Is Amazon Making You a Lazy Shopper?

Let’s face it – in this age of convenience it’s easy to cut corners, and as a working parent of young kids, I welcome any opportunity to be ‘lazy.’ I’ve also noticed that over time I’ve continued to return to the products and businesses that make my life easier.

For example, I’m a huge fan of Target. I could spend hours in their store buying all sorts of things I may or may not need. But when it comes time to purchase a household item online, my default is always Amazon.

Why, if I love Target so much, wouldn’t I consistently choose Target as my retailer of choice? Their prices are comparable, they offer free shipping, and Target also has product reviews and comments.

My answer is simple – Amazon is easy. I can reach my end goal with the least amount of time and effort when I shop with Amazon. And let’s be honest, I’d much rather spend my time with my children then spend hours of time researching purchases online.

 

Why has laziness become so important?
“Busy” is the most common answer to the age-old question “how are you doing?” I hear that response so much that I try not to use it myself. Busy is the new normal, and according to Nielson, our quest for convenience is driven by two primary forces – new consumer challenges and changing lifestyles.

We are busier, more connected, and more on-the-go than ever. As a result, we are stressed, receive too much information, and constantly fatigued by the amount of complexity surrounding us.

While over time all these challenges have changed our lives, one thing has remained the same — we still have only 24 hours in a day and seven days in a week. As we work to prioritize our precious time, we need to reserve our mental and physical activity for the things that matter most. And, outside of big-ticket items like a home or car, that doesn’t include most of our purchases.

So going back to my earlier example, while I may be brand loyal and have an emotional connection to the Target brand, if it means spending more time with my loved ones, I’ll choose convenience (and Amazon) every single time.

 

How does a company like Amazon make my life easier?
While the definitions of ‘easy’ and ‘convenient’ are somewhat subjective, our research at The Verde Group suggests that most people view them similarly.

When we measured the ‘ease of doing business’ for a partner logistics company, we then segmented the results by age but found no statistical differences. The amount of perceived effort necessary to work with our client did not vary appreciably by age or gender.

This is good news for CX executives wanting to deliver a frictionless experience across their entire customer base. And they need to look no further than Amazon for ways to offer that simple purchase experience:

 

  • Customers want trustworthy information and Amazon provides that by encouraging customer reviews. They offer programs (the newest being the Amazon Influencer Program) that make it easy for social influencers to showcase and promote Amazon products.
  • Shoppers can quickly weigh their purchase options and can see all competing products on one page, with prices, features, and reviews. As a result, they feel a sense of confidence when making purchases, knowing that they have done their due diligence.
  • 1-Click ordering. Enough said.
  • Accessibility of customer support. In one place, customers can track their package, make a return, seek technical help, or report a problem. It’s easy for them to find help and to navigate to their end goal.

This last point is an important one. Our research has reported that customer service is a critical component of assessing ‘ease of doing business.’ In fact, we’ve seen up to 50% of all loyalty risk coming from customer support issues.

And that makes sense. If there’s a need to reach out to customer service, then most likely something has already gone wrong with a product or service. If a customer is already upset before speaking to someone, it’s easy to see how a poor experience (like a long hold time or information repeated over and over) can increase their frustration.

Knowing the potentially high impact this service interaction can have on customer loyalty, it’s critical that customer service receives the attention and resources needed to achieve satisfactory problem resolutions.

 

The lazier I get to be, the more I’ll buy from you. Am I alone in this evolution?
Don’t worry, you and I aren’t alone! When it comes to service, companies create loyal customers primarily by helping them solve their problems quickly and easily.

In the book “The Effortless Experience,” the authors report that four of the five drivers of disloyalty involve additional effort that customers are compelled to put forth. The Verde Group’s research confirms this as well. If a customer feels it is easy to do business with our selected client, then they are most likely to be a promoter of that company. And if the customer believes that the company is not easy to do business with, there is a high chance that the customer will be a detractor.

With that in mind, here are three steps to improve your customers’ laziness:

  1. Identify the points of friction in your purchase experience and develop a plan to improve those areas. Prepare to spend significant time diving into the customer service experience. Is that experience helping your customers solve their problems quickly and easily? What about your return policy?
  2. Learn what your customers are doing before, during, and after their shopping experience. Are they leaving your site or store to compare prices? To help your customers to make easy purchase decisions, you must start with understanding what they are doing today.
  3. Make “simplicity” the mantra of your customer experience. Across touchpoints, both online and brick and mortar, ask yourself: “is this experience simple for the customer?” If the answer is no, then go back to the drawing board.

These types of improvements in your customer experience are likely to increase loyalty, positive word of mouth, and customer recommendations. As consumers, we’re all “busy” and overwhelmed. The last thing we want is to have to jump through hoops to give a company our money.

