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Onboarding Research: Research Techniques to Track Effectiveness of Stabilizing New Customer Relationships

As we explored in an earlier post, 3 Types of Customer Interactions Every Customer Experience Manager Must Understand, there are three types of customer interactions: Stabilizing, Critical, and Planned.

The first of these, “stabilizing” interactions are service encounters which promote customer retention, particularly in the early stages of the relationship.

stable

New customers are at the highest risk of defection, as they have had less opportunity to confirm the provider meets their expectations.  Turnover by new customers is particularly damaging to profits because many defections occur prior to recouping acquisition costs, resulting in a net loss on the customer relationship.  As a result, customer experience managers should stabilize the customer relationship early to ensure a return on acquisition costs.

Systematic education drives customer expectations beyond simply informing customers about additional products and services; education systematically informs new customers how to use services more effectively and efficiently.  Part of this systematic approach to create stabilizing service encounters is to measure the efficacy of customer experience at all stages of this stabilizing process.

Onboarding Research

The first step in designing a research plan for the onboarding process is to define the process itself.  Ask yourself, what type of stabilizing customer experiences do we expect at both initial purchase and at discrete time periods thereafter (be it 30 days, 90 days, 1-year)?  Understanding the expectations of the process itself will define your research objectives, allowing an informed judgment of what to measure and how to measure it.

Specific recommendations vary from industry to industry, however, typically, we recommend measuring the onboarding process by auditing the performance of the process and its influence on the customer relationship.

Performance Audits

Mystery shopping is an effective tool to audit the performance of the onboarding process.

First, mystery shop the initial sales process to evaluate the efficacy and effectiveness of the sales process.  Be sure to link the mystery shop observations to a dependent variable, such as purchase intent, to determine which sales behaviors drive purchase intent.  This will inform decisions with respect to training and incentives to reinforce the sales activities which drive purchase intent.

Beyond auditing the initial sales experience, a mystery shop audit of the onboarding process should test the presence and timing of specific onboarding events expected at discrete time periods.  As an example, a retail bank may expect the following onboarding process after a new account is opened:

Period Events
At Opening Internet Banking PresentationMobile Banking PresentationContact Center Presentation

ATM Presentation

Disclosures

 

1 – 10 Days Welcome LetterChecksDebit Card

Internet Banking Password

Overdraft Protection Brochure

Mobile Banking E-Mail

 

30 – 45 Days First StatementSwitch KitCredit Card Offer

Auto Loan Brochure

Mortgage/Home Equity Loan Brochure

 

In this example, the bank’s customer experience managers have designed a process to make customers aware of more convenient, less expensive channels, as well as additional services offered.  An integrated research plan would recruit mystery shoppers for a long-term evaluation to audit the presence, timing, and effectiveness of each event in the onboarding process.

Customer Perspective

In parallel to auditing the presence and timing of onboarding events, research should be conducted to evaluate the effectiveness of the process in stabilizing the customer relationship by surveying new customers at distinct intervals after customer acquisition.  We recommend testing the effectiveness of the onboarding process by benchmarking three loyalty attitudes:

  • Would Recommend: The likelihood of the customer recommending the brand to a friend relative or colleague.
  • Customer Advocacy: The extent to which the customer agrees with the statement, “you care about me, not just the bottom line?”
  • Primary Provider: Does the customer consider the branch their primary provider for similar services?

These three measures tracked together throughout the onboarding process will give managers a measure of the effectiveness of stabilizing the relationship.

Again, new customers are at an elevated risk of defection.  Therefore, it is important to stabilize the customer relationship early on to ensure ROI on acquisition costs.  A well designed research process will give managers an important audit of both the presence and timing of onboarding events, as well as track customer engagement and loyalty early in their tenure.

 

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3 Types of Customer Interactions Every Customer Experience Manager Must Understand

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Every time a customer interacts with a brand, they learn something about that brand, and adjust their behavior based on what they learn.  They will adjust their behavior in ways that are either profitable or unprofitable for the brand.  The implication of this proposition is that the customer experience can be managed in such a way to influence customer behavior in profitable ways.

