Why Care About Patient Experience?

The Verde Group Customer Dissatisfaction in the Pharma industry

Across products and business categories, customers are demanding more from companies and brands.  Better selection, lower prices, faster service, same-day delivery and frictionless interaction: these are the market mandates of the new customer-centric economy.

And then there’s health care.  Characterized by network-restricted product access, price and value obscurity, interminable wait times and a bafflingly convoluted billing system, health care today is often a case study in “worst practice” CX.  This is made clear by health care’s NPS status, which perennially competes for bottom ranking with cable TV and internet providers.

Yes, healthcare is complicated.  Yes, patients, doctors, nurses, administrative staff, hospitals, pharmaceutical companies, pharmacies and payers all own a piece of the problem.  And yes, it’s hard to see how any one stakeholder can break through to meaningfully improve the overall patient experience.  This is particularly true since the traditional economic incentives of CX improvement – customer retention, revenue growth and brand advocacy – are only partially relevant to today’s healthcare marketplace.

But the stakes for customer experience in healthcare are phenomenally high when you take into account the social costs of poor CX.  Consider adherence to a medical regiment: whether or not a patient takes their medicine on time, all the time, in the manner prescribed.  According to a recent study in the journal Annals of Internal Medicine, weak adherence in the US alone causes nearly 125,000 deaths a year, creates 10% of all hospitalizations and costs the already strained healthcare system between $100–$289 billion annually.

That’s real money, and it prompts the question: does CX play a role in these costs?  Do patient experiences influence adherence behaviors?

Please click here to download The Verde Group’s latest white paper which discusses these and other pressing questions affecting CX in the pharmaceutical industry.

Jon Skinner is Executive Vice President at The Verde Group

 

Beware Cross-Culture Comparisons In International Research

customer experience risk The Verde Group

The other day one of my clients forwarded to me a research report citing that 68% of Chinese shoppers were “happy or overjoyed” with their shopping experiences, versus only 48% of American shoppers. While this is an interesting factoid, the data point suggests a more important topic: how to manage the complexities and risks of CX comparisons across global regions.

As of this writing, Verde is conducting baseline and tracking research in 26 countries across 5 continents. Most of these programs are global in nature, meaning that our clients seek to understand and improve their CX in multiple regions. From this work, I’d offer the following considerations for those embarking international CX measurement initiatives.

 

Culture Influences Scale Response

When measuring customer CX attitudes on an international footprint, it is crucial to acknowledge that different cultures respond to scales differently. For example:

  • Latin American and Middle Eastern survey respondents are more likely to offer responses at the extreme poles of a scale, either positive or negative.
  • Asian survey respondents are more prone to “intermediacy”, with scalar scores clustering in the middle.
  • Verde recently was asked by a client to explore a curious situation in the Benelux region of Europe: customers who were “loyal” by most measures (order size, tenure, etc.) but who also were providing Willingness to Recommend scores of zero. We found that these customers were culturally inclined against brand recommendations of any sort, believing that others should make up their own minds with respect to the products they use and promote.

The reasons for cultural scale bias are many, and broad generalizations are obviously risky.  But the biases are definitely there, and they can impact scalar measures such as NPS. This is a key reason Verde supplements scalar measures with binary “ yes/no” assessment of what problems customers have and how those negative experiences impact NPS.

 

CX Maturity Influences Customer Expectations

A country’s CX culture and infrastructure “maturity” will influence a region’s overall expectation set with respect to product and service quality. I have to confess I don’t know much about Chinese shopping habits (Verde’s work in Asia is primarily in financial services, logistics and agribusiness) but I’d be willing to bet that they are appreciably different than those of the US or Britain. So does “overjoyed” mean the same to a shopper in Guangzhou as to a shopper in Nashville, Tennessee?  Probably not.

