Walker Information Blog

• Arena – There are things about you that everybody knows – your hair color, your eyes, your height, weight, etc. 
• Blind spot – There are things that others know about you, but you may not see, such as annoying habits or shortcomings. 
• Façade – There are things you know that others don’t – your habits, your secrets.
• Unknown – There are even things you don’t know about yourself and others don’t know – subconscious things that make you do the things you do.

To some it may sound like heresy, but I think you can advocate too strongly for your customer. Years ago at a certain business services company, the scuttlebutt regarding one of the most senior and otherwise respected SAMs (including at high levels) was, "Has Ralph (not real name) forgotten who he works for?" Perhaps that's the point where advocacy has crossed a line -- when colleagues indicate you are asking too much for your customer, or your company is simply not yet ready to give all you are seeking, or both. 

That's why I really like the term, "Balanced advocate" in describing successful strategic account managers. The "balanced" description cuts at least a couple of different ways. First, the SAM instigates good practices on both sides of the relationship -- with groups and individuals in his own company as well as with contacts and user groups within the customer account. Secondly, the SAM is balanced in the asking --  able to strongly advocate for the customer and acknowledge the situation and goals of the supplier company.

When the Strategic Account Management Association's annual Standards and Practices Survey recently asked SAMs and strategic account program managers for the traits and behaviors that most contribute to SAM success, the notion of balanced advocacy came out as one type of critical practice. But the three other essential practices implied the importance of working well on both sides of the customer relationship. 

Four SAM behaviors most contributing to success

Companies treat prospects inordinately better than they treat customers. This might be understandable since we all know that good prospects come at a real premium today. But is it acceptable?

It reminds me of the story of the person who dies after living a life that confused those that were to make the decision about where he would spend the afterlife. Confused them so much that they decided to give him a “look-see” at his options. So the sent him first to spend a day in hell.

He arrived to everything he enjoyed during his life on earth—great food, beautiful golf courses, terrific music played in perfect venues, and on and on. And the guy in charge? He was terrific too—welcoming, charming, adaptable, the perfect host.

Day 2 arrived and his decision-makers started to send him in to see heaven for a day.

“No thanks,” he said. “I am good with hell. It’s everything I could ask for, so just send me there.” Space being at a premium, they complied with his wishes.

He arrived to find quite a different setting than the day before. It was horrible! It was worse than everything he had been taught to expect—hot, everyone toiling, no food (let alone the great food he was treated to just one day earlier). He found his host (who displayed none of his grace from the day before) and confronted him.

“Hey, yesterday, there were golf courses, great meals, the music was inspiring. Where is all of that? What happened?!?”

With a wry smile his host said simply, “Yesterday, you were a prospect. Today, you are a customer.”

It happens in real life too. Think about businesses like mobile phone carriers. Who gets the best deals? The new customers. If you are already a customer, you are still paying rates from the time you signed your contract. And unless you know to ask about new services and offerings, you don’t enjoy them.

Another way this pops up is with what I think of as “campaign promises.” When chasing a prospect, companies make all kinds of promises. Once the prospect becomes a customer, are those promises kept? Or are they as fleeting as campaign promises made by politicians?

Think hard about the way that customers are treated. Revenue earned from customers is far more certain than revenue that might be earned from prospects. Shouldn’t they be treated at least as well?

Managers or trainers of strategic account managers (SAMs) all look for certain traits needed by a prospective SAM because the job has unique challenges. SAMs must not only build business relationships within complex, global customer organizations, they must become influential in their own company to marshal cooperation and resources for their customer(s).

In helping the Strategic Account Management Association analyze results from their 2010 Standards and Practices Study, we were surprised that SAMs and managers focused on just four topics when writing in suggestions regarding traits that contribute most toward successful strategic account managers. 

1. Strategic thinker with a business mind-set -- Visionary. Have financial acumen. Able to learn the customer business model quickly, not only in terms how they make money, but also how the supplier solution(s) help them do so. Confident working with senior executives on both sides of the business relationship between the customer and supplier.

Remembering back to my last post, the amount of data kept on a customer is increasing within organizations and tying this data to customer survey data could help us gain better insights into the customer experience. 

