Thursday, December 18, 2014

The Gospel of Customer Centricity for Improved Customer Experience

Today I'm pleased to present a guest post by Rohit Yadav.

The way customers interact with brands has drastically changed over the past few years. In the words of Forbes contributor Brian Walker, "Digitally empowered customers are firmly in charge, bouncing from channel to channel at the drop of a hat.”

It is now more important than ever before to intertwine marketing efforts with sophisticated customer relationship management tools to deliver a seamless customer experience at every touch point in the purchasing cycle.

The "Customer Journey" has become a common buzzword - but it can mean a lot of different things, depending on what you ask. I like to think of the customer journey as a love story between a customer and a brand, with the following stages in their journey toward the pursuit of happiness: Acquire, Onboard, Engage, and Retain.

Acquire: You briefly meet and make sure to get the customers’ name and phone number or email address.

Onboard: First impressions are important. This is the perfect time to tell customers about yourself and learn what interests them. Begin building the relationship - convince them to give you a shot.

Engage: So you had a great first date. Now what? You’ll keep it interesting with relevant, compelling conversations. And like the chivalrous type you are, you wouldn't dare forget their birthdays or anniversaries.

Retain: Every relationship has its ups-and-downs. If they’re losing interest, focus your efforts on winning them back. Remember, there are two sides to this. Don’t just ask for what you want, listen for what they need.

The price of the product, the brand value, and the other pillars of marketing are no longer the most important factors in a consumer’s selection process. At a certain level of affluence, the absolute value of experience a company is likely to deliver becomes the pivotal point in making a selection. There is a dramatic growth of consumers who are reaching - or are about to reach - that level. Therefore customer centric companies are likely to outperform their competitors, whose leaders cannot see beyond the next quarter’s financial results.

Customer Centricity is about knowing who your best customers are – beyond demographics and persona definitions. Regardless of the type of business - B2B, B2C, or any other combination of letters  - it is people who decide whether they had a good experience as your customers or if they should try someone else. These people share their opinions with others, like they always have. However, now these opinions have as much, or more, of an impact on shoppers as advertising.

According to Peter Drucker – “The customer rarely buys what the company thinks it is selling him.”
Exclusivity – it may not be politically correct or culturally easy to accept, but a company cannot deliver a top quality experience to any customer – only to those it is best focused on to serve profitably. This is better for such a company’s culture, its employees, its target customers, and the consumers at large to clearly communicate what type of customers it will not serve, because it cannot deliver the quality of experience they deserve. The best example I know is USAA, which leads every chart as the top customer experience provider but will not take your business if you are not a member of the military family.

Being customer-centric is not simply a matter of appointing a customer executive, making bold statements about differentiation based upon your customer experience, building a strong sales force,  or equipping your customer service representatives with new technology. Achieving customer-centricity means that you understand your most valuable customers intimately, you know their world and its challenges, and you are able to speak their language. It means knowing when to be there for them and when to stay away. And when you are there for them, it means delivering on your promises.

Customer Centricity is not a project or a corporate initiative; it is the rationale of how an organization creates, delivers, and captures value. It’s about thinking differently, challenging tradition, adopting a new approach, developing sustainable competitive advantage, and embracing the transformative nature of the change required.

When was the last time you really put yourselves in your customers’ shoes?

Rohit Yadav is a customer experience evangelist who helps companies identify and make the best use of their key performance indicators and generate insights to improve their customer experience. He currently works at BRIDGEi2i Analytics Solutions as Solutions Manager for Customer Intelligence solution consulting Fortune 500 global firms across industries to monetize value from Analytics by analyzing information, deriving actionable insights and delivering sustained impact through operationalization of Analytics.

Tuesday, December 16, 2014

The Secret to Customer Retention

Image courtesy of featureset
I originally wrote today's post for InsideCXM. It appeared on the site on September 15, 2014. 

Want to know the secret to customer retention? I'll tell you, but first a story.

I grew up on a farm in Ohio and, as a young girl, had many horses over the years. One of my horses was named Rusty, and he was what many would call "barn sour" and "herd bound;" he either didn't want to leave the barn or leave the other horses. I hadn't thought about this horse or those terms in a long, long time, until I stumbled on a story the other day about a barn sour horse.

I do sometimes find inspiration to write about both customer and employee experiences in the strangest ways, but that story got me thinking about this blog post that I needed to write about customer retention and how to keep customers coming back. For the horse, his desire to stay in the barn was clearly driven by the fact that he loved his food, his stall, and his companions. All the things that made him feel comfortable and loved.

