Customer Experience Analytics: The Key to Real-Time, Adaptive Customer Relationships

Introduction

Analytics is one of the hottest topics of interest among organizations worldwide not only to information technology (IT) but also sales and marketing professionals. Applying analytics to customer experience provides the highest business value to an organization and is often the most sought-after IT application.

IBM has declared analytics to be one of the four most important areas of growth toward its 2015 plan. IBM has made significant investments in both research and development (R&D) as well as in external acquisition to infuse both organic and inorganic growth in this area. In the latest research with chief marketing officers (CMOs), 67 percent of 1,000 survey recipients reported an intention to increase their investment in customer analytics. This is the highest among all areas of investment reported in the study.¹

The market for customer experience is morphing. In the 1990s, a number of companies initiated packaging and selling of Customer Relationship Management (CRM) solutions that covered marketing, sales, and customer service aspects. In the late 1990s and early 2000s, Master Data Management (MDM) and related topics became popular. Customer Experience Analytics (CEA) is a continuation of this journey as it comprehensively covers sales, product usage, and billing experience and correlates them for a more thorough understanding from the customer view. Furthermore, CEA uses this initial analysis to impact policies, procedures, and customer communication.

What Is Good Customer Experience?

Let us start the discussion with an understanding of good customer experience. In our daily lives, we come across hundreds of companies. With all the automation and multi-touch points, we often encounter good or bad interactive voice responses (IVRs), web sites, and call centers as we deal with our services providers, whether they are banks, airlines, telecommunications companies, investment brokers, or health care providers. We spend hours pouring out our experiences into social networking sites for others to know whether we liked a restaurant, a holiday resort, or a store. It does not take a long time for us to observe, judge, and differentiate good or bad customer experience. We often return to the organizations that provide good customer experience, and we declare it publicly by selecting the like option on Facebook.

How do we characterize good customer experience, and how can it be sensed by the serving organization? What makes us like or dislike an organization so much that we explore public ways of expressing it?

First Impressions

Fred Wiersema has posed six important questions:²

Can your customers find you?

Is your first impression memorable?

Do you get in the way when people are buying?

Are you sending unintended messages?

Are your products intuitive?

Do you show your customers a united front?

As we move from brick-and-mortars to e-commerce, these first impressions are still important in consumer purchase criteria. A lot depends on how we judge a product or service through our first impressions. This point is true not only for impulsive purchases but also for well-thought-out, well-researched, big-ticket items. We look for simplicity and respect in our first interactions. We look for memorable experiences. We sometimes eliminate products based on simple and trivial criteria.

The questions listed above are easy starters to understand and differentiate a good customer experience from a bad one. So how do we analyze and differentiate between a memorable experience and a bad experience? Fortunately, customer touch points provide us with a lot of associated data: How many customers abandon purchases after reaching shopping carts? How many times do we ask customers to type the same information? How much do we trust our customers? Do customers stop shopping when we start asking for a credit-card number during a free trial? In our highly instrumented customer experiences, some of this associated data can be collected, collated, and analyzed. It provides us with insights about how the customer is perceiving the product and the customer contact.

Service on Customer Terms

In today’s automated world, customers like to receive service on their terms. If I value self-service, I would be delighted to find my bank account fully accessible to me after dinner for any transaction. However, if the only way I deal with a bank is to visit the friendly bank branch in my neighborhood, the late-night web site access provides me with no extra value. If I have a complex customer relationship with my broker with many accounts for many members of my household, integrating all the accounts under a single login would be great. However, if I have a single account, I do not need account consolidation.

Over the years, many hotels tried copying the Ritz Carlton Hotels’ legendary capability to remember past customer experience with the hotel chain, including little details across visits, so that service would be personalized and enriched for customers making frequent visits. Does every customer like that level of personalization? For my short business trips, I am interested only in a speedy check-in, and I often ignore the poor clerk peering through his screen and saying It is nice to see you back or remembering a preference I expressed once in a blue moon and have no reason to replicate.

If I reach the hospital in an emergency, my expectation for a warm welcome is a fast check-in process and rapid delivery of medical expertise. Folks at a call center organization in India once told me they send birthday greetings to all their customers. They were confused when many of their customers gave them the feedback that they would rather receive fast service than a birthday greeting card.

How do we discover these customer expectations and preferences? How do we measure and improve customer experience by aligning our products and services to what customers expect?

Customer Differentiation

We have customers, and then we have premium and VIP customers. We often break rules for our most important customers or, better still, have different rules for different levels of customers, thereby rewarding those who provide us with the heaviest revenue. A leading telecommunications organization found that 8 percent of its customers contributed 45 percent to its revenue. Any churn among these 8 percent customers represented a major revenue impact. At the same time, cultivating and harnessing such premium customers gives us the best way to protect our revenue base.

Premium customers are not always that easy to identify. Members of a household may make purchases using their individual accounts; however, money and decision-making might be centralized or collaborative. Changes in marital status or kids off to college may continue to follow old accounts despite new hierarchies. As employees of corporations make personal purchases using discounts offered through corporations, and then leave one job to join another, customer accounts go with the employee—with or without the discounting—depending on how we track the corporate accounts. One of my publishing customers told me that a large number of the company’s corporate customers use public emails for customer communications. It was not clear to them which customers were using proper corporate subscriptions. As we move to medium and large enterprises as customers, finding premium customers is even more challenging amid departmental or corporate contracts, mergers and acquisitions, and other corporate events. How do we stitch the customer experience and payment information together to identify and manage our premium customers?

In addition to the customers, the supplier customer records may be equally broken down. How do we find these customers, if the revenue is counted in different ways in different business units or if the customer definition changes from one business unit to the next? Let us say that we have identified the premium customers. Do we now have a way to provide differentiated services to them? How do we design policies that differentiate these customers? How do we apply these policies consistently across the touch points, so that the premium customers feel the difference? How do we measure whether the differences lead to an impact in customer loyalty level?

Management of Opinions and Sentiments

A century ago, all calls were routed by operators. Each operator knew the people who called by name and knew their personal details. Bank employees knew their customers by name and face. I remember walking to an airline gate just two decades ago, and the airline staff bent their rules to let me board an airplane in the middle of Christmas rush because I was their most frequent traveler that year. As organizations have consolidated and automated their customer-facing functions, this personal touch has disappeared. However, the positive and negative sentiments are still present in the buyer-seller interactions.

Would a self-service system provide me with a personal touch? How do we express empathy via a web site? How do we identify an angry customer or a destructive buzz in the marketplace? How do we analyze and sense customer sentiment and use the information to drive better customer service? While a service provider may offer a faceless web site, the customers can gripe about it on Facebook or Yelp.

I got hooked to an Indian TV show and found it had a fan club on Facebook. In this case, the fan club members were in their teens and early 20s, and they were drawn to the show because it depicted the story of office romance and humor. Facebook provided a perfect channel for them to discuss the show and offer opinions back to the performers. However, someone not very familiar with the power of Facebook decided to convert the show into a family drama. It was fascinating to watch the sentiment transform overnight with negative comments, petitions to boycott the show, and appeals to the writers to change the show. As we can easily expect, the show was soon canceled because it could not manage the negative sentiment and demands to change the story and the focus of the