Published: April 26, 2012 | Comments
Customer Experience (CE) has become the star initiative of senior management looking to enhance revenue and margins. The CE is a huge opportunity for call center directors if they create the capability to measure, guide and enhance it: in some cases, creating the opportunity to become the Chief Customer Officer (CCO). To get the gig, you’ll have to develop a new act and reallocate significant resources away from call handling and call quality and toward collecting and analyzing broader Voice of the Customer information. But, this reallocation could easily create a ten-fold increase in the department’s impact on the company’s bottom line.
John Goodman at ACCE 2012:
Pre-3: Making Your Call Center the Heartbeat of Voice of the Customer (VOC)
In this session, John Goodman of TARP will show you how to make the VOC report something your staff welcomes instead of dreads. You’ll discover how you can harness VOC results to prevent future problems, and you’ll identify the eight key components necessary to create an impactful VOC process. You’ll also learn how to provide a quantitative interpretation of VOC by understanding customer behavior and expectations.
Session 103: Seize the Power - Taking the Lead in Customer Experience and Social Media
Create an integrated voice of the customer process that quantifies the benefits of the call center to other departments and the CFO. You’ll return to your center equipped to build a strong economic case – and ready to seize the power of customer experience!
Session 306: User Input: The Secret Sauce to Technology that Delivers
IT is often criticized for doing things on their own, without asking for input from the team. John Goodman of TARP will share ways to implement a similar process in your center and gain buy-in from all users to make your technology more effective.
Most organizations have not fixed responsibilities for either CE or the end-to-end Voice of the Customer (VoC) that describes the CE. Many companies still operate as a series of functional silos, while the call center sees the impact of every function on customers.
The five major payoffs of an enhanced CE are: enhanced revenue and word of mouth, lower service cost and risk expenses and higher margins. These impacts can create up to 20 times the bottom line benefit as traditional efficiency enhancement activities. While I will explain in more detail how to quantify each of these impacts during my session at ACCE, to top line impacts are:
1. Enhanced revenue. Avoiding customer problems increases loyalty by an average of 20% and resolving an existing problem raises loyalty from 30 to 50% vs. if it is left unresolved. Also, the revenue payoff of resolution is usually five to ten times the cost of winning a new customer.
2. Word Of Mouth (WOM). A negative experience usually causes two to four times as much negative word of mouth (or "word of mouse" on the Web) as a positive experience. CE entails managing WOM.
3. Reduced service costs. In most companies, 30% of service contacts are preventable if there was better communication up front. An effective VoC can reduce these contacts.
4. Most legal, regulatory and PR disasters started as unresolved complaints. A VoC can reduce these occurrences by at least 15%.
5. Margin. Sensitivity to price doubles when a problem occurs and then doubles again with multiple occurrences.
Based on the three top line impacts of revenue, WOM and improved margins due to reduced sensitivity to price, companies such as Allstate, Pepsi Cola, Qualcomm, Neiman Marcus and Chick-Fil-A have invested in operations, sales and service quality improvement with renewed commitment. Beyond surveys and complaints: Gather the full range of CE descriptors Many companies use only the two most readily available sources of VoC information: surveys and complaints (as opposed to customer contacts). There are several difficulties with only using these data sources:
- The data often does not provide enough information to understand the cause of the problem.
- Surveys, especially the usual annual "do you love us" survey is a lagging indicator and seldom provide detailed information on cause, but do provide data on impact on loyalty and word of mouth.
- Complaints often constitute only the tip of the iceberg of the total number of problems that have occurred.
There are other data sets that often go untapped:
- Operations Exception Data - such as missed appointments, ATM downtime and invoice adjustments. This data can provide accurate estimates of the number of customers who have had problems experienced by customers. For example, your IT department knows that an ATM was down for four hours and that 20 customers usually use that ATM each hour so you know that 80 customers were disappointed.
- Quality Inspection Data. – This is audit data from manufacturing quality inspections or process quality inspections.
- Call Quality Monitoring Evaluations - are usually used for evaluating compliance with scripts. However, while listening to a call, the QA analyst can also gain an understanding of the customer expectations and how they were met or not met by the company overall.
- Social Media and Other Unstructured Data - such as the actual text of emails, CSR case notes of customer comments and recorded calls. This data can provide insight into causes of customer problems and expectations.
Becoming a Star
The process of taking the lead in VoC and then CE must be gradual: better a small success than a big disaster. Go for a small success and then, over time, parlay your bit part into stardom. At the beginning, you should avoid systems changes and do the analysis manually on one issue at a time.
