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How often should you collect customer feedback? This question is raised more and more often, especially now, in the “era of customer feedback”. 

In practice, many corporations survey all their customer base 1-4 times a year, bring the results to top management and then forget about it for the next 3-12 months till the next survey. They do this for many reasons, which are often very valid: they don’t want to trouble their customers too often, they need an annual customer metric to follow and utilize in target setting and bonuses. Sometimes they have a long history of doing surveys and they want to continue that to keep the results comparable. Certainly, they cannot start sending long customer surveys out too often. But does this approach make sense?  In most cases it doesn’t.  

Very often, scheduling customer surveys like that leads to dissatisfied customers and slow improvement cycles. Instead of improving the life of your customers (which is why you started collecting feedback in the first place) you end up generating more frustrations and unhappiness.  

The key is timing. 

In the era of internet and social media the expected response time has shrunk dramatically. Some experts say that you should be able to reply your customer within 5 minutes, others say within 24 hours. As a general rule, customers expect businesses to respond to their emails within an hour and three-quarters of online customers expect help within five minutes. Indeed, the faster you reply - the better. Yet at the same time, a fast but meaningless reply would be rather harmful than beneficial.  

Now, as we’re on the same page, why exactly should you find a different timing of collecting customer feedback than doing it quarterly or annually? 

1. Right time, right place

In order to understand what your customers experience, you need to understand the customers themselves and their unique circumstances. For starters, a safe bet is sending a feedback survey for a product after 30 days of use or within a day after you provided a service. Without question, the number is a simple benchmark and a common practice, but in real life you should adapt the timing to your customer cycles. 

Asking for customer feedback in the right time and via the right channel will not only boost your response and accuracy rates (here’re few extra ideas of how you can improve the response rates), but also will help you to understand what’s going on in the different customer touchpoints and in the different segments of the customer experience. Naturally, long surveys won’t work here. It might also make sense to limit, how many survey invites does a single customer receive per year. But generally, it does make sense to adjust your process to your customer’s lifecycle (e.g. when they feel relevant to provide you with some feedback) than vice versa (e.g. when your annual strategy cycle would benefit from some fresh customer data).  

2. No time gaps - address issues right away 

Very often, companies that collect customer feedback a few times a year in massive volumes start analyzing the feedback gradually. First, they collect feedback for a month, then they analyze that feedback (that’ll be another month), then they bring it to the top management… The problem here is that if there’s something urgent/simple to fix, it might take months to acknowledge and act. By that time, unhappy customers would have already found a new supplier. 

Receiving feedback immediately after a product release is often essential for the life of that product. If you are able to adjust your new product to the wishes of the customers and fix what is not working in time, it could easily save you millions in the long run. At the same time, you shouldn’t drop everything to adjust your product to every single customer suggestion (customer wish list is endless, but your resources aren't). Use text analytics (find out more about text analytics here) in order to prioritize and decide on improvements in timely manner. 

3. Close the loop

Another crucial point is that a long customer feedback cycle will most likely damage your response rates. Think of it: you just made a visit to the hairdressers that went absolutely wrong: the hairdresser was late for 1 hour; the assistant was rude and the haircut was not what you expected.  Then you came home, submitted a complaint… and haven’t heard from the salon for the next 6 months. After 6 months, you receive a simple “we’re sorry, but you’re welcome anytime again”. Does it make sense? It does not for a customer nor for the business. The customer received bad treatment and would likely never come back to this particular hairdresser’s. Or even worse, they would already leave a 1-star review on Google. In today’s world, one online review could kill the whole business. 

According to Albrecht and Zemke at Service America: “Of the customers who register a complaint, between 54 and 70% will buy again if their complaint is resolved. The figure goes up to a staggering 95% if the customer feels the complaint was resolved quickly.” 

If you wouldn’t allow this happen to your hairdresser’s, then why would you allow this happen with your software, electricity, hospital or a manufacturing company?  

What is real-time customer feedback? 

