Better experiences – every customer and employee wants them, businesses want to provide them, and solutions providers promise them. But how does one actually track something as elusive as an “experience”? The following is an introduction to how we help companies measure their delivered experiences.

At PeopleMetrics, we focus on tracking both behavioral and emotional outcomes. And while this approach can be a bit more complicated to explain, the composite score is proven to be more reliable than a single item score. In fact, when we compared our 2008 Most Engaged Customers data to our 2010 data, we found that a five point increase in Engagement correlated with a 56% cumulative share price appreciation.

This composite Engagement score is made up of four outcome questions, and we call the score REAP (as in “REAP the benefits” of an engaged customer base).

(R): Retention

Why: Engaged customers will spend more with you over their lifetime than with your competitors, and engaged employees will continue working for you

 (E): Effort

Why: Engaged customers will actually go out of their way to do business with you and are often willing to spend more to benefit from your products and services. Engaged employees feel inspired by their work environment to go above and beyond for customers.

(A): Advocacy

Why: Engaged customers spread the good word, making it easier and cheaper for you to attract new customers. Engaged employees recommend you as an employer allowing you to better compete for talent.

(P): Passion

Why: Engaged customers are passionate about the brand – so passionate that they may even spend time actively promoting the brand to others or defending the brand if others speak negatively about it. Engaged employees love the experience of working for you.

The composite of these four questions is the “ultimate score” or the “people metric.” It provides a snapshot of your most valuable assets: the people who purchase from you and work for you.

Additional Resources:

Introduction to Voice of the Employee

Introduction to Voice of the Customer

Taking Action on Customer Feedback

Photo courtesy of: Paul

At PeopleMetrics, we include one question that often strikes new clients as being rather odd, especially clients in the B2B space: “I love working with [company].” Respondents are asked to rate their level of agreement with this statement. Why do we include it? Because it adds a depth to the client/provider relationship that cannot be attained through a simple NPS score.  This question cuts through all the usual business jargon, formalities, and contracts and asks a completely emotional human question – how does the company make you feel?

Why It Matters

In our Most Engaged Customers Study it became quite clear that while clients are willing to continue working (68%) and recommend their supplier (65%), they are much less likely to report loving the experience of working with them (55%). This love question raises the bar on what makes an engaging experience, and by including it we have found that “Fully Engaged” becomes a strong indicator of client spend.  Clients in the Accounting industry who Strongly Agreed with all four engagement measures* spent, on average, 50% more with their preferred vendor than the Actively Disengaged, proving that when a client loves the experience of working with you, they will show it.

How to Make Them Love You

In our research we have found six drivers of Engagement. Each of these drivers is vital in creating an engaging client experience; for the accounting client, Extra Effort is most important (when employees go above and beyond for clients).  In our Most Engaged Customers study we went on to analyze open ended responses to further identify what “extra effort” means to accounting clients. We boiled it down to three employee behaviors:

1. Employee provides proactive advice, expertise, and guidance. Notice how it is impossible to deliver this without knowing your client’s industry. Making Extra Effort to understand the environment in which your client is working means that you will move from being an easily replaceable commodity to a valued partner.

2. Employee demonstrates an understanding of the client’s unique culture.  Many of the stories talked about how people at the accounting firm stepped in and helped deliver when coworkers became sick or clients were particularly demanding.  This kind of “above and beyond” service can only happen if a partner is willing to put in the time to learn not only what their client does but also what their processes are for getting it done.

3. Employee has a positive attitude towards the organization for which they work. Speaking well of your employer is associated with employee engagement, and this simple act is perceived by the client important in creating a positive experience.
Going above and beyond in these areas shows that your client’s problems are your problems, and that you are committed to making them successful. And really, isn’t that what love is all about?

 
*Engagement is measured based upon the responses to the following four questions: 1.) Given the choice I would do business with [Company] again 2.) I would go out of my way to do business with [Company] again 3.) I would recommend [Company] to a colleague or business partner 4.) I love doing business with [Company]. A Fully Engaged Client Strongly Agrees with each of these statements.

Additional Resources:
2010 Most Engaged Customers Study: Accounting Focus (email info@peoplemetrics.com to request a copy)
Customer Experience Assessment Tool

 
Photo courtesy of: Renjith Krishnan

People call them “satisfied,” “loyal,” or “happy campers,” we call them “Fully Engaged.” All of us are referring to a customer who loves doing business with you.  And whatever you choose to call them, the point remains - positive experiences create happy customers, and dissapointing experiences create a substantial lost opportunity.

This insightful infographic by KISSmetrics blends research from Gallup, Harris International, PeopleMetrics, and others to create a beginner’s guide to the value of great customer experiences.

(click here to view the complete infographic)

To learn more about how we help clients create Engaging customer experiences check out our 2010 Most Engaged Customers Study.

There are certain moments of truth in any retail purchasing experience that heavily influence customer engagement. Strategy gurus recommend mapping out every touch point where customers interact with a company in order to understand the customer experience throughout the purchase cycle. A Voice of the Customer program can help you understand how engagement ebbs and flows during the three phases of a customer’s life-cycle described below.

Pre-Purchase

Your brand reputation precedes you. The customer life-cycle begins long before a customer actually sets foot in your store. Companies often rely on advertising to influence customers in the pre-purchase stage. We have found that customer recommendations are the most effective form of advertising, since 90% of consumers trust recommendations from people they know (Nielsen, 2009). A strong customer engagement strategy for retailers should involve methods of encouraging current customers to provide recommendations.

Once they realize that they actually want a certain product, retail consumers begin researching their purchasing options. Of course, many of us make sporadic retail purchases, but it isn’t unusual for customers to carefully investigate the market. For instance, studies have found that 75% of consumers conduct in-depth research before purchasing electronics. The more positive reviews there are for your brand, products, and services, the more likely a customer in the researching, pre-purchase stage is to choose your company. Regularly collecting customer feedback will allow you to gather real customer comments on your products – share these comments with your marketing department to help them understand what Passionate Promoters love about what you have to offer.

Purchase

This is usually the most influential moment in the purchasing life-cycle. Although most retailers assume that price and product quality are the main drivers of the purchasing decision,  our research has found that these metrics are less “sticky” than emotional components. Customers have no qualms about hopping from brand to brand for a lower price or a better product. However, once they are emotionally invested in a brand, they are less likely to switch to a different company. In this sense, the moment of purchase is an opportunity to create a positive emotional bond between the customer and the employee delivering your company’s service or product.

Uplifting, exceptional customer service isn’t easy to deliver—in fact, it usually requires a unique solution for each company. Therefore, your customer engagement strategy should include a Voice of the Customer program, to help you understand how customers feel as they interact with your employees, and a Voice of the Employee program, to capitalize on insights employees can deliver about the customer experience.

Post-Purchase

Especially in this digitally rich age, customers have plenty of distractions. They are unlikely to think back on their experience with you unless you provide a reminder. This can be as simple as an automatically sent thank-you note, or as complex as following up large retail purchases with a personal phone call. For larger retailers, loyalty programs may be a fruitful method of encouraging repeat purchases. However, you can’t really know what kind of post-purchase care your customers want unless you ask them—that’s where a Voice of the Customer program comes in handy. From a customer engagement strategy perspective, the post-purchase part of the customer life-cycle is important because it is when you will gather the data that will drive your future as a retail company.

Additional Resources:
The Driving Factors of Engagement for Apparel Customers
Who Your Customers Trust, and How to Advertise To Them
The Experience Economy: How Today’s Consumers Choose Discretionary Spending

[photo: Baggu via andrewarchy at Flickr]

There are some elements of the customer experience that are unique to a given industry – things like baggage fees, claims departments, and billing practices. But there are some universal customer experience truths that apply regardless of the industry you happen to work in. This post examines three of these truths as uncovered through our partnership with one of our clients, Service Inspired Restaurants®.

