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Going back to basics – who are your customers?

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26th May 2011
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Keith Schorah discusses finding a practical and repeatable system for achieving more complete understanding of different interactions with customers.

Picture the scene: a global firm’s customer insight team walks into the boardroom and shares the analysis that one third of the company’s customer base is at risk of finding other suppliers. The directors might, in their worst imaginings, only have guessed that 10-15% of their customers might consider churning at some point.

However, the insight team’s new-found ability to capture data from customer purchasing trends to online and social media interactions has clearly helped it identify the likelihood of displacement by competitors, far earlier and more precisely than ever before. The information is out there: companies can now find a new way of looking over their shoulders at the competition as never before. But with such astounding long-range insight, where does that leave the firm’s standing with its dissatisfied customer base – and what should they do about it?

Many businesses are clearly willing to develop a better understanding and a more meaningful relationship with their customers, but executing on these demands is often problematic. Some 70% of companies that collect customer feedback fail to take practical actions to respond to customers’ concerns with practical service improvements.
Despite many organisations taking some steps towards improving their customer engagement, such as setting up feedback programmes, many others are not finding a practical and repeatable system for achieving more complete understanding of their different interactions with customers and how they are faring against other suppliers. Building deeper insights into customer satisfaction would allow them to enhance their relationships with customers, drive more profitable product lines and shut out the competition. But how?
Monitoring sentiment
A prime example of the difficulties of monitoring customer sentiment is the rise of online and social media. Many people will remember the user blog that exposed a global PC brand’s failings back in 2005. This unofficial criticism ultimately led the manufacturer to change its customer service and business processes. Twitter and Facebook have forced brands to change strategic direction within days. In today’s interconnected world, businesses have to consider again how to listen closely to, and engage more actively with, their customer base.
CRM programmes have long performed a valuable role in helping businesses manage their business and sales strategies. However, these products can be fragmented and limited to sales-buyer contacts in specific departments. They can’t provide the wider insights that could reveal impending churn. In the age of electronic transactions, CRM may no longer be sophisticated enough for larger organisations with multiple points of contact with their customers, such as sales, invoicing, purchasing and delivery.
Today’s customer insight teams could instead focus on gaining ‘outside-in’ customer perceptions of their products’ value and performance. Adopting a broader-based thinking provides a single, authoritative view of the customer and their intentions. The real-time insight and sampling strategy approach provides vital understanding on the different points in the customer journey, including performance, product satisfaction, delivery schedules and payment terms. This could make all the difference for global organisations with complex supply chains with multiple touch points that may serve different countries. To achieve this new level in understanding, businesses need to examine the next generation of sophisticated customer experience management (CEM) systems such as voice of the customer (VoC) platforms.
The new wave of VoC platforms combines operational financial data and third party data. Having access to this level of information reduces the burden on respondents as questions can be more focused and help identify key areas of improvement. Questions are configured to allow businesses to very quickly assess customers’ sentiment as well as benchmark the organisation’s performance against its competitors. Data collection can happen at multiple points and at multiple times throughout the year rather than one onerous survey. Pattern analysis can identify developing issues and causes for concern, previously unknown issues and more importantly their root cause, changing patterns in customer behaviour and ultimately reduce the risk of customer churn.
Analysing ‘outside-in’ perceptions from customers can also fuel a drive towards achieving best practice for businesses. These include closed loop analysis, where a specific issue is identified. VoC platforms enable businesses to identify improvements that resolve a customer’s issue. The query is resolved efficiently and the loop closed. The company can record the mechanisms by which they found a solution to the problem and departmental or regional colleagues can access that incident resolution information and examine whether they need to make changes in their own customer dealings.
The coherent process established provides the opportunity to enhance the overall customer experience and strengthen longer-term relationships. Another benefit from these products is their root cause and pattern analysis, identifying previously hidden trends emerging from customer feedback data; the organisation can address these issues earlier and draw up effective action plans across operations to drive necessary process improvements to resolve the issue. 
Cultural change
Implementing these feedback programmes is not an easy task; it requires many regional management teams and departments to conduct surveys and commit to acting on the insights. Indeed it is more than likely that businesses will have to alter previously unchallenged process wisdom and create new best practices. The metrics may suggest that an organisation has to change a whole variety of factors and processes to more effectively differentiate itself from competitors. C-level executives need to lead the necessary process changes across many departments.
Managers may need to bring about significant cultural changes to successfully implement the new type of feedback programme and drive required organisational changes. The senior team needs to constantly monitor progress using regular programme reviews to deliver the real time insights of VoC systems and then act on them.
Businesses can improve their mechanisms for assessing customer feedback by understanding how different data sets can quickly be made available to them and how essential it is for improving customer service and ultimately, to shape strategic decisions. With the latest generation of VoC programmes, businesses are able to view customer and competitor insights in real time and drive actions to improve their performance.
Without making such commitments to try new feedback systems, senior management could suffer the fate of the C-level executives in the boardroom; in their ‘tumbleweed’ moment, they find out that they knew far less about their customers than they ever had imagined.

Keith Schorah is CEO of SynGro.

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