 

You Can’t Provide Identical Surveys in Two Different Languages

No matter how hard you try, it is impossible to fully preserve a question’s absolute meaning when translating from one language to another. While not a research example, consider KFC’s experience exporting their slogan “Finger Lickin’ Good” to China. As it turns out, when translated into Chinese the slogan becomes “We’ll eat your fingers off.” Hardly a trivial difference.

Shifts in meaning arising from translation may be important depending on which aspects of the customer experience are being measured and whether the questions of the survey have a high degree of nuance.

This is another reason Verde emphasizes experiential assessment of a customer’s loyalty: experiences are tangible and observable, which makes them easier than attitudes or beliefs to render uniformly across languages.

 

And Also…

These three areas are hardly the only complexities when conducting international CX research.  For example, increasingly stringent privacy regulations in certain regions (e.g. the EU’s General Data Protection Regulation overhaul) may make it more difficult for you to maintain comparable sample composition across countries.

Or you may contend with different countries having very different field interaction preferences (email vs. phone. vs. face-to-face) which can introduce modality bias to the findings.

But let’s not get too lost in the weeds.

Candidly, conducting good CX research with clear insights and actionable findings is hard to do anywhere.  It’s just harder to pull off internationally.  Keeping matters of culture, CX maturity and language in mind upfront during the design stage of your international programs will pay large dividends when it matters most: in interpreting the data and developing credible, defensible action plans to improve your global CX based on the insights arising from your data.

Jon Skinner is Executive Vice President at The Verde Group

Making Your Customer Experience Research Matter

customer experience research The Verde Group

Find the difference between interesting and actionable insights

By now, the notion that customer experience matters to market success is nearly universal.

A 2016 Gartner survey found that 89% of companies expect to compete primarily on the basis of customer experience — up from 36% in 2012.

Most companies make significant investments in customer research to shape their customer strategies, seeking to understand gaps in customer satisfaction and to develop remedial actions based on research findings.

Yet many companies still struggle to establish a clear link between research findings and meaningful, sustained improvements in business fundamentals.

For some, after many quarters of customer analysis, Net Promoter Score (NPS) – the metric that most companies use to gauge the loyalty of their customer relationships – remains stubbornly static.  For others, changes in customer satisfaction show little relationship to customer revenue growth.

Why would this be the case?  The Verde Group has been analyzing customer experiences for over 20 years, and we’ve arrived at this conclusion: for nearly all categories, customer experience is a rich, complex and dynamic phenomenon that is easy to describe generally using traditional satisfaction research analysis, but is quite difficult to diagnose actionably using those same techniques.

This is why we focus our clients on a different analytic filter for understanding customer experience: the filter of dissatisfaction analysis.

As my colleague Michael Tropp discusses, customer dissatisfaction can be very powerful for interpreting customer experiences.  Rooted in human evolutionary psychology, the concepts are simple:

  • Events that cause us pain are far more influential on what we do than events that cause us pleasure.
  • When a customer says “No, I won’t” (as in “you made my interaction so hard that I won’t buy from you again”) they are far more likely to follow through on that statement than when they say “Yes, I will.” This makes dissatisfaction analysis highly predictive of future customer behaviors.
  • Because problem experiences so strongly correlate to market action, they can be financially prioritized in terms of damage to customer loyalty, revenue or brand equity.

That last point is particularly important.  The objective of dissatisfaction analysis is not to tell companies their customers have problems; they already know that.

And they probably have an overall sense of what those problems are because if they didn’t they’d be out of business.  But what most companies don’t know is which problems are most damaging to customer value and relationship equity.

Now, executives in the C-suite will have their opinions.  But that’s the issue: generally, a company’s problem prioritization is based on partial data, limited analysis and a priori biases.  What’s worse, those opinions vary greatly depending on which executive holds them.

The sales department thinks customers suffer most from one set of problems, but Operations targets a different set.  Marketing focuses on the pain points they think are most crucial, but the Service function has a wholly different point of view.

What happens?  Executive team CX debates don’t resolve, strategies don’t align, and tactics step on each other and undermine overall improvement efforts.