Real-time feedback means that you ask for feedback when your customer is most likely to provide it to you and utilize it immediately. If it requires immediate action, you act. If it is something that is only relevant as part of a bigger picture, you take it into account when analyzing the results. A modern customer feedback software like Lumoa could help you to automate and prioritize customer feedback as it comes in real time. Keep in mind that it’s equally important to address it on both individual level and a on company-level. 

By addressing the feedback individually, if necessary, you respond to the customer directly helping to solve the issue. The Carey School of Business found that if the business said sorry on top of actually solving the problem and compensating for the problem, the customer satisfaction increased to 74% (if the compensation was provided without apology, the satisfaction was 37%). 

At the same time, you might be getting a lot of positive and negative customer feedback, but how can you understand what is important? For that you have to analyze customer feedback on a larger scale. That helps you not only to understand your business’ weak and strong points, but also to prioritize and act on them.  

Setting up real-time customer feedback process is not only about collecting and answering the feedback, but also about understanding the targets and seeing the bigger picture. This step-by-step guide will take you through the details of setting up your own system. 

Ability to address customer feedback in real time is an essential part of retention strategy. Asking customer feedback is an ideal opportunity to build stronger relationships with your customers.  

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Lumoa's State of Customer Experience in 2018 revealed that 65% of companies measure the Net Promoter Score (NPS). That made NPS the most widely used metric both B2B and B2C.

Discover the recent benchmarks, case-studies and tips dedicated to help you launch a successful NPS strategy.

This simple yet powerful metric has conquered the hearts of many exactly because of its simplicity - both for companies to implement and for customers to answer. Net Promoter System includes 2 questions: "How likely are you to recommend us to a friend or a colleague" and open-ended "Why?". Thus NPS give a very fast way to get insights from a large audience.

At the same time, NPS is one of few that connect customer experience in the present to the future revenue. Customers are looking and trust advice and recommendations from their friends and Net Promoter Score made it possible to calculate the value and the state of word-of-mouth marketing. Are your customers complaining or are they praising your services? 

You're about to find out.

Let's have a look at how NPS has become the most popular customer experience metric.

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Most business leaders believe that customer experience will be the key driver for their company’s competitiveness going forward. However, when it comes to the actual customer experience management, things get difficult.

It is not too difficult to listen to the customer. Companies receive real time feedback in massive volumes, if they only start listening to their customers. Insightful analytics is possible with the modern technologies such as machine-learning-based text analytics.

Most organizations, who receive large amounts of customer feedback data, can buy text analytics solutions which help in making sense of the data and transform the chaotic customer voice data into structured info. As a leader, you often know what your customers think about your products and services, and where are the key improvement areas. 

And yet still, acting on the customer feedback is hard.

For many companies it is the hardest part of the whole customer experience management process. 

Sometimes this is because of lack of the ownership in the company – when an issue exists because it falls between organizational silos, improving the customer experience requires some extra effort. However, in many cases the organizational silos are not the only reason for not acting on customer feedback.

The hardest challenge to overcome is often the money - or rather the lack of it.

Let’s face it: customer experience improvements require money. Not always, but often. And deciding to spend money on improving the customer experience is not easy, if the financial benefits are not well understood. Customer experience related decisions are no different from any other business decisions: you need a positive business case to justify them.

And yet, these decisions are extremely difficult to make because the outcomes can be very uncertain.

The people driving customer experience improvements are not always able to quantify the improvements in monetary terms. Our customer satisfaction increases – so what? Does it increase our revenue or profit? Will it positively impact our market share?

If you improve the availability of customer support agents, you certainly know how much it is going to cost. But will it improve the customer experience in a way that also has a positive impact on our business? 

As a business leader you are extremely familiar with numeric metrics – most likely your targets are around revenue growth and profitability. Customer experience is a different animal: it is somewhat unpredictable because it deals not only with what you do but also with how people perceive it. Emotions influence it.

There is a lag: even if your customer satisfaction drastically reduces after you have made some cuts to the customer service headcount, it can take months before your customers have found a new vendor and are able to leave you for your competitor.

There are lot of research and studies about the relationship between financial metrics and customer experience metrics. I will first outline what is generally known. But are the general results applicable for your company? Not necessarily. Later I will go through  how you can understand step-by-step what the value of the better customer experience is for your company. 

