The direct link to the recording is at http://www.blogtalkradio.com/allegiance/2012/01/27/customer-feedback-the-value-of-trustworthy-data

In future discussions we’re planning to continue with a focus on

• Defining “trustworthy data,” from practices in statistics (such as statistical significance and margin-of-error) to revenue contribution, coverage, and response
• Deriving importance
• Making the improvement (growth) happen

BTW, all of these topics will be addressed in detail at VoC Fusion– the World’s Largest Voice-of-Customer event – held in Las Vegas in May.  Will you be able to attend?

 “Paul dominates positive tweets in an atmosphere that is incredibly negative,” said David Rothschild, a Yahoo researcher focusing on event prediction and individual behavior.

“But,” he continued, “tweets originate from an unrepresentative segment of the electorate who can ‘vote’ many, many times… These are not representative samples of the relevant electorate.”

Ever wonder why your company’s financial performance may not be as strong as the marketing hype around your “customer satisfication” would lead you to conclude?  Pay attention to who ISN’T responding:  there’s gold in understanding who’s engaged with you… and who isn’t.

“…respondents say their companies are shifting decision making to incorporate more data and analytics in almost all corporate functions, with the highest share (60 percent) citing marketing and sales as where this is likely to occur. ³”

And then

“³ In our November 2011 survey “What marketers say about working online: McKinsey Global survey results,” we asked respondents (all of whom represent the sales and marketing functions of their companies) which types of data their marketing departments’ typical decisions rely on, and only 14 percent say their data is limited and that decision making relies on management expertise and experience”

We also see the included graphic, which shows that the greatest percentage of respondents feel that the biggest barrier to adoption is “Company culture prioritizes experience over data.”

Click image to see full size

True, small sample sizes and perhaps a lack of “trustworthy data” in this study (of which we’ve also written) might cloud the results, but at least for this group of respondents it seems ego may be a barrier.  What am I missing – am I reading this too fast or do we see an opportunity to manage our corporate culture and defer to our customers to optimize decision making?

“There are two little magic words
That will open any door with ease
One little word is thanks
And the other little word is please”

Do your Account Managers / Salespeople pick up the phone (or send an email) to say “thank you” to your customers? If so, why not? If a customer gives you a 9 or 10 on a relationship questionnaire, does anyone in your organization reach out to that customer? And if so, how did your customer respond? With surprise? Was it expected?

I suspect there would be a WOW factor. In fact, I have, in my past sales experience, not only experienced the WOW, but also driven increased up-sell revenue from existing customers with one very simple phone call (or email).

Have you tried it? What was the reaction? I’d be very interested to hear your feedback.

http://trueinfluence.com/index.php/2011/11/11/3-steps-to-acquiring-new-sales-ready-leads-faster-than-ever-before/

The webinar helped the audience in understanding the innovative potential with Net Promoter that has proven to drive new opportunities for sales teams –producing conversion rates in excess of 30%. We also discussed:

• Where to find these opportunities: The new ‘targeting’ method
• How to engage them
• How to get started and how fast you will see results

We’d certainly appreciate any feedback / thoughts around these ideas and the published results, especially from fellow B2B Marketers!

In other words, times have changed yet most Marketing organizations haven’t.

Most Marketing departments have become zombies. They seem to stalk their prey, occasionally scoring a hit, and otherwise spend a lot of time wondering around (a 3% conversion rate is a 97% miss-rate).

So when I write “Marketing is Dead” I’m not saying that the marketing discipline is no longer needed. Marketing is more important than ever exactly because of all that noise and the need to get noticed.  Marketing needs to evolve.  How?

Ask yourself 2 questions:

1. Where do the best actionable leads come from?
2. What is my own process when I buy something?

For most business, the answer to both these questions is essentially the same:  The best “leads” come from personal referrals and references.  Likewise, when I buy I talk to colleagues that I trust.

So the obvious key is to create an army of Promoters.  Get people (customers and partners) talking positively about your business.  I was fortunate to participate in a Net Promoter program in which the client executives wanted to understand how their Customer “Insights-to-Action” program was helping the field.  Here’s the summary from 800 sales people after just 3 months:

I’m not aware of any other marketing campaign that resulted in a 29% direct-success rate.  And that doesn’t even count the “soft” side whereby Sales was able to increase their wallet-share in key accounts and generate more references and referrals.

