Monday, July 28, 2014

The Rewards of Analyzing Your Customer

A recent report published by the Aberdeen Group presents some interesting statistics regarding the value of customer analytics. The author of the report was Omer Minkara.  Perhaps one of the most impressive statistics that was presented in the report indicated that the average year-over-year increase in customer lifetime value was 7.6% for those organizations that invest in customer analytics. The other side of the coin is that the organizations that do not invest in customer analytics see a lifetime value declined in customer lifetime value by 4.3% year-over-year.

There were a number of other specific statistics that have additional impact. They are noted below.

1.      The number of positive mentions through social media channels was 14.6% for those who invest in customer analytics and 2.9% for those who do not.

2.      The cross sale an upsell revenue was 11.6% for those with customer analytics versus

negative 2.3% for those who do not.

3.      Annual company revenue increased 10.5% for those with customer analytics versus 3% for those who do not.

4.      The return on marketing investments was 8.3% for those with customer analytics versus 4.9% for those who do not.

5.      The improvement in average cost per customer contact was 5.1% for those with customer analytics versus an increase in cost per customer contact of 1.7% for those who do not.

These statistics developed by the Aberdeen group are amazing. To see the dramatic difference between those companies who participate in customer analytics and those that do not paint a picture that is hard to ignore. Even if the sample size and rigor of the analysis that led to these statistics is even close to being true, one would wonder why companies are not jumping on the bandwagon of customer analytics.  Of course, the challenge that most companies face is how to acquire personnel with the analytic skills that will lead to the kind of statistical performance noted in the Aberdeen Group report.

There is a new book published through the Harvard business review press titled “Keeping Up with the Quants” written by Thomas Davenport and Jinho Kim. It is an introductory guide to understanding and using analytics in business. This book complements the report noted above and gives further justification for the use of analytics.

 The bottom line is the statistical improvement in performance that is consistently demonstrated by companies using customer analytics compared to those who do not is no longer questionable. Companies must learn how to take advantage of customer analytics.  Those companies, who either do not want to learn how to use customer analytics or don't know how, will find themselves at a distinct disadvantage in the marketplace.

Saturday, July 12, 2014

Social Media is Changing the Game

The results of the 2014 State of Multichannel Customer Service Survey have been released.  The same parameters of time and speed-of- answer are still prominent.  The survey sampled responses of 1,000 U.S consumers and noted the following statistics which are consistent with past data:
1.       The most important aspect of good customer service experience is “getting my issue solved quickly”.   (41% of responses)
2.       The second most important was “getting my issue resolved in a single interaction”.  (26% of responses)

These results have been consistent for more than 20 years; however, it is worthwhile to note the magnitude of the percentages as a way to gauge the impact of time on the overall experience.  The impact of not meeting the customer expectations for timeliness can be seen in the additional responses.
65% of the respondents indicated they have left a brand over a poor customer experience.  The reasons that they listed are:
1.       Making multiple contacts for the same reason (47%)
2.       Transferred from agent-to-agent (43%)
3.       Poor communication skills (poor manners) (37%)

There were a number of write-in responses that were the result of language difficulties.
Social Media Impact
Social media impact was considered on the survey and some interesting results were obtained.   The survey results indicated that 84% of those responding used search engines to try to resolve their customer service questions and more customers use the social media to give positive responses (52%) than to complain (35%).  The impact of social media can be seen by the high percentage of customers who are now using social media to get assistance.  These statistics suggest that companies should give significant attention to their web sites.  Satisfaction can be driven from the web site as well as through making contact with an agent.  

The bottom line from this survey is that time to resolve customer issues remains at the top of the list.  The second takeaway is that speed alone is not the answer.   A quick answer that does not resolve a customer problem will not be viewed positively by the customer and will cost the company additional money and resources to eventually resolve the problem.  One of the best management strategies used is to “kill the call.”  By killing the call the company is saying spend enough time to get the problem resolved.  It makes no sense to deal with a customer without getting a resolution.  A call back from the customer is expensive and does not create satisfaction.  The objective of each transaction between the company and the customer should yield two outcomes; namely the problem should be resolved and the customer concern should be alleviated.  In other words, fix the problem and fix the customer.  Of these   two, fixing the customer is more important. 
The social media component takes on equal importance based on its pervasiveness into our customer culture.  Whereas we would have been surprised if 20% would have used a search engine to resolve a problem 25 years ago, the percentage of customers with access to the internet today puts a high level of importance on the performance of the company website.  It can be as dissatisfying for a customer to have difficulties on the website as talking to an agent.  The business of customer service just got a bit more complicated.

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