Do Scores Matter if You Don't Know What is Critical to Your Customers?

Last week, I wrote about the importance of knowing what drives customer dissatisfaction, which dealt with data interpretation and the need to dive more deeply into the business issues as well as the data.

There are exploratory ways to interpret data and more analytical methods as well. The key to correct interpretation is knowing which approach will deliver insights to your business. As I said in my last post, coming to the wrong conclusions even with good data is a possibility without using the right tools. In the case of customer loyalty, you could be investing in programs that have little or no impact on the customer’s intention to buy again or you could be ignoring “dissatisfiers” that diminish a customer’s perception of your critical attributes.

So, there are a few initial questions to ask:

• What do you believe are the attributes that contribute to your customers’ loyalty?
• Are you measuring those attributes specifically in any data gathering exercise including social media monitoring?
• Do you classify these attributes in terms of their impact on the customer or importance?

The example below is from an article titled Guests’ Perceptions on Factors Influencing Customer Loyalty, which appeared in the March 2010 issue of the International Journal of Contemporary Hospitality Management.

Customer Service : Dissatisfier

Cleanliness : Neutral

Room quality : Dissatisfier

Value for money : Critical

Quality of food : Dissatisfier

Family friendliness : Neutral

The authors selected typical product and service attributes for a guest at a hotel and designed questions around those.

Using simple regression, they did something very interesting and in my view very revealing about the data they collected. The usual loyalty question was asked (intention to return) and all other questions were tested against this one. Then, questions above a median score were tested individually and those below the median also were tested in the same way. The results were plotted against agreed criteria from Critical to Neutral.

Critical Attributes were significant in both tests and would be considered a driver of loyalty as well as a reason to switch. These have high compliments and high complaints. Performing well in other areas won't compensate for low performance here.

Dissatisfiers were significant in testing low performance but not when high performance was tested. So, if customer service is bad, it influences a decision to switch but an average experience doesn’t critically drive loyalty. These are the attributes that should be maintained but not at the expense of more critical ones.

Neutrals generally may not be noticed by customers and although bad performance would reduce perceptions of quality, it would not be to the point where quality is considered poor.

There are some lessons to be learned, I think, from this type of data interpretation:

• Simple statistical tests are used in a way to deliver insight that would be difficult to obtain with exploring low and high scores alone.
• Knowing whether a key attribute delivers the loyalty factor; whether it has no affect or whether it destroys loyalty is so valuable in terms of designing the customer experience and making the right investments.
• This is the kind of "I know" insight that is compelling when reporting on Voice of the Customer issues.

How are you measuring customer loyalty? Do you know what is critical; which areas need only a minimum performance to maintain loyalty and which attributes have no impact on loyalty at all?

What's Wrong With Taking Survey Data at Face Value?

I’ve been designing survey questionnaires and analyzing the data for so long that I often forget that some people may not be doing the deep dive and asking the hard questions of the data they’ve collected and for which our clients hire us (thank you, you know who you are). Maybe a little exploratory analysis, a tad of correlation, a glance at the verbatim comments and we’re done until the next time. Did we do a survey? Check. Did we do anything with it? Sure, sort of. Do we have a deep understanding of what the data means? Well….

What’s worse than not gathering intelligence from customers and employees?

Coming to the wrong conclusions!

I’m reminded of this fact by two articles I read last week: In This Case, Let’s Examine Dissatisfaction in the February issue of Survey magazine and Guest Perceptions on Factors Influencing Customer Loyalty in the current issue of the International Journal of Contemporary Hospitality Management.

In the case of customer dissatisfaction, the article suggests several calls to action:

Understand whether you have a category problem rather than a brand problem. In other words, your competitive space may allow easy switching with or without loyalty programs so make sure you know what your issue is before investing in programs that will not alleviate it.

Your market strategy will drive a customer’s perception of satisfaction. If you are a low cost provider, you have accepted that a lower level of quality and service is part of the equation. The danger zone you could find yourself in is in trying to be low cost while also attracting a customer who looks for a different level of product and service.

Benchmarking. I’ve never been a fan but lots of companies do it and the swirling vortex that you get sucked into is that you compare your performance to companies who target different customer segments.

Dissatisfaction may not arise from what you do but rather what other, similar companies do that you don’t do. Customers constantly evaluate decisions based on alternatives; some amount of dissatisfaction arises with your product and service even if you are executing your strategy perfectly.

My suggestions for arriving at the best conclusions possible from your data analysis:

• Keep your strategy upper most in mind when designing the project and return to it often when analyzing data. This means knowing who your competition is; who the ideal customer is and what your competitive advantages are.

• Design survey questions to be particular rather than general. The more generic the question, the less likely it is that you have actionable data and the more likely you potentially are arriving at the wrong conclusions.

• Don’t confuse happy with satisfied. If you want to meet a customer’s needs, you are aiming for satisfaction. If you want happy, that’s a whole different level of expectations.

• Perform data analysis from several different perspectives. Not all survey questions should be treated equally in reaching conclusions.

I’ll write more about the last topic next week.

