Allegiance Blog

Arjun Sen, president and founder, ZenMango offered some great advice to companies today on retaining customers as part of the online Engage eSummit presentation that he gave titled: “The Leaky Bucket: The Secret of Eating an Elephant.” His advice:

• Know your customers – Who are they? What’s most important to them?  Etc.
• Make sure your employees’ point of view matches up with your customers’ point of view (and that all of your employees understand why each customer is important as well as the role that each of your employees play in retaining customers)
• Unite your marketing and operations teams and ensure they have a shared vision
• Realize every customer counts – Treat them that way; reward your employees for doing so
• Understand your leaky bucket (why customers are not coming back) and fix it (i.e. Identify your customers’ breaking points and decision to return points. In addition, go through the customer experience yourself and see and feel the pain through the eyes of your customers.)
• Improve and enhance your customer experience

Chris Cottle, VP of Marketing,  Allegiance

During the online Engage eSummit today, Bob Caruso, Managing Director, Endeavor Management, gave a presentation titled: ”Voice of the Customer (VOC) Initiative Success: Win Friends and Influence the C-Suite and Board.”

One of the many interesting points that he made during his presentation was how Colonel John Boyd, a U.S. Air Force fighter pilot and military strategist, was able to begin from nearly any position of disadvantage and successfully defeat opposing pilots in air combat maneuvering. 

As a result, Colonel Boyd developed a “decision cycle” known as The OODA Loop, which he believed was critical to his success in quickly adapting to his surroundings and surviving. This OODA Loop included four continuous looping steps:
1) Observe
2) Orient
3) Decide
4) Act

Caruso said the OODA Loop also applies to listening to the Voice of your Customers and using that information to improve your business via:
* Observe – Collect Voice of the Customer (VOC) information 
* Orient – Understand your customers’ behaviors
* Decide – Determine key levers
* Act – Implement changes

This loop is critically necessary in the world today. It’s about how quickly businesses can adapt and respond to a changing marketplace. And to accomplish this, it’s important to get feedback from your customer base and do it often and consistently, so that you have the data necessary to observe and rapidly respond. 

Kimberly Carroll
MarCom Manager, Allegiance

Dr. Gary Rhoads, Loyalty Expert and Co-Founder of Allegiance, gave a good presentation today during the online Engage eSummit, in which he offered the following “Five Easy Steps to Predictive Analytics: A Top Down Business Outcome Approach”:

Step 1: Review business outcomes or key goals with leading indictators. Understand their relational patterns or trends. When you focus on business outcomes, the reason we gather data is because we want to know how it influences certain issues, as well as what kinds of things go on that increase customer loyalty and purchases. Gather data to try and predict that.

Step 2: Find the subgroup (e.g. location, gender, or job group) that is causing the dip or rise in leading indictors and hence ROI. Predictive Analytics will tell you which group it’s dipping in. When a company has problems and is experiencing a drop, it’s not the whole company, it’s usually a subgroup.

Step 3: Review top box, swing and bottom box scores–Overall get a feel of the landscape.

Step 4: Review the voice of the customer/employee for deep insights. Compare “Best in Class Groups” with “Worst in Class.” Find best practices and barriers.

Step 5: Review predictive analytics–the drivers or “hot items” that impact key goals and indictators (e.g., engagement, NPS, productivity) positive or negative.

Kimberly Carroll, MarCom Manager, Allegiance

“In a crisis, be aware of the danger-but recognize the opportunity.”- John F. Kennedy

As part of today’s online Engage eSummit, Gary Tucker, SVP and General Manager of JD Power and Associates, talked about the importance of delighing your customers in the current economic environment, as well as the resulting increases in financial performance for companies that come with improving their customer satisfaction.

Tucker recommended five steps that organizations can use to pursue customer delight, including: 

1. Focus – Who owns the customer experience? Is everyone traveling down the same road? The companies that really stand out have a very clear understanding of who in their organization owns the customer experience. The companies that perform best have engrained that sense of ownership in everyone across the organization.

2. Quantify – What is most important to your customers? (It varies by company and brand). Companies often spend a lot of money in areas that don’t pay back. What are the drivers of customer satisfaction in your industry? Look at it through the lense of the people, presentation, price, product quality, and the process that a customer goes through. Each one of those five Ps represents an area of opportunity for your company to improve. Know what your drivers are so that you can focus your improvement on things that are going to have the most value to your customers–and the greatest payback for your company. 

