The five keys to customer experience

When discussing the customer experience, many businesses believe their problems can be solved by spending lots of money on a good CRM system. While an important tool, a CRM system should only be one component in your overall strategy to improve the customer experience. CRM systems don’t address or solve the real issues around customer experience problems. The customer experience entails far more. It is the series of interactions and exposures a customer has with your company that cumulatively creates the customer perception. The customer perception is how an individual customer feels about associating with your company. It’s about the reality of the customer experience, not your intention or assumptions.
Here are five things businesses must do to achieve a superior customer experience:

1. Know Your Best Customers
2. Review Your Customer Communications
3. Listen to All Customers
4. Create Happy and Customer-Centric Employees
5. Reflect Your Brand Values

#1 – Know Your Best Customers

Did you know that 80% of your profits come from 20% of your customers? [1] To identify this 20%, you need to know your metrics:

• Do you know your customer attrition rate?
• Do you know why customers are leaving?
• Do you know what happens to your bottom-line when they leave?

Look at your current customers – and then do your best to define the characteristics of your best customers.

• Do you have customers who are repeat buyers of the same service or product?
• Do you have customers who invest more in your company than others?
• Do you have customers who haven't purchased anything in quite some time? (Do you know why?)

Don't just measure revenue growth. Look at customer lifetime value rates, along with retention rates, for true measures of success. If you create a better customer experience, customers will stick around. Plus, you’ll know who your ”best customers” are.

Action items:

1. Review your customer data – know your top 20%.
2. Determine your Customer Lifetime Value (CLV).

Here's a formula* to work from:

M = margin or profit from a customer in a certain period
R = your retention rate (most companies are between 60-90%)
I = discount rate (your company's cost of capital, usually a rate of 8-16%)
*Source: Gupta, Sunil and Donald R. Lehmann, Managing Customers as Investments, Wharton School Publishing, 2005.

# 2 – Review Your Customer Communications

Let’s look at this one from Mary’s perspective.

Mary Customer becomes a customer after following a friend's recommendation. Mary receives some “new customer” information which imbues a warm, friendly tone and makes her feel good about her choice. Then, Mary receives her first invoice. The logo is there – but nothing else about the invoice provides the same warm feeling. She's also confused about a charge. She decides to check out the website for answers but finds the online experience confusing, contradictory, and frustrating.

Finally, she calls the call center only to get lost in the automated dialing system. If she does reach a real person, are they equipped with the right scripts and answers to take care of her concerns?

A month later, Mary receives another copy of the bill with a late fee notice.

At the end of this, how do you think Mary would rate her customer experience? Do you think she would remember the recommendation from her friend or the warm, friendly new customer materials?

No – Mary would recall the frustrating interactions she had with the company revolving around what may have been a simple question about her bill.
If you're ready to truly tackle reviewing your customer communications – you have to think big and small. Know what you're evaluating. Its one thing to have great-looking marketing pieces, but your message needs to live up to what your company promises. If you don't know what your company is promising, then how do you know what tone and agreement you want to reach with customers?

• Review your pre-sale communications.

Think of your customer communications as anything that touches or interacts with your customers. These might include:

• Direct mail
• Marketing brochures
• Web site
• Advertising

Review these materials from your customers’ viewpoint. Are you discussing what's important to them?

• Review your regular customer communications.

These come in many forms, not limited to sales and promotional items. These might include:

• Newsletters
• Email communications
• Blogs
• Invoices
• Statements
• Renewal statements
• Other regular publications

Review every “touchpoint” for consistency in messaging. An easy one - do you say thank you on your invoices? Remember Mary? Review your invoices and statements for ease of understanding, too. Include contact information whenever it might be helpful – on invoices, in your emails, on your newsletters, etc. Also, blogs can create a wonderful dialogue with your customers. With the right promotion and accessibility, blogs provide a valuable barometer of how your company is doing in your customers’ eyes.

• Review your face-to-face, telephone and office communications.

This one's the head scratcher for many. What do these really have to do with customer communications? Again, back to Mary. I bet if those call center scripts were a little clearer, she would have felt better about the whole experience. Some overlooked areas to review:

• Company signage
• How your telephone is answered: by your receptionist, call center, etc.
• Your emails - automatic signatures, formatting, etc.

Action items:

1. Look for opportunities to quickly improve your communications by putting customers first.
2. Provide feedback mechanisms.
3. Be relentless in your customer-focused communications.

# 3 – Listen to All Customers

Your customers are your only true profit center, so keeping their needs and wishes in the forefront will ultimately create increased revenues.
Many companies think they listen to customers, but how many customers truly feel heard. More often than naught, companies produce marketing materials or provide a service without asking customers what they really want.

• Research has an expiration date.

You've conducted consumer research to find out more about your customers, great! But is that really listening? Spending lots of time and money on studies that sit on your desk for months doesn’t help your customers.

• Just ask!

Really listening to your customers means giving them opportunities to provide feedback. Is there a feedback form on your web site and a plan to follow up with customers once you've received their inquiry? What about your call centers? Is the customer offered a chance to speak with a manager at the end of the call? A great question to start with: "What can I do to provide you with better service?"

The power of a check-in call or letter goes well beyond listening. Even if you don't hear back from customers, these actions show you care about what they have to say.

• I can't get no satisfaction.

