Surveys

December 11, 2017

The main customer experience measurement and improvement systems – Part 3 – Customer Effort Score

Maurice FitzGerald / Blog / Customer Effort Score, Customer Experience, Customers, Surveys /

The Customer Effort Score is the metric described in the excellent book The Effortless Experience by Dixon, Toman and Delisi. The primary focus is service-center work and the associated metrics. The authors present a compelling argument that what matters most for some customer interactions is how hard it is for the customers to get what they want. The single topic that surprised me most was their data that shows that the majority of people who phone a company to get something done are simultaneously trying to resolve their issue or answer their question on the company website. Furthermore, you have to get to the 60+ age group for the proportion of simultaneous interactions to drop below half.

Delighting does not work

A central message from the authors is that “delighting” customers is pointless in most situations. Remember the main focus is customer service interactions. Their data suggests that delighting customers does not usually make them more loyal than simply meeting their expectations. They show that a service interaction is four times more likely to cause disloyalty than loyalty. You should take from this that the best service interaction is no interaction at all. As you build your strategy, think of another point the authors make, which is that spending resources on delighting customers displaces those resources from things that are more important.

Best practices of low-effort companies

Particularly in customer service interactions, customers want to spend as little time as possible to get what they need. They just want to get on with their lives. The authors found four ‘best practices’ that were common to companies that successfully reduced customer effort:

Low-effort companies make self-service channels as effective as possible, minimizing the need to call in the first place. Personally, I dread phoning service centers, passing through ambiguous recordings that ask me to classify my request according to how their company is organized, rather than the problem I have, and spending long periods on hold. I do all I can to avoid it.
When customers do call, low-effort companies train their people to head off the next problem as well, based on their experience of what problems are likely to be related to each other.
These companies work hard on the delivering an appropriate emotional and psychological experience on the phone. In my reading, this is more about empathy than being nice to people.
Low-effort companies favor quality-related metrics for their representatives over volume and call-duration metrics.

Self-service

The key points made relate to the fact that most customers are happy to self-serve. Your company needs to work on how to keep customers in the self-service channel. Don’t fall into the trap of just making it hard to talk to a live individual. When reading this, I was reminded of a story one of my INSEAD lecturers told us. He was asked to help Galeries Lafayette improve their customer complaint and suggestion system at their flagship store in Paris.

At the time, Nordstrom was still relatively new and had made a name for itself with its process. My lecturer mainly seemed to copy the Nordstrom process, installing stands around the store where people could fill out a form with their comments. A management change happened after the project ended. The new management noticed the rise in complaints. Their response was to remove the stands and install a complaints desk in the basement. Complaints dropped dramatically. Success? Definitely not! The Effortless Experience authors suggest that the main improvement you can make to self-service is to simplify it, using several suggested techniques.

Conflicting metrics

I loved the book’s message on the conflict between company metrics and human perception. Companies typically report first-contact resolution rates of 70 to 80 percent, while their customers report rates of half that. Some of this is because a different channel is used for the first contact than the one being measured. A lot of it is because the customer’s real problem, say with an invoice being late, has not actually been resolved. Customers call back on related issues that they consider to be the same thing, but company metrics start from scratch. I have had this situation with Air France where in resolving one issue, they accidentally changed my street address in their system, so I phoned them again, using the same incident reference number. We fixed the address. They then closed the service event without resolving the first issue. I phoned again and had to start from scratch as they had closed the first event. The authors suggest a way of changing the metric definition, so that a repeat call is one from the same person within seven days, no matter what the reason. This seems like an excellent idea.

Training service reps

Training of the service center people matters a lot and quite a bit of what the authors describe works against classical metrics associated with reducing call time and getting as many calls done as possible per day. I particularly liked their work on personality-based resolution processes. (The customer’s personality, not the service representative’s.) Overall, I believe the book is essential reading for all service center leaders. It is experience-based and outstanding.

Back to the Customer Effort Score (CES)

The authors refer to their current metric as v2.0. It has evolved, both in terms of the question asked and the scale used. They tried many variations of the question and settled on one that translates well into most languages. With their current question, customer behavior changes radically by response. As they put it, “For instance, 94 percent of customers who had low-effort experiences reported that they would repurchase from the company, while only 4 percent of customers experiencing high-effort interactions reported an intent to repurchase.” The Customer Effort Score is the response to the question, “To what extent do you agree or disagree with the following statement, ‘The company made it easy for me to handle my issue.’” It is measured on a scale from 1 to 7.

Better than CSAT

The authors found that when comparing CES to Customer Satisfaction scores, across thousands of customers, CES was 12 percent more predictive of customer loyalty, as measured by stated intent to repurchase. They did not determine whether the customers actually repurchased.

Suggestion

If you are already using Customer Satisfaction, or indeed NPS, as a metric in a service center, I suggest adding CES and tracking both for a time. Then compare trends with your financial trends to find out which is a better predictor of success.

Conclusion

I freely admit to being attracted by the common-sense nature of Customer Effort Score. My personal experience with service centers drives me to agree with the authors of The Effortless Experience. While I recommend their book, I do of course have to recommend my own books too. This article is a slightly modified part of a chapter in Customer Experience Strategy – Design & Implementation, one of four books written in collaboration with my artist / cognitive psychologist brother Peter. The others are Net Promoter – Implement the System, Customer-Centric Cost Reduction, and a book of Peter’s illustrations, with learning points: “So Happy Here” – The Absurdist but Essential Guide to Better Business. All make great gifts for your friends, colleagues and teams.

And as always, feel free to comment on this article below. Next time: NPS and the Net Promoter System.

December 6, 2017

The main customer experience measurement and improvement systems – Part 2 – CSAT / Customer Satisfaction

Maurice FitzGerald / Blog / CSAT, Customer Experience, Customer Satisfaction, Surveys /

When you are asked to rate your ‘overall satisfaction’ with something, you have entered the Customer Satisfaction rating system. The most common way of doing this is to ask you to rate satisfaction on a scale from 1 to 5, where 5 means ‘extremely satisfied’. There is a minor challenge in the rating scale, as with all scales that do not contain a zero. A small proportion of the respondents will believe that 1 is the best rating, rather than 5. After all, you want to be number one, don’t you? At the level of your overall brand, the satisfaction metric does not predict revenue as well as the ‘willingness to recommend’ metric used in the Net Promoter System. At least, that is the case for most, but not all industries. In that context, it is worth noting that Enterprise Rent-A-Car is used as an example in The Ultimate Question 2.0, and they discovered that overall satisfaction was a better predictor than willingness to recommend. In general, for surveys about telephone, web and chat support, the Customer Effort Score (to be covered soon in another article) is a better revenue predictor.

