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Posted by Brian Koma on Mon, Nov 16, 2009
 Interest in Customer Experience rose dramatically across organizations we surveyed as part of our Vovici CE IQ study, increasing from 47% of respondents stating that Customer Experience Management (CEM) was very important to them in 2008 to 63% in 2009. Clearly the global economic contraction focused many organizations more tightly on understanding how customers are interacting with them, and this has put a dramatic new emphasis on CEM.
In fact, much to our surprise, more than half, or 55%, of respondents say that customer experience is a core differentiator that distinguishes their business from others in their market. Customer experience has arrived, and is now as important as traditional differentiators such as quality, service and staff capabilities. Despite the global economic contraction, price was not frequently cited as a core differentiator (18%).
When asked to assess the current benefits of CEM, customer satisfaction and loyalty were the most important, cited by 52% of respondents. Next was providing greater positive word of mouth (50%) and excellence in customer service (42%).
Leading the areas where organizations could do better, providing greater consistency of experience at every customer touch point was mentioned by only 36% of respondents. This is an area for improvement, as excellence in Customer Experience Management should drive such behavior. Top-line and bottom-line benefits from CEM are currently experienced by only about a third of respondents (35% and 29% respectively).
With organizations acknowledging how important CEM is to distinguish themselves from competitors, it is more important than ever to focus on those CEM best practices that build customer loyalty.
Note: The survey of over 200 organizations around the world is based on a convenience sample designed to identify the impact of CE best practices on loyalty, in order to prioritize those best practices. These results are illustrative and are not representative of any wider population of organizations. For more on the methodology, see Customer Experience Study Findings. Request a Call Vovici Survey Software and Web Survey Request a Demo
Posted by Brian Koma on Fri, Oct 23, 2009
 According to the Vovici CE IQ study, organizations that have the most loyal customers have approached primary research with a coordinated strategy of feedback management.
Standardizing on a common feedback management solution throughout the enterprise provides many benefits for organizations. First, they can use the platform to coordinate activities across different departments and functional areas, helping to eliminate redundant work. Second, a common platform enables the use of "guidelines and guardrails" that empower users with the ability to capture data within pre-approved parameters and branding standards. Finally, it enables easy information sharing among internal stakeholders while eliminating redundant costs for multiple platforms.
Once the platform is in place, organizations must agree on a set of metrics that will be used to evaluate the customer experience. These metrics can be drawn from one of the many existing CEM metrics that already exist, such as Net Promoter, ACSI, the Apostle Model, Customer Heartbeat and many others, or they can utilize a proprietary model. While we can nitpick each measure, and some are better than others for different industries and different organizations, consider this: the most important element of success is to agree on a set of metrics and then apply them consistently throughout the organization.
To achieve the highest levels of loyalty, organizations must also coordinate their feedback efforts across all parts of the organization to avoid fatiguing customers with requests for information. One large customer of a Fortune 50 firm brought to the CEO's attention that they were receiving 100 survey invitations a year! After that Fortune 50 firm became a Vovici client, they realized that they were fielding 450 separate customer feedback initiatives. By eliminating duplicate requests for the same or similar sets of information, organizations can reduce the number of surveys that are conducted while ensuring that response rates will increase to higher levels and avoid the erosion that many organizations are facing due to "feedback fatigue."
Finally, organizations with the most loyal customers track the metrics they measure over a period of time to determine whether or not they are moving the needle in the right direction.
Posted by Brian Koma on Fri, Oct 09, 2009
According to the Vovici CE IQ study, organizations that have the most loyal customers make sophisticated use of their Customer Relationship Management systems.
Nothing undermines loyalty of your customers more than when your organization demonstrates that it doesn't know who your customers are, what they have bought or how they have recently interacted with you. Too often survey authors ask customers to provide basic details about themselves rather than crossreference that information from a CRM system.
By associating known information about the customer - such as name, company name, product/service history, support interactions and other relevant data - with requests for unknown transactional, attitudinal or experiential data, organizations can engender much higher degrees of customer loyalty. This approach achieves two ends: First, it shows customers that you're treating them as individuals and not as numbers; second, it allows organizations to ask fewer questions but get better data. By no longer needing to ask customers to provide answers to questions which you already have answers to in a CRM system, it's possible to ask fewer questions but get better data by further reducing feedback fatigue. How valuable was this practice? With a 0.57 loyalty correlation, it was second only to having a strategic commitment to customer experience management.