Service Inspired Restaurants®, with casual dining concept restaurants operating in the U.S. and Canada, strives to deliver engaging guest experiences through outstanding service. Service Inspired Restaurants® implements our Voice of the Guest solution to improve current levels of customer service. Their goal is to use continuous guest feedback to weave Voice of the Customer (VoC) into the daily operations of the restaurant.

Truth #1: Customers will pay more for great service

In a recent survey conducted by American Express, 70% of consumers said they are willing to spend more for exceptional service.  Any market researcher knows that the difference between what customers say they will do and what they actually do can be disheartening. However, the unique tipping structure of the restaurant industry provides a tidy method to test this theory.

In our VoC solution customers are asked if anyone went above and beyond for them. If yes, they are prompted to offer that person’s name and a description of what they did. Meanwhile we used Point of Sale (POS) data to group guests according to the size of their tips (i.e., bottom third, middle third, and top third). Looking at this data, we find that 41% of guests who recognized their server for above and beyond service left a large (top third) tip.

In addition, we effectively linked a Recognize Alert to a 10% increase in tip size. So while it may not be safe to assume that any industry can improve service and raise prices by 10%, we can safely surmise that customers notice, appreciate, and are willing to pay for exceptional experiences.

Truth #2: Recognition is contagious

Service Inspired Restaurants® began using these positive alerts to recognize exceptional employees. Some managers posted these alerts in public places, while others shared them in staff meetings. One manager planned a special event for the first server to reach 100 Recognition Alerts.

Across 8,000 guest surveys collected over the first few months of the program, 34% included a Recognition Alert – about one in three guests recognized their server for delivering great service. 8,000 surveys later, this number had risen to 40%, an 18% increase relative to the starting point.

Our 2011 Employee Engagement Trends Report examined this very human aspect of work and motivation. We found that employees who receive recognition from customers are 4.5 times as likely to be engaged compared to those who do not (55% Engaged vs. just 12% respectively). One characteristic of an engaged employee is a willingness to go out of their way for a customer, which increases the chances of a customer recognizing them.

Truth #3: The whole experience matters

Using multivariate regression analysis, we were able to uncover the impact of the different elements of the restaurant experience. But really, it only takes a few minutes of reading Yelp! reviews to figure out the winning recipe of an exceptional dining experience: atmosphere, food, and service. Controlling for the other elements we found a 5 percentage point boost in Customer Engagement attributable to server recognition alone. However, when all the elements of a high quality guest experience are working in tandem, server recognition boosts Customer Engagement a substantial 18 points.

Forrester Analyst Kerry Bodine refers to this idea as the Customer Experience Ecosystem, stating, “Companies that want to improve their customer experience need to understand the intertwined and ever evolving relationships among their internal employees, external partners, and customers.” In the case of a restaurant, it can be the state of the bathrooms or the consistency of the tomatoes used in the house salad. In the state of a professional services company, it can be the ease of accessing information or the accuracy of billing. Regardless, Service Inspired Restaurants® is a clear example of how powerful it can be when all elements of the experience align with the customer’s expectations.

This is certainly not a comprehensive list of customer experience truths. What customer experience truths have you found that hold true regardless of industry?

Additional Resources:
Service Inspired Restaurants® Case Study
The Driving Factor of Engagement among Restaurant Clientele
Outsourcing Inspiration: How Customer Feedback Creates Meaning at Work

[photo: Jenny Downing]

With lucrative back-to-school shopping just around the corner, many apparel retailers are wondering how to capture new sales and engage current customers. A Google news search for “apparel retail” returns countless marketing suggestions on how apparel retailers can maximize sales. Some marketing experts recommend that brands grow their presence on social media sites. Others recommend offering in-store shopping help via smartphones. Aggressive promotions, others say, are the only thing that can attract customers to buy from apparel stores. Although these approaches are attractive for novelty-seekers, our customer satisfaction feedback research shows that most apparel customers are looking a far more traditional form of customer care: Trust.

Our current Most Engaged Customers study researched 67 companies in 15 sectors. We established Customer Engagement levels for each brand by using a five-point agree/disagree scale to evaluate customer loyalty/retention, willingness to expend extra effort to do business with a brand, likelihood to recommend a certain company to family and friends, and passion for doing business with a certain company. Overall, we found that 51% of customers are engaged with the brands they do business with. It’s important for brands to have a successful Customer Engagement strategy because customer engagement is tied to important business indicators such as share price and profit growth.

Ten of the companies we studied are apparel retailers. Compared to other sectors, apparel customers are slightly less engaged—49% of them are engaged with the brands they do business with. Our research found that all companies can increase Customer Engagement by creating a compelling offer and providing authentic and consistent customer care. Specifically for apparel retailers, trust is the “hot button” issue that can make the biggest difference for customer engagement—and thereby boost overall sales.

Return procedures influence apparel customer trust levels. Clothing, accessories, and footwear retailers can show customers that they trust them by making it easy to return items. A couple of quotes from our survey participants highlight the importance of the return policy in establishing customer trust:

“My friend returned an item and they asked only basic questions and didn’t ‘grill’ her about the problem. She is a loyal customer also and I was truly impressed by the way they handled the situation.” (Ann Taylor Customer)

“Just is my impression that they want you to be happy. My mom got a shirt for a gift that was an awful color for her. The gals at Chico’s went out of their way to help my mom find something that was just right for her. They were of utmost help even though my mom didn’t have a gift receipt.”

In addition to increasing customers’ trust, boosting employee effort can differentiate apparel brands and result in positive customer satisfaction feedback. When employees “go the extra mile” for customers, they are expending extra effort to make things right. Effort is an important factor for all businesses, but it is especially important in the apparel retail section, as it is the lowest performing dimension of Customer Engagement for this sector.

A strong Customer Engagement strategy for apparel retailers should include a Voice of the Employee program to help leaders cut down on the turnover endemic to this industry. When employees know they could be leaving a company soon, they have little incentive to spend extra effort in helping customers. By learning more about their employees with a Voice of the Employee program, apparel retailers can distinguish their service from competitors and enjoy higher Customer Engagement.

Additional Resources:

Request a copy of the 2010 Most Engaged Customers Study: Apparel and Accessories Industry Focus
Why the Ritz-Carlton is #1 in Customer Engagement: 6 Customer Love Factors in their Credo
Employee Effort: Moving Customers from Loyalty to Engagement
How Customer Engagement Translates into Behavior

[photo: epSos .de]

A Voice of the Customer (VoC) program can be a powerful tool for your businesses—assuming you choose one that provides you with the information we list in this article. By way of providing a basic definition, a Voice of the Customer program gathers customer feedback and provides a system for feedback management across an organization. Different Voice of the Customer programs may measure customer satisfaction, retention, or recommendation rates, but we suggest that companies should measure and track customer engagement. PeopleMetrics’ research shows that customer engagement is the metric most closely tied to overall business success.

Customer feedback management is another major consideration when choosing a Voice of the Customer program. As you can imagine, any statistically reliable Voice of the Customer program will return reams of data—far too much information for most companies to process, distribute, and use without additional help. An effective Voice of the Customer program should therefore include dashboards that your managers will be able to use to quickly assess and respond to customer feedback.

Below, we’ve listed a few more items you should expect to receive from a good Voice of the Customer program:

1) Baseline measurement of Customer Engagement.
A first step in any feedback management process is establishing current customer engagement levels. A Voice of the Customer program should begin with surveying your customer base to understand how engaged your customers are currently.

2) Ideas on how to improve customer processes.
Your Voice of the Customer program should give you a better understanding of what’s not working well for your customers. Whether you receive regular reports from your Voice of the Customer provider, or your vendor sets up an online dashboard where you can dig into customer feedback yourself, your VoC program should deliver customer feedback on how you can improve company processes to improve the overall customer experience.

3) Better understanding of what customers want, for product development.
Along the same lines, your Voice of the Customer program should equip you with a better understanding of what your customers are looking for in new products.

4) Increase in Customer Engagement over time.
Any worthwhile Voice of the Customer program should improve your customer engagement scores over time.

