provide, you are bound to have higher scores.  Respondents have the feeling that if they are “nicer” to you they have a higher chance of winning.  They believe that if they give you lower scores you will throw away their entry and they won’t qualify for the contest or drawing.  This is mostly because they don’t understand the value of the feedback they provide, and the benefit for them of being honest: they are after the money.

  What is that? Manipulation?  Absolutely, no questions about it.  See why you should not use this metric? It is not going to improve your relationships with your customer, guide your customer service changes appropriately, or make you more liked by your customers.  Actually, if you rely on this metric to guide your operations you are likely to loose more customers this way.  Use with caution, good measure, and within a metrics program that looks at other metrics to make sure you don’t over-rely on it.

  Are you still using customer satisfaction as a metric? Did I convince you otherwise?

  Links to Customer Satisfaction Entries

  https://evergance.wordpress.com/2008/05/13/the-one-two-combo-to-end-customer-satisfaction/

  https://evergance.wordpress.com/2008/05/23/the-end-of-customer-satisfaction/

   

• Esteban Kolsky 06:46:49 pm on May 21, 2008 | 3 | # |
  Tags: CRM, customer satisfaction, customer service, enterprise feedback management, feedback, LinkedIn, strategy, surveys

  There is a lot of confusion surrounding what EFM (Enterprise Feedback Management) is and what is not.

  Lately it has been used as a substitute for surveys. Whenever we used to say “surveys” we now say Enterprise Feedback Management. Problem is we are just using a fancy term to describe the same, short-sighted approach to managing customer feedback: ask ’em and forget ’em.

  Enterprise Feedback Management goes much further, if done properly, than that. Contrast the two following cases:

  Case A – company purchases an “EFM” system (surveys by any other name). Produces and distributes a few surveys a year, mostly for customer satisfaction (another no-no), and collects some data. They look at the data collected, produce some simple reports (x% said this, y% said that), and are overall satisfied with their results. Yet, they cannot seem to affect their churn rate, nor can they focus on bringing new customers — not to mention that their marketing program seems to be aiming for the wrong customers. They conclude, erroneously, that EFM is not really a solution for them… even though the vendor told them they would be able to understand their customers better, they are at the same place they were before… but with a “good” customer satisfaction score.

  Case B – a similar company deploys an EFM initiative within their organization. They create a strategy to manage customer feedback, which tells them where the feedback can obtained (no more than 40-50% should come from surveys), what they can do with the feedback they collect (think insights and data-mining for new data), how are they going to integrate and mix their survey-data with existing enterprise-data, what metrics they need to implement and follow, what insights and analysis they need to perform — in short, a complete strategy on how to collect, manage, leverage and utilize customer feedback. As a result, they can identify the three sources of churn and address the problems, they can create a better demographic, socio-graphic, and psycho-graphic picture of their clients, they can finally focus on improving and developing new products per the needs of their customers, and more.

  You probably already noticed the difference in the two cases above, but just in case you need to read it. Enterprise Feedback Management is NOT a piece of software, it is a organization-wide initiative that needs to leverage three infrastructure elements: surveying software, data-mining and analysis software, and integration points into existing data and applications. When you implement it you will spend more time building a comprehensive strategy to understand where the feedback is (surveys, blogs, unstructured data through the world, interaction wrap-up notes, etc.), and how to collect it and integrate with your existing data. You will also know, before you seek feedback, what you will find out, how to analyze it, and what you will do with the insights your obtain.

  Ready to start? just let me know… glad to be of service.

   

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