LISTENING TO THE CUSTOMER’S VOICEFocusThe chieflistening officerGod provided a great model forcommunication when he gave u...
LISTENING TO THE CUSTOMER’S VOICEpermanent. They may flit in and out of retirement and                     which customers...
LISTENING TO THE CUSTOMER’S VOICE                            sensitive, and they often know more about our finances       ...
LISTENING TO THE CUSTOMER’S VOICEmuch quicker and more sophisticated response to                                 WHAT DOES...
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Introducing the Chief Listening Officer

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Introducing the Chief Listening Officer

  1. 1. LISTENING TO THE CUSTOMER’S VOICEFocusThe chieflistening officerGod provided a great model forcommunication when he gave us two FIGURE 1: WHO INFLUENCES CONSUMERS?ears and one mouth. David Jackson 100 ■ 1997 ■ 2001preaches the lesson of better listening. 90 80 70 Take a look at the marketing department’s budget. 60 How much is spent on the different activities of 50 research, advertising, direct mail, sponsorship, PR and 40 events? In most companies, the marketing function 30 and the associated spend is dominated by 20 communications – getting the message out to the 10 prospective customers. 00 Family Friends Advertising Communicating your message is of course a vital Source: BT/Future Foundation (2002) activity: even the best product in the world is of little value if people don’t know about it. It is also true that reaching that elusive audience is increasingly difficult and Customer needs have always changed, but they are expensive. It is said that people are exposed every day now changing more rapidly, fuelled by significant to 4,000 marketing messages from companies trying to changes in social and working patterns and shorter influence their buying intentions. It is hard to make an product life cycles. Globalization provides customers impact, especially as these impressions are just a small with greater choice, and the growth of the Internet has part of the 50,000 thoughts we each have every day. made it much easier for customers to access that To stand out from the crowd in this deluge of choice. Power is shifting from suppliers to customers. marketing and mind games, companies resort to ever- People – consumers and employees – are also more sophisticated and expensive campaigns – which changing. Looking across just three generations, my are less and less effective. Family and friends are much father worked for the same company, doing basically more influential than advertising in shaping consumer’s the same job throughout most of his life, using skills that buying activities (Figure 1). Their recommendations changed relatively little over fifty years. For most (good or bad) are much more likely to be based on first- people, a job involved hard, physical work. He knew hand experience than on the adverts they have seen. exactly when he would retire, and he did not worry This is not to say that advertising does not work; it about his pension because politicians, financial does. But just how effective is it compared with other institutions and employers could be trusted. For Dad, approaches? What would be the effect on sales high technology was a telephone that plugged into the revenue of reducing advertising by 20% and investing wall and a TV with four channels. that saving into improving the customer experience? My children, on the other hand, may well live to be over What if, instead of bombarding customers with more a hundred and move in and out of work for seventy years. advertising, we listened to them more and used their They will choose jobs that suit the lifestyle they want, feedback to improve the service provided? Is marketing which will change according to their situation. Retirement too much of a monologue? will be when they want it to be, and will probably not be26 Volume 4 Issue 4 Argent www.thefsforum.co.uk
  2. 2. LISTENING TO THE CUSTOMER’S VOICEpermanent. They may flit in and out of retirement and which customers do business with companies, as wellwork as money and their whims dictate. They know that as the overall relationship. Monitoring customerthey will have to look after their own future, and will trust interactions provides valuable and actionablepeople and institutions based on their performance, not information with which to drive continuoustheir words. They will exploit the massive choice they will improvement. This cycle of feedback and improvementhave, remaining loyal only to those who demonstrate that underpins the success that many companies have inthey value their relationship.1 building a loyal customer base. Event-driven In this chaotic and complex life, trust will become experience measurement also matches the approachmore critical and companies that can earn and retain a that the Financial Services Authority is taking incustomer’s trust will be in a privileged position. Trust monitoring how suppliers treat their customers fairly.2spans both the rational and emotional elements of Where trust is important in a relationship, customercustomer relationships. At its most basic, trust is about feedback has to go beyond the rational elements suchconfidence in the quality, availability and reliability of the as speed of response, quality of product and