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Customer Experience Measurement in the Coronavirus Age

Earlier in this three-part series we discussed the mechanism and risk of SARS-CoV-2 infection, and the implications of the pandemic on the customer experience.

For many brands, this pandemic represents a moment of truth with their customers.  Moments of truth are specific experiences of high importance, where a customer either forms or changes their opinion of a brand in meaningful and lasting ways.  Customers are stressed.  They feel uncertainty, fear and, frankly, exhaustion.   This uncertainty and fear drives customers to seek shelter from resources they trust.  Brands which become a trusted resource, which provide comfort, true comfort, in the face of this crisis have an opportunity to not only do the right thing, but cement their customers’ relationship with the brand.  On the other hand, brands which fail to do so, risk destruction of their customer relationships.

Perhaps the most important way brands can respond to the moment of truth presented by this crisis is showing true care for: customers, employees, and the community.

Additionally, it is imperative that customers feel safe.  Based on current science, in-person interactions can be relatively safe if followed within CDC and public health guidance including risk mitigation efforts such as: physical distancing, masks, ventilation, length of exposure, and hand washing & sanitizer.

Using these previous posts as a foundation, we can now address the implications of the pandemic on customer experience measurement.

So…. what does all this mean in terms of customer experience measurement?

First, I like to think of the customer experience measurement in terms of the brand-customer interface where customers interact with the brand.  At the center of the customer experience are the various channels which form the interface between the customer and institution. Together, these channels define the brand more than any external messaging. Best-in-class customer experience research programs monitor this interface from multiple directions across all channels to form a comprehensive view of the customer experience.

Customers and front-line employees are the two stakeholders who interact most commonly with each other in the customer-institution interface. As a result, a best practice in understanding this interface is to monitor it directly from each direction: surveying customers from one side, gathering observations from employees on the brand side, and testing for the presence and timing of customer experience attributes through observational research such as mystery shopping.

Measure Customer Comfort and Confidence

First, fundamentally, the American economy is a consumer confidence driven economy.   Consumers need to feel confident in public spaces to participate in public commerce.  Customer experience researchers would be well served by testing for consumer confidence with respect to safety and mitigation strategies.  These mitigation strategies are quickly becoming consumer requirements in terms of confidence in public commerce.

The American economy is

driven by consumer confidence.

Along the same lines, given the centrality of consumer confidence in our economy, measuring how customers feel about the mitigation strategies put in place by the brand is extremely important.  Such measurements would include measures of appropriateness, effectiveness, and confidence in the mitigation strategies employed.  We recommend two measurements: how customers feel about the safety of the brand’s in-person channel in general, and how they feel about the safety relative to other brands they interact with during the pandemic.  The first is an absolute measure of comfort, the other attempts to isolate the variable of the pandemic, just measuring the brand’s response.

The pandemic is changing consumer behavior. This much is clear.  As such customer experience researchers should endeavor to identify and understand how consumer behavior is changing so they can adjust the customer experience delivery mix to align with these changes.

Testing Mitigation Strategies

Drilling down from broader research issues to mystery shopping specifically, there are several research design issues that should be continued in response to the COVID-19 pandemic.

Measure Customer Confidence in Post-Transaction Surveys with Alerts to Failures:  First, as economic activity waxes and wanes through this coronavirus mitigation effort, consumer confidence will drive economic activity both on a macro and micro-economic level.  Broadly, consumers as a whole will not participate in the in-person economy until they are confident the risk of infection is contained.  Pointedly, at the individual business level, customers will not return to a business if they feel unsafe.  Therefore, market researchers should build measures of comfort or confidence into the post-transaction surveys to measure how the customer felt as a result of the experience.   This will alert managers to potential unsafe practices which must be addressed.  It will also serve as a means of directly measuring the return on investment (ROI) of customer confidence and safety initiatives in terms of the customer experience.

Measure Customer Perception of Mitigation Strategies:  Coronavirus mitigation strategies will become typical attributes of the customer experience.   Beyond simply testing for the presence of these mitigation strategies, customer experience managers should determine customer perceptions of their appropriateness, efficacy, and perhaps most importantly, their confidence in these mitigation strategies.