This is why a statistically rigorous, financially based prioritization of the customer experience is so valuable.  It moves the debate from bias to objective facts: which problems are costing us the most in terms of customer revenue and loyalty?  Such a ranking aligns a company’s functions with respect to experience strategy and provides a powerful way to link C-suite strategy to front-line execution.

Maybe dissatisfaction analysis validates what the company already suspected.  That’s a win; validation means the team can move from debate to action.  Or maybe the analysis slays a few “sacred cows”: customer issues that the team firmly believed were highly damaging to customer equity, but turned out to be relatively inconsequential compared to other customer issues.  That’s an even bigger win since now the team can redirect resources to solving what really matters.

And the biggest win of all: identifying problems that the company didn’t even realize they had.  These “silent killers” are the most powerful output of dissatisfaction analysis.

Quietly eating away at customer retention and revenue growth, undiagnosed they represent a serious drag on loyalty and earnings.  But brought into the light, they can be addressed and controlled.

Most companies want the same thing: to serve their customers well, to innovate for the future, and to grow their customer relationships profitably and for the long term.

But few companies truly succeed at analyzing the customer experiences on which those objectives depend.  Those that are willing to go beyond traditional satisfaction analysis to look hard at the dissatisfaction of their customers will find great returns in customer loyalty, customer value and competitive stance.

Jon Skinner is Executive Vice President of The Verde Group

 

You may not know your customers as well as you think

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I’ve been married for a long time, certainly long enough to know my wife Alicia pretty well.  Or so I thought.

But last week while dining out, I learned something new.  At the end of our meal, the server ran my credit card and returned it to me, saying  “Here you go, Jon. Have a great evening.”

This made no impression on me whatsoever.  But Alicia commented “Boy, I hate it when a waitress uses my name like that.  It’s just so phony!”  To which I replied “No kidding?  I didn’t know you hated that!”

My point is not that after many years of marriage my wife still surprises me.  (Although she does.)  My point is a business point:  we all interpret experiences differently.  I don’t care one way or another whether a server calls me by name.  Others find it aggravating.  Still others are charmed by it.

We all interpret experiences differently.  This principle underlies all of Verde’s Customer Experience work, and is embodied in our “EAB” Model: Experience drives Attitude, which in turn drives Behavior.  What makes an experience good, neutral or bad is how we interpret the experience.  Two different customers may experience the same problem, but have wildly different reactions, depending on their temperament, personal history and circumstances.

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Companies seeking to redesign the customer experience to drive more lucrative customer behaviors should keep this principle in mind: strategies and service interaction tactics need to be tailored to address the specific issues most damaging to specific customer segments.

Consider some of the segment-specific differences in problem experience Verde has discovered in our client work:

  • Gender. Verde’s retail experience work with the Wharton School of Business (Executive Summary) has identified some unexpected differences between the shopping experiences of men and women.  For example: the top problem suppressing share-of-shop for female shoppers (by 6%) is “I can’t get sales associates help when needed.”  But for men the top risk issue (5% share-of-shop loss) was “The item I was looking for was out of stock.”
  • Health Condition. Last year Verde conducted a major “Adherence@Risk” study, where we prioritized the specific patient problem experiences that decreased their likelihood of adhering to their medication regimen. We ran the study for a leading injectable product indicated across multiple conditions.  We found that for patients with one disease, more than 50% of all adherence risk was based on injection issues.  Yet for patients with a different disease, injection issues were completely immaterial. Instead, these patients pulled back their drug regimen due to problems understanding their condition and what to expect from the drug.
  • Line of Business. In a recent customer experience assessment for a Health Insurance client, Verde determined that 7% of policyholder loyalty in the “Small Group” segment was at risk due to “plan materials that were too detailed and insufficiently relevant” to the policyholder.  Yet this issue was isolated to the Small Group segment; the loyalty of policyholders in all other group segments was unaffected by this problem, even though the materials were fundamentally the same.

