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Customer Relationship Metrics

Based on insight gained from listening to the voice of their customers, companies can better design their CRM processes.

The voice of the customer is conspicuously missing from most discussions about CRM. We talk much of the technology; we talk even more of integration of that technology; we talk of ways to get people within the organization to use the technology; we talk of ways that we believe CRM will benefit our customers. Yet we seldom listen to the voice of the customers themselves.

CRM without the voice of the customer is like an ERP system that doesn’t link to your suppliers. It will be incomplete, ineffective, and will fail to provide the positive return on your investment that you anticipate.

By listening to the voice of your customer, you let the customer engineer the experience. This article illustrates how you can gather and measure the voice of your customers in ways that are timely, meaningful, statistically sound, affordable, and actionable. With the insight gained from listening to the voice of your customers, you can design your CRM process and choose the right technology based on what your customers tell you is important to them.

The Devil Is in the Details

Managing customer relationships is like smiling on your wedding day. Everybody’s for it; nobody is against it. But as my grandmother used to say, “Good intentions alone won’t get you to heaven.” You need to do what you intend to do. With CRM, the way to bridge the gap between good intentions and effective actions is to listen to the voice of your customers.

Where Can You Listen?

Where is the best place to listen to the voice of the customer? It’s through your call centers. In many organizations today, 90 percent or more of all customer interactions occur electronically - most of those by telephone. Interactions via the Web and email are increasing rapidly. These other types of electronic interactions are also being handled by your call centers, which have morphed into multimedia contact centers.

Therefore, the focus of this paper is on how to develop an effective plan for listening to the voice of your customer during the interactions they are having with your company through the telephone or other electronic means.

If the voice of your customers is missing from your current CRM initiatives, understand that it is a costly omission - one that can cause you to be among the many who have experienced CRM failure rates reported to be as high as 75 percent. You can remedy the situation if you take the right steps. If you are currently in the planning stages for a CRM initiative, this is the perfect opportunity to integrate the voice of the customer into your management metrics and improvement processes. If you have any or all of your CRM initiative in place without representing the customer, add it immediately.

What’s Wrong Here?

If your call centers operate like most, you already have an extensive - and costly - method of call-quality monitoring in place. A sampling of calls are evaluated and scored, those scores are rolled up into composite reports, which are bundled with automatic call-distributor (ACD) statistics, and these are then presented to you for your regular review. The reports you see reveal average caller satisfaction scores of 95 percent and higher. By all indications you’re doing well.

But stop and ask yourself, “Who says so?” On whose criteria are those high percentile scores based? Herein lies the weakness of most quality programs. Many call-quality monitoring programs attempt to rate aspects of the call that have little correlation with caller satisfaction. They are based on someone’s presumptions about what customers are supposed to think is important.

The monitoring form that is used by your call centers has a convoluted history. It may have been created by a committee, or by a manager with related experience in a different call center. Or, perhaps it was drawn up by a senior executive who has some personal expectation of how a call “should” be handled.

The criteria covered by your evaluations have then been tweaked over time. They have grown in both length and complexity. They have evolved within a mental construct, which assumes that if only your agents will follow all of the criteria set forth in the monitoring form, then you’re doing right by your customers. Beware: there is a link missing from this chain of logic.

Put it to the test, and your current method of monitoring call quality may leave you scratching your head in disbelief, because it reveals a gap between the internal quality scores and your ­customers’ experience of the quality of service they received. If this happens, you’re not alone.

Our Findings

Customer Relationship Metrics conducted a comparison between companies’ monitoring scores and their customers’ evaluations for 2,500 CSRs over a three-month period. We found no statistically significant correlation for any of the comparably measured attributes. The attributes we compared included product knowledge, courtesy, quality of the answer given, empathy, tone of voice, listening skills, and overall satisfaction with the call.

Our research proved that the call-monitoring team cannot ­evaluate your customers’ experience for them. A better way is for you to allow callers themselves to evaluate your service delivery, leaving the call-monitoring team to concentrate on evaluating things such as internal adher­ence to policy and procedures.

How do you do that? You do it by measuring the voice of the customer.

Ways to Listen to the Voice Of the Customer

Companies that actively listen to the voice of their customers continue to refine their methods for doing it. It’s been a rapid evolution. By learning from others’ experiences as described below, you can leapfrog over older methodologies to embrace today’s best practices.

A Slight Improvement

Historically, companies that have sought to overcome the myopia that stems from sole reliance on internally-generated evaluations of customer satisfaction have turned to mail or phone surveys to augment their understanding of the customers’ perception of the service delivery. Mail and phone surveys are useful to some extent. The problem is: they are costly; they are slow; and response rates to both have declined precipitously in recent years. The biggest limitation is that responses from mail and phone surveys are inherently biased.

