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Telecoms Dial into Digital Marketing

The days when telecom providers held a monopoly over voice and data services are quickly eroding. New entrants like Netflix, Google, and Internet TV providers are rapidly changing the telco business. Poor customer service and complicated pricing plans are risky practices.

And even though telco companies sit on a mountain of data points, other companies like Apple, Facebook, and Google are also amassing huge amounts of customer data. To compete, telcos must deliver innovative products and services and connect with customers on a personalized level.

The Personalization Conundrum
Digital marketing and providing better customer experiences is a priority for the telecom sector, according to a survey of more than 200 telecom executives conducted by Econsultancy and Adobe. In terms of providing consistent, personalized experiences, 73 percent of the respondents say their marketing activities are integrated to some extent, but two in five (44 percent) say the ability to fully utilize marketing technology is still a key challenge.

“Telecoms are personalizing at very different levels of sophistication,” observes Stefan Tornquist, vice president of research at Econsultancy. “Much of that variation is related to where they stand in terms of unifying their disparate proprietary systems, databases, and marketing applications.”

And when it comes to sharing data with third parties, telecoms are “sharing everything they can that isn’t restricted PII [personally identifiable information] like call histories,” Tornquist adds. “The more specific the data, the more valuable it is, and in the case of telecoms, it can be very specific indeed, especially as our phones are increasingly our main conduit to the digital and wider world.”

But even though telco companies have access to a bevy of rich data points, they face numerous obstacles in leveraging that data, notes Forrester Research analyst James McQuivey. “People will say they don’t want their data collected but they still expect brands to know them, so telcos, like other industries, have to walk a fine line between both demands,” McQuivey says.

The pressure is also rising for telcos to keep up with the innovative ways that companies are collecting ad revenue, including those outside of the telecommunications industry like Netflix and Amazon. “There comes a point where if you’re not using your data, someone else will figure it out,” McQuivey adds. “I think telco companies need to test their level of risk tolerance.”

Searching for New Revenue
Indeed, companies like Verizon and AT&T are experimenting with new revenue streams through partnerships with brand advertisers and app developers. In 2013, AT&T introduced a two-tiered price plan when it launched “GigaPower,” a broadband service that is designed to operate at the same speed as Google Fiber. Subscribers can pay $70 for the broadband service if they agree to receive targeted ads from AT&T and its partners versus the ad-free version, which costs $99.

Verizon is also offering incentives for customers to receive targeted ads. Customers who sign up for Verizon Selects, a program for tracking Web browsing and mobile-app behavior, can win rewards like gift cards and dining or entertainment discounts.

Verizon’s data marketing arm, Precision Market Insights, recently came under fire though, when Jonathan Mayer, a lawyer and computer science graduate student at Stanford University, reported that a unique identifier was being used to power a “zombie cookie”that continued to track users even after they’d opted out. Verizon has since said that it will allow subscribers to opt out of being tagged with the persistent tracking code.

U.S. telcos are not the only companies being squeezed by new competitors. Etisalat Misr, the Egyptian arm of mobile telco giant Etisalat, which operates across 19 countries in the Middle East, Africa, and Asia, is also searching for fresh revenue.

“As a telecom operator, our revenue is declining as more players enter the market,” saysKhaled Almansouri, chief information officer at Etisalat Misr Egypt. “And so we’re looking into new revenue streams beyond our legacy services.”

Etisalat chose Teradata’s Integrated Marketing Cloud platform to help it consolidate its customer service and marketing data as it pursued new markets. One of those areas included B2B customers. Etisalat credits the Marketing Cloud platform with helping it attract B2B mobile advertisers who are interested in targeting against the carrier’s data profiles. In 2013, within a few months after launching the platform, Etisalat expanded its customer outreach to more than 1 million customers.

The company is also looking for other ways to monetize its data as customer intelligence. “We have to capitalize on the rich data that we have,” Almansouri says. “For example, if a petrol station wants to open in a certain area, we can tell them when traffic is busiest because we know the movement of our subscribers.”

Additionally, the company is looking into expanding its offerings with cloud services and machine-to-machine learning. “By 2020 we’ll have about 50 billion connected devices,” Almansouri adds. “As more things become digitally connected, it will be important for us to help our subscribers stay connected across their different devices.”

