Reading Your Customers’ Minds

Enterprise feedback management boosts decision-making strategies.

by Elise Oberliesen

Today more than ever, companies rely on data to drive decision making. But data alone is worthless unless it tells a story. Information born out of data transforms ordinary stories into compelling epics — and possibly improved bottom lines. While companies aim for top ratings and high profit margins, exploiting the competitive advantage helps differentiate their standing in the marketplace. Keeping a foothold in the turbulent market keeps the top dogs fighting hard.

Masters that artfully create long-term customers create strategies for repeat business, reselling or up-selling — for some it’s a formulaic process. Those with high-tech tools like enterprise feedback management (EFM) can wrap their minds and business plans around its results-driven promise. “You can start segmenting your customers better,” says Esteban Kolsky, independent EFM consultant from San Francisco. And that means the marketing efforts target the intended audience more efficiently.

What is it?

EFM is a type of customer relationship management (CRM) tool used to collect, analyze and integrate internal or external data to improve processes and increase both customer and employee retention. Like a roadmap for enterprise-wide decision making, experts say EFM works with current systems in place at an organization, such as employee or customer records. From customer feedback surveys and trend analysis to departmental data, gaps and metrics, companies armed with an EFM’s user-friendly tools tap into high-tech solutions capable of driving efficiencies and exposing corporate cost cutters.

Companies did not always operate in this fashion, says Kolsky. “We never took the time to ask customers what they wanted or needed. We only looked at the data and we made assumptions,” says Kolsky, who, among other colleagues in the 1990s, watched the technology take shape and evolve over the years.

Understanding what customers want makes sense, but not everyone understands how to deliver it. EFM consultants simplify the gathering of customer feedback and developing analysis-driven decision making, says Chris Cottle, marketing vice president at Allegiance, in Salt Lake City.

Data collection methods range from surveys printed at the bottom of sales receipts to online surveys to more sophisticated methods that require completion prior to swiping credit cards, for example. Soliciting feedback directly from customers sounds good, but does it work? When properly executed, connecting the data dots explodes into telling stories. But the flipside is also true. “The information is not useful unless you have the right information from the right people,” Kolsky says.

One reason EFM consultants work closely with the client is to ascertain personality profiles of customers being studied, says Cottle. Ultimately, the pair works together to unravel subtle nuances behind customer motivations and needs. “The mindset of the client is changing. Customers are becoming more used to speaking out and speaking up … and wanting responses back in real time,” he says. Next, surveys are developed, data collection methods are determined and results are analyzed — at which point companies penetrate deeply into the customer’s psyche.

Real time response sets competitors apart

Immediacy shows a level of respect, says Cottle. Companies can realize about 8 percent more customer loyalty by giving quick response times to customers, he says. But it requires acting within minutes to hours — an admittedly challenging task.

Kolsky likens response times to weigh-ins at the bathroom scale. Done daily, consequences of yesterday’s meal become visible. Then take action if needed, like the more-exercise-and-fewer doughnuts strategy. But one month of scale avoidance coupled with extra bagels and that unwelcome muffin top sneaks up.

“You should know what answers you’re going to get. This will fall between 60 and 65 percent threshold for acceptance, then you decide what you need to do,” Kolsky says. Not sure how the customer will respond? Not knowing introduces risk into the equation and that can lead to delayed reaction times. “Timing of feedback to an organization is critical,” Kolsky says.

What the customer says

Using EFM since 2002, Marshall Paepke, executive vice president of administration at Mountain America Credit Union, says the firm leaped right in as a beta tester. What do they like about using EFM? The numbers don’t lie. “Receiving feedback from members and employees provides us with information to understand where we are doing well and where we have opportunities for improvement,” said Paepke in a statement.

The employees’ voices are heard loud and clear. It affords opportunities for the people in the organization to voice the positive while providing constructive criticism when needed, according to Paepke. The ease of use ranks high, but surprisingly, he says it’s cost effective too. Mountain America spends about $50,000 annually for EFM technology, including consulting, hardware, software and human effort amongst its staffers.

It seems like customer surveys are appearing for a growing number of customer transactions, from retail to wholesale. Whether asking for a zip code or posing a more targeted question like, How was your server’s promptness? “About 60 to 70 percent are using survey technology tools,” says Jim Davies, research director at Gartner in the UK, referring to Software as a Service (SAAS) hosted applications. But such applications are not the same as EFM. Rather, such tools are mediocre, such as online survey tools or ad hoc surveys. “EFM is a much more centralized strategic approach to capturing feedback,” Davies says.

With expertise in CRM and customer-based EFM, Davies says market penetration is very low. “Less than 1 percent are using it correctly,” Davies says. Although some experts report about 60-70 percent use of surveying technology, not all organizations use the full spectrum of EFM capability, he says.

Cost savings stack up

With more hospital surveys conducted during the release phase of treatment, questions are designed to remind patients how many pills to take and when or how to determine whether immediate medical attention is required. Through its unique communication design, this type of surveying decreases patient hospital resubmission rates, Davies says.

Connect on customers’ terms

Understanding the multichannel approach, which is any point of interaction between customer and client, is key, Cottle says. “The customer wants to speak to the company in the method of their choice,” he says. Smart phones, texting and social media forge direct links between companies and customers. Options are limitless. “It may be on Internet, on chat, a kiosk, a printed survey or e-survey,” he adds.

Employee retention equals money in the bank

Attracting the best employees brimming with brains is the first challenge; hanging onto them, second challenge. When employees hit the door, replacement costs are reported at 150 percent of their annual salary, says a study from Columbia University. Unless paying for new hires seems like smart money, consider finding ways to keep them around. “Over the last several years, our average retention has been around 76 percent. We have actually tracked the feedback and quantified the retention/turnover. The survey reveals that our employees are very loyal to the credit union,” Paepke says.

Got feedback — now what?

To fully appreciate the power of EFM, data must reveal missing links that drive decision makers into the heart of issues. Having the right players involved often brings optimum results to the entire organization. “Most of the companies that are actively surveying are doing it out of one or two departments,” Davies says. “But those departments may not be empowered … to push decisions out across the enterprise.”

EFM helps Paepke’s crew make organization-wide decisions, such as focused employee communications and development of the employee benefit statement, he says.

The right information makes decisions a breeze. “The real success of our company is reporting the data, but then you have to manage the data and act on it. It allows you to see incredible trends,” says Cottle.

Feedback measures like trend analysis unveil customers with the highest value. But the biggest spenders are not always the best value. “You might have 10,000 people spending $10 a year, and complaining; it’s pretty easy to figure out that it’s important to take care of those customers,” says Cottle. Consider how much customer loyalty outweighs the biggest spender.

EFM technology spans a broad range of industries. Making use of the information takes time, understanding and a willingness to embrace change. When organizations decide to risk change, they take huge steps toward realizing the potential for new opportunity and growth. EFM just may be the vehicle that helps the organization move closer to its goals.