If you’re like me, just keep letting me be lazy, and I promise I’ll keep coming back.

Sarah Pierce is Senior Vice President at The Verde Group

 

 

Captive Customers: When Customers Want to Leave You But Don’t

We’ve all heard it, and probably even said it: “I’m never shopping there again!”

But is there a tipping point, a ‘red line,’ that once crossed means customers will leave you for good? It turns out that things are not so simple. The point where customer dissatisfaction actually impacts repurchase intent varies from industry to industry, and to make things even more complicated, ‘never’ is not always forever

How lack of choice affects customer behavior
Certain industries appear more immune to customer defection than others, as an example, think of your bank or airline you choose to fly. In these industries, customers perceive there is a limited choice between suppliers, and that other supplier alternatives are just as flawed.

Customers may believe that their provider’s problems are endemic to the industry, and are truly not fixable. So why bother going through all the hassle to switch a provider if the alternative isn’t any better?

An obvious example is the cellular provider market. Most customers believe there are only a handful of viable alternatives. And most would say that those suppliers shared common issues (cryptic billing, excessive data charges, etc.) And virtually all customers would say that cellular providers are unable — or unwilling — to find fixes for these issues.

In these cases, the level of friction between a customer and their supplier can reach very high levels before the customer is ready to jump ship. In research done by The Verde Group, 90% of wireless customers reported having at least one problem with their provider in the past 6 months. More likely, these ‘captive customers’ will carry on in the relationship, unhappy but unwilling to make a change.

The problem with captive customers
Marketers in these industries shouldn’t be complacent, however. Captive customers pose at least two risks — including one that could strike a non-recoverable blow to the business.

The first risk involves cross-selling and up-selling to these customers. True, they buy from you today, but they don’t really want to. As a result, your ability to sell new products and services to them is minimal and requires a tremendous amount of marketing dollars to get a little bit of lift in sales. This is not good news for providers looking to grow their business by way of their installed base.

That pales in comparison to the second risk — disruption. Those unhappy customers will be quick to embrace non-traditional alternatives when they emerge. And that can have devastating effects.

Just ask Yellow Cab, once San Francisco’s largest taxi company, who filed for bankruptcy protection in 2016 — largely thanks to Uber. And what about Airbnb’s impact on the hotel industry? Morgan Stanley forecasted that in 2018, due to Airbnb, U.S. and European hotels’ revenue per available room would decrease by 2.6 percent.

Problem frequency and category killers
So when do customers actually leave a supplier? Again, it varies by industry, but The Verde Group research shows that across industries, problem frequency is a strong predictor — the incidence of a specific number of problems, regardless of what they are, tends to be the tipping point. In retail, for example, our research indicates that after just two issues, things are at their worst point with customers. That’s when they’re most susceptible to defection.

Another type of issue that leads to customer loss is a ‘category killer’ problem — one that happens infrequently but does maximum damage to the customer relationship. These problems tend to be related to your core value proposition.

For example, a delivery company who cannot reliably deliver, or an insurance company who doesn’t pay claims properly. These types of issues have one thing in common —they tend to sever customer loyalty completely, and recovery is almost impossible.

Never say never again
Although ‘never’ is not really a relative term, different industries use different timeframes to measure customer loss. In retail, for example, a customer who stops shopping for three or four months is the equivalent of a 100 percent loss. They may return after six months, but at that point, they’ll be considered a ‘new’ customer.

If you’re in the agricultural industry, the measurement is different. It’s an annual cycle, so if a farmer doesn’t purchase from a supplier for a year, they’re deemed to have left. If they return in three years, they’re classified as a new customer.

They may come back — but when?
While some customers never (and I mean never) come back, many do. And often it’s the type of problem they encountered that determines the length of time before they return. This is known as ‘the ‘decay’ period.

Core business problems or egregious issues typically have a much higher decay window. In other words, don’t hold your breath. Those customers aren’t coming back anytime soon — if ever.

Peripheral issues (such as customer support, stock problems, or delivery challenges) can have shorter decay periods. Customers may in effect put their suppliers in the penalty box, but some eventually come back, and do so in a shorter period.

Understand your customers’ issues
It’s critical for companies to develop a complete view of customer problems. They need to monitor frequency, resolution, and customer perception. They also need to be vigilant in guarding against catastrophic, category-killer issues.

Finally, even if doesn’t appear that customers are ripe for defection, companies can’t afford to be complacent. After all, the next Uber could be right around the corner.

Paula Courtney is Chief Executive Officer of The Verde Group and Product Founder at WisePlum.

 

 

 

NPS is Just Part of a Much Larger Toolkit

The Verde Group Customer Experience Risk

The Net Promotor Score (NPS) is a loyalty metric that measures how willing customers are to recommend a company’s offerings to others. As an alternative to traditional customer satisfaction research, it’s widely believed to reflect revenue performance.

