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The Missing Link?

A question I often ask call center operators is, “would you be happy receiving the service you provide to your customers?” This question most frequently is rewarded with a few moments of silence. While there are certainly a number of quality operations providing very good service in terms of access, answer quality, ease of use and first call resolution, it seems to me that an ever increasing percentage of call centers fail on one or more of these points.

So in today’s world where call centers are our primary communication channel with our customers why do so few businesses grasp the fact that providing good customer service is good for their business? I suspect the answer to this question lies in part with the challenges associated with proving the premise. How can you identify the value the company derives from good customer service? Intuitively we know that a satisfied customer is preferable to a dissatisfied customer. We know that a satisfied customer is more likely to continue to purchase the products and services we offer….the challenge becomes proving it.

We do not operate in a vacuum, the call center isn’t the only communications channel, though it is the most pervasive1, we deal with so the exercise of attributing credit, or blame for an action is incredibly difficult in most organizations. Did the customer renew their membership because of the flawless execution and provision of customer service when they called the call center or was it the result of a spectacularly creative renewal mailing or the effective email reminder that was sent or perhaps it was the impact of the new socially responsible advertising ads that ran on television the week they renewed. As you can see the answer to the question what caused the renewal will depend upon who you ask. Each of the appropriate departments will take the credit and/or deny the blame depending upon the situation.

The American Customer Satisfaction Index (ACSI) at the University of Michigan has endeavored since 1994 to try to identify the exact linkage between customer satisfaction and the economic success of a business. ASCI on their website states that “A basic tenet of the ACSI is that satisfied customers represent a real, albeit intangible, economic asset to a firm”. So how can we join the dots, if the acknowledged authority considers the linkage to be an intangible?

One of the most effective ways to do so is to assess the impact that individual transactions have on the satisfaction of the customer. One approach to doing this is the Net Promoter. approach developed by Satmetrix®. This approach based upon research that showed that the highest correlation between customer behaviors was if the customer was likely to recommend a particular company to a friend or colleague. The research showed an 80% correlation to customer behavior to this question versus less than 10% correlation with “easy to do business with”. The Net Promoter approach breaks down the “Likely to Recommend” responses into two groups; those who had a recommend rating or 9 or 10 on a scale out of 10, and those whose rating was 6 or under. By subtracting the 6 and under group from the 9 or 10 group you produce a Net Promoter score. In a assessing the revenue growth for major airlines over a 5 year period, Satmetrix correlated 79% of the variance in growth rates to the differences in the Net Promoter score. The chart below illustrates these results.

TRG research has over the past few years focused on a similar but not identical approach to linking customer behavior with customer satisfaction. In numerous customer satisfaction studies we see a strong correlation between customer behavior and the customers’ response when questioned regarding the opinion of the company/organization based upon their most recent interaction.

Each individual interaction with a company or organization regardless of the channel within which the interaction occurs can only result in one of three following results:

• The interaction Improves our opinion of the company,
• The interaction erodes our opinion of the company,
• The interaction leaves our original opinion of the company unchanged,

The above three options force customers to articulate their opinions into positive, negative or unchanged. By viewing subtracting the negative (erode my opinion of the company) from the positive (improved my opinion of the company) we are able to assess and assign a Net Loyalty value. In one client vertical a strongly positive Net Loyalty score correlated to an almost 50% increase in revenues.

TRG has a research study underway which we believe demonstrates a strong and significant correlation between actual customer behaviors and the impact of individual customer interactions. TRG anticipates publishing this research at the end of Q1 2006. Please contact TRG if you would like to receive additional information on this research.

Determining the linkage between customer satisfaction and actual customer behavior is still a work in progress, however the use of Net Promoter and Net Loyalty scoring can help your organization make the translation.

For more information on Satmetrix visit their website at http://www.satmetrix.com/.

For more information regarding the TRG research Customer satisfaction study please send an email to [email protected].

Let us know what you think of this article or any suggestions you have for future issues by email at [email protected].

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