Saturday, January 5, 2013

Bruce Temkin really does a nice job with this list.  He obviously put a lot of thought into it.  It is insightful and thought provoking.

Bruce Temkin's Trends to Monitor in 2013

I think 1-4 and 10 are the best.  My thoughts on them

1.  Surveys are an important line of bearing on the Customer Experience, but their value continues to dwindle as it can be found through other means.  Surveys are valuable in that they provide structure, but they are also closed and can "lead the witness".

2.  Text analytics is a big opportunity.  It is really a subset of "Unfiltered, unstructured customer contact"  All components, not just text, introducea frontier for differentiation.

3.  Predictive Analytics and Big Data.  Many companies just aren't ready for this.  More importantly, there are few solutions out there that really stick out.  Ambiguity + Choice = Decision Paralysis when trying to select a vendor to do this.  My favorites are OpenSpan, ClickFox, and Nexidia.

4.  Anticipatory is becoming a clear differentiator in the service experience.  It is also a confession that our procedures are implicit to the customer.  That said, anticipating, through pre-emptive outbound calls, or segmented call centers is better than doing nothing.

10.  Software is a world of too many choices.  Combine this with tight operational budgets and it is really a dilemma.

Saturday, December 8, 2012

Why does Marketing ignore Operational Data more than Social Media Data?

In many of my engagements (and what led to me to start my business), I find the marketing departments are reluctant to engage operations for things they can learn and apply to their campaigns.

The scientist in me knows that lagging and coincident indicators are capable of creating a leading indicator.  John Hussman recently showed this in a weekly economic update here.

Operational data that your customer provides you can also do this.  I have seen this in banking, utilities, and telecomm.  I have always been baffled by why it hasn't been used more.

However, marketing types have been fast to embrace social media data.  Why is this?

Then I read this today from Psychology today.  Three excerpts that are worth discussing.

"The human mind hates uncertainty. Uncertainty implies volatility, randomness, and danger. When we notice information is missing, our brain raises a metaphorical red flag and says, "Pay attention. This could be important."

Everyone is afraid that if they are left behind in the social media world, they will fall behind in market share.  This may be true, but the value within their own operational data carries far more value than social media.

"When data is missing, we overestimate its value. Our mind assumes that since we are expending resource locating information, it must be useful."

This implies that when data isn't missing, we may be underestimating its value.  I find this to be the consensus among marketing types.  They have the data available, but they don't pursue it.

One interesting take within this article is that more information disables your information.  I am a strong believer in the equation ambiguity + choice = decision paralysis.  So, why I can understand that selective indifference, it doesn't explain why that doesn't exist with social media.  Let's face it social media is sexier than operational data, but which one drives more value.  Which leads to the conclusion at the end of this article.

"In a world where every click brings the promise of a discovery, we are all at risk of becoming addicts. The challenge lies in differentiating between questions worth exploring and questions best left unasked."

Friday, December 7, 2012

Random Stock Behavior Illustrated and the Worthless Pursuit of Alpha

If you need another reason to not waste your time chasing individual stocks and analyst ratings, look no further.

S&P500 Stock Performance based on analyst rankings


Source:  Bespoke

This pursuit leads to having fewer great experiences, so why do Wealth Managers choose to reduce the numbers of great experiences for their clients?

Thursday, December 6, 2012

More on the Predictable Experience

Steven Walden at Beyond Philosophy recently placed on their blog a comment that I felt was very compelling.  He stated that it is up to the company to "evoke and control" customer emotions.

I found this to be a very profound insight and yet it is so simple.  The question becomes how do you evoke and control customer emotions and channel them in a positive direction for your company?

In several earlier posts, we discussed the value of a Predictable experience.  We feel that on thing you must have present to "evoke and control" the customer experience is to make it predictable.

Variation in the experience and the outcomes is your "red flag" that your customers are not receiving a predictable experience - this has several associated costs with it.  Does one agent give two customers with the same situation the same treatment?  Would one customer get the same treatment from 10 different agents?

If your process and your experience isn't repeatable and reproducible, it's not predictable.  It's time to take action.

If you can develop a predictable experience, you can evoke and control customer emotions.

You can read all of Steven's entry here.

Tuesday, December 7, 2010

A Classic Example of Oversegmentation and the Cost of Complexity

Recently, I had to fly United Airlines mainly due to schedule constraints and I hope I don't need to again anytime soon.

The Boarding Process for someone that is a frequent traveler was a lot of unnecessary chaos.  What precipitated most of the chaos was all of their different customer segments.

Global Services
United First
United 100K
United Business
Executive Premier
Gold
Silver
1
2
3

I was probably most amazed at how many people went up to the gate attendant who had no idea when to board and how far they were down the process and thus it held people up, disrupted the flow and then they had to be sent back and DON'T YOU DARE WALK ON OUR RED CARPET.

Okay, I get it reward loyal customers, but guess what?  We all take off at the same time and there is probably a better way than to have 10 segments especially if you only have 22 passengers.  My one flight had 330 passengers, so 10 segments may not have been as bad, but the sequence is not intuitive or predictable and again, many people came up out of turn.


I had more experiences on my flight, but I wanted to bring focus to the impression that this made and how even for people that fly United often, this isn't a great experience.

Friday, November 19, 2010

The Under the Radar Speech Analytics Evaluation Characteristic

I have discovered that there is a serious element that many companies are failing to use in their evaluation of Speech Analytics vendors, and understandably so, because it is so difficult to find.....BUYER'S REMORSE.

Think about what you need to overcome to find this.  First, do you think a company is going to give you a reference to a company that didn't have success with their product.  That doesn't makes these references worthless, but you have to take that under advisement.  More importantly, do you think a company is going to tell you they screwed up with their first adventure using speech analytics in their attempts to be an early adopter?

I can think of a handful of companies that have not had good experiences with implementing speech analytics and their buyer's remorse comes down to these elements.

Total Cost of Ownership:  How big is your hardware footprint?  How much is available out of the box and how much needs to be customized for your business? How high maintenance is it going to be in terms of employee effort?

Spectrum of Search: Can you do search on speech?  How about chat text and surveys?

Vendor Relationship:  How long have you been working with the vendor on speech analytics?  What type of support is on the clock and what type of support is benevolent?  How do they deepen the customer insight and how quickly do they do it?  Are they a partner or are they a transaction?

Analytical Horsepower and Operationalization:  How do they convert customer insight into choreographed customer interaction?  How do they help me measure performance? Are they evaluating a customer interaction or a complete customer experience?  Are their tools flexible enough to allow me to change my definitions and transcend different definitions across various companies.

Who else did you evaluate and is this the first company you've had integrated?  This is hard to ask and harder to answer, but you need to find out if this is their first or second try, based on Speech Analytics just now reaching mainstream.  The other way to look at this is to find out what company logos are on the vendor website, and then compare that to the companies they actually give you as references and try to triangulate to an answer.

As a last resort, you may have to ask the question via social networking sites, but you have to be skeptical with some of the answers.  Regardless, do your due diligence and find those companies that are less than happy with the results.  You will likely find a recording platform company that is trying to be all things to all people.

Wednesday, November 17, 2010

The 4 Critical Ingredients to a Great Customer Experience

Lots of folks including many I respect, have recently put out new material on imperatives and necessities to the customer experience.  Many tackle strategic and corporate prerequisites which are important, however the tactical customer view is what is really needed and must bridge the gap between this strategic and the tactical, customer-facing view.

So, I have attempted to build my own model and I'd love your feedback on it.  I tossed around a bunch of terms and tried to balance being too specific without being too vague simultaneously.


A great customer experience must be predictable, informative, fulfilling, and trustworthy.  Let me explain.

Predictable:  Predictable to me means that I can anticipate what the agent will say and the agent can anticipate where I am going with my potentially unique request.  Predictable means you can quickly realize whether or not I need to be transferred and respecting my time.  Predictable means an easy transaction, it means I can anticipate how long I may be on hold or whether or not I can handle my needs on line.