Virtually every Fortune 500 company uses the Net Promoter Score (NPS) to measure customer loyalty — if you don’t believe me, check out how they stack up here. Most invest heavily in improving their scores, and many tie executive bonuses to the results.

There’s only one problem. Customer satisfaction in general and NPS, in particular, are poor predictors of customer behavior. And that means that a good NPS score does not necessarily translate into customer loyalty, increased revenues, or a bigger market share.

The problem with NPS scores
While NPS can serve as a decent barometer of customer satisfaction, it doesn’t give you the bigger picture. It doesn’t provide the backstory of why a respondent would or would not recommend your company.

That story — particularly the negative experiences that frame it —  is what really helps predict future customer behavior. The simplicity of NPS can at times, overlook the complexity of company-customer relationships.

Some companies are lulled into a false sense of security by their NPS scores. If they see a year-over-year improvement, they celebrate, but don’t sense the potential dangers that could be lurking right beneath the surface.

This is primarily due to the fact that NPS is a description, not a cause, and measures an outcome without a deep understanding of the actions leading to this outcome. Alone, NPS does not tell you what you need to do to change the rating outcome.

For example, you can have great NPS scores and have flat or declining revenues. You can have a strong NPS result right now, but be ripe for disruption — think of what Uber and Lyft have done to the taxi business.

Because NPS scores don’t provide a complete picture of the relationship you have with your customer and their loyalty to you, you can’t afford to rely too much on those scores.

Still, NPS is not dead, despite reports to the contrary. As the American Marketing Association states, NPS does have its benefits — it’s simple, its findings are easy to understand, and it can be benchmarked.

However, the AMA acknowledges that employing NPS may create tunnel vision for companies, and recommends that it ‘shouldn’t stand alone.’

And that’s the key. NPS represents only a single data set in measuring the customer experience. Customer surveys are another, and inbound feedback provides still more. In isolation, each is incomplete, and almost sure to offer only a partial (and potentially misleading) picture. Taken together, they form a more detailed view of the customer.

However, companies need to dig even deeper to understand customer experiences, particularly the negative ones. Customer response to negative interactions is strong, and those customers with negative perceptions are more likely to take action, such as shopping somewhere else and telling their friends.

Get out your toolkit
With NPS only partially measuring customer sentiment, companies must ensure they have additional, complementary processes in place to help further develop the customer insights they require.

Use Multiple Inbound Data Sources
Call centers, sales, social media — all provide excellent sources of inbound customer feedback. Organizations need to take a broad, holistic approach when managing these different ‘listening posts,’ consolidating, assessing, and actioning the collected data as a whole.

Be Proactive
As I’ve written about previously, many customers won’t share their negative experiences when providing inbound feedback. Companies need to reach out to those customers through interviews or other live interactions — building trust through conversation to uncover, acknowledge and explore underlying customer issues.

Deeply Understand Problem Experiences
Companies need a purposeful and deliberate method of getting an understanding of problems. Our research shows that problem experiences negatively impact the likelihood to recommend a retailer.

We also know that one out of two online shoppers will experience a problem before they even make a purchase. Ongoing measurement and tracking of problem experiences is a valuable and impactful tool in understanding the drivers behind the NPS ratings.

Take Action
Once companies have discovered and acknowledged a customer problem or negative experience, they need to resolve it as quickly as possible. Customers expect a resolution and aren’t concerned if that fix falls within your company policy or is expensive.

Following up post-resolution is also critical. You need to confirm that the problem is resolved and the customer is happy — from their point of view. We see time and time again that when a problem is resolved to the customer’s satisfaction, loyalty and spend actually increase more significantly than if there were no problem experiences at all.

It appears the debate over the value of NPS will continue for some time. Is NPS the best way to measure customer satisfaction, or is it hopelessly flawed?

Our position is it’s neither. It’s just another tool used to capture and assess customer satisfaction. Used alone, it’s flawed and incomplete. Deployed with the rest of the toolkit, it can provide valuable insight into the overall customer experience.

Michael Tropp is Vice President, Business Development at The Verde Group.

 

 

Inbound Feedback is Only One Piece of the Customer Experience Puzzle

The Verde Group customer insightCompanies who rely solely on inbound feedback to gain a greater understanding of their customers’ experiences may be missing the opportunity to solve for the problems that are most related to customer loyalty.

Most organizations understand the importance of focusing on negative customer experiences. Customers who’ve had problems or are unhappy are more likely to change their shopping behavior, and also to tell others about their experience — both to the detriment of their current provider.

