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Building a Customer Feedback Program

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This presentation outlines the essential components of a customer feedback program and quantifies the impact of each component on customer loyalty.

This presentation outlines the essential components of a customer feedback program and quantifies the impact of each component on customer loyalty.

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  • 1. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Building a World Class Customer Feedback Program Bob E. Hayes, Ph.D. Loyalty leaders show how to Improve Customer Loyalty to Drive Business Growth
  • 2. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Executive Overview • Customer Feedback Program Components • Best Practices of Loyalty Leaders – Strategy/Governance – Business Process Integration – Method/Reporting – Applied Research • Build a Customer-Centric Culture Overview
  • 3. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Loyalty leaders build a customer-centric culture with their Customer Feedback Program by: 1. Using customer feedback to set vision and manage business 2. Integrating customer feedback into business processes 3. Communicating process, goals and results of all customer programs to entire company 4. Conducting in-depth customer research – Integrate different business data (operational, financial, customer feedback), to reveal deep customer insights that drive business growth Executive Overview
  • 4. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Formal collection of customer data • Help companies understand their customers’ attitudes • Referred to as: – “Customer Satisfaction Programs” – “Customer Advocacy Programs” – “Customer Loyalty Programs” – “Voice of the Customer” Customer Feedback Programs
  • 5. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Customer Feedback Programs Strategy Vision, Value, Culture Governance Executive Ownership, Decision-Making, Accountability, Compensation Business Process Integration Automated, Closed-looped, Customer Relationship Management and Business Intelligence Integration, Lifecycle Management, Communication Method Data collection, Contact Management, Sampling Methodology, Survey Questions Reporting Analysis, Benchmarking, Micro and Macro Improvements, Dissemination Practices Research Business Impact, Financial, Operational and Constituency Linkages, Use of Customer Information PeopleandTechnology
  • 6. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Best Practices Customer Feedback Programs
  • 7. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Which specific elements of customer feedback programs are critical to improving customer loyalty scores? • 227 customer feedback program professionals asked about their company’s customer feedback program1 – 28 survey questions covered 6 CFP components • Company’s percentile ranking of customer loyalty Best Practices Study 1 Survey administration was conducted using a Web-based survey tool provided by GMI (Global Market Insite, Inc.). Source: Hayes, B. E. (2009). Beyond the ultimate question: A systematic approach to improve customer loyalty. Quality Press. Milwaukee, WI.
  • 8. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Loyalty Leading Companies Structure their Programs Differently than Loyalty Laggards Adoption Rate Customer Feedback Program Component Loyalty Leaders1 Loyalty Laggards ∆ in Adoption Rate Strategy/Governance 89% 71% 18% Business Process Integration 86% 59% 27% Method 72% 60% 12% Reporting 70% 60% 10% Applied Research 80% 51% 31% 1 Loyalty Leaders defined as respondents who have customer loyalty percentile ranking of 70% or higher. Loyalty Laggards defined as respondents who have customer loyalty percentile ranking lower than 70%. Source: Hayes, B. E. (2009). Beyond the ultimate question: A systematic approach to improve customer loyalty. Quality Press. Milwaukee, WI.
  • 9. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Strategy/Governance 40 50 60 70 80 Customer feedback results are as important as financial measures in making business decisions. Customer feedback is included in the company's strategic vision, mission and goals. Customer feedback results are used in executives' objectives and incentive compensation. A top executive (e.g., CEO, VP) is a champion of the customer feedback program. Customer feedback results are used in front-line employees' objectives and incentive compensation. Industry percentile ranking of customer loyalty Companies who Adopted Practice Companies who did not Adopt Practice 1. CF is as important as financial measures in making business decisions 2. Included in vision/mission/goals 3. Executive incentive comp.
  • 10. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Incorporate customer feedback into vision, mission, and goals – Include in employee handbook – Use in setting company goals • Include customer feedback in decision-making process – Executive reports customer results at executive meetings – Present CF data in company meetings, official documents • Use customer feedback when setting executive’s objectives and incentives – Use key metrics (business areas, customer loyalty) Strategy/Governance
  • 11. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Business Process Integration 40 50 60 70 80 Customer feedback results are included in the company/executive dashboards. Customer feedback program is integrated into business processes and technology (e.g., CRM system). All areas of the customer feedback program (e.g., process and goals) are communicated regularly to the entire company. The resolution of customer issues that are identified using the customer feedback program is integrated into the company's Customer… Industry percentile ranking of customer loyalty Companies who Adopted Practice Companies who did not Adopt Practice 1. CF included in executive dashboards 2. Program integrated into business process and technology 3. Program processes/ goals communicated to entire company
  • 12. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Include results of customer feedback in executive dashboards – Build reliable metrics/indices • Communicate customer feedback program processes/ goals to entire company – Develop customer-related employee portal on intranet site – Summarize survey methodology – Present research findings Business Process Integration
