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Operational “Improvements” Lack Customer Insight
Analytical Competitors Can Lure Away Customers
Mountain View, CA – July 10, 2007 – What’s driving most firms’ operational improvement priorities? If you think it’s customer intelligence you’re dead wrong, reports Customer Loyalty book author and consultant Jill Griffin. Her 2007 Customer Insight Study fielded with research firm, CustomerSat, offers key evidence why the customer experience provided by many companies continues to disappoint.
Findings Show Customer Disconnect
“When making operational improvement decisions, over half (57%) of marketing executives and 50% of sales executives reported using internal factors or no formal process at all to identify problem areas and prioritize improvement efforts. “In many companies, what’s right for the customer takes a backseat to other decision making priorities. Instead, departmental lobbying, squeaky- wheel dynamics and management “gut feel” drive a firm’s operational improvement decisions. And that spells trouble,” reports Griffin.
These findings were gleaned from an in-depth survey of over 500 sales, marketing and corporate buying executives fielded in the last 90 days. Executives surveyed represented a cross-section of industries including insurance, banking and other financial services, manufacturing, electronics, technology, professional services, healthcare, telecommunications and pharmaceuticals. According to Monica David, Chief Customer Officer at CustomerSat, “What makes this survey particularly interesting is that we got the perspectives of both the seller and the purchaser in terms of actions taken in response to negative customer feedback. What’s clear is that clear warning signals by the customer are often ignored or dealt with in a decidedly non-customer-centric way.”
Big Risks—Big Rewards
“This lack of customer-driven decision making will increasingly carry heavy penalties,” warns Griffin. That’s because in most every industry, a new breed of competitor is emerging: The company that applies customer analytics, data and fact-based decision making. In these companies, managers negotiate priorities using preambles such as “The data suggests…” rather than simply “I think.””
CustomerSat’s Enterprise™ analytics has helped sales and marketing executives, like those surveyed, achieve both tactical and strategic goals. “One of the key differentiators that sets CustomerSat apart is our ability to identify and develop real-time action plans for clients that are based on analytics, not anecdotal evidence,” notes David. “Tactical actions address unhappy customers’ immediate issues and concerns, and typically include personalized follow-up calls by executives or account managers to address their problems. Broader, longer-term strategic actions can include process improvements, systems upgrades, and product enhancements. What we are seeing is that actions based on analytics build loyalty, save at-risk customers, and protect recurring revenue.”
A few companies have already earned distinction for their analytics cultures. “Take casino operator Harrah’s, for example,” says Griffin. “Just look at the competitive gap Gary Loveman and his team have created between Harrah’s and other casino operators by using decision-science based analytical tools. In return, Harrah’s financial results have been breath-taking.” But analytics champions are popping up in smaller venues as well, advises Griffin.
Consider Ariba, a Silicon Valley spend-management company with $300 million in annual sales. “To set operation investment priorities, the firm uses CustomerSat’s correlation analysis to identify customer touch points that strongly drive repurchase decisions. Continuous operational improvements are targeted in those critical areas. But that’s not all. They use Action Alerts to notify account managers and Ariba Leadership about at-risk customers. The results of follow-up calls to these clients are then logged into the Action Management system. Ariba also has set up customer advisory councils, quarterly management reviews and customer focus groups to further zero in on operational improvements priorities,” reports Griffin.
What Should Leadership Do?
How can a firm avoid the plight revealed in the Jill Griffin/Customer Sat survey by which internal factors or no process at all are driving the executives’ priorities for operational improvements? Start by answering these key questions, advises Griffin:
1. How do you set operational improvement priorities today?
2. Where is the voice of the customer in the decision making?
3. In debating operational priorities, how often do your decision makers and influencers use “I think” (rather than “The data suggests…”), to express and support their views?
4. Which competitors are using customer analytics? How are their strategies changing?
5. What risks does your firm face in not linking operational decisions to customer intelligence?
About CustomerSat, Inc.
CustomerSat is the leading provider of enterprise solutions for measuring, analyzing, and managing enterprise-wide action based on customer satisfaction and loyalty feedback. With advanced technologies and proven market research techniques, CustomerSat delivers feedback solutions for service and support, sales and marketing, HR, channel and partner management, IT, website operations and e-commerce, supply chain management and investor relations. CustomerSat is headquartered in Mountain View, California, with offices in Europe. For news, product demonstrations, and other company information, visit www.CustomerSat.com or call 1.800.372.7772.
About Jill Griffin
Jill Griffin is an internationally published business author and speaker, and corporate board director of a NYSE company. Her book, Customer Loyalty, has been published in six languages, and was named to Harvard Business School’s “Working Knowledge” list. Her co-authored book, Customer Winback earned Soundview’s “Best Books” annual publishing award. Since 1988 she has led Austin-based Griffin Group (www.loyaltysolutions.com), serving Fortune 500 companies including Microsoft, Dell, Hewlett Packard, Toyota, and Western Union. Reach her at jill@loyaltysolutions.com or call 512.469.1757.
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