The Institute of Customer Service in the UK just completed a survey of UK consumers to examine customers perception of the space on the company's site to review products and services and leave a comment versus having a Twitter account and/or a Facebook page. The results are somewhat surprising as noted below.
1. Providing space for on site reviews or products and services is five times more important to UK consumers than a company having a Twitter account.
2. Providing that same space is three times more important than offering a Facebook page or group.
3. About 41% of the UK consumers view the on site facility as a standard element of any good corporate website and 54% of the consumers said they use such facility when it is provided.
4. When age is considered the younger consumers (18-24) expect a company to run a Facebook page compared to 13% of the 35-54 age group and only 7% for the over 55 age group.
Jo Causon, Chief Executive at the Institute of Customer Service commented: "Businesses must wake up to the fact that the relationship between companies and their customer has changed irrevocably." The research also found some more areas that will need to be addressed. Some of the findings suggest better followup to customers concerns are indicated. Some of the findings are:
1. While 55% of consumers expect a response the same day to an online complaint, only 29% actually receive one.
2. Even worse, they found that 12% reported having to wait at least a month for a response.
3. The study showed that 75% of UK consumers complain when encountering a problem with goods or services, yet only 15% of face-to-face telephone complaints are able to be dealt with on the spot
4. More than 52% complaints take over a week to resolve.
5. Worst of all, 26% of the complaints remain unresolved.
The bottom line is that providing customers with a way to complain is still important and even more important companies must find a way to reduce the turnaround time to resolve complaints. These data support the research at The Customer Institute that indicate the UK has lower customer satisfaction for support of technology equipment than the US, Canada, Australia and New Zealand.
While Twitter and Facebook seem to be taking hold of the company-consumer interface, they have not yet displaced what has always been the road to customer satisfaction when a complaint is offered. It may be just a matter of time.
Saturday, July 3, 2010
Wednesday, June 23, 2010
Innovation
Tradition can be a constraint. When working in industry many years ago, I worked for a company that had been in business for 125 years. Needless to say, the company was loaded with "tradition." The favorite response to any desire to improve the business performance was "but we've always done it that way." I would walk down the brick-lined halls and I could feel the walls quietly saying "we've always done it that way." In many ways industry has become filled with tradition in the ways that we measure customer satisfaction and loyalty. Different measures of satisfaction and loyalty arise and become popular only to fall into the abyss of time when another measure is announced. As Yogi Berra said, it is deja vu all over again. We have been using mail surveys, phone surveys and most recently Internet surveys to gather customer information. The response rate seems to relate to the importance of the product or service to the customer. Surveys at McDonald's will not get the same response as surveys on cat-scan equipment at the hospital. Usually the survey response for the retail industry (such as McDonalds) falls far behind the response rate of B2B.
Well, a small company in Windsor, Ontario, Canada has developed an innovative method for dramatically increasing response rates for surveys. The company, Tellbob, Inc. collects instant customer feedback for retailers, businesses and institutions on web-based terminals (computer kiosks) and hand-held mobile units. The customers are instantly rewarded with either a coupon that can be used immediately or some other form of reward. The kiosk-based technology and mobile units with touch screen technology makes it easy for the customer to answer questions and submit comments before printing out a coupon.
The system gives immediate feedback on questions shortly after the point of sale. The obvious benefit is that the data is up-to-date without the time lapse that results when the customer answers a survey at some later point in time (filling out a response card or answering an Internet survey). A secondary, but no less important aspect is the survey can be modified quickly to capture customer trends or major problems before they get out-of-hand.
The preliminary results reported by one of Tellbob's customers, Marble Slab Creamery, indicated a redemption rate of 85%. Wow!!!
The bottom line is that the customer can give immediate feedback in an easy to use way and is instantly rewarded. This is definitely a step forward for the companies that deal directly with their customers face-to-face. I like it.