“Top box” satisfaction

A common method of communicating results is to talk in terms of ‘top box’ satisfaction or “top-three box”, for example. This means arbitrarily deciding that people who give you the top score, or the top two or three scores on a five-point scale are ’satisfied’. I have not been able to find studies of differences in customer behavior between the different categories or groupings. However, based on Net Promoter System studies, it seems unrealistic that someone who gives you a 3 is actually satisfied. The NPS research would suggest that someone who gives you a 5 is likely to recommend your product or service, and someone who gives you a four does not care much either way. A three would already be a sign of negative views. Note that some companies use seven-point scales.

The principal communication challenge

The lack of a single standard customer satisfaction scale and definition causes communication issues. It is quite easy to find companies that say “92% of our customers are satisfied.” What does that mean? On a five-point scale, which of the five are they counting to get to 92%. Since there is no single definition, anyone explaining the metric has to explain where it comes from, and risks losing time in an argument with someone in the audience who measures it a different way.

CSAT is a metric, not a system

While CSAT is probably the most common satisfaction metric, it is not a system. It is entirely up to you to work out what the number means, what customers actually want you to improve, and how you should go about it.

Composite satisfaction metrics

Some companies use the term ‘customer satisfaction score’ or CSAT, and actually use a different method of calculating it. Predicting customer loyalty, meaning the desire of customers to keep on buying from you, can of course different forms. The more sophisticated satisfaction surveys also include several questions that are not about satisfaction. The most common questions ask customer to use the same type of rating scale to answer questions such as “This company has earned my loyalty”, “How likely are you to repurchase?”, “This company is a leader in its field”, “How likely are you to recommend this company or product to a colleague?” and so on. Several metrics can then be aggregated to form a satisfaction index. Where this is done well and with representative customer samples, it can be an excellent revenue predictor. I will cover some composite metrics in an article proprietary measurement systems.

Lists of things to rate

Satisfaction surveys usually ask you to rate a list of things. The list can be very long. For years, I participated in a survey panel that covers the travel industry. I have received surveys that only have satisfaction rating scales and took more than half an hour to complete. The main problems with lists of things to rate are:

It is your list, not the customers’ list. Most commonly, these lists are set up by the way your organization is structured. You want to get some sort of feedback for everyone. This may not correspond to what the customer wants to tell you about. Notably, if a competitor does something that you do not, only asking about what you currently do will prevent the customer giving you that feedback.
It creates the illusion that each of the factors you ask about is equally important. It is particularly difficult to undo this subliminal message. Imagine you have 50 things that you ask customers to rate. Imagine further that seven of them have the worst rating possible. Once these ‘red’ items are visible, you will be forced to turn them around, even if they have no importance whatsoever.

Conclusion

The lack of a standard definition of what we mean by ‘Customer Satisfaction’ causes major communication challenges and is the principal argument against using CSAT. However, no matter how you define the metric, its trends relative to the trends of your competitors are still meaningful. If you can find a reliable way of finding out why such trends are happening, you may well have something useful.

As always, I have opinions, usually based on fact. That does not make me correct. Please feel free to comment below. And this article is a slightly edited part of a chapter of one of our four books, in this case Customer Experience – Design & Implementation. Our fourth book So Happy Here came out recently and is available on Amazon. It is a heavily-annotated book of my brother’s business cartoons. Most have appeared in our first three books, in my blog posts or Tweets. This and all of our books make great end of year presents for your colleagues and teams.

Next time: Customer Effort Score

November 28, 2017

The main customer experience measurement and improvement systems – Part 1 – Smiley Buttons

Maurice FitzGerald / Blog / Customer Experience, Smiley Buttons, Surveys /

There are quite a number of customer experience measurement and improvement systems in use around the world. They are not all equal. This post is the first in a series that covers some of the most common ones. Some consulting companies offer proprietary systems, and I will cover their main measurement principle. There are wide variations in approach for these proprietary systems, but all have one common feature.

The systems I will cover in the series are:

Smiley buttons
Customer Satisfaction / CSAT
Customer Effort Score
Net Promoter System
Wallet Allocation Rule
Consultant-provided proprietary systems
Journey Mapping

Smiley Buttons

Smiley buttons are gaining popularity in consumer businesses and have only marginal potential in B2B situations. HappyOrNot and Agoraopinion are examples of companies who provide low-tech solutions in this area. Changi airport in Singapore has a more high-tech version. The general principle is that you tap on one of three or four emoticons to show how happy you were with an experience you just had. The first time I ran across it was in Heathrow airport, just after the immigration counters. They also have them just after security as you leave. If you are just looking for a number to track, this seems like a simple way. The challenge with the low-tech approach is that you have no idea why people are pushing a particular button so cannot use the input to drive improvements. The weirdest place I have seen such buttons was at the passport control desks in Beijing airport. Theoretically, you are supposed to push a button while the immigration officer is looking at your passport. Really? Can he/she see you push the red button and what are the consequences? You can see a typical button layout in the image at the top of this article.

In my local Media Markt

The HappyOrNot buttons have been installed in my local Media Markt electrical goods and media store in Geneva. They have been positioned just behind the checkout desk, facing the cashier. “Please rate our service today,” The first time the buttons were there, my wife and I had had difficulty being served when buying an electric kettle. Were the buttons there for us to rate the service in the whole store, or just the check-out, which was efficient? The lady at the checkout desk did not know what was being done with the feedback. Once again, there was no way of indicating what we were happy or unhappy about, so no conceivable action could be taken by Media Markt.

