Walker Information Blog

We’re currently in the midst of planning a holiday trip to Florida for our family.   All of our conversations lately focus on which day to leave and return, where to stay, the route to take, what impact on the holiday it may have, what activities will be available when we are there and concerns of the weather.  The planning phase is so intense, with so many aspects to consider and debate and negotiate, I actually asked the question if taking a trip to Florida (in the dead of Indiana winter) was worth it!

Planning for anything, including a Voice of the Customer program, is intensive but without a plan, the outcome may fall short of expectations. And when there are significant investments towards learning what your customers think, the planning phase is critical to ensure that investment is fully recognized. As customer advocates, we develop strategies around contact gathering and survey development. But do we spend as much time on planning our internal and external communications throughout the program?  

With a well-developed and executed communications plan, continual awareness building of the program can be attained, clearing the path internally to take action on the feedback gathered.  Plan key communications for customers throughout the customer survey cycle to garner buy-in, participation and awareness of actions being taken. Leverage current communication avenues already in place, be creative in the messaging and send information out at key junctures in the program to help keep awareness levels high. The upfront planning stages may already be intensive and adding another area to plan is not necessarily what we’d want to do. However, the efforts put forth in creating a communications plan will be worth it in the long run.

Lauri Jones

Senior Analyst

Companies spend billions of dollars on acquisitions. They spend millions of dollars with lawyers to make sure that the companies they buy are legally formed and protected from certain legal and business risks. They spend millions of dollars with accountants to make sure that the financial disclosures are a good representation of the target’s financial position and operating results. They spend millions of dollars with engineers to make sure that the products do what they are supposed to do. These millions are well worth it.

And most companies spend and do almost nothing with respect to the single biggest and most valuable asset in most transactions—the customer base.

Before you spend your shareholders’ money on acquiring another business, shouldn’t you know how valuable that single largest asset is?

Wouldn’t you like to know…

·         How loyal is the customer base that you are buying? Are they likely to continue to do business with you after the deal?

·         What are they loyal to…management? The brand? The product or service? The account team?

·         What challenges are customers having with the target?

·         What opportunities exist within the customer base to jump start post-deal growth?

·         How much of the revenue stream is in high risk of leaving?

·         How do customers view the target relative to its competitors?

Due diligence on the customer base—real due diligence, not the standard phone call to 5 pre-wired customers—can dramatically increase and accelerate value accretion. After all, what’s more important than the customers that account for every dollar of revenue that you are buying?

We all set goals for ourselves and then, truth be told, most of us forget the goals and just continue our daily routine. In order to succeed and help our customers succeed, we must be willing to be relentless in the pursuit of our goals.

There is a group of people that have formed a subculture that demonstrate this unending, unwavering drive to achieve. They are those people who set out to hike the Appalachian Trail from one end to the other in a single trip. They are called thru-hikers.

To add a little perspective to the goal of a thru-hike, the Appalachian Trail (AT) runs 2,178 miles from Springer Mountain in Georgia to Mt. Katahdin in Maine. Most thru-hikers start in Georgia in the spring and finish in Maine about 6 months later. And they do this with a backpack that can weigh as much as 40 pounds strapped to their back.

They walk anywhere from 10 to 20 miles each day, encountering many challenges that nature throws their way—weather, wildlife (bears, snakes, skunks, bees, etc.), dramatic elevation changes, primitive shelters or no shelter for sleeping, injuries (lots of ankle sprains, many ankle breaks), etc.

Now that you are convinced that they are crazy, what can we learn from them? Here are a few things that I think are worth applying to our everyday work.

1.      Teamwork. The thru-hikers are all on their own or in small groups. But they all help each other and work together to achieve their common goal—to summit Mt. Katahdin. They even give each other “trail names,” nicknames to be used only on the AT.

2.      Resourcefulness. Out in the wilderness, you get real resourceful, real fast. You learn how to find and filter water, how to find a safe place to sleep, how to dry wet clothes, how to keep the bears out of your food (and therefore out of your campsite!), and so on. Mostly, the thru-hikers use the many natural things at their disposal to accomplish these tasks.

