What Your Customers are Really Telling You

How do we keep customers satisfied and loyal for the long haul?

October 14 2009 by Andrea Ayers


At a time when retaining customers is vital, CEOs are starting to take a drastically different approach to keeping customers satisfied and loyal for the long haul. This approach puts the emphasis on the customer experience, realizing that the service experience—good, bad or indifferent—has a significant impact on the customer’s continued relationship with a company.

To understand the impact of the customer experience, look at the gap between company and customer as revealed in a recent Convergys survey. To determine what people really think about customer service, we surveyed 2,000 customers, 1,592 employees and 127 senior executives of large companies in the U.S. and the United Kingdom across 10 major industry segments (nine in the U.K.).

The results tell us that we have shifted from a service economy to the experience economy, where customers are in control, brands are becoming commodities and successful companies create consistently superior experiences. Customers have more power in the marketplace than ever before, but they are harder to reach, harder to impress and more likely to take their business elsewhere without notice.

They also don’t think much of the current state of customer service. In fact, as many as 48 percent of our customer respondents said that the enterprises with which they do business “don’t know and don’t care” about their needs or their experiences, citing problems such as rude customer service staff, employees who provide the wrong information and employees who never solve the customer’s problem.

Over half (56%) of consumers said that when they take the time to give feedback, companies do nothing with it. For other customers, attrition is the new company feedback. After a bad experience, 42 percent of customers surveyed say that they will simply leave a company without ever telling the company why.

Nearly nine out of 10 customers will, however, tell their friends and colleagues about their bad experiences, effectively poisoning the well of a company’s prospective customer base. Social media has further turned the tables so that dissatisfaction can become an uncontrollable, multichannel, viral, anti-marketing campaign extending far beyond the loss of one customer.  

When customers are satisfied, they are not necessarily loyal. More than 80 percent of consumers surveyed indicated that their customer expectations were satisfied, rating service as exceptional 36 percent of the time. However, the majority would leave the companies with which they do business for better value. Customers are satisfied when a company successfully completes transactions and understands their needs. Customers are loyal only when they perceive additional value beyond the ordinary parameters of service, and the more extraordinary the value, the greater the loyalty. The difficult part is defining the value levers. Tech-savvy “millennial” customers rate automated, fast interactions as valuable, while retirees cite personalized, demonstrative instruction as key to their continued loyalty. Companies must meet all their customers’ needs—no matter how divergent— to secure loyalty.

Ultimately, what our research shows is that the customer experience is the new competitive differentiator. The customer experience is at least as important as product quality and more important than brand or price to the consumers we surveyed. The quality of customer service is a key factor that influences consumers’ decisions to remain with a company or seek a new service provider with a better customer experience.

Based on our research, here are the five most important things your customers want you to know:

1. Your company just doesn’t get it: Almost half (48%) of the consumers surveyed said that companies don’t get it when it comes to what they experience as customers. Over a third (41%) believe that companies don’t listen to their feedback. This underscores a fundamental management problem: managing inside out for maximum efficiency instead of taking feedback from the outside and using it to improve the customer experience.

2. Service is paramount: No fewer than 78 percent of consumers believe service trumps personalized features, and 86 percent of customers believe service defines the brand. Customers rate brands based on their own experience with a company, and virtually all leading brands can charge a premium by making service their defining characteristic.

3. A satisfied customer isn’t necessarily a loyal one: Even a satisfied customer who rates a company’s service as exceptional will leave that company for one that provides better value. Customers are satisfied when a company successfully completes transactions and understands their needs; customers are loyal only when they receive value beyond the ordinary parameters of service. What is valuable to customers varies widely, but companies must strive to meet all their customers’ needs to secure loyalty.

4. Never underestimate the power of a bad experience: Nearly half (42%) of consumers will stop doing business with a company following a bad experience and never tell the company why they left. They will, however, tell their friends and family about bad experiences. Companies need to understand that negative customer experiences even those they’ll never hear about have a direct correlation to attrition, so it’s important to work on improvements that drive customer satisfaction.