Enabling Trust
Carl Boeing, global head of sales, customer engagement, and commerce at Hybris Software, agrees that telco companies have to find more ways to leverage their data profiles while maintaining the customers’ trust. As an enterprise ecommerce platform provider, Hybris helps telco companies like Vodafone and Telmore created personalized messages for subscribers. “But increasingly we’re seeing telecoms become brokers or enablers of additional connections and play matchmaker between customers and brands whose products might interest them,” Boeing says.

As an example, Boeing points to a capability Hybris is developing in which mobile subscribers create “wish lists” of products that interest them on an app and allow carriers to share that list with retailers. When the consumer walks into a store equipped with beacon technology and opts into sharing his or her profile information like a photo and name, a sales associate can offer the item to the customer, perhaps at a discount. “

“The telco can make both customers happy by giving retailers a qualified lead and consumers get the product they wanted,” Boeing explains. “It’s a win for everyone.” But for such a situation to work, the carrier must have the customer’s explicit consent, Boeing adds. “The customer has to see value in this notion of sharing information so making that connection between the consumer and brand at the right time is critical.”

Trust and transparency are key drivers of customer relationships, notes Natalie Petouhoff, vice president and principal analyst at Constellation Research. “The key to privacy is to have services that are opt-in and companies need to explicitly say how the customer’s information will be used,” Petouhoff maintains.

Companies should also let customers choose what information about them can be shared. “Customers might want to allow a telecommunications provider to use their preference for sports-related information to provide content or promotions,” Petouhoff notes. “But they might not want marketers to use information on their general browsing history because it could be considered too intrusive.”

Leveraging real-time analytics is one way telcos can add value to their services while still offering products and services, she adds. For example, customers can be alerted to various data and application plan options during roaming periods. On the backend, telcos should also analyze real-time network traffic from large users to manage capacity more efficiently and minimize network slowdowns.

As the mobile and telco space becomes increasingly fragmented with new competitors eating up market share, telcos must focus on delivering relevant, flexible, and reliable experiences to their customers or risk disruption.

Who Needs Customer Experience Certifications?

We have entered the age of the customer – when companies only win by being customer-obsessed and delivering exceptional experiences. This is great news for customer experience professionals. Their skills and expertise are in demand, and at Forrester Research, we expect customer experience to continue its maturation into a full-fledged profession.

Unfortunately, the lack of university degree programs or even rigorous training for customer experience hinders that maturation process, and contributes to a shortage of qualified CX professionals. That makes it harder for CX leaders to build high-functioning teams that can drive business transformations.

According to data from a recent Forrester survey, while 73 percent of companies aim to be CX leaders in their industry or across all industries, only 25 percent say their CX programs actually improve customer experiences. What holds them back? One culprit: They don’t have the right people with the right skills. Only 21 percent of companies we interviewed said that their firm’s CX program had effectively improved internal CX capabilities.

In my latest report for Forrester, “Who Needs CX Certifications?“, I look at the CX certification programs created by vendors and the Customer Experience Professional Association (CXPA) that try to fill the education and training void in CX. The programs fall into two categories:

– Voice of the customer (VoC) certifications. These offerings cater to CX professionals who specialize in collecting and analyzing feedback from VoC programs. They train and test on topics like selecting listening posts, turning insights into action, and creating closed-loop follow-up processes. Think of MaritzCX (formerly Allegiance), Medallia, and Satmetrix.

– Customer experience certifications. These programs certify that participants understand the competencies underlying the six disciplines of customer experience — customer understanding, strategy, design, measurement, governance, and culture — and provide an overview of core skills like journey mapping. The providers here include ASU’s W.P. Carey School of Business, Beyond Philosophy, the CXPA, Global CEM, Senteo, and Strativity. While today’s CX certifications are not without merit (my CCXP signals I have an interest in CX and am versed in the related skills) they are no substitute for the rigor of an executive degree program, nor do they emulate the learning that comes with years of on-the-job experience. Why not? Because the current crop of certifications are:

– Insufficient. Of the certification programs we reviewed, none provide more than a week’s worth of training or classroom time. That is not enough time to cover the content in sufficient depth, let alone mold a CX professional.

