Astute Planning, Flawless Execution,
Delighted Customers

Issue #134

Tuesday, December 2, 2008

Where is Your Firm on the Feedback Management Maturity Curve?
by Cedric Nash, QuestBack Boston

In our previous article on customer feedback management, we discussed the differences between simply collecting customer feedback and having systematic processes to both gather and make effective use of customer feedback. We call this Feedback Management – a set of techniques, processes and tools proven to offer major benefits when deployed consistently over time.

In this article, we introduce the concept of Feedback Management Maturity. We'll define some characteristics of organizations at different stages of the Feedback Management Maturity Curve and discuss some approaches companies can take to move up the curve and reap the associated benefits.

Some Definitions:

 

The concept of "Feedback Management Maturity" has several implications: 1) it's a journey for any company to attain feedback management maturity; 2) there are some recognizable stages on the way; and 3) as with people, different firms embrace the journey with different approaches. Some are in a rush to the top (perhaps forced by competition), while others stay at stage 1 indefinitely. The curve diagram above is an attempt to represent the stages that firms go though as they seek to become truly "customer centric" by developing and deploying mature, well-developed Feedback Management capabilities.

Characteristics of firms at different stages of the curve

 

What's the Value of being high on the curve?

It's simple: the further up the curve a firm is, the stronger the firm's ability to compete and prosper because it is better able to gather, manage and act on strategic and tactical feedback. This provides competitive advantage because the firm can:

  • Continuously improve key processes like marketing and customer service
  • Deliver superior customer experiences
  • Attain high customer satisfaction and loyalty (reflected in metrics)
  • Develop and refine new products and services over time
  • PROFITABLY GROW THE BUSINESS!

Firms high on the Feedback Management Maturity Curve systematically measure key dimensions of their customers' experience and perceptions, and effectively utilize the insights to manage the business. They measure and manage the business to assure high customer satisfaction, high loyalty, high retention, to develop new products to meet evolving customer needs (which they track), etc. Over time, these firms rise to the top tier of their industry in terms of growth and profitability.

The correlation between strong feedback management capabilities and performance have been studied and documented by authors like Fred Reichheld, inventor of the "Net Promoter" method for measuring loyalty, and organizations like ACSI (American Customer Satisfaction Index). Companies with the highest Loyalty and/or Customer Satisfaction scores are invariably top performers in their sectors.

Where is your firm on the curve?

A few years ago a Gartner Group study found that while 95% of firms collect customer feedback (in one form or another), only 10% were acting on the feedback and only 5% were communicating back to their constituents what they were doing with the feedback. In other words, for the vast majority of firms in the study, the collection of customer feedback wasn't systematic, and they did not consistently or effectively take action based on the information gathered (including "closing the loop" with customers). Even today, the results from most feedback initiatives and/or surveys are treated like market research and end up as a report filed away on the shelf. Most small and medium sized business would recognize themselves as being in the "Getting Started" stage of the curve.

Moving up the Curve

Clearly, effective feedback management gives companies a competitive "edge". So how can your firm go about moving up the curve and developing this edge for your business? Here are a few thoughts on what it typically takes:

  • Senior management commitment, sponsorship, involvement.

  • Willingness to invest necessary time, resources, budget.
  • An empowered team with the right functions represented (including outside help if necessary).
  • An internal communications plan to get employees on board, to disseminate results.
  • A feedback management tool that meets the organization's needs.
  • A "start small" and "prove- the-benefits" approach. Don't take on too much initially.
  • Commitment to see it through.

Surprisingly, going from "Getting Started" to "Getting Serious" can be simple and affordable. There are cost effective yet powerful feedback management tools on the market, and if you need outside help, there are many smaller, focused firms you can engage as opposed to hiring expensive "big name" consultants. This way you can jump start your progress to the next stage on the curve, learn how to apply feedback management techniques to your business, and quickly begin to reap the proven benefits of effective feedback management.

About QuestBack: QuestBack is an enterprise feedback management tool for gathering, analyzing and acting on feedback from critical constituencies. With unique ASK&ACT(TM) follow-up capabilities, QuestBack makes customer feedback data immediately actionable and supports the implementation of feedback management processes. The company is based in Europe and represented in the US by QuestBack Boston LLC.

Take our Feedback Management Maturity Survey.

 

Learning From The Past
by Robert Mannal, Managing Director of RHMinc, an IT Security Consulting firm

There is little doubt that we are currently in a recessionary period. Some observers are suggesting that this recession will be second only to the Great Depression in severity and economic impact.

Everyone in America felt the Great Depression. At its depths, over 25% of the labor force was unemployed, resulting in lost homes, widespread hunger, significant government intervention and social change. Many companies failed. However, some companies were able to carry on and, as a result, prospered when the economy turned around. What strategies did these companies employ and are they applicable in today's climate?

Reviewing the literature relating to this question suggests that customer-focusing companies survived and prospered. As one observer noted,

"Consumers didn't stop spending during the Depression, most just looked for better deals, and the companies producing those better deals came out stronger after the Depression ended."

He goes on to say:

"Both anecdotal and empirical evidence support the case that advertising was the main factor in the growth or downfall of companies during the Great Depression."1

Other writers have come to the same conclusion, i.e., that those companies who ignored their customers, or became invisible to their customers, and who did not offer a perceived value-add, failed.2

Three strategies for today, drawn from the Great Depression, are:

  1. Focus on existing and potential customers
  2. Provide perceived, differentiated value
  3. Keep your name in front of customers….don't allow them to forget you

A classic Business-to-Business ad for McGraw-Hill publications, written by David Ogilvy, poses the following:
"I don't know who you are
I don't know your company
I don't know your company's product
I don't know what your company stands for
I don't know your company's customers
I don't know your company's record
I don't know your company's reputation
Now – what was it you wanted to sell to me?"


This ad is as relevant now as it was then. It touches on the need to maintain customer contact and the need to use customers to spread the word about your products or services, a theme that is especially true in today's recessionary environment.

Companies who forget to position themselves in the market, or who lose touch with their customer base, risk being forgotten.

If you'd like to ensure that you maintain a high-level of customer satisfaction and loyalty, give us a call. We'd be happy to discuss our highly pragmatic programs that result in improving your customers' experience and the operational performance of your firm.


1"How Brands Thrived During the Great Depression" Dave Chase, October 17, 2008
2See also "Business Lessons from The Great Depression" October 8, 2008, Stacy Perman, Business Week; Google Answers, Re: Successful companies and industries during the Great Depression, especially the answer from digsalot-ga; Wiki Answers: What Businesses thrived during the Great Depression; "When the Going Gets Tough, The Tough Don't Skimp on their Ad Budgets" November 26, 2008, Knowledge@Wharton.

 

Contents

+ Where is Your Firm on the Feedback Management Maturity Curve?

 


 


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"Customer Centricity has been instrumental in making the Sophos customer survey program a reality. From concept to launch, the Customer Centricity team guided us quickly and expertly through the process. Their years of customer experience were instrumental in analyzing critical customer feedback allowing us to take swift and decisive action in a very short period of time. Our organization highly recommends Customer Centricity and will continue to leverage their expertise in our customer-facing programs."

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VP Sales & Operations, Americas
Sophos, Inc.


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