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ViewPoint Loyalty and Retention: Key
Drivers of Sustained Profitability
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The business mantra of the late 90's -- aggressively acquire new customers and grow revenues without regard to profitability -- has become a relic of the past. In the midst of investment hysteria and the rush to grab market share, businesses overlooked the importance of keeping, not to mention growing, customers after acquiring them.
Wall Street's recent and rapid attention shift from revenue to profits should be no surprise: earnings, not revenue, have long been the key driver of market value. Corporate emphasis on customer retention vs. acquisition directly relates to this shift as companies focus on completing their business model. The Internet brought with it added complexities, altering the paradigm of communication. It is understandable that it took companies time to comprehend how to attract new customers in this new environment let alone use this technology to build a customer-centric business focused on profitable acquisition. Retaining and growing existing customers is more important today than ever before. Especially in today's market, which according to GartnerGroup estimates that it now costs up to 10 times more to acquire a new customer than to retain an existing one.
Loyalty:
Rational and Emotion
Price, a key driver of customer acquisition, does affect customer loyalty, but it alone is insufficient to guarantee retention. Consider that loyalty is a measure of both a customer’s rational and emotional commitment. Price, discounts, promotions, and incentives appeal to customer's rational side; individualized communications and service appeal to a customer's emotional side. Both are needed for loyalty and retention. For example, price may be key to initial customer acquisition, but outside of value market segments, price alone plays a small role in keeping the customer. Products, services, and communications that appeal to both the rational and the emotional let you enhance your customer’s total experience with your business.
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Know you customers’ attitudes and behaviors. Find out what your customers like and dislike about your products and services by asking for their feedback. Also, know what and how they purchase and use your services. Maintain constant connections so you can build a meaningful profile of your customer’s attitudes and behaviors over time, and at various contact points. This data is invaluable in pinpointing what you can do to add real value to the relationship. Feedback will vary across customer segments. Don’t rely on averages, which can obscure these differences. Use your analysis tools to drill-down into your customer data to identify, understand, and respond to the attitudes specific to key segments.
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Identify and pay attention to your best customers. Recent studies have shown that up to 90% of revenue is typically generated by only 10% of existing customers. Focusing on these customers not only guarantees a continued revenue stream, but with targeted programs and incentives, your “raving fans” will become advocates, helping attract a new customer base in a cost-effective manner.
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Identify “at risk” customers and act quickly to resolve their issues. At risk customers are often easy to save and turn into a loyal customer if you address their immediate problem in a timely, appropriate way. Real-time feedback lets alert you quickly identify an “at risk” customer allowing fast resolution of his/her issue. Proactive, meaningful resolution will not only save the customer, it can move them far up the satisfaction scale.
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Listen to customer feedback, act, and communicate: Asking customers for feedback is just the first part of assuring their loyalty. Acknowledging their suggestions in a personalized manner is an important next step. Then, as you make changes based on these suggestions, let your customers know! They will become more invested in the relationship as they see themselves as active, positive participants.
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Maintain a 360° View of your Customer: “You have to make your decisions based on total customer behavior and experience,” said Harry Egler, Eddie Bauer’s VP of Customer Relationship Management. Integrate customer behavior data (i.e what, when and where they interacted with your company), with attitudinal data (i.e., were they satisfied, why the purchased, etc.), to build a holistic view of your customer. You then have the information necessary to perform targeted, comprehensive analysis over time, and empower you employees to offer informed, individualized communications.
In the end, loyalty is driven by customer investment in the complete relationship with your company. By understanding their attitudes and behaviors, driving change based on their feedback, personalizing communications, and offering products and services that meet their needs and desires, you expand the relationship and guarantee their loyalty. And, gaining and sustaining customer loyalty is the final ingredient necessary to achieve and expand bottom line profitability.
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Building
Online Feedback Programs that Work Part 2 Managing Support Center Feedback
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As
customer retention becomes paramount to any business’ success –- from
100% online eBusiness to 100% offline models -- improving customer
relationships becomes a key focus as companies attempt to retain
customers and grow advocacy. A recent survey conducted by The Meta Group
found that 55% of those IT business executives surveyed said that
“improving customer intimacy” was among their top three business
priorities, while 36% placed this initiative in their top 10 goals.
Clearly, building a one-to-one relationship is on the minds of any
success-driven company. Deploying
feedback solutions across the enterprise to touch both internal and
external customers is a core ingredient in creating a truly
customer-centric business strategy.