In order to understand how to drive customer behaviors via the customer experience, it is first, is important to define the customer behaviors you wish to influence, and to align marketing message, performance standards, training content, employee incentives and measurement systems to encourage those behaviors.

It is impossible, of course, to plan every customer experience or to ensure that every experience occurs exactly as intended. However, companies can identify the types of experiences that impart the right kind of information to customers at the right times. It is useful to group these experiences into three categories of company/customer interaction:  Stabilizing, Critical, and Planned.

Stabilizing

Stabilizing interactions promote customer retention, particularly in the early stages of the relationship.

New customers are at the highest risk of defection.  As customers become more familiar with a brand they adjust their expectations accordingly, however new customers are more likely to experience disappointment, and thus more likely to defect. Turnover by new customers is particularly hard on profits because many defections occur prior to break-even, resulting in a net loss for the company. Thus, experiences that stabilize the customer relationship early on ensure that a higher proportion of customers will reach positive profitability.

The keys to an effective stabilizing strategy are education, competence and consistency.

Education influences expectations, helping customers develop a realistic expectations.  It goes beyond simply informing customers about the products and services offered by the company. It systematically informs new customers how to use the brand’s services more effectively and efficiently, how to obtain assistance, how to complain, and what to expect as the relationship progresses. In addition to influencing expectations, systematic education leads to greater efficiency in the way customers interact with the company, thus driving down the cost of customer service and support.

Critical

Critical interactions are service encounters that lead to memorable customer experiences.  While most service is routine, from time to time a situation arises that is out of the ordinary: a complaint, a question, a special request, a chance for an employee to go the extra mile. The outcomes of these critical incidents can be either positive or negative, depending upon the way the company responds to them; however, they are seldom neutral. The longer a customer remains with a company, the greater the likelihood that one or more critical interactions will have occurred.

Because they are memorable and unusual, critical interactions tend to have a powerful effect on the customer relationship. We often think of as “moments of truth where the brand has an opportunity to solidify the relationship earning a loyal customer or risk the customer’s defection.  Positive outcomes lead to “customer delight” and word-of-mouth endorsements, while negative outcomes lead to customer defections, diminished share of wallet and unfavorable word-of-mouth.

The key to an effective critical interaction strategy is opportunity. Systems and processes must be in a position to react to these critical moments of truth.

An effective customer experience strategy should include systems for recording critical interactions, analyzing trends and patterns, and feeding that information back to the organization. Employees can then be trained to recognize critical opportunities, and empowered to respond to them in such a way that they will lead to positive outcomes and desired customer behaviors.

Planned

Planned interactions are intended to increase customer profitability through up-selling and cross-selling. These interactions are frequently triggered by changes in the customers’ purchasing patterns, account usage, financial situation, family profile, etc. CRM analytics combined with Big Data are becoming quite effective at recognizing such opportunities and prompting action from service and sales personnel.  Customer experience managers should have a process to record and analyzing the quality of execution of planned interactions with the objective off evaluating the performance of the brand at the customer brand interface – regardless of the channel.

The key to an effective strategy for planned interactions is appropriateness. Triggered requests for increased spending must be made in the context of the customers’ needs and permission; otherwise the requests will come off as clumsy and annoying. By aligning information about execution quality (cause) and customer impressions (effect), customer experience managers can build a more effective and appropriate approach to planned interactions.

 

For additional perspectives on research techniques to monitor the customer experience in the stabilizing phase of the relationship, see the post: Onboarding Research: Research Techniques to Track Effectiveness of Stabilizing New Customer Relationships.

For additional perspectives on a research methodology to investigate “Critical” experiences, see the post: Critical Incident Technique: A Tool to Identify and Prepare for Your Moments of Truth.

For additional perspectives on research methodologies to investigate “Planned” experiences through out the customer life cycle, see the post: Research Tools to Monitor Planned Interactions Through the Customer Life Cycle.
 

