Are We Asking the Right Questions of Our Customer Data?
Blog: Enterprise Decision Management Blog
You have customer data coming out your ears
Chances are excellent that you have amassed a great deal of quantitative and qualitative data about your customers: demographic, transactional, social, behavioral, perhaps even emotional. Some of it is structured; some of it isn’t.
Becoming more adept at slicing and dicing that data in ways that help you make better operational and business decisions is critical. Where most organizations fail, however, is in not analyzing their data from their customers’ points of view. We’re so focused on products, processes and profits that we forget to look at what’s important to customers. And that’s no less critical.
Ask the right questions
Take, for example, these two questions a business may consider in determining what call center improvements they should make:
- “How can we reduce costs in the call center?”
- “What frustrates customers when they contact the call center?”
Both are valid—even vital—questions. The first question is about improving the company’s financial situation without explicitly considering customer needs. This perspective is referred to as inside-out, indicating our internal view and analysis of the situation.
The second question is about understanding what matters to customers. Viewing a situation from the customer’s perspective is taking an outside-in view.
Only taking action from an inside-out perspective is likely to produce a situation that causes customers greater frustration and increases their willingness to move to a competitor.
That’s exactly what many businesses discovered when they rated their call center agents on lowering average handle times in order to reduce costs. Companies learned all too late that incentivizing agents to complete calls quickly, without also setting customer-centric performance goals (such as reducing the number of calls required to resolve an issue), resulted in poor customer experience and marked drops in customer satisfaction and loyalty. So while call center costs were improved, that savings was offset by lost renewal, upgrade and referral sales. Ouch! (If your organization is using average handle time as a primary call center metric, this excellent Harvard Business Review article from 2010 discusses better options.)
Combine inside-out and outside-in for the win
Understanding customers’ needs and their lifetime value to the organization is the first step towards improving customer experience. Once we’ve developed that understanding, we can begin to take well-informed action. When we incorporate both the inside-out and outside-in perspectives in our improvement processes, we can make changes that align with company goals and improve the customer experience.
A real-world example of this principle at work is the loyalty program launched by one of FICO’s major grocery store chain clients. In looking at competitor’s programs, it became clear that the outside-in perspective was missing. Offers being sent to those programs’ customers weren’t personalized or relevant. And customers weren’t buying.
FICO’s client made relevance to customers a requirement. The company leverages FICO’s powerful analytics tools to determine exactly what specials to offer—and when to offer them—on a customer-by-customer basis.
By incorporating outside-in thinking and caring about customer outcomes, the company has substantially increased its share of wallet from its best customers, while customers rave on Twitter: “How did they know we ran out of mayo this week,” and, “They really know me :)” (Read more about the success of this loyalty program.)
Show your customers they matter
When we ask customers to fill out a survey, provide their feedback or allow behavioral data to be collected, there’s an implicit agreement that we’re going to use that information to improve things for them. If you’re collecting customer data and not doing anything with it, stop. You’re wasting your time and theirs. By not acting on the data, you’re breaking that implicit agreement.
When customers see that we understand and care about their needs, it builds loyalty and improves customer lifetime value. What could you accomplish by taking your existing customer data and looking at it in a new light? How would your customer experience improve, and what would that mean for your organization?
We’re here to help
We’d be happy to learn about your organization’s unique circumstances and share our ideas on where you can go from here. Get in touch.
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