Start by telling the story. How would you tell an executive in 30 seconds or less what a “7.78 average satisfaction rating” means? On the other hand, executives should react if we tell them that only 38% of the company’s customers are Promoters, and that the differential annual value between a Promoter and a Detractor is $162 (as a real-world example of a B2C company we recently worked with). Armed with this knowledge and with understanding of what creates Promoters and Detractors, executives can make good decisions and also gain a leading indicator of progress by watching the % of promoters grow in their segment.

The background research for Net Promoter was based on a series of longitudinal studies that examined actual customer behaviors associated with their feedback (documented in Reichheld’s book, The Ultimate Question, and in dozens of case studies over the years). The beauty of Net Promoter isn’t in the score – its strength lies in its ability to easily communicate action plans based on a proven segmentation strategy. It turns out that customers who rate you as less than 9 (on a 0 to 10 scale) are actually not with you (i.e. they aren’t “Promoters”), and they are prone to go elsewhere with their money. Prior to the research in Fred’s book, conventional wisdom found that a score of 5 on an overall satisfaction or recommend question was “neutral” and therefore “ok” and so an average score of 7.78 was generally perceived as good.

However, we all know that a focus on a score, including NPS, is missing the point. A single metric always focuses the discussion on scores, while a focus on improvement and the resulting financial metrics would better serve the business. Reporting averages makes action even more difficult. Take the first step by simply reporting “top box” scoring (% of customers that score a 9 or 10) and see what dialogs result. What percent of your customers are really with you?

Steve is a founder and Principal Consultant with Waypoint Group.  Contact Steve at steveb@waypointgroup.ORG

The experience that I described above is an example of tactically closing the loop (or not closing it, in this case). The design of any world-class customer feedback program should include a closed loop process that makes customers feel that they have been heard and promotes learning about what to do to improve the business in ways that drive customer satisfaction and loyalty.

There are three primary processes that comprise a comprehensive closed loop program:

 In addition to understanding the different types of closed loop processes, there are other factors to consider, such as:

• What is the goal of the follow-up process? Are you trying to learn from detractors, leverage promoters, or assess root cause problems? Or is your goal some combination of the three? Determining your overall goals and objectives is a necessary step toward designing an effective closed loop program.
• Which customers should be contacted, and who should conduct the follow-up? Your business model and capacity for follow-up will help guide your decisions in this area. Make sure there is clear ownership and that the follow-up involves all relevant functions. Then choose the appropriate contact method/channel (phone, email or corporate communications, for example) and establish and train employees on the process.
• When should the follow-up occur? Typically, front line follow-up will happen within 48 hours. However, a reasonable period of time depends on client perspective and operational limitations. Closing the loop on issues (e.g. detractors or service problems) or specific requests for follow-up should occur quickly. Follow-up for root cause investigation can happen over time.
• What are the key touchpoints in the customer experience, and how can we better manage them cross-functionally? Understanding the key touchpoints from the customer’s perspective and aligning goals cross-functionally will help you better understand the customer experience and make end-to-end improvements that will improve customer satisfaction and loyalty. This involvement at the management level will further optimize investments in ways that will directly impact customers and your bottom line.
• How should our executives be involved? Executives drive business outcomes and define overall company strategy. By establishing a customer-centric company culture and reinforcing that culture through internal and external communications, they can let the customers and employees alike know that customers are the first priority. Executives can communicate to customers that they are listening and acting on their feedback by explaining the actions taking place based on that feedback. Within the company, executives can foster customer-centric behaviors and use customer feedback to drive business strategy through initiatives, target-setting and employee recognition programs.

At Allegiance, we encourage clients to get more out of their data. Listening to your customers and analyzing the results are important steps in understanding your clients. However, effectively closing the loop with your clients is another critical component of a world-class customer feedback program. Listen, respond and act – your customers will thank you!

As a subscriber to this restaurant’s Facebook updates, I logged on and thrust my opinion into cyberspace. My wall post clearly illustrated my disappointment. As a loyal, engaged customer, I felt I owed it to the restaurant to provide feedback about my experience. Besides, any responsible business would want to know about the experience of a loyal customer, right?

It has been weeks, and I have heard nothing in response to my feedback.

