Which has the biggest impact on customer commitment?  A) brand image B) customer service experience C) offering good value products and services.

  

As customer service professionals this is an important question to know the answer to to ensure the ongoing support from senior Board level executives for the work being carried out at the front line in the contact centre.

So here’s the answer……. 

Across a number of studies conducted by Fifth Quadrant we have found that customer service experience is consistently identified as either the most important or the second most important driver of customer commitment.  

This has been validated through using both direct questions as well as more sophisticated regression modelling techniques.
In a recent global study we asked, "Please indicate the top three reasons that would cause you to move your business away from one company to another company."  At a global level, 37% of respondents indicated that the attribute, 'the company no longer offering good value for their products and services' was the main reason why they would move their business.  This was followed by 21% of consumers who indicated that ‘poor customer service experience’ was the main reason.

In many other studies we often use driver analysis (Multiple Regression) to understand the strength of relationship between a range of business based attributes with brand commitment or advocacy (NPS).  These attributes have often included statements such as; ‘Having a range of products that cater to all my needs’, ‘Offering the best deals’, ‘Having great quality customer service’, ‘Being flexible in meeting my needs’, ‘Being easy to do business with’ and ‘Being familiar and well-known’.  Across these studies we have repeatedly found that it is the customer service attributes that have the strongest relationship with brand advocacy measures. In one particular analysis we quantified that customer service performance was responsible for driving over 45% of the Recommendation (NPS) performance.  This was followed by ‘Product’ related attributes at just over 40%. 

A study conducted by Intelligent Dialogue found that amongst consumers that had stopped dealing with an organisation, 54% had done so because they had a problem that wasn’t dealt with satisfactorily. Similarly, a blog posed by Forrester’s Kerry Bodine, highlights the same relationship, that a positive customer service experience in a contact centre is strongly correlated to stronger levels of brand consideration and advocacy (NPS). 

Whilst the focus of this blog is customer retention and commitment, we have also found that, for some customers, a good customer service experience can be a significant acquisition driver too.

So what does the mean from a customer experience measurement perspective?  Most organisations are happy to monitor and track customer satisfaction or NPS, often collected thorough short automated online or IVR based surveys.  But this basic data has significant limitations with respect to understanding and quantifying the link between good customer service experience and business performance measures.  For customer service to be taken seriously by the Board, demonstrating this relationship empirically is key. 

Having attended Salesforce.com's annual conference, Dreamforce, last week I return to sunny Sydney thinking, what were the genuine highlights? Now, being a huge Metallica fan makes this a fairly easy decision: check out the video here. To be honest a lot of things stood out and a more detailed analysis of Dreamforce will follow, but for the purpose of this week’s blog I wanted to focus on one of the breakout sessions, 'Key KPI’s for Customer Service and Support'.

This session stood out for me because of a comment made by one of the presenters. Vala Afshar, Chief Customer Officer at Enterasys, said, in the context of the presentation, and I paraphrase here a little, "We are committed to Salesforce.com". That is a hugely powerful endorsement from a customer in front of over 200 people. This comment highlighted to me that much of the current industry discussion about customer experience measurement KPI's misses the point. Much of the current debate centres on Customer Satisfaction (CSAT), Recommendation (NPS) and more recently the Customer Effort Score (CES). There is, however, very little debate about measuring the likely future behaviour or the strength of the customer's relationship with the organisation as a result of their experience.

Satisfaction is, "the fulfilment of one's wishes, expectations, or needs, or the pleasure derived from this." Compare this to Loyalty. Loyalty is, "giving or showing firm and constant support or allegiance to a person or institution." So what would you rather have, satisfied or loyal customers? Loyal customers right? But what about commitment? Commitment is, 'the state or quality of being dedicated to a cause'. Powerful stuff, and much more powerful that loyalty.

So what does this mean from a customer experience measurement perspective? Having spent over 15 years researching customer experience and brand relationships, I would argue that high satisfaction does not always lead to higher customer loyalty or commitment. Therefore, organisations need to make sure that in addition to CSAT, NPS or CES, a customer experience measurement programme should also include relevant future behaviour measures such as consideration, share of wallet or likelihood to increase spend to better link customer service experiences to positive commercial outcomes. In summary, the most important information a customer experience measurement programme should deliver is identifying which aspects of the customer interaction process drive customer future behaviour not just satisfaction.

Last week I presented a paper at the AIST Superannuation Symposium in Melbourne. The theme of the presentation was ‘Member Engagement Opportunities through the Call Centre.’

The focus of the presentation was on understanding the fast evolving world of the Multi-Channel contact centre. I won’t go through the details of the paper but want really stood out for me was a question raised by one of the delegates (ironically asked through a live text feed). The question was, “What three tips would you give in order to improve the experience of our Members?”

After thinking about this further, I would stand by the three points I highlighted at the time;

1. Service Strategy needs to be enterprise-wide. In addition, the best Service Strategies are Board-driven and are directly linked to organisational performance goals.