Potentially fulfilling every researcher's dream, using this data could open the door to massive amounts of data to analyze while answering business questions.   However, with that we can’t lose sight of the quality of the data. In other words, more bad data isn’t necessarily better. So keeping that in mind, before we use this data to help aid us in understanding our customers, we need to evaluate the data itself.

The first thing to do here is look to see what data you have available. This will help you gain a better understanding of where/how this data could enhance your understanding of the customer experience. For example, if only product information is kept for customers, then it would be logical to look at this data alongside a customer’s product ratings. This could help explain trends you are seeing in the data, as well as gain a profile of the type of customers that use particular products. A few examples of things to consider are…

·         Type of data?

o   Is it sales history? Customer demographics? Account Information (ex. size, tenure, etc)?

o   Do we have information for individual contacts within an account or simply account level information?

- How easily can this be linked to customer survey data? Are there common fields, such as customer ID, which can be used to link the data?

o   Is data tied to an individual/account or is it tied to departments within your company (ex. call center, agent)?

o    If there are metrics in the data (ex. Issue Resolution Days), how is it calculated by your company?

·         Location of data?

o   Is all this data stored in a central database? Spread out among different parts of the organization?

o   Is this data available for you to access? Format you can use?

The second thing to assess is the quality of the data to ensure that it is giving us accurate information about our customers. We don’t want to use customer data that has never been updated or doesn’t reflect the current customer’s situation. Instead we want this data to accurately reflect our customer as they are today so this information can be paired with their current perceptions of your company. A few examples of things to consider are…

·         Who owns this data?

o   How is it populated?

o   How often is it updated? 

·         Is there a lot of missing data?

o   Do we have data just for select segments of customers or for all customers?

This assessment will give us a better understanding of what the data is telling you, where it may be best used in the analysis, how best to link the data, how easy it will be to obtain and then any cautions/limitations that could be kept in mind with the use of this data. More to come next week on linking and benefits of using the data…

Becca Lewis

Director, Marketing Sciences

A very smart, experienced businessman – a Senior Vice President in his company – told me last week that there is no customer loyalty in his industry.  Can this be true? Are there certain industries where customers do not develop a certain affinity or alignment with their preferred providers and behave accordingly?

In this particular case, we had some evidence to refute his hypothesis. We were talking about the semiconductor industry which happened to be an industry where we conducted an assessment of the state of customer loyalty across the industry a few years ago. While customers are generally less loyal to their providers in this industry than what we see in others, there is proof that those companies within the semiconductor industry which excel at building customer loyalty are dramatically outperforming their peers on key financial measures. This chart depicts the difference in operating income - with the orange line showing the operating income performance for the most customer-focused semiconductor companies (growing at 82%) and the red line showing operating income performance for the least customer-focused companies (growing at only 15%).  A pretty big difference, and we see the same results across many other financial measures.

Now, I get that customers who are buying semiconductor products are buying based on a lot of (primarily technical) factors.  But, when your performance on these factors is in an acceptable range, then customer loyalty does come into play and makes a big difference in how a company performs.

We’ve conducted similar studies in many other industries, and we find the same pattern. We also work with companies in industries ranging from accounting firms to retailers and have yet to find an industry where there is no payoff in building customer loyalty. But, I’m intrigued by the idea – is there an industry out there where customer loyalty or the strength of customer relationships does not come into play?

Besides customers, there is nothing more important to customer strategists than our teams. Think of all the different things we do – plan, gather information, review it, communicate, refine customer strategies, and take action. We can’t do it alone. Our team needs to be organized for action. 

Unfortunately we can underestimate the need to coordinate with other people. This article by Dan Heath and Chip Heath in Fast Company reinforces why we often do not work well as a team. No one wants to "drop the baton" but it can happen if the team isn't coordinating with each other.

Be assured, it’s possible for teams to function well. I recently learned about W. L. Gore & Associates (known for GORE-TEX® fabric as well as many other products). They have been named to FORTUNE magazine’s list of the “100 Best Companies to Work For” for the past 13 years.  (They are currently ranked #13). Their team approach is a big factor in their success. 

Terri Kelly, President and CEO notes "We recognize the importance of fostering a work environment where people feel motivated, engaged and passionate about the work they do." Time is spent conveying team objectives, as well as matching associates with projects that fit their skills. Watch this short video to get a better feel for how they operate: 



What a great reminder to foster teamwork with your Customer Advocacy Network!

