Jessica Bledsoe

Research & Analytics Software Leader

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Stop Measuring Customer Satisfaction

Oct 23 2014

I recently worked with a company trying to fix their high customer attrition rate with annual customer
satisfaction surveys. The survey project was successful. Fixing the attrition rate was not.

But why?
The company measured satisfaction, and the numbers said customers were not satisfied. To raise the numbers,
the company formulated and implemented action plans. Sounds like a solid plan, right?
The problem: the company was measuring how their customers felt, but not whythey felt that way. They knew
perception of their services was low, but couldnt figure out why.
The account teams were earnest in their actions to attempt to solve the issues, but the actions were misguided
because the surveys failed to ask the customer: What are we doing wrong or right? The team was assuming root
causes based only on customer satisfaction numbers and their own best guesses about what, exactly, was
causing those numbers.

Measuring Satisfaction is Not Enough

Satisfaction (including NPS) tells you if they like you. It gives you a thumbs up or thumbs down.

It doesn't, in my opinion, accurately tell you what its like to be your customer (the customer journey). It also
doesn't necessarily help you retain customers because it leaves a host of questions unanswered. What will the
customer care about when considering a renewal? What will drive their perception of value and ROI? A score
cant tell you either.
Customer experience analysis is ultimately about renewals.To really retain those renewal dollars, you need to
do it differently.
Now, let me be clear: if you are not measuring your customers satisfaction, stop reading this post and do it
now. Its that important.
Im not really advocating doing away with customer satisfaction numbers. Im advocating changing what is
measured and how.

Start Measuring the Journey: Next Page -

Instead, start measuring and analyzing the customers experience. Customer experience analysis is different
from customer satisfaction because it helps you walk the same path as your customer. At Primary Intelligence,
weve found a three-pronged approach works best.
1. Feedback Figure out what the customer thinks and why. Id recommend conducting interviews using
both quantitative (scale, ranking, binary, etc.) and qualitative (open-ended) questions. Create a formal
discussion guide to create consistency and a focused discussion, but dont be shy about going off script to
probe for details. Figure out what will be driving a renewal decision and the overall perception of value.
2. Debrief Although the customer has filled in the gaps on what they are feeling and why, your account
team needs to round out the view. Ask everyone involved with the account to review the interview
feedback and then schedule a debrief session. Focus the session on what the team is doing good or bad
to drive those perceptions and what will likely drive a renewal decision. (Get more tips on debrief
sessions in this webinar.)
3. Act As you end the debrief and move into planning mode, identify specific actions the team can take to
resolve concerns and emphasize value. Also dont neglect identifying growth opportunities and how
youll act on those. Ultimately determine what you want the customer to say during the next feedback
session.

The When Matters Too

And while youre at it, adjust when you measure. Reaching out to all customers at the same time each year
doesn't do your account teams any favors. They need feedback throughout the customers journey, so map the
feedback timeline to that journey. No time is more important than 3 to 6 months prior to a renewal event. Give
the team enough time to shore up weaknesses and plant seeds for growth opportunities.
Remember: your customers are future buyers. Stop asking if theyre satisfied. Instead figure out how to
guarantee a renewal.

Marketings New Math: 3 Cs + 5 Blindspots

Oct 28 2014

I
sometimes wonder what people who look back at the 2010's will say about this time. Though theres a lot to
comment on about the world in general, when it comes to the business world I think people will realize that this
is the time when profound change happened changes in how companies operated, changes in how they sold
to customers, changes in what business meant. Though its a term thats overused, disruption does a pretty
good job of capturing the destabilizing effect that the digital revolution has had on business.
To understand this better, we worked with ANA (Association of National Advertisers) to develop and analyze a
survey about how marketers are thinking about the disruptions. You can read the executive summary I coauthored with my colleague Jason Heller (Marketing disruption). But let me highlight a few things here. When
asked about the disruptions that they are most concerned about, survey respondents cited the "3 Cs":
1. Content (cited by 81 percent of respondents as a disruption) the content companies need to develop and
generate to communicate with customers wherever they are on whatever device theyre using at any stage
of their decision journey.
2. Complexity (80 percent) the multiplicity of channels and the surge of data that has created huge
opportunities to better understand and connect with customers, but has also introduced a bewildering
array of technical and managerial challenges.
3. Connected and empowered consumers (74 percent) the power of the consumer to direct brands, shape
perceptions, and make demands on brands.

When we probed into how marketers are managing these disruptions, we found that most said they had a clear
vision of the path they wanted to follow. But their responses also reveal five blind spots that will hamper their
journey:
1. A fractured customer experience
Continuously evolving customer expectations are a major disruptive force, but Marketing is still limited in its
ability to shape the entire experience. Marketers authority continues to lag in critical areas: CRM
and loyalty (66 percent of respondents), customer support (66 percent), and managing the entire decision
journey (67 percent).
2. Content primacy without a supporting strategy & operations
Brands are confronting a seemingly insatiable demand for fresh contenteverything a customer sees when
interacting with a brand across every channel. Theres a mad scramble for content talent. The percentage of
companies with formal content-strategy roles has risen from 35 percent in 2013 to 71 percent this year and will
increase to 84 percent by next year. Astonishingly, however, 84 percent of marketers do not have a formal
content strategy or underlying production and distribution processes that can scale.
3. Disconnects between leadership and the front lines
Despite the rapidly changing landscape, 43 percent of marketing leaders believe they are not empowered or
encouraged to experiment and innovate. Even worse is the significant disconnect between senior management
and the front lines: While 70 percent of CMOs say they employ agile marketing processes to analyze and iterate
tactics as frequently as needed, just 45 percent of marketing VPs and directors and 50 percent of managers
agree.
4. Hiring talent but not managing it
Bringing on new talent is one of the most important strategies for dealing with disruptions (91 percent of
respondents), essentially as important as investing in new technology. But are companies doing enough to
nurture and accommodate dramatically changing skill sets, not just within Marketing but across the entire
organization? Just 61 percent said executive education programs were important for responding to disruptions,
well behind those who cited investments in new technology (94 percent), and only 35 percent are investing in
new models for employee/worker management.
5. Decisions without data.
Most marketers acknowledge that data and analytics are the key to addressing a more complex landscape; 96
percent said the ability to make data-informed decisions is their most-needed capability to respond effectively to
disruptions. However, about a quarter of companies are not using data to make decisions, and almost half say
they still dont have the right analytics in place to measure the effectiveness of marketing investments. If you
are looking for ways to fund investments to grow digital, it seems like this is a serious source of opportunity.
Do you agree that these are the prevailing blind spots affecting marketers today? Does your organization have
them as well?
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Learn more about digital transformations and other topics on our McKinsey on Marketing & Sales and site.
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[Image, Kate Ter Haar, Flickr]