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20 Best Practices for Customer Feedback Programs: Applied Research

Below is the final installment of the 20 Best Practices for Customer Feedback Programs. Today's post covers best practices in Applied Research.

Figure 5. Common types of linkages among disparate data sources

Figure 5. Common types of linkages among disparate data sources

Applied Research Best Practices

Customer-focused research using the customer feedback data can provide additional insight into the needs of the customer base and increases the overall value of the customer feedback program. This research extends well beyond the information that is gained from the typical reporting tools that summarize customer feedback with basic descriptive statistics.

Loyalty leaders regularly conduct applied research using their customer feedback data. Typical research projects can include creating customer-centric business metrics, building incentive compensation programs around customer metrics, and establishing training criteria that has a measured impact on customer satisfaction. Sophisticated research programs require advanced knowledge of research methods and statistics. Deciphering signal from noise in the data require more than the inter-ocular test (eyeballing the data).

Figure 6. Data model for financial linkage analysis

Loyalty leaders link their customer feedback data to other data sources (see Figure 5 for financial, operational, and constituency linkages). Once the data are merged (see Figure 6 for data model for financial linkage), analysis can be conducted to help us understand the causes (operational, constituency) and consequences (financial) of customer satisfaction and loyalty. Loyalty leaders can use the results of these types of studies to:

  1. Support business case of customer feedback program (financial linkage)
  2. Identify objective, operational metrics that impact customer satisfaction and manage employee performance using these customer-centric metrics (operational linkage)
  3. Understand how employees and partners impact customer satisfaction to ensure proper employee and partner relationship management (constituency linkage)

A list of best practices in Applied Research appears in Table 6.

Table 6. Best Practices in Applied Research
Best Practices The specifics…
15. Ensure results from customer feedback collection processes are reliable, valid and useful Conduct a validation study of the customer feedback program. Verify the reliability, validity and usefulness of customer feedback metrics to ensure you are measuring the right things. This assessment needs to be one of the first research projects conducted to support (and dispute any challenges regarding) the use of these customer metrics to manage the company. This research will help you create summary statistics for use in executive reporting and company dashboards; summary scores are more reliable and provide a better basis for business decisions compared to using only individual survey questions.
16. Identify linkage between customer feedback metrics and operational metrics Demonstrate that operational metrics are related to customer feedback metrics so that these operational metrics can be used to manage employees.  Additionally, because of their reliability and specificity, these operational metrics are good candidates for use in employee incentive programs.
17. Regularly conduct applied customer-focused research Build a comprehensive research program using the customer-centric metrics (and other business metrics) to get deep insight regarding the business processes. Customer feedback can be used to improve all phases of the customer lifecycle (marketing, sales, and service).
18. Identify linkage between customer feedback metrics and business metrics Illustrate that financial metrics (e.g., profit, sales, and revenue) are related to customer feedback metrics. Often times, this type of study can be used as a business case to demonstrate value of the customer feedback program.
19. Identify linkage between customer feedback metrics and other constituency’s attitudes Identify factors of constituency attitudes  (e.g., employee and partner satisfaction) that are linked to customer satisfaction/loyalty. Use these insights to properly manage employee and partner relationships to ensure high customer loyalty. Surveying all constituencies in the company ecosystem helps ensure all parties are focused on the customers and their needs.
20. Understand customer segments using customer information Compare customer groups to identify key differences among groups on customer feedback metrics (e.g., satisfaction, and loyalty). This process helps identify best practices internally among customer segments.
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Summary

Loyalty leaders are excellent examples of customer-centric companies. Compared to their loyalty lagging counterparts, loyalty leading companies embed customer feedback throughout the entire company, from top to bottom. Loyalty leaders use customer feedback to set the vision and manage their business; they also integrate the feedback into daily business processes and communicate all processes, goals and results of the customer program to the entire company. Finally, they integrate different business data (operational, financial, customer feedback), to reveal deep customer insights through in-depth research.

Take the Customer Feedback Programs Best Practices Survey

You can take the best practices survey to receive free feedback on your company’s customer feedback program. This self-assessment survey assesses the extent to which your company adopts best practices throughout their program. Go here to take the free survey: http://businessoverbroadway.com/resources/self-assessment-survey.

References

Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. Psychometrika, 16(3), 297-334.

Hayes, B.E. (2011). Lessons in loyalty. Quality Progress, March, 24-31.

Hayes, B.E., Goodden, R., Atkinson, R., Murdock, F. & Smith, D. (2010). Where to Start: Experts weigh in on what all of us can learn from Toyota’s challenges. Quality Progress, April, 16-23.

Hayes, B. E. (2009). Beyond the ultimate question: A systematic approach to improve customer loyalty. Quality Press. Milwaukee, WI.

Hayes, B. E. (2008a). Measuring customer satisfaction and loyalty: Survey design, use and statistical analysis methods (3rd ed.). Quality Press. Milwaukee, WI.

Hayes, B. E. (2008b). Customer loyalty 2.0: The Net Promoter Score debate and the meaning of customer loyalty, Quirk’s Marketing Research Review, October, 54-62.

Hayes, B. E. (2008c). The true test of loyalty. Quality Progress. June, 20-26.

Keiningham, T. L., Cooil, B., Andreassen, T.W., & Aksoy, L. (2007). A longitudinal examination of net promoter and firm revenue growth. Journal of Marketing, 71 (July), 39-51.

Morgan, N.A. & Rego, L.L. (2006). The value of different customer satisfaction and loyalty metrics in predicting business performance. Marketing Science, 25(5), 426-439.

Nunnally, J. M. (1978). Psychometric Theory, Second Edition. New York, NY. McGraw-Hill.

Reichheld, F. F. (2003). The One Number You Need to Grow. Harvard Business Review, 81 (December), 46-54.

Reichheld, F. F. (2006). The ultimate question: driving good profits and true growth. Harvard Business School Press. Boston.

 

 

2 Responses to 20 Best Practices for Customer Feedback Programs: Applied Research

  1. Michelle Carter November 18, 2014 at 6:28 am #

    Great set of information. Superb!

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