Extracting value without providing any

I was in our Cambridge UK office one day when a US visitor arrived. She was only too pleased to tell me she had seen the smiley buttons just after immigration at Heathrow. I asked her whether there was any indication anywhere of the number of people who pushed each button, what they had learned, or what they were doing with the feedback. The buttons have been there more than four years now. As in all other situations where I have seen the smiley buttons, there was no feedback loop. They seem to be extracting value by having you push buttons, but are not providing any value back. There are plenty of people and companies who are not actually serious about improvements and just want a number. This seems like an excellent way to do just that.

Lest the above be perceived as excessively negative, note that HappyOrNot list some major companies as clients, including McDonalds, Microsoft, Lego, eBay and American Express. The references on their site indicate some happy clients.

Emerging high-tech solution

When I last went through Singapore’s Changi airport, I came across a somewhat better smiley system in the rest rooms and elsewhere. A touchscreen asks you to “Please rate our toilet” and gives five choices. If you choose Poor or Very Poor, you are taken to a second screen asking why and giving a choice among eight reasons, including the smell or lack of toilet paper. My Swiss half was worried about touching a touch screen that may just have been touched by someone who had not washed their hands, though the screen was marked “This screen is sanitized regularly.” There did not seem to be any way to explain positive feedback, and there was no explanation about improvements that had been made from past feedback. A similar system using screens and software from Dr. Voxx is in Brisbane airport, or at least was a year ago.

Relevance to B2B

There are very few B2B situations where you could ask your customer to push a physical button. The system could be used by government administrators that require you to go to their service counters to register your company or for other simple transactions. While you could clearly use smileys as your scoring interface for a web-based survey, this crosses the line into more conventional measurement systems. There is no real difference between asking a customer on your website to give you a score on a rating scale or on a smiley scale.

Conclusion

I can see the low-tech method as useful in a single situation, and this is A/B testing, where you are interested in finding out which of two things a customer prefers, and don’t care why. For situations that require deeper insights, the low-tech system provides no way of finding out why customers provide specific feedback, and therefore has no conceivable use as an improvement system. If you only want to measure a score, but use other data sources to act on that score, it may fit your needs. The high-tech screens are an improvement and show promise.

As always, I have opinions, usually based on fact. That does not make me correct. Please feel free to comment below. And this article is a slightly edited chapter of one of our four books, in this case Customer Experience – Design & Implementation. Our fourth book So Happy Here came out today in Amazon Kindle version, and two print versions should be out later in the week. It is a heavily-annotated book of my brother’s business cartoons. Most have appeared in our first three books, in my blog posts or Tweets. This and all of our books make great end of year presents for your colleagues and teams.

Next time: Customer Satisfaction / CSAT

October 16, 2017

Use direct marketing techniques to improve survey response rates

Maurice FitzGerald / Blog / Customer Experience, Net Promoter System, response rates, Surveys /

Like most people, I receive lots of survey requests by email. Unlike most people, I don’t just delete them all. I want to learn. What I usually learn is that most survey designers don’t understand even the most basic direct marketing techniques. Here are some that you may want to consider.

Direct marketing reference source

My direct marketing guru is Drayton Bird, author of Commonsense Direct & Digital Marketing. Most of the techniques for getting people to do what you want them to do have not changed since direct marketing was done by sending people things by snail mail. Here are the most critical points:

Personalize

Make your invitation as personal as conceivably possible. Use the person’s first and last name. (It is better to err on the side of formality. There are cultures where using an adult person’s first name only will turn them off. France is a good example.) If you have additional information about them, like the city where they live, the industry in which they work and so on, use that too. Personalization applies at the outbound source as well. If you are doing an overall brand image/relationship survey that is being sent by email to smaller customers and partners, it should go out from the CEO’s mailbox. Product-specific surveys should go out from the product manager’s mailbox and should start with “Good morning Mr. Doe, I am the product manager for the DoubleBubble Jacuzzi you bought recently at Home Depot…”

Single action request

Only ask the person to take a single action. When I was taught direct marketing, I was taught to think of the recipient holding a stack of letters and standing over a waste bin. The first letter asks the person to do A. She puts it in an action stack on her desk. The second one asks her to do B. She puts it in the bin. The third one asks her to do A or B… She thinks “Wow, A or B, which should I do? I can’t decide.” So she drops it in the bin. Like most aspects of direct marketing, this has been studied using A / B testing; the technique where you change only one thing in a marketing piece and measure what happens. While intuition would tell you that giving a person two choices would double the overall response rate, the opposite actually happens. Your overall response rate halves if you give a person two choices rather than asking them to do a single thing. If you give them three choices, response rates drop to a quarter.

Herd instinct

Appeal to herd instinct. The UK government has a partially privatized unit called the ‘Behavioural Insights Team’, generally known as the ‘Nudge unit’. They have convincingly shown that writing to people who are late paying their taxes in a particular way works. Something like, “Almost every company here in the greater Homeville area has paid their taxes on time. In the last year, these taxes have paid for a new playground on Middle St. and the new recycling centre behind the farmers’ market. Please join your fellow citizens in making Homeville a better place to live.” Of course, all that has to be true.

Since you are unlikely to get half the recipients of an email to respond to a survey before sending a reminder, the reminder could say something like, “Acme customers from all over the greater Chicago area have already answered our three-minute survey and are helping us to improve our lawnmowers. Please add your views to theirs to ensure all of Chicago is represented.” Naturally, this requires knowing that that the person does indeed live in that area. Again, the more personal you can make it, the better.

The correct choice of fonts

For some reason, this one is controversial and when I talk about it, I am usually told I am wrong, at least by the people who are being polite. The others use stronger words. The font you use makes a big difference to response rates. You should always use a serif font for body text in your emails or paper forms. Serif fonts are the ones with little hooks on them and with bases on all the vertical strokes. These extra hooks and bases are the serifs.There is a reason 99.999% of all books are written with serif fonts. These fonts are much easier to read.

Most people will recognize Arial as a ‘sans-serif’ font and Times New Roman as a serif font. The serifs give the eye a natural line to follow. Comprehension is much better than with sans-serif fonts because your eye never accidentally skips to the previous or following line. This is not an issue with short headings. Look around you and you will see that most books and magazines have sans-serif fonts for the short headings, and serif fonts for body text. This has been tested repeatedly in direct marketing, especially by Drayton Bird. The common view that this is no longer the case because so many sans-serif fonts are used on web pages is simply wrong.