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Calculating ROI: A Simple Intuitive Customer Experience ROI Calculator

Calculating ROI on the customer experience typically takes the blind faith approach, where ROI on customer service is considered a given, and the sophisticated approach, where predictive models explain the links between service attributes, customer satisfaction and profitability. Such models can, in fact, be valuable as a means for understanding the associations among different service and profit factors. They can also provide insight into how service attributes interact with each other to influence customer perceptions. A major drawback, however, is that these models tend to have too many moving parts to function as a practical, day-to-day business tool, give the appearance of being far more precise than they actually are, and may be too sophisticated for some audiences.

ROI

Sometime managers need a simpler, more intuitive approach to estimating ROI on customer service.

First let me suggest the proposition that every time a company and service provider interact the customer learns something positive or negative and adjusts their behavior, again positive or negative based on what they learn. This is a behavioral approach to managing the customer experience, that by managing customer behaviors in profitable ways, service providers can maximize return on investment in the customer experience.

Using this behavior approach as a model, it possible to construct a simple intuitive ROI estimate of the customer experience.

List customer behaviors with financial implications

The first step in this methodology is to list all customer behaviors that directly drive revenues or costs. Ask yourself, “What specifically, do we want customers to do more or less of?” Don’t include attitudes, such as satisfaction, or feelings such as delight – only include empirically measureable behaviors such as purchase more, purchase more frequently, call for support less often, use more profitable channels, return merchandise less frequently, etc.

Before moving on to the next step, review this list and eliminate any customer behaviors that cannot be influenced through service interactions.

List service attributes that likely influence customer behaviors

Next, work backwards making a second list of specific , measureable service attributes that likely influence desired customer behaviors. This list should only include attributes for which there is a realistic cause and effect relationship between the service attribute and customer behavior. Ask yourself, “What can we (across all service channels) do more of, less of, or do differently to influence customer behaviors?” If it can’t be measured, if it can’t be trained (or programmed) or if it has no likely effect on measureable customer behaviors that affect profit, it should be removed from the list.

Consider how to influence desired customer behaviors (systems, skills, incentives, measurement & rewards)

Now, consider what specific systems, knowledge and skills are required to provide the service that will influence desired customer behaviors. Consider what employee incentives will be most effective in reinforcing the use of those skills and what measurement tools need to be in place to gather the metrics to trigger appropriate rewards.

Link list of customer behaviors to costs and revenues (incremental change)

Finally, link the first list (customer behaviors) to costs and revenues. To do this, calculate the financial impact of an incremental change in each item. For example, what would be the effect on revenue of increasing the average customer purchase by one dollar? What would be the effect on costs if the volume of complaints to call centers were reduced by five percentage points? It quickly becomes clear that even a small change in some customer behaviors can have a substantial financial impact. It also becomes clear which service changes will have the biggest effect.

ROI CALCULATOR: See the attached spreadsheet for an example of a Customer Experience ROI calculator based on this approach.

Thus far you have identified the customer behaviors you want to change, the general influence of each behavior on revenue or cost, and the dollar value of an incremental change in each behavior.
The major element missing from the formula is magnitude. How much change can the company expect to create? Can complaints be reduced by 1%, 5%, 10%? Will average purchase amounts increase by 50 cents? Ten dollars?

Also missing is the interaction among different variables. For example, aggressive up-selling may lead to a 10% increase in the average transaction amount, but it could also lead to a 2% increase in customer turnover, which might counteract the benefit.

The only way to answer these questions is to experiment.

Finally, this method excludes word of mouth customer behavior. In this ad of social media, increasing word of mouth (positive or negative) is an important customer behavior to manage. It’s been excluded from this tool do difficultly empirically measuring its benefits. See the attached post for a description of word of mouth measurement.

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The Human Element: Sales and Service, Bank’s Last Link in the Marketing Chain

What if I told you that after all your efforts with marketing (product, positioning and price), there is a one-in-ten chance the branch representatives will undermine the sale?

