Tag Archive | Customer Experience

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.


Click Here For More Information About Kinesis' Research Services

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

It’s the People: Keys to Customer Loyalty in the Grocery Customer Experience

77294463The 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.  However, the question remains, what service attributes drive customer loyalty?

To answer this question, Kinesis conducted surveys of customers who had recently visited a grocery store, collecting impressions of a variety of service 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 experience, 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.

The 12 service attributes with the largest gaps between promoters and detractors are:

  1. No wait for service
  2. Employee made eye contact
  3. Employee offered friendly verbal greeting
  4. Employees attentive to customers
  5. Employees look presentable
  6. Name badges worn
  7. All items have shelf tags and price labels
  8. Employees offer further assistance or offer friendly parting comment
  9. Product knowledge of employees
  10. Quality and variety of products meets expectations
  11. Samples offered
  12. Walk customer to item or area (if asked for assistance)

It’s the People

The performance of the individual employees weighs heavily on customer loyalty.  Eight of the 12 attributes are directly related to employee behaviors: eye contact, friendly greeting, attentive to customers, name badge worn, offer further assistance or friendly parting comment, product knowledge, and walking customers to the item or area.

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 an employee who cares about their needs, they learn that the company, through the employee, cares about their needs as well.  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 your employees care about the customer’s needs?


Click Here For More Information About Kinesis' Grocery CX Research

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:


Click Here For More Information About Kinesis' Bank CX Research Services

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


Click Here For More Information About Kinesis' Research Services

SERVQUAL Model: A Multi-Item Tool for Comparing Customer Perceptions vs. Expectations

5 Dimensions

Looking for a tried and true model to understand your service quality?

The SERVQUAL model is an empiric model that has been around for nearly 30 years. While not new, it is a foundation of many of the service quality and customer experience concepts in use today. It is a gap model designed to measure gaps between customer perceptions relative to customer expectations.

SERQUAL describes the customer experience in terms of five dimensions:

1. TANGIBLES – Appearance of physical facilities, equipment, personnel, and communication materials
2. RELIABILITY – Ability to perform the promised service dependably and accurately
3. RESPONSIVENESS – Willingness to help customers and provide prompt service
4. ASSURANCE – Knowledge and courtesy of employees and their ability to convey trust and confidence
5. EMPATHY – Caring, individualized attention the firm provides its customers

Each of these five dimensions is measured using a survey instrument consisting of individual attributes which role up into each dimension.

For example, each of the five dimensions may consist of the following individual attributes:

Tangibles
• Appearance/cleanliness of physical facilities
• Appearance/cleanliness of personnel
• Appearance/cleanliness of communication/marketing materials
• Appearance/cleanliness of equipment

Reliability
• Perform services as promised/right the first time
• Perform services on time
• Follow customer’s instructions
• Show interest in solving problems

Responsiveness
• Telephone calls/other inquiries answered promptly
• Willingness to help/answer questions
• Problems resolved quickly

Assurance
• Knowledgeable employees/job knowledge
• Employees instill confidence in customer
• Employee efficiency
• Employee recommendations
• Questioning to understand needs

Empathy
• Interest in helping
• Individualized/personal attention
• Ease of understanding/use understandable terms
• Understand my needs/recommending products to best fit my needs
• The employees have my best interests at heart

Call to Action

Research without a call to action may be informative, but not very useful. By measuring both customer perceptions and expectations, SERVQUAL gives managers the ability to prioritize investments in the customer experience based not only on their performance, but performance relative to customer expectations.

The first step in taking action on SERVQUAL results is to calculate a Gap Score by simply subtracting the expectation rating from the perception rating for each attribute (Gap Score = Perception – Expectation). This step alone will give you a basis for ranking each attribute based on its gap between customer perceptions and expectations.

Service Quality Score

In addition to ranking service attributes, the Gap Score can be used to calculate both a Service Quality Score based on the relative importance assigned by customers to each of the five service quality dimensions.

The first step in calculating a Service Quality Score is to average the Gap Score of each attribute within each dimension. This will give you the Gap Score for each dimension (GSD). Averaging the dimension Gap Scores will yield an Unweighted Service Quality Score.

From this unweighted score it is a three step process to calculate a Weighted Service Quality Score.

First, determine importance weights by asking customers to allocate a fixed number of points (typically 100) across each of the five dimensions based on how important the dimension is to them. This point allocation will yield a weight for each dimension based on its importance.

The second step is to multiply the Gap Score for each dimension (GSD) by its importance weight. The final step is to simply sum this product across all five dimensions; this will yield a Weighted Service Quality Score.

Click here for a more detailed step by step description of score calculation.

What does all this mean?  See the following post for discussion of the implications of SERVQUAL for customer experience managers: The 5 Service Dimensions All Customers Care About.

5 Steps to Make Frontline Employees Authentic Representatives of the Brand

Actions speak louder than words.  Brands spend millions of dollars on external messaging to define an emotional connection with the customer.  However, when a customer perceives a disconnect between an employee representing the brand and external messaging, they almost certainly will experience brand ambiguity.  The result severely undermines these investments; not only for the customer in question, but their entire social network.  In today’s increasing connected world, one bad experience could be shared hundreds if not thousands of times over.

Bottom line, frontline employees must be authentic representatives of the brand.

Simple enough, right?  Nearly all rational managers will agree with the above statement.  But how does management ensure that employees animate the brand? – It is a process of alignment.