Reminders

Send a reminder after two days. When you send a survey invitation by email, you will typically get 90% of the responses within 24 hours. Almost nobody files this sort of thing away for later consideration. They either handle it when they see it, or not at all. Only send the reminder to people who have not already responded. If 100 people responded to the first email, my experience suggests that about 65 will answer a second email telling them there are only 24 hours left to provide input.

Incentives

I suppose I should add a word about incentives. Incentives can improve response rates, but should not be used. Way back in early 1994, I ran a project to launch a Digital-Microsoft software subscription service across Europe. It was a precursor to Microsoft’s launch of a volume licensing program. The main technique used was direct-response advertising. One country project leader (OK, it was Norway) ignored my advice and included an incentive. The incentive was to be entered in a draw for two tickets to the soccer World Cup in the USA that year. Norway had qualified, to their surprise, and the promotion was a spectacular success. Surprisingly, it almost got me fired. A certain Steve Ballmer was leading sales at Microsoft at the time, and he apparently became irate that we had taken 20% market share in Norway with the promotion. The incumbent Microsoft resellers were unhappy and complained bitterly. My boss’s boss’s boss (John Rando at the time) had signed the agreement with Microsoft, came to see me, determined that everything was OK and defended me. Whew! In any case, it proved that incentives work in direct marketing, and have consequences.

Incentives produce positive bias

While that is an extreme case of an incentive, there is a more general issue that has to do with human nature. Providing incentives seems to positively bias responses to surveys. Humans have difficulty believing they can win something in a random prize draw if they give very negative feedback. So, if your intent is just to improve the metrics but not to gain accurate insights, go ahead and use incentives.

A/B testing

Direct marketing introduced the concept of A/B testing. This is where you change just one thing in an email (for example) and compare the results randomly with emails that do not have the change. If you want to test the effect of using a person’s name on response rates, randomly pick half your email list and start with “Dear customer” while starting the other half with “Dear Mr. Doe”. Try another experiment the following time, like using the person’s name in the subject line of the email.

Conclusion

This is not a complete list of everything you can do to improve response rates. It is just the subset that has to do with direct marketing techniques. Feel free to disagree with the above, or add your own suggestions below.

September 26, 2017

A Modern Fairy Tale (Part 3) – You don’t need a customer experience strategy. You already know what to do

Maurice FitzGerald / Blog / Customer Experience, Net Promoter System, strategy, Surveys /

You can find parts 1 and 2 here and here.

[Several days later…]

OK, I finally got up my courage and asked George out yesterday evening. It was a bit odd and I am not sure I like him all that much, after all. He said we could make beautiful music together, but I am not so sure. Maybe it is the beard. I don’t really like beards.

On the professional front, George’s list was really useful. I have already gone to see eight of our largest customers so far. It was really interesting to learn what makes them keep coming back, time after time. They seem really happy with our service, and always want more. Insatiable would be the word, I think.

I tried a couple of different ways of talking to them. First, based on my reading, I asked them whether they would recommend our services to a friend, why, and what we should improve. I have to say that none spontaneously mentioned a desire to talk to other customers in an online forum, which was disappointing. Still, I have only spoken to eight customers, so that could change. One of the customers happened to be a professional magician. I used that to ask her a different question. I just said “If I gave you a magic wand that gives you total control over our company, what three wishes would you make?” Her answers were indeed useful.

[After signing up with SurveyMonkey…]

I could have signed up with a variety of online survey providers but chose SurveyMonkey because George suggested it. Except for the top 30 customers, I am sending my feedback request by email. I will follow up by phone if I don’t hear back from the top 100. George told me it was important to be personal, and to promise to tell the customers that we will act on their feed back. So here are the main things I did in the email, which I sent out from my own Outlook account:

I used Excel and Word to set up a mail merge so that every email used the customer’s name and mentioned how much business they have done with us.
I told them who I was and that I am making a presentation to the CEO on what to improve less than two weeks from now. I said that I need their help.
I promised to tell them the result of the presentation, whether they answer the feedback request or not. I mentioned that of course their improvement suggestions will not appear unless they take the survey.
I promised them that there are only three questions in the survey, and included a screen shot of the survey form in the email. It should be clear to them that it will take just a couple of minutes.

Now I am going to hit send. [‘Click’]

[48 hours later…]

Wow! 1,000 responses already. That’s 20% of all our customers. I have not had time to read all their suggestions yet, though I searched the response file for the word ‘forum’, and it did not come up, which is surprising. A forum would be such a good idea.

I have now seen 15 of the top 30 customers. I can’t get appointments with some customers, even for a Skype conference. I will keep trying. The largest customers seem less happy with us than the others. I suppose they spend a lot more money, so it is to be expected that they should be more demanding. I wonder whether I should propose a special VIP service of some sort for them.

[A few days pass…]

The number of survey responses dropped off quickly, though I now have 1400. I suppose I should send a reminder. I have been reading the answers to the open questions and the distribution across our three offers is interesting, at least at first sight.

Our new customers all get logon credential and have to go through that wonderful compatibility analysis that Peter created. He call’s it Pete’s Best Partner Profile, but I think that’s too close to his name. It should be Pete’s Perfect Partner Profile Program (PPPPP). Sometimes I think he wrote it for himself. Pete is a cognitive psychologist and the tool is designed to create mutually compatible profiles of people before they meet. Of course, sometimes opposites attract. There has not been a lot of feedback on the profiling. Should I take that to mean that it works OK. I think it is what FitzGerald called a ‘Hygiene Factor’ in his books, meaning people only notice it if it does not work.
The Video Speed Dating process seems to work well. Both men and women like the ability to talk to a variety of people before deciding whether or not to go to the parties. Of course, some then just decide to meet each other so we lose the party revenue. Not sure we can do much about that.
Our Perfect Partner Parties are really popular with those who attend them. I was surprised to see so few comments about the high entry price. I suppose it is a way of screening people. Still, there are a lot of detailed improvement suggestions about the parties. Some come from people who have not attended them, which is a bit odd.

