Customer feedback is a gift-especially from disgruntled
customers, because they represent customers that care
enough to tell you what they really think rather than being
frustratingly neutral in all of your surveys.
So, how do you take advantage of it?
The first question you should ask is whether or not you
SHOULD take advantage of it. Not all customer feedback is
created equal. Oh, no. Some of your worst customers are
price buyers and negotiate away all your profits, are
massive credit risks, waste call center resources, and
abuse your customer service reps. It might simply cost too
much to satisfy them. Cable TV companies found that even
satisfied customers would switch for a 2% discount whereas
big savings wouldn't placate some disgruntled customers.
Too many companies place equal emphasis on all customer
feedback and typically end up see-sawing back and forth as
they make a change to satisfy one vocal set of customers
that dissatisfies their best customers.
To protect your best customers AND your profits, you must
do three things:
1. Prioritize customers according to value
2. Tier the service offering
3. Address disgruntled customers according to their
priority and service tier
Prioritize Customers According To Value
Most everybody will agree that some customers are more
valuable to your company than others. Guided by your
overall customer strategy, use your CRM system to
prioritize your customers according to their value to you.
Metrics might include profitability, share of wallet,
lifetime value, cost to serve, strategic impact, or other
metrics. Once you do so, it'll be clear at both extremes
which customers you need to keep at all costs vs. those
that you might just be better off if they took their
marbles and went home.
Tier the Service Offering
Some customers will buy on price alone and purchase the
cheapest products possible. World-class companies will tier
their product offerings to address the low-price segment as
well as a high-value segment.
Service offerings must be tiered as well. If a customer
isn't willing to pay for additional service, it is critical
that the additional service not be offered or delivered!
This is incredibly hard for customer service professionals
who pride themselves in providing top-quality service. One
very large financial services provider attempted to charge
a premium for premium service, but ended up giving away
millions of dollars in premium service to everyone as their
penny-pinching customers found out that the service levels
were not actually differentiated. Their best customers
were incensed and began cancelling service contracts,
causing further revenue erosion.
Address Disgruntled Customers According To Their Priority
And Service Tier
If the disgruntled customer is a low priority and has paid
for a lower-tier service plan, after offering to upgrade
their service plan direct them to lesser expensive
self-service or online channels. The goal is to do just
enough to prevent a tarnished overall reputation. If
however, the customer is "high net worth" (ie.
high-priority and on a high-service plan), you then must do
everything you can in a high-touch fashion to resolve the
customer's complaint and ensure their perception of and
loyalty to you is restored.
Here are five steps to do so:
1. Understand the customers' complaint
2. Determine how the customer would want it resolved in an
ideal world
3. Develop & communicate an action plan
4. Deliver on the action plan
5. Communicate the results of the action plan
If you don't deliver on the plan after raising customer
hopes, you ruin your chances in the future of getting this
customer to collaborate with you—not to destroying
loyalty and removing barriers to defection.
One step that many companies leave out is that of
communicating the fix/resolution to the customer. Even
though you may have met or exceeded customer expectations,
if you don't communicate the resolution as promptly as
possible, you might as well have outright ignored the
customer from the outset.
Customer feedback (even the negative kind) is a
gift—if it comes from valuable customers—and it
should be welcomed and addressed immediately to protect
your reputation, customer trust, and your revenue.
Feedback from the rest of your customers might be
interesting, but quite possibly irrelevant.
----------------------------------------------------
Curtis N. Bingham, President of The Predictive Consulting
Group, helps organizations dramatically increase customer
acquisition, retention, & profitability. For more
information about his new Customer Experience Audit,
Customer Strategy, or Chief Customer Officers, visit his
website at http://www.predictiveconsulting.com or his blog
at http://www.curtisbingham.com .
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