Probably not so different from what keeps your customers coming back, too.

If only companies we do business with understood that - if only they knew what they truly needed to do to keep us coming back, to keep us feeling loved. If only they would shift the ratio of acquisition : retention focus to be more about to how to keep the customers they already have than on how to acquire new/more customers.

I've posed this question before: What happens when companies spend huge sums of (marketing) dollars on customer acquisition when they can't even keep the customers they have because their products, services, and experience stink?

I don't think I'm going out on a limb here to say: "Customer retention is paramount to acquisition!" As a matter of fact, this isn't an original thought at all. The stats speak for themselves.
  • A 5% reduction in the customer defection rate can increase profits by 25-95%. -Bain & Co/HBR
  • A 2% increase in customer retention has the same effect as decreasing costs by 10%. -Emmet and Mark Murphy
  • The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20%. -Marketing Metrics
  • Customer profitability tends to increase over the life of a retained customer. -Emmet and Mark Murphy
  • 55% of current marketing budget is spent is on new customer acquisition and only 12% on customer retention. -McKinsey
  • It is 6 to 7 times more expensive to acquire new customers than it is to keep a current one. -White House Office of Consumer Affairs
  • A 10% increase in customer retention levels result in a 30% increase in the value of the company. -Bain & Co
  • Most important marketing objectives? 29.9% think it should be customer acquisition, and 26.6% think it is customer retention; however, 62.2% admit that they concentrate on customer acquisition, with only 20.6% focusing on customer retention. –Emarketer
  • 80% of your future profits will come from just 20% of your existing customers. -Gartner
  • A 10% increase in customer retention yields a 30% increase in the value of the company. -Bain & Co
  • Repeat customers spend 33% more compared to new customers. -Laura Lake
And yet, companies continue to focus on sales, sales metrics, and customer acquisition. It becomes a never-ending vicious cycle, if you can't keep your current customers. In talking to clients about the perils of focusing more on acquisition and sales rather than on the experience and retention, I like to say: "As fast as you're bringing new ones in the front door, current ones are running out the back door." Some refer to it as the leaky bucket syndrome.

I don't get it. Don't get me wrong; I do know that acquiring customers is important, I just wish that companies would put at least as much effort into keeping the customers they already have. If they did, they wouldn't have to work so hard to get new ones. Not that they wouldn't need them - you always need customers to keep the business alive - but your existing customers would become an extension of your sales force and do some of the work for you. And save you money!

So, what should companies be doing? Here's a hint:

82% of consumers in the U.S. said they stopped doing business with a company due to poor customer experience. -RightNow
To focus on delivering a great customer experience (which you know by now I've defined as memorable, remarkable, personalized, emotional, and consistent), companies must improve the customer experience. How? Here are some tips.
  • Know your customers. What's their story? Who are they, what are they trying to achieve with your products or services, and how are they going to do that or use them? Personalize the experience for them, as well... knowing them means never having to ask!
  • Map the customer journey. Understand the steps they walk to get the job done, to do what they are trying to do when they interact with your company. You can't improve the experience without first knowing what the experience is.
  • Be easy to do business with. Simplify the customer journey and your processes along the journey. Don't forget about the multichannel experience and the omnichannel experience.  
  • First impressions are important. Everything from truthful advertising to the greeting at the door or on the phone - if you make a great first impression, you're well on your way to delivering a great customer experience.
  • Exceed expectations. Customers have expectations about your products and services, whether those come from advertising, reviews, or what they've heard or what they know about your brand. Your brand promise sets those expectations. Without question, live the brand promise, be remarkable, delight, and do so every time.
  • Hire the right people. Don't just hire them, train them and make sure they know what your expectations are for delivering a great customer experience. 
  • Remember that the employee experience drives the customer experience. There's a ton of proof to support this premise.
  • Communicate your purpose. This simplifies the hiring process and both customer acquisition and retention. Both customers and employees want to be aligned with brands with purposes and values similar to their own.
  • Listen to your customers. Always. In whatever mode they want to speak to you or provide feedback. Pick a metric and measure it, but don't focus on the metric - focus on the improvements. Listen, learn, act, and improve.
  • Build long-term trust relationships. Not transactional or opportunistic relationships.
  • Communicate. Early, often, proactively, honestly, candidly, and transparently.
  • Quality. Don't forget that if you sell crappy products or deliver crappy services, customers won't come back. Period.
  • Be different. In a world of commodotized products, delivering a great customer experience is a differentiator. Figure out why customers (would) choose your products and services over others.
  • Last and lasting impression. Appreciate the customers you have. Always say "thank you." In words and in actions.
I know the title of this post states that I'm going to tell you a secret. Ready? What's the secret to customer retention? You need to work at it; it's earned, not assumed.