So let's get started.

The financial benefit of improving the customer experience: What do we know?The improved customer experience drives revenue growth

Multiple studies have shown that the revenue growth is impacted by customer experience. Forrester’s report “Customer Experience Drives Revenue Growth” showed that customer experience leaders achieved compound average revenue growth of 17% over five years. The CX laggards achieved just 3% growth during the same period.

Bain & Company’s analysis in 2015 showed that customer experience leaders grow revenues 4% – 8% above their market. Bain & Company’s analysis concluded that the revenue impact of improve customer experience is because the superior experience helps to earn stronger loyalty among customers, turning them into promoters who tend to buy more, stay longer and make recommendations to their friends.

The strongest impact results from improved loyalty

The revenue growth is primarily generated by the impact that the good customer experience has on improving the customer loyalty. Loyal customers are valuable. Generally, it can be five times more expensive to find a new customer than to keep a current one. The probability of selling to a new prospect is 5-20%, while the probability of selling to an existing customer is 60-70% according to Marketing Metrics.

Murphy & Murphy estimate that a 2% increase in customer retention has the same effect on profits as cutting the costs by 10%. Therefore, for many companies, the improved customer retention often provides the most obvious rationale for making customer experience improvements. 

McKinsey research in the US showed that enhancing the customer experience can bring significant financial benefits: “Across industries, satisfied customers spend more and stay more loyal over time. In banking, customers are seven times more likely to increase their deposits and twice as likely to open an additional account if they rate a bank as excellent rather than average. Similarly, pay-TV customers who rate their provider as excellent tend to stay with it for up to twice as long as they would a provider they rate as average or below.” 

The customer experience and retention are clearly linked but the strength of the link does have some industry specific differences. Industries and companies with low switching barriers see a bigger positive impact from customer experience investment. If the switching barriers are high, the customer experience investments don’t necessarily pay off.

Because of the different switching barriers, the customer experience investments typically lead to highest return on investment in industries such as hospitality, retail and consumer products. In industries such as utilities, health care and banks, the linkage is weaker because of the higher switching costs.

Typically, in these industries, a bad customer experience can have a negative impact on revenue, but it is difficult to generate a positive impact. People leave your business if you manage to upset them, but they are not leaving a vendor whose customer experience is on an acceptable level even if you provide something better. 

It does pay off in the long term

The impact on loyalty and therefore revenues seems to be clear, but does it matter for the shareholders? What is the long-term impact of good customer experience?  The long-term impact of good customer experience is certainly more difficult to prove.

However, as the following picture shows, the shareholder return of  good customer experience seems to be significant. The total return to shareholders of companies with above average customer satisfaction was four times higher than the total return to shareholders of the below-average companies over then ten-year period. 

   

It was claimed that a significant change in customer satisfaction levels typically hits a company’s earnings after three to eleven months. The window is long and there are certainly industry specific differences depending on how easy and fast it is to switch providers. But what is clear, is that seeing financial benefits from customer experience investments does require some patience. 

But the linkage to market share is somewhat complex.

When you choose to invest in improving the customer experience and gain loyal customers as a reward, your competitiveness improves. This should increase your market share, given that all the other variables stay constant (e.g. that your competitors don’t do similar moves at the same time). However, looking at how customer experience and market share correlate, the relationship is more complex than this. 

While the improved customer experience normally leads to higher market share, the market leaders typically don’t have the highest customer satisfaction.

On the contrary: typically, niche players who are able to target their offering to a very specific audience, have the happiest customers.

The biggest players serve a very heterogeneous group of customers and the customer experience tends to be average, because they must serve a diverse group of people with diverse needs.

Because of this phenomenon, for some companies a decreasing market share can lead to increasing customer satisfaction: when the unhappy customers leave the company and only the most loyal ones remain, the customer satisfaction metrics can start to show a positive trend. This is not something to be proud of.

So keep in mind that the while customer experience and market share are linked, the correlation is not straightforward. 

More money spent on customer experience is not always better

As the research shows, investment in the customer experience does make sense. It pays off to be a perceived customer experience leader also in the long run. However, when you are making a decision on whether to invest in that particular training, add headcount or build a new easier-to-use payment system in your online store, you are not really dealing with customer experience related investments in general, but one business case in particular. 

