September 27, 2018 /
Comments Off on 30 Reasons why NPS Fails

30 Reasons why NPS Fails


September 18, 2018 /
Comments Off on The biggest (and hidden) reason customers leave.

The biggest (and hidden) reason customers leave.

Why do customers really leave?

The answer is not as obvious as it seems.

Dan Kennedy, the king of direct marketing explained the reason as follows.

  • Customer leave for one of the following reasons:
  • 1% die. There’s not much we can do about this one.
  • 3% move. Offline, this is due to geography; online, it’s due to shifting interests. You must do all you can to hold the attention of your audience. Some loss is acceptable over time, but stay remarkable and you will minimize the losses.
  • 5% switch to something else due to a friend’s recommendation. There is no more valuable referral than that from a friend. Yet, if your customer is truly happy with your product or services, the odds of them leaving are slim.
  • 9% switch to a better product or service. The best way to fight this is to make sure your products, services, and offers are simply the best around.
  • 14% leave for general dissatisfaction. Again, it’s a good idea to trim the tribe, as you’re never going to please everyone. However, if a customer leaves, make sure you did everything within reason to keep them.

Altogether, those five reasons only add up to 32%. A staggering 68% of customer loss is due to indifference.

If I don’t like a service or it’s not as expected, I don’t argue, I don’t make a scene, I don’t tell them how to fix it. I just don’t go back.

Customer surveys won’t help, the indifferent will either ignore your request for feedback or just answer with “ok”. You’ll never know the problems.

Indifference kills loyalty.

A simple way to avoid indifference is to change it up – change the interaction in simple ways. Give the customer small surprises (eg occasionally upgrade a frequent flyer to business class, or change the store layout).

If you can’t change it up, don’t wait for complaints, or compliments to act – incorporate Mystery Shopping. it remains the best way to get operational insights.

Also see post “Why you can’t depend on 10/10 reviews“.

August 15, 2018 /
Comments Off on The anatomy of a bad survey – Emirates

The anatomy of a bad survey – Emirates

The anatomy of a bad customer survey.
 
It’s unfortunate but companies spend millions on surveys and replay around the world. But most don’t work.
 
Here is an example of a survey taken on board an Emirates flight to Europe.
It includes:
  • How they forget the customer,
  • How they ignore the real life actions of real people,
  • How they miss things they ‘should ask’ and ask things they shouldn’t,
  • How they will be victims to literal customers.

July 26, 2018 /
Comments Off on Why you can’t depend on 10/10 reviews

Why you can’t depend on 10/10 reviews

There’s a big problem with customer reviews – they can leave you with a false sense of security.

What could be more important than the customer’s view right?

Well, not everything that a customer sees helps drive profitability. Indeed, many profitable customer service activities are invisible to the customer.

Invisibility

Customers are heavily swayed by the staff member interaction. Attributes such as kind, engaged, smiling, helpful, knowledgeable all rightly affect the service experience.

But it’s possible the staff member displayed all these attributes, scored a 10/10 but didn’t close the sale, didn’t upsell, didn’t mention the loyalty program, didn’t offer a followup call and gave the wrong advice.

So the smiling polite lovable staff member may be missing huge profit opportunities.

Sounds obvious right, but there is a circumstance which can also lead to false positive results, namely synchronicity.

Syncronicity

Some customer experiences are synchronous with the customer’s opinion, but others are asynchronous.

A customer experience is synchronous if its absence or presence affect the customer experience equally.

For example, a smiling experience leads to a positive customer experience, and a scowl (the opposite, leads to a negative experience.

Similarly, the absence of something can be positive, and the experience can be negative. For example, The absence of a bank queue is a positive experience (“wow I got served quickly”) but having a long line is a negative customer experience.

Sounds simple enough.

But then there are asynchronous events where the event is a positive but its absence is NOT a negative.

Have you ever been upgraded to business class when flying? The first thing you do is smile, and you have a warm glow throughout the flight, especially if you’ve never flown before.

Getting a business class upgrade creates a definite 10/10 review, but……

The absence of an upgrade is not a negative experience. You can’t miss what you didn’t have, and you may still score the flight a 10/10.

The opposite of getting an upgrade (not getting an upgrade), does not on its own create a negative review. And more importantly, receiving the upgrade puts rose coloured glasses on the customer.

It’s inevitable that the upgraded business class first timer will score a 10/10, but what if the staff were unattentive, the food slow incomplete or cold, and many of the other normal business class processes not followed?

