Allegiance Blog

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

A survey recently conducted by Towers Perrin, a global professional services firm, reveals that the current economic environment is stirring widespread anxiety among U.S. employees about their job security.

For instance, nearly half (45%) of all survey respondents said they expect their job to change or be eliminated, and even more (55%) believe their future earnings will either plateau or decline.

In this environment, the most important thing that companies can do to increase their employee productivity and loyalty is communicate more with employees and gain a better understanding of their workforce—i.e. their employees’ attitude, opinions, motivation and satisfaction—so that they can help their employees successfully navigate change and increase their employees’ loyalty.

According to research conducted by Dr. Gary Rhoads and Dr. David Whitlark, Allegiance loyalty experts, there are four areas that drive employee loyalty. These are: 1) being helpful; 2) feeling confident and improved; 3) feeling accepted; and 4) feeling respected. Thus, by regularly asking your employees questions related to these areas through surveying, you’ll be able to get into their hearts and minds. And that can make a big difference in increasing employee loyalty and productivity in a down economy.

If you’d like more information on this topic, read our white paper titled “The Top 11 Ways to Increase Employee Loyalty.

Kyle LaMalfa, Best Practices Manager and Loyalty Expert, 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

Preparing your survey data for analysis can be a messy process, mostly because data typically needs to be cleansed for various reasons. For example, respondents’ answers may not match pre-defined choices or they may answer questions that don’t really apply.

Using an online survey tool can eliminate many of the problems associated with paper surveys by limiting response choice and enabling participants to skip irrelevant questions. But even online survey data may contain records that exclude key variable or include duplicate responses from the same person. And if your survey is large, the task of cleaning up your data can, at first glance, seem a bit overwhelming.

However, it needn’t be. For instance, I recently completed a survey analysis with 35,000 respondents who answered about 75 questions, which resulted in a 2,625,000 cell spread sheet. Fortunately, editing and cleansing the data was fairly simple because I used a tried-and-true, five-step process that included:

Step 1: Make a copy of your data and use that version for data cleansing. This isn’t as much of a step as it is a warning. Even the best laid data cleansing plans sometimes have to be taken back to the drawing board. So, only delete records from a copy of your data and keep your original file on hand in case you need to put something back in.

Step 2: Conduct a few mini data cleansing trial runs. Export smaller subsets of your data to conduct data cleansing trial runs to refine your process. It’s a lot easier to get the process down with a data set of 2,000 than 35,000. Plus, then you’ll know the exact steps that you’ll need to follow when you export all 35,000.

Step 3: Identify “crucial variables” in your survey efforts and define what constitutes “complete”. – In the survey I mentioned above, senior-level executives wanted to identify high-performing managers in geographically defined regions. To the company, these geographical regions were a crucial variable in their survey efforts, as without them, survey responses were useless and had to be deleted. In addition, the scores for each region were based on answers to 7 questions. The company decided that in order for a response to be considered complete, all 7 questions had to be answered.

Step 4: Remove “speeders” and “flat-liners” – Using an internet survey tool, we were able to place a date/time stamp on each response and find out how much time it took each person to complete it. We know from past experience that respondents who complete the survey too quickly (less than 30%-50% of median time) and are likely not reading or answering the questions appropriately. The same is true for flat-liners (i.e. those who mark each answer the same), which are often speeders. They may have read the questions, but they don’t really think about their answers. Therefore, it’s best to remove speeders and flat-liners from your data to eliminate a lot of meaningless data.

Step 5: Eliminate duplicate responses – Usually, it’s hard enough to get people to respond to a survey once. But some people actually care so much that they tell you twice, especially if there are some particularly juicy survey incentives involved (which may tempt them to try to increase their odds of winning) and/or if your managers are informed that their scores are somehow tied in with response rates (which may cause them to flood the system with duplicate favorable responses). Fortunately, all you have to do in those cases is match the entry information with your survey list, and then use the date/time stamp to identify and delete duplicate entries later. I recommend keeping the first response and deleting any subsequent responses.

