Allegiance Blog

From our work helping companies make the most of customer and employee feedback, we have developed something we call the feedback progression scale. This scale gives us a way to understand where a business is in terms of using feedback and surveys to grow customer loyalty and engagement.

So where are you on the feedback progression scale? Is your company using self service tools for simple ad-hoc customer satisfaction surveys? Or are you doing regular event driven transactional surveys such as at the point of purchase or when a customer complains?

Do-it-yourself surveys are easy and quick to implement. However, you may not have the expertise in your company to craft a survey and analyze the results properly. And how do you coordinate with other departments in your company to ensure that you are not surveying the same customers again and again?

Companies at the final stage of the feedback progression scale make VOC analysis a part of the company culture. Data collected through feedback and surveys is shared across multiple departments. Self-service and transactional surveys are combined with feedback management analysis to give a complete and real-time picture of the voice of the customer. This methodology continually compares feedback metrics with certain company outcomes. This allows the company to use a scientific-based index or score and to reward employees and departments based on those metrics.

Bruce Temkin’s recent blog posting “16 Voice of the Customer Recommendations” points out that actively managing the feedback process and providing wide access to VOC insights within the company are among the best practices by award winning VOC practitioners. See the full posting here: http://bit.ly/4zhRHe. The recommendations and comments in his post apply to what we describe as the muti-department and multi-channel VOC/EFM program in our progression scale.

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

Bob Caruso is the former head of JD Power’s VOC Center of Excellence. He’s giving a webinar next Monday (Dec 10) on the top 10 best practices of VOC practitioners. He plans on doing a deep dive and field people’s questions. He’s also a former F4 fighter pilot from the Air Force so he is rather entertaining. This is a little self serving because we are sponsoring this webinar (yes, we like him this much). It’s free and under an hour, I think you should consider joining us. http://bit.ly/2mapDK

Many companies have gone through a reduction in force (RIF) recently (i.e. organizations have reduced staffing by nearly 5 million in the past 7 months!), and are now in the process of dealing with all of the changes forced by the RIF. To help, below are three tips for reengaging and protecting your talent pool:

1. Care must be taken in the short term to ensure that the strong talent left in place has the opportunity to grow, contribute and feel respected.
2. Ensure that employees feel committed and secure to reduce the effect that weak employee engagement has on your customers and their confidence in your organization’s ability to deliver on your brand promise.
3. Use this time to challenge staff and expand their contributions in ways that lever forward the organization and themselves in tandem.

Source: Economic Conditions Snapshot, June 2009: McKinsey Global Survey Results

By Bob Caruso, Managing Director, Endeavor Management

I recently met up with a group of Voice of the Customer (VOC) practitioners for lunch in Atlanta.  The purpose of the luncheon was to enable VOC practitioners to come together and swap ideas, network, and to get fresh ideas. For me, it was a terrific opportunity to meet folks who on a daily basis struggle to identify the best way to collect, analyze and act on VOC data; how to build political support and fund their initiatives. There were as many different industries represented as people at the table.  Companies varied in size from the gargantuan down to small 50-person companies. It was a terrific cross-section of VOC practitioners. Amid the laughter and lively discussion, I noticed a few trends emerging from the conversation.

• Net Promoter Score. Everyone at the luncheon was familiar with Net Promoter and a few used a loose interpretation of it.  However, most everyone acknowledged the limitations that come from only knowing a score without receiving any insights into how to improve that score. The answer seems to come down to the nature of the data collected – are you merely looking to see if they were satisfied with their past experience or do you also have a future focus  by identifying current and anticipated needs. (I felt fortunate to know that enterprise feedback management (EFM) technologies, such as those offered by Allegiance, are available to help VOC leaders address this area of concern.)
• Alignment of the cosmos. Senior executives are starting to focus heavily on current customers and how to increase share of wallet and how to better measure and improve customer loyalty. Some of the luncheon attendees felt it was prompted by the recession while others felt it was the improvement of ROI analysis. All seemed to agree that they had better success gaining political support and funding when tying VOC to business outcomes.
• Balance the good with the bad. Many attendees lamented that VOC professionals focused too much on the negative feedback and to a certain extent, ignored learning how to turn positive customer experiences into phenomenal customer experiences, learning the link between revenues and movement on the customer loyalty scale, soliciting feedback about product innovation, identifying what emotional needs the company/product/service fills and how to strengthen that emotional tie.