Trustworthy:  Trustworthy goes beyond secure data and privacy.  It means that you are benevolent in your interaction and doing what's right for me, regardless of what puts more money in your pocket.  It's genuine.  It's personal without adversity because you looked at my situation as a person and not as how it fits your policy.

Fulfilling:  Fulfilling means closure.  It means I have checked something off my list and it means I just avoided an issue where I may have had to call two weeks from now.  It means complete and at peace with the result.


Informative:  Experiences must be informative.  Informative is mutually beneficial to the customer and the company.  Informative is enjoyable and allows you to think about what to do the next time something happens, whether that is the time to call, the form to retrieve, the information to be prepared with, or the time that something will be on sale or a product that will provide me greater value of my time and money.

I have also included what happens or what the experience is if you only have three of the four.  I'm sure this model will evolve as I get ready to tackle some major consulting engagements here over the next six months, but I have a place to start and would love to learn more from you on how this model can be improved.

Monday, September 20, 2010

Predictability is an under-rated Customer Experience Characteristic

When you consider the various aspects of a customer experience, many elements seem to gravitate to how predictable the experience is to the customer.

Consider the concept of the IVR.  Think of how unpredictable this experience is from company-to-company or for that matter for a given company.  Who hasn't heard, "please listen to this entire message as our options have changed"?  That is probably the only thing you can predict.  The fact that the website, www.gethuman.com even exists tells you how hard the concept is of reaching an agent.

Now take a company like ClickFox.  ClickFox basically shows all the various experiences and navigation paths that a call can take.  While a significant percentage falls into a certain category, the concept of "other" is too large a component as companies have introduced their own complexities on one of many fronts.  ClickFox's value proposition is to show how unpredictable your customer experience is and where the opportunities exist to make that experience more predictable.

If a customer can have a predictable experience where they can manage their own expectations better, they are more likely to have better experiences.  Companies that are more likely to correctly predict why a customer is entering an interaction, regardless of channel,  is more likely to exceed the expectations of the customer.

Predictability of experience is something that the customer (implicitly) wants.  Imagine a customer being able to anticipate what the agent will ask for and in what order.  The call will be expedited which saves time for everyone and costs for you.  Hidden behind that predictable experience is the ability of companies to anticipate the reason for the engagement in the first place, so ask yourself and your company how are you mutually creating a predictable experience.

Wednesday, August 4, 2010

How to overcome the objection of "Intangible" ROI

When you look at Customer Experience, Customer Behavior, and the data/analytics that are required to make the most of these opportunities, several technical, political, and cultural barriers are usually thrown at those making the case to invest in customer experience.

If you have tried to influence someone based on an intangible or soft ROI, you know that these objections typically have a hidden agenda.  Let's examine some of these further.

If you have an emerging technology and you are trying to solve some of the traditional problems like FCR or AHT, many may be skeptical.  Their mindset may be, "Six Sigma didn't solve it, and while your technology may be able to better identify the problem, the real problem is my internal execution."  There is probably some truth in that statement, but it is really a path of least resistance mentality.

The Customer Experience Renaissance that has occurred over the past 4 years really couldn't have had worse timing in many respects.  We have had an economic downturn coupled with a fragile recovery.  We have had a much stronger regulatory environment.  Lastly, we've seen many businesses either fail or merge.  Customer Analytics has had to overcome a lot.  How do you make that work when you are busy just integrating two company data sets into one?

However, crisis also introduces opportunity and in many respects, Customer Analytics should have been embedded in the solution on these challenges.

Probably the biggest objection that people in Customer Experience face is "soft" return on business cases.  The way that I would approach that is to turn  the question around. 

Are you willing to risk uncertain higher revenue at a certain higher costs?

This argument holds true in many industries.  Consider the mutual fund industry.  Higher expense ratios do not deliver higher returns.

This higher costs has two components:  the cost of complexity and the cost of complacency.  The cost of service is inflated because companies introduce higher costs due to these elements.  These elements impact the customer experience as well.

The Cost of Complexity

Complexity typically exists with product proliferation and customer segmentation.

The Cost of Complacency

Complacency takes the shape of organizational silos that don't communicate effectively and unstructured data and data strategies..

Unnecessary costs = (The Cost of Complexity + The Cost of Complacency) * Coefficient of Chaos

 The coefficient of chaos is a factor based on the lack of an integrated customer experience strategy that includes Vision, Leadership, Goals, Communication, and Data.  Today, many companies have more activity, more responsibility, less headcount, less budget, but the operational folks still must "guarantee" results on their operational initiatives.  Existing tolls, processes, and organizational structures fail to solve for these 3 factors and any initiative must consider how they will breakdown each one independently and collectively.

Overcoming the Objections

There are really four elements that are required to overcome the objections.

First, reframe the question like we talked about early.

There are three other components that you will see in future blog posts.

1) Solve your data leadership and organizational structure flaws
2) Provide a comprehensive, choreographed customer experience for your customers and your company
3) Communicate Consistently:  Restate the reframed question every time and provide supporting documentation.

Wednesday, June 2, 2010

Unique Customers Want To Be Treated Uniquely

When I look at the spectrum of my personal experiences, the experiences of my clients and customers, and the 000's of experiences I have evaluated in my consulting business, one thing transcends all industries more than anything else.

Unique customers want to be treated uniquely.

Think of every situation in your lifetime where you had unique circumstances and either were late to an appointment or missed a payment or something else that a company's systems would set off red flags.  These unique situations require companies to assume positive intent and demonstrate mutual trust so that is rewarded back to the company.

It doesn't matter if you are a financial advisor with a client who has been diagnosed with cancer or if you broke your ankle trying to help a friend get something accomplished.  Many of us have lived a good life, and every once in a while, things happen.  Your job as an owner of a company is to empathize and make that customer or client feel unique and how you are going to help them solve this temporary setback.

My last eight months have been super-saturated with unique events - nearly lost a finger, had a baby, son fell at school, wife was in a car accident while 6.5 months pregnant, I was stuck in Europe during the Icelandic volcano, and I sprained an ankle.

Do you think I have a list of companies in my head that treated me a little better than those that didn't?  You better believe it.  While my situation and compilation of events is unique, don't think for a second that someone else with an otherwise perfect relationship with your company might be suffering a temporary setback.  Maybe the think to do to make yourself a unique company to your unique customer is to reach out to them and ask if everything is okay and if there is something you can do.

Do you have the data at your fingertips to identify those customers?  If not, you may have a bigger problem.

Friday, October 16, 2009

My comments on customer surveys seem to have struck a nerve

Just to set the record straight, let me say again that Customer Surveys are an important ingredient to any Customer Satisfaction or Customer Loyalty program. That said, I think that customer surveys do have significant gaps and not considering or addressing those gaps, could send you and your company down the wrong path.

Based on the amount of e-mail I have received that has been quite polarized (nearly 50-50 for and against), it is time I provide more context and specifics to my generalization. Just to be perfectly clear, I respect and admire those that administer customer surveys. In fact, I am one of your biggest fans. Unfortunately, many times, your company is not giving you the resources to make your insights more valuable so that you can have a stronger impact on the bottom line. In other words, I am on your side.

These gaps are the result of limitations or constraints in the survey or the supporting mechanisms. These limitations consist of, but are not limited to:

  • Cost of the survey, the analysis, and the action plan
  • Timing Delays: Experience to survey and survey to reporting
  • Unintended filtering by the way questions are worded and captured
  • Context missing from the survey results
  • Ability to connect to pre- and post-customer behavior from the experience
  • Selection bias by agent
  • Follow-up actions by the company and with the customer

Costs

To reach a critical mass and collect a relevant sample of surveys requires a lot of time and money. One company that performs customer surveys for their clients charges $42/completed survey. With low response rates, it can take 1-2 hours of outbound calls to capture a handful of surveys. Companies have different plans and frequency for data collection, but you are looking at $20,000+ just for 5000 surveys. Once those surveys are complete, report compilation and analysis requires more time and often, this is not a full-time job, but rather an ad hoc collateral duty. As a result, one often looks at trends of aggregated data that isn't actionable. This penny-wise mindset, leads to a lackadaisical and less than comprehensive approvach that fails to provide the full potential insights that can build improvements that the customer values.