A research conducted by Avanade and Sitecore showed that there is a $3 return on investment (ROI) expected for every $1 invested in the customer experience. However, this result was based on survey with target group of decision makers responsible for digital experiences in large corporations. One could argue that in the area of digital experiences, both the need for transformation and the reward for successful investments, has been bigger than average.

More general research, however, highlights the asymmetric nature of customer experience spending. Failing to meet the customer expectations can have significant negative consequences. Customer retention and repurchase intentions are negatively impacted by bad experiences.

However, delighting customers more than expected doesn’t necessarily pay off. It has been shown that failing to meet customer expectations has twice the negative impact as delighting customers has positive impact. KPMG sums up the research results: “Delighting customers reaches a point of diminishing returns quickly.”

KPMG divides the customer experience drivers into three different buckets: must-haves, selectors and delighters. The must-haves are the basics that any organization must get right. The selectors are the drivers which can compel a customer from one competitor to another. And finally, the delighters are factors which surprise the customer positively. However, they only are impactful when the basics are in place. And, unfortunately, their impact erodes over time as customer expectations are reset.

Bain has illustrated this dynamic between various factors in a powerful way with the anger-delight matrix. The matrix reminds how some drivers only have potential to drive detraction (these are the basics or hygiene factors). You will lose customers if these don’t work.

Some drivers have a potential to drive promotion. These delight your customer when they are there, but the lack of them doesn’t typically drive detraction. And finally, there are drivers which can drive both promotion and detraction. Bain correctly highlights that your gap to the competition should help you in determining, which issues to tackle first. 

   

How do you know which factors belong to which buckets? Is the list of hygiene factors always the same?

Ask your customers!

When you ask your customers to provide you NPS feedback, their why-comments reveal you the drivers. You’ll soon notice which topics drive only promotion, which drive detraction and which drive both.

If your application crashes constantly, you are going to see it in the drivers of detraction. But most likely the stability of your application never appears in the promoter comments (unless you have a history of buggy apps).

Similarly, if your customer service personnel were not only professional and fast, but also funny and caring, you might see this in promoter comments. But the detractors most likely won’t list lack of funniness as a key reason for detraction. As Maurice Fitzgerald points out, the results of CSAT and NPS surveys are likely to point out to you factors of both kind while the Customer Effort Score typically captures detraction drivers. 

Still only partially convinced?

Don’t just trust what the industry benchmarks say but test the linkage yourself with your own data.

Now let's find out how you can do that for your own company. 

The financial benefit of improving the customer experience: How do you estimate it in your company?

When it comes to customer feedback, the most critical part of managing it is to make decisions and act based on it.

Collecting feedback and understanding what customers think have no intrinsic value. To be able to act, you need to understand how your actions influence the customer experience.

When you know what drives customer experience and by how much, you know how to improve it.

But before you can decide or choose between potential actions all competing for the same budget, you should obviously also understand, whether the customer experience improvement makes financially sense or not.

If you invest 100k€ to retrain your sales people and get 5-point NPS increase as a result, what then? Was it worth it? To understand this, you need to understand how the customer experience translates to customer behavioral changes, which have an impact on your financial metrics. 

To understand the relationship between your customer experience and your financial metrics, think about the drivers of your business metrics according to the following picture. 

1)     Measure the customer experience to understand how your customers feel about you.

This is the critical starting point, because the real time measurement of customer experience with a metric such as NPS, provides you the leading indicator through which you link the value to any actions you make. 

2)     Build basic understanding on how, in your company, an increase in the customer experience metric impacts some critical customer behavioral metric, e.g. when your NPS increases by 10ppt, your churn decreases by 1ppt.

To do this, build hypotheses. Most likely you’ll find that the retention (lack of churn) is the key contributor. But you can also think of how better customer experience leads to upsell opportunities, more recommendations, fewer complaints and product support cases. When you have listed the hypotheses, test.  

3)     Calculate how the change in behavioral metric impacts the financials, e.g. when the churn reduces by 1 point, the revenue increases by 2M€.

