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by Richard Sharp

We're all customers and know how excruciatingly frustrating it can be when an interaction with a company doesn't go the way we want it to.

Who hasn't spent 20 minutes on hold with a contact center, only to have the relief of finally talking to a real person dashed after being informed that you need to call another number to resolve your particular query?

How about going through a protracted e-commerce process involving completing pages of online forms, only to stumble at the final hurdle and have to start again or give up?

Does this have anything to do with quality?

The modern quality movement has made huge improvements in the performance, reliability and consistency of today's products and services. The fruits of these efforts have resulted in huge benefits for companies and customers alike. We've all come to expect high-quality products. I can't remember the last time I was in a car that broke down, or had a call dropped by my cellular network.

That's precisely the problem. How can you differentiate your company from your competit ors when their products are of similar quality? I'm unmoved when a rival cellular operator tells me that its network has a lower number of dropped calls, and I'm not going to switch cars for another manufacturer's three-year warranty when I haven't been stranded on the shoulder in the last 15 years.

Listen to your customers
W. Edwards Deming was on to something when he said that the customer's definition of quality is the only one that matters. You know what quality means to your company, but do you know what it means to your customers?

By incorporating the voice of the customer into your business improvement activities, you benefit from this invaluable perspective. Customers can tell you what they value about your core products and the surrounding support services that make up their experience.

Combining external measures from your customers with internal quality metrics has the potential to deliver an improvement in business performance and the opportunity to continuously outpace your competitors.

Your organization probably already conducts periodic customer-satisfaction surveys. You probably receive reports that your customers are fairly satisfied, and they should be, because you deliver a quality product.

Unfortunately, customer satisfaction isn't a good indicator that customers will continue to use your company's products. Customers who are merely satisfied are easy for your competitors to entice away, or they may leave just to make a change.

Beyond satisfaction
To succeed, companies must strive to turn satisfied customers into loyal customers, and turn loyal customers into advocates. These are the top rungs of the customer-experience ladder. (See figure 1 below.)

Even before prospects become customers, you start informing their expectations. They see commercials or hear about your performance from their friends. Once they become customers, your goal is to deliver what you promised and ensure that they're satisfied. Beyond satisfaction, you must strive to ensure that you deliver consistently positive experiences and build a strong relationship that develops loyal customers and, ultimately, advocates.

A loyal customer is one who intends to stay with your company. When you build loyalty your customers will overlook occasional failings. Outcomes don't always go as planned, but a loyal customer believes that your company is striving to do its best and will cut you a little slack to resolve the problem.

Advocates are even more valuable to your company. Advocates are customers who feel a strong connection to your product or service and will actively endorse it to others. They are so impressed with your company that they are willing to stake their own reputation on endorsing your product to their friends. Advocacy is the best predictive indicator that your organization is delivering product and service experiences that are important to your customers.

There's little doubt that turning your prospects into loyal customers and advocates is good for business. The question is, what does it take to achieve this goal? Unfortunately, it's not going to be easy--if it were, everybody would already be doing it.

Pushing customers up the ladder means delivering a positive experience each and every time the customer interacts with your organizations. A positive experience is one that meets or exceeds the customer's expectations. On the rare occasions where their experiences don't go as planned, your organization must do whatever it takes to quickly make it right.

Delivering positive customer experiences involves everybody in the organization. It's the reason the business exists. It's particularly important that companies focus on the people and systems that the customers interact with most often. We refer to these as touch points, and it helps to think of them occurring around the customer life cycle.

The life cycle is comprised of three phases: the buying experience, the product experience and the service experience. It's important to note that the life cycle is taken from the customer's perspective and not the company's, and that it begins before the individual is actually a customer. The buying phase comprises expectations set by advertisements and word-of-mouth referral (perhaps from an advocate). The buying phase culminates in the customer making a purchase.

The product-experience phase revolves around actually using the product. For a banking e-commerce site, for example, this would include activating the service, making a first transaction or transferring money between accounts.

The life cycle continues through the service-experience phase, which can be the most challenging. Often touch points in this phase are more difficult to automate and require human interaction. For example, customers may e-mail or call support when part of an online product experience fails to meet their needs, and the response will require a customer service agent to resolve the issue.

The challenge for the organization is ensuring that all of these critical touch points are positive experiences, and that the ones the customer really cares about are great. It is particularly challenging when the touch points involve people, who are inherently variable.

An approach called customer experience management (CEM) has been gaining momentum during the past couple of years. Leading companies have adopted the approach to better understand how their customers perceive them and to identify what their customers value.

CEM has three core principles: involve, integrate and improve.

