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Five Trends We Can See From Examining the 2010 1to1 Customer Champions – Part 3

This is the third part of a multi-part series on the trends we are observing among the 1to1 Customer Champions with respect to their efforts to build a customer-focused culture.

My last blog focused on being able to identify the business impact of customer loyalty/customer feedback programs. The primary reason for this was that articulating the link to business impact will resonate better with executives. From a broader perspective, however, I would offer that this is simply the right thing to do – if any of our actions in our businesses do not result in a positive payoff (which would include loss prevention), then we should be extremely critical of whether the activity is worth pursuing.

When consulting with our clients on business impact linkage, we are often asked how to drive more impact – in other words, how do we make certain that our customer-centricity efforts are generating a payoff? The answer is amazingly simple to articulate, but, from my observation, far more difficult for most companies to implement. It is the third trend we see among the 1to1 Customer Champions:

Trend #3: Acting on Customer Feedback is Imperative

I would suggest that there are four general outcomes that can occur when considering customer feedback programs and action taken:

A framework for understanding perceptions of information gathering and action orientation  

1)      Customer-Focused Companies actively solicit feedback from their customers and have a system in place to act on the feedback, both at a systemic level as well as at an account-level. These companies will, over time, have a greater share of loyal customers that are engaged, and their financial performance will thrive, because the action they are taking is customer-driven.

 

2)      Lip Service Companies actively solicit feedback, but – from the customer’s perspective – do not take any action on the feedback. They either lack the infrastructure and discipline to take action on results, or they are acting on the results and not communicating their efforts to customers.

 

These companies are perceived as saying what customers want to hear, but acting differently. Over time, their claims of customer focus will fall on deaf ears, as evidenced by declining survey response rates and increased customer defection rates. More importantly, if they have not taken action on their customer results, it is impossible to determine what changes in their financial position – positive or negative – are attributable to change in customer sentiment.

 

3)      Gut-Feel Companies are good at taking action, but they don’t actively solicit feedback from their customers. Feedback comes in an unprompted fashion, which means that any action taken is based on the most vocal customer (which may not be the largest nor most strategic customer) or on the last customer interaction (a “last-in, first-out” mentality). While these companies are to be commended for taking action on customer feedback (albeit informally), the chief concern is that reacting in a gut-feel manner can yield underperforming (or non-existent) payoff.

 

4)      Internally-Focused Companies do not respond to customer feedback in either a systematic nor unprompted fashion. These are companies that tend to believe that they are so visionary that relying on customer feedback will stifle their creativity – in short, they are smarter than their customers. Very few companies can pull this off – most who adopt this approach will be perceived (rightly, in my opinion) as simply being arrogant.

Most of the 1to1 Champions fall into the first category – Customer-Focused Companies – they have formal feedback programs, a framework to take action (and incentive structures that support action), and a means to communicate their progress.

Of course, it stands to reason that one necessary key to taking action is having engaged employees. We will delve into the topic of employee engagement in my next entry.

Mark A. Ratekin
Sr. Vice President, Consulting Services

 

0 thoughts on “Five Trends We Can See From Examining the 2010 1to1 Customer Champions – Part 3

  1. Excellent Matrix Mark. Very simply defined company attitude towards customers. It will be great if you can share example in each category. I know it will be tough to mention names.

  2. Hi, Mrinall – thank you for your note. As you point out, it is difficult to share specific names; however, I would estimate that most companies fit into the Lip Service category. This isn’t necessarily a function of ill intent on the company’s part; rather, the company will likely lack the resources, infrastructure or knowledge to take full action (and communicate effectively). Our organization has been spending more and more time with clients focusing on this issue. Ultimately, doing the measurement piece is the easy part – leveraging the information requires synergy among corporate culture, discipline, and tools available. This is why we feel that customer orientation is the ultimate differentiator – it is much easier to copy products or steal employees than it is to develop a culture that truly values the customer. Thanks again for your comment.

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