Why attitude counts if you want loyal customers

26th Jan 2009

Consumers are bombarded with advertising campaigns and invitations to 'switch', but they are far more likely to remain loyal to a brand, product or service based on their experience of dealing with an organisation.

By Gary Schwartz, Confirmit

Poor service has a direct impact on new and repeat sales, and has a knock on effect on customer advocacy. So what can be done to improve customer experience in the long term if it is to become the key differentiator?

Many companies track key performance indicators (KPIs) to monitor the successes and failures within the business – including customer satisfaction and churn rates – but the data produced only tells you what has happened. It says nothing about the underlying drivers of these trends.

"Companies talk about facilitating the 'voice of the customer' but how many proactively ask their customers what they think and then act on it in order to retain them?."

The CRM industry set out to unlock the secrets of loyalty by examining historical purchasing behavior in order to predict future purchasing behavior. People are quick to believe that repeat purchase equals loyalty but this is a myth. It is readily accepted because companies want to believe that they can predict purchasing behavior from the data collected. In fact, most repeat purchases are simply a lack of other choices. Unhappy customers will change their buying patterns, given an alternative.

Instead of tracking past performance, companies seeking to make a real impact on customer experience will derive more benefit from trying to understand customer attitude towards the products and services on offer. Why? Because all behavior, including purchasing decisions, is directed by attitude. Companies talk about facilitating the 'voice of the customer' but how many proactively ask their customers what they think and then act on it in order to retain them?

Getting the timing right

There is a discrete amount of time between a change in attitude and a change in behaviour, whether it be five minutes, five hours or five weeks. The sooner a business learns of a change in attitude, the more time it has to intervene to prevent a customer from going elsewhere.

According to analysts Gartner, the most important aspect of feedback is timing. It determined that feedback collected immediately after an event is 40% more accurate than feedback collected 24 hours after the event. In order to learn about attitudinal changes most quickly, it should be captured and measured on a continual, context-driven basis so that the survey is not disconnected from the events that drive an experience with the business.

The most efficient way to collect attitudinal information, for both the company and the respondent, is to deploy event-driven, online feedback surveys around key 'moments of truth' in the customer lifecycle. Companies identify those that have greatest impact on customer experience and capture attitude as quickly as possible after those events.

"Continuous capture of attitudinal information must be matched by continuous monitoring, both at an aggregate level and an individual level where necessary."

Continuous capture of attitudinal information must be matched by continuous monitoring, both at an aggregate level in order for business management to understand trends in the business (and drill down into the reports in order to locate the source of a problem), and also at individual level where necessary.

Any indication of customer dissatisfaction must be handled as quickly as possible after they provide feedback in order to turn them around. This should be automated as part of the feedback management process and the monitoring is best done through dashboard reporting, in which exceptions may be easily noted and appropriate action taken as necessary.

You can’t manage what you don't measure.

Instead of tracking KPIs, which are by definition 'trailing' indicators that tell you what has happened, feedback management software allows you to track key attitudinal indicators (KAIs) that tell you why something is about to happen.

Measuring attitude enables organisations to understand the underlying drivers behind performance. By 'red flagging' changes in attitude, companies should be able to alter their business processes, not only to increase customer acquisition but to improve problem resolution and maintain customer loyalty - the ultimate goal of customer experience.

By providing customers with a 'voice', marketers should also able to communicate more effectively with their customers, centralising control over the frequency and look and feel of all customer communications, whilst devising campaigns that address customer concerns or issues in a more relevant, highly personalised and timely manner.

Gary Schwartz is SVP of marketing at Confirmit.


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By marymcd
16th Feb 2009 22:13

Think that this article is really well-written and presents a good argument for using KAI's in place of KPI's (leading vs lagging indicator) - have linked to this in my blog - thanks!

Mary McDonald,
"The Efficiency Doctor"

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