Well, a small company in Windsor, Ontario, Canada has developed an innovative method for dramatically increasing response rates for surveys. The company, Tellbob, Inc. collects instant customer feedback for retailers, businesses and institutions on web-based terminals (computer kiosks) and hand-held mobile units. The customers are instantly rewarded with either a coupon that can be used immediately or some other form of reward. The kiosk-based technology and mobile units with touch screen technology makes it easy for the customer to answer questions and submit comments before printing out a coupon.
The system gives immediate feedback on questions shortly after the point of sale. The obvious benefit is that the data is up-to-date without the time lapse that results when the customer answers a survey at some later point in time (filling out a response card or answering an Internet survey). A secondary, but no less important aspect is the survey can be modified quickly to capture customer trends or major problems before they get out-of-hand.
The preliminary results reported by one of Tellbob's customers, Marble Slab Creamery, indicated a redemption rate of 85%. Wow!!!
The bottom line is that the customer can give immediate feedback in an easy to use way and is instantly rewarded. This is definitely a step forward for the companies that deal directly with their customers face-to-face. I like it.
Wednesday, June 9, 2010
Measurements Raise More Questions Than Answers
As we read some of the publications that are found on the web some of the information raises interesting questions. This may be one of the most boring blogs written for The Customer Institute. I am basing my concern on a chart that had some very interesting and, in my opinion, some worthwhile information. The chart was titled "The Impact of Problem Resolution on Loyalty." The chart showed information taken from five different industries and noted how the "loyalty" changed depending whether problems left the customer satisfied, mollified or dissatisfied. It also added the score if there was no problem. The group of customers that had no problem recorded the highest level of loyalty.
I actually liked this chart and the reason I am using it as an example is that it is a great example of making a very important point but then gets lost when the scales on the axes don't follow the content of the chart. The concern I have with this particular chart is that the scale used on the y-axis of the chart is labeled "Repurchase Intention." WOW!
How do you get from measures of loyalty to repurchase intention? While it is easy to say there is some relationship between loyalty and retention, it requires a GIANT leap of faith to then put it into a chart that does not indicate loyalty on the y-axis. Some of the questions that come to mind are:
1. Is the relationship between loyalty and repurchase intention synonymous? If yes, then it is ok.
2. If they are not synonymous is there a linear relationship between the two terms?
3. If there is a known linear relationship between these two variables, I have yet to see the data and research to support it.
The bottom line is that we must always pay attention to the charts that always seem so compelling. There is no guarantee that the charts represent the information correctly. I have witnessed past transgressions that included showing a linear relationship between customer satisfaction and loyalty. While the scatter plot of the data implied a linear relationship, the r-square for the linear relationship was so low that the assumption that a linear relationship existed took a lot of courage to swallow.
We need some carefully designed experiments to demonstrate the relationships between these terms that we live with every day. What is the relationship between satisfaction, loyalty, repurchase, etc.?
I actually liked this chart and the reason I am using it as an example is that it is a great example of making a very important point but then gets lost when the scales on the axes don't follow the content of the chart. The concern I have with this particular chart is that the scale used on the y-axis of the chart is labeled "Repurchase Intention." WOW!
How do you get from measures of loyalty to repurchase intention? While it is easy to say there is some relationship between loyalty and retention, it requires a GIANT leap of faith to then put it into a chart that does not indicate loyalty on the y-axis. Some of the questions that come to mind are:
1. Is the relationship between loyalty and repurchase intention synonymous? If yes, then it is ok.
2. If they are not synonymous is there a linear relationship between the two terms?
3. If there is a known linear relationship between these two variables, I have yet to see the data and research to support it.
The bottom line is that we must always pay attention to the charts that always seem so compelling. There is no guarantee that the charts represent the information correctly. I have witnessed past transgressions that included showing a linear relationship between customer satisfaction and loyalty. While the scatter plot of the data implied a linear relationship, the r-square for the linear relationship was so low that the assumption that a linear relationship existed took a lot of courage to swallow.
We need some carefully designed experiments to demonstrate the relationships between these terms that we live with every day. What is the relationship between satisfaction, loyalty, repurchase, etc.?