5) Clear evidence of its Return on Investment. We have seen how powerful well-managed, timely customer feedback can be in driving business results, and leaders in charge of the customer experience should never have to fake business results. Our own stories include:

• A B2B Telecommunications provider that unearthed 260 new business leads in 6 months of using the PeopleMetrics VoC Solution
• A professional Services company that landed $100,000 of new business revenue when a VoC alert identified an untapped client need
• A casual dining chain that found that each Recognition alert generated by the VoC technology was tied to an additional $9 in revenue, a focus on improving service and recognizing good employee work equated to $1 Million in additional revenue

These are the basic outcomes of a Voice of the Customer program. Buyers looking for a VoC solution should expect their vendor to provide details for how each of these five results will be delivered. For an even more powerful feedback management system, look for manager action planning tools, real-time alerts to empower employees, and integration with CRM programs. Read the additional resources listed below to learn more about these feedback management elements.

Additional Resources:
Customer Engagement vs. Customer Satisfaction: Which Should You Follow?
Bringing Customer Satisfaction Research to Front-Line Employees
Proactive Customer Management: Using Customer Feedback in Real Time

Employee Engagement and Customer Engagement Connection (Fig. 1)

A wealth of data has been published since the early 1990s by PeopleMetrics and others that lend support to this formula. The terminology may be different but essentially the prevailing view is that employees who are engaged – emotionally connected to the work they do – are more likely to exert extra effort on behalf of customers which in turn creates an emotional connection between customers and the brand.  And emotions drive profits.  Customers who ‘love’ a brand are more likely to return, tell others about it and even go out of their way to do business with that organization.

Customer-Centricity –> Engaged Employees

The soon to be released PeopleMetrics 2011 Employee Engagement Trends Report uncovers compelling evidence to suggest that organizations that adopt best practices in customer-centricity have more engaged employees.

The study gathered feedback from more than 2,500 employees across a range of industries including: professional services, financial services, telecommunications, media and entertainment, retail , hospitality and healthcare to tell us about the customer-focus practices adopted by their companies.  Customer-centric organizations were defined as those where employees said:

Employee Engagement in Company-Centric vs. Customer-Centric Organizations (Fig. 2)

a)     Customers are:

• Part of the Mission
• Highly loyal
• Invited to give feedback

b)     And employees are:

• Empowered to handle customer issues
• Invited to give ideas on the customer experience
• Provided customer feedback
• Told when they have done a good job serving customers

Company-centric companies were defined as those where employees said that their companies did not apply these practices with the same degree of consistency.

The analysis then examined how employees in these two groups (those working for Company-centric versus Customer-centric companies) rated their work experience and, in particular, how engaged they were with their employers.  The differences between the two groups are dramatic.

• Two-thirds of employees working Customer-centric companies are Engaged; and one in four are Fully Engaged (see Figure 2)
• Contrast this with just 22% of employees in Company-centric companies who are
  

  The Impact of Customer Strategy on Employee Behaviors (Fig. 3)

  considered engaged; and just 4% who are Fully Engaged

Furthermore, two to two and a half times as many employees in company-centric organizations compared to customer-centric companies say that (see Figure 3):

a)     It would take a lot to get them to leave their current employer

b)     They are motivated by the work environment to give extra effort and

c)     They recommend their company as a great place to work

d)     They love their company or organization

Sharing the Customer Experience Creates Purpose and Meaning

One of the above practices is particularly impactful when it comes to the employee experience.  Specifically, sharing customer feedback with employees cultivates a sense of purpose at work that is not there for those who do not receive that feedback.

• Across industries, employees who are told when they have done a good job serving customers are 1.5 times as likely to agree “I get a sense of purpose from my work” (80% vs. 54% agree to feeling purpose, respectively)

• Accordingly, the boost to a sense of purpose at work drives overall Employee Engagement upwards. Employees who receive customer Recognition are 4.5 times as likely to be Engaged compared to those who do not receive this feedback (55% Engaged vs. just 12%, respectively)

Bringing the Customer inside the Company

In a recent HBR article “How Customers Can Rally Your Troops,” Adam M. Grant, management professor at the University of Pennsylvania’s Wharton School, provides in depth insight into this idea. He references companies who “outsource inspiration” by bringing in customers and end users to tell their stories to front line employees. The results of these endeavors provide evidence that while traditionally leaders and managers have felt the responsibility to “rally the troops” toward better performance it is actually meaningful customer feedback that holds the greatest influence on employee motivation.

The New Service Profit Loop (Fig. 4)

So perhaps we need to reconsider the service profit chain, perhaps it looks something more like the image in Figure 4 – a service profit loop.

Companies need to start by admitting that employees need to find meaning and purpose in their work beyond a paycheck.

And those companies that start to actively look for ways to outsource inspiration will be rewarded by higher levels of Employee Engagement and better business results.

This article was originally posted on CustomerThink.com.

Do you wonder how many of your employees are just showing up to pick up a paycheck? In 2009 PeopleMetrics’ Employee Engagement research found that 12% of all employees are actively disengaged at work. Twelve percent may not seem like such a big deal, until you consider the myriad costs this 12% brings to your company. According to The Economist, 84% of senior leaders say Disengaged Employees are 1 of the 3 biggest threats facing their business. Yet only 12% of them report regularly tackling the employee engagement problem—perhaps because it can be difficult to assign costs to under-performance.

This article delineates three ways that employee disengagement costs companies money, and offers suggestions on how Voice of the Employee programs can help business leaders to re-engage their people.

1. Direct Cost to Employers. Gallup has estimated that that employee disengagement costs the overall US economy as much as $350 billion every year. That’s a staggering number, but it’s hard to get motivated to tackle such an endemic problem. Instead, think about what each company loses per year: at least $2,246 per disengaged employee.

The specific expenses contributing to those numbers vary by company, but a few costs generally associated with employee disengagement include:

• Disengaged employees take more sick days and are tardy more often.
• Disengaged employees undermine the excellent work their more engaged colleagues accomplish. Constant complaining is a common characteristic of disengaged employees.
• The decreased productivity of each disengaged employee costs each employer $3,400 to $10,000 in salary, according to Gallup research.
• Missed deadlines and poor sales results are common characteristics of disengaged employees.
• Customer complaints often rise with employee disengagement. Disengaged employees create disengaged customers because frustrated workers can’t help but pass on their cynicism and negativity.

2. Low Employee Engagement and Low Company Performance. Employee disengagement definitely contributes to inadequate company performance. Dozens of linkage studies have compared companies’ employee engagement rates and business performance levels. Our own research has demonstrated that:

• Highly profitable companies have 50% more Engaged employees versus unprofitable companies
• Teams with high levels of Engagement sell over 20% more than teams with low Engagement

Bottom line: disengaged employees drag down overall company performance.

3. Turnover Costs to Train New Employees.
As employee disengagement grows, so does the risk of talent loss. Corporate Executive Board research has found a 13% increase in the number of high-potential employees desiring to leave their current companies in 2011.Another metric to calculate a portion of the cost of employee disengagement in your organization is to consider how many of your talented employees left in the last year. How much did you spend on training those employees? And how much will you spend to train new employees?

Conducting an Employee Engagement survey is a good way to begin evaluating engagement levels in your ranks, but it’s not enough. In fact, many employee engagement surveys end up stranded on some executive’s desk. Gathering data is challenging enough on its own– actually taking effective action on employee engagement survey results is nearly impossible, unless you partner with a professional Voice of the Employee provider. Voice of the Employee programs include employee engagement surveys, but the best ones offer much more. Look for a Voice of the Employee program that prioritizes actions managers can take to boost engagement. You’ll also want an online dashboard tool to track engagement and evaluate improvement.

With a Voice of the Employee program in place, you’ll have a better understanding of what elements have the greatest impact on improving their overall work experience, and as result, their performance. Once your employees are engaged, they will pass on their excitement to the customer in the form of extraordinary customer experiences. And you won’t have to lose any more sleep over how much your company is losing as a result of disengaged employees.