Kitty Radcliff
Vice President 

Most companies have operational metrics that they keep about the ways they interact with customers, as well as an abundance of customer information through CRM tools. For example, support centers keep track of metrics such as time to resolve, time on hold, etc. And CRM tools can give us information on account history, such as products purchased, tenure, etc. An ideal situation would be to link these sources of data with customer survey data in order to gain a fuller picture of the customer experience.

In terms of operational data, this information allows you to link perceptual ratings and op metrics to understand where to focus to gain the most improvement in the customer experience.  Knowing the actual metrics (ex. time to resolve issue) as opposed to simply the respondent’s perception (i.e., satisfaction, quality) of the time to resolve, adds another dimension to the data that can provide additional actionable information. For example, it can potentially tell you if your customer’s tolerance in the actual time it takes to resolve your issue as well as if there are different levels of tolerance for your customers. Additionally, it can help companies set their operational goals with the customers in mind so that company’s improvements will also help to increase the customer’s experience. 

In terms of CRM data, this could help add variables that would be useful in understanding the customer’s experience. For example, if see Account A’s score is significantly declining, CRM data can be useful in seeing what changes have occurred in our relationship with Account A that may help explain this decline. Are we really doing that much worse? Have they changed the products that they are buying with us? Another potential benefit is this could reduce the need to ask customers certain questions in the survey. For example, if we know why the customer called support then do we really need to ask that question in the survey?

As you can see, there are many benefits to linking this information during the analysis of customer survey data; however, there are some things that need to be considered during this process. 

·         What is the best level to link this data at? Is it for an individual respondent or at an account level?

·         Is CRM data kept up-to-date so that we can be confident in its accuracy? 

·         What do you do if customer’s survey data and operational data don’t agree?

·         Should Customer Data be a consideration when setting operational goals?

·         What are the other uses of CRM data?

Over the next few weeks, we will be discussing these considerations, as well as providing cautions and benefits surrounding each concept.

Communicating is critical in a customer listening program, strategic account management, and frankly in each relationship in our lives. Our company’s founder, Mrs. Tommie Walker Anderson, is often attributed with the saying “You’re 100% in control of your own actions, and 50% in control of all your relationships.” Today, I came across a story that is certainly humorous, but also emphasizes that different people have different relevancies and styles. This is all well and good in terming of variety being the spice of life and all – but it can create communication breakdowns and a lack of mutual success when one doesn’t consider what is relevant to the audience and individuals they are trying to engage.

In earlier entries on this topic, I discussed ideas for successfully managing and improving business performance through goal-setting.    ‘Part 6: The sky is not the limit’ emphasized the need to know when to recognize either success or the need to adjust focus. When you hit your target and things are running just perfectly, what happens next? Is there still a need to continue tracking performance once you’ve figured out how to optimize resources? 

This is a common point of interest among customer-focused businesses, particularly those whose method for tracking performance comes in the form of customer feedback. Because there is a cost associated with a customer relationship assessment program, the question becomes, “Do we have to keep collecting feedback now that we have achieved optimum performance levels?” According to the 2006 article Building on Success, the answer is, “YES.”

Building on Success, by Lisa Norcross, emphasizes the importance of sustaining high performance in an operating system environment, though the author’s principles apply across industries. Her claim is that, “hard-earned improvements will quickly sip away if appropriate measures are not put in place to monitor performance.” Her suggested approach includes:

·         Using measures to monitor performance and prevent losing improvements.

o   Selecting indicators that are simple and that reflect business goals

o   Primary measures effectively describe the system’s performance.

o   Secondary measures can act as predictors for forthcoming problems and to aid to the diagnosis of root causes

·         Selecting measures of different timescales for short- and long-term monitoring.

·         Taking frequent measurement to identify and address issues before they become systematic.

The cost associated with such monitoring will vary by company. It is important to evaluate the cost of monitoring versus the potential cost incurred by a slip in performance. It may be determined that a time- and resource-intensive customer feedback program is well worth the investment.   Alternatively, there may be internal metrics that serve as adequate metrics. Norcross suggests the following:

·         Metrics that reflect the customer’s experience of operational performance, and which do not lead to optimization of individual process steps

·         Metrics that cascade from the top-level downward

·         Simple metrics that minimize cost

The resources required to monitor performance vary based on any number of business factors. The key is in acknowledging the success so far and in recognizing that some thought and effort will be required to maintain it.