The brands that succeed wildly don’t just give people a reason to choose, they give people reasons to believe and to belong. And they work hardest of all to give people more ways to matter. -Bernadette Jiwa

Thursday, December 11, 2014

The Metrics Before the Storm

Image courtesy of Jessica
Today I'm pleased to present a guest post by Sabrina Bozek.

It was a dark and stormy survey
With questions to weigh
Like “Recommend Me?” and “¿Por qué?”
Anonymity not a card you can play.

But before the clouds roll in,
Prepare your ship for the task to begin.
Don’t be weathered by the prep at first,
Customer feedback can navigate the worst. 

So before the scores are calculated,
And the mind of management gets complicated,
Take a step back and pay attention,
To the other metrics that depict the rate of retention.

For B2B companies, it’s easy to breeze through the chore of sending a customer survey: design the questionnaire, hit send, sit back, wait for responses to roll in, and simply focus on the overall target: Likelihood to Recommend or Overall Satisfaction. CEOs certainly want to know, “How does it compare to last year?” - which is important - but don’t you want insight into the strength of the relationships with all of your customer accounts, or at least the ones bringing in the most revenue? Before a B2B company actually bases any decisions and actions on overall Recommend scores, there are so many other insights lurking in the background that are indicators of how strong customer relationships really are and whether there should be concern over churn rates.

Chances are, you already have the data just by simply running a voice-of-customer initiative! So before the scores are calculated and potentially used for improvement, look a little closer (or use a tool to expose them – more on that later). These metrics will clue you in to the full picture of your customer relationship and whether your feedback can hold back the thunderstorms.

1) Survey “Representativeness:”  Who are we talking to?
a. Unless you work for a very small company, the amount of customer survey invitations and data to analyze can be overwhelming without the proper strategy. If you’re a student of the Net Promoter System, then you know how important it is to follow-up with your respondents.  Since your customer feedback process needs to exemplify the type of experience your company aims to provide, inviting 100% of your customers at once would likely be the kiss of death – too many actionable items, too few resources to follow-up with, not to mention a poor experience with your customers that will turn them off from engaging with you. Carve out select groups that matter to your business, making sure they represent the appropriate percentage of your revenue. Do you really want to only invite your least profitable accounts? No. Then actively recruit participation from your high growth or Tier 1 segments. When the invitation strategy is sound, you lay a strong foundation in evaluating whether the data is trustworthy or not.

b. Are you hearing from the people who matter within each account?  Setting a minimum threshold for number of responses (by role) for each account is also an integral strategy in collecting trustworthy data. A large (“Tier 1”) account with 25 people that impact buying decisions cannot be accurately represented if only 2 people respond. Decisions based on such “thin” data are likely to have low confidence levels. Understand where you have strong representation, and establish a plan to go back to under-represented accounts to collect more data.

2) Do we know our customers like we thought?
a. Understanding how each person’s role in the account plays into the dynamics of the buying/renewal decisions can be critical as well for B2B companies.  You may think you know who is the Decision Maker and who is simply the End User or Day-to-Day contact, but keeping close tabs on these labels ensures there are no surprises when it comes to renewal time. Mismatched roles can create problems with how you communicate with accounts – and if a new Influencer is already discontent, you’ll need to know who is best to speak with to make it right!

b. Monitoring the bounce rate of your feedback requests is often a reported but ignored metric. But it can also be very telling because if it’s too high, then you clearly did not do your homework to actively recruit contacts from each account and your list it outdated. Do you really know your customers if you don’t even have their right email address? What else are you missing?