[photo: via Russel Associates]

This post was provided by PeopleMetrics, a Philadelphia-based firm that provides a Voice of the Employee program to help companies engage customers. PeopleMetrics also offers Voice of the Employee programs to engage and energize employees.

A few weeks ago, I emailed iTunes to inquire why a gift card I had received wasn’t working. Every step of my attempt to get the gift card validated was frustrating. First, the company asked me to send them evidence that the card had been purchased, which of course I didn’t have because it was a gift card. Second, I was bounced from department to department, and from subcontractor to subcontractor, until I felt dizzy with confusion. The most frustrating thing of all was that I had to explain my story to each new person I spoke with. No one seemed to have a trail of breadcrumbs explaining my circumstances. Even the managers asked me to repeat my whole story. Today, the situation remains unresolved. The result? I am avoiding buying anything from iTunes. And I have shared my story with at least five friends (and now, with all of you). My friends listen to me. Why should I do business with companies who won’t grant me the same respect?

On the other end of the spectrum, there’s my experience with State Farm Insurance. Every time I follow up with one of their agents, they read from notes in their system about what’s going on in my car insurance world. Even better, their representatives are kind enough to remember me personally. As a result, when I contact them I feel valued. I know I might be able to get a better rate at another company, but I don’t want to switch because I’ve had such a great experience interacting with State Farm representatives.  As a result, I recommend State Farm every chance I get.

Marketers are beginning to appreciate stories like mine. In fact, a new movement called Conversational Marketing seeks to replicate my State Farm experience. This blog post will define Conversational Marketing, list its main attributes, and explain how a Voice of the Customer (VOC) program can facilitate customer experience measurement and help any company delight customers, boost profits, and succeed in Conversational Marketing.

Many trace the concept of Conversational Marketing to the publication of The Cluetrain Manifesto, a Luther-esque pamphlet of 95 marketing theses published in 1999. To summarize, in this visionary text authors Rick Levine, Christopher Locke, Doc Searls, and David Weinberger postulate that the internet has changed the way customers interact. Before the internet, consumers had few sources of information about products other than the materials companies distributed. Companies used “Spray and Pray” outbound marketing, which peppered the marketplace with advertising and depended on a small response rate to bring them new customers.

Now, however, customers don’t have to rely on brands’ outbound marketing—they can simply surf to a forum, read a blog, email a buddy, or use any number of other online venues to research products and find the best solution for their problems. The hierarchy of business has been completely upended. As The Cluetrain Manifesto writers put it,

“Markets are conversations. Markets consist of human beings, not demographic sectors. The Internet is enabling conversations among human beings that were simply not possible in the era of mass media. As a result, markets are getting smarter, more informed, more organized.”

Some companies have recognized the shift and are engaging in Conversational Marketing, which aims to join the conversation customers are already having. Here are a few characteristics of Conversational Marketing:

• One-to-one customer personalization
• Consistency across all channels, including the social media, phone, mail, email, etc.
• Interaction with customers is a premium.
• The onus is now on companies to spark interesting, fresh, meaningful, and emotionally-resonant conversations.

All of these goals are accomplished using web 2.0 technology, which wasn’t available when The Cluetrain Manifesto was written but now allows companies to earn a place in the conversation their customers are already having.

It’s one thing to describe the new marketing landscape, and quite another to actually successfully implement the tenets of Conversational Marketing. Seeing a Conversational Marketing approach become a reality requires that companies successfully achieve the following:

1. Know Your Customers.
   If you don’t know your customers well, you can’t very well join conversations they’re already having online. And you won’t be able to target new marketing efforts to individual consumers unless you have a good idea of who they are in the first place. This is where a Voice of the Customer (VOC) solution becomes invaluable. A Voice of the Customer (VOC) solution is a customer experience management tool that gathers customer feedback and helps you respond to customer gripes, capitalize on glowing customer compliments, and identify which employees create extraordinary customer experiences.

2. Eliminate Channel Fragmentation.
   From social media platforms like Hootsuite, to twitter-monitoring services such as Backtype, companies need tools to help them track what customers are saying about their products and their industry. Companies also need in-house tools, such as CRM programs, for coordinating employee efforts.

It’s also important to have a customer experience management tool that helps you communicate actions taken on behalf of customers. For instance, PeopleMetrics Voice of the Customer (VOC) solution includes an online dashboard where company leaders, managers, and front-line employees can all be granted access to the information they need to provide consistent customer service. If iTunes had such a Voice of the Customer system in place, I wouldn’t have been asked to tell my story twice.

1. Achieve Real-Time Response Rates.
   Sparkling conversation is all about timing. Unless you can track trending topics on a minute-to-minute basis, you can’t respond in a way that’s going to engage customers. Your Voice of the Customer (VOC) solution should also deliver results in real-time.
2. Centralized Best-Practices Information.
   Even with all the fancy technological tools in the world, your people won’t be able to respond in a way that will engage your customers unless they also have a library of best practices. Some Voice of the Customer (VOC) programs include proven proprietary reference materials to bring the best customer experience management techniques to your managers and front-line employees.

3. Facilitate Word-Of-Mouth Recommendations.
   The final jewel in the Conversational Marketing crown is the ability to keep the conversation going by attracting new customers. In the old model, mass media marketing was your best bet for bringing in new business. Now, your current customers are your living, breathing advertisements. Choose technological solutions that make it easy for your customers to provide Word-of-Mouth recommendations. For instance, PeopleMetrics’ Voice of the Customer (VOC) solution automatically sends an alert when a customer provides especially positive feedback about one of our clients’ products or services. Our clients can then capitalize on that feedback by using those customer testimonials in marketing materials.

The future of Customer Engagement is individualization, customization, and interactivity. Are you designing company procedures to ride the wave of Conversational Marketing? Or are you stuck in the dark ages of “Spray and Pray” marketing? A Voice of the Customer (VOC) program can help you join the Conversational Marketing revolution.

This post was provided by PeopleMetrics, a Philadelphia-based firm that provides a Voice of the Customer program to help companies engage customers. PeopleMetrics also offers Voice of the Employee programs to engage and energize employees.

Additional Resources:
Taking Action on Customer Feedback
Who Your Customers Trust, and How to Advertise to Them
The Power of Customer Recommendations: Customer Engagement and Referrals

[photo: B S K]

“Well done is better than well said,” advised Ben Franklin. As Franklin appreciated, follow-through is a challenge for most members of our species, and it’s certainly a stumbling block for businesses as far as customer feedback is concerned. According to the Temkin Group, six out of ten companies have a Voice of the Customer program in place, but very few of them actually take action based on the customer feedback they receive.

Tempkin reports that most companies get caught up in what it takes to obtain customer feedback, or sidetracked by endlessly crunching the mountains of data that customer feedback can provide. A few shocking numbers emerge as we get more specific about how most companies fail to take action on customer feedback surveys. Consider the following statistics from Aberdeen Group’s report The ROI on Customer Feedback:

77% of companies DO NOT have established methods for responding to customer feedback.
With no method for responding to customer feedback, what’s the point of gathering it in the first place? From improving customer procedures to driving innovation, customer feedback can be a golden opportunity for any company. If your company is not among the 23% who have established methods of responding to feedback, you should seek out customer feedback management software that does more than provide aggregate data on brand feedback over time. Look for a Voice of the Customer solution that provides actionable techniques your managers and front-line employees can use to improve the customer experience right away.

85% of companies DO NOT take immediate action on individual customer feedback.
Most organizations are still living in the dark days of market research, when technology limitations prevented companies from responding immediately to individual customer feedback. Today’s customers know better and if you can bother them with newsletters, mailings, and requests to provide their feedback -  then it is imperative that you be ready to take real and meaningful action on what you learn from them..

79% of companies DO NOT define best practices for utilizing and deriving actionable insights from customer feedback.