Timing Delays: Experience to survey and survey to reporting

The process behind customer surveys, introduces timing delays that can destroy data integrity and value.

Experience to Survey: Imagine a customer calling in on the 9th for one reason and has a good experience and has a less than desireable experience on the 10th for another reason, and then receives a survey on the 11th, regarding the experience on the 9th. Does the customer know the survey is for his actions on the 9th? How can his experience on the 10th not influence his rating for the 9th?

Survey to Reporting: Survey results are often compiled and reported monthly. If a survey from an experience on the 1st is collected on the 3rd, but then isn't reported until the Monthly Business Review that occurs on the 12th business day of the following month, you are looking at feedback that is about 45 days old. This highlights an opportunity to improve the process by which surveys are synthesized and acted upon, by cycle time and report dissemination. The information within surveys should reach the hands of call center managers and respective product managers as soon as possible after the survey has been rendered.

Filtering

Filtering comes in many disguises. Filtering can come by the way the question is worded to "lead the witness". Filtering can also be the result of the way data is collected. For example, I spent some time analyzing the process behind outbound Net Promoter collection for a major telecomm company. I discovered that the outsourcer left 36% of the customer feedback on the cutting room floor, based on the constraints of the data collection. This data would have been useful for performing correlation, detecting cause-and-effect and issues that create other issues.

Filtering also happens through reporting where data is over-aggregated so that it fits on a PowerPoint slide. A monthly scorecard could show a Net Promoter score of +2 one month, and +4 the next month, but there is typically little information on why it changed, which takes us to our next point.

Context

Context is an important ingredient to understanding your customer and the result provided on your survey. There will be times when a customer gives a negative rating where the customer was already lost or may not be worth salvaging. Conversely, there may be times where a customer gives you a positive rating, but it is because an agent did not follow policies. There will be other times when a customer will be "satisfied", but not necessarily "loyal". A customer may have thought the agent was professional and said "no" gracefully, but that doesn't resolve their frustration with your processes, policies, and product. Having that context is critical to making improvements that the customer values.

Context can also be important in terms of length of the call, time on hold, number of transfers, and the number of times a customer had to repeat information. Context is also critical in terms of reporting and your subsequent action plan.

Customer Behavior - Before and After

Any survey, any Net Promoter score, or an other activity involving customer satisfaction or loyalty that doesn't include customer behavior analysis is missing the mark if they don't have the ability to look at account level detail and how customers responded to an experience in terms of spending frequency and share of wallet. Unfortunately, this hapens more often than it doesn't. Having the ability to find the accounts and the experience quickly to expedite the customer behavior analysis (most likely with speech analytics that has the metadata available) is something that would facilitate greater use of this approach.

Selection bias by the Agent

When agents have the ability to direct a customer to an IVR survey, agents have a tendency to drive positive selection - in other words - select customers that are likely to provide positive feedback. For one company we found that agents selected customers for a post-call survey after their request was fulfilled 89% of the time (compared to 67% of the time for the control group). This could cause you to pat yourself on the back, when it is unwarranted.

After Action

If a customer takes the time to answer a survey, hopefully your company is committed to (i) act on constructive feedback, and (ii) acknowledge the customer's feedback. If the company is not in a position to do both, then question your commitment to your survey program by your senior management. The after action is really the most important part. It is the ends to the means.

Addressing these gaps can transform the line of bearing into a fix.

Companies put a lot of time and expenses into gathering intelligence on their customers psyche. However, a gap remains between the company's perception and the customer's reality, that can often be exacerbated by customer surveys. The more one knows about their customr, the more likely that their $10 choice can be the result of a company's $10 million decision. The more one knows about how the customer thinks and about their experiences, the more confident companies will be with those decisions.

Tuesday, October 6, 2009

Left-brained financial advisors with right-brained clients

Any intelligent fool can make things bigger and more complex...it takes a touch of genius - and a lot of courage to move in the opposite direction. - Albert Einstein

If you can't explain it simply, you don't understand it well enough. - Albert Einstein

Imagination is everything. It is the preview of life's coming attractions. - Albert Einstein

When you look at the typical relationship between the financial advisor and the mass affluent, you find that advisors have worked more on being liked than they have on any other part of their professional development. For an industry where commissions and assets under management are the lifeblood, this is understandable, but not excusable. For an industry where it is so difficult to transfer funds based on the paperwork and effort, getting people signed on is a huge accomplishment and thanks to regulations, that relationship becomes that much more inelastic. As a result, you find that advisors spend 80% of their time getting you in the door and 20% of their time with you for the rest of the relationship. Cadence, tempo, frequency aren't rewarded, unless you have money in other places. Why does customer experience appear to have a lower threshold for financial advisors?

As much emphasis as there is on customer experience within other areas of financial services, why is this a lost art within the wealth management community? When a customer reaches out to a typical company, they usually call for one of three reasons: (1) They want to get something accomplished, (2) they want to get something fixed, or (3) they want to improve the quality of their life. When a new or existing client reaches out to a financial advisor, it is because they approach the relationship from a transaction standpoint rather than an experience standpoint. They think about their money and not a lifetime of experiences that money can create. They have generally been broken by an industry and a culture and they have stopped thinking differently.

Why do financial advisors seem to have immunity from delivering a valuable customer experience? They answer is, they don't. Why aren't the reasons the same? Or are they the same, but they are implicit and buried underneath a relationship paradigm that advisors have defined for decades? One reason this exists is because it is easy for a consumer to comapre Wal-Mart with Target, but it is virtually impossible for a consumer to compare two advisors. Another reason is that a Wal-Mart or Target customer experience is easy to define a start and an end, where with an advisor it is a continuous relationship with various frequency and depth of touch points.

Advisors and clients have grown to accept this relationship, because the paradigm is so strong, it have become part of our culture. Neither side has imagined the possibilities. As a result, the desired experience is the iceberg beneath the water surface. What's more disappointing is that it is easier to ignore the adverse impact on your life than it is to imagine the possibilities. The question is, do advisors have a fiduciary, ethical, and personal responsibility to challenge and quantify the cost of status quo, both tangible and intangible, to improve their practices and the lives of their clients?

The tangible and intangible costs of status quo is high for both parties. Both are sacrificing in the relationship under today's paradigm of the relationship in the form of:

  • Unnecessary costs
  • Non-value add complexity and effort
  • Lack of control

Unnecessary costs

From an advisor perspective, there is no greater cost than acquisition costs. So delivering a customer experience that just drips of loyalty would make referrals the rule rather than the exception. However, advisors tend to not be able to get out of their way of industry paradigms and this adversely affects the relationship in terms of loyalty, but not necessarily satisfaction. One thing that may be causing this distinction is that customers recall the amount of effort to set up the last account and they aren't dis-satisfied to the point of re-creating that effort.

Meanwhile, consumers are paying a huge tangible price that adversely affects their quality of life. In David Loeper's book, "Stop the Investing Rip-off", he illustrated how a couple investing $7000 a year into their 401(k) - including employer match - with a 7.5% return, would have $2.5MM after 40 years. That sounds great, but if your fees were 2.5%, $1.7MM would go to financial services. Oh, and in 40 years, $2.5MM will be closer to $800,000.

2.5% may sound unrealistic, but when you consider that financial services contributed $1.1T to GDP in 2006, and there was $44T in U.S. financial assets, it comes to 2.5%.