3) How engaged are our customers?
a. Most companies look at the overall score for NPS or CSAT, but paying attention to the rate of silent accounts can be far more compelling in the overall health of your customer relationships. If only 20% of your customers replied to your request, a whopping 80% of your customers are either too busy/don’t believe it’s worth their time/indifferent toward you – which is arguably worse than mad and the opposite of love. Before your team puts any weight on feedback as a part of your “customer health score,” take a look at the percentage of accounts from whom you didn’t see any responses.  Focus your efforts there before these accounts start jumping ship.

b. Perhaps your customers are tired of being asked for favors and simply opt-out of your emails all-together. If this rate is suddenly high, you may need to change your marketing communications, invitation strategy, or frequency - or follow-up directly to find out what the underlying issue is. Most systems will report the opt-out rate for any email communications, but most CS teams are likely not paying attention to the rate because it’s not “juicy” enough. But if you want to understand whether your VoC data is accurate, this could be an indicator that it’s not.

c. Some customers may humor your request for feedback by giving straight-line answers or “Christmas-tree” the questionnaire, as you may remember from your grade school days. Be on the lookout for answers that only give straight 8’s or 3’s - they may be half-baked scores just to get a pesky Account Manager off their back and submit a response. Of course, some customers may feel you performed the same for all answers, but if there is also a lack of open-answer comments or signs that little thought went into it (i.e., time spent answering the questionnaire), then your data may be lacking as well. This is especially important for key contacts - someone from your team (perhaps an executive, if necessary) should be following up with them to make sure everything is OK or to determine what needs improvement.

4) Are we taking action?
a. Before any weight is put on the overall customer scores, Account Managers and Success teams should be actively following up with customers to understand why the lowest and highest ratings are the way they are. Tracking the percentage of customers who received a phone call to explain their discontent is a great a way for management to know whether the scores are accurate. Did some of the most severe Detractors just submit their questionnaires after a frustrating Support experience? Or are they really upset about a long-standing product issue? The best way to get to the root cause and tell the whole CSAT story is to oversee the follow-up.

b. Teams should also be analyzing the percentage of improvement, not just with overall scores, but with each account and all repeat responders. Do scores really look the same? Or are you hearing back from totally different people each survey wave? Often times, new customers will respond with high marks because they are still in the honeymoon phase, inflating your overall scores. But if you look deeper at longer tenured customers, are they still as happy as they were in the beginning? Be careful to not just take scores at face value - there could be a much bigger story under the surface.

These metrics really only scratch the surface of measuring the customer experience. For B2B companies collecting VoC data, there are often many more facets to the story - it’s a complex, choose-your-own-adventure kind of tale! Before you start diving into scores, be sure to fully use the data you’re likely already collecting and gain confidence that business decisions based on this feedback are convincing and accurate.

Looking for a software provider that can offer this analysis easily? Shameless plug alert: TopBox is a B2B-specific survey solution that will manage the administrative side of survey deployment with a consultative setup to make sure your program and questionnaire are geared for success. This tool will also produce all the unique B2B reports you need to clearly view customers by account, segment, and individual scores, showing trends, benchmarks and x-rays into each that link to financials. Set up a demo to find out how your team can affordably conduct the proper VoC analysis your company needs.

Sabrina Bozek is the Director of Marketing for TopBox and Waypoint Group. Originally from Miami, she moved to San Francisco from New York to earn her MBA at the University of San Francisco. Sabrina is passionate about elevating and optimizing brands through consumer insights and analytics based decisions. She combines both her marketing and analytics background to make a lasting impact in customer success for the Bay Area and beyond. Previous clients include the British Virgin Islands, Nickelodeon Family Suites (Orlando),, GAGA Sports, and SF Office of Small Business. Sabrina also earned a Bachelors of Science in Communications from Florida State University (Go Noles!).

Tuesday, December 9, 2014

Closing the Loop on CX Improvements

Image courtesy of rovingisydney
Do you close the loop with your customers?

One of the most important best practices of any world-class VoC initiative is to close the loop with customers. They take the time to tell companies what they like and don't like about products and services; as a result, companies must listen and respond, both by making changes and by letting customers know what improvements have been made.

Unfortunately, so few companies actually close the loop with their customers. By now, you know the Gartner statistic: 95% of companies collect customer feedback. Yet only 10% use the feedback to improve, and only 5% tell customers what they are doing in response to what they heard. It's a statistic from years ago, but I believe that it's still representative; companies are still not telling customers what they're doing with that precious customer feedback.

