Charting a new path to the same destination

Editor's note: Andrew McInnes is director of product marketing at Allegiance Inc., Boston. John Carroll III is global head of clients at Ipsos Loyalty, Chicago.

Customer satisfaction and loyalty research sits at the intersection of two major business trends: the rise of customer experience as a strategic imperative and the advent of software as a data democratizer. The first means that companies are more committed than ever to actively monitoring and managing customers’ experiences. The second means that companies can actually operationalize customer focus across the enterprise without going out of business. Together, these trends are driving a sea change in satisfaction and loyalty research by highlighting the shortcomings of traditional approaches and enabling new solutions.

To examine the contrast between old and new, consider the three elements of enterprise feedback management (EFM):

Enterprise: Traditional research programs focused on supporting high-level executive decisions. Just think of the standard customer satisfaction tracker where results ended up in a thick slide presentation delivered at an annual strategic planning meeting. The outputs might have been interesting but they left most employees in the dark. By contrast, modern programs operate at an enterprise level, influencing routine business decisions on the front lines and in middle management as well as strategic decisions made at the top. For example, SAP delivers customer insights to thousands of salespeople and account managers every day to enable more customer-focused – and profitable – relationship management.

Feedback: In traditional c-sat programs, the concept of feedback was essentially limited to survey responses and these narrow inputs naturally led to narrow value. Modern programs expand the concept of feedback to include much bigger data – with more volume, variety, velocity and value – from sources such as CRM systems and social media, resulting in more integrated and comprehensive insights that can influence operational decisions. For example, JetBlue combines its post-flight survey responses with hundreds of transactional and operational data points to provide a more complete picture of the customer experience and identify specific operational issues to address, from individual TVs that need repair to flight delay thresholds that warrant adjustment.

Management: Traditional programs were all about measurement, tracking common metrics over time and reporting results in executive scorecards. While they provided interesting information, they lacked any direct connection to action and delivered limited business value as a result. That’s why modern programs have traded “measurement” for “management.” They still provide scorecards but they include metrics and other insights related to specific customer behaviors and the actions needed to change those behaviors profitably. They also create a closed loop of communication and action that enables employees at all levels to apply customer insights in real time. For example, Webster Bank follows up with thousands of customers each year after receiving negative survey responses. Banking center managers turn roughly 80 percent of those unhappy customers around and even lead 10 percent to make incremental product purchases with the bank.

Isn’t as simple

Transforming old-school research studies into modern EFM programs isn’t as simple as buying new technology or blasting out more reports. Firms need to carefully plan and execute complex activities, many of which are new to c-sat researchers. In particular, change agents need to worry about:  

Program design. Crafting an effective EFM program involves more than surveys and statistical analyses. Program leaders must carefully connect their data collection, analysis and reporting practices to company strategy and understand the context in which program participants will receive, interpret and use customer insights to succeed in their roles.

Technology implementation. Unlike research tools, such as survey builders and statistical analysis packages, EFM software must be a truly enterprise solution used by large numbers of employees and connecting to a firm’s broader technology ecosystem. That means program leaders must involve IT and apply enterprise software implementation best practices more reminiscent of CRM than research.

Organizational adoption. Just building an EFM program doesn’t mean that employees will come. Program leaders need to borrow tactics from the change-management discipline to build and maintain buy-in among intended EFM participants.

Seven basic steps

While the journey from traditional research to modern EFM isn’t easy, it is well within reach. Evaluating dozens of organizations that have – and have not – made this journey successfully, we have identified seven basic steps that program leaders must follow in order to guide their firms into the future.

1. Clarify your strategy. First, program leaders must ensure that business strategy and financial goals directly relate to the employee and customer behaviors the EFM program will influence.

2. Map your journeys. To focus on what matters, firms must then prioritize moments of truth in key customer and employee journeys and document the actions employees will take upon a triggering of events in those journeys.

3. Design your system. Based on journey-mapping outputs, program leaders need to define and incorporate the right customer and employee listening posts to capture high volume, variety, velocity and value feedback and connect it to action.

4. Implement your technology. To make the system work at scale, firms must carefully select and implement EFM technology and connect it to the broader technology ecosystem in place to enable desired data collection, analysis, reporting and intervention activities.

5. Align your processes. Companies then need to drive organizational adoption by tying new EFM practices into key existing processes such as communication, training and compensation.

6. Demonstrate your value. With some time and effort invested, leaders must measure and share program results to maintain and expand support.

7. Renew your commitment. Like other major efforts, you can never “set it and forget it” with EFM. With a solid program in place, continuously return to step one in this process, determine what needs to change and drive that change through to keep things fresh and relevant.