Now more than ever, it is critical for banks to establish themselves as the primary provider of financial services, not only for deposit accounts but across a variety of financial products and services.  Increasing the average products per customer will require a strategic approach to both product design and marketing.  However, at the end of this strategic marketing process, there is the human element, where prospective customers must interact with bank employees to complete the sales process.

Bank teller waiting on customer

As part of our services to our clients, Kinesis tracks purchase intent as a result of in-branch sales presentations.  According to our research, 10% of in-branch sales presentations observed by mystery shoppers, result in negative purchase intent.

What do these 10% failed sales presentations look like?

Here are some quotes describing the experience:

“There was no personal attention.  The banker did not seem to care if I was there or not.  At the teller line, there was only one teller that seemed to care that there were several people waiting.  No one moved with a sense of urgency.  There was no communication materials provided.”

Here’s another example…

“It was painfully obvious that the banker was lacking basic knowledge of the accounts.”

Yet another…

“Brian did not give the impression that he wanted my business.  He did not stand up and shake my hand when I went over to his desk.  He very rarely made eye contact.  I felt like he was just going through the motions. He did not ask for my name or address me by my name. He told me about checking account products but failed to inquire about my situation or determine what needs I have or might have in the future. He did not wrap up the recommendation by going over everything nor did he ask for my business. He did not thank me for coming in.”

In contrast, here is what the shops with positive intent look like:

“The appearance of the bank was comfortable and very busy in a good way. The customers were getting tended to and the associates had the customers’ best interests in mind. The response time was amazing and I felt as if the associate was sincere about wanting me as a customer, but he was not pushy or demanding about it.”

Now…after all the effort and expense of a strategic cross-sell strategy, which of the above experiences do you want your customers to encounter?

Would it be acceptable to you as a marketer to at the end of a strategic marketing campaign, have 10% of the sales presentations undermine its success?

These are rhetorical questions.

Time and time again, in study after study, we consistently observe that purchase intent is driven by two dimensions of the customer experience: reliability and empathy.  Customers want bankers who care about them and their needs and have the ability to satisfy those needs. Specifically, our research suggests the following behaviors are strongly related to purchase intent:

  • Friendly/Smile/Courteous
  • Greeting/Stand to Greet/Acknowledge Wait
  • Interest in Helping/Offer Assistance
  • Discuss Benefits/Solutions
  • Promised Services Get Done
  • Accuracy
  • Professionalism
  • Express Appreciation/Gracious
  • Personalized Comment (such as, How are you?)
  • Listen Attentively/Undivided Attention

As part of any strategic marketing campaign to both bring in new customers as well as increase wallet share of existing customers, it is incumbent on the institution to install appropriate customer experience training, sales and service monitoring, linked with incentives and rewards structures to motivate sales and service behaviors which drive purchase intent.




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The Customer Loyalty Illusion

There is no such thing as customer loyalty.  Loyalty…true loyalty… loyalty through thick and thin – requires an irrational customer, one who will stay with the bank regardless of the bank’s performance.

Every time a customer interacts with their bank, they may learn something as a result of the experience, and adjust their behavior as a result of what they learn. What we perceive as loyalty is an illusion, rather it is actually the product of an ongoing calculation each customer makes conscious or subconsciously to either initiate or maintain a relationship with a bank.  This is the customer value equation.

Customer Value = (Results + Process Quality + Intangible Benefits) - (Price + Other Acquisition Costs + Intangible Costs)

The customer value equation is simply the sum of the benefits of banking with a given institution minus the sum of the costs of choosing another provider.  If this sum is positive, the customer will act as if they are loyal.  If this sum is negative, the customer will behave as if they are disloyal.

The first term in this equation contains all the possible benefits associated with the bank.  These include the obvious, such as convenience of location or hours, rates and fees, breadth of delivery channels, and customer service.  However, they also include less obvious intangible benefits, such as doing business with a local community bank, or the prestige of one financial service provider over the other.

