This post is by Paul Scott, Paul works with purpose driven organisations in Australia and Europe in the digital technology and customer experience industries.
When Microsoft launched the Vista operating system in 2007 and Coca-Cola launched New Coke in 1985, they reckoned they were onto sure-fire winners. They’d collected data from customers through thousands of interviews, focus groups and customer feedback. But the one data source that might have given them the truth about their new big idea was left on the shelf – customer call centres. If they’d bothered to ask simple loyalty questions, customers would have told them what needed to change – if anything – to avoid them leaving for the competition.
Data governs the world of marketing and product managers today. If you’re not using Google Analytics, mining your CRM, pulling stats from the media, sourcing insights from external research providers and capturing user data – you’re not in the game. Customer sentiment and behavioural data are at your fingertips in digital form – everywhere and anywhere.
But ask a marketing manager how often they listen to recordings from their call centre or analyse verbatim comments from Net Promoter Score (NPS) surveys, and you’ll often be greeted with a blank stare or a slightly coy giggle. After all, what additional insights can be gleaned from existing customers we don’t already know? And anyway, why bother with data from existing customers; marketing these days is focused on customer acquisition more than retention.
What is driving this ambivalence, and what precisely can be learned from listening to calls and scrutinising NPS results?
Focusing effort on customer acquisition is all well and good. Still, it ignores the fact that the most cost-effective way to acquire a new customer is to be recommended by an existing customer. To find out who these satisfied customers are and why we need to pay attention to them, we need to look inside customer service operations and call centres. For it is here that the golden nuggets of customer feedback are buried.
I worked in the customer services industry for 20 years, 10 of those with Merchants, the call centre consulting and outsourcing arm of Dimension Data (now NTT). As part of the leadership team, it was common practice to be given recordings of customers. Listening to these on the way to work each morning gave our leadership team a unique insight into the customer experiences – good and bad. We and our clients could use this data to shape services and inform marketing teams on products and services performance. The insights gathered often drove campaign activity and product development strategy.
One of Merchants biggest customers was iiNet – the Australian internet service provider (ISP). Their founder and CEO at the time, Mike Malone, was a passionate advocate for delivering exceptional customer experiences. He believed profitability for ISPs was largely dependent on retaining customers and having them advocate for new customers on the company’s behalf. He was proved correct; iiNet has consistently outperformed its rivals in the ANZ market. They make healthy profits where their competition struggled to break even because of high churn rates and significant customer acquisition costs.
There’s some other compelling evidence to support the iiNet experience. A study in the banking sector found that referred customers were both 15% less likely to churn and 25% more profitable than those acquired through other means. Plus, referred customers are proven to spend 25% more, are more likely to make a repeat purchase, and three times more likely to refer someone else.
Listening to calls might sound a bit old school, but it plays an essential role in bringing customer experience to life. And if data is needed to back up audio, what better source is there than Net Promoter Score (NPS).
Returning to the iiNet experience, Mike Malone was an early adopter of NPS in the 2000s. He quickly realised the power of asking two questions – one collecting a satisfaction score determining loyalty and the other providing verbatim comments qualifying the score. iiNet consistently achieves NPS scores in the 60s, which is highly unusual for ISPs, where the benchmark is in the mid-30s. Other well-known names have some very revealing NPS scores:
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So how can NPS help marketing managers?
NPS is made up of two questions asked of customers – either periodically as a relationship measure or during a customer service interaction process indicating service quality:
- On a scale of zero through to 10, how likely are you to recommend us to a friend or colleague based on the experience you’ve just had with XYZ company or product? Where zero is not at all and 10 is every time.
- Can you briefly explain why you gave us that score?
Those scoring 9 or 10 are described as promoters. 7 and 8 are called fence-sitters, and anyone scoring from 6 down to zero is called a detractor. Once accumulated scores are gathered, subtracting the percentage of promoters from the percentage of detractors creates the NPS score.
The scores are valuable for tracking benchmark comparisons and the overall likelihood of loyalty or referral. But of more value to marketing managers perhaps is the verbatim comments supporting the score. These golden nuggets can be used in two ways: one – lower than average scores can be fed back to the specific call centre agent to help them improve service next time around, or perhaps call a customer back and seek a better outcome; two – the comments can be used by product and marketing teams to improve quality or functionality, or even inform the facets of a new product.
A joint venture I helped set up in the Middle East – Silah Gulf – become an adopter of NPS for its Bahrain telco client, VIVA. Not only did NPS drive up service quality, but it also played a significant role in formulating product strategy, propelling them to No.1 in the region. Call centre feedback becomes an important element of product and service positioning, driving decisions on segments and sectors of the market they felt confident addressing.
Technology plays an ever-increasing role in determining how marketers use data to inform how and where they promote products and services. Technology is also driving how products are promoted.
Six years ago I was working in Europe with an online travel bookings business. They understood the power of customer analytics and call centres. Two hundred data scientists globally gathered and analysed customer behaviour from theirs. They also collected calls from 5,000 customer care agents in the USA, South America, Europe, Asia, and the Middle East. The company’s CTO led their customer care team. He became the most prominent advocate for employing humans to answer customer calls – although, to be honest, you needed the deductive reasoning skills of Sherlock Holmes to find the call centre number on their website.
There were three conclusions he shared that have stuck with me ever since. They fully encapsulate why the human and digital channels of customer service provide organisations with the most significant data collection asset they can muster.
His three immutable facts he described were as follows:
- The customer is rarely, if ever, right. Our CTO knew this to be true because he had the data collected from cookies and behaviour tracking on the site. Relying on customer focus groups and similar market research techniques inevitably had unconscious and group-think bias built in.
- Customer complaint calls are a good thing in his opinion because they provide evidence of aspects in the customer journey that aren’t working and need to be fixed. This can then be correlated to digital behavioural data to inform where changes are required.
- Customers who complain and have their problem fixed spend on average 12% more per annum than those that don’t call or are not answered.
This last point was the business case for employing a further 5,000 staff globally to answer phone calls from customers.
However, it’s all too easy to assume that AI and analytics will always provide the correct answer. Marketing managers must question the validity and efficacy of information presented to them on dashboards and data streams.
Listening to customer calls and reading verbatim comments provides colour, context and meaning, instantly relatable and actionable.
NPS provides data in quantitative and qualitative form. This doesn’t mean abandoning digital data sources, AI and the like, but it’s worth exploring the data organisations already hold from their customers. Who knows, it might provide that golden nugget that informs a new campaign, a new product or service development, or prevents the kind of red faces caused by poor product design decisions.
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