Gather Employee Observations of Mitigation Strategies:  Frontline employees spend nearly all their time in the brand customer interface.  As such, they have always been a wealth of information about the customer experience, and can be surveyed very efficiently.  The post-pandemic customer experience is no exception. 

First, as we discussed previously, employees have the same personal safety concerns as customers.   Surveys of employees should endeavor to evaluate employees’ confidence in and comfort with coronavirus mitigation strategies. 

Secondly, frontline employees being placed in the middle of the brand-customer interface are in perfect position to give feedback regarding the efficacy of mitigation strategies and the extent to which it fits into the desired customer experience – providing managers with valuable insight into adjustments which may make mitigation strategies fit more precisely into overall the customer experience objectives.

Independently Test for the Presence of Mitigation Strategies:  All in-person channels across all industries will require the adoption of coronavirus mitigation strategies.  Mystery shopping is the perfect tool to test for the presence of mitigation strategies – evaluating such strategies as: designed physical distancing, physical barriers between POS personnel and customers, mask compliance, sanitization, and duration of contact.

Alternative Research Sources for Behavioral Observations:  Some customer experience managers may not want unnecessary people within their in-person channel.  So the question arises, how can employee behaviors be measured without the use of mystery shoppers?  One solution is to solicit behavioral observations directly from actual customers shortly after the in-person service interaction.  Customers can be recruited onsite to provide their observations through the use of QR codes, or in certain industries after the event via e-mail.  The purpose of these surveys is behavioral – asking the customers to recall if a specific behavior or service attribute was present during the encounter.  From a research design standpoint, this practice is a little suspect, as asking people to recall the specifics about an event after the fact, without prior knowledge, is problematic.  Customers are not prepared or prompted to look for and recall specific events.  However, given the unique nature of the circumstances we are under, in some cases there is an argument that the benefits of this approach outweigh the research limitations.

Test Channel Performance and Alignment

The instantaneous need for alternative delivery channels has significantly raised the stakes in cross-channel alignment.  As sales volume shifts to these alternative channels, customer experience researchers need to monitor the customer experience within all channels to measure the efficacy of the experience, as well as alignment of each channel to both each other and the overall brand objectives.

Finally, as more customers migrate to less in-person channels, customer experience researchers should endeavor to measure the customer experience within each channel.  As more late adopters are forced by the pandemic to migrate to these channels, they may bring with them a completely different set of expectations relative to early adopters, therefore managers would be well served to understand the expectations of these newcomers to the alternative channels so they can adjust the customer experience to meet these new customers’ expectations.

As commerce migrates away from conventional in-person channels to alternative delivery channels, the importance of these channels will increase.  As a result, the quality and consistency of delivery in these channels will need to be measured through the use of mystery shoppers.  Some industries are going to be problematic, as their current economics do not currently support alternative delivery.  With time however, economic models will evolve to support alternative channels.

Conclusion

This is a difficult time.  It will be the defining event of our generation.

The pandemic, and our reaction to it, is dramatically changing how humans interact with each other, and the customer experience is no exception.  There is reason to suggests this difficult time could become a new normal.  Managers of the customer experience need to understand the implications of the customer experience in the post-Covid environment, as the implications of the pandemic may never fully subside.  Customer experience managers must consider the implications of this new normal, not only on the customer experience, but on customer experience measurement.

Customer Experience Measurement in the Coronavirus Age: The Mechanism and Risk of Infection

Introduction

From Zoom happy hours, canceled events, concerns over how best to educate our children,  economic disruption, and caring for the victims, the SARS-CoV-2 pandemic, and the resulting public heath requirements are changing our lives in ways both big and small, superficial and tragic.  The customer experience is certainly no exception.  Writing about effects of the pandemic, while it unfolds, is a unique challenge – as we are learning more about the virus, its health effects, mitigation strategies, and overall effects on society in real time.  Things change daily and we are all learning on the fly here.  This series of blog posts is an early attempt to discuss the effects of the pandemic on customer experience research.