Cortney Lantry

Director, Marketing Sciences

Resource

• We owe our customers a response when they participate in customer satisfaction surveys.
• Our response should include a summary of what we heard.
• It doesn't have to be too lengthy. Stick to the key points.
• Video is an effective communication tool.
• Our communications should have an impact on our business through building customer loyalty, creating customer value, and increasing our customer retention programs. 

• Customer experience scores are the lowest when the issue is perceived to be not at all complex. This likely reflects a lower tolerance for having to interact with support in the first place.

• The experience is the highest when there is some perceived complexity, but starts to drop when the issue gets extremely complex. This drop is likely due to an increase in the time and effort to resolve the issue. 

The message in a nutshell….

Newly published research suggests that advertising impacts an unlikely audience – the company’s employees. Creating a consistent culture within the organization, aligning advertising with the firm’s culture, and ensuring accuracy of the advertising messages will heighten the level of customer focus exhibited by employees; this, in turn, will yield greater financial returns for the firm. This research reinforces that firms should avoid the temptation to over-simplify the marketing tactics they employ. The key is optimization, which is a function of understanding the ROI each strategy or tactic has in total (and how each may impact other strategies in play).

++++++

We at Walker frequently counsel clients that the drivers of customer acquisition, customer retention and customer defection are different and, therefore, require different strategies. Advertising, for example, is generally associated with customer acquisition efforts, while managing the customer experience tends to be associated with customer retention (or in the case when the experience is not managed properly, customer defection).

Some proponents of social media and word-of-mouth have lately been dismissive of the investments that companies make in advertising, suggesting that these funds would be better utilized in enhancing the customer experience (see this blog entry from Deborah Eastman of Satmetrix for one such example). Newly published research suggests – once again – that business is a complex series of relationships with many interconnections that cannot (or, at a minimum, should not) be reduced to a single theme, metric or focus.

Mary Wolfinbarger Celsi and Mary C. Gilly of California State University Long Beach and University of California, respectively, just published research that demonstrates an unlikely audience for advertising – the firm’s employees. Moreover, this research shows that advertising can be an effective tool in enhancing the customer experience – that is, it has application in both customer acquisition as well as customer retention. Consider the findings of this study:

1)      Employees with a stronger identification to their firm are more likely to think that the firm’s ads are accurate and that the ads align with their own value system;

2)      When employees perceive ads to be accurate in alignment with their values, they perceive the ads as being more effective;

3)      As an employee’s perception of ad effectiveness increases, so does his/her pride in the company;

4)      Higher employee pride leads to increased customer focus;

Of interest to me is the hierarchical nature of these relationships – each stage provides the undergirding to the next, culminating in increased customer focus (and if you have followed any of the Walker blogs for any period of time, you will know that we have proven – with statistical rigor - that increased customer focus maximizes the firm’s probability of financial success).

What does this mean for companies? I would suggest the following:

1)      Make certain your ad claims are accurate and that the tone of the ad is aligned with your corporate culture – Just as perceived accuracy and value alignment yield (ultimately) employee pride and higher customer focus, perceptions of inaccuracy and misalignment can prove damaging to employee pride and customer focus.

2)      Don’t forget to consider cultural fit in hiring (and firing) decisions – The company’s culture is one of the few sources of long-term sustainable competitive advantage – among other things, it is an intangible that cannot be easily replicated by competitors. This research suggests that the path toward increased customer focus starts with employees that are aligned with the firm’s culture and have bought into the direction of the company. With this in mind, seek ways to ensure that potential new hires will effectively fit in the culture, and swiftly deal with employees that do not. Conducting peer interviews with prospective hires is an effective way to help ensure that a candidate will be a good fit.

This also means, of course, that you may have to deal with a strong performer that fundamentally detracts from the culture. To me, this is one of the litmus tests of the strength of the firm’s management.