The second term contains the sum of all the costs associated with the banking relationship.  Again, the obvious are rates and fees.  However, there may be other acquisition costs, such as, the effort of switching providers, as well as intangible costs such as potential risk of switching financial providers. These intangible costs are significant, and play a significant role in what we perceive as customer loyalty, where customers remain with a financial institution more out of inertia, than other reasons.

A common objection to the customer value equation as a model of customer decision making is that it assumes that all customer decisions are completely rational, something that flies in the face of modern research using fMRI machines to probe the biological underpinning of decision makings.  This research strongly suggests that many decisions are neither conscious nor rational.  However, the customer value equation model allows for this equation to be subconscious and the intangible terms on both the cost and benefit side of the equation allow for irrational benefits and costs to be inserted into the customer’s decision making.

The proposition that customers are not loyal, and that behaviors we use to describe loyalty are really the result of an ongoing calculation of benefits and costs at first may seem daunting, but embracing the proposition that customers adjust their behavior based on what they perceive about a provider, gives managers a valuable model to think about customer loyalty in ways that mirror customer decision making. Understanding the customer value equation gives bank managers a rational framework to make investments in product, positioning, price and place to best match their offering with their customers’ value equations.

How might banks use the concept of the customer value equation to manage the customer experience?


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Changes in Word of Mouth Advertising Based on the Customer Experience – Part 2

Previously we observed changes in customer purchase behavior based on the customer experience. 

Every time a company and a customer interact, the customer learns something about the company, and adjusts their behavior based on what they learn.

To explore this proposition, Kinesis conducted a survey of 500 consumers asking them to recall an experience with any provider that they found to be particularly positive or negative, and determined how these customer experiences influenced customer behavior.

Here is how respondents told us they changed their behavior based on the experience:

Change in Cust Behavior

 

This post specifically addresses positive word of mouth as a result of the experience.

Respondents shared positive word of mouth a median 4.3 times as a result of their positive experience, compared to negative experiences, which were shared about 20% more often (median 5.2 times).  In fact, they were more likely to share negative word of mouth across all mediums:

Word of Mouth as Result of Experience

Positive Experiences

Negative Experiences

Friend or family (Excluding Online or Social Media)

69%

80%

Coworkers (Excluding Online or Social Media)

42%

54%

Online Social Media

28%

47%

Online Reviews

20%

33%

Customers are far more likely to share negative experience using online mediums.  While they are about 1.2 times more likely to share a negative experience with a relative, friend or coworker via an off line medium, they are 1.7 times more likely to share negative experiences over positive via online mediums.

Again, every time a company and a customer interact, the customer learns something about the company, and changes their behavior based on what they learn.  And, as this study shows, they certainly will share this experience with others.   But what about the recipients of this word of mouth advertizing?  How does one customer’s experience influence the behavior of others?

Approximately 90% of respondents said their purchase decisions were influenced positively (93%) or negatively (85%) by social media or word of mouth reviews.

With customer trust at an all time low,  and social media providing a much more far reaching medium of person to person communication, positive word of mouth is becoming far more important in terms of defining the brand.  Increasingly social media is becoming the media.  With 9 out of 10 potential customers saying their purchase decisions are influenced reviews of others, it is increasing important that managers manage their customer experience to support and reinforce the brand.


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Changes in Purchase Behavior Based on the Customer Experience – Part 1

Every time a company and a customer interact, the customer learns something about the company, and adjusts their behavior based on what they learn.

To explore this proposition, Kinesis conducted a survey of 500 consumers asking them to recall an experience with any provider that they found to be particularly positive or negative, and determined how these customer experiences influenced customer behavior.

When asked to characterize the cause of the positive or negative experience, these customers’ descriptions were grouped into four common themes that mirrored each other regardless of whether the experience was positive or negative.  The most common themes for both experiences were: speed of service, pleasantness of personnel, efficiency of service, and the success of the outcome.