3. Prioritize actions based on benchmarks – Who/what are my target customers comparing me to? Why are they defecting? Why are they shopping for an alternative solution? Knowing this information will help you understand and forecast your customers’ expectations and needs.

4. Define the business case upfront – What’s it worth to me in lower defection rates? Lower costs? Increased share? $$$$? Connect customer satisfaction activity with the same discipline and scrutiny is critical to getting the equation right.

5. Monitor and make course corrections – Getting good at delighting your customers is not an event. You’ve got to have a continuous customer feedback loop. Make sure that customers are feeling the changes that you’re making. If not, make course corrections. 

As Tucker pointed out, satisfaction is the path, but not the destination. The destination through an excellent customer experience is commitment–that part of a customer’s behavior that creates power for a brand. The primary input to commitment is the experience that customers have.

Kevin Mellander, Director of Customer Care, Allegiance

I was fortunate enough to attend this year’s CUNA Government Affairs Conference (GAC) in Washington, DC.  Someday I’ll probably tell my kids “I was there when it was all going down.” I literally stood a few hundred feet from the White House the same week President Obama was preparing to deliver his first budget proposal to Congress.  With the severity of the current economy, it literally felt like standing at the crossroads of the world.

Just up the street from 1600 Pennsylvania Ave, credit union executives from across the country gathered last week to ponder their own economic fates. U.S. Central, the largest corporate credit union in the United States, had recently announced investment losses large enough to require intervention. And just like the United States looked to taxpayer dollars for economic recovery, the National Credit Union Association (NCUA) weighed a financial assessment on credit unions to support U.S. Central and the failing “corporate credit union” structure.

All of the people I spoke with at the CUNA conference agreed: the NCUA’s Corporate Stabilization Program will have a significant impact on the credit union world. The assessment will hurt profitability. More importantly, there was significant distress that the assessment amount had not yet been defined. There will be a cost to every credit union, but no one knew exactly how much or how many times credit unions will be asked to contribute.

At some level the challenge facing credit unions is the same challenge we are all facing: How can we do more with less? Whether our incomes have gone down or our expenses have gone up, spending decisions are now integral to the survival of our organizations. Even though I don’t have an answer to the corporate credit union crisis, I can suggest one way to “do more with less” – and it comes from a personal experience.
 
While on a business trip to Portland, Oregon last year, I stopped at a small deli for a bite to eat prior to meeting with a CEO of a local credit union. As I stepped up to place my order, I noticed a small stack of business cards on the counter. The cards were from one of the credit union’s lenders who I was about to visit who undoubtedly provided services to the deli. Seeing my interest in the cards, a woman behind me leaned over and declared: “That is the best credit union in the whole world!”

What’s significant about this experience is that the credit union received free marketing from a person who had an obvious emotional connection with their organization. And the truth is, every organization has customers like her. They are out there, and they love your company. To borrow a term, they’re “engaged” with your company. If you ask them, they’ll be happy to tell you why they feel the way they do and what influenced them so strongly. If you can get more of them (the same way you got the first one) you can generate more and more of this kind of free marketing.

This kind of viral marketing is not only free…it’s ridiculously effective.  Allegiance conducted a study last year and found that 19% of “engaged” customers recommended their bank to an average of 4.1 friends—and 23% of those friends actually switched banks!  Your mileage may vary from industry to industry, but what a great way to acquire customers with very little incremental spending!

My experience at the deli have left me wondering: What would happen if the U.S. Government borrowed a page from the credit union playbook…

Brady Wycherly, District Sales Manager, Allegiance

There are a number of well known and popular ways that companies try to measure their overall customer satisfaction and loyalty. Traditional, overall satisfaction questions are still widely in use and provide a good idea of overall customer sentiment. Other loyalty metrics address customer behaviors such as the likelihood of customers to recommend a company or product to a friend or colleague.

While traditional satisfaction and loyalty scoring methods are great, they’re typically only a stepping stone on the way to engagement. The reason is that many of these methods aren’t able to answer questions such as: Of those customers who are likely to recommend you, are all of them equally likely to recommend? Are some customers more effective at recruiting new customers than others? Does each customer’s recommendation have the same impact? Etc., etc.