Business class frequent flyers would score the flight a 3/10, but they are unlikely to complete a survey, whereas the newbie scores a 10. The flight will probably only generate 1 review, and that review will be a 10/10, so the staff get a pat on the back.

What do you do about this problem?

1) Keep collecting data, but you need to filter for any possible abnormal activities (upgraded customers).

2) Be wary of events like Sale times.

3) Conduct some Mystery Shopping to get unbiased operational data (such as speed of service/upsell/closing the sale)

July 17, 2018 /
Comments Off on Why I drove 1,500 miles for $200

Why I drove 1,500 miles for $200

Someone asked me a great question the other day.  What is the most ridiculous thing you have ever done for a customer?  I told her the following story.

Imagine this.  It is the day after Christmas (Boxing Day).  You have a client deadline due at the end of month.  It can’t get done the normal way.  Just can’t.  What do you do?

This once happened to me in my Mystery Shopping Business.  We had three Mystery Shops left to be done for a client with 900 stores.

The stores were 2,446 kilometres (1,519) miles away.  I now believe that what I did on that day, helped changed my business.

I rented a car, and drove for two days to get the Mystery Shops completed – then flew home.

This post is not to boast, but something interesting happened after I completed the mission.

Did the customer notice?  No.

Did we tell the customer the lengths we went to, in order to complete the assignments?  No.

So why do it?

At the time I did it simply because it ‘had to be done’.  But I think there is a better reason.

I didn’t realise at the time, but I was building culture.

Service is about meeting the Customers Expectations, very single time.  My staff in the office now know how important it is to do this.

They know it just ‘has to be done’.  They no there are no excuses.

If you are in a customer service leadership position (and that’s everyone), be occasionally extreme.

Don’t be extreme in exceeding expectations.  Be extreme in meeting them.  Culture will follow.

Have you had a similar experience?

(From my 2011 archives)

June 19, 2018 /
Comments Off on Mixing apples and oranges – NPS and Mystery Shopping

Mixing apples and oranges – NPS and Mystery Shopping

We all try to save money wherever we can. The problem is when we just go for the cheapest option and only get part of the story.

A dangerous new trend is to sacrifice Mystery Shopping for Net Promoter Scores. They do different things, and like apples and oranges, they are different but must live in the same fruit bowl.

Customer Insights

Net Promoter Scores (NPS) is a simple, cheap way to measure the Voice of the Customer (VOC). But just as Adam and Eve couldn’t resist the temptation of the juicy apple on the tree, nor should NPS be seen as the solution to everything.

NPS can tell you about customer sentiment and provide some wonderful real-life feedback from real customers. What could go wrong with getting customer insights?

Dave Griffin, our Head of VOC has built a implementing NPS. Dave sees it like this:

“Over the past decade I’ve seen too many NPS programs fail because clients overreached conclusions, or were drowned in unusable data. Both outcomes are possible but can avoided with good design and use of complimentary tools such as Mystery Shopping” 

NPS gives you a lot of data, but that data is limited (only one or two questions). So it can’t pinpoint operational problems, and it doesn’t inform you how to fix the problem. You need some operational insight.

Operational insights

The strength of Mystery Shopping is that it is deep, though you get fewer data. Mystery Shopping can tell you exactly what’s happening through the whole customer experience. It’s a great diagnostic tool by showing you exactly what to fix. e.g. staff are unpacking boxes and not serving customers.

Mystery Shopping can also measure things which are not important to the customer, but strategically important to the company. For example, a customer will not mark down your NPS score if your staff didn’t upsell a belt when selling trousers, but strategically this could be a core aspect of the store’s profitability.

Mystery Shopping is also strong in measuring asynchronous activities.

Synchronous – If the staff member is polite, you mark them positively, if they are rude, you mark them negatively.

Asynchronous – If you are offered a business class upgrade you mark the experience positively, but if you don’t receive the business class upgrade you don’t mark the experience negatively. Similarly, if you are upsold a probiotic to settle your belly when filling an antibiotic script, you rate the experience highly, but not negatively if there is no upsell. It’s the same for the upsell of a belt when you are buying pants.

Have your cake and eat it

Combine your operational and consumer insights by doing both.

Case Study 1 – Gym membership – a complete picture.

A gym franchise is concerned about sales and retention (like everyone). They are concerned about the sales conversion rates and concerned that customers are leaving more than they’d like.

Solution.

Use Mystery Shopping to measure the phone sales process and the first visit/tour. Focus on whether staff are:

  • highlighting the power features (eg newest equipment)
  • collecting contact details on the phone
  • following up after the call/visit

Use NPS to measure the existing customer experience to plug retention.

