Allegiance Blog

It’s now commonplace for companies to ask for customer feedback by email, phone or even the mail. But that’s just one factor in VOC success. CustomerThink research has identified the following five major pitfalls to VOC success:

1. Lack of executive support to drive change

Being customer-centric is easy to say but hard to do without executive leadership. For example, despite proclamations of being “customer-driven,” a large software company found itself out of touch with consumers who felt the vendor pushed the technology and didn’t pay enough attention to implementation and ease-of-use issues. A comprehensive VOC program identified the issues, but what really mattered was CEO driving action. The key to the company’s success, according to the VOC program leader, was that top executives “believe with heart and soul in the importance of a VOC program and then drive real cultural change.”

2. Garbage in, garbage out

With VOC programs, you’re collecting customer feedback (input) so you can get insights you can act on (output). If you ask customers the wrong questions, that’s just garbage in. If your VOC program is built on faulty logic about what really impacts customer loyalty, you’ll waste time and money making changes that don’t matter, or actually make things worse. A worldwide restaurant chain found, for instance, that while good food was naturally essential, the key differentiator was in fact the “hospitality” of team members. This insight helped the chain make better hiring decisions and invest in training that would improve brand reputation.

3. Employees aren’t motivated to be customer-focused

Employees are people and tend to do things in their own self interests. So it shouldn’t come as a shock if rewards to decrease “average handle time”—a measure of efficiency—motivates call center agents to rush to get customers off the phone. Sadly, these tactics usually don’t save any money because the customer calls back or uses other support channels. Take a tip from Zappos, a popular retailer founded 10 years ago as an online shoe shore. In the Zappos call center, “customer loyalty representatives” are measured on First Call Resolution (FCR) and rewarded for the quality of conversations, not speed.

4. Listening with only one ear

Analyzing quantitative feedback from customers is like listening to customers with only ear. The other ear should be used to understand customers through the unstructured and often unsolicited feedback they provide. To start, text analytics can help listen to customers via their written comments on relationship and transaction surveys. But many other sources can provide unsolicited feedback, such as web site forms, email messages, chat messages and call center agent logs. One U.S airline was able to tie comments to a specific aircraft or even a seat number to help find and fix problems that have a direct impact on the customer experience.

5. Ignoring social voices

Consumer usage of social media has exploded in recent years, including blogs, review sites, Facebook and more recently, Twitter. This provides lots of options to rave about great experiences or vent about bad ones. Now, it’s true that social media is a chaotic and noisy world where it can be challenging to “separate the wheat from the chaff.” And besides, how do you know if the complainers are really your customers? Despite these challenges, can you really afford to ignore social voices?

Avoid these five pitfalls and you’ll be well on your way to success with your Voice of the Customer program.

Net Promoter score (NPS) provides a simple and valuable way for businesses to measure customer satisfaction and promotion. The assumption is that the more likely customers are to recommend, the more likely those recommendations will turn into new business and revenue. But the question remains: how to grow the promoter group. Businesses that successfully identify what makes their promoters tick can more successfully bring other customers into the profitable promoter group.

The Allegiance National Benchmarking study found that banking customers with high engagement or emotional loyalty were much more effective at turning recommendations into new customers. This isn’t so surprising considering that customers with high engagement are more than satisfied, so are pre-disposed to do business. In fact, they are excited to do business with a company. Their excitement translates into more frequent and effective recommendations.

Engaged customers not only recommend a brand, but they identify themselves as being proud of their association with it, and they identify that brand as ‘the best’. Their emotional loyalty makes them more likely to recommend and bring in new business. The link between engagement and NPS is clear. Engaged customers had an NPS of 85%, and Disengaged customers were at -80%. On-the-fence, or Swing customer had an NPS of 10%. Allegiance National Benchmarking data for the last 12 months reveals that 32% of banking customers are engaged.

Our data from Q2 of 2009 through Q1 2010 shows that engaged customers are four times more effective at bringing in new customers. Out of almost 2500 banking customers, 779 were engaged customers. Of the 779 engaged customers, more than 1500 positive referrals were made, resulting in 337 new bank customers.