What is the cost to the quality of your life, even to have that number 1% lower? 1% could mean retiring five years earlier, or having that much more to invest in your present or future lifestyle. 1% could be the difference between dream and reality with your experiences and your most audacious goals.

Non-value add complexity and effort

Advisors by the nature of the business and the nurture of their training introduce a lot of complexity to a relationship that doesn't require it. From the language they use, to the amount of documentation they require, financial planners introduce effort on their own behalf and on behalf of the client that is not valued and does not differentiate. This complexity also adds to the cost of the service.

Consumers are looking for a low-effort relationship and they will seek high and low to find it and maintain it, but the second their relationship with a company becomes higher maintenance, that is when they consider leaving and often do.

Lack of control

Control takes many forms in the investing space: control of the investments, control in your portfolio performance assumptions, and control of your life.

Advisors like to have control of your investments and make decisions on posturing your investments. Actually, you are losing control. You are losing control in the investment choices. You have no control over the companies that your portfolio is invested in. You add another layer if you are investing in targeted mutual funds in terms of what they charge, what they invest in, and how they invest.

When all this happens, you no longer have rational confidence in your portfolio performance assumptions. You introduce uncertainty. You introduce the risk of underperforming the market, but more importantly, you have placed your lifetime aspirations in jeopardy simply because you don't know what to expect out of your portfolio. Thus, you are now out of control of what you can and want to do with your most audacious plan and whether you can achieve that.

Transitioning to and Delivering an Appreciated and Valued Experience

This traditional experience that advisors have been delivering for years, it has been built upon the concept that many associate with the left-side of the brain. Advisors tend to introduce concrete recommendations, analytical concepts, built on past performance, and what they "know". Question is, what do they know, especially when they place the "past performance is not an indicator of future results" on everything they tell you?

Now, contast this concept with clients and their thinking on the right-side of the brain. Clients have abstract ideas and dreams that they want fulfilled, they are filled with creativity and uniqueness in their own lives that can't be set to an equation. Unique clients want to be treated uniquely. They are thinking about their future and what they believe....quite a difference from the advisors line of thinking.

In Frank Luntz'a new book, What Americans Really Want...Really, he talks about his experience consulting with Merrill Lynch and changing their titles from "financial advisors" to "investment specialists". I would argue that Americans don't want "investment specialists" either. They want "Experience Enablers", but we have a long way to make that vision a reality.

Wednesday, August 26, 2009

Your Biggest Source of Net Worth - Future Earnings

It doesn't matter if this is your personal finances or your business, the most valuable asset you own is your ability to make money in the future. The Question Is: What are you doing with that money? Are you investing in yourself and saving? Likewise, are you investing in your customers and creating new sources of revenue, either from existing or prospective customers?

As a Certifed Financial Planner, many people have been crushed by the latest market malaise. If the market goes down 50%, it will need to go up 100% so that you are just back to "even".

Companies are in a similar conundrum. How do you make sure that you do not get too bent out of shape?

In both instances, future earnings, savings, or customers is what will deliver future value and dictate how much you will have in the future, either net worth or market share.

This is why you still need to contribute to your 401k and why you need to keep investing in your customer experience, because some day, we will emerge from this. Once that happens, where will you be standing? Hopefully with the winners.

Tuesday, August 25, 2009

July - Personal Case Study Follow Up - USAirways vs. AirTran

You may recall in July I posted on my experience with USAirways and with AirTran. Since then my experiences in both cases have been validated.

USAirways did response to my complaint:
=======================================================
Dear Mr. Corrigan:
Although Customer Relations is unable to process refunds, as a courtesy we have submitted your request for a refund to our Refund Department. Due to the circumstances you have described, as a one time courtesy I have authorized a refund of your move up fee. Please allow up to 30 days for posting back to the original form of payment.
Please direct all future inquiries on the status of your refund to the Refund Department. Customer Relations is unable to confirm the status of a refund inquiry as this department cannot view the system the Refund Department uses.
To check the status of a refund, contact our Refund Department via our website www.usairways.com/contact. Click on the Refund Inquiry link. Proceed to the Check Refund Status link. On following screen input your13 digit ticket number 0372355996569.
Your comments and concerns regarding the agents at the airport not being able to issue the refund immediately have been documented and will be forwarded to the Senior Management Team.
Thank you for choosing US Airways.
==========================================================

So, let's look at this. Given my situation, a unique situation, I am given a homogeneous form letter. That makes me feel really special. Second, "one time courtesy" really burns me up. What they are telling me is that if I go stand-by again and then I end up on my original flight, that I will be charged regardless. Third, they make me feel like an idiot because I directed my inquiry TO THE PLACE WHERE THEY TOLD ME TO WHEN I CALLED. Total lack of coodination, command, control, and consistency is what this form letter revealed to me.

Let's move to my positive experience.

Same situation with AirTran. The beauty about my frequent trips to Atlanta is that I have developed quite a bit of precision in my time from office to gate. When I discovered after finishing some work early one time that I could make an earlier flight with about 5 minutes to spare, I decided to take my chances and go.

When I arrived at the gate, there was no stand-by fee and because I was so appreciative of the gate agent, he actually bumped me up to first class. I don't know if he did this because he saw how much I fly AirTran, or because he liked the way I treated him with respect, but the bottom line is that (1) he was empowered to do it, (2) he had the resources (available seats) to make my experience better, and (3) guess what? it didn't cost AirTran anything.

In short, I was on first class with USAirways, and felt like I was treated like a coach-class commodity, and with AirTran, I was in coach and was treated like I was the most important person boarding the flight.

I would love to hear your stories about USAirways and AirTran to see if you've had similar experiences. I would also appreciate you forwarding this story to others that fly and in particular these airlines. It will really increase the power of social media and I will track hits to see how much impact a negative and positive experience can have when discussed together.

I will run similar experiments with just negative and positive experiences separately as well.

Wednesday, August 19, 2009

FCR and Customer Surveys

Yesterday, I was a guest speaker for Nexidia's webinar on FCR and the impact on Customer Experience.

One of the questions I received was what is the problem with using Customer Surveys for FCR. After giving this more thought, I think I could have answered this question better.

First and foremost, Customer Surveys are an important line of bearing in judging the Customer Experience, but that's just it, it is simply a line of bearing. So if you are paying $42 per survey for a company to collect and compile these results, you better be getting solid actionable results, especially given the sample size you would need (I recommend 12,000 to facilitate segmentation).

Let's look at a customer experience where a customer receives their statement on the 9th, calls in on the 10th, calls again on the 13th (either for a separate reason or the same reason as the call on the 10th), and gets a customer survey on the 14th regarding the call on the 10th. How many opportunities for false positives have you just introduced? What call is the customer thinking about for the survey? What issue? What if the customer gets another statement the next month on the 9th and the issue isn't resolved?

A typical company will have these results compiled monthly and you will receive the results early in the month, but other metrics on your dashboard aren't available until later in the month and the executive that you are reviewing the metrics with aren't available until even later in the month.

Admittedly, this probably isn't unique to customer surveys, but whenever you are looking to solve for FCR, make sure you have results that are available to analyze and act upon and not be dependent on a monthly compilation. Otherwise, moving the needle will be incredibly difficult.

I have had a lot of success with diagnosing and solving for FCR with Nexidia. If I can answer any questions you have, please contact me at customeranalyticsconsulting@gmail.com.

The webinar should be available later this week at http://www.nexidia.com/

Tuesday, August 18, 2009

Why Customer Experience Efforts Fail, Part 4: Data rich, information poor

Most operations, and specifically contact centers, are at a competitive disadvantage in helping shape the company. Often, they are the ones that are shaped.

When it comes to customer experience, any company that ignores this gold mine will clearly be left behind in the wake of their competitors.

One of the problems that companies have is that they don't know how to mine and integrate contact center data so that it provides meaningful insight into customer behavior and subsequently, the customer experience.

