Modern CFM: How to Gain Business Benefits from Customer Feedback Jukka Hekanaho, PhD and Federico Cesconi This paper is brought to you by: About CustVox CustVox AG, is a global specialist in Customer Experience Management (CEM). The company’s high performance solutions are designed to measure and report on customers point of view, capturing insights on touch-point-experiences when and where they occur, and delivering them continuously in real-time. http://www.custvox.com [email protected] Follow us: Twitter: CustVox Facebook: http://www.facevox.biz This paper is brought to you by Custovox Jukka Hekanaho, PhD and Federico Cesconi // White Paper Table of contents Executive Summary iii Introduction 01 Definition of Customer 02 Feedback Management The Process of CFM 02 Criteria of Modern CFM 05 A Maturity Model for CFM 08 Conclusion 12 About the Authors: Jukka Hekanaho 13 About the Authors: Federico Cesconi 14 Bibliography 15 iii. Executive summary Customer Feedback Management (CFM) is the core component of any customer-centric business strategy aiming to improve customer experiences. The purpose of CFM is to understand what kind of experiences customers have with the company and to use this understanding to improve the experiences. CFM used to mean a static, one-shot,standard market research survey. However, in today’s fastmoving, interactive, multi-channel world this gives no longer organizations a competitive edge. Instead, what is needed is a holistic company-wide practice that captures, analyses, and integrates feedbacks in real-time and over all touch points and customer situations, thus enabling a fast 1:1 response and an effective dialogue with custom- 1. Do not overload the customer. Ask only feedback which is relevant to customer’s situation. 2. Make giving feedback easy and natural. 3. Build a 360 degree view. All touch points, all kinds of customers, and all kinds of situations. 4. Collect all types of data, including free text answers and voice recordings. 5. Never discard feedback. 6. Produce actionable insights of the feedback. 7. React to feedback and do it fast. The customer is waiting. 8. Use feedback for continuous enterprise improvement. ers. Needless to say, this is not an easy task. 9. Measure and manage the whole CFM process, especially the outcomes. To succeed organizations need to build a modern Remember, feedback is a free gift from your CFM practice that satisfies 9 criteria, which collectively enable organizations to effectively use customer feedback to enhance customer experiences and to improve bottom line: customer. Use it wisely, show that you value his feedback and you have already taken the first step to improve the loyalty of the customer. Do this systematically, on an enterprise-wide scale, respecting the criteria above, to build a customer experience management practice that improves your bottom line through increased loyalty, higher share of wallet, and increased word of mouth. iii | Executive Summary Introduction Customer Experience Management (CEM) is a phrase which seems to be on the lips of almost every marketing professional. An increasing number of senior managers have CEM on their 01. Yet although more and more business leaders seek growth through an increased focus and investment in CEM, most companies are still struggling to turn their CEM initiatives into action- agenda as a tool to be implemented to improve able business practices, which bring benefits to customer service delivery and the competi- the company. A more startling fact is that the cus- tive position of their company. There are sound tomers of many businesses are not noticing any reasons for the current popularity of CEM. In change in the customer experience. In fact, recent fact, several recent studies, e.g. (Stratify Group, observation shows that whilst 56% of CEOs do 2010),(Boulanger, 2008) (Temkin, 2009) think their company is customer centric, only 12% (Zabin, 2008), have shown that increased famil- of their customer base agrees (Hunsaker, 2010). iarity and intimacy with customers and a better This is just the last observation in a long chain of customer experience delivery drive customer results that demonstrate that most CEOs depend loyalty, recommendations and wallet share. entirely too much upon internal KPIs, and are not receiving relevant outside-in view of the customer As all these factors have a clear impact on the experience, which is required to guide their busi- bottom line, customer experience is not just about ness towards a more customer centric direction. being nice towards the customer. Customer experience is, or at least should be, a comprehensive One of the primary reasons that CEM initiatives business strategy that delivers financial returns often do not perform optimally in the long term, and improves your competitive position. can be traced back to the way in which the power Introduction | 01 02. of customer feedback is harnessed. Most