If I had a nickel for every time my wicked smaht analytical friends called me fluffy, I’d be able to fill a sock drawer. So here’s my rebuttal to those data scientists scraping the internet for more data about our customers… Want a lesson in fluffy data from the corporate world? Buckle up.
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According to a Bain & Company study on customer satisfaction, 80% of companies believe they’re delivering a “superior experience” to the customer, BUT when the customers were asked the same question, only 8% said they were receiving a “superior experience”. Whaaat?
So companies think they’re awesome and customers don’t quite agree.
How can that be possible when 95% of company leaders claim to be “customer focused” as stated in the same Bain report. Where is the disconnect?
So many of these companies are producing products and services and waiting for their excellence to be consumed… and then it’s not. Where is the engagement they expected?
This “delivery gap” in occurs when organizations put a product/service in font of the customer and then measure their reaction to it. The better organizations then refine the product based on the customer’s reaction and improve, marginally.
The best organizations are not reacting to the customer’s transactional or behavioral interaction, but instead asking them what they want BEFORE they put the product in front of them.
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Welcome to “Voice of the Customer” (VoC).
Wait, MORE data? We’re swimming in data and we have no idea what to do with it.
Well, yes. Imagine a world where we actually know what our customer wants and needs? It’s difficult to decipher wants and needs from behavioral and transactional data, which represents most of the data in any organization.
- What did they click on?
- What did they buy?
- When did they buy it?
- How much did they pay?
- What period of time passed between purchases?
- Did they read our blog?
- Did they click any of the links in our email?
- Do they follow us on Social Media?
- Heat maps telling us when they buy…. So cool.
But, WHY are they doing what they do? The behavior and transactions are not telling us that.
Oh, and 70% of buying experiences are based on how the customer FEELS they were treated. (Source: Zoominfo Customer Engagement Stats) Now it’s getting fluffy in here.
So, yes, more data, and this data tells us sentiment. It’s called the Voice of the Customer and it comes in 2 forms; structured and unstructured. The structured data is easy to analyze. It’s about preferences, but answered with the click of a button. So it’s multiple choice, yes/no, scale, etc… The true voice, however, comes from the unstructured questions, or the open-ended feedback where tools like key-word extraction and sentiment analysis can help process the data.
So when the former Proctor and Gamble CEO, A. G. Lafley said, “I am a broken recorded when it comes to saying, 'We have to focus on the customer.’… I don’t think the answers are just in the numbers. You have to get out and look." what he meant is let’s put the transactional and behavior numbers to the side and actually ask our customers questions.
Organizations that are embracing the VoC are seeing stunning results:
- Engaged customers buy 90% more frequently, spend 60% more per transaction and are five times more likely to indicate it is the only brand they would purchase in the future. (Rosetta Consulting)
- Companies that excel at customer experience grow revenues 4-8% above their competition (Bain & Company)
- Superior experiences deliver 6-14x higher customer lifecycle value (Bain & Company)
- Voice of customer programs result in up to 55% greater client retention (Bain & Company)
- It takes 12 positive experiences to make up for one bad one (Zoominfo Customer Engagement Stats)
- 2% increase in retention has the same effect of reducing costs by 10% (Hubspot Stats)
- It is 6-7 times more costly to attract a new customer than to retain an existing customer (Whitehouse office of Consumer Affairs)
Convinced yet?
Now if you’re an association, does anything here sound familiar? Do you think we can apply any of this knowledge to member based organizations?
Perhaps there’s something to be learned about the value of membership? Or what we should do in our new member onboarding workflow? Or how we should start tracking sentiment BEFORE our members choose not to renew? Or perhaps we can ask what educational content is important to them and sell more of it!
We can learn one more thing from the corporate world. The VoC systems that fail are those that don’t take action. Many of the early VoC technologies provided more data. Loads of data to analyze in conjunction with the behavioral and transactional data, which takes resources. And often is moved down the list to do other important things, so we have the data, but no good comes from it.
So we learned by watching VoC in corporate, that platforms need to be a “system of action”. The action needs to utilize the data to append the workflow automatically. There are several actions that can be automated to manage the many voices we’re hearing out there. For example, when a new member tells you why they joined, make sure there’s an automated response presenting them with programs associated with what they told you. Don’t just send them the menu of everything you do. When a member responds to your question asking why they didn’t renew and they say they didn’t realize their renewal had lapsed, drop them on the account renewal page.
What we learned here: Transactional and behavioral data are fine and provide value, but understanding and utilizing sentiment data, or the Voice of the Customer, will make significant change in the buying patterns of your customers, especially if implemented with automation, driving action.
So yes, more data. And isn’t it interesting that it’s the fluffy data that is actually producing results?!?
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