If your website, billing system, IVR, and call center data does not have the ability to show the complete customer, you are data rich and information poor.

Let me share another personal case study where I knew more that company that was helping me.

My internet/cable/phone provider provided me with a promotional rate and I was making my monthly payments on-line. However, my payments were not being allocated among the divisions of this company, specifically, the internet division.

The first month this happened, I first thought I was hacked. When I called the company to get this resolved, they had to escalate it because from the agents perspective I was paid up and my account was restored.

The next month (on the 17th again) the same thing happened. So the company had treated the symptom, but not the disease and it cost them another phone call, a less loyal customer, and negative word of mouth.

Yes, it happened again the following month, but this time we got it resolved.

When you are looking to evaluate the customer experience, make sure you have the complete view. This may not be easy, but it will pay huge dividends in the end.

Tuesday, August 4, 2009

Why Customer Experience Efforts Fail - Part 3: Inability to translate intangible CE elements into tangible ROI

If you are reading this blog, you have probably been challenged to quantify the value of Customer Experience at some point in your career. Any project requires the due diligence of a Cost-Benefit analysis in today's corporate environment (and rightfully so).

However, it seems to me that operational projects and specifically Customer Experience projects go through another layer of scrutiny. They go through political and cultural barriers of needing "guaranteed" results that marketing seems to be immune to.

Other than quoting other studies and looking at your own customer past behavior data, there are other things you can do as well.

Other studies: There are quite a few out there. I will try to post as many as I can here as I run across them.

Past Customer Behavior Data: This can be very challenging to get to your own data that is retained in data management systems that are harder to penetrate than the political and cultural ones that exist with people. However, this is where the facts and the experience reside. Just make sure you have a control group to stand up to the scrutiny of the eggheads within your company.

I did an analysis where I wanted to promote self-service and how customer behavior would change. Showing two groups of customers with similar, tight credit ratings and how the customer purchasing behavior was different between the two groups based on the channels they chose for service. Those that used on-line, low effort servicing, spent 3 times more than those that did not. Both groups had made purchases on the internet, but the servicing x-factor moved this company up for those that performed self-service.

Best-Worst-Most Likely: One thing that has been very useful for me is to provide a range for people to see and visualize within their own skepticism. If your worst case scenario is still positive, you are in good shape. If it's not, while unfortunate, it does provide your analysis with another degree of credibility that you are just not cooking the books for your own hidden agenda. Working with your biggest critics to define this lower limit also pays huge dividends.

Personal Experience: If you still have your skeptics

Best solution: Use all of them. Triangulating to a solution and then putting a personal experience story on top of it is likely to deliver the fastest approval from the decision makers.

Due Diligence can not be overlooked in today's economy. Make sure you are putting tangible numbers and a documented approach in front of the decision makers as well as a post-implementation measurement plan so the results will speak for themselves. They always do and they are most often, very positive.

Forrester actually published a Bank of America study on the change in customer behavior by length of low effort, online banking. I'm sure B of A spent a lot of time and effort to prove this would happen beforehand.

Attend my free webinar on FCR - Register below with CRMxchange - August 18th, 1pm ET

FREE WEBINAR: The Evolution of FCR – Evaluating the Experience, Not Just the Call - August 18, 1:00 pm EDT

Register here: http://www.crmxchange.com/webcasts/nexidiaaug09.fcr.asp

While most contact centers rely on quality monitoring and data from telephony and CRM systems to measure first call resolution, these approaches usually don’t explain WHY customers call back. However, your customers DO. As a follow up to our April webinar, “The New FCR – Reinventing First Call Resolution with Speech Analytics”, join Nexidia and JC Corrigan, President of Customer Analytics Consulting, at 1:00 p.m. on Tuesday, August 18th to learn how you can use advanced speech analytics tools to gain rapid insight into WHY customers call back for targeted improvement. You’ll discover new and innovative ways of thinking about FCR, including: • FCR as an enterprise-wide indicator of inefficient policies, processes, products and agents • Approaching problem resolution from a customer perspective • The importance of understanding what happens before, during and after calls • Leveraging data AND the voice of the customer for a complete view of FCR • Going beyond analyzing calls to evaluate the experience of repeat callers Hear how a global financial services provider used Nexidia’s new FCR analysis tools to identify the root cause of an issue driving 53% of repeat call volume in just 3 days.

If you didn't attend "The New FCR" webinar in April, view the recording to see what you missed at: http://nexidia.com/resources/the_new_fcr__reinventing_first_call_resolution_with_speech_analytics .

Monday, July 13, 2009

A Personal Case Study - Airlines: USAirways vs AirTran

I recently have had a lot of business in the UK and Atlanta. We all have our airline stories, but this experience is a little more "special" if you will.

Let's start with an absolutely miserable experience with USAirways. I have been in the UK and traveled on USAirways. When I made the reservation, I noticed that they did not offer me a particular connecting flight home that I could easily make, given the landing time of my flight from Manchester, UK. The web didn't offer it to me and when I called to inquire, I was not offered it either.

I was like, okay, I will take my chances when I arrive. Sure enough, my flight got into Philadelphia 20 minutes early, not to mention the additional time I had because of the buffer that flights have built into their schedules.

I arrive at the gate of the earlier flight and tell them my story. Flight wasn't offered, I am flying first class (of which this leg didn't offer first class), the plane is only 3/4 full, can I please get on.

I then discover there is a $50 fee to fly stand by. I thought the concept was ludicrous in my particular case. First, flying early when seats are available gives the airlines yield management and customer experience positives. Secondly, given that the flight was not offered to me based on their own constraints, policies, and schedule sandbagging, it really wasn't fair.

The first agent tells me to call USAirways to avoid any fees, because she agrees with my point. I call the 1-800 number and the agent not only doesn't want to charge me, he wants to charge me $150 to change my flight. I decided this was going nowhere, so I go to another agent who also agrees with me and gets a manager for me to talk to.

The manager also agreed with me, but said there is nothing they can do, but charge me and then put in the additional effort of complaining about it to see if I get a refund. The manager then went on of how these situations happen to her all the time and how frustrated she is in that she can't help customers and do the right thing. I said, "companies that are unable to treat unique customers uniquely are doomed to fail." She couldn't have agreed more.

I had been on the road for nearly two weeks and I missed my family and I didn't want to wait around for 2.5 more hours, so I said go ahead and put me on standby.

So they charge me $50 and put me on standby. However, the plane has a maintenance problem and is delayed. When I approached the agent, I asked, since I'm just standby, I can still get on my original flight if this drags on. She said, "No. After I enter you in the system, you forfeit your other seat."

Now, I have to go through another level of effort and charges to get back on my original flight.

I won't even bring up the Philadelphia Airport and how they are unable to manage capacity, other than to say just that. That is another story, another experience, another cost of complexity to the airlines, tax payers, and the environment.

The bottom line is that I was caught in a circle of failures by policies (charges), processes (time tables), and people (agents) and was charged more and arrived home later and received service below the level for which I paid and expected. Why would I have expose myself or my friends to this again?

Let's now get to a positive story. When I go to Atlanta, I fly AirTran. First, I love XM Radio. Second, I like the last second upgrade options if I've had a long week and want to stretch out a little. Third, they now offer Wi-Fi. This can save my clients a lot of money. I can now leave the day of engagement and work effectively via internet, rather than fly in the night before at the cost of a hotel and time away from my family. Fourth, it's pretty easy to change flights. In every other instance, they are just another airline, but they have perqs and satisfiers that are hard to duplicate, that lead to a better and more valuable experience. Many companies have rewards systems which are easy to duplicate and quickly become entitlements. AirTran has created features that are satifiers that are difficult to change to dis-satisfiers. They have created experience advantages that will take a while to become mainstream.

I would love to hear other airline stories, so please share them with me.

