Allegiance Blog

“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

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