I’ve had the privilege to work with some people who are exceptionally bright, visionary, idea-generation machines.  For some people this is a hobby.  My colleagues tell me I’m good at providing structure to their ideas, so here are the questions I ask, and help them answer:

1. What problem are you solving, or what possibility are you offering?
2. Why should your customers care? Why should you care?
3. What makes you unique, different, or memorable?
4. What skills, people, or services are you missing that prevent you from presenting a complete offering?
5. What is your business model? How do you make money?

Answering these questions will tell you if have, or don’t have, a viable business concept worth further exploration.  All five questions should be answered from the “customers” perspecitve and the need that is being filled.  Remember if your business doesn’t have customers, then you don’t have a business, you just have a hobby.

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There has been much criticism of NPS as a single measure of loyalty.  With most of the criticism centered around the disbelief that a single metric can be reliable, and the inability of others to reproduce the results from the original book.  With this recent work it looks as though the authors are more on the path of using NPS as a process for building a customer-centric business than as a single indicator of ability to grow.  The authors state “Net Promoter is a metric and way of doing business.”  So while the book answers some questions, it still leaves others unanswered.

Pro’s:

• It backs off from the single metric concept and offers a good framework or operating model for collecting, analyzing and acting on customer feedback.
• It provides several good options for understanding and segmenting customers and what to do with each segment. It also offers a good methodology for driving organizational change towards becoming a more customer-centric organization.
• It finally talks about multiple question surveys for gathering customer feedback.
• They urge caution when using NPS to impact employee compensation.

Con’s:

• It lists a major tenet as “linkage to financial outcomes” but doesn’t discuss or show how to really do that.  How does one prove that an improvement in financial performance is due to an increase in NPS?  They state that it does, but don’t show how to prove it.
• Their discussion around correlation, regression, and relative impact analysis without a detailed example is a major fault.  They tell you why it’s important, but it really falls short on implementation.
• Much of their discussion around customer-centricity is not all that new.

So if you are struggling with how to start on the path towards a customer-centric culture it’s a good read.  If your still hoping that asking one question will get you a loyal customer base, keep hoping my friends. It’s just not that easy.

Many of these touchpoints offer confusing,  unclear, or incorrect information that is damaging your customer relationships.  So let’s examine the patients, determine a diagnosis, and provide a cure.

The Exam

• A webinar invite from a “Marketing Company” that is offering a free trial webinar (they usually charge for their webinars).  The invite asks me to confirm participation, but there are no clear directions or a link to confirm.  The invite also has the incorrect time on the email invite, and then I find I can’t even logon to the webinar once I learn it is happening.  And they want me to pay the next time?
• A very popular blog that I subscribe to via an RSS feed aggregrator sends me a daily digest email that only shows a message that this popular blog has changed, while all other subscriptions show at least a portion of the latest post. Too much other content to read so I rarely click on the link to go read the blogpost.
• Clicking on the “Change My Email Address” link at the bottom of newsletters only offers the ability to cancel my subscription instead of change it. Fine, I’ll just unsubcribe then.
• Downloadable file names are meaningless and don’t help me remember the content or the business it came from. When cleaning my desktop it’s just easier to just drag it to the recycle bin.
• Social Media apps that I add to my profiles or pages are just too hard to use or don’t do what they claim. “Remove App” is very easy to click.
• Complex sign-up and security procedures for content that isn’t that important. Required fields such as date of birth and security questions for email newsletters just doesn’t make sense.  I’ll just move on to less secure content.

Possible Diagnosis

• There are no standards for customer communications.
• There are no quality checks of the content.
• There are no customer experience checkpoints or testing.

A Cure

• List all the different ways your business communicates or touches customers (blogs, downloads, email, RSS feeds, social media, website, webinars, etc).
• Determine the call to action for each touch point.  What do you want the customer to do at each touchpoint?
• Test each touchpoint and not just once – for quality, calls to action, and customer experience. Test them on a regular basis because a change in your website may impact any or all of the touchpoints you didn’t consider.
• When testing, do it from the customer’s perspective. Does it allow the customer to do what they want and what you want them to do?
• Here’s the key – don’t have those who created the touchpoint/process test it themselves. You are too close to it and will often miss critical issues. Have someone else test it who is not at all related to your department, or have trusted colleagues or friends outside your company test your process.