Many businesses rely on inbound mechanisms to capture that negative feedback. They’ve invested a great deal in creating multiple, effective ‘listening stations’ to gather feedback — call centers, sales team, websites, programs, market research and social media.

These companies believe that, with multiple channels harvesting customer inputs, they’re sure to understand customer issues and negative experiences throughout the customer journey.

Unfortunately, our research doesn’t bear this out. According to Verde Group findings, more than two-thirds of customers (67%) experience problems and never contact the company about them. Instead, they’ll choose to explore other options and often take their business elsewhere and you’ll be left wondering why you lost a perfectly good customer.

Even if customers do call in with problems, they may only identify issues they think you can fix. Worse, the ones they tell you about may not have a significant revenue impact on your business.

You may spend time and resources addressing issues that have a minimal effect on your bottom line while having no real window into the negative experiences that are making customers walk away — and taking their wallets with them.

Luckily, by looking beyond inbound customer feedback, companies can gain a better understanding of customer issues while also strengthening relationships with those customers.

Get proactive
Reaching out and asking for customer feedback can make a world of difference in the quality of the responses you receive. If they believe your intentions are genuine, many customers will open up about their experiences, both good and bad.

There are a number of ways to do this. Many companies will send out an email survey (or better, a personalized email) after a customer engagement. Some will initiate a call-back to the customer after a purchase is complete.

Even better, develop a plan to reach out to the customers you haven’t heard from in a while. They will offer a unique and valuable perspective compared to new customers or customers who have proactively contacted you.

Where viable, a more in-depth, personal interview can yield the most valuable feedback. A conversation gives the customer the opportunity to be more candid and detailed in describing their experiences with your company.

Feedback gathered from proactive outreach can provide your cross-functional partners with a wealth of information. Socializing these findings is a great way to drive customer centricity within your organization.

Fix and follow up
When a customer does share a problem or a negative experience, your next move is critical. You need to resolve the customer issue, and in such a way that the customer is happy with both the outcome and the interaction.

The fix may fall outside of policy, and in some cases may be expensive, but wherever possible, resolving the customer problem should be your prime consideration.

The next step is equally important — following up. From a customer perspective, there’s nothing worse than thinking your issue is resolved, only to find that it’s not.

Following up to confirm you’ve addressed problems to the customer’s satisfaction will ensure there are no outstanding issues, and create a lasting, favorable impression with the customer.

Many customer service centers send a survey for feedback immediately following an interaction. At times, this can provide a false positive. The customer believes that the problem was fixed only to realize a week later that it wasn’t fully resolved. Consider the timing of the customer service survey to ensure the customer has had time to fully implement the fix or solution.

Revisit your inbound efforts
While inbound feedback alone does not provide a complete picture of the customer experience, it is an excellent source of information. As part of your overall initiative, you should ‘re-tune’ your inbound process to ensure you’re collecting the best feedback possible.

One way to do this is by reframing the questions you’re asking the inbound customer. Rather than ‘are you satisfied?’ consider ‘what didn’t you like about your interaction?’ or ‘what could we have done better?’ You want to develop your questions in a way that provides actionable feedback. Feedback is useless if you can’t drive action to fix the issue.

Once uncovered through your inbound efforts, any issues identified can be managed with the ‘fix and follow up’ process you’ve already established.

The stakes are high
Even the best companies can’t avoid customer problems — it’s how those issues are brought to light and handled that makes the difference. It’s critical to capture feedback not only from customers who self-report problems but also from those who never report at all. Over time, dissatisfaction levels will drop as you tackle one problem after another and loyalty will rise.

Michael Tropp is Vice President, Business Development at The Verde Group.

 

 

The Customer Experience Risk – It’s What You Don’t Know That Should Keep You Up at Night

The Verde Group - Customer Experience Risk

You may be like many executives who’ve had more than a few sleepless nights worrying about your customers. Particularly the customers with problems (and on average that’s 3 out of 4 of your customers – source: The Verde Group white paper) — the ones who light up the phones and fill your inbox with concerns, complaints, and helpful suggestions. Surely if you don’t act and fix their issues, they’ll take their business elsewhere, right?

It’s a common hypothesis that you should prioritize your initiatives around those known problems or the ‘squeaky wheel’ issues. The ‘known issues’ are causing friction in your customers’ experience and should be addressed, however, they may not deserve the resources or priority that you think.

In fact, it’s often the best, most loyal customers who bother to take the time to contact you and complain. And by and large, they’re not a flight risk. There’s a good chance there is no direct correlation between the frequency of customer complaints, the likelihood of retaining that customer, and the revenue impact to your business. This group of customers are passionate about your product or service, and they want to make it work.

How do you determine what the real customer issues are that may be financially impacting your business? With limited resources to address them, you can’t afford to get it wrong.

