Tracking the Actual Customer Experience

By Richard Hanks

[divider]It’s not just about who the customers are, or what they like and dislike.
It’s about what they are experiencing.
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CRM is Good, But…

CRM has been all the rage over the last 15 years. I’ve been around, purchased, and helped build some big customer relationship management systems. But my favorite CRM system is still the one that Ritz-Carlton had when the chain was acquired by Marriott. It was not sophisticated, but it worked.

All employees had a small pad of cards in their pockets. When they noticed a customer like or dislike, they would write it down on the pad. There would be things like “the guest ate only the strawberries from the fruit plate” or “customer prefers late checkout,” etc. At the end of the day, the cards were deposited into a shoe box, and then later entered into a spreadsheet. Fabulous! This simple system put Ritz-Carlton on the map. Today, wonderfully sophisticated CRM systems are available. These systems tell us all about a customer’s history and their likes and dislikes, but they do not usually tell us if the customer got what they expected from their most recent experience.

Market Research is Good, But…

On the other hand, market research gives us a good feel for the average customer experience. Through sampling techniques, a company extrapolates from what a few customers experience, to how the “average” customer generally feels. But market research is not targeted toward improving operations, but rather toward understanding customers.

Looking Forward

The challenge with traditional customer-centric approaches like CRM and market research is that they are not timely and only show a partial view of the customer experience. Typically, CRM systems assist companies by collecting useful marketing and demographic data, rather than addressing existing customer needs. Market research is valuable in understanding product requirements and profiling potential customers, but is not usually set up to understand the needs of today’s customers.

I’ve seen companies use CRM to track information as detailed as the customer’s birth date, but then have no idea what the customer experienced only an hour ago when they called the company’s call center with an issue. Market research can show a restaurant chain that their salsa is too mild in San Diego, but they don’t have a clue about what an individual diner experienced in their restaurant today.

Over the years, a number of well thought out approaches to managing and measuring customer service have been developed. But to me, the most important part of measuring any customer experience can still be summed up in the simple question, “How did it go?”

Customer experiences are created through multiple company touch points: advertising, retail service, call center contacts, field service, web site, social media, and more. To retain customers, companies need to understand these various touch points and know what the customer is experiencing at each one. By inviting each customer to give feedback (not just a sampling and not just a snapshot), a company is demonstrating its commitment to continuous service improvement. In my opinion, the best current vehicle for doing this is the real-time customer survey.

Focusing on the Basics

When surveying customers, it’s always a temptation to make service measurement too complex. If you have leanings toward the theoretical and the academic, it is fairly easy with this particular subject to find yourself sliding down the slippery slope of either:

  • Mental gymnastics about insignificant nuances
  • Masterful analytics of accurate but unusable information
  • Incredibly precise measurements of “milking mice”

It’s not that I find some research incorrect or without merit, but rather that I find many conclusions “beyond the mark” of most service businesses who are living the everyday. To use a football analogy, a coach might develop a brilliantly sophisticated offensive play, but without months and months of proper conditioning and basic blocking and execution skills by the offensive line, the quarterback will never get a chance to implement it – he’ll be flat on his back.

Deep analytical research can be mentally stimulating and may even provide your company with a unique edge in specific areas, but it isn’t generally where the “low-hanging fruit” exists. Almost always, the 80/20 rule points to basic execution as the first place to focus.

There is some sophisticated and interesting research one can do, but like many of you, after years of exploring the deep and academic nuances of customer service, I’m even more convinced that the biggest wins come in executing the basics. The big hotel guys expressed this concept better than I could. J.W.Marriott said “Hot food HOT, cold food COLD.” Along the same lines, Conrad Hilton said, “Leave the shower curtain on the inside of the tub!” The point is to look at the everyday and focus on the fundamentals.

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Measuring Five Basic Things

I’ve found that the service experience generally involves the measurement and improvement of five basic customer experience areas:

  1. The product or service they came to buy
  2. The person or team that delivered it
  3. The process of doing business with your organization
  4. The atmosphere, location, or method that encompassed it
  5. The confidence and reassurance they felt during the experience

Focusing on these five simple areas and measuring the customer experience can do the most to impact customer satisfaction and loyalty.

The truth is that concentrating on the basics can be rather boring. It’s focus. It’s details. It’s sometimes drudgery. It’s repetition and consistency — but that’s why it’s the big win. It’s not really all that hard. Very few people want to focus on what I call the “boring everyday” but it’s the “boring everyday” that will actually make you stand out.

Practical Tactics

Here are some questions to ponder as you approach the customer’s everyday experience:

  1. What are your top compliments and complaints? List and categorize them.
  2. What do they absolutely love about you and how can you build upon that?
  3. Where are you falling short?
  4. Are you excelling at the “core delivery” of your company?
  5. Does your training focus on the “blocking and tackling” of service in your industry?

Measuring Loyalty

Loyalty is a higher-order measure of customer attachment than satisfaction. Loyalty involves an emotional commitment to tie to your brand. It usually has an attitude component as well as a behavior component. (I feel better about it and plan to keep buying it.) Attitudes are important because buying again does not always mean a customer is emotionally invested. For example, you may not like your insurance agent, but you renew because you don’t have time to shop around. Then your friend tells you about a new agent and you switch. You continued to buy, but were not really loyal to the first agent.

Customers demonstrate true loyalty when they have to choose between options. You don’t want customers coming to you simply because there is no other option. When a customer chooses to be loyal to a brand, he is less likely to defect and more likely to buy again, think about you first, and refer you to others. That’s why I like the definition of loyalty as a higher share of wallet, mind, and mouth.

Generally, most loyal customers are very satisfied, but not all satisfied customer are loyal. They may be satisfied with you, but with the slightest irritation off they go to your competitor. On the other hand, customer satisfaction plays a key role in retaining customers and driving them toward loyalty.

So what is the best measure of loyalty? The truth is that there is not one single best measure. Some research studies point to “likelihood to recommend” as the best measure, while other research suggests “overall satisfaction” as the metric most correlated to future profits. Still others use “behavior probability” as the best indicator.

The truth is this: The best measure of customer loyalty for your business is the one that leads to long-term, repeat buying behavior and referrals from your customers, and therefore more profits for you. However, teasing this out of the data can be a complex and time-consuming process. I recommend a three-question composite index comprised of “overall satisfaction,” “likelihood to repurchase,” and “likelihood to recommend” as a proxy for loyalty. This is sometimes called the customer satisfaction index (CSI) and has been used for years.

Once a loyalty metric has been chosen, it is then used as the dependent variable against which individual service issues are statistically measured in order to derive those service issues (key drivers) that have the greatest impact on satisfaction and loyalty.

The key is getting real-time feedback on service issues, leading to local accountability, and continuously focusing on improving operations so you can keep customers coming back long enough to allow them to become emotionally involved – to become loyal!

This article is an excerpt from the book, Delivering and Measuring Customer Service, by Richard Hanks. Hanks is a board member for InMoment (formerly MindShare Technologies), a survey and analysis organization focusing on actionable intelligence. For more information about InMoment, please visit www.inmoment.com.

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