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Customer experience management-promoting loyalty

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“The ultimate goal is not to improve a score, but to create customers for life,” Cottle says. “For that, a company needs a holistic approach.” The use of big data is not so much about having a lot of data stored, but about being able to access and use it. “Ideally, the analysis should not just produce a set of results, but tell the company what to do,” Cottle adds. “That might be to up-sell, cross-sell, rescue or predict some action in the future. Interpretation is critical.”

Root cause analysis

Satmetrix offers a software customer experience solution with the Net Promoter Score as its focal point. Its analytics platform tracks NPS with other performance indicators to relate customer experience with business outcomes. “We take data from across multiple touchpoints and channels and help companies know what to do by looking at the root cause of their customer feedback,” says Laura Brooks, PH.D., VP of innovation and strategy at Satmetrix. “Then our software highlights the recommended insight and action.”

Experian is known for its credit reporting and scores, and has long recognized the value of customer loyalty, especially through difficult economic times. Its customers are banks and other businesses that must manage financial risk, as well as individuals seeking information on their credit. The Credit Services and Decision Analytics (CSDA) group at Experian had identified 11 customer loyalty drivers, and wanted to improve both its NPS and each of the loyalty drivers.

By following up on information obtained from surveys of its client base and transactional surveys after customer interactions analyzed on the Satmetrix platform, Experian was able to increase its NPS dramatically from 10 to 36 between 2006 and 2012. “The company has driven the message throughout all levels of its organization,” says Brooks. “It developed a training program based on client promise and daily work, and asked each individual to consider how they contributed. Everyone in the company took the two-day training.”

Measuring maturity

Distribution of the analytics information is at the heart of an effective customer experience management program. Surveys from either promoters or detractors are sent to account teams by the Satmetrix application, and customers are contacted promptly once the appropriate employee receives the information. Data and comments are sent to members of the sales teams, which generate action plans.

Experian dedicates considerable effort to analysis of text responses. “These comments contain a wealth of information,” Brooks says. “Many customers write paragraphs, suggestions and things they would like, even if they are promoters.” A client advisory panel provides voice of the customer information that is also included in analyses carried out by Satmetrix software. Two new products were introduced as a result of that input. One allows renters to gain credit via their on-time rental payments, and the other enables lenders to quickly implement requirements contained in new legislation.

Over time, companies can take the NPS to the next level. Satmetrix has developed a measure called NP360 that assesses a company’s maturity curve. “The companies that are more mature spend less time handling detractors,” Brooks points out, “because they have few of them. They are not always in recovery mode, but can focus on innovation and creating the next positive performance that will mobilize the promoters.” Those individuals can be leveraged to be the voice and a surrogate sales force. “When you get this promotional spiral, you can capture that momentum, and the marketing seems to happen almost spontaneously,” she adds.

Behavioral data too

NICE Systems provides a platform that collects multichannel, direct customer feedback and adds information obtained from CRM systems. “The direct customer feedback is a good start,” says Matthew Storm, director of innovations & solutions at NICE, “but there is also a lot of information recorded in contact centers. By analyzing that information, you can infer a great deal about their moments of dissatisfaction, or what prompts them to buy more, and so on.”

In addition to direct and inferred feedback, NICE also collects behavioral data and incorporates it into the analyses. “If a customer expresses a negative attitude toward a product or service but then buys it again, that is an important part of the picture,” Storm says. “Some customer experience management systems do not include behavioral information.”

NICE collects and integrates all three types of information—direct, inferred and behavioral information. “We consolidate this information and make it actionable to different parts of the organization,” Storm explains. “If the customer has given feedback about an employee, it is sent to the supervisor and used as a coaching opportunity. If the feedback is about an e-commerce process, it would go to the website team, and if it’s about the product or service, it goes to the marketing department or product development.”

The information collected can be fed into other solutions from NICE, such as NICE Customer Journey Optimization, which allows companies to make sense of the cross-channel behavior of their customer base. For example, changes in behavior patterns can be detected, which in turn allows companies to modify their operations. Key moments such as the point at which a customer might be about to churn, can be identified, so that the company can intervene with a problem-solving action or an appropriate promotional offer.  

The Net Promoter Score

The Net Promoter Score (NPS) was developed by Fred Reichheld of Bain & Company and Satmetrix. It is derived by asking customers how likely they are to recommend the company, product or service to friends or colleagues. Ratings are usually on a scale of 0 to 10. A score of 9 or 10 is considered to indicate a loyal and enthusiastic customer; those individuals are referred to as “promoters.”

Ratings of 0 to 6 indicate unhappy customers (“detractors”) who might deter others by voicing negative comments. Individuals with scores of 7 or 8 are considered “passives.” The NPS is calculated by subtracting the ?percentage of customers who are detractors from the percentage who are promoters. If 60 percent promote the brand and 20 percent detract, then the NPS is 40 percent. Passives are not counted.

Analyses by Bain indicate that the NPS leaders in their categories had double the growth of their competitors. The correlation is strongest under certain conditions—for example, in mature industries where the customers have choices. Under other conditions, it is not as reliable, and economic forces also have an impact on the correlation. Some studies have shown that loyalty is a better predictor of ongoing customer engagement than other measures.

Not everyone is on board with the NPS as a loyalty measure. Some say that it is no more accurate a predictor of growth than measures such as satisfaction or the reported likelihood of a repeat purchase. NPS also does not measure actual behavior. Customers might say they would ?recommend the company, but not do it. In addition, a score of 0 has the same impact as a score of 6—both are counted as “detractors.” Finally, the same NPS of 20 percent can be produced either by having 40 percent promoters and 20 percent detractors, or by 20 percent promoters and no detractors at all, which may not be equivalent.

Nevertheless, the NPS is a simple and well-tested measure, and may be more stable than others, such as satisfaction, which typically relate to a specific transaction. When the complete methodology is employed, including discerning reasons for the ratings and closing the loop to effect change, the NPS can be a powerful tool.

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