3.      Self-Awareness. Thru-hikers go off the trail occasionally to go into town and buy food, medicine and other supplies. I won’t sugarcoat this—after a week on the trail, a hiker is hardly civilized. They smell, they are disheveled and they are dirty. But they recognize that and either spruce themselves up first or go to places that are known to cater to thru-hikers. Back on the trail, they rarely take risks that they are not capable of handling. Trying to climb a rock that is over your skill level is a quick way to injure yourself and require a trip home.

4.      Persistence. The hikers that make it from Springer to Katahdin are persistent. There are times they want to go off trail and go home and take a warm shower, have a drink and watch TV. But they know that the only way to achieve their goal is to stick with it. They trudge on in the rain because they know that the next day will be a sunny, dry 20-mile trek through beautiful terrain.

All of these traits can help us achieve our goals too. Work together as teams all pulling in the same direction to achieve the same goal—success for your customers. Be resourceful and find new ways to serve your customers and help them, especially during these challenging times. Know your strengths and leverage them. Know your weaknesses and compensate for them. And be persistent, relentless, uncompromising.

Take a thru-hiker approach to hitting your goals.  Think about how the sense of achievement that a thru-hiker must feel at the top of Mt. Katahdin.

It’s fall, it’s football season, and in my house, we get our fill of college football on Saturday afternoons. My husband is a fan of a certain Big 10 team who finds itself in its second lackluster year after many past winning seasons and bowl game appearances. Fans were elated when, in 2008, the university brought in a fresh new coach to turn things around and take the team to the next level. With the new coach came an entirely new strategy, which requires the full commitment of the entire organization, recruitment of new players who are best equipped to adapt to the new plan, and willingness from existing players to adjust to the new coaching style.  

Unfortunately, the past two seasons have produced more losses than wins, and disgruntled fans are already calling for the coach’s replacement. Looking at the sweeping changes that have been implemented, you can easily draw the conclusion that it would be impossible to turn the team around in just two short seasons. 

Like football, instituting or reinvigorating a customer listening program is not a “one season” activity. It takes year-round practice, shifting of team members to ensure those with the right skills are at the forefront of the action, commitment from the entire organization, and internal and external support. From the beginning, the entire team needs to be committed to the program and willing to deal with the growing pains in order to see the return. Too much time, effort, and money is invested in these programs to stop them short of their full potential. Organizations need to set short-term goals to monitor steady progress towards achieving long-term success.

While it takes time to ingrain a customer listening program into an organization, customers expect to see a timely return on their investment. Companies must communicate with customers that they are listening and taking action on the feedback that is received. While it might take time to fix the big issues, telling customers that you’re working on it will go a long way in terms of their patience and continued support even during the rocky times. 

Sports teams can’t be expected to turn things around in one season, just like customer listening programs shouldn’t be expected to reach their full potential in a short timeframe. Both take time, repetition, and a lot of practice to develop the team and the process into a cohesive unit. But along the way, be sure to let customers know that you value their commitment and that you’re taking steps to ensure they support you for a long time to come.

Marla Mast
Senior Analyst

Walker clients have heard us talk about the various techniques my colleagues and I have developed to demonstrate the tangible value of customer loyalty. When working with clients, we tend to look at the linkage between customer loyalty and financial performance relative to either individual customer relationships, by product segments, or some other variable of choice. These techniques allow us to discover a number of valuable insights that poise the client to take meaningful action on the customer results:

1)      We can see how much revenue and/or profitability risk exists within the customer base;

2)      We can determine the reality of the linkage between what customers say they will do and their subsequent behavior (and the time lag between the two);

3)      We can calculate the return on customer loyalty – in other words, when we take action on the customer feedback and create change that generates gains in customer loyalty, how much gain do we see in revenue and/or profitability?

4)      Finally, we can use Value Mapping to use Loyalty and the Three P’s – Profitability, Potential and Partnership – as a segmentation method to build differential strategies for taking action.

To accomplish these analyses, we must have not only the customer perspective (gathered, generally, through a quantitative research study), but we also must have financial data at a granular (account, product, geography, etc.) level. This, of course, requires that the client firm tracks customer data at this level. Moreover, it requires a collaborative effort between the Walker team and the client’s finance professionals. For the analysis to be credible, the data have to be capable of “talking to each other” – and this can often be a challenge.