Customer
Service -- A Key Satisfaction Interaction Point
Successfully
managing transactions with customers at the time they need help of any
kind is critical to long-term retention. Customer service and
support – from technical support to billing service – are key interactions that can make or break
a customer relationship. According to the Henley Management Center,
Telecultures 2000 Report, 75% of customers would take their business
elsewhere if a single call is handled badly. Whatever your business
model, delivery of excellent, personalized service and support is a
competitive differentiator.
Customer service and support increasingly overlaps with other touch points, as service offerings are moved to the web, and online transactions require their own support and service. Consider a typical transaction path. A customer purchases a book online, but immediately places a phone call to the support center when there is trouble with the delivery. Likewise, a business that orders equipment at a brick & mortar store, may go online to track delivery. This overlap underscores the importance of creating a single view of the customer available throughout the organization.
Call
Center Transaction Feedback:
When
a customer contacts your support center they are seeking fast resolution to
a problem. They are often
frustrated, angry, and dissatisfied before they can reach your service
representative. Even with excellent training, a your view of the
transaction can be vastly different from the customer's opinion of the
same call. Inviting feedback immediately after the service event is
completed lets build a complete understand of the service delivered from your customer’s point-of-view.
Figure 1 shows a comprehensive, automated feedback system that provides a timely and detailed view of the customer immediately after services events take place. Automating the feedback process speeds the delivery of critical information to those throughout the enterprise who can immediately interpret and act on the information. All pieces of the communication can be personalized, which both enhances customer satisfaction with the process and increases customer response rates. Compared to conventional feedback processes (paper, phone, face-to-face), Internet technology reduces costs, allows cost-effective collection of data from all, not merely a sample of customers, and makes appropriate data available immediately to potentially every individual in the enterprise.
An
effective feedback program involves planning many of the many processes
that must be developed and implemented. Consider
these areas when looking to implement his type of program:
An effective feedback program involves detailed planning. Here are several pitfalls to avoid:
1)
Adopting a "one size fits all" attitude.
It's easy to fall into the trap of asking all of your customers the
same questions, even if they have been involved in very different service
experiences. Some customers
contact you with administrative questions; some with urgent technical
problems; still others, with complaints, compliments or suggestions. To present the same questionnaire to all of these customers
will fail to pinpoint actions you can take to best address those
customers' needs and concerns, will waste customers' time, and will use up
valuable time and resources internally processing less than meaningful
results. Online
questionnaires can be customized based on customers' service experiences.
Not taking advantage of this sub-optimizes your real-time feedback
process.
2)
Waiting too long to invite feedback after the transaction. Waiting
more than a day means that customers will have to recall service
experiences too long after the actual experience. Recollections and feedback are hazy,
reducing the effectiveness of
the feedback process. Through
CustomerSat’s CRMConnect module (see Figure 1), customers can be
surveyed as soon as cases and trouble tickets are closed, often within a
few hours. Service
experiences are still fresh in customers' mind, meaning that feedback is
accurate and highly actionable.
3)
Hoarding survey results. Traditionally,
rating scores, trend lines, and verbatim comments go to customer research,
who then parcels them out to the those in the organization who then take
action. A more effective approach is to make appropriate online views
of feedback results available directly to the people who can act on them
in real time. Ideally, every
individual throughout the enterprise is empowered with the customer
feedback that is right for that individual. For example, each regional
sales director might receive scores and comments from customers in her
region; each product line manager, for users of his product line; and each
customer service rep, for customers that rep has served.
4) Not complementing real-time reports with real-time alerts. Identify key questions or question sets to automatically notify you of an “at risk” customer. For example, an overall satisfaction question can be specified to send an alert if any response falls below an acceptable satisfaction level. In this manner, pre-selected employees will receive timely notification for proactive resolution of the customer's issue. Quick action is key to retaining customers.
Results: Transaction feedback
with effective real-time alerts together provide a continuous stream of data in
multiple forms to drive continuous improvements in process, service level
definitions and agreements, and more.
You then know what is in your customers’ mind –- over time,
and across multiple touch points.
Online
Support Centers:
Service centers are increasingly focused on
driving customers to online support centers to handle an expanding list of
service requests, from answering frequently-asked questions, to changing a
service plan, to taking a call using VoIP.
As companies test different technologies and approaches to enrich
and make online support offerings more useful, knowing how and why
customers are using the site is important to offering services that
customers want. Satisfaction
with the results of their interactions is also key to building an
effective site. The very
nature of web service offerings –- self-service and self-directed
–- reduces the control you have over the interaction and its outcome,
and because the interaction can be anonymous, it is more difficult to
track satisfaction and usage. To
address these challenges, feedback from “customer only” sites, at
which customers register, can be re-purposed to refine and improve
“anonymous” sites as well.