ease ofproduct or service. But it goes beyond that. It doing business. Understanding the emotionalembraces mutual respect, openness, honesty and connection with the customer will help to strengthen thesimilar shared values. We prefer to do business with relationship. Whilst operational performance will affectcompanies with which we have an affinity – companies customers’ views of a company’s efficiency, theirwe like. In an uncertain world, those companies that emotional view is what really shapes their buyinggain and retain our trust will have an edge (Figure 2). decisions. Integrating experience and relationship data As consumers select one supplier to be their trusted with operational performance measures providesadvisor and invest time in communicating their personal insights into the changes that will drive retention anddata and needs to that supplier, the barriers to entry for advocacy. Customers will rarely recommend acompetitors increase significantly. company with which they have had a bad experience, In a rapidly changing world, particularly one in which or that they do not trust, to family or friends; theirthe power is shifting to the customer, understanding reputation and friendship is worth more than that.them is even more vital to success. Listening is set to To achieve a meaningful understanding of theirbecome crucial in the marketing mix. customers, companies will have to increase significantly Much current market research is about informing the amount of listening they do. Marketing must become much more of a dialogue, with the customer an FIGURE 2: TRUST AS A COMPETITIVE ADVANTAGE active player. The resulting richer understanding of the customer can then be used to improve operations and tailor the content and timing of marketing messages Have high impact delivered to the customer. Providing actionable data about individual customers and segments is the key. Likely to happen But customers are increasingly concerned about privacy (Figure 3), and are likely to share personal 0 10 20 30 40 50 60 70 80 90 100 % Agreeing information only with companies that they trust and that Source: Global Future Forum Pulse Survey, March 2005 enable them to make the best buying decisions. Companies that do not act in customers’ best interestsstrategic decisions – identifying customer needs and will be locked out of the opportunity to supply.expectations, sizing market opportunities, and Concerns about privacy mean that more and moreunderstanding what shapes buying decisions. This people now refuse to share information with suppliers.information is vital in shaping product strategies and With the possible exception of healthcare, nowhere isroutes to market, and more will be required as needs privacy more vital than in financial services. The dataand expectations continue to change rapidly. that banks and insurers hold about our lives is highly If retaining customers and building relationshipsbased on trust matters, understanding how they FIGURE 3: PRIVACY CONCERNSperceive the company and its products and services isvital. People remain loyal and recommend a company Have high impactbecause they have had a good experience, and that isdown to operations – it is about products, processes, Likely to happensystems and, most importantly, people. Research into customer experiences is often 0 10 20 30 40 50 60 70 80 90 100simplistic and ineffective, based on the annual “Do you % Agreeinglove us” survey. To be really useful, experience-based Source: Global Future Forum Pulse Survey, March 2005research must gather feedback at all the key points atwww.thefsforum.co.uk Argent Volume 4 Issue 4 27
  3. 3. LISTENING TO THE CUSTOMER’S VOICE sensitive, and they often know more about our finances A brave new world? It is already here. Amazon and than our life partners.3 Customer trust depends not only E-bay today rate suppliers on their track records and on this information being held securely – and ask customers to score their satisfaction and companies must have not only good intentions but recommend them to friends.7 Is it that big a leap to effective systems – but also on confidence that it will not imagine getting the best deal for a savings product via be used unfairly to exploit us.4 E-bay, with suppliers meeting your personal standards So perhaps, in the not-too-distant future, the generally- bidding for your business? Or a price-comparison site misnamed customer relationship management5 will be such as Kelkoo securing better deals for customers reversed in a new paradigm, customer-managed based on their past purchases and potential future information. The scenario set out in the box is, for the value? moment, hypothetical, but technologies to exploit this Could you see a company like John Lewis being new world are here already. trusted by customers in this way? Or Tesco? Or a Smart cards can store data about the holders and their genuinely client-focused independent financial adviser? purchase history, and commercial strategies are already But how do you think most people would react if this being developed around this potential. But customers new service were offered by the big banks? will be able to choose with whom to share this In this future, winning and retaining customers profitably knowledge, so trust and empathy6 are key. On a small- and better than the competition will