Call Center QA Featured Article

November 19, 2010

Focus on the Base (and Basics)

By ,

There are mounds of research and studies that measure overall customer satisfaction and loyalty as it relates to customer service and support experience. Last year, my company went a little deeper, examining this correlation specific to different levels of tiered, subscription-based support services (bronze, silver, gold or some similar categorization). We conducted this study using customer feedback within the B2B software provider industry.*

What did we learn? Generally, and to no one’s surprise, the study showed that, as the level of customer support increases, the percentage of dissatisfied customers drops significantly. But what was eye-catching was the sheer volume and percentage of dissatisfied customers at the base-level tier of support. In fact, more than 92 percent (12,500) of customers who ranked their level of satisfaction as 0, 1, 2 or 3 on a scale of 0-10 subscribed to the lowest level of support.

Figure: 2009 Count of customers of Bottom scores across Support Tiers
Case Satisfaction Bottom 4 Box
TIER	Count	Percent
Base	12,696	91.8%
Silver	173	1.3%
Gold	175	1.3%
Platinum	472	3.4%
Platinum Plus	320	2.3%
TOTAL	13,836	100.0%

How did this translate into loyalty? Sixty-one percent of case satisfaction “bottom box” customers were detractors, meaning when they were asked about their likelihood to recommend the company, they gave a score of 0-6 on a 0-10 point scale. In other words, more than 7,744 customers are a flight risk.

Figure: 2009 Proportion of Case Sat Scores by Loyalty Segment

Case Sat Bottom 4 Box

Detractors 61%

Passives 25%

Promoters 14%

Now consider the financial implications. In research we conducted back in 2006, we identified the economic value of customers across loyalty segments in various industries, including the B2B computer software industry. Based on how much a customer spends over a given period of time and the amount of new business that is gained – or lost – as a result of customer word-of-mouth promotion or detraction, the study showed that the average estimated customer lifetime value of a Promoter was worth $2,053,000 versus negative $46,000 for a Detractor.

Figure: Average Customer Value by Net Promoter Segments: B2B Software Industry

Source (News - Alert): 2010 B2B Satmetrix Cross Cultural Net Promoter Benchmark database

So doing the math on this sample, moving the 7,744 base tier customers with Detractor status in 2009 up to highly loyal Promoters is worth up to $15.8 billion. Why? Because Promoters are loyal customers who remain customers, purchase more and attract more customers through their positive referrals.

Improve the Experience

In the B2B computer software industry, it appears the strategy to sell enhanced support services is not catching on with the customer. One thing is clear: there needs to be a stronger focus on improving the experience at the base-level of support.

How do you do that? Here are four steps companies must take to improve the customer experience.

Establish or Leverage Your Customer Experience Management Program – Many companies have incorporated (or are considering) a continuous customer experience management program for their support services functions. At the core of these programs is a voice-of-the-customer technology system that collects and analyzes customers’ feelings and perceptions regarding specific interactions with their company, including, but not limited to, support. These tools provide key insight into your customers’ expectations and how you’re performing in meeting those expectations.

Drive Customer-Centric Behavior – The real value of customer feedback arises when your organization analyzes the information and takes immediate, corrective action and, more importantly, uses the feedback to identify operational and strategic improvements that will enhance customer experience and increase loyalty. On an individual level, if a customer provides negative feedback, your system will trigger an alert to the pertinent personnel (manager and/or customer service representative) to resolve the dispute in an immediate manner.

Focus on Strategic Improvements – At a higher level, customer feedback also should be used by executives to identify overall trends, challenges and opportunities for improvement. With the aggregate data, you can identify and prioritize operational issues and make strategic investments that have the greatest impact on customer loyalty. For example, through customer segmentation, you may discover opportunities to match high-value customers with high-performing CSRs or the need to institute training on a recurring customer complaint.

Demonstrate Financial Performance – We’ve all heard how support is treated as a cost center. Successful customer experience management programs eliminate this perception. By linking customer loyalty data to financial data – such as revenue gained through retention or new customer acquisition through word of mouth (think Zappos) – you can demonstrate the tremendous impact and financial value of support.

In my opinion, these are the basics for improving performance and driving business results, regardless of how much your customers are paying for support.

Steven Nicks is Vice President of the Eastern Region for Satmetrix, the leading provider of successful customer experience management programs and the co-developer of Net Promoter^®. He has more than 20 years of experience in strategy, customer loyalty, and large-scale enterprise implementations across several industries, including financial services, high tech and telecommunications.

TMCnet publishes expert commentary on various telecommunications, IT, call center, CRM and other technology-related topics. Are you an expert in one of these fields, and interested in having your perspective published on a site that gets several million unique visitors each month? Get in touch.

Edited by Chris DiMarco