Marketing needs to take the lead in creating, developing, and engaging Promoters – people that love the company and speak to their friends and colleagues about their experiences.  How?

1. First, prepare mentally.  Recognize that unless you personally are paying the bills your own voice and opinions don’t matter.  Don’t be a Hippo (HIghest Paid Person’s Opinion).  Your customers matter more.  Then, before you start, commit to action and not just measurement.
2. Now begin by identifying customers that are “with” you and those that aren’t.  Whether you use the Net Promoter model or not, segmenting customers into those that are “with” you and those that aren’t can only lead to good things… if Marketing is prepared to act.
3. Engage those customer contacts that are “with” you.  Find out what they like and why, what they’d like to see improved and why, and what they know about their industry (and who they know) that can help your firm.
4. Open dialogs with the folks that aren’t “with” you.  Find out Why?  You’ll discover that the problem here generally isn’t with Sales or Support or Services or Product – it’s most often the interplay with all of them: gaps in customer experience that are a result of missing customer expectations.  Marketing, Sales, and Competition (industry dynamics) set expectations.  Know how the company delivers on those expectations and understand where and why
   expectations are missed.
5. Act.  Use customer quotes and hard evidence to amplify the voice of the customer so everyone can hear exactly what you are hearing.  Quantify the benefit (here are several posts on ROI) of addressing those gaps, and work collaboratively within the company to create more Promoters.

You can swing for the fences, trying for that 3% conversion rate by sending 10,000 emails that lead to 3 new deals one year later.  Or you can face facts that you win customers over one at a time, and can be a part of the team that wins 15 new deals in 3 to 6 months.

Which metric would you like to report:
1. I sent 1000 emails to prospects, which led to 30 new names that we can contact.
2. I identified 30 Promoters that will help us with references and referrals.
3. I helped engage 30 Promoters that enabled the company close 15 new deals worth $3.2 million.

I hope someone can help me to understand why Marketing doesn’t get more involved in creating and engaging Promoters.  Why isn’t it part of Marketing’s job to help with that?

Statisticians often use a “margin of error” calculation. Depending on your population size this often suggests ~300 responses per analysis segment.  But we can answer the question of “how many do we need” in different ways, with pros and cons for each. Here are my findings, based on my 22 years of real-world experience in this area (and this is certainly a larger topic that I think would be better served as a series of discussions!):

Pros: Confidence intervals are generally familiar and accepted by anyone that sees market research data in the media. People seem to appreciate the idea that “we can be 95% certain that the score is X% +/- Y%.” You can report it and move on.

Cons: Confidence measures assume that you have a representative and random population. Much like in the world of Economics, where textbooks start off, “Assuming a rational world…” we know from experience that most customer feedback programs are not based on random samples that represent the total population. Why?

1. People are people, not instruments. We have emotions and biases that can’t always be known.
   

   CONSIDER: If you wanted to build a bullet-proof airplane, would you want to examine the airplanes that successfully returned from their bombing runs, or would you rather examine the planes and pilots that didn’t make it back in order to improve? Don’t you need to make sure you get feedback from disengaged customers? (Image courtesy of http://www.wwi-models.org/Images/May/Art/index.html)

2. Who is responding? That is, who is “opting in” to provide feedback? In our experience, scores generally skew positively. That is, happy customers respond more than unhappy customers, who are otherwise likely to be “checked out” or see no reason to participate.
3. Whom are you inviting to provide feedback? Many programs suffer from bias and unintentionally select “happy” customers. Face it – where you have good customer contact data, you will tend to also have stronger customer relationships. And, especially if you compensate your employees based on customer feedback scores, then the program is certainly going to try to seek out happy customers to provide feedback. Just use your car-dealer experience as blatant example.
4. What is the right confidence level, anyway? We often see statements like, “At 95% confidence…” That ruler can be generally accepted in the research world where we might be making life-or-death decisions. But would you rather base your decision on evidence or just a hunch? Would 50% confidence be better than 0%?

