Teams perform better when they have more positive interactions than negative interactions. Why? Some might assume that teams that perform well have more to be positive about, so they end up having more positive interactions. But psychologists find that it’s actually the other way around: Positivity drives performance.
I’ve been reading up on positive psychology recently to understand how leaders should communicate with their employees to drive customer experience performance. My most recent read was The Happiness Advantage by Harvard’s Shawn Achor (highly recommended). The book describes one particular concept that I find helpful in planning internal communications: the Losada Line, named after its creator, Marcial Losada.
Losada’s research has found that high-performance teams tend to have at least 2.9013 more positive interactions than negative interactions. Fall below that line and people get mired in problems. Rise above it, and they think more creatively and productively, leading to better performance. Losada has subsequently used this concept to help companies improve their business results by changing how they communicate. For example, he helped a large mining company overcome significant process inefficiencies by getting managers to look for encouragement opportunities even while the company was suffering. The group’s positivity ratio moved from 1.15:1 to 3.56:1, and its performance skyrocketed soon after.
I don’t love the name enterprise feedback management (EFM) to describe the technologies that enable voice of the customer (VoC) programs. It’s just not sexy. Unfortunately, it still accurately represents what vendors in the space actually do. As my colleague Roxie Strohmenger and I explained in a March 1st report: “We believe EFM still accurately represents the category. Why? Because 1) the vendors are still primarily focused on feedback as their primary data source, and 2) managing that feedback extends to the various analytical, alerting, and reporting activities that they pursue beyond just supporting survey processes.”
Since then, we’ve been knee-deep in EFM solutions, preparing for a Forrester Wave due out this summer. The experience has totally validated our earlier decision. Here’s a brief explanation:
Enterprise: The vendors pull together data from across an organization, from contact center to web, store, and social. Many also incorporate data from noncustomers, such as prospects and employees. In other words, they provide enterprise solutions. Check.
Feedback: It’s widely accepted that feedback includes more than numerical survey responses. It includes unstructured and unsolicited feedback too. Many EFM vendors also go beyond what we typically regard as feedback by incorporating transactional and operational data. But their solutions are totally built around feedback. Other data is treated practically as feedback, and it’s used to put feedback into context. Check.
A few weeks ago, I described the sobering fact that most voice of the customer (VoC) programs don’t deliver business results. I recently dug into the responses to Forrester’s Q1 2011 Global Customer Experience Peer Research Panel Survey to find out why. Here’s some of what I found (full results will be available in my new report titled, “Voice Of The Customer Programs Don’t Deliver Enough Value,” due out later this week):
Lack of processes for taking action. Sixty-five percent of respondents admitted that their VoC programs don’t systematically take action based on customer insights. Without clear processes in place, it’s no surprise that VoC programs don’t drive enough value-generating activities.
Lack of accessible, relevant insights. Sixty-five percent of respondents also admitted that their VoC programs don’t make customer insights easy to access, and 52% said that they don’t tailor insights for different internal groups. That means many potential participants within companies don’t get the information they need to take action — even if they’re inclined to do so. As a result, VoC leaders are left to personally move actions forward, and that approach doesn’t scale.
According to contemporary wisdom (in other words, according to what I hear), customers who experience service failures followed by effective service recoveries actually become more satisfied and loyal than customers who experience no failures at all. This is called the service recovery paradox, and academic research suggests that it’s not as common or consistent as we might think. Many customers who experience solid service recoveries still end up less happy than their problem-free counterparts. Service failures are bad, after all. Otherwise, we’d call them pleasant surprises. Nonetheless, service recovery is still an important part of the customer experience. Paradox or not, there’s value in making things less bad than they were. Unfortunately, each service recovery interaction provides another opportunity for failure.
Here’s an example:
I recently traveled to the West Coast for a few meetings, and I decided to try an alternative airline to get a better in-flight experience. The flight out was great. I particularly enjoyed the seat-back entertainment console, which also accepted food and drink orders — sparing passengers from bathroom-blocking, elbow-crushing carts. On my way back to the airport three days later, I was excited to kick back, watch TV, and order a couple of drinks at my leisure. It was a Friday afternoon. Work wasn’t happening (no judgment, please). Then things went south when the entertainment system broke. I couldn’t watch TV, and I had to wait for a flight attendant to take drink orders. Boo hoo, I know. As Louie CK said about this kind of complaint, “Everything is amazing, and nobody’s happy.” Still, the airline didn’t deliver the experience it had promised. Service failed.
More than half of companies say that they have voice of the customer (VoC) programs in place today, and many others say that they’re planning to establish programs within the next year. That’s a good thing, because collecting, analyzing, and acting on customer feedback is a recipe for success in financial as well as customer experience terms. The firms recognized in Forrester’s 2010 Voice Of The Customer Awards attributed impressive business results to their VoC efforts, ranging from increases in customer retention to increases in revenue per customer.
Unfortunately, most companies still aren’t feeling the business value of their VoC programs. We recently surveyed members of our Customer Experience Peer Research Panel Survey. The vast majority of respondents said that their VoC programs were extremely or very valuable in improving customers’ experiences. But fewer than half said that they got the same financial value from their programs. This might not be a huge shocker, but it is a problem.