often, method for collecting customer feedback, but, in customer feedback is collected in a static way, our view, this is just the initial phase of CFM and not respecting the customer’s process with the comes short of the full impact that CFM should company. In addition, the feedbacks are not rigor- have. Companies do not, or at least should not, ously analyzed and the insights are not system- ask for customer feedback just to collect it. No, atically turned into practical actions. All these like the name says CFM is about ‘Management’ facets inhibit the effectiveness and the actual use of feedbacks. Hence, CFM refers to the way feed- of customer feedbacks and lead to deficits in the back is queried, collected, stored, analyzed, mea- customer experience delivery. sured, reported, managed, and how it is finally put This white paper discusses the modern use of Customer Feedback Management (CFM) as the key component of a viable CEM solution, and the role of CFM in a successful customer management scenario. Definition of Customer Feedback Management The purpose of CFM is to understand what kind of experiences customers have with the company and to use this understanding to improve the experiences. Some people view CFM only as a into practice to improve the customer experience delivery. The Process of CFM In order for a company to deliver an exceptional customer experience, it needs to understand the wants and needs of different kinds of customers, across a range of potential interactions. The required level of sophistication, including the capture of a proper level of data at the different touch points and at different stages of the customer’s process, cannot be accomplished by 02 | Definition of Customer Feedback Management / The Process of CFM a simple ad-hoc customer survey. The business needs to continually listen to the voice of its customers, keeping their finger upon the pulse of the customer’s experience. In addition, the feedback needs to be analyzed and turned into actionable 03. feed internal systems, making the relevant information available to the right people, so that they make the right decisions to improve the customer experience. Only then can you gain business benefits from the feedbacks. insights. After which, the findings must be used to Figure 1: CEM Framework The Process of CFM | 03 04. In order to characterize the use of customer feed- • Analyze – By performing analysis upon gath- back, we use the CEM framework in figure 1.CEM ered feedback, together with other internal can be enabled by implementing a simple five customer data, using methods such as simple step process, broadly defined as capture, analy- statistics, data mining, text mining and social net- sis, integration, improvement and measurement. work analysis, the business gains insights about (Cesconi, 2011) This framework can be further experience and what drives it. defined thus: • Integrate – Using the results of the analysis, • Capture – By encouraging feedback via a the business interoperates the results, and deliv- variety of means including surveys, touch points ers actionable insight for the right persons. and text mining, the enterprise gathers customer feedback. 04 | The Process of CFM • Improve – At this stage the business attempts to close the loop with the customer by reacting to his/her feedback. In addition, the business improves the overall customer centricity by enhancing processes, systems, and attitudes in the enterprise using the wide range of insights gained. 05. customer experience delivery may vary depending on place and time. All these factors place certain requirements on modern CFM that we will define and discuss below: 1. Ask only feedback which is relevant to the customer’s situation – Feedback needs to not • Measure – Using a variety of KPIs both inside only be relevant (otherwise the customer will not out and outside in, including measures of custom- be engaged enough to actually provide feedback), er satisfaction like Net Promoter Score or Cus- it needs to be captured soon after the interaction tomer experience Index, to create a 360 degree with the customer takes place, preferably imme- view of the customer experience to continually diately. Hence, feedback should be collected as a monitor and improve CEM. constant stream from the customers, not a single static one time survey. Criteria of Modern CFM 2. Make giving feedback easy – Avoid compliIdeally, CFM should be utilized to understand cated time consuming surveys and always allow what the customer needs and to fine tune the ex- the customer to choose their preferred feedback perience delivery to fit these needs more closely. channel, e.g. e-mail, web forms, SMS, IVR, call This is, however, not a simple task. Customers center. Allow also some form of free text capture. differ, as do their needs and expectations. Also Above all, enable the customer to leave feedback the touch points are different and the quality of whenever they wish to. Criteria of Modern CFM | 05 06. 