2. Develop a Multi-Channel service strategy. The current convergence and integration of customer service channels and the increasing sophistication and use of multi-media channels and devices by customers means the contact centre landscape is changing rapidly as well as dramatically. Our own research tells us that the customer service experience accounts for at least 30% of total Advocacy and Loyalty ratings by consumers. The availability to customers of channel options, access, speed and convenience are becoming key drivers for these Loyalty metrics.

   Today, organisations which are seeking to gain competitive advantage, create a continually improving customer experience, improve loyalty and potentially reduce operational costs, are investigating Multi-Channel Service Strategy.

3. Any Service Strategy must be customer centric.

Of the three points I would argue that ensuring the Service Strategy is customer centric and grounded in customer insights is the most important. Understanding how customers want to engage with you as an organisation and what their service needs are should sit at the heart of any Service Strategy. If organisations do not understand what the customer wants in terms of being able to engage with organisations, managers will effectively be chasing their tails not knowing where to invest and how much. Do I invest in social media or do I focus on improving my email channel? Do my customers prefer to use email or social media? All of these questions need to be asked from a customer’s perspective. The most successful organisations put the ‘customer’ at the heart of everything. Becoming a truly customer centric organisation can be a very challenging process, but one of the first steps must be to get out there and start asking your customers, ‘what do you want and what can we do to improve our service?’.

Many clients often ask for advice with regards to setting KPI's for measuring customer service performance. Often discussions focus on Satisfaction, Advocacy (NPS), Effort and Query Resolution. Whilst these measures are very relevant, measuring the customer's emotional response to a service interaction is generally not top of mind. Research often explores the emotional responses consumers have to brand, marketing and advertising programmes, but less often focuses on the measurement of consumers' emotions prior, during and as a result of a service experience with an organisation. Traditional measures of service experience tend to focus on the cognitive response (level of satisfaction) whilst neglecting the emotional response and its impact on customer future behaviour.

It has been proven that the measure of customer satisfaction, as the primary surrogate of the customer experience and its usefulness in predicting customer behaviour is limited. Satisfaction is a mental assessment of expectations minus service received and does not pick up feelings or emotions. Service interactions can involve up to 75% emotional processing and, as such, it is essential that an assessment of customer experience encompasses both cognitive and emotional measures that can be used to predict how a customer will respond or act in the future.

Leading academics, marketing theorists and practitioners now prefer to model the customer experience on both a customer's psychological or cognitive response (satisfaction) to a service experience as well as their emotional reactions (connection). A combination of both cognitive and emotional response provides a measure of a customer's engagement with an organisation. Engagement has been demonstrated to be an excellent surrogate for the customer's overall experience and a significant predictor of a customer's future behaviour with an organisation.

At Fifth Quadrant we have demonstrated the importance of measuring and understanding emotion and have proven the link between emotion and future behaviour in every customer engagement research study it has conducted over the last 5 years. More specifically the measure of 'happiness' has been statistically proven, both by Fifth Quadrant's own research and from studies in the literature (e.g. The DNA of Customer Experience by Colin Shaw), to be the primary emotion that drives positive future customer behaviour i.e. future purchase/usage and advocacy. Whilst other emotions are important to the service experience (e.g. pleased, calm, stressed), happiness has been proven to be the strongest single emotional predictor of future behaviour and therefore why Fifth Quadrant places such importance on including 'happiness' within any measure of service experience.

Sticking to the multi-channel theme for this week's blog, I wanted to spend a bit more time and expand further on how organisations can navigate through the complex world of developing a Multi-channel Strategy.

In the last blog I talked about the need to understand the level of engagement and effort associated with each channel to help prioritise where to invest your channel $$$'s. This is all well and good as a starting point, however in order to deliver a truly customer driven Multi-Channel Strategy one must dive deeper and understand the how’', the why's and the who's of the multi-channel world.

Let me explain. Let's take Sandra who is 25, single and a heavy mobile phone user. On Monday she contacts her mobile service provider to make a complaint about an error on her bill. Her instinct is to phone the call centre as she wants to speak to an agent who can rectify her issue there and then. Makes sense right. However on Wednesday she contacts the same mobile provider via the online self-service portal to update her personal details. Same customer, same company, but now a different transaction has led to a different channel being used.

Now let's take Ken who is 55 years old and lives in a regional area. Ken is also a customer of the same mobile phone company as Sandra. Like Sandra, Ken calls the call centre to make a complaint about an error on a bill. Later that same week he calls the call centre again, but this time it’s to update his billing address. Now we have the same customer, calling the same company on the same channel but for different reasons.

Now multiply this by 2 million customers, 25 channels, 20 different types of transactions and you can start to see how planning the right channel mix and agent skills to deliver an effective Multi-Channel Strategy can easily become very complex. To navigate this challenge one needs to develop a systematic way of digging into the data.

An effective Multi-Channel Strategy must put the customer at the heart of everything. These two questions are a good starting point:

• What channels are they using most often?
• What queries are they using each channel for? 

By answering these questions organisations will be able to identify which channels to invest in, but also identify the right level of resourcing and the agent skills required to effectually meet customer needs.

For more information on the Avaya Contact Centre Consumer Index 2011 – Australia and New Zealand, contact Sarah Husbands shusbands@avaya.com