Can You Hear Me Now? It's Your Customer Calling

Does anyone still breathing believe that we can succeed without customers? I didn’t think so. If people don’t want what we’ve got to sell, we’re toast. So, there should be no argument that customer satisfaction and loyalty are goals we should be eagerly pursuing since the pundits tell us that it costs five times as much to acquire a new customer as it does to keep one.

I know, some of you are saying satisfaction and loyalty, yes, “but not at all costs” and “not the wrong customers for our business”. Exactly. So how are you managing those customer issues for your benefit and theirs?

Hello? I’m Out Here and Here and Here…: There are so many channels from which to collect customer feedback and each one potentially provides data gold. However, what is interesting may not be useful. Before buying, jettisoning or adding onto your business intelligence platform, a game plan is imperative.

Customer orientation is a critical part of developing a business strategy. It’s hard to describe competitive advantage and competencies unless we’ve defined how we will deliver products and how we will serve our customers. Business intelligence needs to be aligned with both strategy and customer needs. A company’s market research used to be private; now it is open and available on every social media outlet and search engine just by mining customer comments. We shouldn't ignore the qualitative nature of data and fail to integrate that into other customer data sets as it is necessary for ongoing strategy development

See Your Company Through Your Customers’ Eyes: It’s disappointing to deal with companies that seem to have no idea how many customer touchpoints they have and infuriating that they are not integrated. It’s inexcusable that frontline employees are neither selected nor trained for a service job. If you invite some of your co-workers into a room with a big white board and start mapping customer interactions, it is a mind-boggling exercise. Or, just read your customer comments online.

Create a Single View of a Customer: I’ve said it before: customers do not care about our silos. It’s not their job to sort out which department is responsible for resolving a problem. A fragmented approach rather than Outside-In customer experience design means that your employees have a perspective of your customer based on their job roles not on customer expectations.

It’s Called Voice of the Customer: I design a lot of feedback and research surveys and I am sent a few as well. It takes me less than 30 seconds to decide whether or not I’ll complete a survey depending on how it’s constructed. Questions should be properly worded and of an appropriate length; be free of bias; be actionable and be linked to the customer experience as well as the company’s metrics and Key Performance Objectives.

I’ve been on a data and analytics soap box for a while and there is no doubt that through collection of behavioral, rational and experiential data, we are doing a better job of knowing who buys from us and why. To understand what we didn’t sell and why requires tapping into customer emotions. Maybe someone will develop an App for that. Until then, we have to collect, aggregate and understand qualitative data to hear what are customers are feeling as well as saying.

To paraphrase a line from my newest favorite film, The King’s Speech, your customers have a voice. Yes, they do.

Hot Customer $ervice in the $ummer Time

We’ve been sweltering through a crispy summer in Atlanta and I finally had to bite the bullet to install a new HVAC system.

Of course in these new days of austerity, it wasn’t a matter of picking the prettiest system; oh no, I had to do my homework. Onto the web sites I went, looking at systems, any deals that could be available and, most importantly, what my friends and neighbors are saying about the two contractors I short-listed.

While I had used a locally well-known provider for 15 years, I had a very disappointing experience with one of the company’s executives last year. However, I decided to give them the opportunity to make a service recovery and quote for my business. And, I added another local contractor that had very positive online reviews. Both quotes were very similar but I couldn’t shake the bad experience I had had with my current vendor.

After dithering for a month (it’s $10,000 after all; not exactly an impulse purchase), I phoned the sales person for the second contractor. We discussed scheduling and the fact that in this Sahara-like summer, I couldn’t do without air conditioning for a day and a half. Without hesitating, he arranged to bring a room air conditioner 5 days before the work was due to start because “there is no reason why you have to be uncomfortable”.

Do I have to tell you who got the business?

Bill was on time and dutifully dragged the unit upstairs and down until we found a window that would accommodate it. He installed it, tested it and ensured there was no escape of precious cold air into the outdoors. And he did it all cheerfully on a day with a 106 -degree heat index.

I’ve told everyone who is even mildly interested about my customer experience and why I didn’t select the first vendor. Of course, if anyone asks me, I’d happily recommend Bill and his company. I’ll also be doing online reviews because I found them very helpful when I was looking for a new HVAC contractor.

Lessons learned?

• It takes only one conversation to lose a long time customer so if you have the words “Customer Service” in your title and you don’t live up to it, be prepared to lose your revenue base over and over again.

• What your web site and marketing materials say had better align with how your employees behave with customers; it’s becoming easier to spot the differences. And, in this economy, people are fed up and aren’t putting up with sub-par service.

• It only takes one small thing, in my case, the offer of a loaner air conditioner several days in advance of the installation, to completely surprise and delight a customer. We are so hardened to expect customer “no service” that when the unexpected happens, it produces multiples of satisfaction versus the actual expenditure of resources.

• Online reviews are routinely part of a customer’s research. Ignore them at your peril. Google never forgets!

• Word-of-mouth referrals and recommendations are incredibly important for any company.

• Going above and beyond, often in small ways that are personal, is the greatest source of satisfaction, which will drive intention to buy, refer and repurchase. When everything else is equal between you and your competitors, this kind of differentiator stands out.

What is your company doing to surprise and delight your customers? Do you monitor what people are saying about you – or do you think customers don’t really take notice of other peoples’ opinions?