[All research now complete…]

I have now spoken to the top 30 customers. These are of course the people who have attended the most parties, spending the most money. I have to say that none seem to be on a true search for their life partners. They just seem to like to party with people like them. There were 21 men and nine women in the group of 30. They had once consistent suggestion about the parties. I do not look forward to presenting it to the CEO a few days from now. It may be too controversial.

There were just under 2,000 responses from the rest of our customer base of about 5,000 members. I asked three colleagues to look at their answers to the open questions. Oops, we each came up with different lists of the top five items. I went back to Danielle and Michelle and asked them how to analyze it all using software. They gave links to several tools. By coincidence, all were mentioned by FitzGerald in his Net Promoter implementation book. (What a coincidence!) Most were useful in some way. I got the best results when I sent the file to Thematic software and they did a quick demo analysis for free. Nice!

[One more sleepless night…]

Tomorrow is the big day. Four weeks have gone by since our CEO asked me to do the work. I hope I can get the full leadership team to agree to what I will propose. I don’t think they will like one of the top improvement suggestions, though it can bring us more money. I briefed John, Paul and George earlier today, and think I have their support, though they were surprised. I still think I like George. I have gotten used to his beard. It is a pity Pete won’t be there.

I am somewhat afraid. Maybe I won’t survive the day. Maybe I will get fired. Hopefully not.

Are those sheep? Let’s count them…

Until tomorrow,

Richard

Part 4 (the final part) is here

September 18, 2017

For CX Day: How YOU can build a customer-centric culture in your company

Maurice FitzGerald / Blog / Chief Customer Officer, customer culture, Customer Experience, strategy, Surveys /

Your CEO keeps saying customers are important. Your own business leader says the same thing. So does your manager. So why do you still think this is just ‘lip service’ and that nobody really cares? I can suggest several reasons, and some practical steps you may want to take to improve things.

In any company, people can only get things done in three possible ways:

What you do
What you say
What you write

To be credible, all three have to match. Consider this scenario:

Bob has been our CEO for the last three years. Our company has almost 10,000 employees. Bob and his leadership team constantly repeat how important customers are to us. Bob just sent an email to all employees announcing the latest quarterly results. Great stuff! We have had another good quarter, with growth of 10%. He also laid out the top three priorities for the rest of the year. They are:

Sell, sell, sell!
Finish the design of our new corporate HQ in Atlanta, and start building it.
Reduce our operating costs by outsourcing our customer service center operations to an Indian service provider.

Hmm…where are the customers on the list, other than the negative impact they will have from the last point? Perhaps the customer initiatives are on the intranet sites of each of Bob’s staff members. [Click, click, clickety-click] Nope. Nothing on any of those pages about what customers have asked us to improve. What now? Let’s see…who is responsible for customer experience on Bob’s staff? [Click, click, clickety-click] Ah…nobody, or should I say ‘everybody’, since that is what Bob says, when he tells us that everyone is responsible for customer satisfaction. However, nobody seems to actually be doing anything practical about it, at least according to what they are telling their own teams. I think that’s a problem. What can I do about it?

Does any of this sound familiar?

The ‘Bystander effect’

Psychologists have studied the bystander effect for years. The phenomenon is quite consistent. Take the example of a person who is drowning. If you believe you are the only person who sees that the person is drowning, it is extremely likely that you will do your utmost to help, even risking your own personal safety. However, if you are one of a hundred people on a bridge who have seen a drowning person float by, it becomes far more likely that nobody will do anything.

The bystander effect is common in companies that have nobody formally in charge of customer experience for the corporation. Everyone assumes that someone else will do the work, so they just get on with their lives. It is difficult to be successful if nobody is in charge.

Additional things you may like to check

It should be easy to check your intranet for evidence of customer-centric investments. While you are checking that, I suggest finding out whether customers are ever invited to your internal meetings. Why not? And how about your major annual sales event? Are customers and other external partners invited? If not, why? Why should your resellers not receive exactly the same training your own sales people receive, for example.

Do you have a formal customer feedback system?

Does your company have a formal list of improvements that customers have requested based on some form of scientific research? If not, any improvement work is likely to be rather random. Most companies have surveys and other feedback systems in place. However few have a process for agreeing and funding what should be done with the results.

Leaders don’t talk about customer experience. What should I do?

Find out who manages their websites, prepares their presentations and otherwise works on their communication material. Give them the results of the customer research. Provide interesting content about improvements that have been made for customers. Write up personal interest stories about people who have gone ‘above and beyond the call of duty’ to help customers. Don’t be a bystander. Take the lead yourself.

Remember to combine the emotional and the rational

I spent years talking about customer experience in a particular way before noticing that I was putting some people in my audiences to sleep. I spoke in terms of percentages of this and that, numbers of escalations, customer complaints that had been resolved, an Account Loyalty Index, and indeed Net Promoter Scores. All very rational. However, when you are in front of an internal audience, talking about customer experience trends, the people in the audience will make up their minds within the first minute. They will jump to an immediate conclusion, based on intuition and emotion. They will have decided what is important long before you present actual data. No matter what the data, it will then be difficult to change their initial emotional reaction. Don’t let this happen! Create the emotion for them, right at the start.

Make it personal

The simplest approach is to start by talking about a single individual customer situation that encapsulates your overall message. Let’s suppose your company provides ambulance services. Your traditional customer experience messaging may talk about response time, number of paramedics available after midnight, cardiac arrest survival rates, and so on. Tables of data. I am not suggesting you should not present that data. I am just suggesting you should start the presentation differently. Let’s suppose response time is the primary challenge that appears in your research. Start with a photo of a family, with one person missing. The caption is “This is Frank Muller’s family. We were five minutes too late to save Frank.” I guarantee you will have full audience attention for the rest of your presentation.

How to ensure ongoing support for your work

If I were to pick a single thing, it would be to demonstrate continuous progress. Agree a set of three to five initiatives. Demonstrate progress on each at least every one or two months. The progress has to be worth the effort.

Can a customer-centric culture always be achieved?

The simple answer is no. Some CEOs and leadership teams don’t actually care. They believe it is sufficient to have a great product or service. That may work for them in the short term. If you find yourself working for such a CEO, you should probably change jobs. Otherwise, I hope some of the hints I have provided here will help you on your journey.