– Incomplete. Some programs train participants in basics like mapping customer journeys, but, overall, their curricula lack sufficient CX skills training. None of the programs offer enough training in design processes, research techniques, or how to map CX ecosystems that support customer journeys.

– Informal. Many of the certification tests are open book — and virtually all certification candidates pass the tests. As a point of contrast, more than 80,000 aspiring lawyers took the Bar Examination in 2013, and just 68 percent passed. The vast majority that passed had completed three years of law school before taking the test. Even though existing certifications are not perfect, they are not devoid of value either. CX pros still need to sharpen their skills, train their teams, and develop new sources of talent. And so I recommend that CX teams look closely at the certification programs and determine if any meet their needs.

Besides the two categories of certifications–VoC & general CX–the certifications also vary in the amount of training they offer, whether they’re more appropriate for novices or more seasoned CX pros, and whether they are conducted virtually or in-person. And I think CX pros have an opportunity–an obligation even–to encourage providers to create more rigorous certification programs. Beyond Philosophy, Satmetrix Systems, and Senteo have created more advanced certifications. And the CXPA is about to announce an authorized resource and training. That’s a good start. Companies should develop or source more comprehensive training that teaches deeper expertise as well. For example, several companies have worked with Strativity to create customized training curricula. And companies like BMO Financial Group, Cleveland Clinic, and Nationwide Mutual Insurance have created their own CX curricula and are developing their own certifications. Ultimately, I believe that universities will start to offer coursework, certificates and even degree program in customer experience. It’s just a matter of time. For now though, head on over to Forrester to read the rest of my report on how to make the most of the existing CX certification programs.

About the Author: Sam Stern is a Senior Analyst at Forrester Research serving Customer Experience professionals, serving Customer Experience professionals. Learn more about Forrester’s customer experience practice at forrester.com/customerexperience.

Understanding the Behaviors That Drive Sales Success

Because sales remains increasingly competitive, successful organizations must collaborate to cultivate an internal culture of high performance. But, as salespeople and sales organizations push back against the external forces that often hinder their ability to win, top performers must convey their experiences and knowledge to the entire team in an effort to align behaviors and enhance strategy.

The MHI Research Institute‘s “2014 MHI Global Sales Best Practices Study” polled 1,155 respondents to measure and analyze the behaviors, attributes, and performance of world-class sales organizations as they compare to all other sales organizations. MHI defines world-class sales organizations by assessing the three attributes that act as the cornerstones for sales performance culture:

  1. Customer Core: How the organization connects and engages with customers.
  2. Collaborative Culture: How people within the organization work together and with customers.
  3. Calibrated for Success: How the organization measures, recognizes, and rewards its salespeople.

The following statistics explore how world-class organizations compare to all other sales organizations, highlighting how these top performers excel in an effort to demonstrate what laggards can do to improve:

  • Ninety-three percent of world-class sales performers clearly understand their customers’ issues before proposing a solution, as compared to 48 percent of all respondents, for these sales professionals offer a formalized value proposition that’s compelling to their prospects (92 percent versus 42 percent respectively).
  • World-class sales performers are also more likely to align sales and marketing to meet customer desires and needs (91 percent versus 38 percent).
  • Overall, world-class sales performers are more effective than when it comes to allocating the right resources to pursue large deals (93 percent versus 36 percent).
  • Said world-class sales performers are also more likely to collaborate across departments to manage strategic accounts (94 percent versus 43 percent) and jointly set long-term objectives with these strategic accounts (87 percent versus 34 percent) than all respondents.
  • While world-class sales performers better understand why their top performers are successful (92 percent versus 41 percent), these leaders also claim that the management team effectively helps the sales team advance opportunities (96 percent versus 43 percent).
  • Many top sales performers (71 percent) work for businesses that align their sales compensation policies with companywide goals and objectives.
  • World-class sales teams consistently reply upon their company’s own knowledge management system as the single source for collateral and information (71 percent versus 23 percent), with the majority boasting highly effective CRM systems that facilitate cross-departmental, face-to-face teamwork (61 percent versus 23 percent).

