As you well know, marketing your product or service to existing and potential customers is the lifeblood of your success as a business. In the past, before technology took over, businesses had a telephone and personal home address with which to contact their customers. Now, there is email, messaging, Skype, websites, and social media. However, some companies prefer to have one-on-one contact with their customers. Continue reading
Possessing a high quality customer database is essential to your business; it ensures you stay in contact with your customers, having up-to-date information at hand so your customer always stays your first priority. Whether it’s through email, point-of-sales, direct or indirect marketing, information kiosks, online shopping venues, or the like, crafting the architecture of a high quality customer database is the key to procuring long-lasting customer relations. Here are some takeaway points to consider. Continue reading
As you know, social media has exploded over the last decade and many companies have learned the trick to getting customer data through the social networks. If your company is one who hasn’t quite caught up to speed on social networking, then here are some helpful tips. Continue reading
Your customers are everything to your business, and obviously, without them, you would have no business. Seeing how customer service and satisfaction is essential, the importance of great customer engagement is also vital to your success. Continue reading
In business, you know the customer is always right – even if they’re wrong – and should be your top priority. Running a company that keeps customers coming back time and time again is the ultimate goal; with these tips for keeping customers satisfied, you can accomplish that goal on a daily basis. Continue reading
Sports teams and musicians have raving fans and you can too! Raving fans for businesses are the business’ advocates and would never consider taking their business elsewhere. That’s a tall order in this highly competitive market place, but it is possible. Businesses with raving fans not only provide an exceptional product or service, they also provide an exceptional customer service experience. Follow these customer service tips for ensuring you have raving fan customers: Continue reading
It is vitally important for you to take every aspect of your business seriously. If you don’t, the product you provide will decline, your customers will look for other companies and you’ll eventually fall out of business.
Because of this, it is important to know every inch of the company. Every aspect that is both visible to the customers and visible to only those working for the business. Although there are internal checks you can perform, the best way to understand how outsiders perceive the business is through customer surveys. Continue reading
While some may have heard of the technique “factor analysis” many remain unclear about exactly what it is. How does factor analysis figure into decision making? How is it applied? What is it used for? What are “latent factors”? While these terms may sound complicated or otherwise cumbersome the fact is that the ideas behind factor analysis are rather straightforward.
What Does Factor Analysis Do?
We are all living, breathing statistics. That may sound cold, but it’s a fact. We are all consumers of media, news, information, products, and services. Because all people really are to statisticians is statistics, it’s helpful to be able to strip away unnecessary information. Take people; as complex and individual and amazing though they are; and try to reduce them down to the lowest common denominator. In doing this the statistical “dimensionality” is reduced. Rather than complex octagons we are now simple boxes.
Another important thing which this technique addresses are the “latent factors.” What does that mean? Well anything latent; a feeling, an impression, a hunch; is something that can’t be measured. So when you’re doing market research there are things you can know; name, age, gender, ethnicity, income level, occupation; and things you can’t know; passions, intelligence, motivating factors, upbringing. Still with factor analysis we’re able to group these individuals accordingly by the responses they give. As some have keenly observed “the observable data doesn’t create the underlying factor; the underlying factor creates the observable data.”
How Does it Help
One thing which many people conducting surveys do is ask questions which have no real merit unless observed repeatedly. If you asked 100 people in a restaurant with 35 tables and 100 chairs and 1 waitress how their experience was; likely all of them would say terrible. However if the one waitress was covering for 30 others, then the data you got for this one particular day about this one particular waitress would not stick in any real way. Diners experience on the next day when the place was fully staffed would be far different.
As the body giving the survey you want to be dealing with facts. Cold, hard, facts; things which can be correctly transposed to different settings with the same result. A plane takes off from tremendous speed; a helicopter takes off from a stationary position. These are things which cannot be debated. If you’re trying to group results together, factor analysis can really help. You are dealing with measureable items, your latent observation has been borne out and you can group these respondents accordingly.
You can also get measurable results if you’re asking the right questions. Using this technique you should be able to accurately peg a customer’s likelihood that they will purchase a product or service after using it once. If this technique was found to be accurate over an extended period of time it would be immeasurably valuable to all businesses who are trying to discover a products survivability in the marketplace. Using a tool like factor analysis to determine which products to push on full force and which to abandon would vastly change the landscape of the marketplace.
Of course whether or not this remains true over the longer haul; whether this techniques implementation has any lasting chance of thinking before and ahead of consumers, is still up for debate. Still with so much potentially riding on factor analysis’ success or failure, it’s something we all should try and get our heads around sooner rather than later. Nobody wants to be behind the 8-ball on the next big, sure thing!
Customer loyalty is a tricky sentiment to track. It is difficult to measure customer loyalty because proof of loyalty, the state of being loyal, is most often shown after an action occurred that indicates a person’s loyalty. However, past action often indicates but doesn’t guarantee future loyalty.
So how do you measure something that hasn’t happened yet? You can look for patterns when analyzing responses to survey questions designed to measure specific indicators that, when taken in context by the analyst, have varying degrees of certainty as to future action. Bob Hayes, author of Measuring Customer Satisfaction and Loyalty, breaks it down into 3 measurements: Retention, Advocacy and Purchasing.