Before we begin, let me stress one thing.  I am a market researcher who specializes in evaluating the customer experience.  I am not an epidemiologist or doctor, and I have no training or experience in public health.  As a result, I will refrain from expressing scientific or medical theories or opinions of my own.  Any virus related conclusions or opinions expressed in this series of posts will be from credible sources and cited in footnotes.  If at any point it appears I am drawing medical or scientific conclusions of my own, it is unintentional, and should not be regarded as such. 

The need for managers of the customer experience to understand the implications of post-SARS-CoV-2 environment will most likely survive the immediate pandemic.  Changes in customer experience management will probably assume a more permanent nature.  First, this novel coronavirus may never go completely away, but rather become endemic in our society, meaning it could be a constant presence.[1] Second, recent history suggests SARS-CoV-2 is not the only novel-corona virus we are going to face in the coming decades.  Currently there are seven know coronaviruses that infect humans – prior to 2003 there were only four.  In a relatively short period of time, three new coronaviruses have jumped from animals to humans.[2]  The number of known coronaviruses to which humans are susceptible has nearly doubled in 17 years, so it does not require a great leap of the imagination to conclude this is not the last novel virus we will need to deal with.

This pandemic and its predicted aftermath represent a moment of truth for customers and their relationship to the brand.  In an uncertain and risky environment, customers will be even more likely to build relationships with brands they trust.  Forward thinking managers of the customer experience will respond by building more mechanisms to monitor customer perceptions of safety within the in-person channel and fulfillment via expanded alternative channels.

Mechanism of Infection

What we know now is the virus appears to spread primarily through person-to-person contact, via people in close contact with each other or to a lesser extent secondary transfer off contaminated surfaces.

SARS-CoV-2 survives on most surfaces.  Touching an infected surface and touching your eye, nose or mouth represents a risk of infection by transfer.[3]  Although, recent guidance from the CDC suggests transfer is not a significance mode of transmission.[4]  That being said, high touch surfaces such as door handles, elevator buttons, POS machines, and bathroom surfaces, should still be considered a potential risk for transfer infection.  However, the main mechanism of infection is via close personal contact.

When an infected person coughs, sneezes, talks or performs any other activity exhaling air, respiratory droplets are produced.  These droplets can land on the mouths or noses of people nearby, or in some circumstances, hang in the air in an aerosol form and be inhaled into the lungs.[5]  Current evidence suggests most individuals with mild to moderate symptoms can be infectious up to 10 days after symptom onset.  Further complicating this picture, it appears individuals without symptoms can be infectious even without knowing they are infected themselves.[6]

In order for customer experience managers to make informed choices about the customer experience in the post-Covid age, it is important to understand the mechanism of infection.  The infectious dose of a virus is the amount of virus a person needs to be exposed to in order to establish an infection.  The infectious dose varies depending on the virus  (the flu can cause infection after exposure to as few as 10 virus particles, others require exposure to thousands of particles to establish an infection).  Currently, the infectious dose of SARS-CoV-2 is not understood with any precision; however, some experts estimate it at a few hundred to a few thousand virus particles.[7] 

Like fire needs three things to burn (oxygen, fuel and heat), in my layman’s expression, three factors dictate Covid-19 transmission: activity, duration and proximity.

Different activities release different amounts of virus particles into the environment.  On the far end of the spectrum, a cough or sneeze releases about 200-million virus particles.  Furthermore, the force of a cough or sneeze can aerosolize these particles (thus allowing them to hang in the air for a long time), or travel across a room in an instant.  On the other end of the spectrum, breathing normally releases about 20 virus particles per minute, but with less force than a cough or sneeze.  As a result, the particles expelled by breathing will tend to be expelled at a slower speed and travel a shorter distance.  Speaking releases about 200 viral particles per minute.[8]

These rates of exposure are important in terms of understanding the time required to exceed the infectious dose threshold.  Consider the following formula:

The time required to be infected, assuming close proximity with no precautions, is the infectious dose divided by the rate the virus particles are expelled.

Assuming an infectious dose of 1,000 virus particles, very close proximity to someone speaking (close enough to inhale all the particles released by the speaker) would require 5 minutes to exceed the infectious dose:

Similarly, very close proximity to someone breathing normally would require a ten-fold increase in exposure (50 minutes):

Obviously, a single cough or sneeze with 200-million virus particles will instantly exceed the 1,000 particle threshold.

