Saturday, December 29, 2012

Customer Experiences are Relative

Dr. Howard Lax wrote a blog on November 7, 2012 which he titled Customer Experiences and the Theory of Relativity.  The key point of his article is that we evaluate the world through the lens of comparisons. He makes an excellent point when he states that whatever the experience may be, our recall, reflection, and/or evaluation of the experience always is relative to some frame of reference.

These statements by Dr.Lax are consistent with the the preferred definition used by the Customer Institute which says: "customer satisfaction occurs when the perception of the reward from the purchase of goods or services by the customer meets or exceeds his or her perceived sacrifice. The perception is a consequence of matching past purchase and consumption experience with the current purchase."

There are simpler definitions of customer satisfaction, which are often used but which do not have the value derived from the definition above. Four other definitions that are often used are:
1. Customer satisfaction is equivalent to making sure that the product and service performance meets customer expectations.
2. Customer satisfaction is a perception of the customer that the outcome of business transaction is equal to or greater than his or her expectation.
3. Customer satisfaction occurs when the acquisition of products and/or services provides a minimum negative departure from expectations when compared with other acquisitions.
4. Customer satisfaction occurs when the marginal utility of a transaction is equal to or greater than preceding acquisitions.

There are several observations that follow from the Customer Institute definition; namely,
1. The comparison between past purchase and consumption experience must make sense. it is difficult to compare the purchase of the computer with the purchase of a wristwatch. Often we do not have a realistic context or frame of reference  for making a comparison, so there may be occasions when the customer will actually compare  "apples to oranges".  That's just the way we are.
2. When thinking about customer experiences, it must be remembered that there are no absolutes.
3. When evaluating customer perceptions, especially in customer surveys, it is critically important to establish measurement scales that accurately describe them.

The bottom line is to remember that customer satisfaction and customer loyalty measurements are all relative. There is no absolute scale for satisfaction, nor is there an absolute scale for customer loyalty. Surveys of customers and measurements taken from those surveys will always reflect the customers perception relative to their past purchase experiences. It is not unreasonable to conclude that much of the variability in customer's. responses to survey questions is often times due to these experiences.


Saturday, December 22, 2012

Customer Communications

Customer language may not be what you think it is. We think we know our customers language when we communicate with them. That is not always the case. In communication with customers, companies believe that the customers understand what they are saying. Since communication is in two directions, the assumption is that the company understands what the customer saying and the customer understands what the company is saying.  The purpose of this blog is to examine the assumptions of the communications between the company and its customers.

Company Communication
Companies communicate with their customers from various organizations within the company. The sales organization has one type of communication. The customer support organization has another type of communication. accounts receivable organization will have another type of communication. The shipping department will have still another type of communication.

Each of the company organizations will have different vocabularies. In addition to these vocabularies there may be internal jargon that is unique within the company. It often occurs that internal company jargon will find its way to the customer. In fact, the employee may forget what it's like being without the specialized knowledge that they have acquired while working for the company.  The jargon may be unique for each organization within the company, as well as having jargon that may be used consistently throughout the company. One example of different vocabulary from one department to another is the sales organization may refer to a product by a name created for advertising purposes; while on the other hand, accounts receivable may refer to the product by its product number.

Unfortunately, customers may be communicating with more than one organization at the same time. The likelihood that the communication from the company to the customer from each of these organizations will be consistent and understood may not be at the level of company expects. Sometimes the hand-off from sales to customer service can create problems for the customer.  This particular communication problem may be as simple as matching expectations given by the sales organization to the performance being supported by customer service.

The final complexity occurs as companies expand into multiple areas that may have additional challenges in terms of culture and language.

Customer Communication
Customers come in all shapes and sizes for both B2B and B2C. Of course, the range of customer types for B2C is much greater than B2B.  In either case.a wide range of communication skills from the customers can be expected.

Customers have their own jargon.  Customers also have their own vocabulary and often their own definitions of the words they use, which may or may not track dictionary definitions. Many of the problems that occur between customers and companies arise from the communication and lack of consistent definitions between the two.

The Solution
Most companies do not realize this is a problem. Most companies believe their customers always understand the communication from the company. They also believe their employees always understand all customer communications. It is easy to conclude from the preceding discussion that these beliefs or assumptions are false.

The first step of the solution is to recognize that there is a communications problem.

The second step of the solution is to identify internal jargon and that must be eliminated from the communication to the customer.

The third step is to train all personnel that interface with customers to use a common language.

The fourth and most difficult step is to train all personnel that interface with customers to be aware of the communications variation from customer to customer and how to handle it.

The bottom line is that customer communication is imperfect. It is not just the company nor is it just the customer. The communication problem extends in both directions. If a company wants to increase customer satisfaction and customer loyalty it must first reduce communication errors.


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