Sadly, many organizations have not yet standardized on a single CRM system across the organization, and those that have fail to integrate other applications with the CRM system where appropriate, enshrining the CRM system as the central data repository for customer information.
Only by appending CRM data to attitudinal information can organizations build a complete 360 degree view of their customer and their customer's experience with the organization. These four practices truly leverage CRM to build customer loyalty.
Posted by Brian Koma on Fri, Sep 18, 2009
According to the Vovici CE IQ study, organizations that have the most loyal customers have a formal customer experience strategy and tactical plans to execute against it. In fact, out of 24 best practices studied, having a formal customer-experience strategy in place had the highest positive correlation (0.59) to the customer loyalty index. But it’s not enough to just have a strategy: you must also have planned programs and tactics in place to achieve the strategy through practical, measurable changes (0.44 correlation). Further, to be effective, a strategy and plan must have the support of senior leadership and be communicated throughout the organization (0.42 correlation). While three quarters of respondents to the study say that they have a CEM strategy, fewer than half have formal CEM programs in place along with compensation programs that align with CEM objectives. Many organizations appear to be paying lip service to the importance of CEM, with only 44% of respondents reporting that senior executives’ compensation is tied to the achievement of CEM goals. Having an executive sponsor and the buy-in of the senior leadership team are indispensable components of success, but they may take time to achieve. Ultimately, this commitment to a CEM strategy and plan must translate into the organization in a way that allows the brand promise to be fulfilled (0.37 correlation). Need help developing a customer-experience strategy for your brand? Please watch our research webinar, “Countdown to a CEM Program”. Remember, out of 24 best practices, putting a formal CE strategy in place is the single most important practice.
Posted by Brian Koma on Thu, Sep 03, 2009
According to the CE IQ study, organizations with the most loyal customers actively engage those customers in co-creation.
A new breed of customer now exists who demands to be heard and who wants to engage in a two-way dialogue with their vendors about issues that are important to them. As a result, organizations that have the most loyal customers include them in the ideation process around product and process improvement. Very closely related to this practice is having a formal process for obtaining customer input into the planning cycle, instead of relying on ad-hoc methods. Fundamentally, these organizations are engaging customers at every step in the process and, importantly, are providing customers with status updates on the ideas that they have submitted, as well as informing them if their ideas have not been put into an implementation plan.
In fact, each of the four co-creation best practices we studied are in the top 9 best practices with the highest correlation to customer loyalty out of all 24 practices reviewed.
How can your organization apply these best practices to build customer loyalty? First, create a formal process to engage in co-creation activities with customers, through quantitative surveys and through qualitative means such as social media and online communities. Share with your customers what steps your taking based on customer input, closing the feedback loop so that your customer are motivated to provide information on an ongoing basis.
Posted by Brian Koma on Fri, Aug 21, 2009
According to the CE IQ study, organizations with the most loyal customers not only measure and monitor employee interactions with customers but then share that feedback with employees (a strong correlation of 0.54 to the study’s loyalty index). This creates a closed feedback loop that allows customer-facing staff members to understand the impact of their interactions on customers and enables the creation of programs that allow employees to improve those interactions over time.  In addition, companies with the most loyal customers also periodically share VOC ( Voice of the Customer) information with employees across the organization, ensuring widespread understanding of the customer’s point of view. Taken a step further, these organizations also engage customers in two-way dialogues through online communities. As Jeffrey wrote in The Top Ten Reasons for Building an Online Community in 2009, “This allows a wide variety of individuals within the business to interact and engage with customers. Dell has 40 employees participate in a team called Communities & Conversations. CEOs always talk about making their organizations ‘customer centric’: by talking to customers and evangelizing their viewpoints across the company, as these Dell team members do, the organization truly becomes centered on the customer.”