Majority of unhappy customers don’t complain. Over 67% of customers who experience a problem never tell the company about it. Customers cite “it’s not worth my time” and “they don’t believe that complaining will do any good because no one cares”. These are the customers who spread negative word of mouth and then vote with their wallet by taking their future purchases elsewhere. (source: The Verde Group white paper)

Where to start? Build a data-driven hypothesis
In a prior role, I was charged with building business strategies for a start-up SaaS company to reduce customer defect and maintain the very costly customers we worked so hard to acquire. It was early days in the subscription business model, and while we had a hypothesis as to why customers would defect, we didn’t know with certainty what was driving the churn.

We had spent a lot of time analyzing the customer complaints and surveys that came in through our support desk. We could tell you with confidence, the issues that our customers were experiencing.

But as we started to dig into the customer data points associated with that segment of customers (those that contacted us) we were surprised to see that they were some of our most engaged users. They were contacting us multiple times a year and using the product more frequently and recently compared to those customers who never contacted us.

The profile of these customers was contradictory of our institutional belief, so we had to learn more. Following a big subscription renewal period, we began to analyze the data points available on customers who defected. Did they purchase through a certain channel? Did they use specific feature sets?

Examining the data of our lost customers provided us with working theories as to why they left. But the data alone was far from providing us with the necessary insight to be able to put plans in place to reduce future customer churn. We needed to understand the context of the internal data points we were seeing. We needed to understand the “why” behind these behaviors.

Ask ‘what really happened?’
What you’re looking for here is the opportunity to have a genuine dialogue with your ex-customer — an open-ended conversation where you let them talk and share their experiences. It’s important to listen without pre-conceived notions of what the customer will say. Go in with an open mind and the only goal being to listen and learn.

Using the data you already analyzed, target specific segments of users when recruiting for the listening sessions. For example, one group may be users who showed great engagement with the product, yet still defected. This focus enables great efficiency in learning the root cause because you already have some insight into their behaviors.

Each user has a unique experience, but through qualitative research such as IDI’s or focus groups, themes will emerge that will provide the insight that you’re looking for. Often, they will introduce an issue that you didn’t uncover when reviewing the data and provide critical insight in doing so.

Socialize your learnings
At this point, you have detailed customer feedback in one hand, and objective, measurable data in the other. The customers’ experience with your product or service is end-to-end and holistic. What you learn through this process will not fit nicely into just one area of the business or function.

In order to put plans in place to address the top drivers of churn, you will need cross-functional support and leadership buy-in. This is a critical and often overlooked step in the process. Don’t forget that the insights you uncover may be completely new to this audience. It may take some time to help colleagues understand these “silent killers” and why they haven’t heard about them before.

Build your action plan
Now that you have organizational alignment, you’re ready to prioritize the issues you’ve uncovered and start building a plan to address those specific issues.

Start with what you consider to be the easiest fixes that have the most substantial revenue impact. Don’t overcomplicate the solution but rather stay laser focused and have clear metrics in place to measure the impact. It’s easy to start to have scope creep and before you know it you’re attempting to build a plan that is unattainable.

Clarity of ownership is critical in getting plans off the ground. Make sure everyone involved knows their role and expectation in solving the issue at hand.

After achieving some early momentum, move on to evaluate the business case the more complex, resource-intensive solutions.

No resting on your laurels
Once you’ve moved from a reactive mode to proactively addressing customer issues, don’t make the mistake of stopping, or even slowing down. You’ll need to repeat the data review/customer conversation cycle on an ongoing basis to stay in tune with your customer’s experience and keep raising the bar on your performance.

In the end, it’s not the customers who complain the loudest or most frequently that should keep you up at night. It’s worrying whether you really understand your customer’s experience and whether you’re truly addressing the issues that are financially impacting your business.

Of course, if you leverage your data, have genuine conversations with your customers (and ex-customers), build organizational support and create a measurable action plan, you might just sleep like a baby.

Sarah Pierce is Senior Vice President at The Verde Group.

Collecting Consumer Data: Is More Really Better?

The Verde Group - Customer Experience ResearchIt wasn’t too long ago that industry leaders would have scoffed at the idea of collecting too much customer data. In a rush toward realizing the value of big data and analytics, customer information was the key to higher revenue and increased market share, and more was better. Too much customer data? There was simply no such thing.

Times have changed
Today companies are experiencing firsthand the challenges associated with collecting, analyzing and actioning mountains of customer data. Big companies, especially when delivering an omni-channel experience in retail, collect data in many different ways — through various touchpoints, transactional data, marketing automation and primary research initiatives.

The challenge for these companies is how to bring all of this customer experience research and data together in a way that provides value and insights to the business.