Causes of Positive & Negative Experiences

Positive Experiences Negative Experiences
Speed of Service/ Problem Resolution 72% 69%
Pleasantness of Personnel 70% 63%
Efficiency of Service/ Not Passed Around to Multiple People 60% 71%
Outcome Successful/ Problem Resolved/ Expectations Met 55% 49%

The speed of service was cited with about the same frequency (7 out of 10 cases) as a cause of the experience being positive or negative.  Pleasantness of personnel was mentioned 70% of the time as a driver of positive experiences compared to 63% for negative.  Efficiency of service (or lack thereof) was more commonly cited as a reason for the experience being negative (71%) compared to positive (60%).  The fourth most common theme mentioned as a reason for the success or failure of the customer experience is the successful outcome of the experience itself (55% for positive experience, 49% for negative).

Again, every time a company and a customer interact, the customer learns something about the company, and adjusts their behavior based on what they learn.  So…how did these experiences (positive or negative) influence customer behavior?

Here is how respondents told us they changed their behavior based on the experience:

Changes in Customer Behavior Based on Experience

Positive Experiences Negative Experiences
Change in purchase behavior (Buy more or less) 54% 57%
Told others (Positive or negative) 36% 43%
Considered change in purchase behavior 32% 38%
No change 14% 5%

Over half of the respondents said they changed their purchase behavior as a result of the experience, 54% of the customers recalling a positive experience told us they purchased more from the provider as a result of the positive experience, while 57% told us they purchased less as a result of the negative experience.

Furthermore, about a third of the respondents told us they considered a change in purchase behavior as a result of the experience; 32% considered purchasing more as a result of the positive experience, and 38% considered purchasing less as a result of a negative experience.

Finally, roughly four out of ten told others of the experience.  Thirty-six percent of participants told us they gave positive word of mouth as a result of the positive experience, while 43% gave negative word of mouth as a result of the negative experience.

Again, every time a company and a customer interact, the customer learns something about the company, and changes their behavior based on what they learn.  The two primary ways customers change their behaviors based on the customer experience is both their own purchase behavior and sharing the experience with others.

The next post in this series explores how customers share the experience with others and the ultimate influence this word of mouth advertising has on others.


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Customer Experience Measurement Implications of Changing Branch Networks

The branch network is evolving based on banking’s changing economic model as well as changing customer expectations and behaviors. As the branch network evolves measurement of the customer experience within the branch channel will need to evolve as well to fit both the changing economic model and customer behaviors.

Deb Stewart’s recent article “The Branch Shrinks” in the June 2014 edition of ABA Bank Marketing and Sales used the experience of Sweden as an example of how the branch operating model in the US may evolve in response to these changes. Ms. Stewart describes Sweden’s branch operating model’s evolution in four primary ways:

  • Branches will be less monolithic, with branches tailored to location and market;
  • Branches will be much smaller and more flexible;
  • Customer facing technology will be more prevalent; and
  • Branch staffing both decline and change with increased use of “universal” associates who will conduct a wider range of functions, transforming tellers to sellers.

The article goes on to describe five case studies for innovative branch design in the United States.

Most commentary suggests branch networks will be redefined in three primary ways:

  • Flagship Branches: Hubs to a hub and spoke model offering education, advice, and serving as sales centers.
  • Community Centers: Branches smaller in scope focused on community outreach driving loyalty.
  • Expanded ATMs: These will serve as transaction centers at in-store or other high traffic sites.

In short, there will be a variety of branch types, many staffed with fewer employees, each with a unique role, presenting three customer experience challenges:

  1. Consistently delivering on the brand promises despite disparate branch types – Does the customer experience reinforce the overall brand promise?
  2. Fidelity to each branch’s unique role within network – Does the customer experience fit the specific role and objectives of the branch?
  3. Huge challenges associated with a transformation of skills to universal associates – How do we conduct a massive transition of skills of tellers into financial advisors, fluent in all bank products, and manage these associates fewer less employees on site.

Flagship Branches
The customer experience at flagship branches will best be measured much like it is at traditional branches today with a mix of customer satisfaction surveys and mystery shopping. A random sampling across all interaction types will ensure that all of the services offered at these education and sales centers are evaluated. Mystery shopping should focus scenarios on sales scenarios across all retail product lines, evaluating sales effectiveness, quality of experience and compliance.