Step 1: Clarify your strategy

Traditional customer satisfaction research captures generic customer data without recognizing that the measures and models used should align with company strategy and, more specifically, influence the employee and customer behaviors that lead to company success. Since firms don’t share all the same financial or operational goals, the measures and models they use shouldn’t be the same either. For example, some firms don’t generate business through customer referrals, so they probably shouldn’t worry too much about likelihood to recommend. Creating a true EFM program requires clarifying your business strategy and translating it into specific employee and customer behaviors you must create.

To get there, start by conducting short interviews with top executives in each function and asking them to prioritize the ways their customers must behave in order for the company to achieve its business goals. Then consolidate this input into an agreed-upon set of behaviors that will be the guiding light for your EFM system and ensure the system links directly to your strategy and financial goals. In addition to providing the clarity you need to design with the right end in mind, this approach engages senior executives in the change effort early, increasing support and positioning the program to achieve big results.

HP provides a great example of successfully translating company strategy into specific behaviors and tying those behaviors to customer measurement, modeling and management. The technology giant’s Total Customer Experience system provides a comprehensive picture of the HP customer lifecycle and makes important customer behaviors explicit. With this documented understanding of desired customer behaviors, HP employees at every level can guide their own actions toward these goals and stay aligned with financial and strategic targets. In addition, the company can measure success against those targets and use these measures for continuous, focused performance management.

Step 2: Map your journeys

In the past, satisfaction research studies tended to measure high-level aspects of the customer experience to understand the key drivers of generic metrics such as overall satisfaction and likelihood to recommend. For example, in every traditional hotel survey, you would see a question asking for a rating of cleanliness. While interesting, the aggregate results wouldn’t say much about real underlying issues or how to improve. Should a hotel manager look for trash in the parking lot, torn carpet in the hallway or dirty glasses in the restaurant? One could only guess. In this scenario, survey results drive more confusion than action and the actions that are taken often don’t address real problems. The effort is inefficient at best and completely wasteful at worst for customers, employees and companies.

Customer journey mapping (Figure 1) helps break this fundamental problem and provides a solid foundation for EFM program design. By mapping out the customer journey, one can determine exactly when and where customer minds and hearts are won and then understand the behaviors that lead to and result from these moments of truth. In contrast to the hotel scenario described above, one global hotel chain mapped the customer journey and learned that cleanliness comes alive most crucially in the moment when guests arrive in their rooms for the first time after check-in. The brand also traced this moment of truth to the employees who directly controlled that experience – in this case, the frontline service staff. With this knowledge, customer experience and loyalty leaders can now educate hotel managers on the importance of this experience and establish the measures and processes that enable managers to effectively coach their employees based on desired and actual performance.

Step 3: Design your system

Old-style c-sat research managers spent significant time and effort on survey sampling strategy, painstakingly defining things like how many responses to collect and how to account for different customer segments. Cost was a major driver of this effort due to the high price of data collection. Similarly, traditional programs reported results to only a small fraction of the organization due largely to the manual effort – and thus cost – required to create audience-specific outputs. Modern EFM systems curb these considerations by making data collection, analysis and reporting efficient and affordable. That makes the customer experience and loyalty discipline a practical application of big data that companies can benefit from today.

Just consider the four Vs of big data: volume, variety, velocity and value. EFM incorporates large volumes of direct feedback from across many listening posts as well as indirect feedback from sources like social media and implied feedback from sources like CRM systems (Figure 2). The data come in a wide variety of formats, from structured survey responses to unstructured customer and employee comments to raw financials. Data flow into and out of EFM systems with high velocity, often in real time. And, finally, they create significant value in terms of increased retention, spend and referrals and lower cost to serve.

With this new world of possibilities in mind, design your program to collect, analyze and distribute the right data in the right places at the right times. To avoid getting overwhelmed, stay focused on the key moments of truth identified through journey mapping, the employees that influence those moments and the information that will empower those employees to deliver as desired. When in doubt, start small to test, adapt and demonstrate value.  

Step 4: Implement your technology

Old-school research programs used a variety of technologies such as survey systems and statistical analysis packages to make data collection and analysis more efficient. But they still left researchers to manually create and distribute audience-specific reports. While some researchers clearly enjoyed the level of control this gave them, limited distribution created limited value. Modern EFM software empowers firms to finally “democratize” their data without hiring hundreds of data crunchers to build custom spreadsheets and slide presentations.

To select the right solution, carefully consider your unique requirements for data collection, integration, analysis, role- and hierarchy-based reporting and closed-loop case management – the areas that power the primary activities of modern EFM programs. Also think about which areas of the solution you intend to use directly in-house versus those your software provider will handle, as well as which areas of the solution you plan to use on an ad hoc basis versus those you can configure initially and let run. For example, a large car rental brand with a small customer experience team uses EFM software to continuously collect post-rental surveys and distribute reports and alerts to location managers. The system runs continuously and program leaders engage the software provider and other vendors to handle system changes and ad hoc analyses. Conversely, a competitor with a larger team and more desire for hands-on control uses its EFM software also to make changes to the system, conduct ad hoc analyses and create custom reports directly without engaging the provider. Each approach works well in the proper context.