June 21, 2017

#22 – Benchmarking, Bain NPS podcast, Temkin Customer Service report

Maurice FitzGerald / Newsletter / Customer Experience, Relationships, strategy, Surveys /

Welcome to the 22nd edition of my customer strategy newsletter. The five topics this week are:

Comparing your company to others: benchmarking
Questions for the Bain Net Promoter System podcast
Latest blog posts
Notable items from other sites
Looking forward

Comparing your company to others using public ‘benchmarks’

One of the more common questions I am asked is “What is a good Net Promoter Score?” The simplest answer is “Any score trend that is better than that of your main competitor.” However, it is not easy to find your competitors’ scores. And all scores are not equal. So… what can you do?

A few words about the the word ‘benchmark’ are in order. The Merriam-Webster dictionary includes “something that serves as a standard by which others may be measured or judged.” This implies a consistent way of measuring something. I have to observe that there are various sources of ‘benchmark’ NPS data, but there is no single standard for how it should be measured. Bain has recently started a ‘certified NPS benchmark’ initiative, and I believe JD Edwards is the only company to have been certified so far. I believe you can trust NPS benchmarks from Satmetrix and Temkin, though they use different methods and are not free. Temkin does publish overall NPS ranges by industry free of charge, and you can find them here. If you sell to US consumers, you can at least try to understand where you are compared to your industry.

There are two other sites that provide what they call benchmarks. In practice, most of the content is data that companies themselves have provided. If you choose to use them to compare yourself to the competition, please do your best to understand where each number comes from. They are not well documented. The sites in question are npsbenchmarks.com and indexnps.com.

If you are not covered by any standard benchmarking report and can’t afford to fund a benchmarking effort of your own, I suggest using your relationship survey NPS scores for the comparison to others in your industry. They will be closer to benchmark results than transactional / touchpoint survey results.

The one thing you do not get from most benchmark studies is potentially the single thing that would help you most. This would be a summary of the verbatim comments and improvement suggestions for your competitors. If you can get these, your sales and marketing teams will be delighted.

Questions for the Bain Net Promoter System podcast recording

As mentioned last week, I will be recording a Net Promoter System podcast this coming Monday. The host is Rob Markey, co-author of The Ultimate Question 2.0. Thanks to those who have submitted about 20 questions by email and in the LinkedIn NPS Forum so far. More questions are still welcome, up until Monday morning, Geneva time. Send them to me by email at mfg@customerstrategy.net.

Our latest blog posts

The first two posts of three planned articles on deep customer relationship research are shown below. My Tropicana post surprised me in that it attracted both positive and negative attention. At least nobody has contradicted what I stated about the control distributors and supermarket chains have over farm prices. Older posts are of course still available on the blog page.

Customer relationship research / surveys – Third of three articles

This is the third and final article in my series on deep relationship research, particularly for B2B. The main subject this time is how to overcome objections from inside your own company to the whole process. These objections usually come from sales teams.

Customer relationship research / surveys for B2B – Second of three articles

The second article in the series covers who to interview in a customer organization, how to perform the interviews, and how to track and report results.

Why I became disloyal to Tropicana – A story about brand image

I have been fiercely loyal to Tropicana since late 2005. Reading the results of an orange juice comparison test in a Swiss consumer magazine changed my mind, and I don’t expect to buy Tropicana products anytime soon. Read on to understand why.

Notable customer experience items from other sites

Net Promoter System podcasts – my three favorites

Since I will be recording one on Monday, I thought it would be a good idea to provide you with links to my past favorites. I think my all-time favorite is the one with Horst Schulze, formerly of Ritz-Carlton, explaining what he did to create the legendary service culture of the hotel chain. I also liked the one with Lee Cockrell, formerly EVP of operations for Disney’s Orlando resort. It includes some of his experiences in Paris too. Finally, I loved the one with VimpelCom executives Anton Telegin and Natalia Macpherson. They talked about what it took to get that Russian telco’s leadership to believe in and sponsor their NPS work. Note that the link to the VimpleCom podcast takes you to the iTunes podcast library and you can find it as ‘Ep. 74’.

Temkin Customer Service Ratings

Temkin Group has just published its latest report on Customer Service based on a survey of 10,000 US consumers. It covers 295 companies across 20 industries. As usual, you have to pay to read the full report. However, I think you will find the free tables here to be interesting reading.

Looking forward

Thanks to those who have bought and read our books up to now. If you like them, please recommend them to friends and colleagues. No matter what you think of them, please post your thoughts on Amazon. This will help us to improve and will help others with their buying decision.

Please also share this newsletter with your friends and colleagues and encourage them to sign up for the here. I have put links to past newsletters on the subscription page. Finally, please feel free to change or cancel your subscription using the link below.

You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

To change your subscription, click here.

June 20, 2017

Customer relationship research / surveys – Third of three articles

Maurice FitzGerald / Blog / Customer Experience, Relationships, Surveys /

This is the third and final article in my series on deep relationship research, particularly for B2B. You can find the first article here, and last week’s article here. The main topic this time is how to overcome objections to the process from within your own company. I conclude with some advice about relationship research when you don’t have enough resources to interview all relevant customers face-to-face.

Common objections to relationship surveys

Relationship survey interviews with large customers can be difficult to arrange. Contrary to what you may expect, the difficulties are almost always with your own sales teams rather than with the customers. The objections usually take the form of “I already work with my customer every day. I understand what they think and want in great detail. You can’t possibly tell me anything new.” These objections become stronger if you decide, despite earlier advice, to publish a score by customer. If you make the further mistake of deciding that these scores should be part of the formal evaluation of the sales leader at the individual customer level, you may as well forget about the feedback process. The sales person will prevent you interviewing anyone who is not ecstatic about everything.

Your CEO may be paying an inappropriate amount of attention

If the account-level score exists and is (at least formally) not part of the sales team’s annual evaluation, you can still have problems. One of our HP CEOs regularly read the interview reports for low-scoring customers only, and then phoned the sales representative to discuss it in detail. This did not happen where the scores were good. At one point, I wanted to get an account manager to agree to have some of his contacts interviewed specifically for software, not knowing that he had just ‘benefited’ from one of these CEO calls. His answer: “OK, and I will do all the interviews for you. What score do you want?”

