Udesh Jadnanansing, Founder and Managing Partner at Mopinion,looks at how online retailers should strive for ‘Excellent’ rather than settle for ‘Good’ and looks at the ways they can take their CEM to the next level to reap the rewards.
Customer Experience Management (CEM) is big business. In an environment where retaining customers is just as important as winning new ones, the battle lines between competing businesses have shifted significantly in recent years. Largely fuelled by the online retail revolution, customers are far savvier about the service they deserve for their custom and have many avenues to communicate their dissatisfaction to other consumers, if this isn’t met.
Retailers, in turn, have ramped up their CEM and Voice of the Customer (VOC) programmes to meet this challenge – but this has raised the bar across the industry. So in this retail arms race the question now is – How do you take CEM to the next level?
Currently there is a lot of interest and use of Net Promoter Scores (NPS) and Customer Satisfaction (CSAT) monitoring. For many businesses this looks at the customer service function as a whole as an overview, and the types of reporting can vary greatly (from paper reports and Excel files to online dashboards). For some businesses measuring CSAT scores may only happen twice a year or quarterly. This unfortunately means that many businesses have no real-time measurement – and more importantly, this means they are unable to react to issues quickly and recover at risk customers.
Ashley Williamson of leading knowledge provider Informa has worked with organisations of all sizes and agrees that using NPS and CSAT is sometimes regarded as a convenient panacea for CEM needs. “Most companies use some form of CSAT, and NPS is a very common way of working out where your business is within an imaginary league table of competitors. But it is important to consider the objectives of these systems. CSAT is great if you want a simple reflection of satisfaction but NPS can sometimes be seen as? point scoring, the flaw being that it doesn’t really tell you much about the dynamic of your customer relations and where you could make improvements to increase sales. Customer loyalty is more complicated and can fluctuate at different times due to market conditions or seasonal purchasing trends.”
Indeed there is a phenomenon of so-called ‘Flat-Liners’ – businesses where an NPS or CSAT metric does not improve and simply maintains a level over time. In real terms, this is even more of an issue over time, as competitors inevitably creep ahead by raising customer expectations and fulfilling them. Companies that want to improve loyalty and really want to excel in great customer service need to be aware of the fact that just monitoring or measuring NPS (or any other loyalty metric) is not enough.
Williamson comments, “It’s fair to say Flat-Liners look at the results but don’t really see the details of their Customer Satisfaction relationship. Part of the reason for this is that many companies still operate the different departments of their businesses as silos. A sales team will deal with the same customers as the customer service department or returns department, but they won’t necessarily be sharing the customer feedback directly with each other in a proactive way. After-sales teams will often get as much feedback on the sales cycle as the team selling the products/services and yet it’s surprising how rarely this information is considered from an overall view. Until a business can look at its customer sales holistically, it will always struggle to rise above its competition.”
The crux of this argument is that attaining a score of ‘Good’ is not enough when your most successful competitors have reached an ‘Excellent’ level. Often this means dealing effectively with issues as much as aiming to ensure that things run smoothly for customers in the first place. Pain points also need to be addressed and this often means looking at data from all touch points, be it the website, customer IM, email or telephones. An ‘Excellent’ customer experience will often hinge on the business reacting and taking positive action to rectify any issues or concerns.
“Part of the problem with simply relying on scores is that it can make the company unmotivated to improve,” argues Williamson. “A ‘Good’ score may sound perfectly reasonable but in the context of your market, you want to be ‘Excellent’. But actually even if you reach top scores it is still worth knowing where you can improve or be alerted to up and coming competitors that could steal your sales. Benchmarking is an important addition to any customer service scoring mechanism as it shows you how you are placed within your market. A high satisfaction score may just be an indication you have a passive customer base that tends to repeat buy from the same source – which leaves you in danger of these customers being ‘poached’. In fact, there are significant gains to be made even if your score appears to be high already. I have seen organisations that have moved from a ‘Satisfied’ CSAT score to an ‘Extremely Satisfied’ score and have realised four times more business because they stand head and shoulders above their competition.”
At the moment, Social Media has become a lynchpin of customer service for many businesses. There is good reason for this. There is a high degree of visibility of experiences on social media, which is good for consumers. But it is also good for customer managers and executives because it highlights genuine strengths and weaknesses in service. It’s important not to let these remain passive – if it’s just a forum for complaint it can have a negative effect on the perception of your business. As well as addressing complaints properly, appropriate monitoring should guide improvements to your offering as a whole to put issues right for the future. This means investing in monitoring of these channels and this needs to reflect social appetites for communications – social media trends can change like anything else.
It used to be easy to spot good and bad customer service but this is much more flat now. So what is it that will elevate your business above the competition and win more sales? “An ‘Excellent’ score will mostly come from a consistent service to customers, one that offers a personalised service so customers feel valued and appreciated,” advises Williamson. “You also need to be aware of customer satisfaction in real-time, look at what competitors are offering them and provide an offering that persuades them to keep buying from you’.
By Udesh Jadnanansing
Founder and Managing Partner
Mopinion
www.mopinionlabs.com