Marrying these data enables us to tell a compelling reason for change – in dollars and cents. Beyond this, though, the process serves an extremely strategic purpose by taking “soft” metrics like customer loyalty and creating a valuation of the customer asset – a concept that has been espoused by Baruch Lev and others who have called for fundamental changes in our accounting methods to adequately reflect the shift of firm wealth metrics from hard assets (factories, inventories, etc.) to more intangible assets (customers, intellectual property, etc.).

What if we don’t have financial data at a granular level? Fortunately, we can still conduct linkage analysis; however, the utility from an actionability perspective within the company is highly constrained. From an external perspective, however, this information can be quite valuable. I will cover that in my next entry.

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

When feedback is actionable, why aren't more work teams taking action? The knee-jerk answer tends to be that people don't want to change. But action-taking hinges on more than just their will to take action. They must be able to do so, and that means overcoming certain barriers.

For all the talk of empowerment, more is needed. Most employees need to be better equipped to effectively serve customers. A study published by Strativity said, despite recognizing the growing importance of customer strategies, a third or less of workers feel their company has compensated or equipped them to solve customer problems.

My experience has shown that you enable sales, account and customer support leaders to more effectively use customer feedback by:

• Designed a results format for their team and teach them to use it. Craft reports to hone in on the team's subject matter, be it a specific account or a support process such as customer service. Make reports easy to understand, by highlighting two or three priority areas for action. Teach how to apply root cause analysis, and initiate change.
• Integrate the use of customer feedback into ongoing jobs and routines. Account teams often have created key account plans. Cross-functional teams or departments budget for special initiative and reset metrics periodically. Work with each group to integrate the customer feedback into the way they currently do their jobs.
• Provide incentives for taking action on customer results. People are compensated for meeting objectives in their jobs now; the ideal is to build in incentives for effectively launching and executing ways to improve customer experience.
• Ask each group exactly how they need to be equipped. To have the desired impact on customer loyalty, account teams need help from support functions, and support functions will seek funding to launch their own enhancements. It helps to escalate these needs and requests for equipping sooner than later, as part of the process.

In conclusion, the course of taking action for customers hinges not so much on the willingness of employees to act, but on their ability to do so.

Have you ever had a situation that you were dreading, but turned out to be not so bad? That happened to me recently when I needed to take my son to a local flu shot clinic. We weren’t having any luck with the flu shot supply at our doctor’s office, so we loaded up the family and went to a flu shot clinic. I expected it to be a torturous experience. I imagined a line of people hundreds deep, with a wait time that was measured in hours, not minutes. Much to my surprise, the event was very well coordinated and staffed, which resulted in us getting right and out. When leaving, it struck me how easy the whole thing was.

What lesson is there for us as customer advocates? In order to motivate our organizations to take action, we must make it easy for them to participate in the process. If we don’t, employees will view it as just one more thing that they need to and will be looking for ways to avoid it. Think of your company when answering the following questions:

• Is there an efficient process in place for sales teams to provide customer contact names?
• Do people know where to go to get feedback that customers provided?
• If they do know where to go, is it easy for them to retrieve it?
• Is there an easy way for people to document the action they have taken with customers?

If you are like most organizations, the answer to one or more of the questions above is “no.” When designing the customer feedback system, focus on making the process easy for people to participate in.  Think about how the process can be embedded into existing processes and management systems. Use technology to enable efficiency around program administration and documentation activities. If successful, I bet you find that the uphill battle on getting employees to participate won’t seem so steep.

Melissa Meier
Vice President, Client Service

Since the behaviorists, psychological theory has taken a more humanistic approach to understanding human motivation, moving beyond the tactic of presenting/removing a stimulus in order to achieve a desired response. One of the early psychologists to probe deeper into human motivation was Maslow. The research field has used Maslow’s Hierarchy of Needs as a theoretical basis for how to motivate respondents to complete a survey. Here is some background on Maslow’s theory-

Summary of Maslow’s Theory:

There are six levels to Maslow’s hierarchy. The hierarchy proceeds from the lowest, base needs, to the highest, self-fulfilling needs.

Level 1: Physiological Needs- Food, water, oxygen, etc.