Unless you know where you’re going, a map is pretty useless. Similarly, all the customer feedback tools in the world won’t help your organization improve, unless you define best practices for utilizing customer feedback. Managers are busy, and a good VoC provider will provide guidance on the best route to creating the most engaging customer experience.

Marketing and Branding and all the “well said” materials in the world can quickly be unraveled by a disappointing experience. And while neither business nor people can be perfect all the time, a good VoC solution should be guiding your company and employees toward a more frequent “well done!”

Additional Resources:
Customer Alerts : Turning Customer Feedback into Immediate Sales
Bringing Customer Satisfaction Experience to Front Line Employees
Becoming Customer-Centric Through Real-Time Alerts

It’s every CEO’s nightmare: you’ve spent bundles of money and time on an advertising campaign, only to discover that your target audience isn’t buying it—or at least isn’t buying more of your product. Measuring the effectiveness of advertising is a Sisyphean task, and all too often companies see little tangible results from advertising efforts. Author James B. Twitchell goes so far as to say, “The simple fact is that you cannot put a meter on the relationship between increased advertising and increased sales. If you could, agencies would charge clients by how much they have increased sales, not by how much media space they have purchased.”

Lack of trust among consumers is part of the challenge for advertisers. A 2009 Nielsen study shows a range of trust levels for different forms of advertising, from brand websites (which 70% of consumers trust) to text ads on mobile phones (which just 24% of consumers find trustworthy).  Overall, 56% of consumers said they trust traditional advertising. Just over half isn’t a very compelling rate. Yet the Nielsen report also contains one  extremely high trust rating: 90% of consumers trust recommendations from people they know. A 2008 Forrester research study uncovered a similar pattern. This survey found that email from people you know was the most trusted form of information (77%), followed by consumer product ratings/reviews (60%). Consumers even trust complete  strangers more than they trust advertisements.

So, if traditional outbound marketing via advertisement doesn’t work, what should companies do to attract new business? In Marketing without Advertising, Michael Phillips and Salli Raspberry suggest that organizations can in fact see a higher ROI by promoting customers’ personal recommendations. They also write that stable long-term growth is rooted in providing superior products and services, and relying on positive word of mouth to win new customers. Phillips and Raspberry point out that many successful companies, including Costco and San Francisco’s Anchor Steam Brewing, have  never advertised to the general public.

However, it’s much easier to spout the wonders of what many are calling inbound marketing (positioning yourself to be found by potential customers) than it is to actually implement it. Here are a few steps you can take to influence the source your customers trust the most—i.e., their fellow consumers.

Understand your Customers. PeopleMetrics’ research has shown that highly engaged customers recommend an organization twice as often as those who are ambivalent about the brand. Therefore, it’s crucial to understand your customers so that you can keep them happy enough to recommend your service to others.  And the best way to get to understand your customer? Listen to them.  Implement a Voice of the Customer program, act on customer satisfaction feedback, and make customer feedback the driving force behind your decision making.

Capture and Capitalize on Positive Feedback. As we saw above, customer testimonials, even from complete strangers, are trusted more than traditional forms of advertising. From informational pamphlets to your website to social media outlets, there are plenty of places where customer testimonials can influence potential clients. Seek customer feedback systems (including customer engagement software) that allow you to capture and maximize positive feedback. PeopleMetrics’ Voice of the Customer program instantly sends a Passionate Promoter alert when a customer raves about your services in their questionnaire responses, giving your managers the opportunity to identify what makes your Fully Engaged customers tick.

Locate and Emulate Your Brand Ambassadors. Every company has employees who consistently provide amazing service—the kind of service that leaves customers raving to their friends and family. We call those employees Brand Ambassadors because their dedication creates loyal, returning customers.  Many companies have no idea who these individuals are, but a well-designed Voice of the Customer solution will give your customers a chance to tell you and your managers a chance to learn from them.  Recognizing employees who go above and beyond for your customers is the first step in making excellence contagious and curing your organization of average experiences.

Reward Customers for Recommendations. Finally, you may find that customers are more likely to make recommendations when they are rewarded for doing so. As an example, CorePower Yoga, one of the nation’s most successful yoga chains, puts $5 in customers’ accounts when they bring in a friend to sample a CorePower class. Our research has shown that 61% of customers who come to a brand through a recommendation are Engaged vs. 47% who come through other methods.

One final benefit of the inbound marketing approach is that customers who come to a company via a recommendation by a friend are more likely to stick around for the long haul. 37% of customers who come through a recommendation and experience a problem remain engaged with your brand vs. the 26% who came via other methods and experienced a problem. As Phillips and Raspberry point out, “customers who respond primarily to media ads usually don’t return.”  To earn the revenue boosting recommendations of your customers it is imperative that every aspect of your company is focused on providing them with memorable  experiences.

Additional Resources
The Power of Customer Recommendations: Customer Engagement and Referrals
How to Use Customer Testimonials to Increase Engagement
How Word-Of-Mouth Attracts More Engaged Customers

Sources:
Phillips, Michael and Salli Raspberry (2008), Marketing without Advertising Berkeley: Nolo, p. 6

The Nielsen Company (2009), “July 2009 Nielsen Global Online Consumer Survey,” research report.

Forrester Research (2008), “North American Technographics Media and Marketing Online Survey,” research report.

Best Practices to Boost Employee Engagement and Customer Engagement ~ Employee Engagement is central to long-term business success. Excellence in organizational and Human Resource practices results in higher levels of retention, productivity, and better service quality. Unfortunately, few companies are successfully engaging their employees. Research shows that 84% of employees plan to look for a new job in 2011; that’s no surprise, when only 27% of employees are actively engaged on the job. An unsteady job market may have been sufficient in retaining employees over the past two years, but this is no longer true. It is imperative to take targeted actions to ensure you hold onto your best talent.

Among other research, our annual Most Engaged Customers report has shown that the easiest way to get a customer to fall in love with a company is for them to experience exceptional service delivered by Engaged Employees. In other words, Engaged Employees who are passionate about their work inspire the customers they touch to be highly engaged as well. High Employee Engagement fosters high Customer Engagement. In turn, Customer Engagement impacts bottom-line metrics including stock price, profit rates, and ROI.

This makes sense in today’s challenging economic climate, where the customer experience is a company’s competitive advantage.  Behavioral economists tell us that just 30% of the average purchasing decision is rational—the other 70% is emotional. Most of us decide where to spend our money by how we feel in the store—how we feel while talking to that front-line employee. Nonchalant, apathetic employees create a less-than-stellar customer experience. Actively disengaged employees create actively disengaged customers.

At the same time, every company has Brand Ambassadors—people who provide such amazing customer service that they act as living advertisements for the brand. One experience with an exceptional employee is often enough to create a Passionate Promoter—a customer who will bring in new business through enthusiastic recommendations to family and friends.

How can you foster Employee Engagement and create more Brand Ambassadors? Well, here are a few tips we’ve culled during our ten years working with companies:

Start a conversation with employees. One of the most effective ways to pre-empt the dreaded mass exodus of top talent is to start listening to them. Before launching into an in-depth employee survey initiative that can take many months of leadership approvals, buy-in and planning, online or electronic focus groups can be a quick, cost-effective and valuable way to learn what is on employees’ minds and what they think you can do to fix some of the issues negatively impacting Engagement and future retention of staff.

Measure and Identify Priorities. Of course, there are tremendous benefits to employee surveys as well. They give leadership an understanding of the extent of the issues and how many employees perceive opportunities for improvement in company procedures, culture, and work practices.  Later, ongoing “check in” surveys can help employers understand shifts in employee priorities and opinions.

Listen to Customers to find Brand Ambassadors. A strong Voice of the Customer (VoC) program  goes hand-in-hand with a strong Voice of the Employee (VoE) program. Our online dashboard automatically sends a targeted “Brand Ambassador” alert when a customer praises an individual employee by name. This allows you to study what these employees do differently that so engages your customers.