There is a lesson in this for all businesses. Social media has become the no. 1 online activity, so it’s essential for businesses to pay attention. When a small percentage of customers share their experiences with your company via social media, you have an opportunity to engage or re-engage these customers. To use social media to your advantage, consider the following:

Get involved.  Businesses should be actively monitoring what is being said about their brand on social media sites and across cyberspace. Seek out not only feedback posted directly on your Facebook page or directed at you on Twitter, but research your brand. Find out where your customers are talking and become part of that community. Take the opportunity to engage customers who mention your brand and learn from them. 

Ask for more.  As it becomes more difficult to solicit feedback from customers through common survey methods, follow your customers online and connect with those who are already talking about you. With technology such as Allegiance SocialVoice, you can turn unstructured social media comments into structured data by reaching out to customers with a survey to ask specific questions about their experience or brand perceptions. You’ll find that many of these customers will appreciate your effort to engage them and learn more.

Actively manage feedback.  It’s okay to be reactive to specific social media mentions about your brand. Many times you’ll be able to identify “quick wins” where intervention is warranted to resolve an issue and save a defecting customer. However, it’s also important to allow social media data to paint a bigger picture. With Allegiance SocialVoice, you can pull social media feedback into a single platform and include it in analysis with other data collected across your organization. Here you can report on what type of feedback has come via social media alongside data collected with surveys and other tools. This gives you added insight.

If you’re only using social media sites to promote your brand and obtain additional customers, you’re missing out on a huge opportunity. As customers see your willingness to consider their opinions posted online, loyalty will surely increase. Those companies who act on the wealth of information customers share on social media sites will surely gain an advantage.

So how does a company do that? At the core, it’s about making offers that build trust–offers of stress-free service that really is stress free. Offers of discounts that are actually discounts. Offers of personal growth to employees that are made good. Each time we in the business world “make good” on a promise, trust is enhanced and deeper bonding occurs.

Here are three additional steps that organizations can take to enhance trust:

1. Offer customers/employees something unexpected
2. Deliver on the offer quickly without conditions (a.k.a. fine print)
3. Repeat as often as you can

Case in point – A few years ago, Bell South implemented a “just ask” program requiring every customer-facing employee to ask customers a simple question at the conclusion of every interaction: “Is there anything else I can do for you?”

The result was a rise in overall customer satisfaction and customer loyalty because a little offer goes a long way and sales increased based on that little question, adding $100M in the first year. Additionally, reward points were given to service people to be used ot choose from a catalog of goods enhancing the quality of work because they had to qualify for the opportunity and follow up with the sale.

Bob Caruso, Managing Director, Endeavor Management

While there are several great examples that come to mind on how companies are using customer feedback to gain a competitive advantage, since there isn’t enough room in this blog post for all of them, I’ll just share one. (So as not to make this blog a promotional piece, I picked a neutral one).

In the book ‘What Customer Really Want’, author Scott McKain tells a great story about how a coach bus company that transports music stars across the nation to their concerts (i.e. clients either lease or purchase its buses), was originally planning to improve the interior of its buses because it believed that if it did, its customers would be willing to pay more, and the company would make more money.

However, in the midst of picking out fabric, flooring, etc., the company realized that it had never asked its customers what they thought about its plans. So, the company did. To the company’s surprise, it found out that while its customers did want nice interiors, the single most important factor to them in selecting a coach company was the bus driver! (i.e. Someone who could get these music stars to their destination safe, especially if they had to drive through the night. And, someone who would also serve as a good ambassador for the band with fans).

The company immediately launched a driver education program to teach its drivers how to communicate more effectively with customers, and how to retain and grow customer relationships. The company also changed its reward system so that drivers were compensated according to how well they served the customer, and how well they cultivated long-term relationships with them. Once the company did that, it moved from fourth in the marketplace to first, and grew from 28 to 56 coaches.

My point is if you want to grow your revenues and increase your customer retention, customer loyalty and engagement, you have to ask your customers for feedback. It’s the only way to find out what they really want, where and how your company can improve, and yes, even make more money and gain a competitive advantage.

Kimberly Mathie, MarComm Manager, Allegiance

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

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

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