The remaining 1683 customers made fewer than 1000 positive recommendations resulting in only 168 new customers. On average each engaged customer gave positive recommendations to two of their friends or colleagues. By comparison, only 16% of less engaged customers gave any sort of positive recommendation. In other words, it took about six non-engaged customers to make one recommendation.

This same pattern is evident in data gathered by Allegiance clients. It takes about two engaged customers to bring in a new customer, compared to 10 lukewarm or marginally satisfied customers needed to bring in a new customer.

Measuring engagement and its associated drivers can help drive up NPS. By measuring and exploring actionable engagement drivers, a business can then act in the most impactful way to increase engagement. Creating feelings of engagement in the minds and hearts of customers empowers them to be more frequent and effective promoters.

In response to overwhelming demand, I’ve written this to serve as a resource for those looking to justify the budget and resources needed to add social media monitoring to their existing customer feedback / market research programs.  All the organizations and corporations listed herein are trademarks of those respective companies.

A Case Study:  Will the customer feedback found in social media really help drive revenues?

In 2009, Domino’s Pizza had a problem.  Pizza deliveries were down 6% compared to 2008 and although they ranked first in convenience and price, they finished dead last in Brand Key’s consumer taste preference test.[i] Consumers complained about their 50-year-old recipe with comments like their crust tasted like cardboard and their sauce tasted like ketchup.  Ironically social media made their problems worse when an infamous video hit YouTube of Domino’s employees doing disgusting things with the pizza ingredients. Changing their core product was risky.  The only other major brand to change their core product in recent memory was Coca-Cola – a change which had to be undone due to a consumer revolt.

Domino’s embraced social media including YouTube[ii], Facebook, Twitter (hash tag #newpizza) other venues to solicit feedback about their new formula.  They even invited their biggest food blogger antagonists to give public feedback about the change in formula.  The feedback was made famous with a series of TV commercials where the negative feedback was read to company employees and executives.

The results?  In March 2010, they reported that US sales actually grew by 1.4% while overseas sales grew 3.9%, representing $23.6 million in profits.  Earlier in March their stocks shot up 5%[iii].

Times have changed. Social media contains customer feedback that you cannot solicit in surveys. We’re not suggesting you do away with your surveys. But consider the following:

Consumers spend nearly as much time watching TV as they do on the Internet.  And what are they doing online?  Increasingly, they are researching purchase decisions (97% of consumers[iv]).  The vast majority of consumers now trust product reviews over corporate marketing.  And there are a lot of reviews to choose from.  73% of consumers post product or brand reviews on sites like Amazon.com, Facebook, or Twitter and 52% of consumers blogged about a brand’s product or service[v].  Compare this to the number of your customers who actually take time to fill out your surveys.  Research shows that on average, only 4% of your dissatisfied customers will take the time to fill out a survey.

Social media allows you to influence the customer experience.  How important is this?  65%[vi] of consumers had a digital experience that changed their opinion about a brand.  Of that, 97% of consumers reported their online experience influenced their purchase decision and 96% were likely to recommend the brand to their friends[vii].  Building on this, 64% of consumers report making a first purchase from a brand because of a digital experience[viii]

Technology has changed your customer.  Your customer is about to change your company. The CMO Council reports that 58% of marketing executives say that the Internet and social networks have changed customer expectations for their brand[ix].

Capturing the feedback found in social media is no longer a luxury.  It’s a competitive advantage.

25% of companies are already using Twitter for customer feedback and 27% of companies are using Twitter for customer service[x].   Econsultancy reports that 86% of companies are spending more on social media in 2010 than in 2009[xi].   By the end of 2010, virtually all chief marketing officers plan to incorporate a broader range of customer content sources including customer reviews (59% increase) and Twitter (407% increase) to influence product decisions[xii].

As demonstrated with the Domino’s example above, social media is entering the realms of legitimate ROI.  The CMO Club reports that 81% of chief marketing officers expect to link up to 10% of their annual revenues to their social media investments in 2010[xiii].

