3 | Customer
Baldrige Embraces Social Media
The 2011 Baldrige Criteria give a shout-out to social media with a new question added to the Customer Focus category: “How do you use social media and Web-based technologies to listen to customers, as appropriate?”
A lot of organizations will hide behind that “as appropriate” qualifier, arguing that social media has nothing to do with them. According to David Armano (“Six Social Media Trends for 2011,” HBR, December 6, 2010), a global survey indicates that only 29% of companies have a social media policy. That puts 71% well behind the curve.
Everybody uses Google, right? Last year, Facebook had more weekly site traffic than Google. And it’s not like even the most Luddite of companies ignores social media all together: Some surveys report that 95% of companies use LinkedIn for recruiting.
So it’s not just about using social media and Web-based technologies to listen to customers, as the Baldrige question addresses, but how you use them to acquire and keep customers. With that in mind, here are Armano’s six social media trends for 2011:
- It’s the Integration Economy, Stupid. The challenge is to integrate social media into all facets of business from marketing to crisis management and beyond.
- Tablet & Mobile Wars Create Ubiquitous Social Computing. Cheaper, smarter phones and tablets will move technology consumers closer to being connected 24/7, and in more powerful ways.
- Facebook Interrupts Location-Based Networking. Facebook is about to roll out a location-based service that promises to make location-based networking…
A Baldrige View of Customer Experience
The Baldrige Criteria ask: How do you create an organizational culture that ensures a consistently positive customer experience and contributes to customer engagement?
Adam Richardson defines “customer experience” as the sum-totality of how customers engage with your organization and brand through the entire arc of being a customer. In “Understanding Customer Experience” (HBR, October 28, 2010), he suggests three layers of customer experience to consider:
- Customer Journey. The journey a customer takes with your organization from first contact to providing a product or service to supporting that product or service and extending the relationship with the customer.
- Touchpoints. All of the points where the customer interacts with your organization.
- Ecosystems. By Richardson’s definition, the integrated ecosystems of products, software, and services that offer more than isolated touchpoints.
Have you ever used Zipcar? It’s the largest car-sharing company in the United States (it’s also in Vancouver, Toronto, and London). Here in the Twin Cities, the Zipcar locations are all in or near the University of Minnesota; college students are big Zipcar customers. Richardson touts Zipcar as a great example of a company that used its understanding of the entire arc of the customer car-renting experience to turn car-sharing into a mainstream business—and help the environment in the process.
It starts with Zipcar’s website where you can find out where cars are available, how it works, and rates and plans. “All aspects of being a Zipcar member have been thought through,” Richardson writes, “from which…
1Nov2010 | Steve George | 0 comments | ContinuedBest Practice in Measuring Customer Satisfaction
This is a best practice in the measurement of customer satisfaction courtesy of CDW, one of America’s largest private companies with technology sales of more than eight billion dollars in its most recent fiscal year.
CDW had been using Net Promoter to measure customer satisfaction and brand health. You get a Net Promoter Score by asking one question of your customers—How likely is it that you would recommend your company to a friend or colleague?—and then grouping the responses by promoters (those who answer the question with a 9 or 10), passives (7-8), and detractors (0-6). You subtract the percentage of detractors from the percentage of promoters to get your Net Promoter score.
This has been a leading edge measure for many companies because it helps them identify opportunities to improve customer satisfaction. CDW decided that Net Promoter was too one-dimensional so, with the help of the person who developed Net Promoter, it went to a three-question approach that, according to Calvin Vass, CDW’s senior manager of research, looks at “different dimensions of the relationship; what the customer plans to purchase with us, if they are committed, and what they would do if we went away.” Vass is quoted in “Is Net Promoter Really the Ultimate Question?” by Drew Neisser (Fast Company, October 20, 2010).
CDW segments its market into two groups, Active Customers and Less Active Customers. It surveys the first group quarterly, receiving more than 100,000 surveys…
21Oct2010 | Steve George | 0 comments | ContinuedSeeking Very Satisfied Customers
According to a recent survey by American Express, most Americans are willing to spend an average of 9% more with companies that provide excellent service. The American Express Global Customer Service Barometer survey suggests that not many companies are taking advantage of this opportunity: Nearly half of the respondents said companies are helpful but don’t do anything extra for them, while 21% believe that their business is taken for granted. A little over a third think that companies have increased their focus on providing quality service in the current economy, which is higher than I would have expected considering all of the layoffs and the added pressure that puts on the people who remain.