Key takeaway: Before companies can progress to the next level of sales success, their entire organizations must learn from the habits and behaviors of their top performers. World-class sales performers (89 percent) and all respondents (29 percent) work for organizations that leverage the best practices of their leading sellers to improve their entire workforce, as these companies recognize that they must understand why these top performers are so successful before applying these lessons to every area of the enterprise. The why drives the how, thereby teaching staff across departments how said strategies can enhance their own roles. While many salespeople learn best by doing, examples and best practices allow less experienced employees access to the knowledge they need to gain the advantage within the market, for collaboration and community lay an effective foundation for continued growth and success.

It’s Time to Change the Automotive Customer Satisfaction Survey System

When an auto customer buys or leases a vehicle at a car dealership, it’s common for the salesperson to ask the customer to give them the highest possible marks in the customer satisfaction survey that’s soon to follow. While I’ve been pressured by dealer salespeople to do this on more than one occasion (and even within the past several weeks), I’ve come to discover that these aren’t simply the actions of an overzealous salesperson that is out to pad his or her annual bonus. Customer satisfaction scores are also used by car manufacturers to reward dealerships with financial incentives and for automakers to flaunt their results over rivals. No matter how you slice it, it’s a flawed process that ultimately dissatisfies customers and can change an otherwise good customer experience into a bad one.

My own recent experiences typify what’s wrong with the process. A few weeks ago, as my car lease was nearing expiration, I began researching options for a new lease with the dealer I’d used along with a few dealers for other automakers. Unsatisfied with offers I’d received from other dealers, I set up a meeting with the existing dealer. When I arrived at the dealership, I met with a salesman I’d worked with before. I explained the features I was most interested in and “Joe” showed me a few cars on the lot. Before taking a test drive, Joe gave me a one-minute rundown on the car (a slightly different version of the model I was returning). After selecting a vehicle and agreeing to terms on a new lease, I made plans to pick up the new car a few days later.

Here’s where the customer experience began to head south. Joe rushed through the closing and said he didn’t need to go over the features of the new vehicle since he’d already done so a few days prior. Since the gas tank was nearly full, Joe offered me a voucher to use at a local gas station instead of filling the car himself. His logic was that I could drive the car for a few days and get some free gas out of the deal. However, I live 20 miles from the gas station, so it’s not like it’s convenient. I never did use the voucher.

During the closing, Joe implored me to give him the highest possible customer satisfaction scores. “Anything below a ’10’ (on a scale of 1 to 10) isn’t good enough,” since a lower score could impact his annual bonus, he explained. A few days later, I received an email from the automaker asking me to fill out the customer satisfaction survey. After giving it careful consideration, I filled it out. In most sections, I rated my satisfaction with the salesman a ‘7’. There were gaps in my customer experience, so I thought the scores were fair. Although I was informed that my survey response would be anonymous, I soon discovered it was anything but. Within hours of submitting the survey, I received a frantic call from Joe who claimed that he needed to check on the status of a refund check that had been promised to me for the vehicle I’d turned in. When I called him back, we discussed the check briefly before Joe asked me whether I’d filled out a customer satisfaction survey that day. Apparently, the dealership received the survey response I’d submitted from corporate and Joe was upset that I’d “crucified him” with the scores I’d given him. This seemed overdramatic to me, but given that Joe’s bonus and even future employment can be shaped by such scores, I can understand his concerns on some level. Nevertheless, the situation made me extremely uncomfortable as a customer. I’ve purchased or leased cars from this dealership in the past. Overall, I’ve had good experiences and have been satisfied with the vehicles. But this latest incident was downright unsettling. And the thing about it is, I’m not sure if I can honestly expect a better experience from another carmaker or dealer in the future since this appears to be an industry-wide problem. As automotive companies strive to become more customer centric, the customer satisfaction survey process needs to change so that automotive customers like me aren’t pressured by salespeople to give obsequious responses and salespeople and dealerships aren’t penalized when they receive less-than-exceptional scores.

Five Customer Loyalty Fixes for Telecom Companies

When was the last time you heard someone rave about an experience they had with their Internet, television, or mobile phone service providers? Going by numerous sentiment-measuring reports, the likelihood is that such an occurrence is very rare.

Let’s change the question around: When was the last time you heard someone complain about their experience when dealing with a telecommunications company? The likelihood is that we don’t have to think long and hard to remember about a poor experience that we’ve heard or read about.

