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Why client satisfaction is not enough
Carey Evans, Warc Exclusive, December 2013
This article demonstrates that high levels of client satisfaction are not as positive a measure of the health of client-supplier relationships as might be assumed.
This article demonstrates that high levels of client satisfaction are not as positive a measure of the health of client-supplier relationships as might be assumed. Even when companies fire a supplier, many of them have still claimed to be 'Satisfied' or 'Very Satisfied' with the supplier just prior. Instead, agencies must try to understand client commitment, as committed clients are typically more loyal, less price sensitive, take less time to serve and more profitable. The article proposes a Customer Client Commitment Index, which breaks down relationships into four different zones: Commitment, Satisfaction, Apathy and Rejection. Agencies are recommended to regularly take active steps to probe client commitment in order to preserve the health of the relationship.
Transforming the customer experience
Douglas Quenqua, ANA Magazine, Summer 2013, pp. 32-42
This article highlights American brands that have improved their customer experience and benefited from the change.
This article highlights American brands that have improved their customer experience and benefited from the change. As customer experience has become ever more important – but unwieldy - it is necessary to have someone in charge of overseeing it and who has the power to make real changes within the company. Through this approach, Sprint, the telecommunications company was able to identify the 'customer pain points' and brought together every department involved to address it. Other brands include Oracle and IBM, the technology companies, and Eli Lilly, the pharmaceutical company.
The business return from social media
Erica Buckley, Admap, July/August 2013, pp. 20-23
This article argues that to get business value from social media, you must have a social media strategy that defines business objectives with appropriate metrics for the measurement of results against those objectives.
This article argues that to get business value from social media, you must have a social media strategy that defines business objectives with appropriate metrics for the measurement of results against those objectives. While it is important to track soft metrics (such as 'People are talking about this'), these are often inappropriate when trying to demonstrate a return on investment (ROI). Marketers are encouraged to develop a social media strategy with a clear vision of what social media will do for the business. Once this is agreed, they should create a key performance framework that defines what success looks like and how it will be measured. It is important to choose the right tool for measurement, which in practice is usually a variety of tools because there is no single tool available that offers everything. Common and frequent challenges include the difficulty of using automated tools to understand human sentiment and dealing with unmanageable amounts of data.
Point of View: Conversational care
Molly Flatt, Admap, April 2013, pp. 13-13
Customer service (CS) may have been one of the areas to benefit highly from the rise in social media but social care takes a lot of resources, training, listening and flexibility.
Customer service (CS) may have been one of the areas to benefit highly from the rise in social media but social care takes a lot of resources, training, listening and flexibility. So are companies actually damaging their reputations by failing to deliver on their dedicated social presences? Depending on the nature of the business, Flatt believes there are three main options for staying ahead: 1. If a company has the capacity to do social CS brilliantly, put a clear, flexible process in place that empowers staff to respond quickly and effectively. 2. If resources are available but skills or strategy lacking, get some help and establish specific skills training. 3. If unable to handle the speed and volume of social media interaction, don't feel pressured to create poor presences and instead make existing channels as authentic, disruptive and conversational as possible.
Towards a better measure of customer experience
Philipp Klaus and Stan Maklan, International Journal of Market Research, Vol. 55, No. 2, 2013, pp. 227-246
Defining and improving customer experience is a growing priority for market research because experience is replacing quality as the competitive battleground for marketing.
Defining and improving customer experience is a growing priority for market research because experience is replacing quality as the competitive battleground for marketing. Service quality is an outgrowth of the total quality management (TQM) movement of the 1980s and suffers from that movement’s focus on the provider rather than the value derived by customers. Researchers today state that customer experience is generated through a longer process of company–customer interaction across multiple channels, generated through both functional and emotional clues. Our research with practitioners indicates that most firms use customer satisfaction, or its derivative the Net Promoter Score, to assess their customers’ experiences. We question this practice based on the conceptual gap between these measures and the customer experience. In IJMR 53, 6 (2011), we introduce a new measure appropriate for the modern conceptualisation of customer experience: the customer experience quality (EXQ) scale. In this article we extend that work and compare EXQ’s predictive power with that of customer satisfaction. We establish that EXQ better explains and predicts both, loyalty and recommendations, than customer satisfaction.