The Problem of Bias

Biased survey results are very dangerous - very dangerous because you are making operational and personnel decisions with flawed information. Some of the pitfalls of relying on mail or phone surveys include:

• The bias of self-selection. Respondents to mail or phone surveys tend to be those customers who are either truly delighted or very displeased. Relying only on responses from customers at either end of the satisfaction spectrum gives you a distorted view of what actions you should take. You can become lulled into taking no action. Or conversely, you can be falsely convinced to take expensive actions to fix a problem that is, in fact, a rather isolated incident.
• The questions you ask. Home-grown surveys are often obscurely worded, contain multiple concepts, or ask leading questions. If your survey design is poor, you are better off not measuring the voice of the customer at all.
• Delay. Mail surveys, in particular, have a long, built-in delay. Customers are unlikely to remember the details of a three- or four-minute phone call several days or several weeks after it occurs. CSRs, too, will discount the feedback as being nonspecific and unreliable; therefore, they are not open-minded to receiving it. The longer the gap between your customers’ experience and their evaluation of it, the lower will be the confidence level of the feedback gathered. In fact, beyond 24 to 48 hours, error rates in recall can be as high as 60 percent.
• High cost. Declining response rates to mail surveys and increased postage rates are driving the cost per response ever higher. With the technology existing in most call centers today, there is no reason to use mail surveys to measure customer satisfaction. As a consequence, phone surveys have come to be used more and more. Today, however, customers’ increased resistance to receiving telemarketing calls has now spilled over into resistance to receiving calls for follow-up surveys. So the cost per response of phone surveys has also spiraled upward. The high cost per response for both mail and phone surveys often entices managers to take shortcuts, which could tip you into the next pitfall.
• Small sample size. Your sample size must be large enough that you can generalize it to the entire call population. Don’t cut corners here. If you cannot afford to undertake a statistically valid sample, don’t try.
• Incorrect statistical analysis or analysis based only of numerical scores. Survey results - even from validly worded surveys - cannot be analyzed in isolation. In order to manage the flood of information that can be obtained from customer surveys, you need to know what key factors drive caller satisfaction, you need to segment perceptions of service by types of customers, and you must correlate customer evaluations with operational metrics (see Figure 1).

Somewhat Better

To remedy the pitfalls described above, some organizations have recently adopted interactive voice response (IVR)-based surveys. IVR surveys eliminate the problems of delay and the bias of self-selection. They also overcome the high costs associated with declining response rates to mail and phone surveys. They are a definite improvement over old ways of soliciting customer ­feedback. However, depending on your technology, your scripting and branching options may be inflexible; you may struggle for internal resources to manage an ongoing program; you will likely be unable to capture qualitative responses; and you will not be able to drill down your analysis of customer responses to the level of each agent. Most glaringly, if you rely on a plain IVR-based tool, it means that you are still missing the actual voice of the customer.

Defying the Limits

Fortunately, you can defy the limitations of each of the survey methods we have talked about so far. Leading companies today have begun to embrace a more comprehensive, multiviewed approach to eliciting the voice of the customer through advanced applications of IVR. One such system is known as CATs® (completely automated telephone survey), which is a complete process for gathering, analyzing, and providing results so you can act upon the voice of your customer.

This process utilizes IVR-type technology coupled with sound survey design, extraordinary flexibility in script branching, and the ability to capture the actual recorded voice of your customer. By adopting a similar methodology, you will be integrating best practices in customer relationship management into your CRM implementation. You will defy the limitations of all older survey methods.

What Best-Practice Methods Will Do for You

Feedback from such a system is less expensive per response than either mail or phone surveys. The methodology for it largely eliminates the bias that stems from self-selection. Whereas response rates to mail surveys typically run as low as 2 percent, response rates to a system similar average as high as 25 percent.

Here’s how it works. Callers are greeted at the beginning of the call with a request to provide feedback at the end of the call on their satisfaction with the interaction. This is done without the agent knowing of the impending evaluation. When they are done speaking with an agent, they are connected to an external survey. Because the request for feedback is immediate and non-intrusive, response rates are very high and confidence levels of 95 percent and higher are easily achievable.

This type of system enables you to capture qualitative feedback in the customer’s own words. In addition to being asked to respond to various questions on a numeric scale, respondents are invited to say - in their own words - whatever they would like to say about the experience. The technology captures customers’ actual words and the transcription complements and elaborates on the scores. The comments are reported in aggregate as well as attributed to specific calls and specific CSRs.

The CATs® process or one similar is more robust than a standalone IVR system. With it, you get graphical feedback in the form of an impact and performance chart based on your call center’s key drivers of customer satisfaction (see Figure 2).

Where This Will Take You

While good intentions alone won’t get you to heaven, once you back those intentions with the right technology and an analytically sound process for using the voice of the customer to engineer your CRM strategy, you will be well on your way to CRM heaven.

Correctly integrating the voice of your customer into your CRM initiative will result in a host of process improvements that may include any or all of the following:

• You will be able to provide performance feedback to CSRs in a way that motivates rather than de-motivates;
• You will have clear direction that allows you to focus improvement initiatives in the right areas - those areas that your customers say are important to them;
• You will avoid frittering away time, money, and energy into misguided change initiatives;
• You will be able to calibrate the voice of the customer with operational measurements, resulting in a truly balanced scorecard;
• You will gain the insight needed to determine the best ways to stratify your service for different types of customers based on their value or their potential value to your organization;
• You will gain increased customer share (and be able to prove it), leading to a higher ROI for your CRM initiative; and
• You will have in place the statistically valid data collection tools that you need to pursue Six Sigma quality in your service delivery processes.

Summary

The voice of the customer provides a solid foundation on which to build your CRM initiative. Best-practice companies listen to the voice of their customers and let their customers engineer the CRM experience. If that voice has been missing from your current CRM implementation, now is the time to put it in. If you are just now planning your implementation, by using the ideas summarized in this article you are well poised to integrate the voice of the customer from the outset.