Despite the telecom industry’s cutthroat market environment in which brands steal competitors’ customers by buying out existing contracts and constantly undercut rate plans to get customers to switch, few have made customer centricity a priority. This shortcoming is evidenced by the industry’s low Net Promoter scores in Satmetrix’s recently released 2014 Net Promoter Industry Benchmarks. With a score of 39, Tracfone had the highest NPS among cellular phone service companies, while DirectTV’s NPS of 34 ranked it highest among cable and satellite television providers. Bright House Networks’ NPS stood at 20, even though it was the top-ranked company among Internet service providers. To put these scores into perspective, USAA gained NPS scores in the 80s for banking, automotive insurance, and home and contents insurance.

Further, television and Internet service providers were among the companies receiving an average of “poor” ratings in the 2014 Temkin Experience Ratings.

So why are customer experience metrics for telecom companies continually low? And more importantly, why does it seem like there have been no customer strategy advancements despite the constant threat to their customer loyalty? Perhaps it’s because they’re all in the same boat. “The best-in-class companies are not faring much better than those that are ranked at the worst positions,” Chris Burton, senior vice president for communications, media, and technology at TeleTech, notes.

Traditionally, telecom providers have looked at cost and coverage as two of the main areas of investment. In fact, even marketing messages seem to target these two factors as main differentiators. Verizon, for example, uses maps of the United States to compare its 4G LTE coverage with coverage areas of other providers.

But in an intensely competitive market, where companies are constantly trying to one-up their competitors, lack of investment in customer-centric measures is seeing clients considering other companies, with some actually pulling the trigger and making the move. While cost and coverage are important factors for customers, on their own, they are not enough to avoid churn. “It’s no longer enough to just be the cheapest offer,” notes Martin Morgan, Openet’s director of marketing. As Don MacNeil, CMO for Xo Communications, explains, in today’s uber transparent market, customers can easily find out more about the companies they’re doing business with and also about their competitors.

Further, even though many customers are tied down by contracts, a negative customer experience could very well drive them to a competitor once their contract is up, if not before. T-Mobile, for example, is even offering to pay the much-dreaded early termination fees of customers who want to switch carriers for their postpaid plans. If other companies follow suit, customers will have the option to break their contract anytime their current provider fails to deliver on their expectations, or they come across a better offer. Experts share five actions that telecom companies should take to attract new customers and retain existing ones:

1. Move towards a customer-based focus: Organizations across all industries suffer from departmental silos. Especially when customers buy more than one service from a company, it’s imperative that the organization makes the necessary investments to create a 360-degree profile of its customers. As Burton explains, some telecom companies are trying to consolidate their CRM systems to have a more holistic view of their customers and enable the delivery of better customer service. Further, improved customer visibility will allow telecom providers to reiterate what other industries have been doing for some time-offer services and products that best fit an individual or a household’s needs. “They need to steer away from the one-size-fits-all approach and instead offer products and services that address the needs of different segments,” notes Michelle Nowak, vice president of product management at CSG International.

2. Invest in first-contact resolution: Customers want their problems addressed and rectified immediately. However, as Burton notes, many telecom providers rate poorly when it comes to first-contact resolution, reflecting negatively on their customer satisfaction scores. There are a number of steps that companies can take to resolve issues immediately, including investing in training for contact center agents and providing agents with access to the information they need to give customers the answers they need. Ryan Pellet, senior vice president for strategic consulting services at Nexidia, also recommends using insights from contact center calls to determine what is making customers unhappy and making them want to churn. Information from individual calls, he notes, needs to be put in context of the relationship between a client and the company to better understand whether this is the first time that particular customer had a problem or whether this is a recurring complaint.

3. Focus on an omnichannel experience: With customers communicating with brands over multiple channels, organizations need to make sure that they can connect these different touchpoints and provide continuous experience across the board. While brands are trying to provide new ways for their customers to get in touch with them, the different channels are often siloed. Burton uses the example of a customer who starts an inquiry with a company by engaging with chat support when he realizes that the issue is complicated and he would rather get on the phone with an agent. “But many times there is no direct way to connect to the agent, and when the customer finally navigates the provider’s IVR maze, he’s often connected with someone new who doesn’t have visibility into the chat conversation.” In order to improve the experience, telecom companies need to consider investing in technologies like unified communications platforms and the cloud, as well as unifying the organization internally to connect the disparate channels and provide seamless transitions for customers.