Saturday, June 5, 2010
On-going Validation that Satisfaction Matters
Thee was a short blog by Kevin Thomson on Webtrends on June 2, 2010. The author pointed out that investing $100 in the S&P 10 years ago would be worth $81 today whereas that same investment in stocks from companies that scored well in the ACSI index would be worth $372.13 today.
This tracks very well against an article published in the Summer 2007 edition of The Business Renaissance Quarterly by Bleuel and Stanley titled "Customer Focus: One Key to Financial Success" that demonstrated similar results. The authors reviewed 12 industries that were represented in the ASCI index. The authors compared the best and the worst (in terms of their ASCI index) in each of the industries and found statistically significant differences (at the 5% level) for the following financial measures:
1. Cash Flow (16.4 versus 3.4)
2. Price Growth (59.7 versus 34.6)
3. Earnings Predictability (76 versus 51.8)
4. Beta as a measure of risk (0.95 versus 1.23)
In addition there was a statistically significant difference between the average ACSI scores for the best companies versus the worst companies.
The bottom line from both of these examples is that companies that have a strategy that includes a strong customer service component tend to have better financial performance than those that do not.
This tracks very well against an article published in the Summer 2007 edition of The Business Renaissance Quarterly by Bleuel and Stanley titled "Customer Focus: One Key to Financial Success" that demonstrated similar results. The authors reviewed 12 industries that were represented in the ASCI index. The authors compared the best and the worst (in terms of their ASCI index) in each of the industries and found statistically significant differences (at the 5% level) for the following financial measures:
1. Cash Flow (16.4 versus 3.4)
2. Price Growth (59.7 versus 34.6)
3. Earnings Predictability (76 versus 51.8)
4. Beta as a measure of risk (0.95 versus 1.23)
In addition there was a statistically significant difference between the average ACSI scores for the best companies versus the worst companies.
The bottom line from both of these examples is that companies that have a strategy that includes a strong customer service component tend to have better financial performance than those that do not.
Saturday, May 15, 2010
Loyalty from the Perspective of Human Capital
While this blog usually focuses on theory and modeling customer satisfaction and loyalty, it will, from time-to-time, discuss topics that are a little outside the normal discourse. Such is the case today where brief discussion of customer capital has some relevance to the topic of satisfaction and loyalty. This blog is the result of re-reading a book published in 1997 titled "Intellectual Capital" and was written by Thomas A. Stewart. Reviewing some of his concepts about how companies and customers can interact gave me some ideas that relate customer capital to loyalty. The idea is that both the company and its customers have knowledge that may yield greater benefit and loyalty when combined.
Successful companies will invest in employees because they know that employees are knowledge sources for the company. As employees become better trained and knowledgeable, they also become more likely to create knowledge assets, usually referred to intellectual property.
But when we examine the company from a broader perspective the question becomes can the company also form a relationship with its customers that might create knowledge assets? The obvious answer is yes. The combined resources of the company and its customers can very likely create knowledge that may provide new asset value to both. This seems to be an opportunity that many companies are missing.
It is clear that when a company solves a customer problem there may be some new knowledge created from the solution. However, these circumstances where new knowledge is created are more spontaneous that planned and rarely make it into any category of either the company or its customer that would identify the new knowledge as capital. Some of the more dramatic company-customer solutions may lead to a shared patent or copyright as well as a stronger relation with the customer. Another benefit of these new knowledge solutions might be another way to differentiate a product or service from the competition and lead to increased margins.
The bottom line is the company-customer interface is rarely seen as a place to create new knowledge capital even though the benefits are obvious and may actually lead to significant product and service breakthroughs. The challenge is to change the way we look at customers. Customers are no longer simply a source of revenue. They also bring the opportunity to create knowledge capital jointly with the company that can lead to a stronger customer relationship with the company as well as create barriers to competition that are built from the new knowledge.
Successful companies will invest in employees because they know that employees are knowledge sources for the company. As employees become better trained and knowledgeable, they also become more likely to create knowledge assets, usually referred to intellectual property.