Closing the loop with customers is one of the first steps in operationalizing your VoC efforts. It lets customers know their feedback:
  • has been received
  • has ended up in the right hands
  • is being used to make improvements, and
  • has been (is being) acted on (and how)
Closing the loop takes a couple of different forms, from the tactical service recovery efforts to the more-strategic product, service, and process improvement announcements. It is a valuable part of your VoC efforts because it shows that:
  • you care
  • you value your customers and their feedback
  • you do something with their feedback
Closing the loop also helps to:
  • increase future survey response rates or the likelihood that customers will provide feedback again in the future... because they know it hasn't been a waste of time, i.e., you are actually using their input to make improvements.
  • increase their likelihood to recommend, simply because it's an unexpected delighter; in my experience, when customers respond to surveys, they honestly don't expect that companies will follow up with them, even if they say they will.
I think these are key points to remember.

So, imagine my surprise when I received the following email from United last week:

While the image shows just the first part, the letter does go on to list the three themes in detail and then closes with:

We want to continue hearing from you. We are committed to creating a flyer-friendly experience for our customers, throughout all their travels and across all of their interactions with us. Again, I appreciate you taking time to let us know about your experiences via our travel experience survey and hope you continue to do so as we work to build the flyer-friendly airline that you expect. On behalf of my more than 80,000 co-workers at United, I thank you for choosing to fly with us and look forward to seeing you on board again soon.

This is a great example of how to follow up with customers after they've provided feedback!

Interestingly, I received an email from American Airlines yesterday morning with the subject line: Annette, we’re investing $2B in your travel experience; in it, they outlined their plans for "going for great." I wrote about American several times last year, as they were going through their rebranding efforts; I was disappointed then that they didn't really focus on the customer experience during those efforts. In yesterday's email, they gave a high-level overview of what they were doing to improve "your travel experience" and also provided a link to a splash page with more details. While I'm pleased that they are focusing on the customer experience, I'm wondering if they are investing in the things that matter to customers most, those parts of the travel experience that are important to you and to me. Nowhere in their messaging did they say anything to the effect of: We heard you! We're investing $2B in the things that are most important to you during your travels!

We'll see how that works out for both airlines; it'll be interesting to find out how they both rank next year in the various airline rankings. Better yet, it'll be even more interesting to compare the two airlines' travel experiences in the coming months.

But I digress...

The message here is: Listen to customers, analyze their feedback, act on it, and let them know how you've used their feedback to improve the experience.

What makes Superman a hero is not that he has power, but that he has the wisdom and the maturity to use the power wisely. -Christopher Reeve

Thursday, December 4, 2014

First or Last Impression - Which One is Lasting?

Image courtesy of Unsplash
Which is most important: the first impression or the last impression?

As you think about the customer experience, which impression is most impactful, the first one or the last one? Which one is the lasting impression?

Let's think for a moment about the customer experience lifecycle. If we think at that high level and consider when the customer first becomes aware of your brand/products: Did he hear a good story or a bad story? Which would you prefer he hears at this point?

Consider when the customer walks into your store, goes to your website, or calls you by phone. Was that a pleasant experience? Was she greeted with a warm, friendly smile and "hello?" Was the entrance clean and uncluttered? Was the website intuitive?

Those are all first impressions. What is the first thing that you want your customers to know or to see about your brand? I can guarantee you that it's something positive. If it isn't, then the chance that they'll pursue the purchase or a relationship is slim to none. No. Let's just call it as it is; the chance is none.

Now let's think about the other end of the customer experience lifecycle. Consider when your  customers are canceling their subscriptions or memberships or when they decide not to renew their product licenses. How do you handle that? Do you say "good-bye" with grace? Or do you rake  customers over the coals and force them to pay crazy termination fees - or worse yet, simply don't let them out of their contracts and continue to deduct monthly fees?

Consider when the customer has finished his purchase on your website or is hanging up with your customer service agent. Does the agent thank the customer for his business, or does he simply hang up before the customer does? After the online purchase, does the customer get a confirmation page with a clear message stating that the order has been submitted, or does she get an error page or a redirect to some other page that has nothing to do with the transaction just completed?

Those are all last impressions. How do you want the customer to remember you when it's all said and done? Do you want the customer to do business with you again in the future, should the need arise? Yes, of course.

So, which one leaves a lasting impression?

Honestly, they both do. The first impression sets the tone for what lies ahead; it sets expectations. The last impression is what we're left with; it's probably what we'll remember most about a brand.


You won't get one without the other. There won't be a last impression if you don't get the first impression right. You know what you need to do.

You never get a second chance to make a first impression. -attributed to both Oscar Wilde and Will Rogers