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Authentic. Unvarnished. Straight-on. These words describe the power of the voice of the people—now being heard in political debates, in news coverage, and on the Internet—as a blending of old and new media reinvigorates citizen participation in their communities. The same power has the potential to shake up business as the Voice of the Customer (VoC) is felt in new ways. So far few companies have harnessed this force despite nearly all companies collecting customer feedback. Yet when executives can hear their customers in the customers' own words, the urgency, earnestness, and nuance come through. How real people are affected comes through. Why it matters to the customer and why it should matter to the company comes through. And executives act. To most executives, customers are essentially invisible. Most executives are isolated and have to rely on the opinion of people close to them or on anecdotal information for a sense of what is going on with customers. The results of a 2006 IBM study are not surprising to us. Of the executives participating in their study 79 percent had only superficial understanding of their customers. It's obvious that the 21 percent of executives, who do know, have a huge advantage in this customer-driven competitive environment. What is surprising is how many companies actually collect customer feedback. A Customer Champions in Europe Companies 2001 study referenced by Gartner Group showed that 95 percent of the companies collected customer feedback. But few did anything with it, giving another huge advantage to those that do. Only 50 percent alerted their staffs. It gets worse. Only 30 percent used the insight gained, only 10 percent made improvements, and a mere 5 percent told their customers of the change. Why is that? Why do so few companies use the feedback they get? We think that there are five major reasons for so little action. First, customer research asks WHAT, HOW, and WHO more than WHY. For all the research that is typically done, it is rare that companies drill down deep enough to know WHY people do what they do—or what they are likely to do. Or that they get to listen to the customer's story in the customer's own words. Second, customer feedback relies primarily on multiple-choice instead of open-ended questions. Instead of really listening to customers themselves, customer feedback is predominantly point-and-click. The open-ended questions that there are, are read by machine. With the rise and proliferation of low-cost online surveys, the qualitative research that used to inform and focus quantitative surveys is not so prevalent. In addition to learning what a customer would say without prompting, qualitative work in the past helped calibrate the formerly more costly quantitative studies to make better use of a company's money. Now a primary reason is to keep from wasting a customer's time. Third, the "customer" research is company-focused rather than customer-focused. Paradoxically, the research most companies do to understand customers has as its main priority the offering and the company, from the company's perspective instead of from the customers' perspective. It is not just that research isn't as in-depth as it could be or that the results are presented in aggregate—as the first two reasons suggest. Fourth, customer feedback isn't integrated operationally. In many companies the customer research effort is fragmented and disjointed—just as the operational control in sales and marketing and customer service is fragmented and disjointed. It isn't orchestrated across the entire customer lifecycle at the individual customer level. The context for the insight gained just isn't there—where in the lifecycle, what had just happened, and what happened next. Intelligence hasn't been built into the process. Fifth, customer research is generally not as strategic as it could be. A company's resources can be stretched very thin if it hasn't focused on feedback from customers the company wants more of, as much as it could, or if it hasn't used customer research to inform strategies more likely to be profitable to build the relationship with customers. That makes for results that may be seen as not reliable enough or specific enough or actionable enough. It is not the relevant intelligence it could be. All of these contribute to feedback lost in a sea of data and research that sits on a shelf. We all know that when an individual customer does get the attention of top management, or when a surrogate like the media or consumer action group puts attention on a customer's plight, action is usually taken. In general when action is taken, research shows that the customer is 50 percent more likely to repurchase than the average customer. There
is more good news for companies who fix customer issues. A company
who makes a good effort and has a record of good performance, is
as likely to be defended as those companies who don't make a good
effort and don't have a record of good performance, are criticized.
It is commonly accepted that if people have a problem, they will
tell nine more people about it. Now that people have Internet communities,
social networks, and blogs as outlets, that number actually looks
small! Mass opinion can quickly destroy markets so painstakingly
grown over years, as the once personal telling is now reverberated
over the Internet in a permanent digital record. It has always been important to know the answer to WHY. But in today's environment, where the power of the Internet has transformed how business is done and leveled the technological playing field, it is more important than ever. Now what customers really think is recognized as critical. Connecting with customers and building relationships with them in an ongoing process across the customer lifecycle is a business imperative. It is especially so in high-value business-to-business sales and marketing, our primary focus.
Why
Ask WHY? The answers to WHY lets you know where you stand with customers; helps you know what to promise, what to deliver to strengthen your relationships; gives you the nuance you need to differentiate your product/service in the marketplace. With WHY you increase the likelihood customers will buy what you have to sell-again and again. Asking top priority customers WHY in in-depth, one-on-one Voice of the Customer interviews brings more nuance, meaning, and intelligence to WHAT you are selling, WHO you are selling it to, and HOW you deliver what you sell. Voice of the Customer research augments traditional research in product/service development, market assessment, process improvement, customer satisfaction, and customer feedback tracking to make it more actionable, powerful, and relevant. Through the Religence Framework for Customer Relationship Intelligence (CRI), Voice of the Customer feedback is linked to strategy execution and operational results in our operational CRI tracking system.
When
You Ask WHY, Be Prepared to ACT. Here are three ways we can help you act now to align for success in putting a value on customer relationships to drive profit:
The
Advantage in Asking WHY. People
Appreciate Being Asked WHY. To get started now learning where you stand with customers, what's important to them, what to promise, and what to deliver to "develop" the relationship, we invite you to contact us. Our team of senior people is ready to help you listen to your customers, deliver more value, and identify the customers you should cultivate—who the most profitable customers are and why and what their potential is for profitable growth. _________
Another excellent resource is our CEO’s new book Customer Relationship Intelligence: A Breakthrough Way to Measure and Manage Sales and Marketing, which explains how to build Voice of the Customer feedback into our operational CRI tracking system. __________ About the Author and Religence: Linda Sharp is CEO of Religence, Inc. Linda has run her own marketing firms for 30 years, building a strong track record with Fortune 500 clients and understanding success in marketing with a mathematician's eye. The Religence Framework was born of her five-year odyssey to quantify marketing and has resulted in a business process patent application and the formation of Religence to commercialize her discovery. A sales and marketing innovator and integrator, Linda was well ahead of the movement to customer-focused thinking, having pioneered the use of Voice of the Customer research. She's built Voice of the Customer feedback into the Religence Framework, taking yet another pioneering step. Learn more about her ideas in her new book Customer Relationship Intelligence: A Breakthrough Way to Measure and Manage Sales and Marketing. Religence is a customer-focused performance management consulting firm specializing in Customer Relationship Intelligence. The Religence Framework links strategic planning to operational execution and customer relationship metrics to profitability for breakthrough business-to-business sales and marketing performance.
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