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The two minute CRM guide to: customer feedback

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31st Jul 2009
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In the latest in our series of brief guides on key CRM topics, we turn our attention to customer feedback. So, what do you need to know about customer feedback management?  

Eighteen months ago, Don Peppers suggested that despite the massive amount of customer feedback information available today, very little of it was being put to productive use. Furthermore, Peppers forecast that the problem would worsen as even more feedback channels opened up to customers. With social networking sites providing this new channel, Peppers' prediction is in danger of being realised.

As Jennifer Kirkby has emphasised, customer feedback takes many forms - from unsolicited complaints to word of mouth monitoring. It can be positive or negative or neutral. Feedback is a customer service, a key resource for a change programme, a vital ingredient in six sigma process improvements. If feedback is used effecively, resource can be allocated more efficiently, customer brain power can be used for innovation (such as customer co-creation) and ‘bonded’ customers increased.

Although 95% of companies collect feedback, only 50% brief staff on its contents, a mere 30% use it, and a paltry 5% bother to tell the customer what action they took. Prime causes of this sorry state are poor cross functional collaboration and lack of information culture. But the main culprit is the disparate sources of feedback with no overall owner, plan or use.

Feedback techniques include:

  • Operational - experience managemetn or proactive event management; call centre customer feedback; customer care calls; observations of customer behaviour.
  • Traditional - Complaints (see Complaint Management: The Heart of CRM by Bernd Stauss and Wolfgang Seidel); enquiries; customer satisfaction studies.
  • Collaboarative - customer communities; usability panels; customers in the boardroom or staff meetings; customer immersions  (taking customers to have an experience, e.g. stay in hotel and monitor them); word of mouth monitoring; social feedback.
  • Performance related - mystery shopping; account reviews and plans.
  • Stakeholders - employee feedback; supplier feedback; investor feedback; community feedback; influencer feedback.

Louise Vacher, head of customer research at ORC International believes that organisations that don't have a strategy for capturing feedback and still rely on volunteered comments alone have to reconsider their approach.

Consumers are not necessarily good at complaining; it's still true that you're most likely to lose an unhappy customer without ever hearing from them. So those organisations that are relying on a complaints register to tell them what's gone wrong, are probably missing a trick.

Internet surveys, where appropriate, offer huge advantages over more traditional ways of collecting feedback. Email surveys can be triggered by the customer experience – for example, sending an email the day after a guest has stayed in a hotel, or contacted an organisation, gives an impression of a proactive company who cares what their customers think. Easy and convenient, email surveys can achieve response rates of 35% (compared to paper surveys which often get returns as low as 4%), and there are substantial benefits in terms of cost, speed, quality and depth of response.

Online communities

But even those organisations who are particularly proactive with customer feedback can fall foul of common mistakes however. According to Strativity Group, companies often fail to understand the value and purpose of surveys from the customer perspective, and in light of this they can fail to deliver the requisite changes that their customers expect. Common errors include a lack of strategic intent at the outset of the study, and a lack of follow-up with customers to communicate that changes have indeed been made in response to the feedback.

Meanwhile, organisations that are successfully collating customer feedback are falling at the final hurdle - by not acting on the findings. Product development managers and process managers may be keen to use customer data but are simply not receiving the information in a timely, quantifiable and/or understandable fashion - or indeed they might not be receiving any information at all.

The advent of social networking has been a major game changer for customer feedback management. Whilst customers may fail to provide honest feedback to businesses directly, they are not so shy when it comes to venting their anger in online forums. "Companies have found stability, comfort and confidence in traditional market research and customer satisfaction scorecards, but what we have today is an uneasy scorecard being written by all these consumers and customers who have relevant experience with your product and it is crating massive instability," says Pete Blackshaw, executive vice president of digital strategic services at Nielsen Online. "It can be incredibly disruptive and companies really have to wake up to it."

Despite this, according to a CMO Council study, only 16% of organisations regularly monitor online forums and message boards to track complaints and pick up feedback. Inevitably, 58% of them protest that they realise that the internet has expanded the expectations of their customers, but the disconnect between this and the lack of feedback monitoring is noticeable - which may explain why only 33% of respondents would claim that their organisations are good at addressing customer complaints and even fewer (31%) rate their company's commitment to listening to the voice of the customer

Nonetheless, in the present environment, customer feedback is more important than ever! A recent study conducted by Loudhouse Research revealed that an overwhelming 82% of consumers believe that during the current economic climate organisations must listen and act on customer feedback in order to retain business while 74% are less likely to do business with a company if they feel that their feedback is ignored. Customer feedback may be found in increasingly diverse places, but the message has never been so important.

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