Take action on your unique Employee Engagement drivers. The building blocks of Employee Engagement tend to be consistent across sectors, companies and job roles; however, the importance of those building blocks will vary across and within companies. Compensation and benefits are clearly important drivers of engagement across all companies, but they may not actually be the most influential variables in your company. Are your employees looking for more fun on the job? Or are they yearning for more meaning in their work? Fun in the form of on-the-job line dances works at Texas Roadhouse, but it probably wouldn’t work in an accounting firm. Avoid cookie-cutter solutions; instead, use ongoing Employee Engagement Management questionnaires to stay plugged in to your employees’ needs and dreams.

Starbucks founder Howard Schultz has said, “The relationship we have with our people and the culture of our company is our most sustainable competitive advantage.”  Through Voice of the Employee and Voice of the Customer, you can discover organizational practices to create Passionate Promoters and Raving Fans among both your employees and your customers. And in doing so ensure that in the coming months your best employees will choose to continue to work for you and not your competition.

Additional Resources
Creating Brand Ambassadors Through Recognize Alerts
The Role of Emotional Intelligence in Delivering Authentic Customer Service
The Link Between Employee Engagement and Customer Engagement

Every recession is unique, but at the same time, every downturn results in the same outcome: some companies emerge winners, while others fall under the guillotine of a lagging economy. With even Wal-Mart’s growth flat-lining, many CEOs are wondering if they can do anything besides frantically cut costs and grit their teeth through this jobless recovery. Unfortunately, customer engagement program budgets are often among the first to fall under the knife as companies make cuts to stay afloat during tough times.  Savvy company leaders know that slashing budgets without maintaining a strong customer engagement strategy can send loyal customers fleeing to competitors. In this article, we’ll focus on how Voice of the Customer programs can help companies identify crucial trends and develop successful tactics to see them through the most difficult economic times. By preserving and extending your Customer Engagement program throughout the recession, companies can survive the downturn and be in a good position to thrive once the upturn takes hold.

Simply cutting budgets willy-nilly won’t help companies survive. As an example, consider a recent MSNBC article about Hertz rental cars. In January, Hertz laid off 4,000 people in an effort to cut costs. The effect? Customers are finding it increasingly inconvenient to return Hertz’s cars, since there aren’t as many employees on hand to conduct instant returns. The MSNBC article mentions one loyal Hertz customer, Richard Garber, a business development manager who travels on business 20 to 40 times per year. The dearth of Hertz employees has Garber considering switching brands. “When you’re rushing for an airplane, every minute counts,” he explains. “The less convenient they are, the more likely I am to try someone else.”  Clearly, a focus on cost cutting outweighed Hertz’ Customer Engagement strategy.

Customer-friendly budget trimming can be accomplished by adopting the same tactic investors use during economic doldrums: a flight to quality. During recessions, investors often shift their funds to more stable, long-term, high-quality stocks. Companies can follow suit by prioritizing their long-term, loyal customers. Rather than spending gobs of money trying to attract new customers, companies can focus on wowing current customers through a strong Customer Engagement strategy. As we’ve discussed before, long-term customers are invaluable to any firm both for their ongoing business and because they bring in new customers via word-of-mouth. And the chain of good business karma just keeps going: when customers find a company via a personal recommendation, they are more inclined to be engaged. Moreover, recommended customers are more forgiving of service slip-ups. To survive the economic downturn, cut costs while preserving and even improving a Customer Engagement program that will keep your most loyal customers raving.

Here are a few ways you can use Voice of the Customer and Voice of the Employee programs to create a strong Customer Engagement strategy that will keep your company thriving in spite of the ups and downs of the economy.

Know your customers. Consistent customer research might have clued Hertz into the fact that quick rental return is a high priority among their loyal customers. Include ongoing customer feedback in your Customer Engagement program. This will allow you to understand what’s most important to your customers, so that you can ensure those aspects of the customer experience stay in place during the downturn. Quick “check-in” surveys can provide priceless data on what customers want. Once you know what your customers need, you can seek out economical fixes—such as cheaper technology or different staff procedures—to cut costs while protecting the customer experience.

Engage Employees to Engage Customers. One piece of advice from the MSNBC article mentioned above is that company leaders should aim to “Get more out of people you have on staff.” However, squeezing an already under-engaged workforce for more will only create cynicism and exhaustion, both of which you should be protecting your customers from. Just as you need to engage customers in an ongoing conversation via a Voice of the Customer program, it’s important to understand your employees through a Voice of the Employee program. By regularly interviewing employees, you can better understand how to maximize your workforce while preserving Employee Engagement. Remember, happy employees make happy customers. Plus, front-line employees often have brilliant ideas on how to engage customers—meaning you’ll have even more ideas about how to keep your best customers around through the tough times. Bottom line: Employee Engagement is a key ingredient in any successful Customer Engagement strategy.

Focus on Preserving and Increasing Customer Engagement. As we’ve discussed previously, Customer Engagement is the new competitive advantage. Customers are also exhibiting a flight to quality. They have less discretionary income, and they are more focused than ever on their spending. Both B2B and B2C customers are choosing how they spend their money more carefully. Once customers know what they want, price and product are easy enough to source—it’s the customer experience that is the distinguishing factor these days. Customers are looking for a unique, compelling experience. By gauging and improving Customer Engagement, you’ll be putting the customer experience at the heart of your business—right where it belongs.

As Sam Walton famously pointed out, “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” By understanding your customer base, maintaining an ongoing conversation with employees, and building a strong Customer Engagement program, you can ensure that the customer-boss will help your company survive the recession and thrive in the upturn.

Additional Resources
The Power of Customer Recommendations: Customer Engagement and Referrals
How Customer Engagement Translates into Behavior
Customer Engagement Since 2008: Recession “Reset” Customer Engagement Scores

[photo: Nick Benjaminsz]

There’s a certain type of customer lurking in every company’s sales records. This customer is influential on your future business. She’s mindful enough to pay attention to her purchasing experience, and articulate enough to pass on any dissatisfaction to her friends and family. However, she doesn’t provide feedback to you when she experiences a problem; she just walks away.

This is The Silent Customer, a variety of consumer that’s potentially dangerous for your business’ future stability. At the same time, The Silent Customer can be a blessing in disguise; it all depends on how you respond to customer problems, and how your customer engagement process works. This article describes The Silent Customer and lists a few ways you can gather feedback from even these mute consumers—thereby improving your own service outcomes and boosting Customer Engagement.

The Silent Customer is more common than you might think. PeopleMetrics’ Customer Engagement research has found that 1 out of every 4 customers will not tell you if they experience a problem. They won’t complain about a breakdown in service; instead, they will just cease to do business with you and your brand. Furthermore, we have found that these quiet consumers will share their dissatisfaction with at least three other people outside your organization.

Other studies have discovered even higher rates of Silent Consumerism. As Sam Deep and Lyle Sussman write in Smart Moves for People in Charge, one customer service study commissioned by the White House found that for “every 27 dissatisfactions experienced by American consumers, only 1 is voiced in the form of a complaint to the company. But the 26 silent customers don’t stay that way for long—they each tell another 10 about their unhappiness, who turn around and tell another 5. Worse than that, 91% of the mute malcontents will eventually shop around because of their unresolved dissatisfaction.”

As you can see, dissatisfied customers can be highly influential, and very difficult to track down.  Although your inclination might be to dislike these customers, doing so would be a disservice to your business.  As Bill Gates is known to have said: “Your most unhappy customers are your greatest source of learning.”

First, consider that it’s natural for a customer to respond in this way. Imagine a less-than-stellar dining experience. The noisy atmosphere, lukewarm food and imperfect order leave you feeling tired and ready to run as soon as you have the check. By the time the waiter asks, “How was everything?” you reply, “Fine,” because it’s easier than sharing everything that went wrong. You then walk out, never to return.

The truth is that most companies make it difficult to complain. They ask vague questions, or their customer feedback hotline doesn’t actually accept complaints. Many managers avoid receiving customer feedback, because complaints are often seen as a problem, a failing—something that upper management doesn’t want to hear about.

