Asking the Right CX Questions: Optimizing your Customer Relationship Survey

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I present best practices for relationship-based surveys for Voice of Customer (VoC) programs. Based on his 20+ years of implementing these types of surveys, I talk about the primary goal of relationship surveys and propose a set of survey questions that will improve how you measure and improve the health of the customer relationship. My talk covers four parts of the optimal customer relationship survey: 1) Customer Loyalty Questions; 2) Customer Experience Questions; 3) Competitive Benchmark Questions; and 4) Additional Questions.

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Asking the Right CX Questions: Optimizing your Customer Relationship Survey

  1. 1. ASKING THE RIGHT CX QUESTIONS:OPTIMIZING YOUR CUSTOMERRELATIONSHIP SURVEYBOB E. HAYES, PHDBUSINESS OVER BROADWAY Presented at the Customer Experience Summit 2011. Register here to watch the conference presentations.
  2. 2. Overview  Why?  Customer Relationship Survey  The Optimal Customer Relationship Survey 1. Customer Loyalty 2. Customer Experience 3. Relative Performance 4. Additional Questions2 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  3. 3. Why? 1. Good to review methods 2. “I see patterns” 3. Customers’ questions  What type of loyalty questions do I ask?  How many questions should our survey have?  Our survey is too long. Can I drop any questions?  Focus on the content of survey questions  What gets asked3 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  4. 4. Customer Relationship Surveys  Solicited feedback from customers about their experience with company/brand  Assess health of the customer relationship  Conducted periodically (non-trivial time period)  Common in Voice of the Customer Programs  Guide company strategy  Identify causes of customer loyalty  Improve customer experience  Prioritize improvement efforts to maximize ROI4 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  5. 5. Customer Relationship Survey 1. Customer Loyalty – likelihood of customers engaging in positive behaviors 2. Customer Experience – satisfaction with important touch points 3. Relative Performance – your competitive advantage 4. Additional Questions – Extra value-added questions5 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  6. 6. Three Types of Customer Loyalty Frederick Reichheld. The Loyalty Effect. Harvard Business School Based on the article by Gupta, et al. (2006). Modeling customer lifetime Press, 1996 value. Journal of Service Research, 9(2), 139-155.  Customer can engage in different types of loyalty behaviors, each impacting different kinds of growth1  Survey needs to comprehensively measure all types of customer loyalty 1In Hayes, B.E. (2011). Lessons in loyalty. Quality Progress, March, 24-31.6 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  7. 7. Customer Loyalty Questions Not at all Extremely Likely Likely 0 1 2 3 4 5 6 7 8 9 10 Type Definition Loyalty Questions The degree to which customers 1. Likelihood to switch to another company* Retention will remain as a customer/not 2. Likelihood to purchase from competitor* Loyalty leave to competitor 3. Likelihood to renew service contract The degree to which customers 4. Likelihood to choose again for first time Advocacy feel positively toward/will 5. Likelihood to recommend (NPS) Loyalty advocate your product / 6. Likelihood to purchase same product/service service / brand The degree to which customers 7. Likelihood to purchase different/additional Purchasing will increase their purchasing products/services Loyalty behavior 8. Likelihood to expand use of products across company * Reverse coded so lower rates of these behaviors indicates higher levels of Retention Loyalty.7 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  8. 8. POLL QUESTIONS 1. Which type(s) of customer loyalty do you measure in your relationship survey? Check all that apply  Advocacy (e.g., Overall Satisfaction, Recommend)  Purchasing (e.g., Buy additional/different products, expand usage)  Retention (e.g., Renew service contract, Switch to another company)8 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  9. 9. Customer Experience  Sum of all experiences a customer has with a supplier of goods or services, over the duration of their relationship with that supplier  Customer experience is measured through satisfaction ratings of important customer touch points  Understand drivers of customer loyalty  Better customer experience leads to higher levels of customer loyalty9 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  10. 10. Customer Experience Questions  Two types of customer experience questions Extremely Neither Satisfied Extremely  Overall, how satisfied Dissatisfied Nor Dissatisfied Satisfied are you with… 0 1 2 3 4 5 6 7 8 9 10 Area General CX Questions Specific CX Questions 1. Reliability of product 2. Features of product Product 1. Product Quality 3. Ease of using the product 4. Availability of product 1. Knowledge of your industry Account 2. Sales / Account 2. Ability to coordinate resources Management Management 3. Understanding of your business issues 4. Responds quickly to my needs 1. Timeliness of solution provided Technical 2. Knowledge and skills of personnel 3. Technical Support Support 3. Effectiveness of solution provided 4. Online tools and services10 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  11. 11. POLL QUESTIONS 1. What kinds of customer experience questions do you use in your customer relationship survey?  