What themes are emerging from the customer comments on negative scores? e.g. dirty, packed, uninterested staff.

Case Study 2- Homewares store – save budget

A homewares company had a budget of $4,000.00 per month for Mystery Shopping. But they wanted to shave costs and were concerned that Mystery Shopping didn’t tell the whole picture.

We advised them not to sacrifice all the Mystery Shopping budget for NPS. A lower targeted Mystery Shop program with lower volumes AND NPS was implemented for $3,000.00 per month, saving 25% of budget. Contact me if you want to know how. (Hint – we target the Mystery Shops based on locations with low NPS scores)

NPS and Mystery Shopping are as different as apples and oranges, but they can mix well together in a nice salad.

April 30, 2018 /
Comments Off on The State of Retail Lending in Australia 2018 – Infographic

The State of Retail Lending in Australia 2018 – Infographic

Australian financial institutions are under intense scrutiny as a result of the Banking Royal Commission.

There is an obvious important legal compliance element, but the story doesn’t end there. Customer experience audits are equally important.

We’ve put some of the legal and customer facing statistics together in the form of a customer journey.

Did you know that during the initial interview:

  • only 52% of customers are told about upfront fees,
  • 44% were offered a larger loan than requested, and only
  • 40% of customers are given a credit guide.

To find out more about the state of Banking, click on the image to download.

To discuss conducting a private study, please contact us click here.

 

 

 

 

 

 

March 20, 2018 /
Comments Off on Don’t ask stupid and inappropriate survey questions

Don’t ask stupid and inappropriate survey questions

You know the story. At the end of a call, the company asks you to hang on the line to answer a brief survey.

Makes sense right?

It’s almost free, it’s from a real customer, it’s immediate, and you can get a lot of data.

But nothing is free. Either you pay in dollars, or pay in bad data.

Often, these short (NPS style) surveys are embedded after the wrong interactions such as a request for an insurance certificate, a change of address, or a query about an invoice.

In those situations, is it really appropriate to ask whether you would recommend us to your friends or family?

Recommend only when appropriate

I’m not going to recommend an insurance company based on a minor query. Recommending something to family or friend is a big deal, it affects your reputation.

Who recommends insurance companies anyway? Who recommends airlines or coffee shops? Even if you do, what are you recommending?

Now we have to get this right. Everyone knows (or should know) you can’t judge based on a minor interaction. Let’s get real, survey questions are often asked to judge the service provided by the staff member. But when a customer is answering the survey, they are judging all the other stuff that happened in the encounter, stuff that the employee has no control over (including call wait time).

Insurance company example

You won’t recommend an insurance company based on how someone served you for a minor request. So why should the staff member be judged on the backend systems?  What if the customer got bounced around for 20 minutes on a call loop before getting to a wonderful efficient employee who gets scored zero because of the phone tag?

Airline example

You won’t recommend an airline based on the staff service. You might give your preference based on your own price or routes. You may even share horror stories or conversely, the warm glow after an upgrade. But stories and justification are different to recommendations. Imagine having a great crew on a short flight, but the check-in was a disaster due to a power outage, the flight delayed due to storms and your luggage lost? None of it is in the airline’s control, but the wonderful flight crew will probably still score closer to zero than ten.

Coffee shop example

Ah coffee shops.  You might think a coffee shop is the perfect place for recommendations, and it is, but the recommendation is not for the service. You might suggest someone visit a coffee shop because of the awesome coffee or quiet areas, or location, but almost never due to the service. A coffee shop with great coffee and ordinary service will outscore awesome service and bad coffee. Better still, great service and great coffee.

What’s right for your Brand?

So use surveys to measure the appropriate thing for the brand.

If the insurance company is all about being the ‘experts’ then ask about that. If you are a cut price provider trying to get people off the phones, ask about that. For example:

For the ‘expert brand’, “After the interaction, would you consider the staff experts in insurance?”, or

for the cut-price brand, “If you have this query in the future, would you try to resolve it online or call again?”

Make the questions appropriate and consistent with the situation and your strategy.

A cut-price airline might ask “Did the on-board staff have time to offer you a snack for purchase?”

A full service airline might ask “Did the on-board staff make you feel like a special customer?”. You may ask business class passengers whether they felt like they were being treated as a VIP.

A coffee shop may ask “How would you rate the quality of your coffee today?” and, “Apart from the coffee and food, how would you rate the service provided by staff today?”

You have to narrow in to WHAT you are trying to measure, and WHY you are measuring it. Sounds cliche, but one survey question cannot simplistically answer all questions for all organisations in all situations.