Multiple stakeholders, multiple agendas
Consider call center teams, who collect and validate basic customer information, but can also confirm customer interest and readiness to purchase. Or social media engagement tracking, which tells companies how customers interact with their content and also provides a means to monitor brand image. Sales also collects client data (installed base, key customer contact, competitive information), especially in business to business (B2B) companies. Marketing has their own data points including website traffic, email open rates and communication preferences to name a few.

Often these and other groups within an organization will drive separate research initiatives to gather, analyze and action customer data, in many cases for their specific purposes and in isolation.

A significant expense
Collecting, housing, analyzing and actioning all that customer data is very expensive. With no centralized plan, companies can incur a considerable cost for overlapping initiatives. Even if separate groups share data, there’s bound to be overlap in the data collected, and each group will mine the data based on their unique requirements. The costs in dollars, time and resources add up quickly. Additionally, your company may be investing these resources into something that may or may not have a substantial impact on the customer experience and your business.

Lack of planning can drive lacklustre results
While it’s okay and often necessary to have individual customer initiatives, the absence of a centralized and coordinated plan often creates missed opportunities and confusion for companies. Inconsistent approach to research can yield conflicting insights and drive different action plans, and rather than improving the customer experience, they can confuse or even frustrate customers.

Organizations need to start with a company-wide understanding of their goals for increasing profitability and improving the customer experience and establish a consensus on how to target and measure progress against those goals. Without these two in place, they risk investing in initiatives that may have little to no impact on the customer and not meet revenue or market share targets.

Three ways to improve your customer data initiatives
How can businesses manage all this data and build a company-wide strategy that promotes collaboration, data-sharing, and the creation of common action plans? Here are four ways that organizations can get started:

  1. Establish common goals
    While each team will have unique requirements and metrics, it’s critical to establish common goals when it comes to customer engagement and the customer experience. These goals should align with the strategic vision for the company set out by the executive team.This helps to streamline the number of goals, creates clarity and also ensures executive support for the overall initiative. An effective way to determine those goals is by conducting strategic customer experience research — this helps clarify the current relationship between company and customer, and ultimately to refine and prioritize goals.
  2. Share data and minimize overlap
    Teams collecting data should work together to consolidate their efforts. Where possible, ‘no repeat data’ should be their mantra. Customer data must be centralized and fully accessible to the appropriate stakeholders.This includes defined business requirements – how to collect the data, when it should be collected and where it will be stored and how to access the data. Consistent screening questions across initiatives will enable cross-collaboration between studies.
  3. Collect the right data points
    Companies need to carefully examine the questions they’re asking their customers. Too often, in an effort to gauge customer satisfaction, they’ll ask customers about what they like, or what makes them happy. Many organizations invest a great deal of money and effort in measuring customer satisfaction and even pay bonuses based on the results.The problem is that customer happiness and satisfaction are very poor predictors of customer loyalty or future behavior. In fact, negative experiences are much more predictive of what a customer will do in the future. In fact, 60-80% of defecting customers categorize themselves as ‘satisfied’ on surveys conducted immediately before their departure. (source: Verde white paper).

    Another point to note is that attitudinal feedback (‘I’m angry’, or ‘I’m frustrated’) is much less valuable than experiential feedback (‘this is what happened’). It’s hard to do anything with the former, while the latter provides a precise readout of that particular customer experience.

Create common, actionable insights
With shared data and goals, companies can consolidate their findings and create actionable insights that are consistent across the organization. These can serve as a platform for individual functions to align behind broad initiatives based on the desired customer experience.

Michael Tropp is Vice President, Business Development at The Verde Group.

 

Start Small To Create a Company-wide View of the Customer

The Verde Group - Customer Insight

I’m sure you’ve heard the ancient parable about the blind men and the elephant.

It’s the story of a group of blind men who encounter an elephant for the first time. They all touch a different part of the animal, then draw different conclusions as to what they’ve experienced. In some versions of the story, the men violently disagree and almost come to blows. The moral of the story, of course, is that people often form different conclusions based on a partial view of the same information.

This is precisely the challenge many companies have when collecting, analyzing and actioning their customer data for customer insight. How best to link multiple sources of data to capture a complete, holistic picture of the customer experience?

Islands in The (Data) Stream
For many companies, views of the customer experience are functionally focused. For example, the team in charge of packaging design understands everything about the customer’s perception of their packaging. Sales knows about product features and benefits and is competition-savvy. Customer service is full of experts about everything that can go wrong with the product.

Often, especially in large organizations, each of these teams captures, prioritizes and actions different (and incomplete) data about the customer experience. However, customers don’t view each of these areas separately — their perception of their purchase experience and the company as a whole is much more holistic.