Each month, our company conducts a national benchmark survey called the Allegiance Pulse of America survey, which tracks the emotional loyalty or engagement of banking customers throughout the United States. In this survey, customer engagement is measured by several questions, covering overall satisfaction, ‘likelihood to recommend’ and other emotional and behavior outcomes. In addition, Pulse of America asks customers how many friends or relatives they have told about favorable experiences with their bank, and of those they told, how many actually switched banks as a result.

What we found when we separated engaged customers (i.e. those who have an emotional bond with a business) from other customers in this survey is that the engaged customers were nearly 4 times as effective at recruiting new customers as other customers, which proves that all recommendations are not equal. After all, it makes sense that a dispassionate customer’s recommendation doesn’t have the same convincing power as a recommendation from a customer with an engaged, emotional bond.

My point is that it’s not enough to simply know your loyalty score—you have to actively track, measure and understand the feelings and behaviors of your customers and understand your organization’s unique drivers of engagement and loyalty in order to know who’s recommending you and why in order to capitalize on that behavior by obtaining more effective customer referrals. And that’s where technologies (such as those offered by Allegiance) can help pick up where other traditional methods of measuring customer loyalty and satisfaction leave off.

Alan Bainbridge, Allegiance Best Practices Consulting Specialist

In my previous blog (see: “Community – Items to Consider before Diving Into this New World (Part 1 of a 2 part series)”), I talked about the importance of companies considering capacity and effectiveness before incorporating communities into their marketing communication and public relations strategies. And, here are two additional items that your company should consider during this process:

Analysis Point 3: Something I have come to understand because of this new community wave is that employee and customer communities have existed in our corporate spheres for a long time, even before the modern day internet. Anyone remember CompuServe or the old dial-up bulletin boards?  (If you can’t remember, rent the movie “WarGames” starring Matthew Broderick). The pre-internet crowd used dial-up communities for all the things that we now do with MySpace, Facebook and Second Life (and the water cooler has existed even longer than dial-up bulletin boards). Before you decide to launch your own community, analyze existing communities. Find out where your customers and employees hang out in both the virtual and real world. Listen to them there. Determine why they are gathering and what problem(s) they are trying to solve by doing so. Determine what your company’s roles have been and should be. You may find that it may be better to join an existing community (online or not) as a guest rather than to force your community concept on an established group. By the way, I would recommend either dedicating an existing Generation X, Y, Z or V (for Virtual) employee or hiring one who is already deep in social networking to help in this process. They are already tuned-in to that world and will be much more efficient at finding your existing community. Better yet, find someone who is already an engaged customer advocate and team them up with your cyber-genius to tackle this endeavor. 

Analysis Point 4: Do you have the willingness to be completely forthcoming? One of the evolutions in this new phase of the Internet is that users and the virtual communities they inhabit are increasingly requiring a bi-directional relationship as mandatory for citizenship/membership.  Relationship is no longer just two entities interacting. A Web 2.0 relationship now implies openness, long-term commitment, genuineness, and a willingness to put the concerns of the other party above (or at least equal to) your own. One litmus test as to your readiness is to ask yourself, “How would our company feel if an irate customer posted a less than flattering story about your company on a public or your own community?” If you are confident that your company would honestly be grateful for the opportunity to publically admit culpability, apologize to the community, and work with the citizens toward a mutually beneficial solution, then you are ready to dive into this new world.

So before you blog, chat, write on someone’s wall, or otherwise step out into the bright sunlight of communities, please take the time to “consider” these things.  The good news is that great benefits await those who do. 

John Epeneter, VP of Product Management, Allegiance

Barack Obama’s recent election and transition to the White House has been interesting to watch, not just for the traditional and historic reasons, but also because of the powerful example that it provides of how loyal and engaged people can help spread the word to others and actively promote an organization and/or individual.

The Pew Research Centre conducted a survey on the enduring legacy of Barack’s approach to his presidency. Its key findings showed that:

• 62% of Obama voters expect to encourage others to support the new administration’s policies and actions during the upcoming year. 48% of these expect to do so in person, 25% expect to do so over the phone, and 16% expect to promote the new President’s agenda to others on the internet.

• Among Obama voters who were involved online during the campaign, 25% say they plan to mobilize support for the administration’s policies by using the internet.