One size does not fit all. Never does, stop taking shortcuts.

March 05, 2018 /
Comments Off on Customer Survey Fraud

Customer Survey Fraud

There is a new way to collect customer service data. And it’s a scam. Be careful.

In many countries, you can now ask a simple question when the customer swipes their credit card.

“Would you recommend us to your friends or family?” Push 1-9.

Sounds perfect and cheap.

I recently came across this in a place called the Reject Shop when looking for fermentation bottles (another story).

I was in and out of the store in 2 minutes. Hardly enough time to form an opinion, or for anything interesting to happen. But, ignoring the ridiculousness of the question. Here’s the problem.

The staff member swiped my card, and IMMEDIATELY pushed 9 as the survey question popped up on the terminal.

I was looking for it but otherwise would never have seen it pop up. Guess what number the staff member pushed? Nine. Great job team!

The same happened to me when I bought a car. The Salesperson offered to complete the manufacturer survey on my behalf, in exchange for a free tank of fuel.

Don’t be conned. There are great alternatives, except they cost a little more than ‘free’.

Don’t base important business decisions on fraudulent data.

March 01, 2018 /
Comments Off on When to use customer feedback, and when not.

When to use customer feedback, and when not.

It’s tempting to ask for customer feedback and then make strategic decisions.  The problem is, you will probably make the wrong decisions.

A customer might still give a 10/10 for service although your staff were NOT wearing a name badge, they did NOT close the sale, they did NOT upsell, and they did NOT mention the loyalty program.

Profit driving activities are usually invisible to the customer, so they won’t tell you if they were missed.

The table below explains where customer feedback is appropriate, and when it’s not.

Don’t be myopic. Get the whole picture.

Quantity

Complaints are uncontrollable,
and in fact, the number of complaints is a base measurement in itself,
regardless of their contents. However, rarely are complaints categorised or
even tracked over each customer contact point.

Regularity

Complaints and customer
feedback forms are not regular because they are received at the discretion of
the customer.

Objectivity

Complaints tend to be subjective,
especially as a bad event can be over-exaggerated and taint the whole
relationship. Customers often get “on a roll” when they start complaining and
bring up as many trivial points as possible to “make a point.”

Detailed

Complaints and feedback
forms tend to be specific about one event and do not address anything else
that happened.

Measurable

Complaints and feedback
forms tend to be more verbose than binary. It’s difficult to measure words.

Actionable

Complaints are directly
actionable when they reference an event. If a customer directly complains
about an employee, it is not difficult to address the issue with the employee
directly.

Accuracy

Complaints and feedback
cards are emotional and therefore open to exaggeration, compromising the
accuracy. For example, a wait time of two minutes can be “honestly”
remembered as five minutes.

Staff Interaction

Complaints and feedback
are an excellent way to capture the staff interaction as it pertains to a
particular event.

Predictive

Complaints and feedback
can predict the future direction of sales in a limited way, but not the
quantity. Decreasing complaints may indicate sales will increase, and vice
versa. But they can’t predict by how much.

Unstructured

This form of data
collection is very unstructured and therefore can reveal surprisingly trends that
were unforeseen (e.g., a spike in complaints about a promotion not being
honoured).

Consumer Insight

Complaints are usually
so mixed with emotion that the emotion buries any insights towards buying
behaviour.

Feedback forms can give
an indication of future customer behaviour if the questions are asked
directly and correctly. But the answers must be treated cautiously. Asking
whether you would be willing to buy in six months may sound like a valid
question, but it gives no assurance that it will actually happen.

Operational Insight

Complaints and feedback
give direct operational insights but only in pockets. They often don’t report
the 99% of operations that are happening quietly, and efficiently.

Real Customer

Feedback is provided by
real customers who have transacted with the brand.

Customer Conversation

Customer conversations
tend to be centred on the initial customer contact and a single response. The
conversations rarely go beyond those two events.

Brand Insight

Very little brand
insight is provided because the communication tends to be for a single pocket
of events for a small group of people. It does not provide any brand insight
to the majority of people who didn’t have problems.

Feedback forms may be
designed to give some brand feedback, but care should be taken in taking the
answers too seriously because customers may not share the truth about their
behaviour.

Right Context

Complaints are received
within the context of a real situation relative to the situation.

Feedback forms are
usually broad and not in the context of a real situation. However, modern
feedback loops through email and apps can now allow more immediacy and data
within the context of a real transaction.

Lifetime Measurement

These measurements are
not lifetime measurements and tend to be limited to a specific event.

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