One of the adages about customer service is that people are much more likely to talk about a bad experience than a good one. The survey contradicts that notion, finding that consumers will talk about a good experience 75% of the time but complain about a bad one 59% of the time. If that’s the case, companies should be investing more in delighting their customers rather than just avoiding a bad experience.
When it comes to your online image, the survey found that consumers put more stock in negative reviews on blogs and social networking sites (57%) than in positive ones (48%), but the percentages are close enough that positive and negative reviews are both important.
The Baldrige Criteria ask several questions about how you…
28Sep2010 | Steve George | 0 comments | ContinuedPlaying to Win Customers
It’s an old question—“What will help us attract and retain customers?”—with a very new answer: gaming. In “Play to win: The game-based economy” (Fortune, September 3, 2010), JP Mangalindan describes companies that “study and identify natural human tendencies and employ game-like mechanisms to give customers a sense that they’re having fun while working towards a rewards-based goal.” Companies don’t do this because they want their customers to have fun; they do it because it helps them attract and retain customers, which increases their revenues.
If you’re wondering how “gamification” might apply to your company, consider Mangalindan’s examples:
- Mint.com made personal finance a game. You can set a financial goal online and track your performance toward achieving it. You can check out your total financial score, which encourages financially responsible behavior. You can even compete with other members who have similar goals. If you think that sounds lame, think again: Mint.com claims more than 1.5 million active users.
- Nike sells a pedometer (Nike +) that you put in your sneakers. It monitors distance, pace, and calories burned and transmits the data to your iPod. The Nike software on your iPod “rewards” you if you reach a milestone. For example, if you run and you best your 5-mile distance time, Lance Armstrong congratulates you via audio clip. Nike has sold more than 1.3 million Nike + units.
- Foursquare is a mobile social network that “rewards” users with virtual badges. For example, check…
Kano Satisfaction Model
A few years ago, I met Noriaki Kano at a hotel restaurant in St. Paul to talk about his famous satisfaction model that helped earn him a Deming Prize and ASQ Medals of Distinction. A retired professor, Kano still spoke about the evolution of his model with intensity and curiosity.
The point of the Kano Satisfaction Model is that organizations need a profound understanding of their customers’ requirements to increase satisfaction and secure loyalty. Not all customer requirements are equal. The Baldrige Criteria ask: “How do you use customer, market, and product offering information to identify and anticipate key customer requirements and changing expectations and their relative importance to customers’ purchasing or relationship decisions?”According to Kano, “relative importance” can be characterized as basic, performance, and excitement.
Basic services or features do little to improve satisfaction unless they fail, in which case they can cause serious dissatisfaction. We expect the checkout lane in a store to move relatively quickly and without any problems. When it does, we don’t feel more satisfied with the store because that is what we expected. When it doesn’t, we feel frustrated and dissatisfied.
Performance services or features are those that produce customer satisfaction. If the store you are visiting is Wal-Mart and you get excited about paying the lowest prices, the signage showing great deals is a differentiable service. If you are shopping at Target, the wide and welcoming aisles and the quality of…
30Aug2010 | Steve George | 0 comments | ContinuedWhen Customer Satisfaction Is Irrelevant
“Has there ever before been an industry that’s so actively tried to piss off their entire customer base?”
Guess which industry Kevin Drum was talking about in his column?
No, it’s not credit card companies since they probably have a few wealthy customers who aren’t getting gouged by 29% interest rates.
The answer is: the airline industry.
Drum does an excellent job of summarizing how the airlines have behaved:
- First, they hassled customers about carry-on bags and convinced them to check their luggage instead.
- Next, they started charging for checked bags.
- As a result, customers stopped checking their bags and started fighting for space in overhead bins.
- American Airlines saw a new opportunity, not to improve customer service and alleviate the bin shortage on planes, but to make a few bucks by charging for “select” coach seats that gives those passengers willing to pay for it dibs on the bin space.
Same crappy seats. Same lack of any amenities. Just peace of mind that your bag will travel with you.
It won’t be long before other airlines follow American’s lead, and it won’t be long after that before airlines start charging for every bag whether you check it or not. And we’ll pay it because we don’t have a choice if we want to fly.
There’s a reason no airline has won the Baldrige Award: Their behavior contradicts one of the Baldrige core values called “customer-driven excellence.”
To read more about customer-driven excellence, click on these articles:
23Aug2010 | Steve George | 1 comment | Continued
