Three Customer Experience Management Tips for Startups

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Figure 1. Customer Experience Management Program Components

I was invited to give a talk last week at a local incubator (Eastside Incubator) on how startups can incorporate customer experience management into their companies. Thanks to Phuoc Do from 1001 Mentorsfor the invitation. The slides to my talk are at the end of this post. The content of the post below should provide good support for the content of the slides.

Successful companies understand that, to ensure long-term sustainable growth, they must focus on providing a great customer experience. Across the entire phase of the customer life cycle (e.g., marketing, sales and service), companies lay out a strategy that will, hopefully, ensure a great customer experience and increase customer loyalty. This process of understanding and managing the customer experience is formally referred to as customer experience management (CEM). Before I provide some advice for startups, it is important to review what we know about what works in these program.

Customer Experience Management Programs

A CEM program consists of a set of organized actions that support the goal of CEM. While a CEM program has many moving parts, an easy way to organize those pieces is depicted in Figure 1. A CEM program has several major components:

1. Strategy addresses how companies incorporate CEM into their long-term plans/vision/mission to help achieve its objectives and goals
2. Governance describes the formal policy around the CEM program: Rules, Roles, Requests
3. Business Process Integration involves embedding CEM processes/data into other business operations
4. Method addresses the means by which customer feedback is collected and what gets measured
5. Reporting addresses analysis, synthesis and dissemination of customer feedback
6. Research is concerned with how companies provide additional customer insight by conducting deep dive research using different types of customer data
   

   Figure 2. Adoption Rates of Customer Feedback Program Practices of Loyalty Leaders and Loyalty Laggards

The success of your CEM program depends on how you structure it. In a study examining (see Figure 2) the differences between loyalty leading companies and loyalty lagging companies, I found that loyalty leaders, compared to their loyalty lagging counterparts, adopted specific business practices in how they approach CEM. Generally speaking, I found that loyalty leading companies have top executive support of the CEM program, communicate all aspects of the program company-wide, and integrate customer feedback to other business data (operational, financial, constituency) to gain deeper customer insights.

The Challenge for Startups

Founders of startup companies have limited resources. Coupled with plenty on their plates, founders appear to be unable to invest in programs that support processes outside of standard business practices (e.g., marketing, sales and services). They are responsible for every aspect of the company, from raising capital and creating products to implementing a marketing plan to providing support. There often is very little time/resources to devote to a formal CEM program.

A growing startup, however, can still implement key CEM best practices in a cost-effective way. Below are three things startups can do to integrate the voice of the customer in their business processes and begin to build a formal CEM program.

A free five-page introduction to the practice of customer experience management. To download the paper, simply 1) click the image, 2) tweet about it and 3) download.

1. Start with the Executives

A good first place to start your CEM journey is at the top of your organization. Through their actions and established policies, top executives set the tone and culture of the company. Without their their support, the success of any program is likely to fail. We know that companies who have executive support around the CEM program have greater success (e.g., higher customer loyalty, higher satisfaction with their CEM program) compared to companies with little/no executive support.

Here are a few things start-ups can do to improve executive-level support:

2. Collect Customer Feedback

You cannot manage what you do not measure. These words ring true for your CEM program. Loyalty leaders collect customer feedback using a variety of sources (surveys, social media, brand communities). When you collect customer feedback, you need to consider what you measure and how you collect the feedback.

Here are a few things start-ups can do around collecting customer feedback.

1. Conduct an annual / bi-annual customer survey. While loyalty leaders collect customer feedback using a variety of sources (e.g., relationship survey, transactional survey, web survey social media), a good start would be to start with a relationship survey conducted annually/bi-annually. See the section on Customer Relationship Diagnostic below to learn about what to ask in your survey.
2. Measure different types of customer loyalty. Selecting the right mix of customer loyalty questions will ensure you can grow your business through new and existing customers. Determine the important customer loyalty behaviors (retention, advocacy, purchasing) and measure them.
3. Use automated (e.g., Web) tools to collect and report customer feedback metrics. Web tools not only facilitate data collection, but with the ever-increasing adoption of a Web lifestyle, they are also becoming a necessity. Data collection via the Web is cost-effective, allows for quick integration with other data sources and speeds reporting of customer feedback. There are several free survey services you can use to start collecting customer feedback: SurveyMonkey, Zoomerang. While these free services provide reports, they do not allow you access to the raw data. Also, you might consider using Limesurvey, an open-source, enterprise-quality survey engine; Limesurvey allows you to access your raw survey data.

3. Share Feedback Results Company-wide

Word clouds help you convey frequencies in beautiful pictures.

A good way to build your startup around your customers is to share the results of your customer survey with the employees.

Click image to read more about the Customer Relationship Diagnostic (CRD).

Customer Relationship Diagnostic: Your Customer Survey

So, what questions do you include in your customer survey? In a series of studies, I found that short, concise surveys (N <20) provide just as much insight into understanding the customer experience as longer surveys (N > 40). Based on this research, I created a short, reliable, valid and useful customer survey called the Customer Relationship Diagnostic (CRD). The CRD includes question to measure four key areas:

1. Customer Loyalty: Ask customers about their likelihood of engaging in different types of customer loyalty behaviors
2. Satisfaction with the Customer Experience: Ask customers about their satisfaction with general business areas (e.g., product quality, support, service, communication)
3. Relative Performance (Competitive Benchmarking): Ask customers how they view you compared to the competition (where you rank and why).
4. Company-Specific: Ask customers about question unique to your need (e.g., marketing benefits, decision influencer)