However, if you can turn around that attitude, and create a customer feedback process that makes it easy and even pleasant for customers to relay concerns, you can see complaints as the golden eggs that they really are. Customers don’t have to complain. They are under no obligation to provide free suggestions and offers of improvement on the experience you deliver. So when they’re brave enough to speak out about something that went wrong, it makes sense to thank them. Those golden eggs of complaints are the treasures your company needs to engage future customers.

In reality, there is no such thing as a totally silent customer. Under the right circumstances, all customers are willing to pass on feedback—especially when doing so can improve their future experiences with a brand. Here are a few ways to capture customer feedback from The Silent Customer—and boost Customer Engagement going forward.

Conduct short, specific and targeted surveys. The days of the 25-minute survey are gone.  Customers will tolerate at most a 5-minute survey.  If the questions are phrased in a way that make sense to the customer’s own personal experience and doesn’t present a battery of irrelevant survey questions that are clearly written with the company’s, not the customer’s, needs in mind, you will receive more feedback. Design your surveys to be customer-friendly.

In more general terms, instead of asking, “How was everything,” you might ask, “What’s the one thing we could have done to make your experience better?” This kind of detailed question will streamline your customer engagement process and provide much more telling information.

Consistently gather customer feedback. We recommend gathering customer engagement feedback on an ongoing basis after key touch points. This ensures that customers will always have the opportunity to pass on feedback. Because they are built into our clients’ customer engagement process, these surveys are seen as opportunities, rather than irritations. With a “no-hassle” customer feedback process in place, your customers will be more likely to report on things that bothered them.

Respond to Complaints in Real-Time. One past weakness of Voice of the Customer programs was that they never “closed the feedback loop,” so to speak. Customers might fill out an online survey, or answer a telephone interview, but their responses were typically anonymous, meaning that managers could never actually reply to individual problems. In this context, giving feedback felt especially pointless on a personal level. Thankfully, today companies are able to implement feedback programs that allow managers to see and respond to customer engagement feedback in real-time. When a restaurant customer complains about a food allergen being present in the food, for instance, a manager can see that feedback and call back within 24-hours with a sincere apology and gift certificate. This shows previously Silent Customers that their feedback is important, and can have a positive impact on their personal customer experience and future purchase intentions.

Additional Resources:
Turning Customer Problems into Company Wins
How to Measure Customer Satisfaction: Our Best Practices for Determining Customer Love
Bringing Customer Satisfaction Experience Research to Front-Line Employees

[photo: Cara Photography]

For the modern American consumer, the times they are a changin’. Shoppers are much more conservative than they were before the recession, in the big-box-store-heyday of the late ‘90s and early ‘00s. At $58 per day, discretionary spending is at its lowest since 2008^[i], when measurement began. Moreover, Customer Engagement levels have remained essentially flat since 2009. All in all, it seems there is a “new normal” as far as American shopping habits are concerned. How can companies hope to win share of wallet in the new paradigm of conscientious consumerism?

Joseph Pine and James Gilmore may have the answer. They predicted this new normal years ago, dubbing it The Experience Economy. Basically, they argue that the commoditization of goods and services means price and quality are no longer the only differentiators; nowadays, consumers are also looking for a unique purchasing experience.

Starbucks serves as the classic example of a company that has thrived according to the new formula of the Experience Economy. Beyond the business “entry fees” of a compelling business offer, competitive prices, and consistent customer care, Starbucks is one of the world’s most popular brands because they have created a special purchasing experience. Like the coffee houses of the 19^th century, Starbucks creates a “Third Zone” between home and work, where consumers can get a special emotional experience along with their grande-skim-milk-no-whip lattes. Theatricality, attention to the consumer experience, and consistent service are crucial in the Experience Economy, among other Customer Engagement-boosting qualities, such as authentic service.

The Mayo Clinic is another example of an organization that is thriving in the new environment. As described in the Harvard Business Review^[ii], the Mayo Clinic successfully creates a compelling customer experience through visual and experiential clues. For instance, they renovated to provide new amenities in standard hospital rooms and add couches in doctors’ offices, so as to make patients feel more comfortable. Additionally, the Mayo Clinic instituted a strict business-attire dress code for doctors who are not conducting medical procedures, to communicate the importance of the client. The Mayo Clinic’s high standards for employee appearance even extend to asking back-office lab technicians to change out dirty shoelaces. As one Mayo Clinic employee explains, these details are important because “Everything [we] do, down to [our] shoelaces, represents our commitment to patients and visitors.”

Like Starbucks and The Mayo Clinic, the winners of our 2010 Most Engaged Customers study create an emotionally compelling experience for their customers. And with higher Customer Engagement, these firms also enjoy higher performace across several key business indicators, such as share-of-wallet, profit margins, and ROI.

To emulate these winning brands, aim for a memorable customer experience that still sustains “brass tack” values such as functionality, price, and quality. The first ingredient in any successful Customer Engagement model is measuring current Customer Engagement levels. Next, continuous measurement allows companies to track effectiveness of Customer Engagement programs. PeopleMetrics’ Voice of the Customer solution also includes a proprietary library of best practices and automatically-sent Action Alerts to quickly indicate how to win back wavering customers, or maximize impact from a glowing customer comment. Because American consumers have less discretionary spending these days, companies must put extra effort into creating a consistently compelling customer experience.

Additional Resources
How to Measure Customer Engagement & Customer Satisfaction: Our Best Practices for Determining Customer Love
Bringing Customer Satisfaction Experience Research to Front-Line Employees
Customer Alerts: Turning Customer Feedback into Immediate Sales

[photo: Adam Bartlett]

A Chinese proverb advises, “Don’t open a shop unless you like to smile.” For millennia, business owners have appreciated the power of a smile to improve sales. Allow me to take some liberty with ancient wisdom and add to that, “Don’t work in customer service if you don’t enjoy making other people smile.” Employees that truly care about delivering smile-worthy experiences radiate genuine happiness at work; their natural enthusiasm attracts new customers and engages long-term customers. Here at PeopleMetrics, we call these employees Brand Ambassadors. In addition to flashing authentic smiles at every customer they meet, Brand Ambassadors provide unparalleled service— the kind that can only be delivered by someone who truly cares about a customer’s happiness, the kind that leaves customers raving and sales figures booming.

In this era of scripted customer service, it’s natural to be cynical. Aren’t today’s customers too savvy to fall for that old “service with a smile” schtick? As it turns out, no. Our research shows that, through stand-out service, Brand Ambassadors endear customers, thereby growing customer engagement, which, in turn, is connected to a slew of bottom-line indicators including share-of-wallet and ROI.

What distinguishes the kind of service that Brand Ambassadors provide? Our research into the brands with the highest Customer Engagement levels reveals that Brand Ambassadors:

• Demonstrate high Emotional IQ. They tune into the customer’s emotional state, respond appropriately, and discover solutions that benefit both the customer and the company.
• Treat customers like friends or even family. A Brand Ambassador greets customers by name and remembers details that may have come up in previous interactions.
• Provide Authentic Service. Customers can spot a fake smile a mile away. A genuine smile is a rare thing these days—it’s something that customers will remember and return for.

As an example, consider Steve Wynn’s story about an amazing bellman at one of Wynn’s Vegas resort casinos. As an older couple was checking in, they realized they’d forgotten their medication at home. Because the husband was diabetic, missing their medication would mean ending their vacation. After making arrangements with and reassuring the couple, the bellman actually drove back to their house (a four-hour drive!), picked up the medication, and had it back at the casino in time for their 7am required doses. You can bet that couple will be extremely loyal customers going forward. And they probably shared their story with plenty of friends, attracting new business. But the Brand Amabassador bellman’s influence didn’t stop there. His dilligence spread through the rest of the organization, inspiring his fellow employees to seek out their own opportunities to help casino guests.