Allowing your employees to leverage social media will not destroy productivity. Consider the following:

Research shows that 89% of US and global employers say they have NOT been negatively affected by allowing access to social media at work[xiv].

Conclusion: Social media is now part of the customer feedback and market research worlds and the feedback found therein is important for creating a sustainable competitive advantage.  You are more likely to find defecting customers in social media than with a survey – thereby giving your company a greater chance to rescue and up-sell / cross-sell that customer.   There is now sufficient evidence to show that adding the feedback found in social media to your existing feedback / market research programs can directly link to company revenues.

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[i] USA Today. Domino’s Pizza delivers change in its core pizza recipe.  Bruce Horovitz.  http://www.usatoday.com/money/industries/food/2009-12-16-dominos16_ST_N.htm

[ii] http://www.youtube.com/watch?v=AH5R56jILag

[iii] NYDailyNews.com.  New Domino’s pizza recipe doubles quarterly profits. http://www.nydailynews.com/money/2010/03/03/2010-03-03_a_recipe_for_success.html

[iv] http://feed.razorfish.com/downloads/Razorfish_FEED09_Webinar.pdf.

[v] http://feed.razorfish.com/downloads/Razorfish_FEED09_Webinar.pdf.

[vi] http://feed.razorfish.com/downloads/Razorfish_FEED09_Webinar.pdf.

[vii] http://feed.razorfish.com/downloads/Razorfish_FEED09_Webinar.pdf.

[viii] http://feed.razorfish.com/downloads/Razorfish_FEED09_Webinar.pdf.

[ix] http://www.marketingcharts.com/direct/companies-ignore-customer-feedback-fail-to-track-wom-7789/cmo-council-satmetrix-customer-voice-ways-measure-analyze-experiences-january-2009jpg/

[x] Marketing Charts:  http://www.marketingcharts.com/interactive/86-of-companies-plan-social-media-budget-bumps-11248/

[xi] http://www.marketingcharts.com/interactive/86-of-companies-plan-social-media-budget-bumps-11248/

[xii] http://www.marketingcharts.com/interactive/cmos-seek-better-metrics-for-social-media-revenue-linkage-11311/

[xiii] http://www.marketingcharts.com/interactive/cmos-seek-better-metrics-for-social-media-revenue-linkage-11311/

[xiv] http://www.marketingcharts.com/interactive/small-businesses-use-social-media-to-pursue-customers-12010/

Social media is here. Your customers are talking. And they’re talking publicly. Twitter has a large user base and provides a simple application and interface to get you started.

What should you do?

1. Search Twitter for your company’s name, brands, products, or services
2. Search Twitter for your competitor’s company name, brand, products, or services

Why?

We see several trends.

Today’s customers are social networkers and influencers. They are publicly sharing observations and experiences regarding your company’s products and services and those of your competitors. New social web applications such as Twitter allow any customer to amplify a single voice.

Twitter, Facebook, and all social networking services have an inherent interest in growing their user base. Hence, they continuously innovate and build new tools and services to foster easy sign-up, discovery and broadcasting of users’ experiences. For example, at the South By Southwest (SXSW) Conference in Austin, Twitter’s CEO announced @anywhere. This technology enables publishers to embed Twitter and its tools directly into any web page, thereby strengthening and streamlining the social network’s presence, broadcast, discovery and follow process for any reader. Facebook’s Connect feature has similar capabilities.

Twitter recently partnered with Google, Microsoft’s Bing, and Yahoo search engines to have them incorporate Twitter’s search results into those search engines’ organic search results. And this week, Facebook surpassed Google’s search page as the most visited web site in the US. Social media platforms, and hence your customers’ voice, will continue to become more ubiquitous.

Forward thinking managers and business owners are already taking advantage of new conversations enabled by social media. These business owners understand consumers have a bigger microphone, but these astute business leaders also realize that social networking applications provide a new means to respond. At a discussion about the popular and social restaurant review site Yelp.com at SXSW, a restaurant owner said he responds to negative feedback on Yelp the same way he would if the reviewer was still a guest at his restaurant.