3)      Realize how much complexity exists (and embrace it) – The purpose of this blog is not to dispute the power of social media or recommendation/word-of-mouth.[1] Rather, this research is further evidence that business success cannot be reduced to a singular metric or tactic – that is, this research suggests that the notion of customer centricity is an overarching theme of the entire culture that has ancillary benefit beyond just the efforts to maximize customer retention.

What is the best way to deal with this? I would suggest from the ground up – start with the culture and build the company around that. In my last blog series, I reviewed an HBR article about Zappos. Part of Zappos’ success is based on the fact that entire company was built upon a framework of customer-centricity – and we should not underestimate the impact this has. Here’s why – it is immensely easier to decide what the company’s culture is going to be and then build it vs. re-engineering it. Re-engineering is not only time-consuming (and, many times, emotionally draining), but it is also costly – consider the impact of the cost of reorganizations, new branding campaigns, etc.

It will be interesting to see how the acquisition of Zappos by Amazon works in the long run – it is not uncommon for mergers and acquisitions to underperform, and we would hypothesize that this is a function of 1) not properly understanding the security/risk associated with the acquired customer base (I’ve written previously about this here), and 2) not fully appreciating the extent to which compatible cultures drive the success of integration (or, to the contrary, the extent to which incompatible cultures can undermine the merger’s success).

So, to summarize – build your processes from the outside/in, but build your culture from the inside/out.

So, is advertising relevant? This research suggests it is, as it can contribute to the firm’s efforts to engender a customer-focused culture. Wise marketers will seek to optimize the tactics they employ – this requires not only an understanding of the ROI of each tactic, but also the extent to which each inter-relates (and impacts) other initiatives. Regardless, a single tactic is unlikely to yield sustainable business results.

To those who suggest that we need only a single approach to business success, I am reminded of Abraham Maslow’s quote - "If the only tool you have is a hammer, you tend to see every problem as a nail."

How full is your toolbox?

Mark A. Ratekin
Sr. Vice President, Consulting Services & Resource Management

Source: Celsi, M., & Gilly, M. (2010). Employees as internal audience: how advertising affects employees’ customer focus. Journal of the Academy of Marketing Science, 38(4), 520-529. doi:10.1007/s11747-009-0173-x.

Recently I had the privilege of visiting a client about their customer feedback program. A flight to Dallas and car rental was in order to make my way to their facility.
 
Perfect flight.  Perfect service.  Horrible car.  On the highway I realized there was no visibility when I wanted to change lanes. “Blind spot” is an understatement. I couldn’t see a thing. My colleague had to check the traffic to see if it was safe to change lanes. Truly it is amazing we didn’t get in an accident.

Afterwards, the car rental company sent a survey about the experience. Being in the customer strategy business, I shared my thoughts – the positive about the service and the negative about the car. The customer service area sent an email back in response. In theory this is good practice; I also encourage my clients to follow up on certain survey responses. 

However, no one took the time to review my feedback prior to sending that email. I had already provided input on why I was dissatisfied with the vehicle. Instead of asking me to reply to the email “If you would like to provide more feedback on why your rental was unsatisfactory” I wish they would have asked what the obstacles were to seeing out the driver’s side or how tall I am to understand if there are limitations to who should drive that type of car.   

At the end of the day, fortunately we made it home safely. I provided feedback to prevent an accident for someone else because they couldn't see other traffic. My hope is the rental car company cares enough to get past the task of follow-up -- to drive change and ensure the safety of other customers.  

Kitty Radcliff
Vice President
 

I started this series by asking whether customer delight should be our ultimate objective. This was prompted by two seemingly contradictory articles in the July/August issue of Harvard Business Review – “Stop Trying to Delight Your Customers” and “Zappos’s CEO on Going to Extremes for Customers.” Based on a review of these articles, in conjunction with our experience with client data on the same issue, I would offer the following thoughts:

1)      Superlative customer care, by definition, cannot be the norm – If everyone is providing outstanding customer care, then the bar is effectively raised, meaning everyone is average. The concept of Delight (or superlative customer care) suggests that it is rare. Moreover, in order to understand what will delight customers, we need to know what the minimum requirement for satisfaction is. That brings me to my second point.
 