  • 13. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Integrate customer feedback program into business process and technology (e.g., CRM) – Customer feedback and CRM System provides a comprehensive picture of customers’ satisfaction and behaviors throughout the customer lifecycle – CRM system necessary to aggregate all customer data – helps in operational linkage Business Process Integration Customer Feedback Program CRM Application Market
  • 14. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Method 40 50 60 70 80 Web surveys are used to collect customer… Paper and Pencil surveys are used to collect… Customer satisfaction surveys are conducted by… The survey delivery is an automated process. Multiple methods of collecting customer… In-person interviews are used to collect… Telephone surveys are used to collect customer… Customer contact management process (e.g.,… Industry percentile ranking of customer loyalty Companies who Adopted Practice Companies who did not Adopt Practice 1. Web surveys
  • 15. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Reporting 40 50 60 70 80 Customer feedback results are shared throughout the company. Customer feedback results are benchmarked against competitors and industry averages. Web-based reporting tools are used to report customer feedback results to employees. Results of customer satisfaction research are presented externally (e.g., conferences, user… Results of customer satisfaction research are presented internally (through employee portal,… Customer feedback results are shared only at executive/management level.* Industry percentile ranking of customer loyalty Companies who Adopted Practice Companies who did not Adopt Practice 1. CF results shared throughout company
  • 16. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Use Web-based surveys to collect customer feedback – Facilitates communication through automation – Improves ease of integration with other business systems (e.g., CRM) • Share customer feedback results throughout the company – Keeps employees focused on customer-centric goals – Facilitates customer-centric culture Method and Reporting
  • 17. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Applied Research 40 50 60 70 80 Statistical relationships are established between customer feedback data and operational metrics (e.g., turnaround time, hold time). Applied research using customer feedback data is regularly conducted. Statistical relationships are established between customer feedback data and other constituency metrics (e.g., employee satisfaction or partner… Existing information from customer databases is used to help segment customer feedback data. Statistical relationships are established between customer feedback data and business metrics (e.g., revenue, margin). Industry percentile ranking of customer loyalty Companies who Adopted Practice Companies who did not Adopt Practice 1. Operational linkage established 2. Applied research regularly conducted 3. Constituency attitude linkage established
  • 18. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Validate customer feedback program – Ensure results are reliable, valid and useful – One of first research projects that need to be conducted • Develop programmatic research around customer • Establish statistical relationships between customer feedback data and operational metrics (e.g., turnaround time, hold time) and other constituency metrics (e.g., employee satisfaction or partner satisfaction metrics) – Manage customer relationships using operational metrics – Expand customer ecosystem; manage all constituencies Applied Research
  • 19. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Linkage among key organizational variables – Company profitability/growth – Customer relationship variables • Satisfaction, loyalty, perceived service value – Employee relationship variables • Satisfaction, retention, productivity, internal service quality – Partner relationship variables • Satisfaction, allegiance • The quality of the three relationships impacts company financial success • Key to success is managing these three key relationships Understanding Business Growth Starts with Understanding the Ecosystem
  • 20. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Must Understand Entire Company Ecosystem to Drive Business Growth Employee, Partner, and Customer Loyalty Drive Business Results Based on the book, The Service Profit Chain: How leading Companies Link Profit and Growth to Loyalty, Satisfaction and Value (Heskett, Sasser & Schlesinger, 1997) Employee Survey Customer Survey Partner Survey Company Business Strategy and CRM System Company PerformanceInternal System Employee Satisfaction Employee Productivity Perceived Value Customer Satisfaction Revenue Profits Employee Loyalty Customer Loyalty Partner Advocacy Purchasing Retention Market Share
  • 21. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway • Customer Satisfaction Survey – Customer Loyalty Indices – Identify drivers of customer loyalty – Improve service value – Increase customer loyalty and lifetime value of customers • Employee Survey – Employee Loyalty Index – Identify drivers of employee loyalty – Improve internal service quality climate – Retain exceptional employees • Alliance Partner Survey – Partner Allegiance Index – Identify drivers of partner allegiance – Offer right partner programs to ensure partners can deliver 100% customer satisfaction – Retain exceptional partners Measuring Loyalty Across the Company Ecosystem
  • 22. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway Customer Feedback Programs Success  Customer alignment  Top management uses customer feedback to set vision, manage business  Applied research reveals insights  Companywide communication of program process, goals and results
  • 23. Copyright © 2010 Business Over BroadwayCopyright © 2010 Business Over Broadway For More Information Bob E. Hayes, Ph.D. Email: bob@businessoverbroadway.com Web: www.businessoverbroadway.com Blog: www.businessoverbroadway.blogspot.com Twitter: www.twitter.com/bobehayes Business Over Broadway Business growth through customer insight

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