Tag Archives: customer experience

Valuing Customer Value Management

Customer Value Management (CVM) is widely undervalued in the way we practice customer experience management (CEM). Excellent resources on the CVM topic abound, yet few executives &#8212 and even few CEM professionals — are aware of them. Sometimes CVM seems too quantitative or difficult to grasp or implement, but the companies that have distilled customer value management principles are certainly reaping higher value for their stakeholders, especially customers! In addition to step-by-step calculations for customer lifetime value, return on customer, customer equity, customer value-added, and other essential metrics, CVM literature provides practical advice that is absolutely necessary for managing customer experience right.

Firms of Endearment (by Sisodia, Sheth & Wolfe) explains how "endearing companies tend to be enduring companies". By asking a broad sample of people which companies they love, and then working backward to identify those companies’ collective, distinctive set of core values, policies, and operating attributes — and then their return on equity — amazing findings resulted. The firms of endearment (FoE) list includes the usual suspects, and then some: Amazon, BMW, Caterpillar, Google, Harley Davidson, IDEO, IKEA, JetBlue, Johnson & Johnson, LL Bean, REI, Trader Joe’s, UPS — to name a few. "They actively align the interests of all stakeholder groups, not just balance them … and can do seemingly contradictory things such as pay high wages, charge low prices, and get higher profitability." Indeed, the financials seal the deal: " the public FoEs returned 1,026 percent for investors over the 10 years ending June 30, 2006, compared to 122 percent for the S&P 500; that’s more than a 8-to-1 ratio! Over a 10-year horizon, FoEs outperformed the Good to Great companies by a 3.1-to-1 ratio." Continue reading

Customer Value Creation Essentials

Value creation is perhaps the single most important aspect of any executive’s job. As such, crystal clarity on what it is and how it’s done should certainly be top of mind. Shareholder value is fueled by customer value; shareholders leave when customers leave, not the other way around. Customer value is an ambiguous term, as it can be used either from the company’s or the customer’s perspective. Few companies know the lifetime value of their customers, or collective customer equity, and more importantly, fewer still know how much customers value their brand, and why.

Why care about how much customers value your brand? Because the customer view of the company’s value is a predictor of market share and shareholder value. Vodafone’s Graham Maher, Managing Director, says “The Customer Value Management (CVM) score is a leading indicator of Vodafone’s market share. We were able to predict market share a quarter out using CVM data, to within 1% accuracy! In fact, the Finance Director said the CVM score is more robust than any of our financial Continue reading

Trust & Choice: Essential Customer Experience Ingredients

This article describes the 5th of 10 unique characteristics of customer experience relative to more well-known concepts such as customer satisfaction and retention. The characteristic defined in this article is: Choice — Customer experience is built on trust and mutual respect for variety; share of budget is more important than loyalty.

So you want a relationship with your customer? If one of your greatest hopes is for your brand to be loved by your customers, think about what it takes for your personal relationships to thrive. Since customers (even B2B) are people, they tend to have similar responses to relationship strengths and weaknesses whether the relationship is personal or with a brand. As you know from your own experiences, trust and respect for your choices are at the root of relationship failure or success. Yet, customers’ trust of companies is steadily eroding! In fact, U.S. consumers’ trust dropped a whopping 8 points from 2010 to 2011 in the Edelman Trust Barometer study1, and U.S. and U.K. firms rank 8th and Continue reading

Customer Experience Social Media Conversations

Social media contains a wealth of information about the customer experience, and savvy managers are paying attention. In my interview with Sean McDonald, fomer director of Dell’s online community, he points out that the social Web is full of customer comments, and engaging customers in conversations enables opportunities for:
– Building brand reputation: turn negative sentiment into positive word-of-mouth.
– Customer service: delight and retain customers for additional growth.
– Competitor analysis: see how they are viewed by customers.
– Sales leads: find customers who are researching your brand category.
– Employee engagement: channel relevant data to all functional areas.
– New product development: augment focus groups with private community inputs.

Transition to Conversations
“Typically customer conversations occur on a need-only basis, which is unfortunate,” he says. “Companies are aligned by departments to facilitate the ease of their production: Finance keeps the books, HR manages people policies, etc. — and most departments are inward facing. Customers’ conversations used to be at barbecues, around water coolers, and in back halls. The social Web has unleashed a billion users with an appetite to share and learn from people like themselves.The Web has become more social and given literally everyone a voice.”

“Companies can engage in conversations both online and offline about customers’ passions and interests to build Continue reading

Recognize Employees for Improving Customer Experience

Humans, as well as all living things, align their behaviors with the rewards in their environment. For example, only 42% of companies agree that they can do what is right for customers despite the pressure to make current-period financial numbers. Interestingly, the same number of companies are actually using customer metrics to evaluate organizational performance.1 To engage executives and employees in customer experience management, walk the talk, and put your money where your mouth is.