How?

Simple. You don’t even need an account. Twitter’s real time search allows anyone to search for any buzz at any time. Go to http://search.twitter.com and type in a phrase of interest. For best results, if your company or brand or product name has more than one word, enclose all the words with double quotes. Try adjusting the search phrase to include specific product names or model numbers. Do the same with your competitor’s products.

You’re likely to find many useful and interesting Tweets, a trend of positive or negative comments, and actionable insights. You may even find customers or prospects who have been reaching out to you directly.

Search is only the first step. From there, develop a process to allow for interaction and engagement. Make plans with your team to engage with authors of negative reviews or complaints about your products. Make social media a two-way street.

After all, if listening is part of your strategy, you’ve got to be ready to act and change. Be authentic, honest, and transparent in your responses. As soon as you show you care, you’ll rescue customers, and you’ll have made your caring engagement public.

Allegiance has several social media related projects in development. The Allegiance platform is all about helping you listen wherever customers and employees are talking. Hence Twitter and social media are natural channels for us to capture. In the meantime, use Twitter.com or a Twitter client such as Seesmic to monitor public experiences and dialog about your company and the competition.

Join the American Marketing Association for the free March 23 webcast titled, “Social Media – The New Frontier of Customer Feedback.” Speakers include Matthew Bowman, former CEO of Wi5Connect (a social media company) and Eric Weight of Attensity (text analytics expert). To register, go to http://bit.ly/ajOQop

For the second year in a row, Allegiance was honored with the 2010 Service Leader Award for Enterprise Feedback Management (EFM) by CRM Magazine. It is especially gratifying to receive this award since customer satisfaction is one of the top criteria. Click here to read the full article.

The winner is selected through an extensive three-month process and proprietary rating formula that involves industry analysts, financial and corporate information, product and functionality assessments, and scores reflecting customer satisfaction.

Allegiance was rated highest among its competitors in helping businesses to perform surveys and collect feedback from multiple channels, including e-mail, Web, phone, print, Interactive Voice Response (IVR), and social media. In addition, with the acquisition of Inquisite’s online survey software, we raised our already high score in the category of depth of functionality from the prior year.

But we are not resting on our laurels. We are busy planning the launch of an entirely new set of features and functions to help companies capitalize on customer and employee feedback. I hope you will plan to join us at the Allegiance Engage Summit in May 16 – 19, 2010 to hear all about it. For more on the summit, click here: http://engagesummit.com/

Working with Allegiance clients, I have discovered that the decision to implement a feedback management solution usually stems from the desire to show the company as caring and interested in the feelings of employees and customers. This is a good thing, altruistic in a way, and it always looks good when a company can say that they care… and mean it.

However, if you want customers and employees to participate in your company’s efforts to listen and respond to feedback, here are a couple of important steps to take as you roll out a new feedback management solution:

Analyze your feedback history
Have you asked for feedback before? Was there a previous method of gathering feedback?  Customers and employees may become a little wary if this comes out of the blue. Therefore, if you haven’t solicited feedback before, you may need to integrate this rollout as part of an overall company strategy or plan to ‘care more’ about their opinions, etc. Otherwise, it may just appear as the latest company albatross.

If you have used previous methods for gathering feedback, were they successful? Did you respond to concerns? Or do customers and employees have an apathetic attitude that nothing will be done, so why bother? Overcoming apathy may be difficult, so again, if this is incorporated within a corporate mission statement and overall company set of values, it will be much easier to gain acceptance.

Prepare your staff
A funny thing tends to happen when you solicit feedback…. people actually give it! That makes the early stages of a feedback management launch the most critical.  For example, one of my clients recently implemented a new “Voice of the Customer” product, and after the first month complained that, “there was no way we can keep up with the feedback!” The point here is that you are opening up a channel for people to voice their opinion, so get ready!