Satisfaction surveys don't really cut it. Although good for benchmarking purposes, they don't reveal how your customers truly feel about an experience. In fact, 80% of customers who switch providers express satisfaction with their previous provider. [2]

So what does that really tell you? Your customers may be satisfied enough not to complain, but not enough to stay.

Action items:

1. Train your front-line employees to ask customers for feedback.
2. Ensure customers have a way to provide feedback easily.
3. Show customers you’re listening.
4. Don't take it personally, just keep evolving.

Hearing and acting on your customers' concerns and wishes provides you a roadmap to success and profitability. So make it easy for them, and don't forget to say thank you!

# 4 – Create happy and customer-centric employees.

Ask people about significant customer experiences, and chances are they will recount stories dealing with employees. These stories either praise the good work of empowered individuals who solved problems or condemn employees who were at best helpless, and at worst hostile.
Employing people who care about the company, product, service and, most importantly, customers, is powerful and crucial to on-going success.

• Uninformed Employees = Angry Customers

Typically, companies don’t provide employees with enough information or power to serve customers well. We've all heard the laundry list of why they can't give us the discount we were promised; process our parking validation; find something special we're seeking; correct the inaccuracy on our billing statement.
Suddenly, our problem is thrown back on us along with their problems, which is beyond frustrating.
Companies who empower employees and keep their front-line force informed, help foster real relationships between the company and customers.

• Employee Turnover = Profit Loss

Studies link employee satisfaction rates to customer satisfaction rates. Wegman's, is an east coast grocery store chain that experiences significant growth each year. They put their employees first and they're proud of it. For instance, their employees are sent to Italy to learn about the cheese they sell. In turn, customers appreciate their knowledge. Customers are treated well and return in droves. Wegman's customers won't be wooed by low-cost alternative or the latest fad, because they have a true relationship with the employees and brand.
Likewise, empowered employees are loyal, which positively affects the bottom line. 70% of the reasons why customers leave companies stem from employee turnover issues. [3]

Action items:

1. Set expectations for employees and provide tools to help them succeed.
2. Ensure employees can provide customer feedback easily.
3. Train. Communicate. Then do it again.

Employees are the central link to your customers. They can make or break your customers’ perception in just one interaction. Make sure your employees know that they are empowered and appreciated, and they will create meaningful relationships with your customers.

# 5 – Reflect Your Brand Values

What is your brand? What does it mean? Once you have a clear vision of your brand, take a look around your company. Do your marketing and advertising materials reflect your brand values? What about your website? Do your values come through? Or are they a mix of messages? Take a look at the mundane, everyday communications with your customers. Does your invoice feel like that of a company going “beyond the call,” so to speak? How are your phones answered? If you send out a regular newsletter, review it from the brand perspective.

• Your brand is your company

Strong customer experiences and strong brands go hand in hand. It's the tangible (like communications) and intangible (like the tone of the customer service rep). It's as much about listening as it is about communicating. Never underestimate the power of your customers' intuition. If you're not living the promise, then don't say it. Your customers will see that their experiences aren't consistent, and they'll walk away.
When in doubt, ask an expert. Find someone in your company who really gets it; someone who is already living the brand. Ask them to serve as a review point for communications or sticky situations (like sponsoring a controversial event.) For consistency and quality, have your “brand guru” review anything and everything before it leaves your company.
Action items:

1. Do a communications audit.
2. Create a brand manual.
3. Assign ownership to the brand guru.

Your customers appreciate you when you appreciate them. Create relationships by remembering your customers as individuals with whom you have one-on-one relationships. Keeping these five keys to a superior customer experience in mind will help you develop meaningful and powerful win-win customer relationships.

About Vox
Vox is “the voice of customer experience.” For more than ten years, we’ve helped clients increase customer retention and profits by strategically and measurably improving the customer experience. Business success depends upon a company’s ability to create a more compelling, long-lasting customer relationship. A focus on retention allows you to lower customer acquisition costs while dramatically increasing the size of your customer base and overall profit margin.

Vox helps you keep more of your profitable customers by “walking in their shoes.” Through our exclusive Customerspective™ Audit, we analyze the nature of your customer experience by scouring the different communication channels, employee processes and touchpoints that ultimately create the customer perception of your company. By methodically examining and understanding the strengths and weaknesses within a customer lifecycle, we make targeted recommendations that deliver high ROI for your business.
We help clients implement experiences that are human, flexible and simple – with results that are profitable.

Vox helps businesses improve:
• Website Design and Usability
• Customer Interaction <http://www.voxinc.com/how-vox-can-help/
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• Call Center Process <http://www.voxinc.com/
how-vox-can-help/call-center-process.htm>
• Customer Communications <http://www.voxinc.com/
how-vox-can-help/customer-communications.htm>
• Employee <http://www.voxinc.com/how-vox-can-help/
employee-channel-partner-communication.htm> Engagement
Vox delivers increased retention, ROI and profits by creating a unified customer voice and transcendent customer experiences. Learn more by calling 312-676-1300 or by visiting www.voxinc.com <http://www.voxinc.com>

References:
[1] Customer Retention: A Business Imperative, Baxter Strategies, 2004
[2] Loyalty Based Management, Frederick F. Reichheld, 2003
[3] Linking Employee Loyalty with Customer Loyalty, TheWiseMarketer.com, August 2003