Finally, organizations with the most loyal customers also recognize the link between satisfied employees and loyal customers by measuring employee satisfaction on a regular basis. Satisfied and loyal employees reflect their positive attitudes and good behaviors to customers, who in turn increase their loyalty to the business. Averaging these four best practices together, the resulting index has a 0.65 correlation to customer loyalty, highest of any of the six practice areas examined. Clearly, employee-customer engagement is a key to unlocking greater customer loyalty.
Posted by Jeffrey Henning on Thu, Aug 20, 2009
- Employee-Customer Engagement – the extent to which customer input is shared with customer-facing employees and how that input is used to modify employee behavior
- Co-Creation - how organizations engage their customers in providing formal input on products and services and the extent to which they collaborate with customers in jointly creating products and services that best meet customer needs
- Strategic Commitment - the level of commitment an organization has to measuring the customer’s experience and listening to the Voice of the Customer
- Customer Relationship Management – the extent to which organizations use CRM data in their feedback efforts
- Feedback Management – how organizations gather, measure and track customer feedback and the metrics associated with this feedback
- Voice of the Customer – the extent to which the organization gathers, uses and shares VOC data within the entire organization
We then correlated each best practice against a loyalty index comprised of an average of these four customer-loyalty metrics: Not surprisingly, the traditional loyalty measure, willingness to repurchase, had the highest correlation to the overall index. Nor is it surprising, given the recession, that increasing purchase amount had the lowest correlation to the index and the lowest level of strong agreement, with just 5.2% of respondents strongly agreeing. Here, then, are the correlations against the six practice areas: Each practice area had a strong correlation to loyalty. Interestingly, customer relationship management, despite its maturity, remains difficult for most organizations to implement well: only 6.0% of respondents strongly agreed that their organization followed the four CRM/CE best practices. Surprisingly to us, the highest level agreement was for a strategic, executive-level commitment to Customer Experience Management, with strong agreement of 18.1%. In future posts, Brian Koma and I will look in detail at each CE practice area and how they distinguish organizations with highly loyal customers from those without.
Posted by Brian Koma on Thu, Aug 06, 2009
 In the most challenging economic environment in generations, organizations are more focused than ever on retaining customers and maintaining existing revenue. Improving customer loyalty has replaced growth as the focal point for many organizations, and many businesses have put significant resources into implementing Customer Experience Management (CEM) and Voice of the Customer (VOC) programs, or are in the process of doing so. But what constitutes success in this arena? Of all the programs that organizations have implemented, which are most effective at driving customer loyalty? The Customer Experience IQ (CEIQ) study, conducted jointly by Vovici and CGA, pinpoints the most effective elements of customer experience programs and answers these important questions: - Are Customer Experience Management and Voice of the Customer programs effective at creating customer loyalty?
- What are the most effective methods for creating customer loyalty in the first global economic contraction since 1945?
- What specific steps can organizations take to create loyal customers based on best practices from around the globe?
Derived from quantitative data obtained through an online survey conducted among more than 200 companies around the globe, the Customer Experience IQ (CEIQ) report identifies the six secrets of highly effective customer experience programs that every company can use to create true customer loyalty. Whether your organization has already implemented a Customer Experience Management (CEM) or Voice of the Customer (VOC) program or is just thinking about it, the elements uncovered in the CEIQ study can help you dramatically enhance the effectiveness of your customer loyalty programs. Key Findings - The downturn has caused an upturn in interest in measuring the customer experience. In 2008, just under half (47%) of survey respondents said that CEM was important, while in 2009, almost two of out every three organizations (63%) say CEM is important to their business.
- There’s a disconnect between what organizations say and what they do when it comes to CEM/VOC programs. Almost 75% of respondents say that they have a CEM/VOC strategy, yet less than half of respondents say they have formal programs and compensation systems in place to implement the strategy.
- Only those organizations who have implemented formal CEM programs are able to translate those activities into higher customer loyalty. It’s not enough to merely have a strategy – it must be articulated throughout the organization and executed in a coordinated fashion.
- The most effective CEM programs include a standard set of metrics by which the customer experience is measured. Organizations with the highest customer loyalty use one of the many standardized measures (NPS, the Apostle model) or a set of proprietary metrics, in order to apply consistent measures across the organization.
- Organizations with the highest customer loyalty integrate what they know about customers from Customer Relationship Management (CRM) systems into their feedback efforts. CRM integration enables personalization of surveys and invitations and reduces survey fatigue and helps to maintain high response rates.