Plus, Obama supporters also expressed a strong interest in remaining in the loop as the new administration took office and began promoting its legislative agenda: nearly half (46%) of all Obama voters expected to hear directly from the new President or other officials as the incoming administration took office.

As Aaron Smith, a Research Specialist with the Project and author of the report, so aptly put it: “The election may be over, but these voters want to hear directly from their leaders and they hope to remain part of the action. They plan to be in direct contact with the Administration and then carry those conversations back to their fellow citizens. This is a new kind of personal democracy.”… And a powerful example of engagement!

Kimberly Carroll, MarCom Manager, Allegiance

In the consulting work that I do with companies, I find that businesses looking for ways to increase their sales and profits often overlook a critical ingredient: employee engagement.

The reason this is an important ingredient is because there is a direct connection between employee engagement and customer engagement, otherwise known as “The Spillover Effect”.

For example, in their book, Return on Customer: A Revolutionary Way to Measure and Strengthen Your Business, Don Peppers and Martha Rogers, founders of management consultancy Peppers & Rogers Group, emphasize that “Motivated employees are clearly more productive and keep a company’s employee churn rate down, which lowers expenses. Yet they also have a profound impact on customers as well by creating positive experiences through efficient and smart customer service.”

And, my colleague, Dr. David Whitlark and I, have also found this to be true. For example, in a large research study that we conducted on engagement, we found that one out of every 10 customers was hurt by disengaged employees. We also found that the work environment combined with employee attitudes has a significant impact on a customer’s perception of quality. For this reason, it’s important that companies lead with their strengths, emphasize the positives, and remove the barriers that lead employees to be disengaged with their jobs, their organization and customers.

After all, in the end, the Spillover Effect is much more than a discussion about employee happiness. It is about emotional engagement that is continually shared from employee to employee, employee to customer and customer to customer. And it is a concept that encompasses and impacts all aspects of a business, ranging from company culture to profits.

Companies that understand and leverage the Spillover Effect to their advantage will realize higher customer and employee engagement, and ultimately, greater profits.

To learn more about this topic, read the new Allegiance “Spillover Effect” white paper.

Dr. Gary Rhoads, Allegiance Loyalty and Engagement Expert

I don’t know if you have noticed but the internet has morphed (again) recently. The hot new word on the street is “Community.” Before I get too far into my thoughts on this subject, we should get our terms straight. Wikipedia’s definition is: “A virtual community, e-community or online community is a group of people that primarily interact via communication media such as newsletters, telephone, email, online social networks or instant messages rather than face to face, for social, professional, educational or other purposes….Many means are used in social software separately or in combination, including text-based chatrooms and forums that use voice, video text or avatars.”

But things are different now. One could say that we have reached the tipping point where companies must incorporate communities into their marketing communications and public relations strategies.

And that is why I say: Hold the bus!

We should rephrase the above by replacing the word “incorporate” with “consider.” We absolutely must consider communities in our marketing communications strategies, but we should analyze this carefully.

Analysis Point 1: How much capacity does my company have to listen and then respond to our customers? How many people, processes, and technologies (i.e. your capacity) are you willing to put in place to listen to your customers, both by soliciting their feedback as well as letting them come to you unsolicited with their thoughts and concerns? Has this capacity (i.e. the amount of people, process, and technology) risen proportionally with the size and complexity of your company? Perhaps more importantly, has your capacity to respond been increased proportionally with your capacity to listen? When “considering” communities, are you willing to add capacity to your communications machine to adequately support adding a community emphasis to your marketing communications strategy? If you cannot add resources, but are determined to add community to your communications mix, you better prepare to either diminish the capacity of other efforts, or fail.

Analysis Point 2: Is your listening and response capacity proportional with effectiveness? For example, one of my wife’s and my favorite movies is the “Hunt for Red October” starring Sean Connery. One of the great analogies in that movie is “They are pinging away at their sonar but at almost 30 knots they could run over my daughter’s stereo and not hear it.” Are you listening to so many customers on so many transactions that you cannot understand not just what your customers are saying, but what they really feel? We must analyze the role of all communication tools in the above context. Would adding community resources to your communication efforts increase you ability to understand your customers’ and employees’ problems more effectively?

Keep an eye out for my next blog in this series, in which I’ll go over existing communities and willingness.

John Epeneter, VP of Product Management, Allegiance