Level 2: Safety and Security- Structure, order and predictability.

Level 3: Love and Belonging- Having family, friends, and group identification.

Level 4: Esteem- Recognition, esteem, status, feeling adequate and competent.

Level 5: Self-Actualization- The need for personal growth and fulfillment.

Level 6: Knowledge and Understanding and Aesthetic Needs.

Translating Maslow’s Theory to Collecting Customer Feedback:

Within the arena of collecting customer feedback, researchers have tended to focus on the need for esteem as a way to encourage survey participation. More specifically, Maslow’s theory has been translated in the following ways-

-          Interviewers ask for help in completing an important survey.

-          Survey invitees are told that they have been chosen to participate in the survey.

-          Survey invitees are told that their opinion counts.

Shortcomings of Applying Maslow’s Theory to Response Rate:

The above words have been chosen to try and create feelings of esteem in potential responders, attempting to make the solicited customer feel special. While these words may have motivated people to participate in surveys in years past, given the prevalence of surveys, and the knowledge that most people have about this prevalence, these words alone are not likely to solve the response rate issue. This is not to say that potential responders should not be made to feel special, rather this should just be one aspect of the overall approach to increasing response rate.  A sustained increase in response rate is likely to involve consideration of the entire customer feedback process, not just one element. Theoretical findings from fields like psychology can provide guidance in addressing specific aspects of the feedback process that can be improved upon in order to achieve improved response rates.

Next week, we will apply a more recent theory on human motivation to response rate- Self Determination Theory.

Amy Heleine 

Director, Marketing Sciences 

Reference

Cape, P., “Understanding Respondent Motivation,” Survey Sampling International White Paper, 1-17.

We’ve all had those “duh” moments in our life that we aren’t necessarily proud of. You know - those situations where someone asks you a seemingly easy question that you swear you know the answer to. You search your brain and….nothing. Blank. Or, better yet, you blurt out something that sends the room into explosive laughter. Oh yes, we’ve all been there.

Jay Leno makes a point of exploiting unexpecting citizens on the sidewalks of U.S. cities in the segment of his show called Jaywalking. By simply asking questions that we would think anyone could answer, he finds many people who after being interviewed will never live down the public embarrassment. He may even ask something like, “Who was the first president?” Even this simple question can often be met with blank stares. Unbelievable, right? You would never be caught in a situation like that, right?

Perhaps when it comes to customer listening we can often be a bit too presumptuous about what we know. It’s not uncommon for our sales and account teams to say that they don’t need to gather feedback because they already know everything there is to know about their customers. While to some extent this can be true, often we find that what they think they know is not aligned with what customers actually say. Or, at best, it is only part of story.

We need to encourage our account teams to really use unbiased customer feedback in addition to what they already know. The combination of both perspectives can be quite powerful, particularly when the customer feedback is used as a radar on internal metrics and performance. Tracking actual performance on metrics relative to perceived performance on those metrics can provide direction on where you should actually focus. Determine what the “breaking point” is in the eyes of the customer and use that as your indicator for the performance level you should be achieving.

It pays off to truly listen to customers – ask for their feedback, really understand what they are saying in comparison to what you already know, and then act. Don’t get stuck thinking you know your customers and then scrambling to explain why their sales are declining or even worse why you have lost their business. You may just end up in a bind like one of Leno’s Jaywalkers!

Katie Kiernan
Senior Account Analyst

 

One thing that often gets overlooked in the gathering of customer feedback is what your customers tell you about the competition. Obviously, one of the primary objectives of any customer feedback initiatives is to gauge how your customers perceive their interactions with your company.

But, how you factor in any comparisons to other relationships your customers have may change the perspective on the feedback. For instance, let’s assume that 70% of your customers view your company as Easy to Do Business With. Sounds great, right? You might even be tempted to take this nugget of feedback and trumpet it out to the marketplace. That’s fine if you have benchmarking information that suggests the industry average for this concept is 50%. But, if 80% of your customers view your key competitor as Easy to Do Business With, then this is something you likely need to work on before you celebrate.

Two good examples of taking what customers have complained about have been used in high profile ads recently. Apple has done a good job exploiting feedback about Microsoft in humorous campaign around the launch of Microsoft’s new Vista OS.