- Organizations with the highest customer loyalty share CEM and VOC feedback across organizational boundaries throughout the organization. Feedback is not held in silos; rather it is shared freely throughout the organization and viewed as a strategic corporate asset.
- Organizations that have the highest customer loyalty constantly obtain feedback on the performance of customer-facing employees and then share that feedback with those team members. By doing this, they are able to provide constructive suggestions on how the individuals can improve their performance
- Finally, organizations with the highest customer loyalty engage in a co-creative process with their customers. They have a formal process for obtaining customer input and then incorporate those ideas into strategic initiatives and tactical process improvements.
Methodology Vovici and CGA conducted an online web survey of 208 organizations between May 20th and June 2, 2009. Respondents include a wide variety of organizations, including small (1-19 employees), medium (20-499 employees) and large companies (500+ employees). Over 62% of respondent organizations are located in North America and United Kingdom, with the balance participating from Asia/Pacific, Africa and South America. Respondents hail from a diverse set of industries, including Marketing, Services, Financial Services, Healthcare, Manufacturing, Technology, Retail and a variety of other segments. Participants were decision makers who have a comprehensive view of their business operations. Over 70% of respondents hold senior-level titles, including Manager, Director, Vice President or President/CEO/MD. Job responsibilities ranged from marketing, customer service, operations, research and development, administration and market research. Respondents were provided with an incentive of an early copy of the results of the survey in consideration of their participation. No monetary incentive was provided to any participant. The results are not statistically representative of any market but provide strong qualitative indication as to the effectiveness of different customer-experience best practices.
Posted by Rod Morris on Thu, Jul 16, 2009
 Last month we completed new research that shows that business leaders are placing more importance on customer experience management during the global economic downturn. Forty-seven percent of respondents said that customer experience management (CEM) was important to them in 2008, and for 2009 this number increased to 63% of respondents. This is evidence that the recession has driven many organizations to focus more closely on understanding how customers are interacting with them, putting increased attention on CEM and Voice of the Customer (VOC) programs. With our partner CGA, a customer-experience consultancy in the United Kingdom, we surveyed more than 200 organizations between May 20 and June 2, 2009, to determine what the most successful organizations are doing to achieve measurable improvements in customer loyalty. The results of the Vovici/CGA Customer Experience IQ study strongly show that CEM and VOC programs can be effective at maintaining and increasing customer loyalty even in a very difficult economic environment. We are hosting a webinar on the results of this study, highlighting the seven best practices of organizations with highly loyal customers; you can sign up for this one-hour webcast, Improving Your Organization's Customer Experience IQ, which will be on Tuesday, July 21st, 2 PM ET/11 AM PT: http://www.vovici.com/webinars/20090721.aspx
Research findings from the Customer Experience IQ study also reveal that, out of 24 best practices that were surveyed, possessing a formal customer experience strategy with tactical plans to execute against it is the best practice most highly correlated to high customer loyalty. And what better way to create such a plan than to look at the seven best practices with the highest correlation to customer loyalty? 1. Creating a formal customer experience management strategy and executing against it
2. Integrating customer relationship management data into feedback efforts
3. Including customer ideas for both strategic initiatives and tactical process improvements
4. Defining planning cycles to include formal processes for obtaining customer input
5. Systematically sharing feedback with customer-facing employees
6. Engaging customers in co-creation
7. Sharing Voice of the Customer data across organizational boundaries
These findings help us narrow our advice to organizations seeking to improve customer loyalty. Every organization has finite resources; while it would be wonderful if an organization adopted all 24 best practices, they need to prioritize those that they are not currently doing that will have the biggest impact. The Vovici/CGA study also shows that organizations with the highest customer loyalty share CEM (Customer Experience Management) and VOC (Voice of the Customer) feedback freely throughout the enterprise. By coordinating feedback efforts, organizations are less apt to repeatedly contact customers with redundant requests, thus eliminating feedback fatigue and keeping customers engaged. Solutions such as Vovici v4 address this by offering a common platform that enables individuals to obtain feedback and easily share it throughout their organization. Look for more to come from us in the coming weeks as we continue to analyze and present this important research.
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