The customer experience: a healthy obsession

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What customers feel may be more important than what they think — are dealers asking the right questions to engage them?

recent article in the Report on Business caught my attention.

It was an interview with Joe Natale, the new Rogers Telecommunications CEO who recently left rival Telus to join Rogers.

The telecommunications industry is notorious for delivering perennially low customer satisfaction scores and Natale said he aims to bring some lessons from Telus — the acknowledged customer experience leader in the industry — to Rogers.

“I believe teams only succeed if they obsess — truly obsess — over the customer experience,” Natale is quoted as saying. He also said he will be visiting retail stores and call centres to “get a better sense of the customer experience on the ground.”

If we think the auto retail business is a difficult one to manage, then imagine the challenge in his industry, where consumer tastes and demands change on an almost daily basis along with technological developments. And where customers have multiple choices in product and service levels and expect their provider to keep pace.

I’m not defending the telecommunications industry, as it does need to do much better, but there are some lessons we can learn from watching how this plays out.

Doing a lot wrong while focusing on some very important metrics

Much of my career has been spent working with companies in many industries to help them improve the customer experience.

Unfortunately, one major thing always keeps getting in the way of real progress: customer satisfaction scores.

As an industry, we have not done a good job getting past these scores to focus on what makes the customer experience and what really drives it.

Even our “key driver” analytics fall short because they are based on surveys that are very rational and process oriented.

I get very skeptical when I see every dealer scoring in the high nineties on almost all satisfaction metrics and even on the much touted net promoter measures (intention to recommend).

We need some much more “detached” measures to truly help in the quest for the perfect customer experience.

These fall into two categories: business outcome metrics and metrics that gauge emotional response.

They are not part of traditional CSI programs, but I believe they should be and should carry more weight than satisfaction measures.

Focus on business outcomes

While the telecommunications industry has a long way to go in overall terms, they do focus on two key business outcomes when looking at the customer experience:

RPU — revenue or profitability per user

Churn rate — the percentage of customers who discontinue their service within a given time period

Both of these metrics are key to the success of their business.

In the auto retail context, the equivalent metrics would be revenue or profitability per customer and true customer retention.

The interesting part about the churn rate is that you can make the mistake of looking at only one side of the equation: even if the churn rate is lower than the new customer acquisition rate, a high churn rate in itself is a sign of a problem. 

It may indicate a revolving door with lots of customers coming in and lots leaving — not a sustainable situation over the long term.

Clearly, these two metrics are much easier to envisage in auto retailing in the service context than in sales. It is not too difficult to get a true measurement of customer loyalty or of customer value in the service area.

On the sales side, the cycle is very different from that in telecommunications and presents some challenges.

However, there has been ample evidence of how a positive service experience at a dealership is a very strong component in the customer’s decision to purchase another vehicle from the same dealership.

Focus on more emotive metrics

This is definitely not a strong suit for the telecommunications industry.

I’ve often wanted to ask a telecom executive how it feels when you know so many of your customers actually dislike doing business with you!

This is not generally a problem with car dealerships, but do you have any solid, on-going metrics to guide you on what your customers are thinking?

You can look at business outcomes — service retention and service revenue. But how do your customers really feel about doing business with you? How much of that is habit or fear of the risk and hassle of change?

I believe we should be focusing much more on emotive measures.

Do your customers trust you? Do they respect you and your business? Do they feel a sense of connection with your business?

These are more complex questions to ask, but there are effective ways of capturing the information accurately using different questioning techniques.

Some OEMs are moving in a positive direction, supplementing short, on-going CSI surveys with periodic (quarterly) longer surveys with more detail.

Unfortunately, there is still strong resistance to including a comprehensive and robust set of more emotive questions, so the opportunity to truly break new ground is blunted.

Should you obsess over the customer experience?

I must admit that my initial reaction to the article about Rogers was: “Here we go again — I’ve seen this movie before”.

As it stands now, there are many business leaders who claim to obsess over the customer experience, but many do it only in one aspect — the CSI score. Not surprising, given the attention the scores get and the money and benefits tied to the scores.

Based on what I have seen with telecom satisfaction scores, however, Telus has been a leader in many respects, so I would give Natale the benefit of the doubt for now.

He has a lot of work to do, since obsessing over the customer experience must cover all three core elements of any business: people, process and product.

The desired outcome depends entirely on all aspects of the elements working together towards the same goal.

One thing about Natale’s statement caught my eye — his reference to “teams”, indicating that he does indeed believe that all the cogs need to mesh and work together and that it’s not just a narrow focus. If this happens, then I think he is likely to be successful.

Even though our business is vastly different on the surface, the fundamentals are the same and his quest will be interesting to watch.

My suggestions

If I were given a clean slate to design a Customer Experience Management program from scratch, here’s what I would do:

  •  Set up key business metrics for integration with customer satisfaction data;
  • Identify critical metrics that allow dealership personnel to monitor progress and address issues on a real-time basis — use these metrics in on-going surveys;
  • Develop a more comprehensive survey that can be deployed on a quarterly basis to provide deeper analytical capabilities — include a robust section of emotive metrics and use the results of these surveys to provide deeper direction for all employees;
  • Always include the opportunity for the customer to provide unsolicited comments that can be linked to specific questions or sections of surveys;
  • Segment your customer base (beyond demographics) using business metrics and survey data and set specific targets (including business metrics) for different categories of customers, e.g. high value customers, low engagement customers, completely loyal customers, partially loyal customers, et al.;
  • Stop incentives on CSI and place incentives on true retention and customer value metrics.

What about social media and the customer experience?

Comments and feedback on social media are assuming a far more important role in understanding the customer experience.

We’re quite good at capturing this feedback and analyzing it in a basic way. But there are tremendous advances being made in analyzing social media content and turning it into truly valuable and actionable information.

This is done by using AI (Artificial Intelligence) algorithms to better understand and predict customer behaviour.

Canada is becoming a recognized hub for AI development. An Ottawa-based upstart company, Advanced Symbolics, successfully used their technology to correctly predict both the Brexit vote and Trump’s victory in the U.S. election. The firm accomplished this against the backdrop of traditional polling which predicted the opposite in both cases.

Perhaps the days of traditional surveys are over. Perhaps it’s time to do more intelligent listening and less asking of the same traditional questions year after year.

So, I think it is, in fact, worth obsessing over the customer experience, but that such an endeavour must be done in a way that breaks the traditional rules of customer experience measurement.

I hope it’s just a matter of time before an OEM or a dealer group decides to commit to a new way of understanding the customer experience to the point of obsessing over it.

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