Here are five steps to align the customer experience with external messaging:

  1. Align external messaging with customer expectations:   Repeatedly test the effect of external messages on customer expectations.  Ask yourself, what expectations are we instilling based on our messaging?  Additionally, the next four steps will help ensure that operational staff fully understand and are equipped to handle these promises made to customers.
  1. Align customer expectations with company service standards:  Even in the most sophisticated and progressive companies, standards of service delivery can be out of sync with customer needs and expectations. One reason is that customers are seldom involved in the writing of these standards. Rather, service standards tend to be the product of mid-management committees, resulting in a hodge-podge of ideas and opinions that are more a reflection of operational expediency than of customer expectations.  A better practice is to calibrate service standards against customer needs, expectations and experiences.
  1. Align service standards with training content:  Training should arise from standards, not vice versa.  Bring training managers into the process from the beginning, ensuring that as standards are adjusted, training content will follow.
  1. Align training content with frontline execution:  The success of most training programs is measured in terms of the participant’s ability to recall the content, rather than to apply the information on the job.  A more proactive practice is to identify specific deficiencies in service delivery and adjust training content to address those deficiencies.
  1. Align frontline execution with rewards and incentives:  At the managerial level, incentives tend to be in the form of quarterly bonuses linked to metrics such as customer satisfaction and service execution scores.  However, you can go farther.  Depending on the data available, consider rewards on a much more immediate and shorter cycle.  For example, on a daily basis, call centers agents can receive bonus points that are immediately redeemable at on-line redemption sites.  Or a bank teller may receive an immediate reward if they display the appropriate behavior to a mystery shopper. Thus, employees receive quick, meaningful rewards that reinforce the specific skills that are needed to improve customer experiences.

These are five steps to align the customer experience with external messaging.  How do you ensure your frontline employees are authentic representatives of the brand?


Click Here For More Information About Kinesis' Research Services

Shareholder Return and the Customer Experience: A Case for Investment in the Customer Experience

I recently came across a very intriguing bit of research that suggests the benefits of investments in the customer experience in terms of shareholder return.

Great customer service processes and people are not built overnight. They take years of investment to cultivate. Unfortunately, for some publically traded companies, the short-term demands of Wall Street make such investment difficult. The demands of investors to meet earnings estimates for the next quarter can make it difficult for managers to invest in the customer experience – the payback is too slow and uncertain.

Stockholders have little patience nowadays with investments that do not show a clear and quick return. To ensure that managers are acting in the owners’ interests, management incentives are more frequently tied to quarterly financial performance than to difficult-to-measure variables like customer loyalty.

Given great customer experiences are not built overnight, they are constantly at risk of budget cuts by managers who would boost short term earning at their expense. Service initiatives have a tendency to come and go in large companies before they have a chance to prove their worth, resulting in customer frustration, employee cynicism and widespread service mediocrity.

Service gurus talk about the need for “investor loyalty” as a counterbalance to customer loyalty, but that requires a visionary, motivated and stable management team who can convince investors to look farther ahead.

Easier said than done, right? How does one make the case for investments in the customer experience in an environment that demands making the next quarters numbers?

Jim Picoult, founder of Watermark Consulting, has an answer. Jim has created a stock index based on Forester’s annual Customer Experience Index (CXI). Jim calculated the returns of two hypothetical portfolios consisting of the top and bottom 10 publicly traded companies in Forester’s CXI for a six year period ending in 2012. Each year he rebalanced the two portfolios based on Forester’s new rankings. The portfolio comprised of companies ranked in Forester’s top 10 yielded a cumulative return of 43%, compared to 14.5% for the S&P 500. The portfolio containing the bottom 10, yielded a cumulative return of negative 33.9% – it lost a third of its value.

Customer Experience Leaders Outperform the Market

Now, correlation is not causation, and there are a lot of factors at play here. But clearly the managers of firms in the portfolio of Forester’s top 10 were able to both deliver shareholder value and invest in the customer experience.

It all comes down to thinking of the customer as an asset in which to invest and realize a return.


Click Here For More Information About Kinesis' Research Services

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

 


Click Here For More Information About Kinesis' Employee Engagement Research

A Picture is Worth a Thousand Words: A Simple and Elegant Tool Determines How Customers Perceive Your Brand

The way to gain a good reputation is to endeavor to be what you desire to appear.
– Socrates

Brands have personality. Brand personality is a set of characteristics associated with the positioning, products, price and service mix offered by a company.

How would you describe your brand?

I’m often surprised how often clients are unable to answer this simple question. Even those who have a defined set of brand characteristics don’t know to what extent customers’ perceptions of the brand match the bank’s defined brand. Often what is needed is a cold hard look in the mirror to determine how they are perceived by their customers. What brand personality does our customer experience create in our customer’s minds?

As often in life, the best solutions to a given problem are in fact very simple. One simple and elegant tool is to ask customers to describe your customer experience with just one word.

A picture is worth a thousand words. When we asked a bank’s customers to describe the customer experience with one word the results produced the following word cloud:

Adjectives

With one simple question, we produced a simple and elegant depiction of how customers perceive the brand as a result of a recent experience.

This cold hard look in mirror can be painful; certainly it is tough to hear, as in the case above, that some of your customers might consider you disappointing, indifferent or pushy.  But once you determine how you are perceived, you can figure out how you want to be perceived, and begin addressing any gaps between the two.


Click Here For More Information About Kinesis' Research Services