Saturday, May 10, 2014

Customer Feedback System

A broad scope of satisfaction related evaluations, comments, and ratings, collected at key points in time, is the lifeblood of an effective customer experience initiative.  This is because you must have a very deep and thorough understanding of the various interactions customers have with the organization if you are to respond to ongoing issues, as well as proactively anticipate and develop potential new offerings.  Ideally, this feedback is systematically collected throughout the customer’s tenure with the company -- from the prospect stage up to an including the end of their association with the firm.

To further optimize this system, the satisfaction-related feedback should be associated with other transaction-related data (e.g. purchase price, discounts / margins, frequency, recency, etc.) to realize a comprehensive view of the customer’s relationship with the organization.  Developing such a customer feedback system is a significant undertaking that likely requires collaboration with various stakeholders, including systems vendors, IT, marketing, finance, among others.  In addition to collecting this information, the organization would also need to invest in the expertise and tools necessary to analyze the data, draw insights and propose recommended actions.  

Several noted companies have in fact developed these capabilities and, as a result, have realized significant improvement in their overall operations, including the customer experience.  In his book, Competing on Analytics, author Thomas Davenport profiles how Best Buy uses a variety of data to enhance the relationship with the customer.  Writes Davenport, “(Best Buy) used analytics to determine, for example, the impact of pricing changes not only on short-term sales velocity, but also on the overall customer experience (emphasis mine), and its long-term impact on customer perception and sales.  It even studied the behavior in each segment of frequent returners - people who commonly seek to exchange products or return them as defective - to learn how to better satisfy these customers (emphasis mine).” (1)

The image below is a high-level view illustrating the “architecture” for what such a comprehensive customer feedback system could look like.  Given the importance of this topic, the next several posts will be devoted to an in-depth discussion of each of the system’s components.  As mentioned previously, a systematic method to collect customer feedback must serve as the foundation of a CX initiative if it is to be successful.

(1) Competing on Analytics by Thomas Davenport,

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