Monday, June 22, 2009

Where have I been the past two months? Solving for Customer Experience in Financial Services

With my lastest consulting assignment, I was quite surprised at how time consuming it would be and how much venom people have for financial services right now. I thought it would be bad, but not this bad.

After 7 weeks of analysis, and quite a few more to go, here are some tips for those of you working in financial services and fighting the good fight of customer experience on a day-to-day basis.

1) Assume positive intent on behalf of the customer, reward demonstrated positive execution.

When a customer calls, he is calling for one of three reasons: (1) She wants to get something done, (2) he wants to get something fixed, or (3) they want to improve their quality of life.

This hold across, all industries and especially within financial services. Let me give some examples here. If you are in the credit card industry, what is worth more to you, that $15 pay by phone fee and that $39 late charge because they were a day late, OR that $15,000 in annual purchase volume and no negative publicity from that customer? This is a choice your associates are making every day.

2) Change sticks into carrots

I recently chose to book a flight using Air Canada for several reasons, neither good or bad. I had flown Air Canada before and it was a good to great experience. It was interesting to me that Air Canada didn't charge me for luggage, but instead, they gave me a discount for not bringing luggage. Clever and sends a totally different message to the customer and incents the right behavior.

Fast forward this to the Financial Services world and specifically to collections and their integration with customer service. Given all the publicity associated with charge-offs today, wouldn't it be a win-win to offer to waive the pay-by-phone fee to the customer if they made a payment over the minimum required, say $100? This is a great way to ensure you are not only First-in-Wallet, but also First-in-Checkbook.

3) Verification builds trust

When I travel, I stay at Marriott's because they make things easy for me and I trust their brand. When I make a reservation, I instantly get an email confirmation and I can a bill via email as well. This verifies that my reservation is in the system and I trust it is done. Why can't banks do this more often?

I have probably listened to close to 2,000 calls over the past 7 weeks for some large US Banks. Why don't more banks use email, texts, etc to give customers what they want? The number of calls that I hear where customer are verifying that their internet payment went through is absurd. It demonstrates a huge First Contact Resolution opportunity.

I could go on, but I wanted to capture these three big ingredients for your Customer Experience recipe within Financial Services. Look forward to posting more in the near future.

Wednesday, April 22, 2009

Why Customer Experience Efforts Fail - Part 2: Unable to resolve products, processes, policies, and people

The inability to resolve conflicts between products, processes, policies, and people.

This is easily the hardest thing in creating an enterprise wide enjoyable customer experience.

When a company asks me to come in and examine where they are missing the mark, this is the easiest area to identify. Let me give you some examples.

Imagine a company who has had a strong direct mail presence in the market, all built around analysis in prospecting and acquiring new customers. Culturally, this part of the organization has built the company into an empire. Their models are built with several factors. One of those factors is overdraft, past due, and overlimit fee revenue. This company was so hellbent on capturing this money, so their models would be accurate, they would not empower the agents to waive fees.

Consequently, this part of the organization created another group that would be responsible for reviewing fee waiver requests, where they would control what could and could not be waived with their list of "minor rule breaks". The list, over time, had grown into a monstrosity that was more complex than a bill in Congress.

Meanwhile, the agents are helpless and put into a position of creating a miserable customer experience. "Call back in 10 to 15 business days" to see if you fee has been waived had become the phrase I heard the most when I spent time listening to calls.

The backlog of fee requests was huge. They added a non-value add process that ended up waiving more than 80% of the fees, and they never looked at the overlap with their "minor rule breaks" list.

When we examined this entire process, we found that one rule captured 91% of the fee waivers requests. This one rule, could easily be handed to the agents.

As a result, we were able to reduce callbacks significantly, eliminate a good portion of a back office process, and bring greater alignment among product, policy, process, and people.

When you reflect on your own company, it's important to examine where your efforts are cannibalizing each other. Using the 4 P's as a guide of where you are creating friction for your customers is great way to diagnose your problems and find the root cause.

Wednesday, April 15, 2009

Why Customer Experience Efforts Fail - Part 1: Siloed Organizations

Siloed organizations that technically, politically, or culturally can not be penetrated.


Overcoming organizational silos is not unique to Customer Experience, but it does introduce new challenges in an effort to improve the customer experience. It is probably more important to first discuss why it is hard to overcome organizational silos and then specifically discuss the issue of why Customer Experience can not infiltrate an entire organization.

Product Managers have a pride in ownership and fear giving up that control to others in their organization. Few product managers seek or invite feedback from contact centers. Product managers feel opening up to operations will just be a “wet blanket” to their creativity.

The Sales Team often over promise on delivery deadlines, forcing others throughout the organization to hurry which creates internal conflict and decreases opportunities to open the dialogue on how to make improvements that the customer and/or the rest of the organization would benefit from.

Operations is in a constant struggle to find the resources and the capabilities to stay afloat with newly added complexity, some of which may not add any value to the customer. Many ideas are not properly vetted. As a result, Operational structures are becoming more centralized and thus, less likely to be penetrated in what is good for the organization and the customer because centralization simply adds bureaucracy and complexity. This is a self-fulfilling prophecy that was generated by those upstream from operations. Any savings that this would have produced their centralization is lost in coordination.

Collectively, no common language or common goals exist. I was with one company that every December, we would do our planning for the following year. We generated 256 goals independently. None of the executives were looking at the big picture to see who should be working together and who was working in conflict with their goals. It was incredibly frustrating to those that saw what was happening.

Let’s now translate this to the impact on the customer. Miserable, unhappy, defecting is what was happening. While no individual department had a complete end-to-end view of their collective actions were impacting the customer, the customer saw what the corporate blind spots could not and the experience was not unified or consistent.

Organizations think they are adding value to the customer, but collectively they are cannibalizing each others efforts. Each silo has their own agenda, mostly focused on increasing revenue or decreasing costs, but each silo’s actions have a reaction to other silo’s and the victim is the customer.


Technically, many IT devices are unable to talk across the siloes. Politically, people are serving themselves and not working together to serve the customer. Culturally, it takes a lot of work to collaborate and see how moving the needles collectively has a greater impact. This generates a mis-alignment of expectations among departments which certainly leads to failing to meet the customer's expectations.

In summary, organizations individually create collective complexity, ambiguities, and barriers for the customer. The customer isn’t going to put in the effort to solve your problems. They will move to another company that doesn’t have these issues (sounds like some old girlfriends). You have to solve them for yourself and consequently for your customer. Simplifying for your customer is optimizing for yourself.

Wednesday, April 8, 2009

If you want to think like your customers, get on the same side of your brain as they are

If you view the Customer Equity Management Blog, they have an interesting slide that shows the difference between CRM and CEM (Customer Equity Management). It got me to thinking about where companies are failing in terms of thinking like their customer.

Many know that the left side of your brain is analytical and the right side of your brain is creative. It is important to translate that concept to customer experience, because if you do not move to the same side as your customer (the right), they will eventually move to your side (the left).

The Left Side of the Brain in Business Speak:

I want to model past transactions that allows me to determine the Net Present Value of each customer so I can plug in concrete values into P&L models that I know. I want to reduce costs by migrating my customer to self-service and make my call centers as efficient as possible. I want to increase the value of each customer to my company.


The Right Side of the Brain in Customer Speak:

I want to invest in valuable experiences that make me feel better about who I am. If I can find a company that can do this consistently, I will appreciate it and they will have my loyalty. I act based on what I believe. I want to have a low-effort, no-hassle relationship. I expect company's to offer value to me....both tangible and intangible.


If companies are unable to get this customer view with their products, policies, processes, and people, then customers will shift to their Left Brain:

I don't want to spend my money on something that feels like a transaction that has led to past disappointments and inconsistencies. I have concrete evidence and know it will happen again, it's just when, not if. I do not want to have to put in un-necessary effort. It's probably not as bad as I am making it sound, but my eyes and ears are open for a better value.

www.customeranalyticsconsulting.com

Tuesday, April 7, 2009

The survey creates a new Customer Experience opportunity. What are you doing with it?