From a company-wide perspective, this functional approach is wildly inefficient. It’s hard to know what to prioritize and take action on if you’re only focused on your small area and can’t see the big picture. It can lead to competing (and sometimes conflicting) action plans, duplication of efforts, and resources spread too thin to be effective. 

More Than a Systems Issue
A common theme, again in large companies, is to put the problem down to deficiencies in systems. With the mountains of data collected and stored, the refrain goes, it must be a systems limitation that prevents customer data from being pulled together into a centralized view.

It’s true that it’s difficult to consolidate disparate data sources like customer service data, transactional data or product usage. Systems issues are real enough. However, even more than systems, this is a leadership issue. Leaders must embrace the need for a complete, ‘single source of truth’ for the customer, and acknowledge that it’s worth the time, money, and organizational disruption to do it. It’s a long-term initiative and not an easy call for leaders to make, given other more pressing, short-term issues.

It may be easier for startups to implement the ‘single customer view’ as a priority than for established businesses. It’s simpler for smaller companies to build from the ground up — to agree on what data should be collected and how it will be shared and actioned. Startup mode gives these companies the luxury of building systems around the process, rather than the other way around.

Look at how Netflix has leveraged their data gathering and their understanding of the customer experience. By collecting and analyzing user preference information, the company can recommend shows they ‘know’ you’ll like based on your previous viewing habits. Moreover, armed with a holistic view of their customers, they are creating bespoke programming that’s almost certain to be a hit with their target audience.

Starting Small The Best Approach
Ironically, the optimal solution to tackling a customer view that’s too narrow is one that involves starting small and staying focused. Remember the elephant? Not that you would, but if you had to eat him, ‘a bite at a time’ is the right approach. The same goes here.

The idea is straightforward — pull together cross-functional teams and build agreement on a small number of ‘must-have’ customer data fields that you think are the most important and impactful to your business. Next, brainstorm about the best way to collect that data if you aren’t already, determine how it can be easily shared and interpreted even if it is a manual process while gaining traction with leadership/ Once the organization begins to see that there is consistency in how teams are looking at the customer experience, it is time to leverage that data and build coordinated action plans from your findings.

Once the cross-functional team has had success with limited data streams, you may see a snowball effect. Perhaps you started with a Top 5 list of must-have customer data fields, but the team can now see gaps and opportunities that lead you to expand the initiative.

While the cost benefits of this approach can be substantial — less duplicated effort means a lower cost of data collection — the real benefits to the organization are far greater.

This focused, cross-functional approach yields a single ‘true picture’ of the customer,  supported across the enterprise. Stakeholders share data and analytics and execute universal programs and get-well plans. The company develops a greater understanding of the customer experience, and that understanding is the key to building deeper, more meaningful relationships with its customers.

Sarah Pierce is Senior Vice President at The Verde Group.

Tomorrow is Fine. Free is Fine. What Else Can You Do?

The Verde Group Customer InsightCustomer Insight: How Logistics Raises the Bar on Customer Expectations

Ask any customer shopping online when they want their order delivered, and it’s a good bet they’ll answer ‘tomorrow’.

Thanks to masters of logistics like Amazon and Zappos, customers have come to expect 2-day or even 1-day shipping, sometimes at no cost. They want things NOW and will choose companies based on that expectation. If you can’t deliver, you risk losing customers — even if you have a great product and competitive pricing.

A case in point. Prior to a recent business trip, I needed a new laptop bag. It was Saturday, and I was flying on Wednesday. I found a nice leather case I liked and identified several online retailers who carried it. Whom did I choose? The one who could get it to me by Tuesday and didn’t charge a premium for fast shipping.

Evolving logistics capabilities have impacted the customer experience in other ways. Consumers now want to know ‘where’ their order is every step of the way. And these expectations have spread across industries. If Uber and Dominos can tell you the exact location of their driver, exactly where the driver is, consumers expect that their package delivery company should be able to do the same?

Companies who can meet these constantly rising expectations are being rewarded with increased sales and customer loyalty. Those who can’t may suffer the consequences. Faced with the customer challenge of ‘why drive to the store when I can double-click and two days later it’s at my door?’, Toys ‘R Us had no answers.


Fast and Free Delivery Is Not Enough
With delivery speed and accuracy quickly becoming the norm, how can companies further differentiate the delivery experience? For that, they’ll need to get creative. Going back to my recent laptop bag purchase — supposing the retailer had included a small sample of leather protector in the box? Unfortunately, they didn’t, but adding a small gift or discount coupon can further endear customers to a brand while also providing an opportunity to cross-sell.

Post-delivery follow-up provides another opportunity to differentiate from the competition and add value. This generally takes the form of a post-purchase survey or a request for a product review. Most customers appreciate the touchpoint, and the post-sale interaction typically promotes brand loyalty.