The rise of the relationship economy: What it means for brands and brand research
Iain Stanfield, GfK, March 2013
This article explains how brands are now part of the Relationship Economy, where increased connectivity and both personal and online recommendations have disrupted the traditional purchase funnel.
This article explains how brands are now part of the Relationship Economy, where increased connectivity and both personal and online recommendations have disrupted the traditional purchase funnel. Consumers are interested in great experiences, not just for the experience itself, but also in order to share it with others. Brands can exploit this trend by differentiating themselves through innovative use of social media to build relationships with consumers. However, for brands to truly succeed they must emulate the qualities that make people like their actual friends, and want to engage with them. Authenticity is crucial, and apologising when mistakes are made essential. Brand owners need to ensure that they understand the importance of each touchpoint, as well as the impact on the brand and on the relationship with consumers. The article suggests a consumer brand relationship model for conducting research in this environment.
Sarah Cook and Steve Macaulay, Warc Best Practice, January 2013, pp. 44-45
The number of customers who are prepared to complain is rising. Effective complaint handling can drive business improvement, improve internal communications and increase operational efficiency.
The number of customers who are prepared to complain is rising. Effective complaint handling can drive business improvement, improve internal communications and increase operational efficiency. And handling complaints well is one way of ensuring customer loyalty. However, only around 50% of complainants report a satisfactory resolution to their problem. This article looks at why complaints might be badly handled by an organisation and proposes ways to improve customer relations. Dell and Ryanair are among the brands identified as providing poor customer service while American Express and Cathay Pacific are some of the brands identified as getting it right.
Word-of-Mouth Marketing: The satisfaction myth
Rohit Bhargava, Admap, October 2012, pp. 28-29
Creating satisfied customers is generally perceived to be rule number one in business, but what if they are not as important as first thought.
Creating satisfied customers is generally perceived to be rule number one in business, but what if they are not as important as first thought. This has become more important as a growing number of large and small organisations turn to the 'ulitmate question' philosophy of using net promoter scores as a way of understanding how much goodwill they have with their customers. The more willing your customers are to refer you to others, the higher your net promoter score. But businesses realise that satisfaction doesn't have anything to do with willingness to refer and never has - this is the satisfaction myth. Companies such as Ritz Carlton have discovered that the way to stimulate positive word-of-mouth is to deliver an extraordinary customer experience that goes far beyond satisfaction.
Choosing the right baskets for your eggs: deriving actionable customer segments using supervised genetic algorithms
Sam Davis, International Journal of Market Research, Vol. 54, No. 5, 2012, pp. 689-706
In the context of key driver analysis in applied customer satisfaction research, the assumption of sample homogeneity (that single models perform adequately over the entirety of a survey sample) can be shown to restrict the value of the insights derived.
In the context of key driver analysis in applied customer satisfaction research, the assumption of sample homogeneity (that single models perform adequately over the entirety of a survey sample) can be shown to restrict the value of the insights derived. While latent class regression has been used as a method of circumventing some of these issues, it is proposed that there are major barriers to both uptake and successful practical usage of the technique. Several of these issues are common to any multivariate technique, while others are specific to latent class regression. Following an examination of these issues, we introduce an alternative technique for deriving discrete latent classes, using a combination of genetic algorithms and (bivariate) correlations. This paper concludes that the proposed approach outperforms latent class regression in its ability to deliver action-orientated insights, and is better placed to assist marketers facing real-world research questions and datasets.
Value: do you add or extract?
Fiona McAnena, Market Leader, Quarter 4, 2012, pp. 28-30
The author responds to Hugh Davidson's June 2012 article, 'Only consumers can make capitalism work', which identified the distinction between value adding and value extracting as fundamental to marketing.
The author responds to Hugh Davidson's June 2012 article, 'Only consumers can make capitalism work', which identified the distinction between value adding and value extracting as fundamental to marketing. She discusses how the suggested reforms could be applied to the financial services industry. The more regulated the sector, the greater the pressure on marketers to operate according to sector rules and not to rethink their offerings to match consumer preferences. This seems especially so in financial services. True marketing means reframing your propositions to be relevant to your target audience, in language they understand, and to appeal to what they believe and value. It is necessary to engage people in the vision, not just the brand, and to work with other functions to figure out what role the whole enterprise plays in people's lives.
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