3. Build a 360 degree view – Aim to collect and 5. Never discard feedback or fail to integrate it – understand the customer’s feedback in every situ- This means storing historical customer feedback ation. This includes all touch points, which should in a centralized data warehouse. Data will need to be captured and analyzed in every relevant situa- be integrated into other business support systems tion. Often the most simple touch points, e.g. bills, including CRM and ERP. Build a history of feed- are forgotten. These can, however, be of great im- back on a customer scale, and a timeline of how portance to the customer. Collect feedback from the customer relationship evolved. all kinds of customers; do not be tempted to make specific selections of customers based on your 6. Produce actionable insight – The purpose of own assumptions, collect feedback across the full feedback analysis is not to produce reports, but range of customers to develop an all-encompass- to produce real actionable insights that can be ing view. effectively used to improve the customer experience. Criteria 1-4 above outline a process which 4. Collect all types of data – Utilize all types enables the business to collect a wide range of of data; discard none, for example satisfaction information across a number of touchpoints. In scales, numeric answers or free text comments. addition to the actual attitudinal feedback, the Often open ended free text comments of custom- business needs also to combine structural infor- er are not analyzed and used to their full potential. mation, like socio-demographic information and But these are of great importance and give you a customer value. Furthermore, the nature of the hands-on feeling to the customer pain points. feedback collected from each channel will often be quite different. Therefore, the level of analysis required to produce real, actionable insights 06 | Criteria of Modern CFM based on this data should not be underestimated. The business needs to apply modern analytical techniques such as driver analysis, data mining, text mining, trend analysis and analysis of social network activity to exploit and benefit from all of the feedback collected across these channels. 07. gathered and correlated, it will need to be delivered to the person responsible for dealing with the customer, to enable them to resolve the issue in the best possibly way, and to interface with the customer on a personal level in a professional manner. Analysis of customer feedback is not a mission impossible, but it needs to be approached in a structured way using modern analytical methods. Above all, there is a need to be goal directed during the analysis phase. Focus on the major customer issues, find out the underlying reasons and fix them. 7. React to feedback – Analysis and resolution of any issues which customer feedback highlights, should be dealt with quickly, and on a 1:1 basis. Integration with other business systems such as CRM or your call center systems will be required, so that other relevant information can be gathered and correlated to complete the customer’s overall picture. Once the relevant information has been Criteria of Modern CFM | 07 08. 8. Enterprise improvement over time – A Maturity Model for CFM CFM should be used to streamline and improve the customer experience delivery the business CFM has come a long way in the last few years. provides over time. This will involve the analy- The initial ad-hoc style market research has sis of all customer feedback, to derive the main now evolved into adaptable solutions to capture drivers of a good customer experience. Business customer feedback and to enable the voice of the processes, systems, workflow, strategies and customer across a multitude of touchpoints and architecture will need to be improved iteratively across different customer situations. based upon these analytical findings. However, to improve its CFM a company must 9. Measure and manage – Constant monitor- first assess the current maturity level of its CFM ing of the drivers of good customer experience and decide what needs to be done to move to the enables you to know how your CEM initiative is next level. We can use our five-step CEM-process developing. Use the insights gathered from feed- from figure 1 to demonstrate how companies backs and define the drivers of customer satisfac- can assess the maturity of their CFM and what is tion. Take these drivers and develop them into a required in order to move into the next level. range of KPIs which can be used to measure the customer experience delivery. The resulting 4 stage maturity model is shown in figure 2, where we move from a company driven Be sure to build dashboards for all relevant static feedback into a deep customer interaction management levels, as well as for employees in a based feedback management. Let us have a