Again, currently, we do not know the infectious dose – estimates range from a few hundred to a few thousand virus particles.  Therefore, the data is insufficient to determine the exact duration of time to acquire an infection.  However, public health authorities do provide guidance.

Risk of Infection

The Centers for Disease Control and Prevention (CDC) advises, that for close contact with an individual in a non-healthcare setting, 15 minutes can be used as a threshold for the time to acquire an infectious dose.[9]

Since currently we do not know SAR-CoV-2’s infectious dose, the key take away is an individual is not going to be infected by a single virus particle.  However, we are not free from risk.  We, as a society, are going to need to weigh the risks.  This will take the form of everyday people making everyday decisions about the risks they are willing to accept – both to themselves personally, and to society as a whole.  “Nothing is without risk, but you can weigh the risks. . . . It’s going to be a series of judgment calls people will make every day,” as  Dr. William Petri a professor of infectious disease at the University of Virginia Medical School, told the Washington Post. [10]

Forward-thinking customer experience brands will consider how individuals and society as a whole weigh these risks and build customer experiences around both customer expectations and responsible civic commitment.  The pandemic represents a moment of truth between brands and their customers.    Building responsible and safe customer experiences will become a core driver of trust in the brand.

Some factors individual consumers and customer experience managers will need to consider as we weigh these risks include: [11]

Distance:  At a minimum the environment and activity should allow for 6 feet separation to be maintained.

Duration:  The duration of the activity should be short enough to minimize infection risk, considering the specific activity (breathing, talking, singing, etc) and other mitigation efforts (distance, masks, ventilation, etc).

Ventilation:  Indoor venues should be well ventilated.  Outdoor venues are naturally well ventilated and, therefore, safer.

Masks:  Mask wearing by individuals will inhibit the spread of virus particles in the air. The CDC recommends wearing cloth face coverings in public settings where other social distancing measures are difficult to maintain (e.g., grocery stores and pharmacies).  Masks are less of a filter to protect the wearer, but they inhibit the spread of virus droplets in the air by the wearer – masks protect others.[12]

Transfer Risk:  Customers and employees should avoid unnecessary contact with high touch objects or surfaces, disinfecting surfaces and hands with hand sanitizer.

In the next post, we expand on this discussion of infection risk and mitigation strategies and look at the implications of these on the customer experience and customer experience management.


[1] “Nothing Like SARS: Researchers Warn The Coronavirus Will Not Fade Away Anytime Soon”  npr.org,  June 11, 202.  Web.  August 13, 2020.

[2] Fred Hutchinson Cancer Research Center. Dr. Amitabha Gupta “Fred Hutch and Covid-19.” August 4, 2020. Video, 10:15. https://www.youtube.com/watch?v=iaa40DflvOk&feature=youtu.be.

[3] Skinner, Michael.  “expert reaction to questions about COVID-19 and viral load”  sciencemediacentre.org, March 26, 2020.  Web. May 13, 2020.

[4] “How COVID-19 Spreads.”  CDC.gov, May 21, 2020.  Web.  May 21, 2020.

[5] “How COVID-19 Spreads.”  CDC.gov, May 21, 2020.  Web.  May 21, 2020.

[6] “Transmission of SARS-CoV-2: implications for infection prevention precautions.”  who.int, July 9, 2020.  Web.  August 13, 2020.

[7] Geddes, Linda. “Does a high viral load or infectious dose make covid-19 worse?”  newscientist.com, March 27, 2020.  Web May 14, 2020.

[8] Bromage, Eric.  “The Risks – Know Them – Avoid Them.” Erinbromage.com, May 6, 2020.  Web. May 13 2020.

[9] “Public Health Recommendations for Community-Related Exposure.”  CDC.gov, March 30, 2020.  Web.  May 15 2020.

[10] Shaver, Katherine.  “Wondering what’s safe as states start to reopen? Here’s what some public health experts say.”  Washingtonpost.com, May 15, 2020.  Web. May 15, 2020.