But when we examine the company from a broader perspective the question becomes can the company also form a relationship with its customers that might create knowledge assets? The obvious answer is yes. The combined resources of the company and its customers can very likely create knowledge that may provide new asset value to both. This seems to be an opportunity that many companies are missing.
It is clear that when a company solves a customer problem there may be some new knowledge created from the solution. However, these circumstances where new knowledge is created are more spontaneous that planned and rarely make it into any category of either the company or its customer that would identify the new knowledge as capital. Some of the more dramatic company-customer solutions may lead to a shared patent or copyright as well as a stronger relation with the customer. Another benefit of these new knowledge solutions might be another way to differentiate a product or service from the competition and lead to increased margins.
The bottom line is the company-customer interface is rarely seen as a place to create new knowledge capital even though the benefits are obvious and may actually lead to significant product and service breakthroughs. The challenge is to change the way we look at customers. Customers are no longer simply a source of revenue. They also bring the opportunity to create knowledge capital jointly with the company that can lead to a stronger customer relationship with the company as well as create barriers to competition that are built from the new knowledge.
Wednesday, May 12, 2010
The Other Side of the Coin
In the previous blog, it was noted that when high performance agents became at-home agents, their performance deteriorated. Customer satisfaction decreased. There appears to be another side to this situation. The inContact consulting firm has written a white paper titled "The Work-at-Home Agent model for Improved Customer Loyalty". Some of the statistics presented include:
1. A national poll conducted by inContact in 20007 showed that 46% of respondents (presumably businesses with call centers) said they were using at-home agents.
2. A study published by The Telework Coalition noted that the at-home contribution on improving the bottom line included 91% of agents were happier, had increased productivity, a higher retention rate, and reduced office space and operational expenses.
3. Frost & Sullivan report the median age of an at-home worker is 38 while the average age of an on-premises call center agent is 23 and further noted that 80% of at-home agents have some college-level education compared to 35% of agents in the on-premises centers.
4. According to a Gartner Group survey, at-home agents measured 40% more productive.
5. IDC Consulting has published results that indicate an on-premises agent costs $31 per our while an at-home agent costs $21 per hour on average.
6. The Interantional Telework Association and Council have published statistics the show there is a space savings that can reach $12,000 per employee per year. They also appear to indicate that there is a decreased cost of $25,000 per at-home employee compared to a traditional call-center agent.
These are strong statistics which suggest there may be an impact on customer satisfaction and loyalty. However, please note there were no statistics that compared customer satisfaction between at-home agents and on-premises agents.
The bottom line is that while these statistics are encouraging, there is no measured difference between the in-home agent and the on-premises agent for customer satisfaction. The Customer Institute will continue to search for studies that attempt to measure the satisfaction impact of the at-home agent. While this white paper has good content and meaningful statistics, it can only suggest that at-home agents may improve customer loyalty.
1. A national poll conducted by inContact in 20007 showed that 46% of respondents (presumably businesses with call centers) said they were using at-home agents.
2. A study published by The Telework Coalition noted that the at-home contribution on improving the bottom line included 91% of agents were happier, had increased productivity, a higher retention rate, and reduced office space and operational expenses.
3. Frost & Sullivan report the median age of an at-home worker is 38 while the average age of an on-premises call center agent is 23 and further noted that 80% of at-home agents have some college-level education compared to 35% of agents in the on-premises centers.
4. According to a Gartner Group survey, at-home agents measured 40% more productive.
5. IDC Consulting has published results that indicate an on-premises agent costs $31 per our while an at-home agent costs $21 per hour on average.
6. The Interantional Telework Association and Council have published statistics the show there is a space savings that can reach $12,000 per employee per year. They also appear to indicate that there is a decreased cost of $25,000 per at-home employee compared to a traditional call-center agent.
These are strong statistics which suggest there may be an impact on customer satisfaction and loyalty. However, please note there were no statistics that compared customer satisfaction between at-home agents and on-premises agents.
The bottom line is that while these statistics are encouraging, there is no measured difference between the in-home agent and the on-premises agent for customer satisfaction. The Customer Institute will continue to search for studies that attempt to measure the satisfaction impact of the at-home agent. While this white paper has good content and meaningful statistics, it can only suggest that at-home agents may improve customer loyalty.