customer facing support role. closer look at the levels: 08 | A Maturity Model for CFM • Level 1: Aware – This is the starting point for companies. They acknowledge that they need to know more about their customers and start to gather information about them. Usually, the first step is a standard market research satisfaction survey, i.e. a static, single-shot, sample based 09. mous in its approach. Being quite general and not customer specific, it normally does not produce any actionable results. Additionally, returned data is traditionally analyzed using simple statistical analysis methods, with little interpretation of what the business (and customer) context is. collection of customer feedback, entirely anony- Figure 2: CFM Maturity ModeL A Maturity Model for CFM | 09 10. • Level 2: Understand – At this level compa- • Level 3: Interact – At this level companies nies want to measure and understand customer make a quantum leap. They become reactive. satisfaction. This is typically done using a regular They go beyond capture and analyze and start yearly / bi-yearly / quarterly customer satisfaction putting feedbacks into actionable actions. To do survey. The surveys are clearly more focused on this, they deploy a fully interactive CFM solu- different touch points or on specific topics which tion with ongoing capture of customer feedback are doomed to be important for the customer across multiple touchpoints and in different situ- experience. ations. This is followed by a deep analysis of the feedbacks and enterprise improvements based The analysis is lifted to a new level by analyzing on the findings. the drivers of satisfaction using valid statistical methods. The results can be actionable at a gen- The companies also integrate the feedback pro- eral level and do, in best cases, lead to improve- cess into their systems and processes and trigger ments of processes and services at the touch suitable 1:1 interactions with customers, hence points. At this level companies have a regular, closing the feedback loop. On the measurement although restrictive, capture process in place. The side, they apply a sophisticated combination of analyze part is also done at a reasonable level. internal and external KPIs, based on a correlation analysis of satisfaction drivers. There is a general improvement and measure process in place for the touch points. The biggest • Level 4: Involve – This is the highest maturity lacks of at this level is that feedback collection is level of feedback management. Companies at this not linked to the single customer and that there is level treat customers as partners in a dialogue. no effective integration to allow 1:1 response to They involve customers and their feedback in all feedbacks. 10 | A Maturity Model for CFM aspects of business, from product development to branding and from customer service to back office processes. Feedback is a part of daily business and all effort is made so that it is easy and natural for customers to give feedback. Customers are 11. Each step towards a mature CFM process brings benefits, but requires also a more concerted approach of the organization. We can clearly see that there are major obstacles to overcome at each stage of the development of an effective not bothered with long and complicated surveys, CFM practice. However, the further up the curve a instead they are asked to give short specific, company is, the stronger the company’s ability to open ended feedbacks, immediately after their compete and prosper because it is better able to interaction with the company. gather, manage and act on strategic and tactical feedback. (Nash) Feedbacks are analyzed using sophisticated data mining and text mining methods and are automatically channeled to the right person for an appropriate reaction. There exists a clear definition of customer experience that the company wants to deliver based on the analysis of customer feedbacks and other customer information. This definition is well-known and used throughout the organization. On the measurement side a set of relevant internal and external KPIs are used and it is understood what factors of customer experience drive satisfaction and how this links to the bottom line. A Maturity Model for CFM | 11 12. Conclusions CEM without insight into what customer expecta- to make it a powerful, adaptable way to manage tions and experiences are is nothing worth. And customer feedback. By now the benefits that be- the best way of getting this insight is through come available to a business as a result of imple- direct, unfiltered, raw customer feedback. So menting advanced CFM within the enterprise obviously, CFM is a key enabler of CEM, giving should be apparent. These benefits include an crucial inputs for customer experience definition increase in revenue due to customer loyalty and and design. satisfaction, as well as the ability for the business But modern CFM is much more than