5. One size does not fit all: Those U.S. consumers preferring automated channels have doubled in the last four years, with 55 percent of both the U.S. and U.K. population preferring automated resolution to waiting to speak with someone on the phone. Companies must balance automated self-service with agent-assisted service and deliver a seamless customer service experience every way they serve their customers.

The ability to deliver an excellent customer experience is a competitive necessity, even as customers’ needs and preferences change. Companies must meet the challenge of evolving with their customers over time and master the skill of managing the customer experience across an array of changing service channels.

 Seven Steps to Customer Experience-Oriented Employees

Being able to manage the customer experience depends strongly on being able to manage the employee experience. A happier, more satisfied and better-informed employee can go a long way in influencing the customer experience. Convergys research identified these steps companies can take to help their work forces do their best for the company’s customers:

  • Train each employee according to his or her needs. Emphasize individualized learning; flexible access, format and timing; and quality over quantity. Use blended and just-in-time learning to support employee performance, and central learning management systems to track employee learning.
  • Equip employees well. Give employees the tools they need to provide targeted, high-quality service. These include systems that help manage knowledge, streamline navigation and provide analytics-based recommendations for individual customers.
  • Empower employees to take action. Policies, processes and systems should enable employees to take action and resolve customer issues quickly and accurately. Metrics and incentives should focus on customer experience, as well as on efficiency.
  • Acknowledge and act on employee feedback. Companies should actively solicit and act on employee feedback that can shed light on ineffective processes and other workplace issues that hamper the delivery of good customer service.
  • Bring employees into the fold. Workers often have a good understanding of what they need to do to succeed in their jobs, but they lack the big picture perspective. Understanding company strategy enables employees to link their efforts to overall corporate success and helps build engagement and motivation.
  • Show employees the love. Companies need to provide employees with an environment to be successful and advance their careers. Open communication, ongoing personal and professional development opportunities and well-designed reward programs that align appropriately with performance expectations show that companies care.
  • Engage employees in their careers. Invest in employee administration, education and talent management to meet employee workplace needs. Provide a strategic blend of HR communication channels, including self-service.

 

Here are the steps companies need to take to reconnect with their customers and build the strong relationships that fuel success:

1. Develop an outside-in view: Draw on a variety of information sources to bring the external “customer reality” and the internal “enterprise reality” into alignment.

 For several years, a large telecommunications company had been conducting a “voice of the customer” survey program, but the program was falling short of its original objectives. Customer response to surveys was limited and reports were difficult for management to use in making process improvements.

To revamp the program, the company designed its surveys to capture more customer-experience data and to include a broader sample of customers. To support those changes, the company made extensive use of analytics technology, using it to identify key drivers of customer satisfaction, to understand customer usage of various channels throughout the customer lifecycle, and to assess the effectiveness of save/callback efforts with defecting customers. The company also implemented a real-time reporting tool customized to each level of management, and real-time reports for use by business analysts. It then implemented a variety of tools and techniques that would enable it to use customer insights to drive business process improvements.

As a result, the monthly volume of survey responses grew from 1,000 to more than 50,000, providing a wealth of information that has helped the company improve the customer experience. The ability to identify unhappy customers led to a 60 percent reduction in churn. A better understanding of the drivers of customer satisfaction allowed the company to reduce its high service levels in e-mail interactions, thereby cutting costs. Moreover, the analytics driven insights enabled the company to improve training and coaching and re-evaluate channel strategies.

2. Focus on the basics of customer care: Deliver results by enabling front-line employees to address segment- specific customer issues, building flexibility into the workforce and recasting internal metrics to encourage quality interactions with customers.

Operating in a fast-moving industry, a major technology company found it difficult to keep its technical support representatives up to date on constantly changing products. Without adequate product knowledge, those reps found it difficult to quickly resolve customer issues and often had to transfer calls to other parts of the organization that could help the customer. The results had a negative effect on customer satisfaction levels,   and executives worried about the overall effects on the customer experience.

In response, the company implemented a new learning model that addressed the entire agent lifecycle from new hire training to continuous learning and performance improvement. The new approach took advantage of e-learning tools that deliver content to individual agents based on their skill gaps and then track and report on their progress and performance. The effort included revision of learning content based on customer feedback, the redesign of processes to enable the rapid dissemination of new learning content and the use of performance focused coaching agents to augment the new tools and processes.

