Measuring the Quality of the Client Experience

October 11, 2010 at 2:18 pm 3 comments

by Rob Wolfe – Connected Places Global

Peter Drucker’s maxim that “what gets measured gets managed” is still true today. Yet most organizations focus exclusively on end-results measures. Market share, profitability and EPS growth are all vital measures of business performance but they are all lagging indicators—the result of differentiation, customer loyalty and brand preference. The answer is to move up-stream and measure and manage those activities that deliver the required customer experience and drive customer advocacy. [Excerpt from Customer Think article, Customer Experience Management: 10 Best Practices to Create Real Business Value.]

Back in February I posted an article on Creating Meaningful Customer Interaction via Social Media Marketing with some ideas for using social media marketing to create engaging customer experiences for propelling business. I said that rather than focusing on the content you want to deliver, you should focus on the experience you’re creating for the customer. This time around, in considering measures of business success, I’d like to say that rather than focusing solely on KPIs such as market share and profits, you should (again) focus on the experience you’re creating for the customer.  According to Andy Blackstone, Owner of Blackstone Associates Sales Training and Consulting and author of “Small Changes That Help Small Companies Make BIG Increases in Sales“, Portland, Oregon: “It depends somewhat on what you are selling, but generally I think you can make a compelling case that quality of customer experience is the most important underlying key to market share and profits.”

Customer engagement is key for Sir Richard Branson.  He strives to set a culture of being fearless in engaging customers. “I’ve always enjoyed calling randomly selected newly arrived Virgin passengers in one of our limos to say ‘Hi, This is Richard Branson, I wanted to say thanks for flying with us and see how you’ve enjoyed the flight.’ On more than a few occasions this has been met by derisive comments like ‘Yeah, right. I’m sure the real Richard Branson has nothing better to do. Who the hell are you?'”  Also, says Branson, “At Virgin we look for opportunities where we can offer something better, fresher and more valuable, and we seize them.” Creating a breakthrough customer experience and combining brand with the physical customer experience is what the vision should embody!

Yoram (Jerry) Wind, Professor at The University of Pennsylvania Wharton School of Business and author of “Marketing as an engine of business growth,” Journal of Business Research) says these types of interactive relationships are the first step to changing the role of the customer.  Instead of passive ‘‘consumers,’’ these customers become active stakeholders and advocates.  Instead of passively monitoring customer satisfaction, companies are looking at active customer ‘‘reference-ability,’’ the likelihood that customers will refer another person to the company. Recent studies have found that it is not customer satisfaction that drives loyalty and repeat purchases, but rather this reference-ability. It does not take much commitment to circle a ‘‘highly satisfied’’ choice on a customer satisfaction form, but it takes a lot more to put your reputation on the line in making a recommendation to others… Building these interactive relationships with customers requires changes throughout the organization, he says. Any employee who has contact with the customer is involved in the interaction. Systems need to be in place to facilitate the knowledge-sharing needed to effectively interact with customers when and where they choose. And there need to be effective financial systems and revenue models to ensure that these increased interactions continue to be profitable for the company while delivering value to the customer.

According to the Customer Think article, CEO Andy Taylor and his team at US-based Enterprise Rent-A-Car only focus on one thing; the number of customers who give the highest rating for satisfaction and are willing to recommend the company to others. Frederick F. Reichheld, director emeritus of Bain & Company and author of Loyalty Rules! calls these enthusiasts “Promoters” and by deducting the percentage of customers who say that they are unlikely to recommend he calculates a “net-promoter score.” Enterprise enjoys both the highest rate of growth and, at near 35 percent, the highest net-promoter percentage in the car-rental industry according to Reichheld.

Do You Really Listen to Customers?

According to MyCustomer.com, one of the Five Barriers to Measuring Customer Experience is that we don’t really listen. They suggest that many companies don’t ask the right questions to truly get at the customer experience, or ask questions in a way to get the answers they’re looking for.

