|By Alison Diana
Customer Experience Management Benefits Are Nascent But Proven
From traditional phone banks and letters, to blogs, Facebook and Twitter, today's customers have a myriad of ways in which to keep in touch with business. But if companies don't optimize the customer experience, as well as monitor, manage and track all these open lines of communication, they risk losing customer loyalty - and a lot of top line revenues.
It falls on IT to integrate these streams of information, make them searchable and manageable and, ultimately, useful. It falls on those empowered with the customer relationship management strategy to solicit customer feedback and continually improve channels of communication. Without the mix of strategy, business processes and supporting CEM software to deliver consistent customer experience management (CEM), many customers' will likely choose not to engage due to a poor online experience or if communications fall on deaf or unavailable ears, resulting in frustrated consumers who turn elsewhere - and, most likely, openly vent their dissatisfaction to many other potential buyers considering your company's products or services.
CEM software solutions provide insight to maximize the customers use of online channels and also give businesses visibility into consumers' online activities, for example allowing organizations to see why consumers leave a company's website. Art.com, for example, emailed a coupon to loyal customers but the back-end system failed to correctly process the coupon code during check-out, causing a majority of shoppers to abandon their transactions. The e-tail site's Tealeaf CEM analysis software's real-time alert system notified Art.com about the high rate of abandonment and the customer service department noted many shoppers had a problem with the coupon. Art.com identified 300 "lost" customers who abandoned their orders due to this error and emailed these customers with a new purchase incentive, curtailing dissatisfaction with their experience.
It is, then, vital that organizations tap customer experience management solutions to ensure they manage and continually improve upon the entire consumer experience. But all-too-often businesses find themselves limited by antiquated systems or policies, according to a 2009 IDG/Fortune study of 258 organizations.
Less than one-third of those polled said their companies are "highly effective" at adapting to changing customer needs and priorities, and a measly 7% said their organizations were "extremely effective" at accomplishing this goal, the report found. Fewer than 50% of respondents said their company had a "high level of effectiveness in using technology to handle and respond to customer requests."
Running the risk of losing customers to a competing product or vendor can be a costly mistake. After all, acquiring a new customer is five to 10 times more expensive than retaining an existing one, according to the CBS Business Network, and repeat customers spend an average of 67% more than new ones. In addition, a 5% increase in customer-retention can deliver a profit increase between 25% and 100%, CBS Business Network estimated. Those are impressive ROIs.
Those businesses that proactively pursue CEM strategies, policies and tools reap impressive rewards.
Forrester Research tracks CEM and its impact on three elements of loyalty: Consumers' willingness to purchase more, reluctance to switch suppliers and likelihood of recommending the provider. The research firm then looked at the percentage of loyal customers at 100-plus businesses and determined that "customer experience leaders" had an advantage of more than 14% over "customer experience laggards" in all three areas," wrote Bruce Temkin, who now is managing partner of Temkin Group.
"The annual revenue gains from a modest difference in customer experience can total $311 million for a large hotel. Banks and hotels garner the largest gains from their current customers, while airlines get the most from an increase in positive word of mouth," he said. "Customer experience professionals should use this information to build customized business plans."
Customer experience management leaders included Barnes & Noble, Marriott Hotels & Resorts, and Hampton Inns, while Charter Communications took the bottom spot on Forrester's ranking. But no matter where they ranked, 90% of those surveyed stated that customer experience is very important to their companies, and 80% are using it as an area of differentiation, the study found. The main problem: A lack of clear strategy, respondents said.
Integrating Social Media
In addition to highly effective online tools and traditional communication channels such as email, phone and surveys, businesses should integrate social networking into their CEM strategies as part of their voice of the customer (VoC) programs, said Temkin. "Social media tools like wikis, Facebook and blogs will be increasingly used to facilitate and stimulate communications within organizations," he said. "Customer service organizations will become increasingly social; blending agent interactions, self-service applications and multi-channel knowledgebases with customer-to-customer interactions."
This rich tapestry of information will give companies a fuller picture of consumers' likes and dislikes, empowering them to provide better products and services, more accurate price-points and distribution outlets, and ultimately resulting in better sales and profits.
Social media also allows companies to create an emotional connection with consumers. "The social web is becoming a very human place where people are connecting with other people in an emotional way. Only humans can make other humans feel valued — computers can't do that," Kimarie Matthews, vice president of customer advocacy and loyalty at Wells Fargo Bank, told ClearAction LLC. "Social media is an opportunity to engage and communicate with customers, listening to them, showing them how we're acting on their feedback, and giving them feedback on what we're doing."
In fact, CEM strategy requires a blend of human and technology integration: Businesses must train employees at all levels to ensure buy-in and consistent understanding of the consumer's point-of-view. Customer-facing employees should be empowered to act upon the consumer's requests or escalate a concern, thereby creating a balanced customer service team that acts on customer feedback.
On the technology front, the business should access and act upon an integrated deluge of information steadily streaming into its call centers, its order-entry departments and websites, offering a constant and consistent experience to customers whether they shop by phone, catalog or website.
Consumers have never been more powerful or more vocal. Satisfied customers are a powerful, unpaid sales force, and one that can dramatically boost revenue and reputation if you listen well and act upon what you hear.
Categories: Customer Experience Management
Author: Alison Diana
||— Comments for this page are closed —
||Were considering building surveys and implementing a voice of the customer program. Is there a standard structure for voice of the customer programs and what resources might you recommend?
||There's no consensus structure for VOC programs, however, in his book "Voice of the Customer Marketing", Ernan Roman lays out a five step implementation process as follows:
- Perform VOC research—Conduct in-depth interviews with segmented prospect and customer research cells to understand how each segment defines value and relevance with your company;
- Implement VOC-driven opt-in relationship strategies—Engage customers to indicate their contact preferences and tell you exactly what communications, types of content and offers they want, and how often they want them;
- Create a VOC-driven multichannel mix—Launch an integrated multichannel campaign program that deploys the type of media, messaging and frequency requested by each customer class learned from the prior step;
- Create a VOC-driven social media presence—Further leverage the VOC data to create strategies for relevant, real-time engagement and conversations in social media channels;
- Integrate customer service as part of the program—Marketers must include customer service to help improve the post-sale experience or the program will fail to gain traction.
Also, if you're truly going to integrate VOC data and help the company chart its course with the customer as its North Star, telephone interviews are much more effective than surveys. Real discussions, with structured but more flexible call scripts, provide insight that simple surveys may fail to capture. Not every customer will engage in telephone dialogue, but for those that do, you will achieve qualitative and specific input in how that customer wants to be treated, and for those that don't you can employ other techniques as a fall back.
Share This Article
Forrester Research found that customer experience management leaders achieved an advantage of more than 14% over customer experience laggards in the areas of consumers' willingness to purchase more, reluctance to switch suppliers and likelihood of recommending the provider.
More Articles By Alison