Hopefully this will prevent the spread of this disease, and keep your business and your customer relationship healthy.

If you’re approaching social media as a “way to sell” then you’ve got it all wrong.  Companies need to look at social media from their customer’s perspective, and see it as a “way to buy.”  Your customers are not using social media to be sold, they may, at times, use it as a source of information and support to help them buy.

Helping Your Customers Buy

1. Be relevant. First and foremost your social media presence should focus on being relevant to your customers.  Offering the information and products they want, when they want it, and how they want it.  It’s really about customer advocacy, which builds trust, and trust leads to longer and stronger customer relationships.  The number one issue for email unsubscribes is relevancy, and it would stand to reason that same issue will hold for all communication channels.
2. Set clear expectations. Using social media to help customers buy is all about expectations – setting them, and meeting or exceeding them.  Be sure you let customers know what type of information they’ll receive and how often;  and stick to those parameters.

Blending Push and Pull

By combining the push of messaging with the pull of information and interactions, social media can be used to help build customer relationships:

• Push – News & Events
• Push – Product Information & Promotions
• Pull – Customer Dialogue & Insight
• Pull – Customer Support (SalesForce.com Social Media Integration)

The “pull” activities are more resource intensive, but that is where trust and loyalty will really be earned.  Stop using social media to sell, instead find ways to use it to help customer’s buy.

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Lesson Learned for Coke

According the Colloquy article, Coke underestimated the power of their decades of marketing.  What mattered to Coke loyalists was “their emotional connection to Coke as a quintisential American brand.”  Coke consumers attached more than just the taste of the Coke to their buying decision.  They attached the powerful images and memories associated with Coke campaigns over the years.

… subjects who knowingly preferred Coke were recalling, perhaps subconsciously, positive memories and impressions from Coke’s advertising campaigns. Most subjects said they preferred Coke; but given a blind choice, many of them actually preferred Pepsi.  Cultural influences have a strong influence on expressed behavioral preferences…”

According to Sergio Zyman, Coke’s CMO at the time, as detailed in Guerilla Marketing Research:

What went wrong?  The answer was embarassingly simple.  We did not know enough about our consumers.  We did not even know what motivated them to buy Coke in the first place… After the debacle, we reached out to consumers and found that they wanted more than taste when they made their purchase decision.  Drinking Coke enabled them to tap into the Coca-Cola experience, to be part of Coke’s history and to feel the continuity and stability of the brand…  As soon as we stared listening to them, consumers responded, increasing our sales from 9 billion to 15 billion a year.”

What is the lesson for your business?

Most business can’t afford the marketing budget of a Coke to build emotional attachements over generations.  What you should learn here is that your customers don’t buy for just one reason. There are many factors that go into the purchasing decision.  Price may be most important, or it may not.  Features, customer support, convenience, quality, and the overall customer experience also weigh in on the decision.  It will be different factors for different types of customers.

How do you know what is most important to customers?  Do what Sergio Zyman did and start listening to customers, watch their behavior, and don’t always rely on a blind, single-feature test.

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Is it a real loss after all?

I’m sure most readers will say that if they stop listening to customers then how will they know what customers want, or what customers think about their products and services, and what behaviors customers are exhibiting?  All valid points and probably true.  But the company could use other measures to track customer behavior such as revenue, purchases by segment, calls to customer support, and sales staff feedback.

What is the hidden price paid?

Think about the message the CEO is sending to the staff.  “We used to gather feedback, now we don’t, so maybe we don’t really care about our customers?”  It just seems natural to most employees to listen to customers.  For those not on the front-lines how else will they know that state of customer relationships?  For those on the front-lines how will they know if their experience is consistent with other front-line employees?  I have seen employee morale at companies like this really take a hit.  This change in policy, and how the void will be filled needs a good explanation from the new CEO to keep everyone on-board.

