Curtis Bingham.com

Mike McLaughlin over at Geurrilla Marketing blog commented on the Sad State of Customer Satisfaction saying,

For the third year in a row, customer service ratings are taking a beating. According to researchers at Accenture, almost half of the 3,500 consumers surveyed said that their service experience with companies was fair, poor, or terrible.

Making matters worse, consumers aren’t just complaining about poor service. Most respondents (59 percent) reported that they switched to a new provider in the past year, specifically due to service failures.

The report, titled “Customer Satisfaction in the Multi-Polar World: Accenture 2007 Global Customer Service Satisfaction Survey Report”, studied more than 3,500 consumers in 2007 across 5 continents. They found that even though overall service satisfaction was highest in the US, only 7 percent of U.S. respondents rated it “excellent,” and 28 percent said it was “poor/terrible” to “fair.” Read more »

What is the key to Customer Strategy?  A Chief Customer Officer who is regularly speaking with customers and drawing connections where none existed before. In today’s Wall Street Journal, Carol Hymowitz profiles Ann Livermore, H-P’s head of storage & servers as well as the software and services business.  In years past, she was dubbed H-P’s Chief Customer Officer.  In the article, she describes herself as someone who “understands how processes and people work at the company.”  She’s very focused on customers, “talking to two or three big ones every day.”

In conversations with major financial services companies several years ago, she listened when they said that they were spending too much time & money operating their data networks.  As a result, she drove H-P’s strategy for building next generation data networks that are driving significant growth for H-P’s  software and services.   Ms. Livermore’s division reported $37.7B in revenue last year, or 36% of H-P’s total.  More recently, H-P’s purchase of EDS was driven by conversations with companies that had huge outsourcing opportunities that her group couldn’t handle.  Ms. Livermore helped drive the strategy whereby Ronald Rittenmeyer, current chief of EDS, will assume the outsourcing portion of H-P’s services business and report directly to Mark Hurd, CEO of H-P.

What do we learn from the article?  The critical imperative that senior executives have to be speaking with their most important customers on a regular basis–and drawing the connections that will help grow the business.

How do you do so?

1. Identify your most strategically important customers that are the most critical to your growth
2. Orchestrate meetings with key executives–not just buyers–to get their perspective on their business challenges and opportunities, even if you may not be currently providing solutions to the problem areas
3. Capture the issues in your CRM or other knowledge management system so you can return to them again if they crop up in other areas
4. Take time out to review customer data, looking for connections and correlations
5. Where correlations exist, invest in discovering the ramifications

Like Ann Livermore, you may just find a huge opportunity to grow your business.

C.C. Chapman shared his quite interesting experience of Comcast monitoring Twitter for negative comments and scheduling a technician visit in response to his post about his lackluster HD picture during a Celtics game.

I must say that I’m rather impressed. This is the first time that I’ve ever heard of monolithic brands effectively using social media to scan for negative customer comments and actually doing something about it!

Do you suppose that they are using some sort of aggregation tool on twitter or more broadly across social media or is there a rep dedicated to monitoring twitter?

I spoke with a lawyer whom I’d advised a while back about how his efforts to reconnect with some of his best clients were going and he told me a fascinating story.  He’s been meeting them for breakfast or lunch and asking them how they’d like his firm to improve and what they thought about a new service he’s thinking of launching.  Not surprisingly, his clients were stunned that he would actually spend time with them without billing them.  Once they got over their shock, they gave him some excellent feedback and helped him refine his new service idea.  Most said they would sign up for it and to be sure to let him know when it was ready.

Most importantly, though, was what came next.  He said that his firm had really screwed up with one client–no two ways about it.  The client actually told him that if they hadn’t gone out to lunch last month, he’d have fired his lawyer over this.  But, because the relationship had been built & loyalty established, he was willing to allow the firm to make good rather than storming out the door.

The lesson is threefold:

1. If you wait until you need them, it is too late to build relationships.
2. Relationships can help you define new products and services
3. Relationships can get you out of a bind and allow you time to salvage a customer

Get out and build those relationships, one good client at a time.