require a much richer scale, highly-motivated customers already boycott understanding of customers, as well as innovative companies that do not share their world-view on “big practices for delivering genuinely and meaningfully issues” such as fair trade, the environment and arms personalized products and services. Understanding the sales; but technology will make it easier for them to act customer like never before will require a whole new on their motivations, so that far more people will exclude approach to listening to the customer – reflected by the far more companies for far more personal and subjective emergence of the chief listening officer (CLO). reasons. Customer-managed information, where customers Two types of companies will benefit from this growth are equal partners in the marketing dialogue, will require of customer power. Firstly, those that truly put the a significant change in the culture of most customer first and develop innovative ways of delivering organizations, and the CLO will be a leading player in the right mixture of product and service at a competitive driving that change. People and departments price. Secondly, an emerging new breed of trusted throughout the whole company will have to rethink how intermediaries that offer a secure, independently- and why they operate, and throw out many of the verified home for customer data and share this only with beliefs that have shaped their actions in the past. companies that fit each individual customer’s model of The jobs of CLOs will not be easy. They will face two “acceptable suppliers”. significant barriers to success: fragmented marketing and feedback systems; and (by far the biggestAMAZON FINANCIAL SERVICES? challenge) legacy attitudes. Few marketers or chief executives will want to giveIn the not-too-distant future, customers will hold their own buying records electronically power of choice to their customers. Raised inand use these to negotiate special deals with suppliers. Imagine shopping on-line for organizations used to paying only lip-service toan investment product. You insert your smart-card or send a message from your smart- customer needs, many will not be willing or able tophone with your purchase request inquiry. Attached is your personal purchase history make the required intellectual or attitudinal leap. “New”for this type of product, with this and competitor companies. The supplier’s system companies such as First Direct and The One Accountrecognizes you as a regular buyer of this product, with a history of recommending lead in this world because they do not have thecompanies to friends and colleagues. Of course, this information is only shared with millstone of legacy cultures. Companies that have builtcompanies with an exemplary record on trust. their business model on service excellence, particularly From the information on your card, Amazon, as a trusted provider, knows your buying in a real time or on-line environment, have had to facerecord, which it uses to generate a special deal in recognition of your loyalty, lifetime value some of the issues discussed here from the start.and advocacy. The latest transaction, coupled with knowledge of your visits to Amazon’s Legacy systems will also be a barrier. Customer-website, triggers a satisfaction survey, part of which asks you for information about managed information requires the integration ofpeople that you have recommended Amazon to in the last three months.* With your disparate systems. Close links will be required betweenapproval, these people are contacted, in your name, with information about special marketing management, customer feedback,offers. Once the transaction is complete (including experience/satisfaction feedback), the transaction management and management information.smart card is updated, ready for the customer’s next inquiry. These systems will have to reach a much broader audience, presenting a holistic view of the customer at * Perhaps the last couple of years for longer-term products such as pensions, or the last month each and every touch-point. for faster-moving products such as credit cards. Integration of data is at the heart of the responsibilities of a CLO. The future for many companies will require a 28 Volume 4 Issue 4 Argent www.thefsforum.co.uk
  4. 4. LISTENING TO THE CUSTOMER’S VOICEmuch quicker and more sophisticated response to WHAT DOES THE CLO DO?opportunities that customers present. Feworganizations today hold a comprehensive record of She is a key member of the marketing leadership team – increasingly often, the marketingtheir customers, despite the vast investments in CRM director – and the focus for all information about the customer, with responsibility for:systems. The data required to build real insights spans: • Segmentation: Defining context-based segments on which the company will build • Transaction records. and tailor its value propositions. Individual customers will move in and out of • Marketing campaigns (with responses). segments as their circumstances and needs change. • Segmentation. • Measuring the customer experience: As product life-cycles shrink and products • Intentions. and services become more and more homogeneous, the broader customer • Buying preferences. experience will be an increasingly-dominant differentiator. Instead of suppliers • Satisfaction and advocacy