I’m all for cost-cutting measures if they make sense.  A real business leader needs to be able to balance cost-cutting with customer-caring.  I’ve yet to see a business only cut it’s way to growth…

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We can understand part of the problem by looking at the results from a study investigating company usage of customer feedback by Respond (now part of CDC), which showed that:

• 95% of companies collect feedback
• 45% alert their staff
• 35% use insights gained from the feedback
• 10% deploy a change or improve processes
• 5% tell customers they used their feedback

So what we have is a lot of activity (collecting feedback) but very little in the way of outputs (changes or improvements).  It is disappointing to see how few companies actually tell customers they used their feedback.  Maybe that is because they did so little with it.

So why so few outputs from customer feedback?

There are several reasons, and unfortunately none of them are as easy to solve as it was to collect the feedback in the first place.  Some reasons that come to mind are:

1. The feedback mechanisms are poorly designed at the outset and deliver very little in the way of actionable insights.  Referred to as drowning in data, but starving for information.  Often times multiple tools that collect data at different customer touch points are inconsistent in their language rendering the data confusing.  Useless information is collected that only adds complexity to the interpretation of the data.
2. There is no process outlining what to do with the data once it is collected.  There is no clear owner of the data, there is no accountability to make improvements based upon the feedback, and there is no mechanism to track improvements.
3. Probably the most important, is the company itself does not have a culture of valuing customer feedback. I once had a CEO tell me that if a customer contacts him directly that his processes have failed!  He did not want to talk to customers directly, and as a result he now had a significant customer relationship problem on his hands.  Part of a healthy customer-centric culture is having clearly understood mechanisms for integrating customer feedback into employee compensation programs.

None of these are easy fixes, but if you truly are a customer-centric company you need to put customer feedback at the heart of your business.  To make sure it all works, keep it simple, make it all consistent, and make it part of your culture.  To accomplish all that you need to do your best to be able to correlate changes in customer feedback (leading indicator) to changes in the way you measure your business (lagging indicator).  If you don’t, make sure there are plenty of flotation devices around so you don’t drown in your data.

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• Where are we now? (current state)
• Where are we going? (future state)
• How will we get there? (strategy & tactics)
• What resources will we need? (people, money, technology, etc)
• Who will do what? (strategy owners, participants, etc.)
• How will we know when we get there? (measures of progress)

Many will follow a process that looks something like this:

1. Gather necessary data
2. Discuss process, expectations, and strategy prior to developing plan
3. Planning meetings or retreat to develop strategic/action plan(s)
4. Build process/reports to measure progress toward plan

Pretty standard stuff, eh?  With any process, the success of each step relies on how well you complete the prior step.  If you do a poor job of data gathering, then your whole plan could be suspect.  When it comes to gathering data about your customers, it’s not just the ‘gathering’ that is critical.  It’s also what you are gathering in the way of quality data that is most critical.

Question Your Customer Data and Definitions

Each organization has some standard customer data and metrics.  If your company has been around a while (> 3 years), it’s time to question the accuracy and source of the data, and what is really meant by all those fancy terms you use when discussing customers:

• Take the time to understand how you calculate customer growth, retention, or profitability, and to see if adjustments are needed.  Many times data sources are inappropriate or the method of calculation needs to be adjusted.
• Review your customer data to confirm that your metrics have the right mix of leading (predicting performance) and lagging indicators (measures performance).  Does an increase in satisfaction or Net Promoter score correlate to an increase in customers, or revenue, or profit? Do you know what causes those measures to go up or down, and what changes to make?
• Define those terms everyone uses, but not all agree on the definition – such as customer experience, customer insight, or social media strategy.
• Challenge widely held customer “beliefs” to see if they are true for your organization.  For example, does it really cost you six times as much to acquire a customer as to keep one?

Take nothing for granted.  Challenge your data, your assumptions, and your beliefs about customers.  It may ruffle some feathers for some people, but failing to do so can turn your strategic plan into nothing more than a 3-ring binder that serves as a hefty bookend on your bookcase.  BTW – do we still print strategic plans?