In just four months, overall customer satisfaction scores rose from 66 percent to 70 percent, average handle time dropped from an hour to 42 minutes and first contact resolution improved from 63 percent to 70 percent. The number of problem-escalations per month dropped to zero. Overall, the customer experience has been greatly enhanced—and so too has the employee experience, with agent satisfaction scores rising from 73 percent to 85 percent.

3. Strengthen the employee experience: Provide greater flexibility, better development opportunities and more effective learning to drive employee satisfaction and engagement.

Effective learning has a tremendous impact on retention and engagement. When a U.S. technology retailer used a combination of online and offline learning to cover topics such as product knowledge, sales skills and customer service, it reduced average time-in-training per employee from 200 to 68 hours and shortened product-specialist certification time by 60 percent. It also cut employee turnover by 15 percent an indication of greater employee satisfaction and engagement, which is linked closely to customer satisfaction and loyalty.

4. Leverage technology for the right experience: Use self-service applications for cost-effective, customer- friendly interactions, and blend technology and people to create targeted interactions that drive greater customer lifetime value and customer satisfaction. 

Companies can leverage technology to provide automated relief. For example, a global financial services company found that a growing number of its customers were calling from around the world for help in finding ATM locations where they could use their credit cards. The calls, fielded by contact center agents, were taking up a lot of the customers’ and employees’ time and driving up the cost to serve.

As the number of ATMs available to customers grew, the company saw that these ATM-related calls would grow as well, and it wanted to find a better way to handle these requests. It began by creating a dedicated toll-free number that customers could use to locate ATMs, complemented by the implementation of a self-service, voice-activated ATM-locator application. The automated solution, which was able to support customers across the globe, used caller-ID to suggest a search for nearby ATMs automatically.

The system resulted in an immediate reduction in calls coming into contact center agents, with the speech application handling hundreds of thousands of calls. Over time, the company added a mobile, location-based feature that provides search results over the phone or via text message. It also launched an ongoing analysis and improvement program that continues to fine-tune the system to meet the evolving needs of customers. This improvement program has further reduced contact center workloads by cutting the number of callers transferring out of the automated channel by 50 percent—an indication that the customers are happy with the experience provided in this cost-effective channel. It has also saved the company money, since it’s much more cost-effective for certain calls to be handled via automation instead of a live agent.

5. Take a balanced approach: Ensure that people, processes and technology are working together across channels and the customer lifecycle to meet the needs of both the customer and the company. Taking a balanced approach helps eliminate bottlenecks.

A few years ago, a major financial services firm’s back-office operation, which handles the processing of dispute correspondence for credit card accounts, was having trouble keeping up with workloads. As a result, customer satisfaction was low between two sets of customers: card members and the businesses that received payments.

The company pursued a balanced and strategic approach that addressed processes, technology and people. One initiative focused on increasing back-office efficiency, using Six Sigma methodologies to review process flows and identify bottlenecks. Its findings: About one-third of completed cases were routed incorrectly, leading to delays and growing work volumes.

To fix the problem the company created a “routeback” specialist position to review all cases and route them to the correct departments. It also implemented a new process to monitor closely the quality of resolved cases and updated an online help system used by agents in dispute resolution.

At the same time, the company used analytics to understand the key drivers of customer satisfaction and then strengthened its training curriculum to address those factors. Such insights also enabled the closer alignment of agent performance metrics with customer satisfaction, as well as the implementation of a daily review of top metrics to improve the monitoring and management of performance.

The efforts quickly bore fruit: Processing times dropped from 14 days to five days, and overall case volume dropped 50 percent, saving more than $1.6 million annually. Over the course of two years, customer satisfaction increased 12 percent to an average of 90 percent for card members and 95 percent for business customers.

Ultimately, customers want reliable help packaged in a good customer service experience.

As we move away from a service economy towards an experience economy, companies have the opportunity to adopt a new model in customer care, one that works from the outside in, listens closely to their customers and their wants and needs, and places customers at the heart of the service experience.


Andrea J. Ayers is president of customer management at Cincinnati, Ohio-based global relationship management firm Convergys.