You should have already prepared your staff for the potential deluge of feedback that may be coming their way. Allow adequate resources and be ready to follow up! A catastrophic thing can happen if you implement your feedback solution and then do not follow through on responding to feedback—people will stop using it. For instance, when reviewing some survey responses from a company interested in garnering employee feedback, one employee left the survey blank except for an open-ended comment that simply said, “Why fill this out?  I know nothing will happen.” Be prepared to respond to all so that they will believe in your commitment to caring.

Analyze, prepare and be committed to follow through. It may not guarantee success, but it will go a long way to ensuring a positive outcome!

While doing my Christmas shopping this past season, it seemed most every store had a survey they wanted me to take. Their clerks dutifully circled the survey website with their pen and told me about a juicy incentive to get me to fill it out. Since I’m in the business I decided to take all of them to see what they wanted to learn from me. Not so surprisingly, virtually all of the questions dealt with customer satisfaction and little else.

Before we go much further, let me state unequivocally that measuring customer satisfaction is a key data set of any customer feedback program. However, it is becoming apparent that many companies are leaving a lot of valuable information on the table – information that can help your sales department, drive innovation, and provide competitive advantage, increased revenues and profitability.

I outline below a list of possible topics to explore with your customers. This list is by no means comprehensive. Feel free to add other topics in the comment section of this blog.

Topics to consider:
1. What can we do today to improve our customer satisfaction score tomorrow?
2. Better yet, what can we do to turn our customers into “walking billboards” – touting us to all their real-world and online friends/colleagues? For tips, go to http://www.allegiance.com/solutions/total-engage.php.
3. How did the customer first learn about our company?
4. What made them decide to come to our store and buy today?
5. What caused them to buy the product they purchased on the day they purchased it? (buying behaviors)
6. Of a list of possible enhancements to our product or service, which do our customers value most?
7. What additional product or service can we offer that our customers are willing to buy?
8. What level and type of communication do our customers want from us? And in what form (post card, email, text, etc).
9. What are they saying about my competitors that I can learn from?

Soliciting this type information obviously presents its own unique set of challenges. Best practices on how to design, ask, and what medium to use is the topic for a future blog.

But having recently embarked on this quest myself, I know first-hand that customers, in most cases, are very happy to tell you what they think on more topics than just customer satisfaction. If you are interested to see where your company resides on the feedback progression scale, check out this blog: http://www.allegiance.com/2009/12/where-are-you-on-the-feedback-progression-scale/

Be sure to check out the Jan 21 webinar with Todd Rowe of SAP as he discusses why a survey is not enough for a complete VOC program. In this webinar, Todd will discuss:

- The new role of surveys in the world of customer feedback / customer insight
- New ways to listen to customers and aggregate data without asking your staff to read thousands of replies
- Competitive advantage of next-gen VOC technology
- The new VOC tool set

To learn more or register, go to https://www1.gotomeeting.com/register/323150952

Most of the CEO’s I speak with agree that innovation and improved customer service is the key that will help their company emerge from the recession stronger than their competitors. To accomplish this requires employees with good morale and solid productivity. The problem may be that if your employees are like 55% of American workers, they are suffering from poor morale which is leading to dropping productivity and stifled innovation.

According to the Conference Board research group, employee job satisfaction in America is at a 22 year low with the largest percentage of workers suffering from poor morale and low productivity (http://bit.ly/4ViPWr).

The study reports the low job satisfaction stems from:
• Fewer workers consider their jobs to be interesting.
• Incomes have not kept up with inflation.
• The soaring cost of health insurance has eaten into workers’ take-home pay.
What really stood out to me was a quote from one of the research participants who said he wished bosses would take time to listen to worker’s ideas – and their difficulties on the job.

Many companies today are focusing on listening to their customers to find ways to improve customer service and drive product innovation. However, your employees represent the whole of your company’s brain trust. Many of our customers have also set up Voice of the Employee initiatives with the goal of identifying ways to improve employee morale, better engage their employees, identify ways to save money, improve procedures and in short, do things better and faster.

Since the same tools used to survey customers can be used with your employees for little or no incremental cost, you might seriously consider setting up a Voice of the Employee program.

We would love to hear your comments and thoughts on this.