4. Provide proactive warnings and information: In today’s connected world, customers expect to be able to communicate anytime and anywhere. Loss of a wireless connection or Internet access is, for many people, an experience they will go to extremes to avoid. Nowak says one service that telecom companies should invest in is warnings and alerts when customers are about to reach their data limits. This, she notes, is especially important for those on shared plans who might not know how much data others in the group have used. “Use real-time data to notify customers about what they’re buying and what they’re consuming,” Nowak recommends. Ulla Koivukoski, senior vice president for Comptel’s analytics business unit, agrees. “We need to proactively reach out to a customer before he calls us,” she notes.

Organizations should go a step further and use such opportunities to inform customers of other plans that might fit their needs better. “Understand their needs, quantify them, and offer them the right services.” Koivukoski uses the example of Bangladesh-based pre-paid mobile provider Robi Axiata, which is leveraging data to determine what services customers need and then letting them know about the packages that make the most sense to them. Further, Morgan highlights that these offers need to be timely. “If a customer is using his mobile phone to watch a video and encounter a problem with data, send him a message with an offer to make up for that issue,” he recommends. “Apart from being relevant, an offer needs to be timely or it will stop being relevant.”

5. Identify high-value customers: While all customers are important, there are certain segments that are more valuable than others. Telecom companies need to first determine the attributes of their high-value customers and then identify these clients. The next step, Burton notes, is to determine who, among this group, is most likely to churn, for example those clients who are approaching the end of their contract. Not only can organizations make sure these segments are routed to higher tier agents who can provide a better experience, but they should put structures into place to proactively reach out to these customers with relevant offers and information. For example, a cable company which knows that a particular household enjoys watching movies might offer that account a month of free movie channels or credit to use towards the purchase of on-demand movies.

Acquiring new customers is neither easy nor cheap. This is why organizations need to make sure those new customers are satisfied enough to want to continue doing business with the brand. Otherwise, companies are in for an endless cycle of acquisition without retention, a practice that will drain their coffers.

Finding the Right Vendor(s) For Your Voice of Customer Program

Are you looking for a vendor or vendors to support your voice of the customer (VoC) program? Or are you reviewing your current VoC vendor(s)? Selecting the right vendor or vendors can be hard! Why? The VoC vendor landscape is difficult to decipher. There are many but relatively small vendors, and they rely on an interconnected network of partners, acquire each other at an impressive rate, and regularly expand into new spaces. And companies often already have a number of vendors they work with. In my recent webinar about VoC, most of the attendees had from three to five vendors that supported their VoC program in some shape or form. But there are a few beacons to help orient you in your quest:

– The VoC vendor market is an ecosystem. What vendors are the right “lid” for your “VoC program pot” depends entirely on your internal capabilities and the characteristics of your VoC program. We identified customer feedback management (CFM) platforms and VoC specialist vendors. CFM platforms support VoC programs with a robust set of capabilities that include feedback collection, integration of feedback with other data in a centralized data hub, analysis, reporting, and closed-loop action management. VoC specialists offer a subset of VoC platform vendor capabilities. Their areas of expertise range from surveying customers in order to generate measurement data to mining your unstructured feedback with text analytics, monitoring social media data, and consulting to help establish or evolve a VoC program.

– Look at how VoC vendors can support your key VoC tasks. Although vendors in the same category are alike in many ways, there are also some significant differences you need to take into account. For example, in capabilities like advanced survey management, advanced analysis, data integration, responding to customer feedback, and supporting processes to improve taking action on customer feedback.

– Exercise due diligence and look beyond capabilities. Ask yourself which professional services your program requires, whether you need an on-premises solution or a software-as-a-service (SaaS) solution, what pricing models work best for the types and volumes of your data sources, and whether you need a local vendor office in certain countries. Read more about this in our latest research. We at Forrester just published two reports (based on a survey among VoC vendors) to answer some key questions we get from CX professionals:

– “Voice Of The Customer Vendor Landscape, 2014.” What does the complex VoC vendor ecosystem look like? What are the capabilities of some of those vendors? How will the VOC vendor market evolve in the future? (Hint: We will see some consolidation.)