2)      There is a priority to how we should tackle the issue of customer care experience – Delight is a fine aspirational goal; however, without proper sub-goals, the notion of customer delight can be de-motivating to your staff. This is why the two articles are not contradictory – taken in total, they provide insight on the priority order of how we should focus:

a.       First, make it easy for them to reach you (minimize the effort the customer must expend);

b.      Once they reach you, make sure you address their issue (in as few calls/contacts as possible);

c.       Consider the “unintended consequences” of the actions you recommend in the support process, and be prepared to address that at the time of the contact;

d.      Finally, seek to delight – but only after you have satisfied the original need – and only if it aligns with your overall customer service approach. This also means understanding why the support issue occurred in the first place and conducting the appropriate post-case analysis to see if there is an underlying systemic cause that should be addressed in the core product or service design. Ultimately, what will delight customers is having a product or service that is so good that they will never need to contact support.
 

3)      Make sure all your support channels reinforce your approach to customer service – If you intend to be the leader in customer delight, make certain all your support systems contribute to (and do not detract from) this goal. That means, for example, that your self-serve website must align with the same principles as outlined above – make it easy, thoroughly address the issue (in understandable terms) and proactively provide input on what other issues the customer may want to address. If a customer has to “channel jump,” then you have failed in not only your goal of delight, but also in the whole customer care exercise.
 

4)      Ensure that you design your customer care system in an “outside-in” manner – Commit to conducting an audit of your customer care processes – is it easy to contact support? Is the telephone number for support readily available (or, as will often happen with M&A activity, are there many numbers that the customers must filter through to decide which is the right number)? The best way to deal with this is to periodically use your own support system (or, better yet, watch as a friend who is not associated with your organization navigates the support landscape). Ask yourself the following questions:

a.      Was the system easy to use?

b.      Was the rep confident and knowledgeable?

c.       Did the rep adequately address my question?

d.      Did the rep stay online with me while I tried to implement the recommended fix?

e.      Did the rep ask me to confirm that my issue was resolved? If not, was there a logical escalation process that was used?

You might also monitor calls in your customer care facility so you can hear firsthand what customers experience.

5)      If your goal is to be the leader in customer delight, go “all in” – Being customer-centric is easy to give lipservice to; it is immensely more difficult to implement. If you choose to be the customer-focus leader in your industry, avoid the temptation to cut corners to minimize cost. This is not to say that you should spend foolishly; rather, you should seek to maximize ROI. This can have an impact on what metrics you should goal – for example, is it more important to minimize average call handle time and to target first call resolution, or is it more important to focus on getting the customer’s issue completely resolved? Remember, what gets rewarded gets done.

Going “all in” also means investing in the right tools and infrastructure to enable your customer service team to achieve its goals.
 

6)      Make sure you have the right people in place to deliver on the customer delight goal, and reward them when they achieve that goal – It takes a special personality type to be an excellent customer care rep – too often, though, customer support centers simply fill seats with bodies. This exacts a cost to your organization by eroding the brand equity you have worked hard to establish by being customer-focused. Make sure you are staffing the customer support with the best people for the role, and make certain their incentive structure is aligned with the customer delight objective.

7)      If you conduct post-case surveys, make certain they align with the customer experience and be sure to take action on what you have learned – This article provides a good example of poor survey design. If you have conducted the process audit suggested above, you will be better prepared to design an effective survey instrument. You should also pre-test the survey (or follow-up with a few customers) to determine if the survey is effective and aligns with the customer’s experience.

In addition, make certain that you take action on the information – customers are investing their time to respond, and a lack of follow-up/action means they realize an ROI of zero. Over time, this means response rates will fall, and customers will view your claims of becoming more customer-centric as hollow at best. Some ideas to consider include:

a)      Follow-up with a post-survey thank-you message;

b)      Conduct close-the-loop exercises with customers who reported unresolved issues;

c)       In a B2B setting, use the information gathered within an account across all survey touchpoints as a key input into strategic account planning;

d)      Communicate – both in a mass-media manner as well as at an account-level – what you have learned and what you are doing to address customer issues;

Let there be no doubt – saying you are customer-centric and actually demonstrating it are two different things. Building a culture of customer-centricity/customer delight is difficult to achieve; I hope some of the ideas presented over this series help you in developing a framework that works within your own organization. We would be very interested to hear of your success – or challenges – please feel free to reach out with your stories.