[11] Shaver, Katherine.  “Wondering what’s safe as states start to reopen? Here’s what some public health experts say.”  Washingtonpost.com, May 15, 2020.  Web. May 15, 2020.

[12] “About Masks.”  CDC.gov, August 6, 2020.  Web.  August 14 2020.

Leverage Unrecognized Experts in the Customer Experience: Best Practices in Bank Customer Experience Measurement Design – Employee Surveys

Bank Employee Surveys

Frontline customer facing employees (tellers, platform, and contact center agents) are a vastly underutilized resource in terms of understanding the customer experience.  They spend the majority of their time in the customer-bank interface, and as a result tend to be unrecognized experts in the customer experience.

An excellent tool to both leverage this frontline experience and identify any perceptual gaps between management and the frontline is to survey all levels of the organization to gather impressions of the customer experience.  This survey can be fielded very efficiently with an online survey.

Typically, we start by asking employees to put themselves in the customers’ shoes and to ask how customers would rate their satisfaction with the customer experience, including specific dimensions and attributes of the experience.  A key call-to-action element of these surveys tends to be a question asking employees what they think customers most like or dislike about the service delivery.

Next we focus employees on their own experience, asking the extent to which they believe they have all the tools, training, processes, policies, customer information, coaching, staff levels, empowerment, and support of both their immediate supervisor and senior management to deliver on the company’s service promise.  Call-to-action elements can be designed into this portion of the research by asking what, in their experience, leads to customer frustration or disappointment, and soliciting suggestions for improvement.   Perhaps most interesting, we ask what are some of the strategies the employee uses to make customers happy.   This is an excellent source for identifying best practices and potential coaches.

Finally, comparing results across the organization identifies any perceptual gaps between the frontline and management.  This can be a very illuminating activity.

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


Click Here For More Information About Kinesis' Employee Engagement Research

Does Your Frontline Understand the Customer Experience Better than the CEO?

Frontline customer facing employees are a vastly underutilized resource in terms of understanding the customer experience. They spend the majority of their time in the company-employee interface, and as a result tend to be unrecognized experts in the customer experience. Conversely, often the further management is removed from the customer interface the less they truly understand some details about what is going on.

One tool to both leverage frontline experience and identify any perceptual gaps between management and the frontline is to survey all levels of the organization to gather impressions of the customer experience.

Typically, we start by asking employees to put themselves in the customers’ shoes and to ask how customers would rate their satisfaction with the customer experience, including specific dimensions and attributes of the experience. A key call-to-action element of these surveys tends to be a question asking employees what they think customers would most like or dislike about the service delivery.

Next we focus employees on their own experience, asking the extent to which they believe they have all the tools, training, processes, policies, customer information, coaching, staff levels, empowerment, and support of both their immediate supervisor and senior management to deliver on the company’s service promise. Call-to-action elements can be designed into this portion of the research by asking what, in their experience, leads to customer frustration or disappointment, and soliciting suggestions for improvement. Perhaps most interesting we ask what are some of the strategies the employee uses to make customers happy – this is an excellent source for identifying best practices and potential coaches.

Finally, comparing results across the organization identifies any perceptual gaps between the frontline and management. This can be a very illuminating activity.

And why not leverage employees as a resource to understanding the customer experience? They spend most of their time in the company-customer interface, and are therefore experts of what is actually going on. Secondly, employees and customers generally want the same things.

Customers want… Employees want…
To get what they are promised The tools/systems/ policies to do their job
Their problems resolved Empowerment to solve problems
Their needs listened to/understood More/better feedback
Knowledgeable employees; adequate information More training; more/better feedback
Employees to take the initiative, take responsibility, represent the company Empowerment; clear priorities; inclusion in the company’s big picture
The company to value their business Clear priorities; the tools/systems/policies to do their job

 


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Not All Service Attributes Are Equal: Retail Bank Transaction Drivers of Loyalty

Research has determined the business attribute with the highest correlation to profitability is customer loyalty.  Customer loyalty lowers sales and acquisition costs per customer by amortizing these costs across a longer lifetime – leading to some extraordinary financial results.  In one study of the retail banking industry, a 5% increase in customer loyalty translated into an 85% increase in profits.[1]

Customer loyalty is driven by the entire relationship with bank.  Image, positioning, products, price and service all mix together in the customer’s’ value equation as customers make a continual decision to remain loyal.