Act One: Get the Facts and Come Up with the Plot
Gather some general data and then pick a couple of candidate issues to work on. Identify the value of the average customer and the percentage of new customers won via word of mouth. Gain agreement from Marketing and Finance that great WOM and less customer attrition will enhance revenue and margin and reduce cost.
Look at the customer-facing processes that generate the most complaints and identify two relatively fixable problems involving multiple functions and departments that are generally recognized as an issues causing tangible damage to revenue and/or producing extra service cost.
Be sure to also look at survey data and operational data when selecting your candidate issues. Often the problems not complained about do the most damage. For instance, in studies at three different copier companies, TARP found that being misled by sales reps did four times as much damage to loyalty than machine breakdowns or repair delays but was seldom articulated as a complaint for fear of alienating the sales rep. The most damaging problems were exactly the ones not highlighted by the complaint system. Using the multiple sources of data, quantify the impacts of the issue in a manner the CFO will accept using principles of service impact on word of mouth, loyalty and risk reduction. Then, humanize the data with quotes from a few loyal customers.
Act Two: Make your Pitch
Pick one target issue that can be fixed within weeks (not months or years) and estimate the payoff of fixing an acknowledged issue. In many cases this might be better education of customers or changing an onerous policy.
The best approach is what I call, "Better a small success than a big disaster." The strategy is to collect data on several candidate customer problems on an ad-hoc basis from the most important three or four silos and then select the most promising problem (in terms of ease of fixing and executive support and build the baseline business case and performance level using a manual analysis).
Act Three: Get an Audition and a Couple of Great Reviews
Mobilize action on that one issue and let the line manager get primary credit. Once the data on the size of the problem and its economic impact is produced, buy-in from an ad hoc or existing quality improvement cross-functional team is significantly higher. Also, a champion from the department that will gain the most benefit from the improved CE, often Marketing or Operations, can usually be recruited to support the effort with the quality department doing the short term analytical heavy lifting.
You should offer to do the heavy lifting for the measurement, analysis and pilot test of the improvement, document the success and let your client take credit. As Mary Ellen Burris, SVP of Consumer Affairs (who drives the customer experience) at Wegmans Supermarkets says, "Let the other executive take most or all of the credit for the success. Everyone knows that you helped create the success."
Once you have a well-documented success, you can then repeat the cycle. Soon, everyone at the table including the Chief Operating Officer (COO) and the Chief Executive Officer will look to you as the trusted advisor on managing the customer experience. Only then should you offer to take the title in name as well as in function.
Act Four: Ask for an Extended Engagement
To effectively guide the CE, the VoC must provide an end-to-end, unified picture of the CE. End-to-end means from the first presale interaction to the final billing, assuring that all issues are identified and critical ones addressed. A VoC that provides a unified picture of the CE reduces the impact of gaps, contradictions and biases in any one data source.
There were eight factors associated with an effective VoC process:
- Unified ownership or coordination of the VoC by a single executive (you).
- Unified plan for data collection
- Integration of multiple types of data into a unified picture of the CE.
- Tailored reporting to each stakeholder.
- Quantify the revenue and profit implications of each issue in terms of monthly damage of the status quo.
- Suggest specific actions and targets.
- Track the impact of the VoC.
- Linking the fixing of issues identified by the VoC to executive incentives.
The most challenging part of the VoC process is the actual integration of the different types of data. For example, operations and survey data can often be projected onto the customer base as a whole. Complaint data may only represent one out of fifty customers who have had the problem. Unless you have an estimate of this ratio (what TARP terms the "multiplier"), it is difficult to integrate contact data with survey and operations data.
This sequence has led to success of chief customer experience officers (or executives who act like them) in companies such as Allstate, Conagra, Moen and Federal Express.
In summary, the key to the call center director getting a seat at the table with the CFO, Chief Marketing Officer and COO is to show how a quality customer experience is the foundation of an enhanced revenue stream and bottom line and that the call center can 1) create the Voice of the Customer needed to guide CE management and 2) provide the leadership, facilitation skills and knowledge of the customer to improve the CE.
1 - TARP coined the term "word of mouse" in 1999 in its first study of online support for the Consumer Electronics Association.
2 - Goodman, John, "Treat Your Customers as Your Prime Media Rep", BrandWeek, Sept. 12, 2005, page 16.