an input source for CEM. CFM defines the way in which the business interacts with its customers, both through the 1:1 response and through the enterprise improvement process. Hence, CFM becomes an integral part of the customer experience delivery. With modern customer management methodologies, customer feedback must be seen as a crucial component making up a vital part of the customer experience. We have taken a close look at the way in which modern CFM works, how the operational model looks, and the key components which combine 12 | Conclusions to monitor and modify its customer experience delivery based on proven real time data. Day in and day out, your company delivers customer experiences. Perhaps they are positive and meaningful, or perhaps negative and boring for your customers. If you never asked for customer feedback, the changes are that you are not delivering the great experience your customers want. The only way to find out the truth and to start managing these experiences is to put a professional and structured feedback management practice in place and use it to drive improvements in your customer experience management. ABOUT THE AUTHORS: 13. Jukka Hekanaho is the Chief Customer Officer of largest global banks. The analytical CRM solution CustVoX (www.custvox.com), a leading provider and practice of Credit Suisse developed by Heka- of Customer Experience Management consulting naho and his team has been elected a benchmark solutions. CustVox provides both consulting ser- in banking industry. vices in customer experience management and an industry leading real-time Voice of the Customer Jukka Hekanaho has over 15 years of experience platform for capturing the customer feedback. in data mining, client analytics, CRM, and customer Jukka Hekanaho was appointed to his current po- experience management. He started his career as sition in March 2011 with the responsibility of both a data mining researcher and has developed 2 customer solutions (consulting) as well as client novel genetic algorithms for solving complex data insight and analytics. mining problems. During his academic career he has worked in Åbo Akademi University and Torino Prior to joining CustVox, Mr. Hekanaho worked as University and earned his PhD in Data Mining from management consultant supporting companies to Åbo Akademi University. define and implement Customer Experience Management solutions. He has also 10 years of senior You can contact Jukka Hekanaho on: management experience in the financial industry. [email protected] He served as Head of CRM in Bank Sarasin, a leading Swiss private bank. Also, he has served as Head of Data Mining in Credit Suisse, one of the About the Authors : Jukka Hekanaho | 13 14. Federico Cesconi is the CEO of CustVox Federico has more than 15 years of experience in (www.custvox.com). CustVox is a leading provider marketing analytics. He served as the Marketing of real-time systems that automate capturing the Manager at Tinet SA, one of Southern Switzer voice of the customer and measuring customer land’s leading Internet Service Providers, where he satisfaction and loyalty. was responsible for database marketing and data mining. After joining Cablecom Ticino in 2000 as He was appointed to his current position in No- Marketing Manager, in 2002 he moved Cablecom vember 2010 with responsibility for both business corporate headquarters in Zürich as the Head of insights and the customer insights area. Customer Information Management. Prior to joining CustVox, he was Director of Busi- Federico has won the North American Insight ness Intelligence at Cablecom and UPC. There he Award 2006 in Data Mining, the European Insight was responsible for the development and imple- Award 2007, and the 1-to-1 Gartner Award 2008. mentation of best practices for Customer Experi- Federico earned a Masters in Business Adminis- ence Management and business insight across tration from the University of Wales. the organization. You can contact Federico Cesconi on: [email protected] 14 | About The Authors : Federico Cesconi Bibliography 15. Boulanger, D. (2008). Customer Experience Management: Is your entire company really focused on the customer. Aberdeen Group . Cesconi, F. (2011). Customer Experience Management that Improves the Bottom Line: A Framework for Implementing CEM. Hunsaker, L. (2010). Customer Centricity Link to Customer Experience ROI. Von Customer Think. abgerufen Nash, S. The Role of Feedback Management in Becomminf Customer Centric. A Customer Centricity White Paper. Stratify Group. (2010). 2010 Consumer experience study. Temkin, B. (2009). Customer Experience Boost Revenue, 2009. Forrester Report Zabin, J. (2008). Customer Feedback Management: Mind if I Ask You a Question? . Aberdeen Group. Bibliography | 15 Modern CFM: How to Gain Business Benefits from Customer Feedback Jukka Hekanaho, PhD and Federico Cesconi cesconi.com Home of predictive analytics
© Copyright 2024