In the end, today’s customers are looking for more than the best product at the lowest price. They have plenty of choices when it comes to finding inexpensive, functional products and services. That’s why the modern key differentiator is the customer experience. Brand Ambassadors create an exceptional experience that exceeds customers’ emotional and functional needs.

Every company has Brand Ambassadors. The problem is that so many fail to find them and unleash their potential.  Recognizing and learning from these individuals can set the standard for customer experiences. When employees are encouraged to imitate the best, excellence becomes contagious in the organization – an imperative for anyone concerned with building a truly customer-centric culture.  As more and more employees become full-fledged Brand Ambassadors, Customer Engagement rises, and business outcomes improve.

The challenge is that no two company’s Brand Ambassadors look alike. Every company is unique; there is no “one size fits all” solution as far as the customer experience is concerned, but your Brand Ambassadors know how to deliver the perfect experience for your customers. A Voice of the Customer solution is the best way to spot the people in your company building valuable customer relationships.  Imitating the employees that customers love  guarantees that your steps toward customer-centricity will align perfectly with what your customer wants.

PeopleMetrics’ Voice of the Customer solution sends a special Recognition Alert when a customer praises an employee by name. Too often, companies only notice what employees are doing wrong, and fail to capitalize on the excellent work of Brand Ambassadors. PeopleMetrics’ Recognition Alert is a good indicator that you may have a Brand Ambassador on your hands—and once you’ve identified Brand Ambassadors, you can study their performance , train other employees accordingly and make excellent customer service contagious in your organization

Additional Resources:
Creating Brand Ambassadors Through Recognize Alerts
PeopleMetrics 2011 Brand Ambassador Award Winners Announced
How Customer Engagement Translates into Customer Behavior

[photo: clix]

[Steve Wynn video: via Tony Robbins]

Restaurants have a few advantages when it comes to customer service. Unlike in many industries, restaurant employees have the chance to interact personally with customers. This means restaurants have more opportunities to deliver a positive emotional experience to each guest. On the other hand, because it’s such a guest-focused industry, the bar for outstanding customer service is set a little higher in the restaurant arena. Therefore, restaurant managers and owners have more motivation to identify and replicate employee effort that engages and delights customers. In this article, we’ll examine the general customer service landscape in the restaurant sector. Next, we’ll take a look at the characteristics all businesses must exhibit in order to win high Customer Engagement, as our 2010 Most Engaged Customers (MEC) report revealed. Finally, we’ll zoom in on the “hot button” issues for customer engagement in the restaurant space.

PeopleMetrics found a 51% engagement rate among customers in all industries. However, if we limit the focus to only the restaurant sector, we find that 61% of customers are engaged. This implies that restaurant customers generally receive better service, perhaps because this is one of the last industries in which face-time is still common. However, once we break down those statistics according to each brand, we see a wider spectrum of scores, from 51% for McCormick & Schmicks, to 67% for Ruth’s Chris. In other words, some restaurants are more successful than others at creating a compelling customer experience.

What sets apart organizations with high Customer Engagement scores? What do they know about how to improve customer satisfaction? Well, it starts with a compelling business offer. Additionally, restaurants, like all organizations, must display consistent customer care that earns their customers’ trust.  Extraordinary, authentic employee effort is also key to engaging customers. These are the traits PeopleMetrics has found influences Customer Engagement, which in turn impacts such important business outcomes such as profit margins, share price, and ROI. (To learn more about these six traits for Customer Engagement, read our blog post, “Why the Ritz-Carlton is #1 in Customer Engagement: 6 Customer Love Factors in their Credo.”)

We have discovered a few “hot button” issues for restaurateurs, namely the business offer, consistency, customer care, and employee effort. (For a complete picture of our restaurant research, order a copy of our restaurant industry Most Engaged Customers report.) The compelling business offer at a restaurant might be superior food quality. One Ruth’s Chris guest gave insightful customer satisfaction feedback on the brand’s business offer, explaining, “There are no words to describe how good their steaks are. I don’t even want to try. And the desserts are heavenly.” A wide variety of menu choices and an enjoyable atmosphere are also viable business offers.

The most critical trait in the restaurant space is extraordinary extra effort from restaurant employees. As one Cheesecake Factory respondent put it, “They do everything in their power to make certain you have an outstanding time when eating in the restaurant. The staff is always helpful and friendly. They always seem to go above and beyond to make sure that everything is just right.” We have found that Engaged Employees foster engagement among customers as well. Some chains, such as Texas Roadhouse, engage employees through fun activities, including nightly in-house competitions and line dances in the dining room. Each restaurant is unique, so a strong Customer Engagement strategy begins with Employee Engagement research to determine what motivates employees. Ultimately, attentive, consistent, authentic service is what sets apart the restaurants with the most engaged customers.

Additional Resources
Replicating Brand Ambassadors through Recognize Alerts
How the Mode of Interaction Impacts Customer Engagement
Customer Satisfaction vs. Customer Engagement: Which Should You Follow?

[photo: Zoetnet]

Nearly every company watches rational market drivers such as price and product innovation. But today’s customers aren’t deciding how to shop based on these traditional, rational forces alone—they’re also highly influenced by their emotional experiences with a brand. Tuning into and appropriately responding to the customers’ emotional needs is a prerequisite for achieving Customer Engagement. Customer Engagement is important because engaged customers are the ones that stick around for years. They bring in new business with their ebullient recommendations. Ultimately, Customer Engagement boosts your organization’s profit margin, share price, and ROI. To fully engage customers, you must offer an exceptional buying experience, not just another product. But customers’ emotions aren’t one-size-fits all; in order to figure out what each customer wants, front-line employees and managers must have tools that help them maximize their own emotional intelligence.

Emotional intelligence is the ability to identify and appropriately respond to one’s own emotions and the emotions of others. In business, it is becoming more widely accepted that this intelligence has great influence in HR—many studies show, for instance, that emotionally intelligent teams are more productive. However, although many firms now offer trainings on how to get along with coworkers by growing Emotional Intelligence, few customer satisfaction programs train service reps and front-line managers how to read and appropriately respond to customers’ emotions. Empowering employees in this way is what separates the customer service wheat from the chaff, so to speak.

Daniel Goleman, the author who had the most influence in popularizing the concept of Emotional Intelligence, has addressed its relevance to business in his book, Working with Emotional Intelligence. He writes, “How customers feel when they interact with an employee determines how they feel about the company itself. In a psychological sense, the ‘company’ as experienced by the customer is these interactions. Loyalty is lost or strengthened in every interaction between a company and its customers.”

Goleman also examines the skills needed to earn loyalty (which is included in our Customer Engagement model). The most successful service reps, he writes, are emotionally intelligent enough to assess a customer’s emotions. They empathize and stay emotionally present so as to fine-tune their understanding of the customer’s emotional needs as the interaction continues. Finally, they are able to assertively (not aggressively) make suggestions according to what the customer wants. Instead of telling the customer how she should feel or what she should buy, which often leads to resentment on the customer’s part, the emotionally intelligent customer service representative can find a win-win outcome in which the customer finds the best product or service for her needs, and the company sees increased Customer Engagement and sales.

Such service is definitely beneficial in the long run, as many studies have shown. For instance, a L’Oreal study found sales agents selected for their emotional intelligence each sold $91,370 more annually than salespeople selected through the traditional hiring process. What’s more, the emotionally intelligent salespeople had a 63% lower turnover rate during the first year of employment.

To harness the power of emotional intelligence, hire with emotional intelligence in mind and provide tools for current employees to hone their emotional competency. Doing so will foster authentic, engaging customer interactions that will bring you business for years to come. PeopleMetrics has developed a real-time customer feedback dashboard to empower your front-line employees and managers to read and respond to customer emotions with empathy. Learn more at our Customer Engagement Management page.

Additional Resources:
How Long Term Customers Benefit Your Company
Customer Engagement vs. Customer Satisfaction: Which Should You Follow?
The Power of Customer Recommendations: Customer Engagement and Referrals

[photo: Jim Borgman]