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A recent article on Marketing Sherpa demonstrated the difference between what companies (vendors) believe are the reasons customers leave, and the real reasons customers leave.  While companies cite pricing as the top reason, customers say they really leave because of customer service.

Why the Difference?

The article sights two great reasons for this difference.  First, since it’s usually sales reps that report the loss, it’s easier to report price as the issue since it’s beyond their control.  Second, it’s easier for customers to claim price as the issue as it’s harder to dispute and doesn’t cast blame on sales.

Divorce and Customer Loss

I can’t find the exact study, but when asked why a couple is divorcing, an often cited reason is financial stress.  When researchers dove deeper with the individuals to get to the real reason for the divorce it’s usually not financial.  It’s just that it’s easier to say that, it’s less embarrassing than stating infidelity or abuse as the reason.  Same thing is happening here.  It’s just easier to use price as the excuse.

It’s hard for a customer to tell you straight-up that it is poor service that pushed them to leave.  It’s hard because that kind of information may lead to confrontation, defensiveness, or hurt feelings with the sales rep.  These are all experiences the customer doesn’t want to pile on top of their existing frustration with your company.

More Proof

As a customer researcher, I am often able to show companies that their beliefs around customer loss are just not real.  By conducting customer satisfaction interviews in the B2B space I have often showed clients that service and support were significant issues for clients. It can come as a shock since the company previously believed they had no problem with their sales and support staff.

In working with credit unions and member (customer) loss, you will find that many members will cite “moved out of area” as a primary reason for leaving the credit union.  Now I know the housing crunch is brutal, but there really are not that many people moving out of the service area of the credit union.  It’s just easier to give that reason when you are face-to-face with the teller when you go in to close your account.

Good News, Bad News

As the article states, the good news is that customers are less likely to leave because of price.  Also, excellent customer service can lead to stronger customer loyalty and a price premium for your company.  The bad news – if you don’t really know what your customers think of your customer service you may be headed for a trial separation or a divorce…

Why the difference you ask?  Even if you didn’t ask, here is my take:

“It comes down to trust, and the most trusted source for information about a company and it’s products for consumers comes from someone like themselves. (AdAge)”

So the key to getting rave reviews on your customer reviews rests in your ability to provide customers the ability to determine how much the review writer is like themselves.  So some do’s and don’ts:

Don’t:

• Have your marketing people write your reviews, or put up a “sponsored” review that reads like a marketing message.  Consumers can see through that “overly glowing” review and will not trust other positive reviews on your site, or any other messaging for that matter.
• Remove negative reviews from your website.  Consumers understand that not all reviews will be positive.  Have no negative reviews can often raise warning flags.  Let customers see the nature and content of the negative reviews.  Give your customers credit for their ability to discern what is fair.
• Don’t reply to negative reviews with excuses.  Instead, reply by acknowledging the customers complaint and respond with a fair solution.

Do:

• Summarize the scoring of your reviews and let customers see the distribution of reviews.  Let them see if all reviews were 5’s and 4’s or if they were all 5’s and 1’s.  These two views of customers reviews for video game consoles tell different stories.  The one for the Wii has a much higher percentage of 5’s and 4’s and a lower percentage of 1’s than the one for the Xbox.

• Let reviewers tell customers a little about themselves so the customer can know how much the reviewer is “like themselves.”  Your products/services can’t be all things to all people.  The review format from Sierra Trading Post does a nice job of letting a customer know more about the reviewer by asking them to describe themselves and their “gear” style.

• Let customers vote on reviewers content, as well a flag potentially problematic reviews for things such as profanity, spam, duplication, content problems, etc.
• Use customer reviews to improve your product/services, and let customers know it was their reviews that helped.

Remember to focus on building trust, demonstrating transparency, and being an advocacte for your customers (doing what’s best for your customers) and you’ll be well on your way to getting 5 stars for your reviews.

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… C: wait… SD: wait…