Regardless, the VOC luncheon was a great opportunity to hear about some of the issues that are currently top of mind with today’s VOC leaders.

Matthew Bowman, Director of Campaign Marketing, Allegiance

A new research report from industry analyst firm Aberdeen Group called “Customer Experience Management: Engaging Loyal Customers to Evangelize Your Brand” reveals how organizations that achieve superior performance in customer retention and customer satisfaction grow and harvest customer advocates.

Some of the most compelling survey findings include:

- 70% of firms that enjoyed Best-in-Class performance periodically used customer feedback to influence strategic decisions (versus 29% of Laggards). [By comparison, the report notes that even though "70% of Industry Average organizations indicated they collected customer feedback...only half of these organizations actually used feedback to influence strategic decisions."]

- 96% of respondents saw value in formalizing a strategy to encourage or incent loyal customers to promote the brand, product or service.

- 37% of respondents currently have a formal program in place to systematically identify and encourage loyal customers to become advocates for the brand, product, or service.

- Over the next 12 months, more than three-quarters of all organizations will either have in place, or be in the process of pursuing, a formalized program to promote customer advocacy.

The report also cites a  March 2009 Aberdeen study titled “The ROI on Customer Feedback: Why It Pays to Listen to the Voice of the Customer” which found that the number one pressure driving investments in customer feedback initiatives is to increase customer retention and customer loyalty.

Since every interaction that a business has with a customer is an opportunity to positively influence the customer experience as well as grow customer retention, customer loyalty and customer advocacy, it makes sense that customer feedback has become a critical component in these initiatives.

Kimberly Mathie, MarComm Manager, Allegiance

Everyone who’s been watching TV or reading the news lately knows that banks have certainly had their fair share of challenges lately. But what’s been interesting to watch is how those challenges and the fall out from big bank failures and the economic crisis have impacted bank and credit union customer loyalty and engagement levels.

In a new report called the “National Benchmarking/Pulse of America report for Banks and Credit Unions” which was put together by Allegiance, 600 consumers per quarter were asked questions about their “primary” bank or credit union (i.e. the financial institution that they use for everyday purchases) between January-June 2009 (about 1200 responses). What we found was: 

1. Customer/member expectations of banks and credit unions have shifted away from the more traditional roles of industry leader, guardian and protector of customer/member finances. As a result, two items increased in their impact on customer/member engagement: 1) The perception that doing business with one’s bank or credit union saves customers/members time and money, and 2) Feeling trust in the financial advice customers/members get from their bank and credit union.
2. Credit unions continue to have much higher member/customer engagement levels than banks, but the gap is narrowing. Customers’ engagement with their banks stayed about the same with roughly 30% engaged customers from Q1 to Q2. Although credit unions continue to have much higher member/customer engagement than banks, credit unions saw a significant drop in customer engagement from 57% to 49% between January and June 2009. [The 8% drop in credit union engagement is the sharpest drop Allegiance has seen in credit union member engagement since the Allegiance National Benchmarking/Pulse of America survey began in October 2007.] In addition, the percentage of disengaged credit union members rose from 4% to 8%, most likely due to credit unions being forced to raise rates on credit cards and/or introduce variable rates.
3. Engagement levels among older customers have fallen. Engagement stayed roughly the same (rose on average by 5%) for banking and credit union customers/members age 54 and younger. However, customers 55 and older saw a 10% drop on average in engagement. (i.e. The push to engage younger customers through social networking may be leaving older customers/members disengaged. Therefore, banks and credit unions should not and need not abandon the practices that have grown their base of loyal, older customers.)
4. Both banks and credit unions appear to be focusing their customer/member engagement resources on the most profitable demographics. While engagement fell by 8% for customers with incomes of $50,000 or less, engagement rose by 3% for customers with incomes of $50,000-$150,000.
5. Banks and credit unions that had a multi-state and/or international presence experienced a huge 12% drop in customer/member engagement between Q2 2008 and Q2 2009, whereas banks and credit unions that only operated on a local or statewide level saw little change in their customer/member engagement levels during that same period.