Here are tips for gathering feedback from both types of online
support center:
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“Anonymous” Site Feedback: Many companies offer a wide range of information and service offerings in areas that do not require user registration. A Pop!Up-on-Exit™ survey can invite feedback from all or a sampling of your customers, providing data to help you strengthen offerings to meet real customer needs. CustomerSat strengthens this option with Smart Pop!Up, letting you customize the survey with questions that relate to specific pages or sections each online customer visited. In the survey example below, the visitor accessed the FAQ and email response section, and is presented with questions dealing with those pages. All feedback is available in real-time using full online analysis and reporting tools.
(Click
on image for full view)
· “Customer-only” sites: If customers access your support site using a unique login, your feedback system can be direct and intelligent. By integrating the system with your eCRM or other contact system, you can utilize data fields in the customer's record to deliver a personalized survey invitation to his/her email address. The automated process illustrated in Figure 1 is triggered as soon as the customer logs off the session.
Results:
By
monitoring customers’ use of and satisfaction with online support
offerings, you can make continuous improvements to online support
offerings to make them more useful to your customers. Service provided
through a content-rich, online support center is highly cost-effective
compared to phone support. Consequently, delivering web support
that optimally reflects your customers’ needs can improve satisfaction
and loyalty while reducing costs.
Closing the Loop for a 360°
View of the Customer
Incorporating
customer feedback into your e/CRM system closes the
loop (Figure 1) and provides a 360°
view of your customers. Making customer feedback available to
service representatives enables them to offer highly individual,
personalized service – service that reflects customers’ attitudes,
preferences and perceptions.
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eCEM
System 4 Special Focus: Multi-Variable Report Builder (MVRB)
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CustomerSat's new Enterprise Customer Experience Management (eCEM) System 4 provides even more power to users throughout the enterprise to create meaningful, action-oriented reports based on user-specific views of customer data. Using Multi-Variable Report Builder, users can quickly compare performance of up to 20 different variables for different customer segments or time intervals Multi-Variable Report Builder provides a simple, point & click user interface which lets users quickly select up to 20 rated questions or uploaded data fields from the survey as data points. It is then easy to assign a Power Filter to target analysis on a specific sub-group, for example, users of different products in particular regions with a specific demographic profile. Power Filters let you filter results using any Boolean expression of up to 20 variables. A date range can also be applied. In this manner, you can quickly create multiple views and comparisons of your data. Reports show data in a variety of ways:
- Number of Responses
- Mean Scores
- Top Box
- Top 2 Boxes
- Top 3 Boxes
- Bottom Box
- Bottom 2 Boxes
- Bottom 3 Boxes
With MVRB, you can quickly and easily produce product performance comparisons, trend lines, regional analysis, and other user-specific reports that usually require time-consuming preparation off-line. Of course, MVRB reports are generated and updated in real-time, letting you continuously monitor performance over time. You can easily modify charts to incorporate new products, services, or regions as they arise. Authorized users across your organization can access saved reports -- from your CEO to technical support managers. And, reports can be copied directly into PowerPoint, Word, and other documents.
Here is an example of MVRB in action. The report generated will compare the top 3 box scores of XYZ Corp’s customer satisfaction….
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For technical support overall
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Across 2 different products: Product A & Product B
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For 3rd and 4th quarters 2000
- Once logged into eCEM, select Reports & Analysis and click Chart Designer.
- Once logged into eCEM System 4, select Reports & Analysis, and click Chart Designer.
- Select the question(s) you wish to analyze. In this case, overall satisfaction with XYZ Corp's technical support is selected, filters for each product are applied, and date ranges specified.
(Click
on image for full view)
- Once the report has been defined, it can be named and saved to use later.
- Clicking
on Show Results generates the first view of the report which clearly
shows satisfaction for products over time:
(Click on image for full view)
- To
view the data as a bar chart, you simply click on the gray button to
generate this view:
(Click on image for full view)
MVRB is just one of eCEM' System 4's advanced reporting capabilities that provide power to the user to create, modify, and generate reports to speed analysis. For more information on this and other eCEM system 4. functionalities, please call 1-800-372-7772 opt 2.
(c)
2008 CustomerSat
500 Ellis Street., Mt.
View, CA 94043
Mail to: expert@CustomerSat.com
http://www.CustomerSat.com