Community Centers
Community Center branches offer the greatest need to refine customer experience measurement, and opportunity to use it as a management tool. Universal associates, with broad skill requirements working in lightly staffed branches, mandate that the customer experience be monitored closely. Post-transaction surveys across all interaction types should be used to evaluate employee skill level, appropriate resolution of inquiry, and consistency of service with brand promise. An automated email or mobile survey will provide managers with a near real time view of the customer experience at fraction of the cost of other data collection methods. Mystery shopping across a broad range of scenarios will evaluate employee skill level and appropriate referral practices for mortgage and investment services to Flagship branches or Video Bankers. Fewer employees will allow for better tracking of the customer experience at the employee level, which will be a necessity given the increased expectations on these employees with less onsite management.

Expanded ATMs
As with the other branch types, a random sampling of all interaction types will yield a valid sample of transactions these branches perform. As with the other branch types, automated email or mobile surveys will provide a near real time view of the experience. Mystery shopping may be used to evaluate service interactions with video tellers, investment advisors or tellers.

Evolution of the branch network, particularly with changes in the staffing model, will require changes in how the customer experience is monitored. The good news is survey technology is evolving as well, and will give managers the opportunity to gather intelligence on the customer experience in a highly efficient and productive manner.

For more posts in this series, click on the following links:


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Own the Call: A Key to Customer Loyalty

What service attributes from your agents drive customer loyalty?

To answer this question, Kinesis conducted surveys of people who had recently called a contact center. Impressions of the customer experience with particular attention to the performance of the agent were collected across a variety of attributes. In order to determine the relationship of these attributes to customer loyalty, we identified each customer as a promoter or detractor as a result of the call, according to the Net Promoter methodology. Net Promoter is generally accepted as a strong proxy measurement for loyalty, and serves as the basis for evaluating the relationship of these attributes to customer loyalty.

It’s the People

Not surprisingly, the performance of the individual agent weighs heavily on customer loyalty. The average overall impression rating (on a 5-point scale) of the agent is 1.4 times higher in calls where the customer was identified as a promoter (4.9) compared to those identified as detractors (3.5).

Further evidence of the importance of the agent can be found in a comparison of the specific attributes ratings for promoters compared to detractors.

Promoter

As Result of Call

Detractor

As Result of Call

Took Ownership of Call 4.9 3.2
Confidence in Agent 4.9 3.3
Value as a Customer 4.8 3.6
Interest in Helping 4.9 3.8
Use of Understandable Terms 5.0 3.7
Job Knowledge 5.0 3.8
Professionalism 5.0 4.0
Friendliness/Courtesy 5.0 4.3

The agent taking ownership of the call and the confidence the customer had in the agent are both 1.5 times stronger in calls where the customer is a promoter as a result of the call, compared to calls where they are a detractor.

Own the Call

What does ownership of the call mean?

Ownership of the call was defined in this survey as the extent to which the agent appeared to be the voice of the company, took responsibility for the customer’s concerns, showed a desire to be of assistance, and advised of possible solutions and assured resolution.

Every time a company and a customer interact, the customer learns something about the company, and adjusts their behavior based on what they learn. When customers encounter a contact center agent who owns the call, they learn that the company, through the agent, cares about their needs, wants to help resolve the need, and will stay engaged until the need is met. Customers respond to this information with an increased desire to positively spread word of mouth, a behavior strongly correlated to customer loyalty.

What are some of the ways you take ownership of the call?


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The 5 Service Dimensions All Customers Care About

Reprinted with permission from Chris Arlen, of Service Performance.

by CHRIS ARLEN

Not All Dimensions Are Equal

All dimensions are important to customers, but some more than others.

Service providers need to know which are which to avoid majoring in minors. At the same time they can’t focus on only one dimension and let the others suffer.