feedback. selecting customers on the basis of profitability and attractiveness, customers will set criteria by which they will choose providers. Listening carefully to reactionsOnly by integrating all this data will companies generate along the customer journey will thus be crucial to winning and retaining a place onthe insights they need to serve the customer properly. each customer’s preferred list.This information will need to be shared much more widely • Intentions management: As with investment, so with customer intentions – pastacross the organization, with anyone serving the performance is no guarantee of future returns. The CLO must ensure that eachcustomer having access to the same, complete customer customer’s changing intentions are monitored and recognized, so that marketingrecord. Only then can informed customer interactions and face-to-face interactions focus on the issues and opportunities that are relevant(through any channel) take place, increasingly influenced to that customer.by decision-support tools that guide customers, and the • Data integration and mining: The CLO will lead the way in mining understandingpeople dealing with them, to the best deal. from the different seams of information gathered about customers and the Many companies will seek to exploit this integrated operations that serve them, seeking in particular causal links.view of the customer. But in an environment in which • Early warning systems: From this information, the CLO will develop predictivetrust is a vital component of relationships with customers, algorithms and track buying intentions and customers at risk of being lost. Thiswhat better way of demonstrating that trust than by information will allow front-line staff to sell more effectively and to take appropriateturning the power inherent in the information over to the and focused action to retain a firm’s preferred customers.customer? Listening is the new marketing. • Campaign management: The information and insights gleaned by the CLO will be used to personalize dynamically the content and timing of context-specific marketingDavid Jackson is Chief Executive of Clicktools messages for each customer, based on the integration of data about intentions, campaign responses, satisfaction, past activity and general demographics. 1 This scenario is based on research by the Global Future Forum. The author sits on its European advisory board. 2 For more information see the author’s paper “Treating Customers Fairly – the role of feedback”. 3 They certainly hold more data, but family members can often just CORE LISTENING BELIEFS sense when something is not right. It is the difference between awareness and understanding, and also shows that real knowledge The listening organization will have at its heart a number of simple but vital beliefs: is based as much on sense, context and informal signals as on hard facts. Ed • Respect: Financial service providers must recognize and respect the desires and 4 Financial institutions do not, of course, do not have an exemplary aspirations of customers and deal with them in an adult-to-adult relationship – not record on the former (see, for example, Identifying the problem by talking down to them, as has been the case. Tim Kitchin and Peter Massey in Argent 4.3, May 2005), and most • Trust: Companies that cannot gain and retain their trust cannot hope to win and people probably feel that they are taken advantage of in respect of the latter. One key reason for the lack of customer enthusiasm for retain customers. Given a choice, would you put your future in the hands of a account aggregation (despite some impressive advocacy – see, for company you cannot trust? example, The service now arriving ... by Holly Mackay in Argent 3.3, • Mutuality: Whether member-based or not, only providers that seek to balance their May 2004 is that most people’s perception – and it does not matter needs with those of customers can succeed when information has shifted the whether this is valid or not – is that the value of the customer benefits power to the customer. are far outweighed by the advantage that the aggregator might take from the information that the customer has to surrender. Ed • Personalization: Whether it is the core product or the interactions across the 5 Most companies use CRM merely as a customer data-collection customer life-cycle, personalization must increase. In fact, contextualization is system. probably a better description of what is required. 6 Empathy – the feeling, for example, that this company’s aims and • Dynamism: Every interaction with the customer will be dynamic. Companies will ideals are aligned with my own – is an increasingly-important factor need to be significantly more agile if they are to respond quickly to customers in a world in which the core elements of product and service offerings are pretty indistinguishable. The Co-operative Bank, Body empowered by information and choice. Shop, John Lewis and (at some stages of its rather chequered record over the past thirty years) Marks & Spencer all offer strong evidence of the power and value of empathy. Ed 7 And, of course, in the world of old technology, this recommendation model was key to the success of companies such as USAA. Edwww.thefsforum.co.uk Argent Volume 4 Issue 4 29

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