Involve customers at every life-cycle touch point, regardless of the channel that they use to interact with your company. The goal is to get feedback to your business as soon as possible after customers have an experience with the company. It's still fresh in their minds, and if there was an issue, you have the chance to resolve it.

Typically, three types of collection methods are used to involve customers.

Customer-initiated feedback gives customers an opportunity to let you know about what has delighted or disappointed them. You may not even be aware of a problem unless you provide this conduit for feedback.

The next collection method employed is event-initiated. At critical life-cycle stages, the company should ask customers about their experiences, perhaps when the first bill arrives or after signing up for a new credit card online. These are the touch points your customers have told you are important. Listening closely for problems here is critical.

Finally, company-initiated collection is closely related to traditional customer satisfaction surveys, where customers are invited to provide details about their overall impression of your organization.

You now know what your customers think about your company's ability to deliver on its promises. But just like quality assurance metrics, unless the information is quickly disseminated to the people who can do something about it, it soon becomes worthless.

Figure 2 below illustrates how poorly most organizations share and act upon feedback from their customers. There's no value in listening to your customers and then ignoring them.

Providing the right people with the right information at the right time is the goal. For example, information that enables a contact-center agent to improve his or her customer interactions is different than the summary required by a manager to ensure that all parts of the business are performing in unison.

The final principle of CEM is actual improvement. This is undoubtedly the most challenging step but arguably the one that quality practitioners are best equipped to champion.

Micro-level improvement means addressing customer experiences one customer at a time. If customers have a problem, it doesn't matter if the data are statistically significant. Deal with it or risk losing them as customers--and then having them tell all their friends and family about their bad experiences in detail. Fix their problems to create advocates and customers for life.

At a higher level, CEM aims to address systemic and process issues that affect groups of customers.

The final step in improving customer experience is letting customers know that you listened, acted and fixed the problem. Only 5 percent of companies actually carry feedback through to this conclusion.

Online customer experience
E-commerce interactions are designed to be streamlined and efficient. They are less expensive than other ways of interacting with customers, and they reduce the human involvement of traditional transactions. However, you risk frustrating your customers if the online process that you've designed doesn't meet their needs. If you build flexibility into your process and allow your customers to tell you when their online product or service experience disappoints them, you will be able to improve that experience.

It's important to understand how online transactions fit into the customer life cycle. The customer experience spans the entire life cycle across all channels of communication, including Web site, phone and retail outlets. It's the sum of these experiences that creates customer advocates.

Using the involve, integrate and improve framework, let's take a closer look at how CEM applies to a company providing products and services online. First, the company needs to involve its customers at key life- cycle touch points. For example, consider an event such as completing the purchase of an airline ticket. Here, an event-driven collector can assess how the experience meets the customer's expectations.

Conversely, if the customer is unable to complete the transaction online, the company needs to provide its customer with an opportunity to tell it why. For a financial institution, customers abandoning online credit card applications are a real problem. Without collecting information from their customers about their reasons for stopping the process, the company will repeat its mistakes and won't even know it.

Companies should also conduct audits of their overall experience. Periodic customer surveys provide a way for a company to understand both the overall experience as well as gaining greater visibility into specific areas of online service delivery.

Finally, a single, customer-initiated collector accessible through every Web page rounds out the ways that companies receive feedback. Customers can provide feedback on what they want, when they want. This feedback may reveal issues that the company didn't know existed.

After companies have collected information about their online experiences, they need to benchmark it against similar data from other channels, for example, the contact center.

At the integrate stage, all of the customer experience information that a company gathers--whether through a customer-initiated collector or an abandonment survey--is delivered to people in the organization who are accountable for it. Thus, if a customer abandons the online credit card application because the transaction is timing out, the problem is one for someone in information technology to solve. If, on the other hand, customers can't find the answer to a question they have about a product, a customer service agent handles it. Either way, the company engages in a dialogue with their customers until a solution is found.

Once that solution is reached, the company improves the experience for the individual customer and, if possible, applies the solution to improve the experience for all customers. If customers were abandoning the online credit card application because it was too confusing, and the company then clarifies its language, it should see an increase in completed forms.

Experiencing quality
Think of CEM as a structured approach to bringing the most important external measure of quality back into your organization. Quality professionals are uniquely positioned to help their organizations transform into truly customer-centric businesses and drive the next competitive agenda.

About the author
Richard Sharp is director of marketing at ResponseTek Networks Corp. (www.responsetek.com), a leading provider of customer experience management software and services. He has 15 years of experience spanning systems engineering, product management, and marketing in consumer electronics, software and telecommunications businesses. An engineering graduate, he also holds an MBA from the Cranfield School of Management in the United Kingdom.