Companies that see gaps between the customer experience and financial benefits delivered by their VoC programs are likely:
It’s that time of year again. We’re already in the midst of planning our annual Customer Experience Forum, and now we’re gearing up to collect and evaluate nominations for our Voice Of The Customer Awards — which we’ll present at the Forum.
If you’re new to the awards, here’s some background: Forrester's annual Voice Of The Customer Awards recognize organizations that excel in collecting, analyzing, and acting on feedback from their customers — incorporating customer insights into everyday decisions. We conduct the awards for three basic reasons: 1) to emphasize the importance of VoC programs; 2) to celebrate organizations that are leading the way; and 3) to highlight best practices.
If you (or, if you’re a vendor, your clients) have a strong VoC program, we encourage you to participate. It's free and offers a great opportunity to earn some solid PR while also sharing your wisdom with other customer experience pros. Also, we only reveal the names of the finalists and winners, so the potential downside is limited.
You can find all of the information you need on our VoC Award home page. The 2011 nomination form will become available there on March 25th. In the meantime, you can review this year's timeline, get answers to FAQs, and check out information about past winners.
Most customer experience professionals recognize that the voice of the customer (VoC) is critical to their success. After all, if you're trying to improve customers' perceptions, you better understand them. But building a comprehensive VoC program isn't easy. It involves complex challenges, such as collecting customer feedback across channels and tailoring reports for diverse internal audiences. Nothing can erase these challenges completely, but the right set of tools can help overcome them. Enterprise feedback management (EFM) vendors offer many of these tools, simplifying VoC activities by providing central systems for feedback collection, analysis, response, and reporting.
To get a better sense of the EFM market, Roxie Strohmenger and I scanned the space and asked 26 of the vendors to provide information about their software and services. You can find the vendor responses and my analysis of the market from a customer experience perspective in my latest report. Or you can check out Roxie's take from the market insights professionals' perspective.
Here are the key findings from my report:
The EFM market is crowded and hard to navigate. Most EFM vendors are small. Twenty-four of the 26 we surveyed generated $30 million or less in revenues from EFM in 2010. The lists of common competitors provided by the vendors suggest that survey technology is still the centerpiece of the market, but many vendors are evolving beyond that traditional area of focus.
Here at Forrester, we run quarterly surveys to find out what customer experience professionals are doing in various areas. This quarter, we’re focusing on customer experience strategy and voice of the customer (VoC) programs.
Do you have an understanding of your company’s customer experience strategy (or lack thereof) and how it's applied?
Do you know about your company’s VoC program (or lack thereof) and what it entails?
The survey closes March 9th. After that date, we’ll analyze the data and send you a free copy of the aggregate responses to each question — even if you’re not a Forrester client!
Thanks for helping to fuel our research!
If you can’t participate this time around but wish to participate in the future, please join our Customer Experience Peer Research Panel — just remember to select “customer experience” in the enrollment form. If you do take the Q1 2011 survey, you can sign up for the panel directly at the end of the questionnaire. No need to duplicate efforts.
I waited until the last minute to get my car inspected this year. It was a Sunday, so my usual service station was closed. Luckily, the Firestone near my house was open and had availability. I was happy just to find a place, but the folks at Firestone made me happier by delivering a positive experience from end to end — clean store, polite service guy, clear expectations about timing, and a call to make sure I wanted to replace a rear brake light bulb. Then, when I went to pay, a message on the self-pay screen reinforced the idea that I had gotten a good experience. It read, “Committed to providing a positive customer experience, every time.” Naturally, I was glad to see the company making this commitment — and actually living up to it. I also got a chuckle out of the message, imagining the boardroom discussions that led to it appearing in front of me. And that got me thinking . . .
What does it mean when companies use the term “customer experience” when they’re talking to actual customers?
I’ve noticed this happening more and more over the past year or so, not in my research but in my life as a customer. Firestone’s not alone. AT&T uses “customer experience” on its website. Amica uses it in a TV ad. What does this trend mean? To me, two things:
More companies are interested in customer experience. We already know that customer experience is a growing area of focus for companies, but seeing the term seep into marketing and advertising is just more evidence of this phenomenon. At the very least, it shows that companies think that their customers desire good experiences — versus just low prices or good products — and that companies feel the need to address the desire somehow.
If you called American Express a few years ago to report a lost credit card, you got the card cancelled right on the spot. If it appeared under the couch a few minutes later, you were out of luck. You still had to wait several days for a new card to arrive. It was bad for you. It was bad for AmEx. Luckily, a customer care professional (CCP) noticed this phenomenon. And, luckily, AmEx had a formal program for CCPs to suggest policy changes to improve customer experience. If you call to report a lost card today, you can put a 24-hour hold on your card instead of cancelling it. If it turns up, you can have it reinstated — and then go use it. Everybody wins.
This solution may seem obvious looking back, but only an employee with unique contextual insight could spot it at the time. If your company isn’t taking advantage of this insight, you’re missing out.
As I describe in my new report, employees hold the key to great customer experiences. Why? Here are three reasons:
Many employees observe customer interactions directly, so they can spot emerging customer needs and issues before they surface in traditional customer research.
Employees also understand internal operations, so they’re in a natural position to identify root causes of customer problems and suggest solutions. Back-office employees have just as much to offer here as customer-facing employees do.
In addition to having valuable insight, employees have enormous influence. They directly shape the processes and interactions that affect customers, so they can make arms-length changes to quickly improve customer experience.