Friday, March 22, 2013

Crucial Elements in Preventing Customer Defection

Customer Feedback Analysis and a Service Recovery Program: Crucial Elements in Preventing Customer Defection

Today's post is republished, with the author's permission, from the original post on Etuma.

No matter how great a product your company provides and no matter how carefully you safeguard against faulty products, things go wrong: delivery systems fail, component suppliers ship faulty parts, customers use products improperly, or sometimes customer expectations are simply wrong. All these are quick opportunities to lose current and potential customers, including not only the dissatisfied customer or customers but also every other customer or potential customer they interact with about the problem. To avoid unnecessary customer defection, companies need to have a process in place for dealing with these types of issues. This process is typically called a “service recovery program,” and it requires accurate and effective detection systems, a preemptive action plan, and resources ready to take immediate action.

The service recovery paradox is a popular hypothesis, which states that a customer who has a less than satisfactory experience with a company’s product, but who receives a high level of attention and compensation for the problem, can actually end up being a more loyal customer than one who never had any problems with the product to begin with. This hypothesis is debatable and, of course, in reality not so simple, but experts agree that a service recovery program is an essential element in a company’s customer experience management process.

Why is customer feedback analysis important to a service recovery program?

The right customer feedback analysis service will provide a unique opportunity to recognize product, service, and delivery failures in real-time and to take corrective action quickly, effectively, and to the customer’s satisfaction. 


So, what are the characteristics of the right customer feedback analysis service?

1. A real-time customer feedback analysis service enables companies to detect customer dissatisfaction as soon as it happens and to take action before the customer has been lost and/or starts to interact with others about his dissatisfaction via, for example, social media.


2. A multi-channel customer feedback analysis service enables companies to react to customer complaints from social media as well as traditional “complaint channels” like feedback forms, call centers, event-based surveys, and email.


3. An effective service recovery program–one that results in saving the customer or even improving his level of loyalty–is well-thought out and extremely reactive. A centralized customer feedback analysis service enables companies to shift valuable human resources to planning and carrying out recovery efforts.


4. An efficient customer feedback analysis service allows companies to shift financial resources typically spent on analysing data to recovery program planning and execution and, perhaps most importantly, compensation for dissatisfied customers.


Matti Airas is the CEO of Etuma. Etuma's main mission is to provide customers with services for free-form text feedback analysis covering various feedback channels (social media, forums, NPS, transaction queries, etc.), to help improve their overall customer satisfaction.

2 comments:

  1. Annette,

    I am all for understanding what went wrong and I accept that there is a certain inevitability that things will go wrong.

    But as well as understanding the cause, I think giving your employees the opportunity to do something about the issue as soon as they realise there is one is also invaluable.

    Rather than simply relying on a service recovery team.

    James

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    Replies
    1. Thanks, James. I can't argue with that... good point.

      Annette :-)

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