Apple has not escaped criticism, and Motorola has recently launched a campaign targeted at some of the negative feedback received about the iPhone.  


 

Both campaigns are humorous, but are made possible only when these companies listen to feedback about themselves, but also about their competition. 
 

The same concept works on Loyalty, and can be even more powerful. In this scenario, if you’re measuring your customers’ relationships with the competition, you can begin to understand how plausible dual-loyalty is in your relationships. It’s very possible that while a customer is Truly Loyal to your company, they may also have a similar level of Loyalty to your biggest competitor. In that case, the ability for you to increase your share of wallet may be harder to achieve. However, if another customer is Truly Loyal to you, but High Risk to your competitor, this represents a very strong opportunity that should be explored to help you prioritize your time and resources.

So, while it’s good to be selfish when it comes to customer feedback, don’t forget that it’s not always just about you.

Brad Harmon
Vice President, Consulting Services

In previous blogs, we have reviewed findings-to-date, regarding what specific elements of the survey process have been shown to be influential on response rate.  If we take a step back from the specifics, at the heart of the response rate issue, is respondent motivation. How do we get respondents to want to take a survey? In a recent article by Pete Cape, “Understanding Respondent Motivation,” he provides a historical review of how psychological theory on human motivation can help us tap-into motivating survey respondents.  This week, I will start with his review of the Behaviorists, relating how Behaviorist theory can provide insight to the response rate issue.

Behaviorist Theory in a Nutshell

·         The behaviorists provided the concepts of reinforcement, punishment and extinction.

o   Reinforcement concerns strengthening a desired behavior as the result of either experiencing a positive condition (Positive Reinforcement) or eliminating a negative condition (Negative Reinforcement).

o   Punishment concerns weakening behavior as a result of experiencing an aversive condition (Positive Punishment), or removing a positive condition (Negative Punishment).  

o   Extinction occurs when the reinforced behavior is no longer effective.

·         A primary criticism of behaviorist theory is that it provides a mechanistic view of human behavior, which is limited, as the motivation behind human behavior is complex.

How does Behaviorist Theory Aid Understanding of Response Rate?

Sometimes you can learn the most from the criticisms of a theory. Respondents are unlikely to be sustainably motivated to complete a survey by making any single improvement, or removing any single negative component, at one point-in-time. For example, providing a deadline by which to complete the survey has been shown to significantly impact response rate; however, a deadline alone is not likely to sustain response rate, rather there are many other influential factors. Instead of focusing on any one factor, consider the entire survey process-

·         Remember that the process starts before the respondent chooses/declines to take the survey- creating a survey that is easy for the respondent to take, pre-communication, personalizing communication, scheduling reminders, etc.

·         And, the process continues after the respondent completes the survey- communicating and acting upon findings, showing and proving that the feedback matters.

Next week, we will start to examine psychological theories that assume a more humanized-approach, exploring how understanding human needs can help us tackle declining response rates.

Amy Heleine

Director, Marketing Sciences

Reference

Cape, P., “Understanding Respondent Motivation,” Survey Sampling International White Paper, 1-17.

Recently, the topic of encouragement came up in a small group discussion – the question being “Why is it so difficult for some people to encourage each other?” The general sense being too often we don’t recognize the efforts and lengths people go to since they are “simply doing their job.”

You may have seen the video where two students at Purdue University,The Purdue Compliment Guys, show us it is not difficult to encourage others.  Last spring they gained national attention for standing on a prominent walkway at the center of campus every Wednesday and offering free compliments to hundreds of passersby. Their goal is simply to brighten people's days.

Their praise might be surprising, but is definitely appreciated and makes people feel good:  
http://www.youtube.com/watch?v=QShPNcjgtfs

As a customer advocate, you likely recognize the importance of motivating individuals to take action on customer feedback. It’s true some people are motivated by linking their personal success with customer success (through pay and other rewards). But, let’s not forget the importance of reinforcing or sharing positive messages to keep people motivated. Recognizing their efforts can go a long way in motivating for action.

You’re doing a great job!  And, I encourage you to offer a word of encouragement to your colleagues…


Kitty Radcliff
Vice President