What customer service attributes drive customer loyalty?

This article summarizes research into specific transaction service attributes with the intent of identifying which transaction attributes drive customer loyalty, and provides an analytical tool to help managers determine which attributes will yield the highest potential for ROI in terms of improving customer loyalty.

In order to determine transaction attributes which drive customer loyalty, Kinesis surveyed bank customers who had recently conducted a transaction at a branch.

With respect to the transaction, customers were asked to rate the following service attributes:

  • Professional dress
  • Branch cleanliness
  • Prompt greeting
  • Greeting made customer feel welcome
  • Dependable and accurate
  • Prompt service
  • Willingness to help
  • Job knowledge
  • Interest in helping
  • Best interests in mind
  • Actively listened to needs
  • Ability of bank personnel to help achieve financial needs
  • Desire of bank personnel to help customers achieve financial goals
  • Commitment to community

The next step in the research is to capture a measurement of loyalty against which to compare these attributes.

Measuring customer loyalty in the context of a survey is difficult.   Surveys best measure attitudes and perceptions. Loyalty is a behavior based on rational decisions customers make continually through the lifecycle of their relationship with the bank.  Survey researchers therefore need to find a proxy measurement to determine customer loyalty.  A researcher might measure customer tenure under the assumption that length of relationship predicts loyalty.  However, customer tenure is a poor proxy.  A customer with a long tenure may leave the bank, or a new customer may be very satisfied and highly loyal.

Measuring customer loyalty in the context of a survey is difficult.   Surveys best measure attitudes and perceptions. Loyalty is a behavior based on rational decisions customers make continually through the lifecycle of their relationship with the bank.  Survey researchers therefore need to find a proxy measurement to determine customer loyalty.  A researcher might measure customer tenure under the assumption that length of relationship predicts loyalty.  However, customer tenure is a poor proxy.  A customer with a long tenure may leave the bank, or a new customer may be very satisfied and highly loyal.

Kinesis proposes a model for estimating customer loyalty based on two measurements: likelihood of referral and customer advocacy.  Likelihood of referral captures a measurement of the customer’s likelihood to refer the bank to friend, relative or colleague.  It stands to reason, if one is going to refer others to the bank, they will remain loyal as well.  Because customers who are promoters of the bank are putting their reputational risk on the line, this willingness to put their reputational risk on the line is founded on a feeling of loyalty and trust.  This concept of trust is perhaps more evident in the second measurement,: customer advocacy.  Customer advocacy is captured by measuring agreement with the following statement: “My bank cares about me, not just the bottom line.”  Customers who agree with this statement trust the bank to do right by them, and not subjugate their best interests to profits.  Customers who trust their bank to do the right thing are more likely to remain loyal.

Kinesis uses likelihood of referral, hereafter labeled “Promoter,” and customer advocacy, hereafter labeled “Trust,” to calculate an estimate of the customer’s loyalty.  Imagine a plot where each customer’s Promoter score is plotted along one axis and the Trust score plotted along the other.  Using this plot we can calculate the linear distance between the perfect state of the highest possible Trust and Promoter ratings.  This distance yields a loyalty estimate for each customer, where the lower the value, the higher the estimate of loyalty – low values are good.[i]

Trust Promoter Plot

See Using Promoter and Trust Measurements to Calculate a Customer Loyalty Index for a complete description of this methodology.

Calculating a loyalty index has value, but limited utility.  A loyalty index alone does not give management much direction upon which to take action.  One strategy to increase the actionably of the research is to use this index as a means to identify the service attributes that drive customer loyalty.  Not all service attributes are equal; some play a larger role than others in driving customer loyalty.

So…how does the research determine an attribute’s role or relationship to customer loyalty?  One tool is to capture satisfaction ratings of specific service attributes and determine their correlation to the loyalty statistic.  The Pearson correlation coefficient is a measure of the strength of a linear association between two variables.