A sales leader cannot possibly understand everything that everyone is thinking

A sales leader’s claim to understand everything that every key contact is thinking cannot possibly be correct. In our interviews, we have constantly been able to surprise sales teams by showing them changes in customer views, at the individual level, or that their preconceived notions about an individual are not correct. Customer contacts who have been vocal critics in the past sometimes turned into our most powerful advocates, if we listened to them and acted. The problematic relationships are not the openly negative ones. At least they are communicating with you, and most want you to be successful. The problematic relationships are the ones where you have fallen into the deadly zone of mutual indifference.

Overcoming objections from sales teams

In a perfect world, you will already have other sales teams who have gone through the process and found it effective. You then use these first teams as references for the others. In the absence of such references, here are some suggestions, in priority order:

Be clear, in writing, that the sales person will not be evaluated on the overall score that comes out of the survey or on its trend over time. This can be tricky to word correctly, as it is not impossible that you will find bad chemistry between the sales person and essential people at the customer end. This might lead to changing the sales person. (To minimize the exposure to ‘bad chemistry’ issues, your account managers should be interviewed by the customer before they are appointed.)
Demonstrate to the sales person that you have the resources and sponsorship to drive the improvements suggested by the customer. This should be positioned as unburdening the sales team from the corresponding workload.
If you are in the customer experience leadership position, negotiate with the sales leader so that the customer experience lead becomes a formal position in the account team, accepting guidance from the sales leader. The formal description of the work should concentrate on the improvement process, and not on the gathering of the feedback. As customer experience leader, you should also agree to function as part of the sales staff, and attend all their meetings, no matter where you report formally. These steps are designed to prevent perception of customer experience as a pure audit function.
Concentrate your messages on the individual people in the customer’s organization chart when communicating feedback results. Your audience will find the individual stories highly interesting.
Involve the key sales people assigned to the customer in the feedback and improvement process. It may be easiest to start this when conducting a win-loss analysis, as described in the next chapter.

If relationships are not quite that deep

If your customer coverage is not quite that dense or you simply don’t have the resource or travel budget needed to go and see them face-to-face, the second-best approach is to interview them by phone, or a video link such as Skype. Just remember that the main work is not the interviewing, but the improvements. In all cases, you must tell customers what you have learned quite soon after the interviews have been completed, then execute. Finally, if you only have the resources to do relationship surveys by email, I would suggest not doing them. I don’t believe you can have deep relationships by email. You should worry if your competitors are better resourced.

Conclusion

Thank you for reading these three articles. Your comments, objections and suggestions are always welcome. As usual, this article is an edited version of an extract from one of our books; in this case from Customer Experience – Design & Implementation.

June 6, 2017

Customer relationship research / surveys for B2B – First of three articles

Maurice FitzGerald / Blog / Customer Experience, Relationships, Surveys /

In almost all B2B situations, you have a relatively small number of customers that provide the majority of your revenue. For many companies, it is not the old 80:20 rule, or even a 90:10 rule, but more of a 99:1 rule, or even 999:1. If you have a ‘strategic account’ team or something similar, you are likely to be in this situation. If you are not sure whether you have strategic accounts, a way of looking at it is to understand how many customers a face-to-face sales person has. If some of them are assigned one to three customers or partners, you have strategic accounts. You need to listen to them in a special way and work on improvements that are specific to them. Rather than going through a series of definitions, let me start with a personal story.

Shortly after HP and EDS announced their merger, I went to see Vodafone in Newbury, UK. They were a large customer for both HP and EDS. At the time, information from Vodafone showed that they really did not care very much for HP. My new EDS colleagues gave me their Voice of the Client (VOC) survey results for Vodafone, which were outstanding. I started the meeting by saying, “Look, I would like to cut this short. You hate us and you love EDS. I am going to learn what EDS is doing that HP is not, and copy it.” The main Vodafone person in the room was surprised. “EDS is even worse than you,” he said. “What makes you think they are any good?” I proudly produced the transcripts of the EDS interviews with senior Vodafone people. “But…” he said, “None of these people were actually involved in the EDS project.”

The point here is that not all relationships are equal. You need to be certain you are talking to people who matter.

B2B Relationship research

A good relationship feedback process could be described as a non-anonymous mono-vendor benchmark survey. You usually only get detailed information about your own company. If you just have a small number of customers, say less than a hundred, you should simply interview them all face-to-face. If you have a large number of customers, you should segment the customers in some way, using increasing depth for your most important customers. Deeper research does not mean asking more questions. The Net Promoter System format (for example) remains intact. When you interview your most important customers, you go into far greater depth on the ‘Why?’ and ‘What should we improve?’ questions. Clarifying the input right away will make it far easier to prepare a worthwhile improvement plan for the customer to approve.

It is certainly possible to add questions about competitors to your relationship survey, though it would dilute the focus on your own company’s improvement opportunities. In cases where your product and your competitor’s are mutually exclusive, meaning nobody would buy from both companies, adding questions about competition would give you an early indication about whether customers are thinking of changing. For example, “Why do you buy from us instead of [insert key competitor name]?”

Resellers and other partners

Companies that help you to sell or implement your products and services are a special case. Since their job is to recommend your products and services, asking them the recommendation question is not appropriate. I recommend asking “Please rate your overall satisfaction as an Acme partner,” followed by the usual “Why?” and “What should we improve?” Since your partners have the choice of working with other suppliers, they are a good source of competitive information. I therefore suggest adding the following questions, using a reseller example, and supposing that the main competitors are called Alpha and Beta:

Do you sell products from Alpha or Beta?
What can Acme do to make it easier for you to recommend us over Alpha and Beta?

Future-facing relationship segmentation

I believe it is more useful to segment your research and improvement process by your future revenue expectations for a customer, rather than by what you achieve now. This means that customers who spend a lot on your type of product or service deserve a lot of attention, no matter who they spend it with. I suggest a two-year time horizon. The segmentation is used to determine the type of feedback process you will use. The top tier should be interviewed face-to-face, the second tier by phone or Skype and the lowest tier by email / web. The depth of your loop-closing and improvement commitments will also vary by tier.