5 recommendations:

1. Pay attention to your sampling strategy – whom are you inviting to provide feedback? – and also examine who responded. Make sure both areas represent your business in ALL segments that you intend to act upon. Are you seeking out and acquiring feedback from those who matter most? (And how do you know…? We’ll have to address a response to that in a separate post…)
2. Recognize that some customers simply are more important to your business than others. Especially in business-to-business (B2B) situations with complex buying cycles, make sure you are talking to the people that matter most.
3. Pay attention to everyone. While this might seem contradictory to item #2 immediately above, no business wants negative word-of-mouth that destroys growth and profitability. A sample size of 1 can be telling, especially if you leverage that 1 person to understand root-cause (that looks like yet another potential topic for a future post…)
4. Leverage your strengths. We often tend to focus on the negative. Now that you’ve identified your promoters, engage them! Whom do they know? What are the cross-sell opportunities? What can those customers tell you about your competition?
5. Context is everything; scores can be meaningless. Whatever you use — net promoter, customer effort, customer satisfaction, etc – you will always need relevant metrics for comparison in order to understand what actions to take. Example: If you step on the scale this week and weigh 170 lbs (~77 kilos), and the week before you weighed 168 pounds (~76 kilos), is that a good thing or a bad thing? In order to answer that I’d need to know more – percent of body fat / BMI, goals (‘thinness’? muscle?), and how you compare to your “peers” (defined by your goals). Scores don’t say much on their own. Similarly, in the “Customer Feedback” world you need to understand your sample and make sure you are comparing apples-to-apples.

As one of my mentors always says, there are a lot of edges to this work.  One short blog-post isn’t going to close this out. Bottomline for me is that if your primary goal is to present data then use confidence measures. On the other hand, if you want to drive profitable growth then consider doing more.  After all, between this ‘word-of-mouth’ age of the Internet and the need to keep our existing customers coming back for more, don’t you ideally want 100% of your customers to be with you (and not against you)?

Dear Reed,

I’ll bet you’re feeling pretty embarrassed after yet another beating from Wall Street today as you changed direction yet again.  Here’s one tip:

Listen to your customers.

Kind regards,

Steve Bernstein, Former-Netflix customer

Like many Netflix subscribers I was incensed at how Netflix treated me as a customer and so I canceled my subscription today (my billing date is in 2 days).   I was pleased that they made it easy to cancel (unlike many of subscription services that create even more detractors by setting up confusing and time-wasting cancelation processes).  And then they directed me to their cancelation survey…

• It’s 3 pages long when printed.  It’s generic and doesn’t respect my time.  Many options aren’t even relevant to my subscription plan.  If they don’t care to invest time in this, why should I?
• They start off with the Recommend question.  I’m all for Net Promoter-based segmentation, but I wonder why they think this is the right question to start off a cancelation survey?  And I’ll refrain from over-emphasizing their proprietary scale… how on earth are they going to use this?

Why does Netflix use "Recommend" when someone is canceling...and why corrupt the scale?

• They ask me why I canceled and the reasons presented show that it’s all about them.  I mean, every one of the options starts with “I,” as in “I needed to cut costs” (which is the first choice).  It’s not about me; it’s about how you treated me.
• Then they ask me a bunch of market research questions.  To what extent do they think they’ll get trustworthy data from this survey?  I’m sure they have other market research channels and they merely want to triangulate the feedback here, just seems like a misguided way to treat customers that you want to win back.

To what extent am I over-reacting?

Update Sept 22:  I thought this was a funny response to Reed Hasings’ email… perhaps much better than my rant above!  Check it out:

http://www.happyplace.com/10642/a-series-of-progressively-more-insane-follow-up-emails-from-netflix-ceo

1. Whoever understands the customer best wins.
- Mike Gospe

2. Are you using information for evidence-based decision making, or for decision-based evidence making?
- Joey Fitts

3. It’s hard to do one thing 100% better than everyone, but you can do 100 things 1% better.  It all adds up.
- Jay Steinfeld

4. Never cross a river that is, on average, 4 feet deep.  You will drown.
- Simon Lyons

5. I am the customer experience.
- American Airlines banner as noted by Bruce Temkin

6. 95% of companies collect customer feedback.  Yet only 10% use the feedback to improve, and only 5% tell customers what they are doing in response to what they heard.
- Gartner Group

7. Deal with the world as it is, not how you’d like it to be.
- Jack Welch

8. Hippos are not only the #2 largest source of humans killed by animals, but they also kill ideas, as many companies suffer from Highest Paid Person’s Opinion.
- Joey Fitts

9. Customer service starts where customer experience fails.
-  Chris Zane

10. We had clients that wanted kitchens and we were selling them pots and pans.
- Eric Murphy