Most Rewards are Invisible
There is a wide spectrum of influencers on human behavior, spanning a simple smile of approval, to a sixth sense of what gets you ahead or penalizes you, to fabulous attention and monetary increases. All of these influencers Continue reading

Customer Experience Data: Untapped Gold Mines

“More companies are getting to the point of putting the customer at the central part of their data collection systems, and managing from outside-in. That’s when you know you’re working to optimize customer experience.”

This theme emerged in my recent online interview with Theresa Kushner, Director of Strategic Marketing Customer Intelligence at Cisco Systems. Theresa is co-author of the book, Managing Your Business Data: From Chaos to Confidence. Her team at Cisco received the National Council for Database Marketing Award for Analytics and Modeling, as well as The Data Warehouse Institute Best Practice Award, for Cisco’s new customer intelligence center initiative that integrates customer data for sales, marketing and financial applications. This initiative assisted in correlating over $500 million in customer bookings.

Customer Experience ManagementTheresa explained how to go after the gold in your customer data, avoid fool’s gold, and refine your customer data gold to make a difference in your business growth and profitability. Untapped opportunities exist in:
*Making use of unstructured data, such as customer inquiries
*Connecting data systems such as order-entry and sales
*Helping Sales, Service, Finance, and the whole company see the customer in totality
*Allowing customer-facing people easy access to combined customer/company data
*Enabling customers to define their profile and why they’re interested in the company
*Demonstrating to customers you can move with them as a partner
*Avoiding pitfalls of fools’ gold, such as Continue reading

Marketing Wins Strategic Clout by Driving Customer Experience Management

Traditionally, Marketing takes the organization’s message to the customer base, but now equally important is Marketing’s potential to take the customer base’s message back to the organization.
Marketing sets up the value proposition that the brand represents, but ultimately customers define what brand truly means to them. The way we actually deliver the value proposition is more relevant than what we tell customers.

Customer Experience ManagementThis theme emerged in my recent online interview with David Cliche, Vice President of Global Interactive Marketing at Aon, a leading provider of risk management and workforce productivity solutions. Dave’s role includes leadership of interactive marketing, customer experience management strategies, sales operations, corporate communications, marketing research and analysis, and knowledge management.

“Delivery on brand expectations is most important and customers will tell us how well we do that. There’s so much to learn from the Sales and Customer Service interactions with customers”, explained Dave. “Take all those lessons learned for improvement, and drive them into creation of Marketing programs and value propositions. Then take the customer experience full-circle back into the organization as part of the strategic Continue reading

Customer Experience Research & Customer Outcomes

If the “customers’ jobs-to-be-done” concept is becoming embraced as essential for successful innovation, why is it largely ignored for monitoring of customer experience and satisfaction? Customers’ jobs-to-be-done (desired outcomes) are the customer’s viewpoint of functional and emotional needs to be fulfilled. Hence, the solution a firm sells is a means-to-an-end, simply a tool meant to enable the customer’s desired outcome from the points of need awareness through need extinction.

“For any given job, customers collectively apply 50 to 150 metrics to measure how well the job is getting done”, says Anthony Ulwick in his book What Customers Want. “Only when all the metrics for a given job are well satisfied are customers able to execute the job perfectly. Figure out which of the 50 to 150 outcomes Continue reading

Customer Retention Begins With Trust

Why is it hard to retain customers? Of course there’s the ongoing battle with competitors. They may make highly attractive offers to your customers that are hard for them to refuse, and their brand affinity may have strong appeal to your customers – brand affinity here is positive association built through cause marketing, perceived social status and so forth.

Over-focus on customer acquisition teaches customers to switch brands. For example, the brand switching rate, called customer churn, is 40% for the mobile phone industry, compared to a 7% customer churn rate for the insurance and financial services industries. As growth slows in acquiring new customers – either due to the economy or to shrinking technological gaps with competitors, more companies are pursuing customer retention as a vital corporate strategy.

Not Planning or Funding Retention
Most executives and marketers can quote the well-known universal statistics on customer retention – that a small improvement in the number of customers retained can Continue reading

Customer Survey Metrics: Are They Really Satisfied?

By Guest Blogger Michele Goetz

Customer Satisfaction studies have become a mainstay metric in Marketing’s effectiveness dashboard. However, all too often this metric is used as a feel good measure promoting top box results. Leveraging customer experience analysis to also identify drivers of bottom box response can make the difference in shoring up attrition, improving product and offer capabilities, or creating stronger client references.

The Need:
A leading online retailer noticed sales in certain key segments slowing or remaining flat in North America and Europe. They needed to Continue reading