According to the Gartner Group:

95% of companies collect surveys from their customers
45% of companies alert the staff of the survey results
35% of companies use the insights
10% of companies deploy the insights to make improvements
5% reach out to customers thanking them for their feedback and telling them what they are doing about it.

Think about this from the customer's perspective. If a customer had a bad experience, 95% of them will become more disloyal as they believe that you are not acting on the feedback or don't care. You are the one taking the survey and creating an additional customer experience and giving the customer a chance to affirm their feeling by not acting.

If a customer had a positive experience and you don't respond, you are adding an opportunity cost of not creating a more loyal customer.

If you look at the rest of this customer rolled throughput yield, the fact that 50% of companies do not act on their customer feedback brings the question, why are you doing it and why are you subjecting yourself to more customer apathy?

One possible solution is to avoid structured deliberate surveys and to use Speech Analytics to find both positive and negative experiences. If the surveys are too hard to manage and act on, try something that will reduce the effort for you and your customers.

Monday, April 6, 2009

The Indian Call Center

In my last corporate role, I asked my team to identify some test accounts and to send them exclusively to India and to also send some accounts exclusively to our call center in Canada.

When we ran this test, we saw that the Purchase Volume for those that went exclusively to Canada jumped by approximately $48/month. Conversely, the accounts that went exclusively to India went down by $24/month.

Without further context, these numbers may not seem valuable. However, clearly you could see an impact on customer experience and the behavior of the customer when they were not forced or were forced to deal with a certain environment.

This also changes the equation in terms of the cost per hour of outsourcing and "opportunity cost" must be added to the outsourcing equation so be sure to test for this prior to entering any BPO environment that directly touches the customer.

Friday, April 3, 2009

What impacts Customer Loyalty?

To answer this question, you must first define Customer Loyalty.

Customer Loyalty is measured in terms of:
  • Likelihood to return
  • Likelihood to spend more
  • Likelihood to refer and spread positive experiences
So what behaviors by your company will drive these behaviors by your customer?

Believe it or not, it's more about what you don't do. To drive customer loyalty, you need to go back to the concept of customer effort.

  • How are you reducing transfers?
  • How are you preventing your customer from repeating themselves?
  • How are you reducing multiple (if any) contacts?
  • How are you navigating their call to the right agent?
  • How are you reducing the time to resolve an issue?
There are also opportunities to impress your customers by leveraging their information and previous behaviors and acknowledging them as individuals by doing so.

  • Are you anticipating the reason they called and acknowledging past behavior?
  • Are you educating your customer on how to make their lives easier going forward or how your processes work?
  • Are you demonstrating transparency with your business practices and policies?
  • Is your agent truly acting as an advocate of the customer?
  • Are you offering the customers choices in the options to resolve and providing them pro's, con's, and recommendations.

Why do companies fail at Customer Experience?

I have been trying to come up with the top reasons why companies are failing at Customer Experience.

Here is my current list:

1. Siloed organizations that politically or culturally can not be penetrated.
2. The inability to resolve conflicts between products, processes, policies, and people.
3. The inability to translate Intangible ROI to tangible ROI.
4. Lack of leadership and/or funding commitment.
5. Data rich, information poor
6. Un-necessary complexity
7. Blind spots
8. Process variation
9. Metrics and Measures that are not actionable
10. Paradigms that create barriers that prevent change from happening

I will be writing about each of these in the weeks ahead.

Tuesday, February 10, 2009

What is the proper way to measure callback rate?

There are many different ways to measure callback rate....probably as many ways as there are companies that measure it.

From my experience as a consultant, no two companies have measured it the same way, either due to data cleansing (or lack of data cleansing) or the time period at which a callback "counts".

So which way is the right way? I think each company should tailor their metric for their business, but many are not doing this properly.

First and foremost, callback rate should be continuous in terms of time interval. Knowing what the callback rate is on day 1,2,3, or 35 can identify unique business intelligence that can be acted upon. What I have seen from my experience is that customers callback on days 1-3 for one reason 5-15 for another, and 30-35 for quite another. Picking one particular day as a snapshot, does no service for any of these groups.

Secondly, data cleansing is the only way that you can ensure that callbacks are for the same or a different issue. This proves to be a challenging task and often it is probably not worth the time investment to do continuously. Therefore, I would recommend that this exercise be done once or twice a year.

Thursday, February 5, 2009

Corporate Executive Board introduces Customer Effort Score!

In 2008, Corporate Executive Board trademarked "Customer Effort Score" based on their research. Some of the findings included:

  • 80% of CEB's members used Customer Satisfaction Surveys as their primary customer experience metric.
  • 12% of CEB's members used Net Promoter.
  • 8% used something else - usually a large number of metrics.

Corporate Executive Board (CEB) then went further to find how these metrics were able to predict repurchase and increased spend.

  • CSAT scores were found to be the less predictive and introduced a large number of false positives and false negatives. Repurchasing found that 20% of satisfied customers would not repurchase, while 28% of unsatisfied customers would repurchase. Likewise, 45% of satisfied customers will not spend more, but 11% of unsatisfied customers will spend more.
  • Similarly with Net Promoter Score (NPS), 14% of promoters would not repurchase, while 19% of detractors would repurchase. Additionally, 27% of promoters will not spend more and 7% of detractors will spend more.
CEB went on to examine a common denominator to find what elements could cleanse these metrics and determined that the level of effort that a customer must put into the experience clearly defined how they would spend in the future, both repurchase and increased spend. Specifically, 94% of customers that put a low level of effort into their experience, would repurchase from those companies. Meanwhile, 88% of customers that put a low level of effort into the engagement, would increase their spending, based on this perceived simplicity because of the low level of effort.

CEB went on to construct the measurement for Customer Effort with an objective and subjective component. The objective components measured callbacks within 14 days. The analysis showed that 70% of all customers said that 2 or 3 calls registed as "Moderate-to-High" effort, where only 30% gave that rating for those that made only one call. The subjective component was a customer survey.

Companies that can track customer effort, especially at the issue level, and can provide tracking at the customer, issue, and agent level, are much better positioned to solve for customer effort.

I would highly recommend getting hold of CEB's Customer Effort Score and how the subjective component is derived.

Tuesday, February 3, 2009

Customer Satisfaction/Net Promoter Surveys - Post-Survey Execution is the most important part!

From my personal experience reaching out to several companies, many companies do not have a good plan to act upon once the surveys return to them.

Survey Aggregation: I have seen on many occasions, especially Net Promoter, that the numbers are reported with one silver bullet number. The number fluctuates from month to month, and companies spin to find out why the number changed and don't even look to see if the change is statistically significant.

Time lapse: It is downright humorous to see companies collect their numbers throughout the month and even if the numbers are ready on the 1st or 2nd of the month, they are summarized in a Monthly Business Report, typically 12 or more business days into the month.

"Leading the witness": The surveys usually ask questions that lead to filtering, either by the company or the customer. For example, companies will not ask an open ended question that will quickly define the experience, instead they will ask about what they feel defines the experience upfront. Ideally, they should allow the customer to begin without any boundaries and then coach and lead based on their initial response to determine what the independent variables are that defined the experience.

Best Practices: I have seen two companies that are ahead of the rest. More later on this.

Customer Satisfaction/Net Promoter Scales - 4,5 or 10 point?

I’d like to share an excerpt from the white paper “American Customer Satisfaction Index (ACSI) Methodology” written by Russ Merz, Ph.D.
Research Director at ForeSee Results.
---------------------------------------------------------
"A common basis for recommending 5-point scales often rests on the assumed inability of people to reliably discriminate more than 5 levels on a scale, where offering more than 5 levels would introduce error into the measurement and offer weaker correlations and lower explanatory power. Research has clearly shown that people can handle more than 5 pieces of information at one time, particularly depending on their experience in a given area and ability.