If you would like to get some concrete ideas on how to calculate this link, take a look at our ROI model for customer experience improvement. It is a simple excel tool for assessing the return on investment for your customer experience management activities.

When you know the financial value of the customer experience improvement, deciding on improvement actions to make should become easier. You should also be able to make these decisions as part of your normal decision-making process. 

4)    Understand what drives the customer experience metric and by how much, e.g. the unclear pricing drives the NPS down by 5 point. 

5)    How much does fixing this issue cost? What is the benefit? Make a cost-benefit calculation. 

Do you want to get more insights into how to best do this? We have put together a workbook outlining some concrete ways you can proceed through each of these steps. 

If this sounds like a complex process, I have good news for you. If you do the ground work properly once and establish a link between your NPS and financial metrics with one study, you don’t need to struggle with the business case work every time you suggest something new driven by he customer experience. If you know how in your company the NPS and revenue correlate in general, your daily work can move to making improvement actions based on the feedback you receive. 

If you think understanding the ROI of the customer experience is difficult, you are not alone

Surprisingly few companies understand the ROI of customer experience activities. This spring, we surveyed customer experience leaders in Nordics, and the results were somewhat staggering: only 14% of the companies responding to the survey were measuring the ROI of customer experience activities.

In most companies, customer experience was measured (majority of companies are using NPS for that) but there was no systematic way to link this to financial results. In 26% of companies, the results were assessed using behavioral metrics, e.g. churn reduction. This is already a great start because it should provide the direct linkage to the monetary value. 

Note that measuring the success of your customer experience improvement activities by measuring the customer experience itself is not wrong! It really is a good thing if your customers are happy! But as the lack of budget is a significant issue in most customer experience organizations and the decisions are difficult to make, it won’t hurt to be able to justify changes also in monetary terms. 

If you still find it impossible to prove the monetary value of customer experience improvements, what should you do? It is possible that you cannot prove the linkage in your company because e.g. the lack of the historic data.

Maybe you are only starting to collect customer feedback now. Because of that, you have no way of comparing how differently your promoters and detractors behave.

You might also experience other data related challenges. Maybe you have surveyed your customers to get their satisfaction ratings, but you have no means to link this data together with behavioral or financial data.

What to do in that case?

My recommendation is to start small.

It is possible to build a customer experience program so that it is a self-funding one. Start collecting feedback with an affordable tool. Identify the top-five improvement drivers and focus first on the low-hanging fruits: almost all..

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Q&A with Michal Redbord, General Manager, Service Hub at Hubspot

Previously we have shared how you can build a customer experience management processes in your company. We continue diving into the secrets of the most successful tech companies and this time we talked with Michael Redbord, General Manager, at Hubspot Service Hub about how HubSpot does things, their failures, successes and the most common practices. 

Michael started at HubSpot, when they were slightly less than a hundred people (now HubSpot employs more than 2000!).  During the last 10 years HubSpot has gone far in building a truly customer-centric culture, a fantastic product and the community, that many love and are proud to be a part of. 

Navigate the blog post ->

Chapter 1: Everyone and everything is customer experience.  It’s simple. Customer-centricity is one of the core values of HubSpot.  

Customer experience touches every aspect of company’s work including the back-office functions: HR, legal and finance. 

"At the end of the day, everything, that you do inside a company, creates some effect outside the company.”- concludes Michael. 

You might want to check the culture book of HubSpot, as it just concludes and confirmed customer-centricity from the operations deep inside. What the recruiters are looking for in every potential new HubSpot team member are two things: if they are result-oriented and customer-obsessed. . It’s summarized with a very precise idea: “For every decision we should ask ourselves: what’s in it for the customer?”  

Culture Code: Creating A Lovable Company from HubSpot  Chapter 2: Revenue and growth is a function of happy customers.  

“Most companies aim to grow with some financial metrics. The philosophy, that we developed over the years, is that revenue and growth is a function of happy customers. It’s not about selling or upselling but delivering exceptional value.”  