Do you ask customers about the details of their emotions about your brand, about the basic proposition, about service levels? Do you listen to their tales and stories? Stories quickly convey complex thoughts and difficult emotions. How do customers feel beyond satisfied and not satisfied on a 1-10 scale? Stories give us a way of locating the desires, perceptions and attitudes of our customers.

Companies like Zara and Red Bull listen to customer stories and then use them in their brand building – always monitoring the outcome, according to the article.  Norwich Union uses emotional feedback measures they have found to be important, such as “do you feel appreciated as an individual” and “do you genuinely feel that NU cared about meeting your needs” and use the result back in ‘customer innovation’ sessions with staff.

In his book, Andy Blackstone also touches on the importance of listening to customers: Probe deeply for the real reasons they bought, and be sure you understand the nuances and details of the problem they solved with your product.  To get at the important real reasons for their purchase, you might try to understand what your customers were trying to accomplish, rather than focusing on the problem they were solving.  Pay particular attention to how they are using your product.  Ask yourself if it is the way you intended it would be used.  Are they creatively making a different use of the product than you thought they would?  What product features are important to them?

“Managing a consequent customer experience is very important these days and it will become more important,” says Eric Jan van Putten, Regional Marketing Manager at Sitecore, Netherlands. “Social media will play a roll in this. For example: You manage all your channels perfectly and the customer has a good experience. Then he sees one bad Tweet and it could be over. KPI’s are important also on sales and market share, but I think it will shift more and more to the customer experience.”

What are your thoughts on monitoring and measuring the quality of customer experience vs. other KPIs such as market share and profits? Can you share a success story?

Advertisements

Entry filed under: CLIENT EXPERIENCE / LOYALTY, MARKETING STRATEGY, SOCIAL MEDIA. Tags: , , , , , .

What’s Your Market-Focus Quotient? Brand Equity and Ockham’s Razor

3 Comments Add your own

  • 1. Chief Feedback Officer  |  November 2, 2011 at 6:15 pm

    Rob,

    Nothing could be more important in this challenging economy that meeting customers needs. The only way to do that is by getting real time customer feedback and using it to improve your business.

    Customer feedback must be fast and easy!

    Check this out…http://feedbackrevolutionqr.com/

    Reply
  • 2. Adam Dorrell  |  October 12, 2010 at 5:23 am

    Rob
    My story comes from experience running the webshop for a major global electronics brand. There was no real focus on customer, and in fact many processes had been put in place to misguidedly try to maximise margins: for example difficult return processes, anti-fraud measures, high freight charges.

    We needed to change culture. And we did it by putting in the Net Promoter Score. We sent an invitation to complete a small NPS survey after every single transaction. This is really “managing by measuring” in practice.

    We set targets on improving NPS. We manually coded each customer comment and then prioritised changes according to customer needs, rather than internal inititiatives. We contacted customers with 24 hours to respond to comments. Within a year, the culture had changed to one of zero customer contact to one of welcoming customer comments.

    Needless to say the NPS rose by around 1 point a month, and after two years the team was delivering results that got them noticed in the rest of the business, with other departments actively requesting feedback on product lines and so on… The business impact was impressive. By relaxing product return rules, and creating new processes, costs were driven down, and soon customer recommendation was increasing. (Improvement in retention business also helped to reduce an enormous Adwords bill).

    Since leaving that company I built the CustomerGauge business on helping clients listen to customers on every transaction, and building in loyalty as a KPI to drive business. I can tell you stories about the success these clients have also had, and the surprising learnings they found by putting customers in the front seat.

    So we are definitely promoters of “Measuring the Customer Experience”. Hope useful.
    Adam

    Reply
    • 3. Rob Wolfe  |  October 13, 2010 at 7:45 am

      Adam. Thanks for sharing your story of the success of using NPS and congratulations on your success with CustomerGuage.

      Reply

What do you think? Please share your reaction to this article.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Categories

Copyright Notice:

All content on this site and all images displaying the Connected name or Connected Places Global name © 2008-2017 by Rob Wolfe and Connected Places Global and is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

%d bloggers like this: