New "Loyalty Metric" Tries To Change The Conversation But Adds Nothing New

Last week, an article caught my eye claims that exceeding customer expectations (which 89% of executives believe creates positive impact to business results) actually has little effect on bottom line. Rather, that service interactions are four-times more likely to result in a negative outcome than a positive one.

The authors, the Corporate Executive Board’s Customer Contact Council, believes that exceeding customer expectation results in virtually no gain in customer loyalty. Further, that service and support centers have little stake in building customer loyalty at all. The Council believes that instead of Customer Satisfaction, one should ask a single question to determine the Customer Effort Score, a proprietary metric. This metric, the authors believe, more accurately measures the customer's reaction to a service event, by measuring the customer's effort during the event.

My View:

My reaction here is pretty blunt. I think this research is garbage, from professional and personal experience. Somehow this magic question (that the Council doesn't reveal presumably unless you buy the research) will unlock the driver of dissatisfaction. Good answers yield good results; bad answers get bad results.

I believe companies that position themselves as premier service organizations need to establish ways to measure all drivers of satisfaction...finding "Perfect Knowledge" of their customers needs. Effort put forth by the customer can be just one measure. If a company delivers well across all drivers, then the customer is loyal--resulting in retention, references for others, and cross-sell opportunities. If you fall flat on that one measure, the customer will be unhappy.

Personal example today: two of my home computers had to have some work done, and the settings for the wireless network were deleted. I called my cable operator that also maintains our internet access and told them my issue. He said he would walk me through the process. So instead of fixing it on his end, he walked me through the multi-step process and within 10 minutes both computers were operational. My effort--full participation which I wasn't expecting. My satisfaction? Complete.

At the end of the day, service providers need to understand their customers needs, deliver to those needs, measure how they are doing meeting those needs, and fix anything that is broken. The result from exceeding customer expectations is a multiplier of benefit...customers stay, tell others, and buy more!

To link to my response to the posting on another blog, go to http://experiencematters.wordpress.com/2009/05/29/meeting-expectations-is-not-the-goal/

Healthcare Company Objectives: To Be Prettiest Pig On The Truck

A bit of disturbing research was recently published by Forrester showing that customer satisfaction of the health plan industry is poor and heading lower. Should that surprise anyone? No...not with prices rising, co-pays and deductibles increasing, and coverages more restrictive than ever. Here are some of the results from the Forrester research from Bruce Temkin in his blog "Customer Experience Matters":

In Forrester’s 2008 Customer Experience Index (CxPi), we ranked 113 companies across 12 industries. I recently published a snapshot of the health plan industry looking at the results from the eight plans on the list (Aetna, Anthem (BCBS), CIGNA, Kaiser, Medicaid, Medicare, TriCare, and United Healthcare). Here’s some of what we found:

--Experiences are “very poor” and getting worse. As a group, the eight health plans ended up with a “very poor” rating of 51%; the lowest score of any of the 12 industries we examined. Making matters worse, the industry dropped three percentage points from the 2007 CxPi results.

--Kaiser led the pack. With an “okay” score of 70%, Kaiser led all health plans. All of the other plans ended up with ratings of either “poor” or “very poor.”

--Medicaid is as bad as it gets. With a terrible rating of 38%, Medicaid was the lowest scoring plan. It also ended up in next to last place across all 113 organizations in our rankings.

--Only Kaiser improved. When we compared the 2008 results with those from 2007, only Kaiser showed an improvement. CIGNA and Medicaid, on the other hand, declined the most.
Some big shifts in CxPi components. There were five double-digit changes in the scores for the three underlying elements of the CxPi: Kaiser’s improvement in being easy to work with and enjoyability, Anthem’s decline in enjoyability, and both CIGNA’s and Medicaid’s drop in being easy to work with.

My view:

The Health Benefit industry is headed toward a cliff, with people paying a lot of money and not feeling like they are getting the service they are paying for. There are lots of reasons for dissatisfaction, many of which are not related to the service itself, but many are--such as the "easy to work with" category."

Service has not been a priority for these firms in the past. Controlling costs has been. I have heard management at healthcare companies say that their goal is to provide service that is just good enough, but not great, thinking it will be too expensive to provide service that makes clients/employees happy. The phrase "prettiest pig on the trust" describes their goal...not a lofty objective.

Further, health plans are viewed as marquee benefits for companies. Can you imagine spending millions on a "benefit" that no one is happy with? Companies will soon see that the money spent is not worth the aggravation, and look for other ways to provide coverage...like cheaper Consumer Directed Health Plans....or no coverage at all.

That is, unless a company, like Kaiser, steps up and shows you can provide service at a satisfactory way, and make the case that it benefits the company to have good service for its helathplans. There is clear opportunity for health benefit companies to step up here....and differentiate based on service....Perfect Service!

Customer Service Reputation Can Be Tarnished/Enhanced In So Many Ways

I have been reading a couple of items recently about the customer service delivery of several companies written by users of the services--

First the good: Apple

Karn Bulsuk in his Full Speed Ahead blog http://karnbulsuk.blogspot.com/2009/05/lessons-from-apple-on-customer-service.html has written about his experiences with his new I-Touch which when ordered was special delivered to him ahead of promised date, and when it broke unexpectedly overseas, he was able to get it fixed with no questions asked. He was very impressed and summarized his experiences--

Apple has shown us that good customer service involves:

• Under promise and over deliver: Apple told me 3-4 days, but managed to get it done in less that time, which was a pleasant surprise because I didn’t expect it to be done so soon.
• Accepting the product as defective, without arguing with the customer or making them feel if you are cross-examining them.
• Have conveniently located offices, and design them well to make sure your customer feels comfortable.
• Listen to your customers: if you say something will happen or you will do something, make it happen.
• Smile.

Seems pretty basic, but now Karn's experience will be told to thousands of others. The result: Apple's reputation will continue to shine and people will continue to pay premium dollars for its products.

Now the bad: Nationwide

It appears that for whatever reason--purely for information or for sales lead generation--people ask questions on networking sites about experiences with different companies. The responses tend to be negative, since it is human nature to complain rather than to praise.

On LinkedIn, the networking site for businesspeople, a recent question was posted in one of the group discussion sections:

401k Platform Provider Issues: Who is having problems in the 401k market place ?
401k Platform Providers have issues from time to time. Whether its poor service, dropping or changing product lines, client neglect, or raising fees, employers can get poor treatment and seek to find a new 401k platform provider. Has anyone come accross a pattern of plan outflow from a particular 401k provider ?

There is no question about the intent of the questioner...who happens to be a broker from SmithBarney...although his motives are not clearly stated. He is prospecting.

In the first day of the question, he has three leads with more undoubtedly coming. Here is one response:

I find the Nationwide call center to be extremely unhelpful. I have heard they are taking steps to change it, but I've had many complaints from clients and participants.

Ouch...while the broker has gotten a lead, Nationwide has gotten a blackeye. Left unresponded, the perception from readers is that Nationwide delivers inferior service.

There are other examples which I will post upcoming....

My View: Companies that compete on services for competitive differentiation should care about what people are saying about their services, and deliver in such a way that leads to unsolicited compliments. Further, companies should encourage their clients to talk. And if one hears about any issues, companies need to address them forcefully. Nationwide management should address the comment with the LinkedIn poster directly (take care of the situation) and then post a rebuttal. This will muddy the "unanimous" feeling of the complaint while the company determines the root cause of the call center issue.