Retention as an Indication of Loyalty
Retention is a reflection of a customer’s willingness to remain with a particular company’s service or products and is useful to measure customer loyalty. Questions designed to determine loyalty are often based on the “How likely are you…” model to predicate future behavior. Among wireless or other service provider companies, Retention is most often asked by the question, “How likely are you to switch?” This question is an indication of the relationship the customer has with the company and may be an indicator of overall satisfaction. Although, the smart analyst should be aware that the question alone, without corroborating evidence, may be an indication of a deeper dissatisfaction with the competition rather than satisfaction with their current company.
This least of all evils attitude is often found in service industries such as cable/internet providers, wireless companies and banking. To be helpful, retention questions should be supported by an investigation of the second measure, Advocacy.
Measure Customer Loyalty by Measuring Advocacy
“How likely are you to recommend…?” or How likely are you to purchase other products from us?” and ” How satisfied are you with…?” are typical advocacy questions. They are related to retention because the assumption is that a customer that is a cheerleader for or satisfied with your organization is likely to remain with you. They relate to the customer’s perception of the company’s image that they are doing something right. Determining what that “right” something is requires additional investigation. It may be related to a single experience or simply to an overall – but general – impression.
There is overlap between Advocacy and Retention but they are distinctly different. Advocacy requires less action on the part of the customer, because to advocate does not mean purchasing. Whereas Retention requires the costumer to engage with your company through the basic transaction of making an additional purchase (or renewing a service) which in itself is a strong indication of customer satisfaction.
However, the strongest indication of customer satisfaction is related to Purchasing.
(RE)Purchasing is a strong Customer Satisfaction Indicator
Purchasing questions like, “How likely are you to (continue)(increase)(purchase different) products from X Company?” are the best indicators of growth through customer loyalty. They seek to determine if the amount spent per existing customer will increase or decrease based on additional purchases within or across product lines. It is distinguished from the retention question of how likely are you to switch because a switching question may me a repeat of the same revenue (0 growth) rather than an increase in spending (positive growth)
Use All 3 To Measure Customer Loyalty
All three customer satisfaction indicators are closely related in that they measure costumer intent. negative responses to these types of questions usually indicate a loss of that customer. Either they will re-up, purchase additional products or feel good about your company/product/services — or they won’t or don’t. It is fairly straight forward to develop relevant survey questions to receive the data.
What becomes difficult is providing the context for analyzing the survey data into a meaningful construct that can be used by decision makers. That is the job of the analyst to rely on his or her experience, knowledge and expertise to put the data into perspective.
This post, Creating a Customer Engagement Culture, is the last installment in the customer engagement trilogy. In it, I examine the recommendations of the authors of the article, Creating an Engagement Culture, published in Chief Learning Officer Magazine.
“Improving employee and customer engagement is hard and there are few models to guide leaders on how to achieve it.” – Leimbach, Michael & Roth, Tim, (2011) Creating an Engagement Culture, Chief Learning Officer Magazine.
The primary lesson I took away from the article was that focusing solely on customer engagement strategies ignores your employees who, after all, are the people engaging your customers. If your employees have not made an emotional choice to be loyal to your company they’re not as effective when engaging your customers. According to the authors there are 5 areas leadership and their managers must strategically align to create a customer engagement culture: Opportunity, Personal Accountability, Validation, Inclusion and Community.
As the quote above says, creating a customer engagement culture isn’t easy. It’s also not impossible.
5 Key Components to Creating a Customer Engagement Culture
- Opportunity – Focus on potential rather than on loss. Focus on growth rather than survival. Create an environment where employees feel they are engaged in a process that recognizes personal contribution as necessary for company success.
- Personal Accountability – Set, Communicate and Measure behavioral expectations that support company values. This task is about aligning what you do (task specific) with how to behave while doing it (action specific). Achieving this objective may require manager communication training to reinforce, support and clarify expectations.
- Validation – Acknowledge and encourage everyday performance, not just the top performers. When leadership validates its employee’s efforts they send a signal that employees matter. It is the daily affirmation, a note, a kind word, or a gesture that says, “Hey, employee, you matter and we notice.” that makes employees feel personally supported and valued.
- Inclusion – Change is difficult but when Leadership engages employees in the change process they achieve buy in when change decisions are made inclusive. Imposing change from above creates resistance but effective dialogue resulting from leadership listening to employees, incorporating the best suggestions into the change process and regular, positive communication creates a sense of community and trust that flows upward from employees to leadership.
- Community – A term I often hear regarding business cultures is “silos”. Departmental, informational, operational and other silos of isolation contribute to “not my department” or “not my job” attitudes. Seeking a high engagement culture in your company means tearing down the silos and building community engagement halls where information, goals, success stories and failure challenges are shared and acknowledged; a place where collaboration is encouraged.
Stating the obvious, there is nothing said here about creating systems to encourage customer engagement as a cultural value. Instead, the authors focus on what your company can do to align executive and management leadership around the values of an engaged culture.
I agree with the author’s that engagement is a choice made by your employees and customers. It is not something that can be imposed. They conclude that a culture of engagement is one where the conditions under which engagement can occur have been met, thereby providing your employees – and by extension your customers – an opportunity to choose to be fully engaged with your company.
I think most of us would agree that it’s not easy but it’s also not impossible.