Wednesday, November 5, 2008

Proactive versus Reactive Customer Management

There was an interesting survey performed by Shape the Future, a market research company in the UK. While there was no information on the sample size of their survey, the results are interesting. The major statistic is that 70.3 percent of the companies are measuring customer satisfaction, which implies that 29.7 percent are not. They note that most of the companies that say they are measuring customer satisfaction are employing simple and informal tactics, such as relying on unsolicited customer feedback. The exact breakdown of the 29.7 percent not measuring customer satisfaction offer the following reasons:
1. Believe that customer will tell them if there is a problem.
2. Never thought about measuring customer satisfaction.
3. Are too busy to measure customer satisfaction
4. Plan to measure customer satisfaction in the future.

The first thing that comes to mind is that there is no understanding of the difference between a "good" customer and a "nice" customer. They must believe that all their customers are good customers. If I haven't noted this difference before, a good customer is one who will tell you when something is not done satisfactorily. A nice customer doesn't want to take the time to tell you or is not willing to confront you with the problem. The nice customer just goes away without saying anything. Of course we all want good customers but, unfortunately, not all customers are good customers.

One of the comments by Shape the Future, which is in agreement with my comment above, is that the results are saying too many businesses assume that people will give them useful feedback. Nope! There are too many "nice" customers in the market. They do point out that unhappy customers often leave without telling them why.

The point I want to make in this blog is that companies seem to think they know their customers when, in fact, most of them are out-of-touch. The study several years ago by Bain & Company surveyed 362 companies in the US and found that only 8% of their customers described their experience as "superior," yet 80% of the companies surveyed believe the experience they have been providing is indeed "superior." Many firms have CRM (Customer Relationship Management) programs but only know the customers after there is a record of a customer interaction. Thus, these CRM programs are lagging programs since they only look at the touch points after an interaction.

The bottom line is that customer experience with the company should be viewed from a leading perspective. Rather than waiting for an interaction, companies should be looking at the customer's experiences to determine where the gaps are between what the customer perceives and what the customer experiences. This approach will lead to a better understanding of how to increase loyalty and share of pocket by proactively filling the product and service gaps.

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