HubSpot realized that when a customer starts using the software, there has already been a long journey to this point from initial discovery, blog articles or marketing and sales e-mails. Getting a user profile is not the day #1 of HubSpot for that customer, it might be the day 30 or 100 of their customer experience. 

If you're inspired by HubSpot, you might want to check our upcoming webinar next week to find out how to spread customer-centric practices in your company.

Chapter 3: Understand the power of Net Promoter.  

For the company, measuring customer success at each customer touchpoint is crucial. If you use HubSpot, you would know this immediately. As an active user of HubSpot you would deal with on average one customer survey per week about a variety of new features (which are released extremely often) or about customer support.  

The Net Promoter Score (NPS) is the metric #1 when it comes to Customer Experience Management at HubSpot (here’s why you might also want to implement NPS), yet Customer Effort Score (CES) or Customer Satisfaction Score (CSAT) are frequently used as well. The NPS is also what the whole company aims to improve all the time. “We're trying to improve our NPS target constantly. We are working incredibly hard against it, but the number is not the focus.  

We are setting goals to improve NPS for this product by 10 points this year as it's effective and motivating people… even if we all know, that the pursuit of the number is not really going where we want to end up.” 

If it’s not the number, then what should you measure? 

"The number I think is useful, but I can’t act on a number. Somebody gives me a six, okay. Then somebody gives me a two. Then somebody gives me a ten. I don’t know what to do with a number. All of the value in actually improving a given customer’s experience, or even understanding in aggregate, what customers think of our experience is from the written feedback.” 

Chapter 4: Act. Right now!  

For HubSpot, it’s crucial to act on customer feedback as soon as they receive it. Customer feedback on customer support-related touchpoints is 98% of the time very positive. The key is to capture the other 2% and to correct, remediate the experience. "If a real person sends an email and asks what went wrong - customers are very happy to share their feedback in detail" 

Despite capturing customer feedback from the individual touchpoints, HubSpot collects customer feedback to measure the overall customer journey.  

“We follow up as much as possible after we receive customer feedback. At the same time, we are a little more careful than just sending emails to everybody. I think not every NPS response warrants a conversation if the nature of the conversation is delicate. I believe that you have to be careful with how you handle survey feedback and it should always a human being who is going to do it.” 

If a person identifies that they don’t want to be responded to, would the feedback be ignored? Not in HubSpot. The company addresses all the feedback in strategic and long-term planning and development. 

"If you got feedback from a customer and they took time to give it to you and then you go work with them to improve that thing that they didn’t like, that’s it – you’ve just improved the customer experience. Like there is some magic in there, they told you a thing and then you worked on the thing and it doesn’t have to be more complicated than that. In the moment for that one customer you already improved customer experience. The best way to improve the experience is just to action it, whenever you can. All other forms of analysis and kind of longitudinal stuff are important in the long term. You can actually get a ton of value in the near term, just by picking up the phone, the right person with the right context, having the right interaction…" 

Chapter 5: Approach promoters and detractors differently.  

Getting your customer to respond to the survey is just a beginning. Period. 

HubSpot aims to approach both detractors and promoters and address their feedback. "We actually would do some pretty extraordinary things, whenever we can. If the CEO sees the comment… CEO doesn’t care that it’s not part of your job to do a certain thing – you just do it. Right? NPS has this trump card effect, it causes people to do things they might not otherwise do."  

At HubSpot, the team focuses a lot on segmentation of promoters and detractors. What are the themes of their comments? Who is going to answer those comments? How long have they been a customer? What products do they own? Are they from a certain country? Or do they speak a certain language, whatever that is? Answering these questions helps to improve the life not only of that one particular user, but the user journey for that customer segment. Creating user stories helps to identify the key problems for the accounts and the team is ready to address the issues and improve the journey. 

Although, the company puts more effort in communicating with detractors, promoters are not left alone. "Some of them we’ll reach out to, because they have specific positive feedback and we are like – this is so awesome. Like we are going to print out your comment and put it on the wall and that makes them happy and it engages in the conversation and lets them know their feedback is being heard. I believe that that kind of stuff improves your response rate, which is important.” 

NPS helps HubSpot to identify the real advocates of the brand.  Those are the people who participate in case studies, reference calls or simply tell their friends, or colleagues about HubSpot.  