Comparing the correlation of the above service attributes to this loyalty estimate yields the following Pearson Correlation for each attribute:

Pearson Coefficient

Want to help me achieve financial goals

-0.69

Commitment to community

-0.66

Ability to help achieve financial goals

-0.64

Best interests in mind

-0.60

Greeting made customer feel welcome

-0.56

Interested in helping

-0.56

Willing to help

-0.55

Prompt service

-0.51

Actively listened to needs

-0.50

Prompt greeting

-0.49

Dependable and accurate

-0.45

Professional dress

-0.42

Knew job Job knowledge

-0.41

Branch attractive

-0.39

Branch clean

-0.37

Note the Pearson values are negative; the loyalty estimate is an inverse, where lower values indicate a stronger estimate of loyalty.  As a result the stronger negative correlation translates into a correlation to our estimate of loyalty.

The four attributes with the highest correlation to loyalty are:

  1. Want to help me achieve financial goals,
  2. Commitment to community,
  3. Ability to help achieve financial goals, and
  4. Having my best interests in mind.

Two common themes in the top-four attributes are empathy and competence.  Bank customers value relationships with banks that care about their needs and have the ability to satisfy those needs.  Again, customer loyalty is driven by the entire relationship with bank.  However, in terms of transactional service, customers clearly value empathy and competency and will reward banks who deliver on these two attributes with loyalty.


[i] The mathematical equation for this distance is as follows:

Loyalty Index Equation

Where:

T = Trust rating

P = Promoter rating

ST = Number of points on the Trust scale

SP = Number of points on the Promoter scale

 


[1] Heskett, Sasser, and Schlesinger The Service Profit Chain, 1997, New York: The Free Press, p 21


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People: The Fifth-P of Marketing

We are all familiar with the Four-P’s of marketing: Product, Price, Promotion and Place – but maybe there is a Fifth-P. Recent research by Kinesis has determined the importance bank representatives play in driving purchase intent. The Fifth-P – it is People.

In the first quarter of 2004, Kinesis conducted a survey of people who had recently visited a bank branch to inquire about a retail banking product or service. The purpose of this research was to determine the key drivers of purchase intent after a branch visit. Six hundred ninety-four people (n=694) were asked to rate how the experience at the branch influenced their intention or purchase a product or service from the bank according to a five-point rating scale anchored at -2 and +2, where -2 was defined as “significantly decreased purchase intent”, +2 was defined as “significantly increased purchase intent” with zero (the mid-point) defined as “had no influence on purchase intent.” Paired with this purchase intent rating, respondents were asked why the experience influenced their purchase intent as it did? The responses to this open-ended question were grouped according to common themes and cross-tabulated according to the purchase intent rating to determine what elements of the branch experience drive purchase intent. The results of this cross-tabulation are presented in the accompanying chart.

Once a prospective customer enters the branch, the platform representative clearly drives purchase intent. Over two-thirds (69%) of the reasons given for positive purchase intent are the result of branch personnel, only one-in-five (18%) were product related, while 8% were due to the branch atmosphere.

The branch personnel driven elements include: generally positive friendly service (26%), product knowledge/informative/confidence in the representative (16%), attentive to needs/ interest in helping/ personalized service (14%), and professional/ respectful/ not pushy employees (10%). Prospective customers want confidence and trust not just in the institution, but also in the people who are the human face of the institution. Product knowledge, attention to personal needs, and a respectful professional sales approach are all very important in establishing the trust necessary to earn the right to play a role in the household’s financial business.

Reasons Behind Purchase Intent

Friendly Employees /General Positive Customer Service

26%

Product Reasons

18%

Rep. Product Knowledge/ Informative /Confidence in Rep.

16%

Attentive to Needs/ Interest in Helping/ Personalized Service

14%

Professional/ Respectful Employees/ Not Pushy

10%

Branch Atmosphere

8%

Felt Valued as a Customer

3%

In a follow-up study, Kinesis wanted to investigate the key drivers of purchase intent as a result of the sales presentation for more complex financial services. Three hundred fourteen people (n=314) who had recently participated in a sales presentation for bank-marketed investment products (annuities, mutual funds, and other securities from Series 6 and Series 7 licensed sales people) were given the same survey. If trust and confidence in the platform personnel is important for retail banking, it is even more important for investment products.