In each of the examples above our clients were surprised by these differences.  Of course they knew that different customers hold different attitudes concerning their service models and go-to-market approaches.  But they did not expect to see such pronounced differences in the specific experiences underlying those attitudes.

This client surprise is not uncommon when Verde presents its findings, and it is one of the most gratifying aspects of our work.  But it also reflects my surprise at my wife’s restaurant reaction. We think we understand those we spend a lot of time with: our families, our co-workers, our customers.  But we often understand far less than we think we do.

Don’t take for granted that you know what is happening with your customers.  Taking the time to really understand what matters to them is the first step to creating great customer experiences that deliver long-term, successful customer relationships.

Jon Skinner
Executive Vice President, The Verde Group

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Which “Silent Experiences” Are Killing Your Customer Loyalty?

Which Experiences Are Your “Silent Killers”?

In my last post, ‘The Complexity of Customer Simplicity‘, I pointed out that one of the chief obstacles for companies that seek to “simplify” the customer experience is the difficulty in knowing what customers want.

Customer simplification efforts need to address the issues that aggrieve customers the most. These are the problem experiences that drive customers away – the issues that make them defect, spend less or adopt fewer products or services.

Most companies are confident that they have a sound grasp on these issues. They have millions of dollars invested in call centers that listen to customers complain every day. They monitor social media for negative brand sentiment. They have thousands of front line sales representatives interacting with customers. How could they not know what matters most to their customers?

Here’s how: The issues customers complain about most are often not the issues that have the largest impact on their loyalty and economic value.

Lethal issues are often silent

Verde analysis of customer problem experience consistently reveals a critical difference between the problems that occur most frequently and those that inflict the biggest damage on spend and retention. Call centers and social media monitoring pick up the frequent issues, but miss the “silent killer” experiences: the problems that customers don’t complain about but that drive down their economic value.

This is a huge challenge for companies seeking to simplify customer experience. Based on 15 years of research in retail, financial services, pharma, manufacturing, telecom and insurance, Verde finds that the intersection of “most frequent” problems and “most damaging” problems is generally under 50%.

Look at the chart below, which illustrates the overlap between a company’s “most frequent” problems and their “most damaging” problems. The data is from Verde research conducted in the last 18 months.

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The data shows that if these clients relied solely on “transactional” sources of customer dissatisfaction such as customer service complaint logs, negative tweets and sales call sheets, they would be ignoring 75% of the dissatisfaction drivers costing them revenue and market share. That’s a big miss.

Be proactive about understanding your “Silent Killer” experiences

A company can’t passively rely on customer complaint volume to identify their “silent killers.” These problems can only be discovered analytically by assessing the complex interactions of specific customer problem experiences with customers’ intended or actual economic behaviors.

This is not a trivial undertaking. It requires a disciplined research approach and a strategically rigorous assessment of the issues potentially hurting customer equity. But when a company unearths these silent killers the benefits are immense.

How immense? As an example: one year after making mostly tactical adjustments to customer experience processes, one of the Verde clients in the chart above realized a 9% revenue improvement in a key strategic customer segment worth over $20 million annually.

That’s a pretty high ROI on research. Clearly, knowing what really matters to your customers is worth the effort of discovery. If you want to simplify your customer experience and enjoy economic gain from doing so, don’t just ask customer service or the twittersphere what to do.

Take the time to find those silent killers. You and your customers will both be very glad you did.

Jon Skinner
Executive Vice President, The Verde Group

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The Complexity of Customer Simplicity

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Last week I had to call my cable company to accomplish what I thought would be a simple task: getting a replacement modem.

I was quickly reminded why most consumers hate their cable companies. I’ll save you the gory details of the experience and just provide the bullet points:

• three days
• seven calls
• three transfers, including two disconnects
• at least two hours on hold
• four chat sessions
• a couple of hours on the website
• five emails and
• one trip to the closest retail service outlet for my cable provider.

And as of this morning, still no modem.