How does HubSpot identify their advocates? ”We don’t automate this stuff, because it’s too sensitive, too important and it’s valuable to have a real conversation. It could be like "Hey, I saw that piece of feedback you gave, that was awesome. So glad you really liked the experience, did you know that we have this program where you can get some stuff from us and we can get some stuff from you and it’s like give-give relationship, are you interested?" If they are, then we invite them to the group. Some people are more active than others, but basically those advocates are incredibly valuable for our business. 

I do think that our advocacy program is a bit of a secret weapon. And we believe that word of mouth, social proof and what your friends and colleagues think is probably more important than what a company’s marketing department says, what their blog says, what their own case studies say. Advocacy for us, is capable of doing things that we are not.” 

Chapter 6: Scaling your company, scale your customer experience management.  

 HubSpot has been growing tremendously fast during the last years. When Michael started in 2010, HubSpot was a scaling startup with over 80 employees. Many functions were still mixed and since then the company has become much more structured. The company has gone from hiring one customer support representative a month to hiring 20+. Things changed, yet customers remained loyal. 

How? "The thing we did wisely without knowing it is that when we were smaller, we really worked on the human elements, so we focused on recruiting, we focused on culture, we focused on shared knowledge. All those things made a huge difference on our ability to scale. Many are seeing benefit to use more systems and things like machine learning and more sophisticated technologies. For us the foundation of all is really the people, our employees and customers, and a very human approach.” 

Conclusion. 
“Many companies have forgotten they sell to actual people. Humans care about the entire experience, not just marketing or sales or service. To really win in the modern age, you must solve for humans. Every process should be optimized for what is best for the customer—not your organization.”
— Dharmesh Shah, Co-founder of HubSpot

HubSpot is an amazing example of how a company grew relying on their customers. 

Human interactions and approach is what differentiated HubSpot since the creation and continues doing so now.

 It could definitely teach us that the power of the human connection shouldn’t be “that one thing that we do when we have time” but an essential part of the business strategy. 

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Unhappy, yet talkative customers are a golden source of information for your business. They desperately want your company to change and build a better experience for them. If they’re dealt with carefully, they can turn into your greatest advocates. 

So how do you make that happen? 

#1: Address the feedback quickly 

It shouldn’t come as a surprise that the more efficient your team is in solving the customer’s issue, the more satisfied the customer will be. That’s exactly what was found out in the recent study by Zendesk: a faster response rate correlates with the higher customer satisfaction. It is important to remember, that each customer is unique and their customer experience is unique too. Don’t underestimate the power of human connection and don’t be afraid to be proactive.  

That’s exactly why TourRadar, an online marketplace for travelers to compare and book multi-day tours with ease, prefers calls to online messaging system or email when talking to dissatisfied customers. ”When we know a customer is unhappy, we normally focus on responding to them as quickly and efficiently as possible so that we can find the best solution to their issue, - shares Carly Hulls, Head of Customer Support at TourRadar, - "When a customer is unhappy, we almost always get on the phone to give them a call as we find this is the best way to communicate through a problem. This is because conversations via email or online chat can often be viewed differently on the other side of the screen and being on the phone can clear up miscommunications easier.” 

Now that it’s settled, that you have to address the negative feedback individually and efficiently, let’s move on to the strategic decisions to understand and eliminate negative feedback (check this article to get new tips on how to talk with your unhappy customers). 

#2: Encourage the feedback

According to these statistics, for every customer who complains, there are 26 customers that don’t say anything (and 91% of them will simply leave your brand). That brings up the first thing you should pay attention to: check your response rates and find new ways to improve them

Encourage leaving customer feedback both generally about your brand and also about a single important customer touchpoint. Simply asking "Based on your recent messaging with our customer service, how likely you are to recommend us to your friends and colleagues?” followed by the NPS why-question will help you a lot in getting specific and useful feedback. 

As soon as you find the detractors, reach out. Eliminate the problem as soon as possible: your efficiency and speed play an important role here. 