Relationships are relative

Some time ago, we hired a new account manager for an important Swedish / Swiss customer, ABB, based in Baden, near Zurich. OK, it was a long time ago, when Digital Equipment Corporation still existed. Being clever sorts of people, we at DEC decided to move a Swedish sales person down to Zurich. While ABB was based in Switzerland, the most important executives were mainly Swedish. We told him he could live wherever he wanted. He did his research to find out where the key ABB executives lived and found a house on a street near two of them.

He struck up social relationships, and was feeling pretty good about himself and his prospects after a few months. I thought he was fantastic, and that his thinking was perfect. One evening he met a sales person from Andersen Consulting, who was competing with him for an ABB project. They had a discussion over a drink. He asked whether the Anderson person knew Mr. X, mentioning that Mr. X lived just a few doors away from his own home residence. The Andersen Consulting guy replied, “Sure. I took his kids to school this morning.” Oops.

Relationships can be complex

If yours is a large company and the customer is one of your most important ones, the relationship is likely to be complex. Multiple projects may be on the go at the same time. Some may be going well and others less well. One department can be ecstatic about you, while another may want to drop you as a supplier. Each person that deals with the customer in your organization is likely to have a partial view, but believe they understand everything. Good sales people are likely to know everyone that matters for their next deal, and may be totally unaware of an escalation on a product or service the customer bought three years ago.

Similarly, the support team may not know anything about a new deal that is being negotiated. When I was due to give a Big Data presentation to Swiss TV encryption provider Kudelski, I was given an exhaustive and rather painful briefing about a technical escalation that was in process. I was assured that the leadership team would not want to know anything about Big Data until the issue had been resolved. Once on site, the CIO did indeed note that “Our technical teams are working on an issue, but that is not why we are here today.” None of the others present mentioned it, and we had a great session.

In the next episode…

The next blog post / article will be on deciding who to interview, interview formats, and how to track results.

As is usually the case, the content of this article has been assembled from our books. This particular article combines content from Customer Experience Strategy – Design & Implementation, with related content from Net Promoter – Implement the System. As always, your comments, suggestions and personal experience are all most welcome below.

April 27, 2017

#15 The new triplets have all arrived. More survey madness. “NPS stole my dog and ran away with my wife.”

Maurice FitzGerald / Newsletter / Customer Experience, strategy, Surveys /

Welcome to the 15th edition of my customer strategy newsletter. The five topics this week are:

More on the triplets!
The Amazon approach to customer research could stand some improvement
Latest blog posts
Notable items from other sites
Looking forward

The paperback triplets have all arrived!

My brother and I are happy to announce that all three of our customer strategy books are now available in paperback as well as the Kindle editions launched last month. You can find links to various Amazon sites that sell them here. I don’t expect them to be available anywhere else. The third and final book covers how companies can avoid negatively affecting customers when they go through a period of major cost reduction. The content builds largely on my experience managing cost reduction initiatives when Mark Hurd was CEO of HP.

Customer research should be about something useful (to me as a customer)

I received an order from Amazon this morning. At the same time, I received a survey from them via email. If you received something from a web vendor, what would you like to be asked? What might be relevant to your experience and willingness to continue to order from Amazon? In my case I suppose the top of the list would be how easy it was to find and order what I wanted. Second would probably be whether it was delivered on the day they initially promised. (It was late.) But no, just like my last few orders from Amazon, the survey was about their packaging. I really don’t care about the packaging. Referring to the blog I sent readers two weeks ago, the packaging is a hygiene factor. If it has not been opened and the contents are still there, I have no memory of the packaging ten minutes after opening it. Yes, it could upset me if poor packaging caused the contents to get damaged. However, if you were to ask me to list the top five things, or even top ten things that make me want to buy from Amazon, the packaging would not be on the list. I continue to think this is a silly approach to customer research. Stick to NPS basics if you can, with open questions.

Our latest blog posts

Older posts are of course still available on the blog page.

I suppose it all started in a bathtub in 1981

A story about my first great learning experience about customer research. If you think you already know what customers want, you are probably wrong. At the time, was was working for the Wrangler jeans parent company in Paris. My job title was ‘Quality and Engineering manager”. My boss, meanwhile, was in his bathtub…

Do your company leaders care about customers? Here is how to know

“Our customers are our top priority.” “Everything we do, we do for our customers.” “Customers come first.” Internal and external corporate communication is full of statements like these. Do they actually mean anything? Here is how to know.

‘Hygiene factors’ and ‘Motivators’ in customer experience – The Bain Anger-Delight Matrix

American psychologist Frederick Herzberg invented the ‘Two-factor Theory of Motivation’ in the context of his work on how to motivate employees to perform. The two factors are ‘hygiene factors’ and ‘Motivators’. Here is how they are relevant to customer experience…

Notable customer experience items from other sites

NPS killed my dog and ran away with my wife – Matt Haney on LinkedIn

Yes, I was attracted to the conversation by the provocative title. Matt works for Medallia, a leading customer experience management software company. Since Fred Reichheld (inventor of NPS) is on their board, they are obviously not against NPS. The article is a good read. The replies have a certain entertainment value, if you like reality shows. You can find the article here.

What most companies miss about customer lifetime value – Harvard Business Review

Michael Schrage’s article goes well beyond what I feel is the basic customer lifetime value problem. He talks about the additional value that is often forgotten, mentioning things like “They give us good ideas. They evangelize for us on social media. They introduce us to their customers” and more. While he makes good points, there is a more pressing issue: There is no standard way of measuring customer lifetime value. The accounting profession has let us down here. There needs to be a GAAP standard for how to measure customer lifetime value. After all, when we say that an investment will improve customer loyalty, we need to get beyond sentiment and talk about dollars. Without an accepted standard calculation of the expected value of a customer, it is an uphill battle. The article is here.

Looking forward

Since our books are now out, the most important thing we can do is to persuade you and others to read them and give us feedback. We believe they provide new ways of thinking about old problems. We hope you agree. Do let us know.

Thanks for reading. Please share with your friends and colleagues and encourage them to sign up for the newsletter here. I have put links to past newsletters on the subscription page. Finally, please feel free to change or cancel your subscription using the link below.

You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

To change your subscription, click here.

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