FEATURE1 April 2009

How can we help you?

What are companies doing to close the loop beween customer research, customer feedback and customer service? Tim Phillips reports on a growing trend

?Market research conducted according to the MRS Code of Conduct, Justin Alderson reminds us, is anonymous. MR firms do not feed back to clients a list of customers who want their problems solved.

Yet Alderson, who is managing director at Aurora Market Research, is part of an MR industry that is built on helping clients to solve their customer problems. He’s not about to tear up the MRS code, he explains carefully, but he does work with clients such as Air Miles that don’t want to find out what they did wrong if it’s too late to fix it.

Aurora is one of a growing number of MR firms that use market research techniques to make personalised customer feedback the engine for better customer service. Closing the loop between customer research, customer feedback and customer service offers potentially huge advantages to the companies (and consultants) that can do it successfully, but as long as the people who act on the information exist in a different world to the people who collect it, those advantages are impossible to realise.

“I’ve worked clientside, so I have had this issue in the past with research,” explains Alderson, “saying, ‘why can’t we contact them?’ This is feedback management rather than market research – we’re very clear about that because the MRS has a code of conduct – but we are helping clients and I do think this is a way that MR will be moving.”Alderson’s clients use a powerful feedback management application called Confirmit to contact selected customers and ask them to give their views on service - as well as to give permission to be contacted again by a representative from the firm to follow up. The web-based customer information is analysed and acted on while remedial action, or simple up-selling, is still relevant. Discarding the idea of anonymity is essential to the business model.

“The MRS Code of Conduct has to apply to traditional research, but this is a different way to help people – both your clients and their customers. Sometimes the market research industry does not help itself by not getting involved,” says Alderson.

This type of research-driven customer interaction is growing rapidly, says Brad Bortner, a principal analyst at Forrester Research, because clients want it. “Everything is being changed by the recession. You have to put this in the framework of what’s going on in the economy,” he says, “Market research firms always want to be management consultants. That’s tough right now, it means they would be swimming upstream. This is a completely different deal: clients who are saying that they are more interested in solving their problems in real time.”

Keeping them keen
The joke that a consultant borrows your watch and then tells you the time has teeth in this context. Organisations don’t want to know why their customers defected as much as they want to stop them defecting. Matt Rhodes, head of insight at FreshNetworks, which builds and manage online communities, gives an example. One of its clients sells insurance, so once a year it interacts with customers, and can predict when that will be. If they don’t renew, often the company doesn’t know until too late about that customer’s problem. FreshNetworks, using research techniques built around online communities, can identify those customers who are unhappy, and why. “We can look at the customer satisfaction trajectory over three years, but then we have to dive in and find out what they are discussing,” he says. “You can track this data in real time, and that means you can pre-empt their purchases with service if they have a problem. It’s a process of identifying the people who might defect before they defect. It’s actually real-time research.”

Aboard the enterprise
Bortner says that Enterprise Feedback Management (EFM) software like that provided by Conformit, Vovici, SPSS and Globalpark has a powerful message that might disintermediate MR providers, who have traditionally owned the voice of the customer. “It’s sad for the industry because many traditional market research buyers are losing budget, and many traditional market research sellers don’t know how to move to the next wave. Companies like SPSS and Confirmit have a healthy business and a good market. They are solving the customer satisfaction problem in real time rather than waiting for the research to get back. But in some places I see the market research department going in one direction, and marketing and sales asking, will it fix our customer problems?”

EFM presents a challenge to research departments and MR vendors alike, because the people using the information for customer service are traditionally in sales and marketing. In his paper ‘The next wave in customer satisfaction studies is CRM integration’, Bortner points out that unless research departments and vendors take part in this process of helping to fix problems, sales departments will do it anyway, using cheap research tools like Survey Monkey. They will probably do it badly, and that’s where MR expertise – as Aurora has discovered – is valuable.

“The idea that research and customer service are two different disciplines isn’t true any more,” says Gary Schwartz, senior vice president for marketing at Confirmit. “The difference [between research and EFM] is in the goal of what you want to achieve. Most research is done when the company want the answer to a question, such as whether a new feature is popular or how its customers feel. They answer a bunch of questions and the company bases its business decisions on this. If you use feedback, you’re basically looking at the question of ‘how did you do?’ You want to capture as many interactions as possible. It’s a census, not a sample. It’s personalised, not anonymous, and it is event-driven, based on the interaction, not additional to it.

“There is no point in asking a question if you’re not going to do something about the response”

Do something about it
Businesses that do a lot of transactions have a lot to gain from fixing problems more quickly than the competition, he explains. “There is no point in asking a question if you’re not going to do something about the response. If you don’t follow through because you are looking only at the aggregate data, you’re simply creating one more bad customer experience by doing the research.

Should MR companies evolve to become census-takers in this way? “Not only should they incorporate this, but some already are. We sell Confirmit to the business as a technology only. When customers contact us to say ‘What questions do we ask?’, we tell them that we have a roster of MR specialists who can help. They will see themselves as delivering much greater business value, and because this programme is not project-based, they don’t have to continually bid for those projects,” he says.

Schwartz gives the example of the Air Miles work that Aurora helped to create. “At Air Miles customer contacts are a constant source of feedback – for example, you book a flight and don’t book accommodation, then they might contact you to ask if you are satisfied, and would you book it with us if we offered you it. Air Miles has been converting 32 per cent of those opportunities. It’s a clear indication that the customers are happy, but it’s also good service. If they did this as part of an annual satisfaction survey, they would get good results but would have lost the opportunity to cross-sell or up-sell,” Schwartz explains.

Brick by brick
One of the problems in linking research and service is finding an internal language that the whole organisation can speak. Conny Kalcher, vice president consumer experiences at Lego, is part of a company-wide initiative that promotes feedback as a research tool. Community, Education & Direct (CED) is a department that gathers all the businesses that work directly with customers and analyses and distributes what they are learning. “We have a report that’s generated every month called The Voice, which actually states which of our products cause problems and what the issues are. You can click on a flag in that report and hear the voice of the consumer calling us. Normally it’s only the operator on the phone who would hear that voice. As a result our people get a feel for the consumer as a person, not only the numbers,” she says.

Customer insights
Rather than being a servant of the business, customer service is seen as having important insights. “We have product specialists from customer services. They travel twice a year to headquarters to report on the feedback we get. They are the voice of the consumer in the organisation. After they visit, marketing and innovation have to report on what has been done to address this, so it’s a closed loop. This gives the contact centre much more credibility, because when the customer calls they can say that something is being done to solve their problem.

One of the essential parts of the process of integrating research and feedback is Lego’s use of the Net Promoter Score (NPS) as a measure of customer enthusiasm. This simple number is the basis for part of the company’s bonus scheme. Everyone from the CEO downwards who is customer-facing knows the NPS, and are incentivised on improving it.

Closing the loop between customer research, customer feedback and customer service involves a change of culture for many MR vendors, and needs to be handled responsibly to protect the customer’s privacy. It also involves some sacrifices for MR. “This is powerful, it gets noticed,” says Alderson, “The trouble is that this is reducing margins enormously. We’re acting as consultants to help clients do some of their research themselves. You are potentially passing on much of the work that MR firms have been doing in the past to your clients.”

On the other hand, in a world where sales departments are already aggressively using quick and dirty online research – what Bortner calls “doing the Monkey” – as a way to target and fix customer problems, EFM is an area where consultancy can show immediate, measurable returns.

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