To read about these and other findings, download the report  at: http://www.allegiance.com/resources/papers/poa-aug09-report.php

Kimberly Mathie, MarComm Manager, Allegiance

There’s certainly a lot to be said about the importance of listening to customers, especially in the current economic environment. And in these new videos, some industry experts highlight the importance of not only listening to customers via a formal voice of the customer (VOC) program , but also increasing your customer retention efforts.

1) A new video interview with Spencer Tall, Managing Director of Allegis Capital, on ”Why Listening to Customers is Critical”.

2) A new video interview with Todd Rowe, Group VP & General Manager, WW Mid-Market Division, SAP, on customer retention and the importance of the voice of the customer (VOC) in this economy.

Kevin Mellander, Director of Customer Care, Allegiance

By Bob Thompson, CustomerThink Corp.

When times get tough, it’s tempting to put “customer-centricity” on the back burner. But it doesn’t have to be that way. Below are a few tips on how to weather the economic storm:

Reach Out
Do you know what’s driving your customer decisions now? If not, reach out to your customers and have a real dialog with them. You may find that they’re looking for a better deal, but dig deeper and you’ll discover that experiences are still important and can swing decisions in your favor and help retain customers. Show them you care. Learn what’s most important in the solutions they need. These conversations will not only help you make better decisions during the downturn but will also strengthen relationships that will pay off in the future.

Fix Lose-Lose Problems
Budgets cuts may be a painful reality, so instead of building a customer experience plan around growing revenue, build it around efficiency and retention. For example, advanced analytics tools can help you ‘mine’ customer feedback to get to the root cause of what’s frustrating your customers and costing you money.

Personalize the Business Case
When it comes time to allocate funds, many customer-centric champions find themselves face-to-face with executives asking: “Why should I do this?” and “Who else is on board?” In other words, is the initiative going to help a key functional area, and is that manager willing to back the effort? To succeed, get the key people involved to believe that the project will be personally helpful to them.

Now What?
Once you have funding, the next step is to consistently deliver a more effective and efficient experience. As part of this, remember to give appropriate tangible and intangible rewards to encourage the behavior you seek.

Bob Thompson is CEO of CustomerThink Corp., an independent research and publishing firm focused on customer-centric business management, and founder of CustomerThink.com.

(Adapted from my article “Building the Case for Customer-Centricity: How to Make Your Customers and the CFO Happy“)

In the work that we do at Allegiance, we occassionally come across a company that is afraid to ask for or collect feedback from its customers or employees for fear of what those individuals might say – or that the only feedback that they’ll receive will be negative.

While this is a natural human concern, it isn’t a concern that typically matches up with reality.

In fact, we’ve found that the businesses that we work with on their voice of the customer (VOC) and voice of the employee programs receive feedback of all types–compliments, suggestions, questions, complaints, concerns, etc. And regardless of how that feedback is shared (e.g. via an e-mail, a letter, a phone call, an in-person discussion, survey, etc.), this feedback–when centrally collected, stored and analyzed–can provide a business with tremendous insights about what its customers need, want, and value most. Moreover, it can help a business understand what’s working and what’s not working in their organization so that they can continue to do more of what’s working and discontinue or fix what’s not.

In contrast, if a company only collects or receives feeback from customers when something goes wrong or a customer has a bad experience, that business can end up having a pretty distorted view of what its customers think and feel about its business. Not only that, but the business also typically misses the opportunity to gain a better understanding of its customers, as well as develop more meaningful and lasting relationships with them.

My point is that collecting customer feedback isn’t just about finding out what your customers are unhappy about–instead, it’s about gaining a better understanding of what your customers want, need and care about most in order to create more and lasting value for them.

And, if you do happen to receive some negative comments along the way, don’t take them personally. Instead, view that feedback as an opportunity to improve. As Bill Gates, chairman and founder of Microsoft, once said, “Your most unhappy customers are your greatest source of learning”. And he’s right. Talking to your customers and listening to their feedback is the only means through which you can gain clairity about what’s most important to them. Plus, if you listen closely, it may even show you where and how to gain a competitive advantage. And in my next blog post, I’ll tell you how.

Kimberly Carroll, MarCom Manager, 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