Over nine-out-of-ten (91%) of the respondents mentioned an employee related reason as driving purchase intent, only a handful mentioned product (3%) and branch atmosphere (2%), as drivers of purchase intent. The themes of trust and confidence are even more evident in investment presentations. Interest in helping/attentive to needs (43%), product knowledge/informative/confidence in the representative (28%), and professional/respectful employees (13%) are the top three reasons for positive purchase intent. Furthermore, the strength of these attributes’ influence is striking, 78% of the respondents who mentioned these attributes assigned the highest purchase intent rating (+2). Not only are they mentioned with significant frequency, but the strength of their influence on Purchase Intent is significant as well.

As banks continue to expand their offerings to more sophisticated products, the professionalism and personalization of the sales process is critical to garnering the trust necessary to earn the household’s business. Not only is this due to the sophistication of these products, but also because of their risk profile. Customers understand this increased risk and therefore require even more personalized and professional attention to feel comfortable giving their business to an institution, even if the institution is a bank with all the trust usually associated with bank brands.

Once a prospective client is in the branch, the people in the sales process drive purchase intent. Product, Price, Promotion and Place all play a role in getting prospective clients to the branch, but it is the people involved in the sales process who clearly drive purchase intent from that point on. Perhaps People really doesn’t deserve elevation to the status of Fifth-P. In fact, the people in the sales process is part of the Fourth-P, Place. However, consider this – financial institutions invest heavily in marketing efforts for both core bank products and increasingly more sophisticated products. Yet, all this marketing investment is wasted if it is not supported by the people involved in the sales process. It is these people who connect with prospective customers on a personal level, and as a result, influence the sale and maximize return on marketing investments. That’s worth repeating – the people in the sales process maximize ROI on marketing dollars.


Click Here For More Information About Kinesis' Employee Engagement Research

Click Here For More Information About Kinesis' Employee Engagement Research

Cheer Up: Improve your reps’ job satisfaction to reduce turnover – and raise sales

Author: Julia Chang, Staff Writer, Sales & Marketing Magazine
Reprinted from the Sales & Marketing Magazine
June, 2004

Cheer Up: Improve your reps’ job satisfaction to reduce turnover – and raise sales

When the economy soured and the number of sales jobs shrunk, managers had little incentive to improve job satisfaction. But with the market getting stronger, managers could find themselves dealing with flight risks: According to a recent survey by job site CareerBuilder.com, four in 10 sales professionals plan to look for better jobs in 2004.

Internal unrest can lead to low morale, and smart managers will work to mitigate discontent.

“You’ve got to catch dissatisfaction quickly,” says Jim Campbell, president of Performance Unlimited, a sales coaching and training firm based in Albuquerque, New Mexico. “Even if you have one person who’s unhappy, it spreads. It’s the whole rotten-apple-spoils-the-barrel thing.”

Campbell recalls one recent client who suffered from a bad case of employee dissatisfaction. The client, a bank, was having problems with its 11-member internal sales and service department, whose job it was to train branch tellers and loan officers to sell new services. The department had recently expanded, but there was no unity among new and veteran members; a few even made it clear they were looking for new jobs. The bank’s performance was going south, and the manager was told he had to turn it around it around in six months – or lose his job.

Through team-building training, Campbell focused on topics like communication skills, creating a well-functioning team, and the effect of attitude on performance. Additionally, he held follow-up sessions for several weeks afterward to see how these new skills were being executed. He also individually coached the manager on his motivational and performance management skills. Team unity improved, and even those most vocal about their unhappiness stayed on. “They actually wanted to be part of the team, they just didn’t know how,” Campbell says, “They finally saw they could accomplish more in a team than as individuals.”

Happy employees yield more business. Campbell’s client saw the number of new loans and additional services sold increase following training, because employees were more enthusiastic in their training of branch workers. “In doing interviews with clients, we definitely see a link between customer satisfaction and employee satisfaction,” says Eric Larse, Managing Member of Kinesis, a market research firm based in Seattle, that specializes in the customer experience. But, he says, an employee satisfaction culture has to start at the top. “It’s a strategic issue that rests at the highest levels of the organization.”


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