Are you measuring customer loyalty because it is “the right thing to do”? I spoke with a company this last week that was doing exactly that, except that because there was no unifying strategy to their efforts to do so they weren’t able to make any sense out of their data.  Their data had been corrupted by well-meaning product managers that were eager to get customer feedback on new product features.  Because the data were gathered haphazardly, there was no way to correlate causes with effects and therefore, no way to know what changes to make.

I’ve found there are 5 key mistakes that many companies make in measuring loyalty:

1. Allowing the survey to become cluttered with product-related feedback-gathering efforts.
2. Gathering insufficient detail because it is unclear what actions might be necessary to improve results
3. Inability to segment & prioritize customers according to their value
4. No Closed-loop implementation process that streamlines business improvements and keeps the affected customers in the loop
5. Lack of accountability for business improvements derived from poor loyalty scores

More on each of these tomorrow.

Why would I write a letter of recommendation for someone whom I’m never met?

I just got a request via LinkedIn:

Dear Curtis,
I’m sending this to ask you for a brief recommendation of my work that I can
include in my LinkedIn profile. If you have any questions, let me know. 

Thanks in advance for helping me out.

The name at the bottom wasn’t familiar, so I searched all my email and contacts to no avail–I’ve never received an email message from him (at least not important enough to avoid my Deleted Items folder.   I’m not overly particular about accepting LinkedIn connections so I’m sure that somehow he found me, sent me a generic invite, and voila, we’re now connected.  However, I’m pretty sure that I resent the assumption that I would provide a recommendation for him.

No, recommendations are not commodities to be thrown away.  I want my word and my handshake to mean something real, like it did back in the days of the pioneers, before we needed legions of lawyers to define what a handshake really meant.

The Customer Experience is All in the Details.

I’m trying to order manilla folders from Staples, which should be pretty simple, right? It was easy to find them on the website, but when it came time to order, it was miserable. Read more »

Someone recently asked me, “How can customer research provide competitive advantage?” There are far too many ways! Here are a couple:

1. Let your customers tell you what your competitive advantage really is. When FedEx gathered a group of executives to show them a video of their new planes, the huge capacity they have as described by all the packages on the runway around the plane and the staff in their spiffy uniforms, one executive said, “this is all well and good, but I use you guys when I absolutely, positively have to get it there the next day.” There’s a billion dollar tag-line, free of charge!
2. Establish pricing: For another company I researched small businesses who purchased credit-card processing services. My client thought their prices were too high, but as I researched their customer base, I found a group of customers that were actually willing to pay 3, 4, and even 5 times their current prices because my client’s solution saved them so much time at the end of the month in reconciliation of their accounts. For this group of customers, they raised prices and generated an extra $16M annually.
3. Let your customers tell you how they want to be marketed to: In the above example, by focusing on the time savings in their marketing, they were able to justify a premium price and protect themselves from the severe discounting their competitors were engaged in.

The bottom line is that you need to ensure customer research is at the core of your business and decision-making processes to grow your market, grow revenues, and profits.

I was speaking with a major market research firm that in the not too-distant past had scuttled an eagerly anticipated new practice area, claiming that there wasn’t a market for the new practice and associated research. Yet, a few years later, their biggest competitor has a huge, booming practice in the same area! The competitor’s most widely-read analyst in the entire firm is (you guessed it!) writing exclusively about the same practice area that was scuttled. For the competitor, this is the largest practice area, generates the greatest volume of reports, and the greatest revenue. Clearly, their competitor has made a very successful business in the same market that was deemed unprofitable and unfit for entry. How could one firm fail when a fierce competitor succeeds? Read more »

I spoke with a rapidly growing software company last week about their sales compensation practices. Like many software companies, they provide sales incentives on license revenue, but NOT on services revenue. In other words, they want their sales team to sell software, but NOT the services required to implement the software and deliver the ROI for the software. Their rationale is that licenses are 95% profit, whereas services may only be 25-30% profitable.

While I understand why the company might choose to focus on licenses, there is a practical problem with this model. One of two things happens when salespeople aren’t compensated on services: Read more »