All this complexity, and frustration, got me thinking: why are so many customer experiences so unnecessarily complicated? Of course, customers clearly want simplicity in their interactions. But so do most Fortune 500 companies. This is what Verde sees in our work with clients, which are a pretty good representation of the Fortune 500:

Marketing wants customer experience simplicity.
Choice is good. But the exponential growth of options when consumers consume – brands, models, channels, retailers – raises the stakes for clarity and ease of consideration/purchase. Experience simplicity reduces cognitive overload and moves barriers to purchase out of the way.

Service Operations wants customer experience simplicity.
The more complexity in customer experience, the higher the service costs. And not just because complexity requires customer service staff to handle more calls; experience complexity also drives service cycle times, rep turnover and capital investment. Experience simplicity means fewer calls, easier calls, less rep burnout and more straightforward service technology investments. Oh, and service reps could spend more time on interactions with customers that grow their value instead of defending against customer defection.

The C-Suite wants customer experience simplicity.
The less energy customers have to spend managing their relationship with a brand, the more energy they have to invest in enjoying the brand promise. The outcomes: greater loyalty, advocacy, spend and commitment. Which means more revenue, more market share and superior competitive position.

So all of us – customers and companies, executives and front-line sales service reps – want pretty much the same thing: simplicity. So isn’t it surprising that more companies haven’t cracked the code on making their customer experiences simple?

Not really. Paradoxically, simplicity is actually pretty complicated. For any specific company there will be numerous reasons – cultural, financial, technical, operational – why customer simplicity is difficult to achieve. But at Verde we see three common reasons why companies struggle so hard to simplify customer experiences:

1. High quality simplicity depends on flawless integration of a complex set of business processes. 
From the outside looking in, I’d guess my less-than-simple cable experience resulted from the intersection of at least: poor hiring/training practices, inadequate technology infrastructure, sloppy marketing communications, unreasonable corporate goal-setting and short-sighted financial policies. If I was on the inside, my list would probably expand. Syncing all these processes up to deliver simple-yet-high quality experiences without sacrificing long term customer profitability is a very complex task.

2. Change is hard.
Even when companies have a good grasp of what is required to deliver a high quality customer simplicity, making the changes necessary to meet those requirements requires fortitude, focus and discipline. Very few meaningful changes in the customer experiences can rely on quick hit “silver bullet” solutions at a single point of the value chain. Staying on plan over time – and knowing how well you are progressing – is critical to simplifying customer experience.

3. Knowing what matters to the customer is really hard.
This is the big one. You may have noted our use of the adjective “meaningful” in my bullet above. Companies purposefully invest in a multitude of customer experience improvements every year, but many of these are not “meaningful”: they don’t matter to the customer and they don’t improve profitability or share. Consider for a moment the hundreds of experiences that comprise your customers’ relationship with your company. Which ones matter the most to loyalty and advocacy? Just as important: which ones don’t? Are you investing your energies and resources where you’ll get the highest return in customer equity?

Customer experience simplicity is complex. But all is not lost. There are specific proven ways to cut through all the complexity and align the organization against the experiences that really matter to loyalty and customer value.

Subscribe to this blog and go to Part II of this post, Which “Silent Experiences” Are Killing Your Customer Loyalty?, where we’ll share our thoughts on those tactics and provide some examples of companies who “cracked the simplicity code” and reaped significant gains.

Jon Skinner
Executive Vice President, The Verde Group

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How Reward and Recognition Can Drive Customers Away

The Short Story:  Verde is seeing a significant increase in customer dissatisfaction with the reward and recognition practices of the companies they do business with.  But companies that attempt to “fix” reward and recognition often make matters worse because they misunderstand the relationship between reward/recognition and core product/service performance.  Performance on the latter is a prerequisite to upside on the former.
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Playing Notes or Making Music?

Welcome to Verde Group’s new blog. We look forward to discussions with you on the topics we care about: the psychology of customer interactions, how companies and customers form relationships, and the critical role of customer experience as a driver of loyalty, value and brand.
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