General Measures (e.g., Product Quality, Customer Service)  Specific Measures (e.g., Reliability of product, Responds quickly to my needs) 2. How many customer experience questions do you have in your customer relationship survey (combining both general and specific questions)?  1-5  16-20  6-10  21-30  11-15  31+11 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  12. 12. General CX Questions  Overall, how satisfied are you with each area? Extremely Neither Satisfied Extremely Dissatisfied Nor Dissatisfied Satisfied 0 1 2 3 4 5 6 7 8 9 10 1. Ease of doing business 2. Sales / Account Management 3. Product Quality 4. Service Quality 5. Technical Support 6. Communications from the Company 7. Future Product/Company Direction12 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  13. 13. CX Predicting Customer Loyalty 100% 1. General CX Specific CX QuestionsPercent of Variability (R2) in Customer 4% Loyalty Explained by CX Questions 90% General CX Questions questions explain 80% 0% customer loyalty differences well. 70% 2% 60% 2. Specific CX 50% 4% questions do not add 85% much to our 40% 74% prediction of customer 30% 60% loyalty differences. 20% 42% 3. On average, each 10% Specific CX question 0% explains < .5% of Company A Company B Company C Company D variability in customer 7 General CX 5 General CX 6 General CX 7 General CX loyalty. 0 Specific CX 14 Specific CX 27 Specific CX 34 Specific CX General CX items reflected areas (e.g., product quality, ease of doing business, tech support) and additional specific CX items reflected specific aspects of the general items (product reliability, tech support knowledge, account management’s ability to respond quickly). R2 reflects percent of variance of customer loyalty that is explained when using general items in regression analysis . ∆R2 reflects the additional percent of variance explained above what is explained by general items when using general items and specific items in a stepwise regression analysis. 13 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  14. 14. Competitive Analytics  Customer experience questions may not be enough to improve business growth  You need to understand your relative performance  HBR study (2011)1: Top-ranked companies receive greater share of wallet compared to bottom-ranked companies  Focus on increasing purchasing loyalty (e.g., customers buy more from you) 1 Keiningham, Timothy L., Lerzan Aksoy, Alexander Buoye, and Bruce Cooil (2011), “Customer Loyalty Isn’t Enough. Grow Your Share of Wallet.” Harvard Business Review. vol. 89 (October).14 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  15. 15. Relative Performance Assessment (RPA)  Ask customers to rank you relative to the competitors in their usage set  What best describes our performance compared to the competitors you use?15 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  16. 16. RPA Predicting Customer Loyalty  What best describes our performance compared to the competitors you use? 100% 1. General CX questionsLoyalty Explained by General CX Questions and 90% explain advocacy loyalty Relative Performance Assessment (RPA) Percent of Variability (R2) in Customer differences well. 80% 2% 1% 1 RPA Question 70% 2. Relative Performance 7 General CX Questions Assessment improved 60% the predictability of 50% purchasing loyalty by 40% almost 50% 69% 72% 30% 8% 7% 1% 3. Improving company’s 20% ranking against the 10% 18% 16% 14% competition will 0% improve purchasing Overall Recommend Purchase Expand usage Renew loyalty and share of Satisfaction different/new Subscription solutions wallet16 Loyalty Questions Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  17. 17. Understanding Your Ranking 1. Correlate RPA score with customer experience measures 2. Analyze customer comments about the reasons behind their ranking  Why did you think we are better/worse than the competition?  Which competitors are better than us and why?  What to improve?  Product Quality was top driver of Relative Performance Assessment  Open-ended comments by customers who gave low RPA rankings were primarily focused on making the product easier to use while adding more customizability.17 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  18. 18. Additional Questions  Out of necessity or driven by specific business need  Segmentation Questions  How long have you been a customer?  What is your role in purchasing decisions?  What is your job level?  Specific topics of interest to senior management  Perceived benefits of solution (What is the % improvement in efficiency / productivity / customer satisfaction)  Perceived value (How satisfied are you with the value received?)  Open-ended questions for improvement areas  If you were in charge of our company, what improvements, if any, would you make?18 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  19. 19. Summary: Your Relationship Survey 1. Measure different types of customer loyalty (N = 4- 6) 2. Consider the number of customer experience questions in your survey (N = 7)  General CX questions point you in the right direction. 3. Measure your relative performance (N = 3)  Understand and Improve/Maintain your competitive advantage 4. Consider additional questions (N = 5)  How will you use the data?19 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  20. 20. For More Information Bob E. Hayes, Ph.D. Email: bob@businessoverbroadway.com Web: www.businessoverbroadway.com Blog: www.businessoverbroadway.com/blog Twitter: www.twitter.com/bobehayes20 Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com

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