While most EFM systems are offered as software-as-a-service (SaaS) applications that can be deployed with little or no IT involvement, true EFM programs benefit from IT support. Make friends with IT early in order to take inventory of existing data sources – especially operational and transactional ones – and explore options to connect those data sources to your EFM software. As importantly, work with IT to remove all possible barriers to EFM access and use across the organization. For example, many leading programs use single sign-on (SSO) to make EFM systems easy to access once employees have connected to the broader corporate infrastructure. Likewise, many programs present EFM outputs within other business applications, such as CRM. A large B2B technology firm does this with in order to give account managers and tech support reps relevant customer insight in the system they are already using every day.

Step 5: Align your processes

Traditional c-sat programs asked small groups of stakeholders to periodically step away from their routine functions and review research findings. Modern EFM programs weave customer insights directly into routine functions so that employees can apply them every day without distracting attention from their primary jobs. To successfully embed EFM into everyday activities across an organization, program leaders need to thoughtfully align EFM with existing processes and policies, such as internal communications, training, performance management and compensation (Figure 3).

Not surprisingly, the specifics look different for every company. For example, industry leader Frost Bank makes customer focus a major part of its internal and external communications, sharing stories of employees living brand standards and earning customer recognition as well as celebrating third-party recognition such as the bank’s recent J.D. Power Customer Service Champ award. A large technology company has weaved EFM into core operations by making it a key element in its account management and retention strategy. As frontline employees use alerts to recover at-risk customers and capitalize on upsell opportunities in real time and review account-level reports to craft appropriate contract renewal plans, the connection between EFM and business success is clear. Lastly, global airline AeroMexico uses a combination of customer feedback and operational data in its EFM solution to actively manage the performance of staff from flight attendants and pilots to airport location and operations managers and many of these employees get individual-level performance scores.

Step 6: Demonstrate your value

In the old days, satisfaction researchers presented their findings and walked away, leaving executives to worry about taking action and generating value. That just doesn’t cut it anymore. To build and maintain the broad support they need, modern EFM programs must market and measure the business value provide. Otherwise, they’ll never get off the ground – or they’ll have a very short flight.

While some corporate veterans might cringe at the thought of posters and pep rallies for new company initiatives, solid branding and marketing position an EFM program for large-scale success by creating awareness and momentum. For example, global industrial giant Siemens has internally branded its improvement efforts under the banner of Customer Focus in many of its operating units, helping to build and maintain awareness around the company. VMware maintains awareness by starting company – and customer – meetings with reviews of recent customer feedback, even when results highlight problems.

However, branding and marketing aren’t enough. Eventually, EFM programs must prove their value to keep their promises. This typically happens in three ways: 1) linking improved customer feedback scores to improved financials; 2) measuring return on investment in specific EFM-initiated projects and; 3) calculating retention and revenue from direct closed-loop customer intervention (Figure 4). American Cancer Society found that fundraising events with improving experience scores generate 10 percent more revenue than those with declining scores. With this type information, these organizations can make the case that score improvements enabled by EFM have real financial value. U.S. utility Nicor National attributed $1.5 million in annual cost savings to specific call-center improvements initiated through EFM. Lastly, a large B2B company calculated that it generates more than $12 million each year by directly following up with individual customers based on their feedback for both retention and sales.

Step 7: Renew your commitment

With the first six steps under your belt, you’ve made the transition from old-school research to modern EFM. Now start all over again! Sorry, but this is important. Traditional customer research might have retained its relevance had it more actively adapted to changing demands and new possibilities. That’s what EFM must do to stay relevant too. Just as your firm listens to customers, make sure that you listen to employees and other stakeholders to continuously improve your EFM practices by linking them to business strategy, connecting them with customer and employee journeys, designing them appropriately, implementing and maintaining the effective technologies, weaving EFM activities into routine business processes and marketing and measuring the value EFM delivers to your organization.

The future is already here

The path from traditional research to modern EFM is long and hard. The seven steps described above provide a high-level roadmap but the future may still feel discouragingly distant. It’s not. In the words of sci-fi cult hero William Gibson, “The future is already here – it’s just not very evenly distributed.” Dozens of companies have followed the path, or some version of it, and learned important lessons on the way that you can apply in your own organization. If you can let go of the past, stay focused on the future and seek help where you need it, you’ll have the opportunity to elevate your company and your career in ways old-fashioned researchers couldn’t imagine.