A 10-point scale is within capabilities of most people with little experience, and in areas of professional expertise people are able to and will make much finer distinctions.

Because customer satisfaction data is positively skewed (where customers less frequently use the lower ends of scales), a 5-point scale is really closer to a 3-point scale, and a 10-point scale behaves more like a 7-point scale.
Since most customers don’t really use the lower ends of scales (values 1 and 2 on a 5-point scale) and mostly use values 3, 4, and 5, a 5-point scale offers little opportunity to differentiate positive responses. This negative skewness
introduces error into the measurement process and loss of critical, meaningful information compared with a 10-pointscale.

Societal norms and the fact that customers typically “like” companies they do business with tend to limit the number of customers who use the very lower ends of response scales. In most cases, if a customer is so completely
dissatisfied as to have the need to use the lower ends of the scale, they will leave and stop doing business with the company. As a result, the 5-point scale effectively turns into a 2- or 3-point scale due to limited response at values 1 and 2.

This “compression effect” also militates against the common assumption that 5-point scales offer a mid-point that can be considered as the “average response”, a characteristic not present in 10-point scales. The mid-point argument is only valid if respondents use, or at least contemplate, all points of the scale, and as discussed above, they do not, and responses are consequently negatively skewed.

The use of 10-point scales significantly enhances the information that is transmitted in the surveying process.

There is one area in which 10-point scales are not appropriate relative to 5-point scales – that is when there is a desire to label each response point within the scale (e.g. 1=poor, 2=not so good, 3=satisfactory, 4=good,
5=outstanding). There are several arguments for not attaching labels to response categories, most notably
1) added error due to violation of the interval/ratio data assumption, where it can no longer be assumed that the distance between 1 and 2 is the same as the distance between 2 and 3, and so forth, and
2) respondent burden and increased questionnaire length."

The four point index's strongest selling point is that if there is no "middle ground" (#3 in a five point scale), you force your customers into telling you if you were good or bad. The five point scale's strength, on the other hand, is that if someone is feeling complacent about the service they received, they can let you know with that #3 (or "neither satisfied nor dissatisfied"). The ten point scale allows your customers to give you a wider distribution, and thus you could perhaps see the needle move in more subtle ways over time, but I've heard some analysts do not like it because it is so broad that some customers start picking one extreme or the other just to get through your survey. Another possible criticism is that while two customers might tell you they were "mostly satisfied" in a four point scale, one might give you a six and the other an eight on a ten point scale, and that by broadening the choices, you actually have less opportunity to predict consumer behavior or build effective models using multiple regression techniques.

One of the drawbacks of a four or five-point scale is that some customers will never give the highest score, thus adding a bias and an inability to distinguish on a great customer experience. Those customers may give you a "9" on a ten-point scale and you can take away that you delivered a valuable customer experience.

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Thursday, January 29, 2009

How Process impacts Customer Experience

I think many people understand that process impacts customer experience. However, I think most companies spend more time fixing front-office processes, such as call centers, rather than focusing on the back-office processes that cause the call centers to be in a state of chaos.

A study by Corporate Executive Board showed that 63% of problems (footnote) resolved by operations did not originate in operations. This demonstrates that many back-office processes, either in product development, origination, or administration, fail to see how they are impacting the customer.

That said, many front-office operations, especially call centers and web sites developers, do not interact and share their feedback with those that control your content and constrict your message. This is one place where Speech Analytics can make a big difference and bring the true "Voice of the Customer" directly to those that impact it in an efficient manner.

Front-office Processes: Front-office processes, such as call centers and websites, must be customer friendly. Through one of my consulting contracts helping a company implement Nexidia Speech Intelligence, we found that almost 20% of all customers were mentioning on the phone that they tried to perform a transaction or find something on-line and were unable to do so. Do you think this is something that call center agents were feeding to the eCommerce department? Of course not. Imagine being the call center director and realizing he could reduce his calls by one-fifth! Websites must be easy, enjoyable, and useful. If they are missing any of those ingredients, they are doomed to fail.

Call Centers are equally as guilty of not sharing information as those that create the products they must sell and service. Call Centers have a wealth of information from their direct interaction with the customer. They know the emotional trigger points. They know what needs to be simplified. They know what causes customers to leave. They know what needs remain unfulfilled. However, they do not attempt or are not afforded the opportunity to share this information.

Case Study: The Tax Extension

Retail counters are also front-office processes and some are

Case Study: Baby Furniture




Back-office Processes: Nothing I have seen creates more non-value add for a company than back-office processes. Don't get me wrong. Some back-office processes are necessary and add value, but most of them are the result of un-necessary complexity that the company has weaved through years of tribal knowledge and not examining the policies and practices.

Case Study: The Fee Waiver

Many people at some point, regardless of your credit rating, have missed a payment and been tagged with a late fee. For this example, we'll say it was $29. Upon using Nexidia Speech Intelligence, I found that for this one company, they had not empowered the agents to waive fees IN ANY INSTANCE! Instead, they had created a back-office team that processed fee waiver requests in an attempt to control lost revenue. Additionally, the call center agents instructed customers to "cal back in five to ten business days" to see if the fee waiver request had been approved. Think about this. The agents were training the customers to call back.

Take that $29 fee, and you have suddenly increased your costs by $10 (assuming customers only call twice), so you are probably overstating your profit for these fees.

When you look further into the practices of this company, we saw they had several complicated rules for determining who would and would not receive a fee waived. What they didn't look at was (1) how many of these rules overlapped each other, and (2) They weren't looking at customer behavior prior to AND after the fee was assessed.

When we examined these attributes, we saw that one rule could account for 87% of the fee waiver requests and 96% of the approved fee waivers. The company failed to realize that more often than not, customers demonstrate positive intent. We saw this on many occasions, using speech intelligence, where customers had disputed a charge and then recognized the charge and called back to have their bill adjusted and have the charge placed back on their bill.

Why is Customer Experience important?

Customer Experience bridges the gap between Customer Satisfaction and Customer Loyalty. Customer Satisfaction deals mainly with attitude. Customer Loyalty has to do with behavior.

If you measure Customer Satisfaction and have been doing so for years, you probably have a hard time translating this into the newest metric fad, Net Promoter. The bottom line is that Net Promoter has a greater association with loyalty, so these scores will be much lower than your customer satisfaction scores. This paradigm is not uncommon. Realize that Net Promoter is not a silver bullet metric and your ability to tie this to tangible behavior (call back rate, spending, etc.) is what will separate you from other businesses. We will discuss that more later.

Customer Experience can be the difference between satisfied and un-satisfied, loyal and unloyal customers. Picture a 2x2 grid with these dimensions. 2 are bad, 1 is nearly impossible unless you are a monopoly or the barriers to exit are so high (think life insurance and surrender charges). It is truly a moment where an emotional trigger can translate satisfaction into loyalty.

Customer Loyalty can be broken down further. There is (cognitive, affective, conative, and action loyalty).

Diagram: Left to right Cognitive----->Affective----->Conative------->Action

Customer experience can change an un-loyal customer to a loyal customer, regardless of their satisfaction and that is why it is so important.

Coming up: What impacts Customer Loyalty?

Wednesday, January 28, 2009

What is Customer Experience?

Customer Experience is where Product and Service interact in the mind of the customer to deliver a unique experience, either from the competition or from yourself. Yes, if you do not deliver a consistent delivery of product and service every time, you are setting yourself up to create a variety of experiences, both good and bad, that posture you to lose customers.

The key for any Customer Experience leader within an organization is to break down the product and the service and determine where the failure points are occurring. More often than not, it is when product and service are not aligned with the needs of the customer. Furthermore, it starts when product and service are not aligned with each other as well as process, policy, and people.

We will break down each of these components and identify solutions to making each work effectively with other parts of the organization.