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Tuesday, June 16, 2009
How much should you spend on Customer Experience?
The Strativity Group surveyed more than 850 executives globally this year and is now publicizing
the findings in what they call their 2009 Customer Experience Benchmark Study. Lior Arussy, president
of the firm, states that "The economics of customer experience is critical. Companies must develop the financial understanding
that drives customer experience investment and return".
I couldn’t agree more
with that premise, but clearly see things differently when it comes how one acheives a healthy ROI. Mr.
Arussy is concerned about the need to spend a significant percentage of revenue “in customer experience”.
His study commends companies that invest 10 percent or more of their overall revenues in customer experience and claims
that they see myriad benefits including lower attrition rates and higher referral rates. Customer Experience
Partners has difficulty in understanding even what is meant by spending “in customer experience”.
We believe that the TOTAL customer experience includes every touchpoint in which the brand interacts with
their customer (whether intended our accidental). Yes the customer service center is part of the experience,
but so also is the brand’s advertising presence, their packaging, their trucks, service personnel, billing appearance,
website, etc. As such we just can’t imagine how some part of the budget can be
earmarked as being spent “on customer experience”.
From our point of view virtually
everything that touches the customer is part of the customer experience. Our belief is
that management’s role should be one of identifying the areas in which changes would be most valued by customers. There
are just too many things that could be done and too much money that could be spent to improve the customer experience (without
a justifiable ROI). Management should not be aiming to maximize the customer experience, but rather
should be seeking to focus efforts on the key issues that will optimize their investment by adding the greatest value
for customers.
Which direction is your company taking?
1:52 pm edt
Friday, June 5, 2009
Satisfaction scores deciding fate of auto dealrships?
Earlier this
week a Senate Committee was grilling the heads of Chrysler and General Motors about how they selected which dealerships they
had decided to close, and how they were treating those dealers. Congress has become involved in such issues of course because the government
now owns a large part of both Chrysler and GM, and because many of those influential dealers are highly visible employers
in their communities.
We could argue about the value of having a Senate
Committee attempting to micro-manage such major corporations, but what caught my attention most was the criteria that the
auto makers claimed to have used in their decision-making process. Unless I heard them wrong, the biggest
issues considered were: 1) whether the dealers were capturing what the manufacturer considered an appropriate share of total
auto sales in their territory, and 2) how positively the dealer was representing the brand as measured by their customer satisfaction
scores.
The Senators
apparently haven’t spent a lot of time buying or servicing there own cars over the years, because not one of them even
raised a question about the legitimacy of those satisfaction scores. As most consumers know from their
personal experience with dealerships, and as I know as someone who has seen from the inside how a number of automotive CSM
programs operate, what Detroit has done is now in some cases rewarded the dealerships that cheat. From
the hand on the shoulder request from the salesman to give them only “excellent” scores on the satisfaction questionnaire
(or as some dishonestly claimed “Or I won’t get any commission for this sale”), to the instruction sheets
distributed on service visits showing how to fill-out the survey form (with all “10s” of course), to the all out
bribes (we’ve honestly seen everything from a free tank of gas, to free floor mats, to $100 cash) to bring the survey
package into the dealership so they can “help you fill it out” (or even do it for you), to filing of fraudulent
addresses so the customer never even gets a chance to complete the questionnaire - some dealerships have done it all –
while others have played entirely fair and by the rules.
I have no way of knowing how many of those who systematically cheated
the system over the years have now been saved. I don’t know how many of those dealerships who played
fairly and believed that the satisfaction surveys were meant to capture honest feedback are now been shut down.
If that’s what the satisfaction scores
were going to be used for, someone should have advised the dealers years ago.
If they knew that the very existence of their dealership was on the line, do you think some of those honest dealers who
took the high ground would have been more tempted to play the Customer Sat Survey game differently?
12:37 pm edt
Thursday, June 4, 2009
Finding the tasks that customers value
I listened
in on a webinar yesterday because its title spoke of issues near and dear to me: “Better Customer Insights Equal Better
Interactions”. Three speakers used all the right terms and buzzwords like retention, lifetime customer
value, word of mouth, ROI and so on. I was about to fall in love with one speaker when she pointed out
that the real benefit of providing better insight was in helping clients focus their attention on the higher value tasks. I say about to fall in love because
she then finished her thought with the word “online”. (The area of expertise of her company). Another
speaker talked of providing a great customer experience. He explained that this of course would
be accomplished by giving customer contact agents the right information about their customers, the right training to answer
their questions, and the right guidance to offer additional products and services best suited to individual customer needs.
(All of course that could coincidently be delivered through the software solution his firm sold.) There is a lot of talk about the voice of the customer, and better
managing the customer experience. But very few of the experts and their firms seem to be beginning by actually
listening to the customer. Before acting clients really need to understand the TOTAL customer experience
– that is all the rational and emotional reactions to each and every interaction the customer has with their brand –
and that is a complex challenge to deal with. You might wonder who is willing to pursue such a thankless task. For
most of those who sell their services as experts in customer retention or customer experience management, it’s not where
they want a client to wander. If in reality the consulting firm makes their money selling CRM software,
or training, or web applications, or store design, or other upgrades to the customer experience, but those changes are not
in fact what the true voice of the customer reveals as the most valuable, then that’s certainly not the kind
of objective insight that they want to be helping develop.
Management of the Customer Experience without real financial success until clients get that true
voice of the customer. They need a trained and objective resource to help them learn what their customers
would value most BEFORE they hire the firm specializing in that area and move to action.
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