– “Voice Of The Customer Vendor Go-To-Market Strategies, 2014.” What are other factors that drive success in vendor relationships, and how should you go about selecting a vendor? So in detail, this report answers questions like which vendors offer SaaS versus on-premises solutions? Where do they have offices? Which pricing models do they offer? What kind of professional services do they offer? What are your challenges when selecting the right VoC vendor(s)? We’d love to hear from you.

About the author: Maxie Schmidt-Subramanian is a Senior Analyst at Forrester Research.

Is There Such a Thing as NPS for Social Media?

We’ve seen NPS gaining in popularity as brands are looking to better tie loyalty measures to guest behavior and growth.Without question, the attraction to NPS for many is its simplicity. Are the raves outnumbering the rants? However, there’s growing debate about the validity of the NPS as many believe it is too simple and too good to be true.

Why do we need NPS or even the ability to benchmark loyalty? Isn’t the beauty of social media that it gives me the opportunity to cull the worldwide web for my data as well as that of all my competitors? Exactly. Which leads directly to today’s challenge for brands: If social media is dominating any conversation about customer feedback and that its connection to guest loyalty is in its infancy, how does NPS fit into this evolving frontier?

NPS is described as a management tool that can be used to gauge the loyalty of a brand’s customer relationships, serving as an alternative to traditional customer satisfaction research. Interesting. Social media and the various monitoring tools available in the marketplace today make many claims about their ties to loyalty.

The ease of NPS is that only your 9’s and 10’s are considered Promoters. The bottom tier, 0-6, are the Detractors. Subtract the percentage of Detractors from the percentage of Promoters and voila–you have your NPS. But let’s look at the hospitality industry, for instance. What about all these existing guest surveys that spent the last decade focusing on moving from an 8.4 to an 8.6? Can we get our best-performing hotels to maintain their superior service? Move the worst to less bad? And, maybe along the way help those middle performers eek up the scale? We thought 8 was tolerable, and in some brands even commendable. However, if you’re calculating overall satisfaction or other measures counting 8’s, 9’s, and 10’s as “high” marks, your percentage is likely overinflated due to the preponderance of 8’s — or satisfied customers who are unenthusiastic about your brand and just as open to competitors. Ouch!

Same goes for social reputation score. Trends show improvements across the board as the vast majority of ratings and reviews are positively skewed. The bulk of the remaining are neutral and only a small percentage are negative. TripAdvisor was reported in 2012 to have a global average of 4.04 which means good news for operators, but how does that translate for NPS?

Using some basic numbers, which have been reported over the years, let’s assume 65 percemt of all reviews are positive, 25 percent are neutral, and 10 percent are negative. The NPS for the entire hospitality industry sits at a +55. Not bad. Now, how useful is it? In time it would be worthwhile to know if this is trending upward or downward. Is it seasonal? How are my main competitors doing comparatively? What we don’t know from this basic calculation is if those positive reviews qualify as Promoters? Probably not. And, if that is the case, how do we decide if someone is truly a Promoter? Is it only the 5’s? That is a good starting point, but it doesn’t tell the complete story.

NPS is an easily digestible measure of loyalty, especially for organizations that felt that focusing on overall satisfaction failed to deliver results. The mantra of simplicity has marketers wanting to find a way to compare apples (traditional surveys) and oranges (social media) or at least put them on level playing fields.

Will there be a unified standard? NPS has major obstacles to overcome before it could be widely recognized in many industries, let alone in social media. While the insights gained by using NPS can be useful, without a proper customer-centric system to support it the score alone is flawed and incomplete.

A perceived lack of actionable insight from more traditional approaches to customer satisfaction or NPS is one of the reasons pushing companies to investigate how they can best leverage social media intelligence to augment the this information. Marketers are just beginning to understand how social media analytics can fill in information gaps. Digging into customer sentiment to find out more about what influenced a customer decision is the current priority. Including sources such as reviews, ratings, and qualitative comments gives marketers a broader view of their business, but any single source is only that-a single measure.

In order for Social NPS to have real viability, the mechanics on how to calculate it must be applied uniformly. Marketers must also acknowledge that Social NPS is limited because of the bias in representativeness. This means that social, even at its very best, does not represent the full breadth of your customer base. Increasing the number of enthusiastically loyal customers, your Promoters, is a worthy endeavor. NPS is a metric not the means to do so.