However, when companies master logistics, they can take the Customer Experience to even higher levels. They know exactly when you received the product, how long you’ve had it, and when that product is due for replacement. This mastery of logistics and “big data” gives these companies an edge on their competition – it enables them to be more than a “one and done” with the initial transaction.

 

Where Do We Go From Here?
Customers now expect to get anything and everything to their front door FAST. This has created industries that didn’t exist just a few years ago — think of meal preparation companies such as Hello Fresh and Blue Apron.

The continued growth of online sales and the globalization of supply chains will keep driving logistics innovation. We’re already seeing trials of drones and driverless long-haul trucks. The automatic re-ordering and shipment of products based on a pre-set delivery cycle is certain to disrupt some industries — just ask Gillette, who late last year introduced cheaper razor blades to fend off competitors Dollar Shave Club and Harry’s.

And of course, there’s Amazon, ever the leader in logistics innovation. Amazon continues to surprise consumers with their innovations. In April 2018, they partnered with GM and Volvo to offer product delivery to the trunk of your vehicle rather than your front steps by remotely unlocking your vehicle through the car’s internet connection.   Granted, not all Amazon customers may want to take advantage of this offering, at least initially.  But for those who do (perhaps those with “front porch security concerns”), this is a potentially high value-add service.

Most companies now understand that there is a direct correlation between their logistics ability and their customer loyalty (NPS score). The challenge for these companies will be to develop and deliver innovations to their customers that represent relevant, timely and meaningful improvements.  Understanding which delivery innovations will materially shift customer spend and brand affinity will become a competitive advantage, particularly in those categories where product quality and price are weakly differentiated.

Want to learn more about the link between logistics, innovation and the customer experience? Check out a few of my favorite customer insight articles on the topic:

How Innovations in Logistics Fulfill the Experience Demand

The Amazon Supply Chain: The Most Innovative in the World?

Lori Childers is Vice President, Client Solutions at The Verde Group

The Four Biggest Mistakes Companies Make When Implementing a Customer Measurement Program

Transform your customer insights by avoiding these common errors 
Technology and analytics have provided companies the means to understand their customers in ways they couldn’t have imagined even a few years ago. Almost every large organization invests heavily in customer measurement programs, yet many don’t achieve the customer insight they’re looking for.

Why?

It turns out that a handful of common missteps are responsible for the unsatisfactory results:

#1. Unclear Measurement Goals
What are the reasons for undertaking the measurement program? Is it a desire to improve your customer’s experience? Are you trying to gauge the success of a recently launched product or service, or understand how you stack up against a competitor?

Companies need to establish clear objectives for measurement programs and ensure there is alignment across the entire organization. Extensive planning and engagement with key stakeholders are critical, as is a clear strategy for the use of the data captured. What decisions will be driven by that data, and who is accountable to take action?

 

#2. Not Enough Time Spent Establishing Ownership
Building alignment within the organization is fundamental to the success of any measurement program. But it’s not enough to just inform stakeholders, collecting their input into the objectives of the program, how it will be structured, and how findings can positively impact their specific business metrics — these are all are critical to the success of the program. And all require a lot of work upfront to get it right.

The most important step is to establish a link between the findings of the measurement program and business issues those findings promise to address. Stakeholders need to know how the program findings may help improve or transform their business.

 

#3. Measuring Customer Loyalty or Satisfaction in a Vacuum
Customer surveys only provide a single data set in any customer measurement program. A single data source provides an incomplete picture, and sometimes a very misleading one.

To truly gain customer insight, you need to establish multiple listening posts across the entire organization. This means gathering information from your sales team, the call center, your service teams, and your complaint management system.

All of this information should be reviewed and packaged holistically. The different data sources may corroborate some findings and create different perspectives for others. This provides a much broader understanding of your customer’s experience.

 

#4 Thinking You Know What Customers Want
Preconceptions can ruin a customer measurement program. Often programs are built in isolation and structured based on what is perceived as important to stakeholders.

Good programs need to be constructed outside-in. Speak to customers before building a survey. These upfront discussions provide customers with the opportunity to tell you their full stories, and many times it’s the qualitative insight you gather that proves most valuable.

This feedback also helps you understand and adopt the language your customers use to discuss your business, which may not align with your internal company vocabulary. For example, if your survey poses questions about the effectiveness of your claims department, but your customer refers to it as your customer service department, your findings will almost certainly be skewed or incomplete.

 

My Challenge to You
Customer measurement programs can provide you with critical customer insight that helps improve your business metrics and shape your company strategy. For these programs to be effective, however, you need to establish clear goals, cultivate alignment and ownership across your organization, and most critically, ask for your customers’ input as you’re building the program.

Paula Courtney is Chief Executive Officer of The Verde Group and a lecturer at The Wharton School

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