Once you complete these steps, you’ll not only have a cleaner and more accurate data set, but you’ll also be able to ensure that each person who takes your survey only counts as one response instead of several in the results.

Alan Bainbridge, Best Practices Consulting Specialist, Allegiance

I’ve been doing a lot of research lately on Software-as-a-Service (SaaS), and have come to the conclusion – given the current state of the economy which is forcing businesses to do more with less (e.g. collect more feedback and increase customer and employee loyalty; spend less on surveying, infrastructure and staff, and yet get the same or better results) that more businesses will be taking a look at SaaS as well as Enterprise Feedback Management (EFM) solutions in 2009.

Obviously, SaaS is not for every company – many companies still need on-premise installations, so the reality is that we’ll live in a dual world for some time.However, SaaS does offer some strong advantages to traditional software, including:

SaaS subscription models are an easier way to prices and budget for a solution over traditional pay-upfront models

• SaaS makes it easier to mash-up data, which is a great way to see what’s happening and find new ways to grow
• SaaS feedback management solutions can fulfill on the promise of anonymity, whereas on-premise, by nature, cannot offer anonymity. Many people, especially employees, want to provide feedback but are unwilling if they believe the company will discover them, especially if the feedback is negative
• SaaS offers a fast implementation, and an always-updated promise that is very attractive to many companies because the IT group does not need to get involved in any way

Industry analysts have a lot to say about SaaS, too:

Gartner, Forrester and IDC cite SaaS as critical in recessionary times. They say SaaS cuts costs and conserves cash, providing flexibility and new efficiencies. - Gartner Market Trends Report 2007-2012, Forrester, Cloud Computing Report 2008, IDC, IT Cloud Services Report, 2008

Nine out of 10 organizations expect to maintain or grow their SaaS products, citing cost-effectiveness and ease/speed of deployment. Key drivers of high SaaS engagement include:

• Total cost of ownership
• Unmet performance expectations with on-premise solutions
• Changes in sourcing strategy

Gartner 2008 SaaS Adoption Report

“Need more evidence of the traction gained by software-as-a-service (SaaS)? Nearly nine out of 10 organizations expect to maintain or grow their usage of SaaS products. With the economy weak and financing difficult to obtain, companies are looking for ways to reduce upfront costs as well as total cost of ownership for technologies needed to run their businesses.” - DestinationCRM, Dec 5 2008, SaaS Gets Strong Loyalty Marks

As I mentioned before, SaaS is not for everyone. But for more and more companies, SaaS EFM solutions, such as those offered by Allegiance, may just be combination they’re looking for to accomplish their goal of doing more with less in 2009.

Chris Cottle, VP Corporate Marketing, Allegiance

Hopefully you have already read my previous blog entry on this subject [see Why Do Electronic (email) Survey Response Rates Seem so Low? I Have a Theory, and a Way to Help Improve Them.]. This next tip I will keep short and sweet. Consider this fact as researched by the ESP (email service provider) EmailLabs: 69 Percent of Business to Business (B2B) Subscribers Frequently or Always Use a Preview Pane; 45 Percent Rarely or Never Download Images

This fact means that you have very few lines for them to read before they make a decision. Make those lines count! Consider carefully that top 10% of your email. Is your company logo, a piece of stock photography or some puffy copy really the most important communication you want to have with that 69 percent?

I know it’s hard to do (I have fought designers on this issue for years). But you have to hold your ground and fight for that 10% of real estate. Let them do whatever they want in the bottom 10%, but you absolutely must make your first impression space matter. Tell your readers right there why their feedback matters to your company and how much you value it. Tell them exactly how much time it will take them to do your survey. You are fighting for that next action and that next click. And at this point, that’s all that matters.

Terence Fugazzi, VP Demand Marketing, Allegiance