Both intuition and research have long linked increased customer satisfaction with increased profit. Finding the reasons and insight behind this link has proved difficult, however. Software company Allegiance and CRM consultant Peppers & Rogers Group aim to help provide this insight.
In a recent whitepaper, the two companies discussed the concept of "Voice of the Customer intelligence" (VOCi) – a combination of voice of customer (VoC) data and operational data – CRM, financial, etc. (Hear an interview with Allegiance VP of Marketing & Products Chris Cottle).
"VoC and CRM insights are usually separated like oil and water," according to the study, which mentions studies showing retailers list inability to capture customer data as a leading challenge. "The broad spectrum of customer insights available to companies isn’t being fully exploited."
Exploiting the broad spectrum can identify actual causes – "hidden intelligence and patterns" – behind customer dissatisfaction, helping create actionable steps to raise customer satisfaction. Taken separately, however, each side – VoC and CRM – has significant shortcomings. For example, customer surveys – a VoC metric – are generated to produce high response rates, ignoring the idiosyncrasies of the behaviors of individual customers. Conversely, transactional information, behavioral data and other CRM or operational measurements can represent in-the-moment measurements, but fail to capture a customer’s future needs or motivations to purchase.
[eventPDF]
VoC data compounded with behavioral data, however, can generate insight. Consider the customer survey example. Instead of simply conducting a basic survey, a company might connect that survey to the customer’s actions for the following year, blending VoC and behavioral data. The United Services Automobile Association, a financial services organization, did just that. They found a customer who had submitted a positive review correlated with, on average, an additional $108 in revenue per customer per year.
Such a specific example does not generate a general framework for capturing insightful data, however. And companies can’t effectively use any framework until there is significant company and c-level buy-in for an integrated approach to VoC and CRM data through tailored messages aligned with each level of employee.
"C-level executives make million and billion dollar bets based on two things: data and intuition," said Chris Cottle, executive vice president of Marketing and Products at Allegiance. "The intuition part is drawn from their experiences and they’re expected to use that as part of their decision-making. But the scary part is that they’re making these high-stakes bets with only a percentage of the data they should be considering."
Thus interdepartmental collaboration of information is an imperative first step. Market research and customer service teams must share their VoC data with CRM analysts in the IT department. A cloud-based approach is increasingly seen as an efficient means to share data and access resources through the Internet.
"[Data analysis] is never going to impact business change unless we can tie those insights together and connect the dots to tell a business story," Cottle said.
According to the study, there are five benefits of a cloud-based system to access customer intelligence: faster access, a centralized approach, enhancing real-time dialogues with customers, avoidance of unnecessary costs and reduction of needed internal resources. Two companies – Nicor and EMC – implemented Allegiance cloud-based solutions to take advantage of some of these benefits.
By adopting cloud-based technology, Nicor strove to "quantify the business value of having engaged employees and how that correlates to customer experience." Nicor merged employee engagement data with customer experience information to mine correlations between the two. Nancy Korman, senior manager of Nicor National’s 200-person call center operation discovered three key correlations between employee data and CRM information. In the first year, calls handled per person increased 30 percent, leading to 18,000 more sales. Increased employee performance and higher productivity also raised conversion rates by 15 percent and lowered cost per sale by 20 percent.
"We use all of this information to help us determine the amount of business impact we might see if we make an operational change or if we make certain tactical decisions," Korman said, adding that a better customer service understanding has helped identify $1.8 billion in contact center operational efficiencies throughout 2010. Nicor’s IT department, freed from managing software or a server, can also focus on other initiatives.
"Not only can we isolate a customer support issue, but we can quantify the impact of resolving an issue and how having happier customers translates in business terms," Korman said.
EMC targeted a cloud-based solution because "it became very clear to us that we weren’t looking holistically at customer experience," said Jim Bampos, vice president of customer quality at EMC. Customer surveys – VoC data – were conducted in different departments, but not shared across departments. Customer response time was measured by tracking queue time, which is not a "customer-impactful metric."
So EMC adopted Allegiance’s cloud software to give the entire company access to this information and integrate it with operational metrics, such as contact center performance measures. The company created a method to correlate customer-defined loyalty attributes with metrics based on product and service quality characteristics as cited by customers. The methodology developed was granted a patent for its method of "correlating customer metrics and loyalty drivers," the study said.
"We want to produce a customer value or customer loyalty ROI model so that we can demonstrate to business leaders that if you drive these types of improvements or increase willingness to recommend by X amount, how that will translate into market share or revenue opportunities."
And EMC has seen the results; one business unit, acting on recommendations from this methodology saw a 20-point increase in product loyalty, a double digit percent increase in revenue and a significant gain in market share.
"At the core of all successful initiatives is the ability to tell a compelling business story using comprehensive information," Cottle said.