SERVQUAL research showed dimensions’ importance to each other by asking customers to assign 100 points across all five dimensions.*

Here’s their importance to customers.

The 5 Service Dimensions Customers Care About

SERVQUAL

What’s this mean for service providers?

#1 Just Do It

RELIABILITY: Do what you say you’re going to do when you said you were going to do it.

Customers want to count on their providers. They value that reliability. Don’t providers yearn to find out what customers value? This is it.It’s three times more important to be reliable than have shiny new equipment or flashy uniforms.

Doesn’t mean you can have ragged uniforms and only be reliable. Service providers have to do both. But providers first and best efforts are better spent making service reliable.

Whether it’s periodics on schedule, on-site response within Service Level Agreements (SLAs), or Work Orders completed on time.

#2 Do It Now

RESPONSIVENESS: Respond quickly, promptly, rapidly, immediately, instantly.

Waiting a day to return a call or email doesn’t make it. Even if customers are chronically slow in getting back to providers, responsiveness is more than 1/5th of their service quality assessment.

Service providers benefit by establishing internal SLAs for things like returning phone calls, emails and responding on-site. Whether it’s 30 minutes, 4 hours, or 24 hours, it’s important customers feel providers are responsive to their requests. Not just emergencies, but everyday responses too.

REPORTING RESPONSIVENESS

Call centers typically track caller wait times. Service providers can track response times. And their attainment of SLAs or other Key Performance Indicators (KPIs) of responsiveness. This is great performance data to present to customers in Departmental Performance Reviews.

#3 Know What Your Doing

ASSURANCE: Service providers are expected to be the experts of the service they’re delivering. It’s a given.

SERVQUAL research showed it’s important to communicate that expertise to customers. If a service provider is highly skilled, but customers don’t see that, their confidence in that provider will be lower. And their assessment of that provider’s service quality will be lower.

RAISE CUSTOMER AWARENESS OF YOUR COMPETENCIES

Service providers must communicate their expertise and competencies – before they do the work. This can be done in many ways that are repeatedly seen by customers, such as:

  • Display industry certifications on patches, badges or buttons worn by employees
  • Include certification logos on emails, letters & reports
  • Put certifications into posters, newsletters & handouts

By communicating competencies, providers can help manage customer expectations. And influence their service quality assessment in advance.

#4 Care about Customers as much as the Service

EMPATHY: Services can be performed completely to specifications. Yet customers may not feel provider employees care about them during delivery. And this hurts customers’ assessments of providers’ service quality.

For example, a day porter efficiently cleans up a spill in a lobby. However, during the clean up doesn’t smile, make eye contact, or ask the customer if there is anything else they could do for them. In this hypothetical the provider’s service was performed fully. But the customer didn’t feel the provider employee cared. And it’s not necessarily the employees fault. They may not know how they’re being judged. They may be overwhelmed, inadequately trained, or disinterested.

SERVICE DELIVERY MATTERS

Providers’ service delivery can be as important as how it was done. Provider employees should be trained how to interact with customers and their end-users. Even a brief session during initial orientation helps.  Anything to help them understand their impact on customers’ assessment of service quality.

#5 Look Sharp

TANGIBLES: Even though this is the least important dimension, appearance matters. Just not as much as the other dimensions.

Service providers will still want to make certain their employees appearance, uniforms, equipment, and work areas on-site (closets, service offices, etc.) look good. The danger is for providers to make everything look sharp, and then fall short on RELIABILITY or RESPONSIVENESS.

At the End of the Day

Customers’ assessments include expectations and perceptions across all five SERVQUAL dimensions. Service providers need to work on all five, but emphasize them in order of importance. If sacrifices must be made, use these dimensions as a guide for which ones to rework.

Also, providers can use SERVQUAL dimensions in determining specific customer and site needs. By asking questions around these dimensions, providers can learn how they play out at a particular location/bid opportunity. What dimensions are you in?

* For a description of the SERVQUAL methodology, see the following post: SERVQUAL Model: A Multi-Item Tool for Comparing Customer Perceptions vs. Expectations


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