Saturday, May 8, 2010
Some Surprising Findings
Call centers represent one of the fastest growing segments of customer service. A recent blog by Carmit DiAndrea of Analytics & Client Services brought this to the attention of The Customer Institute. There has been a trend toward work-at-home agents and some of the data suggest the number of work-at-home agents is growing at the rate of 40% per year. Other studies indicate the attrition rate of work-at-home agents is much less than the typical call center. One of the prime reasons is that work-at-home agents eliminate the cost of work space. While this may be of interest to those who watch the financial aspect of call center operations, the point of this blog is that in one case study there were two surprises. These surprises lead to the question: "is this an anomaly or is there something to this that needs to be investigated."
The first surprise was the likelihood to recommend the company's services was somewhat lower for the work-at-home agent than the call center and the second surprise was that satisfaction with service provided was also lower for the work-at-home agent than the agent at the call center.
Let me enter a few caveats here; namely,
1. This is only one company that recorded these results and that company has chosen to remain anonymous.
2. The differences between the call center agents and the work-at-home agents were concluded to be different but there was no test to determine if the differences were statistically significant.
3. This was not a controlled experiment. Thus, there may be other factors that caused the differences.
The company tracked these two parameters metrics for one year and based on the data asked the following questions:
1. Why did these metrics drop when one call center sent their top performing agents home to work?
2. What would cause these top agents to struggle to perform at an average level?
While there were no clear answers to these questions, the following ideas were presented without any evidence that they may be significant:
1. How were the work-at-home agents selected? Is there a difference between agents in the call center and work-at-home agents? Does it take a different type of person?
2. Should the expectations be different for the call center agent than the work-at-home agent?
3. Can the type of training make a difference?
4. Should the management of call center agents be different than work-at-home agents?
The bottom line is that there appears to be a sea change in the work force for call centers. Some of the questions that need to be addressed are:
1. Do we need a new way to train managers to manage the work-at-home agent?
2. Do we need to train work-at-home agents differently than the call center agents?
3. Do we need new metrics for the work-at-home agent?
4. Should there be different hiring requirements for call center agents than work-at-home agents?
Since we know that call center agents have a direct impact on both customer satisfaction and loyalty, this topic needs more research. One case is not enough. We are interested in the outcome and will blog any further results that are published.
The first surprise was the likelihood to recommend the company's services was somewhat lower for the work-at-home agent than the call center and the second surprise was that satisfaction with service provided was also lower for the work-at-home agent than the agent at the call center.
Let me enter a few caveats here; namely,
1. This is only one company that recorded these results and that company has chosen to remain anonymous.
2. The differences between the call center agents and the work-at-home agents were concluded to be different but there was no test to determine if the differences were statistically significant.
3. This was not a controlled experiment. Thus, there may be other factors that caused the differences.
The company tracked these two parameters metrics for one year and based on the data asked the following questions:
1. Why did these metrics drop when one call center sent their top performing agents home to work?
2. What would cause these top agents to struggle to perform at an average level?
While there were no clear answers to these questions, the following ideas were presented without any evidence that they may be significant:
1. How were the work-at-home agents selected? Is there a difference between agents in the call center and work-at-home agents? Does it take a different type of person?
2. Should the expectations be different for the call center agent than the work-at-home agent?
3. Can the type of training make a difference?
4. Should the management of call center agents be different than work-at-home agents?
The bottom line is that there appears to be a sea change in the work force for call centers. Some of the questions that need to be addressed are:
1. Do we need a new way to train managers to manage the work-at-home agent?
2. Do we need to train work-at-home agents differently than the call center agents?
3. Do we need new metrics for the work-at-home agent?
4. Should there be different hiring requirements for call center agents than work-at-home agents?
Since we know that call center agents have a direct impact on both customer satisfaction and loyalty, this topic needs more research. One case is not enough. We are interested in the outcome and will blog any further results that are published.
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