8 Reasons To Master Customer Experience Ecosystem Mapping

A customer experience ecosystem map is a visual technique that connects end-to-end customer processes to the ecosystem of employees, partners, capabilities, processes, technology, information and interfaces involved in delivering the experiences. Without these maps, companies regularly perform “blind-man-and-the elephant” exercises in which different silos of an organization see only parts of the customer’s experience related to their own jobs. A customer experience ecosystem map breaks down this tunnel vision to help systematically improve or re-design experiences to deliver value. Customer Experience Ecosystem Maps are evolved from service blueprints, which experience designers have used since at least the mid-80s. They essentially start with a customer journey map that depicts the experience a customer has in a scenario that describes the context and the outcome the customer seeks to achieve. But it doesn’t stop there. It continues to map the value stream responsible for delivering the experience.

Why bother with this exercise? Here are eight reasons:

1) Create empathy and a shared understanding of the customer experience. Departments work from their own internal perspective and only have a partial understanding of what the customer experiences. Ecosystem maps create a shared picture of the end-to-end customer experience – and connect diverse departments that only have a partial perspective. In order to create a shared understanding of what a customer experiences, United Health mapped the key moments across a customer’s interactions with the firm. It provided packages to all managers that includes the 3’x4′ map, cards that describe key customer goals and issues, and instructions for how to use the map to inform improvement projects.

2) Improve communications and processes between front and back office. One B2B software company knew that a “change request” was a particular pain point for customers. Through the process of mapping the customer’s journey and ecosystem for this scenario with a cross-functional group, the group realized that the change agreement often took longer and required more internal resources than actually delivering the additional services to customers. One of the key problems was simply that account managers had false assumptions about what legal required for the process.

3) Focus employees and partners on strategic activities. Employees and partners need to stay focused on the things that drive the most value to customers. Firms have long used Michael Porter’s “activity system maps” to articulate the actions that create differentiation for a company in the market. Ecosystem maps can perform a similar function with a couple of distinct advantages: a) they are easier to create, which makes them more accessible to a wider variety of staff, and b) they take an outside-in approach, starting with the outcomes that target customers seek and then shaping business process to deliver maximum value.

4) Identify duplicated capabilities that create inconsistency and waste. Mapping the end-to-end journeys for particular customer scenarios point out the duplication of efforts internally that not only waste resources, but also creates horrible customer experiences. One financial services firm used this exercise to illustrate that a customer upon the death of a family member needed to submit two separate death certificates for different business units which each created their own inheritance process.

5) Identify low-cost fixes. One credit card firm that mapped the customer experience ecosystem identified simple fixes to a problem, such as training and incentivizing off-shore call centers in a similar manner as on-shore call centers. For a health insurer, understanding the dynamics of its customer experience ecosystem helped it discover that it didn’t need to expand its physician network…instead customers had a problem navigating the current network and the way the company presented it made customers feel like it was limited.

6) Make the business case for projects single departments couldn’t make. When Boeing began a project to re-vamp its online customer portal for mechanics, it had over 20 different personas reflecting internal departments, not real customer behavior. By rationalizing these personas by behavior (rather than internal departments), and then mapping the customers’ journeys, the group found enormous synergies for putting in place a common financial system.

7) Prioritize funding for projects. Journey and ecosystem maps helped Elsevier – a provider of scientific, technical and medical information and services – create a prioritization matrix that showed how ideas that emerged from the journey maps stacked up in terms of the effort to implement them and the benefit from implementing them. This helps the change management team manage the queue of projects and monitor the results of previous initiatives.

8) Reframe metrics. Performance measurement should start by focusing on customer experiences that matter most. Charles Schwab centered its initial measurement program on several critical customer journeys that correlated with the health of a client relationship, which included: onboarding, providing a mortgage, and delivering consultations to review a portfolio. For more information about mapping and applications of the customer experience ecosystem, check out Forrester’s Customer Experience Ecosystem Playbook or inquire about hosting a workshop at your company. Or join us in London next month for Forrester’s Forum for Customer Experience Professionals EMEA, November 19th and 20th.’

About the Author: Paul Hagen is a principal analyst at Forrester Research serving Customer Experience professionals. He blogs at http://blogs.forrester.com/paul_hagen

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