Several years ago, while selling software in the British telecom market, I met the CMO of a smallish network operator. He described the issues his business was facing, and when I asked him his churn rate, he replied, almost casually, that it was “about normal for our industry: 37 percent.”
He must have seen my jaw drop, as he quickly abandoned his blase tone. However, his brutal honesty gave a young salesperson stark insight into the industry’s attitude toward its customer base.
That attitude isn’t limited to network operators. I recently met with a member of the retail board of a major financial services institution, who told me that the board now considers customer retention a key strategic issue.
Given the current state of the global economy and the risk that customers might defect to the sidelines rather than to the competition, it seems obvious that retention strategies should be at the forefront of any business with direct customer relationships.
So, where to start? With the business line that has the most direct customer access and can create the most emotive customer experiences: the call center.
Can you beat ‘pure price competition’ by listening to customers?
Edmund Kelly of Liberty Mutual has argued that “to truly differentiate on the basis of service in the face of pure price competition requires a much deeper understanding of what customers really want.”
Based on this premise, one thing is clear: As the initial point of contact for most customers, the call center presents the first and vital step in understanding customer attitudes toward a business and in reducing attrition rates.
Call Center Metrics and How to Measure Quality
Businesses use a range of metrics to measure call center effectiveness and efficiency, including its ability to drive customer satisfaction and increase sales. Call center operational software typically provides many of these metrics, such as average call duration and first-call resolution. Management analyzes and evaluates performance against these metrics and assigns resources appropriately to improve performance.
Problems arise, however, when these metrics are used to infer customer satisfaction and, therefore, the success of the contact center. Call center managers might believe metrics such as first-call resolution, as assigned by the agent, are good indicators of performance and satisfaction, but unless they ask the customer immediately after the correspondence, they won’t actually know whether the customer was satisfied with the call.
The question is, how can you track the customer experiences that affect attitude and intervene when things go wrong to retain your customers?
The only way to know whether customers are satisfied is to ask them.
Asking only some of them, however, and allowing agents to determine whose feedback is collected, isn’t enough. To gather valuable and actionable data, you must ask for it regularly at “key moments of truth” in the customer lifecycle — not just once a year.
Feedback Management Technology Measures Customer Attitude
An increasing number of companies use Enterprise Feedback Management (EFM) software as part of their customer experience program to measure customer attitude.
Using EFM software alongside other customer relationship management (CRM) tools allows companies to automate and personalize the process of soliciting, capturing and analyzing customer feedback. The business can therefore request feedback automatically after each customer interaction and personalize it with data like the customer’s name and recent interactions.
Consider the following example of EFM at work in an insurer’s claims-handling contact center. When a claim’s status changes to closed, data about the customer and the specific claim is uploaded into the EFM system. The system emails the customer, inviting feedback on the claim experience. Because the system includes customer data, the invitation is personalized, and it’s clear the request is strictly about the experience the policyholder has just undergone. The combination of a personalized email invitation and its timeliness drives very high response rates and can improve overall customer experiences and business processes.
Once the policyholder completes the survey, two things happen:
- Any indication of dissatisfaction creates an alert to the claims team for appropriate handling. The team uses an online “resolution alert console” to view all relevant information in one area, including the customer’s claim history detail and survey responses.
- The system automatically updates its Web-based “dashboard” summary of all customer responses to reflect the latest response. Company staff can access the online dashboard portal to monitor customer attitude using both aggregate and detailed screen views. Management relies on these reports to understand where any systemic problems reside. Analysts can drill down into overview reports to see greater levels of detail, even individual responses, if necessary.
Driving Retention Through Quality of Service
The advantage of automating feedback is that you can proactively solicit comments and complaints from unhappy customers, rather than simply reacting to them. Absent this type of program, customers are more likely to leave than complain. With an EFM program, businesses can increase opportunities to identify dissatisfied customers in order to satisfy and retain them.
By understanding what customers want and which issues drive retention, business will realize the following benefits:
- growth in the number of products per customer or household due to the enhanced relationship built on trust;
- increased customer retention due to better complaint handling and increased loyalty;
- a spike in customer acquisition due to increased advocacy from existing customers who have been turned around; and
- greater visibility and control over the entire customer relationship, whether the sales model is direct or indirect.
Management can use dashboard reporting to track aggregate customer attitude over time. Given that changes in attitude precede changes in behavior, businesses that implement such a program have the tools to anticipate customer actions and change business processes before customers leave.
Using EFM, companies can drive competitive advantages based on quality of service rather than simple price-based differentiation. Capturing the experience as close to the interaction as possible and acting on the feedback received will drive increased response rates and customer retention, more closely aligning businesses with Edmund Kelly’s vision.
In the current economic environment, forewarned is forearmed. If only the CMO I met years ago had chosen to understand his customer churn rate rather than merely accept it.
Gary Schwartz serves as senior vice president of marketing at Confirmit, a provider of software that enables organizations to conduct customer feedback, employee feedback, and market research programs.
At our company, because pricing is so competetive, there is only one way to differentiate between our competitors. Customer service is the only way. When someone calls us and is listened to and given a superior level of service, thats how they realize they are dealing with a different company.