Taking Action With Customer Measurements
Inaction at the customer level can lead to financial ruin. Here's how to avoid falling into this economic trap.
July 7, 2009
As I read the financial news, much of the buzz is on layoffs, loans, restructuring, and in ag, inventory write downs. I hear talk of workers, but not of customers. So I am thinking, how customers will emerge from the recession? Here are some predictions.
Your customers will be less trusting at the end of this recession than they were, say, 18 months ago. Consequently, many retailer/grower relationships will be re-evaluated in light of the economic pressures we are facing.
What an opportunity to forge ahead and create a sustainable advantage over your competitors! The best retailers will use this time of turbulence to do three very smart things. First, they will focus on rediscovering the priorities of their top customers. Next, they will learn how their customers (and prospects) rank their day-to-day performance on these priorities. Finally, they will use this time of turbulence to realign their company from top to bottom to more effectively deliver outstanding customer experiences.
I have been describing a process called the Customer Experience Monitor that helps companies become more aligned with their customers. Leading companies such as Dell Computer, Harley Davidson, and LEGO are using customer experience measurements to learn what is important to their customers, and then take action to consi
stently deliver outstanding customer experiences. Over the next few months, I’ll discuss strategies to help you take action from your customer experience measurements.
|Customer Experience as
|Create goals for
|Create goals for
|Organizational learning to
|Champion customer focus
|Take corrective action.
Use follow-up to "delight."
Levels Of Action
In most companies, there are three levels where your “taking action” strategy needs to be developed and implemented: General Management, Line Management (Agronomy, Grain, Energy, or Feed) and the Front Line. The diagram shows some areas staff in each area need to focus if you are going to become aligned with customers.
General Management must set the overall direction for creating a customer-centric culture, and hold Line Managers (Agronomy, Grain, Energy, Feed, Equipment, etc.) accountable for improving the customer experience. Most agribusinesses believe they are already customer centric. Compared to companies of similar size in other areas however, many agribusinesses don’t have strategies and processes in place to delivery outstanding customer experiences. If I was an embedded observer in your company for six weeks, what would I conclude? If I did not attend any meetings where the customer experience was the top priority or didn’t hear any initiatives or participate in team meetings to improve customer experiences, I would have to conclude you haven’t achieved a customer-centric culture. More likely, the culture would be focused on operations and products. General Management is responsible for company culture.
Line Managers work directly with Front Line staff to implement your culture on a day-to-day basis. Continuing my embedded observer analogy, I would want to see Front Line mangers not only managing the company’s operations, I would want examples of cross-functional collaboration to improve the customer experience. If I stayed long enough, my manager would review my own goals and progress toward creating outstanding customer experiences.
Taking Action on customer experience measurements typically starts with the Front Line because they have the most contact with customers, and this represents your area of quickest wins. You need to consider the following in designing your customer outreach strategy for the Front Line:
■ Which customers should receive a follow-up?
■ Who should conduct the follow-up?
■ When should the follow-up occur?
■ What should happen after the follow-up?
■ How should the follow-up be handled?
|GOAL||FOLLOW-UP WITH...||REDESIGN SERVICE|
|Neutralize Detractors.||Detractors.||Begin with most dissatisfied
Detractors (0-3 on recommend
scale). As your process gains mo-
mentum, incorporate all Detractors.
|Interview Promoters, Passives, and
Detractors to uncover their percep-
tion of your performance on key pri-
orities. Leverage learning for
|Improve Relationships.||All customers.||Listen to Detractors to fix problems.
Listen to Passives to find how to
move them to Promoters.
|Mobilize Promoters.||Especially High Value
|Use feedback from Promoters for
communication to customer base,
employee recognition and targeted
Levels Of Sales
Your gold customers represent the top 50% of sales, silver customers represent the next 30%, and bronze customers represent the final 20% of sales. There are Promoters, Passives, and Detractors within each value segment. Neutralizing Detractors is your first priority because of the negative word of mouth and financial harm these customers do. (See my column on “Economic Word of Mouth” at www.croplife.com.)
The chart above links four strategic goals with customer groups that should receive follow-ups once your customer feedback system in place. Suggested service design improvements are shown for each goal.
Next, let’s consider who should conduct customer follow-up in your company. Neutralizing Detractors generally starts with the Front Line. They need clear guidelines from management regarding their latitude for resolving problems. I recommend you have an escalation path to your line managers, or higher for cases where Front Line staff cannot resolve a Detractors problem.
Customer problems often result from dysfunctional processes within the company. Optimizing customer experiences will require root-cause analysis to identify the gaps in your various service delivery processes that cause customer problems. I usually recommend companies develop a cross-functional team with staff from across the company who have unique perspectives on the customer experience and how it can be improved. The line managers in your company are the logical champions of this effort. Describing this process will be the topic of a separate column.
As a final word, I want to make three observations that will help you become more aligned with customers. First, identify your Detractors because they hurt you financially. Your customer feedback process must run all year long. Second, follow up with Detractors to understand and fix their problems. Many times, these problems result from processes within the company that just don’t work for customers. Finally, follow up within about 48 hours of learning about a detractor problem.
Keogh is president of AgKnowlogy. E-mail him at firstname.lastname@example.org or call 905-478-2282.