Understanding and addressing the customer feedback, both negative and positive, is the cornerstone principle for Leadfeeder, a lead generation SaaS platform. "Our Customer Success Team is automatically notified if we get a low NPS score from a client, so they can reach out to investigate it further. Similarly, we learn from the users who give us a high NPS and try to improve our Customer Success functions. Recently, we did series of 1-on-1 in-depth interviews with our customers from different markets to gain insights on the experiences of our customers, - shares Jesse Pärnänen, Director of Business Development at Leadfeeder, - You need to connect with your customers via multiple channels and understand their challenges and needs in order to improve the customer experience. It is important to ask for feedback, listen to your customers and have 1-on-1 calls and chats with your customers as often as possible. This will help the company in the long-term and help you to provide more value for your customers.” 

#3. Dig deep

Understanding why customers are unhappy about your product or service is even more important at scale, than on the individual level. 

Now, that doesn’t require cost-heavy data analysis, but a modern customer feedback analytics tool that can help you in digging deeper into the impact drivers of your detractors. Your dashboard could look like this:  

   

From the example above, you can clearly see that most of the customers complain about the technical quality of the product. Talking about the digital services, logging in to the mobile app and the app in general cause the most confusion. 

"For us the negative feedback is an essential part of growth and learning. We dig a bit deeper to understand the root cause of the negative feedback and of course thank the customer for giving direct feedback to us. We want to maximise our learning and the feedback, both positive and negative, is important for growth and learning. If we fail, we normally have a retro meeting: what we did, why we failed and how can we prevent it from happening again.” - says Kalle Tiihonen, Head of Agencies, Nordics at smartly.io, one of the fastest growing startups in Finland. 

#4. Finally, do something about it! 

Analysing customer feedback and doing nothing about it is the greatest sin of customer experience management. Bring the discussion to the table, encourage your company to work towards customer centricity and improve the issues stated by the unhappy customers.  

Dave Dyson, Sr. Customer Service Evangelist at Zendesk, a help desk software with global reputation, shares strategies to prioritise development areas across the organization: "Negative feedback can be about a lot of different things - the product failing to work as designed, the product missing some piece of desired functionality, or human service failures (from the support team or other customer-facing roles).  

In the human-failure cases, it might be due to a structural/policy problem, a training deficiency that applies to that team as a whole, or an individual coaching issue. If it’s a product problem, then there’s the question of how much engineering resources would it take to correct the issue, how many customers are affected, and how great of a business impact does the problem have? Is it worth potentially delaying other development work in order to fix this issue? Negative feedback helps in answering some of these questions.” 

Companies very often forget that the negative customer feedback is also a great asset if treated properly. It helps you to shape your strategy, enlighten the prioritisation discussions and will guide you in the right direction. 

A complaint is not the end of your customer relationship It’s just the beginning. 

Over to you

How do you treat unhappy customers in your company? 

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Every company dreams of having no negative feedback and no unhappy customers, yet many companies fail to identify their detractors and turn them into promoters. 

Why is that important?

First, let’s get back to statistics:

  • At least 30% of consumers stop interacting with a brand they love after the 1st bad experience and around 50% of all the consumers leave the brand for good after several bad experiences. (PwC)
  • A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. (White House Office of Consumer Affairs) In the world of internet, "20" people can quickly turn into 20.000. More than 75% of buying decisions are based on reviews.
  • 55% of customers would pay extra to guarantee a better service. (Defaqto research)

If you’re still not convinced that customer experience is not a cost, but a whole new business opportunity not to be missed, I would add that a 5% reduction in the customer defection rate can increase profits by 5 – 95%. (Bain & Company).

So what should you do in order to decrease your churn?

Here’re 5 steps that will help you to turn an unhappy customer into a happy one.

Originally defined by Jonathan Sprinkles, the 5-step method takes a new approach to the negative feedback. 

1. Appreciate

Thank the customer for sharing the feedback with you. According to these statistics, for every customer who complaint, there are 26 customers who don’t say anything (and 91% of them will simply leave). That same customer could've easily shared their thoughts online, but instead, they turned to you. 

Even if a customer is extremely angry, take your time and thank them for the time they spent on writing to you. Most of the time, you can turn an unhappy customer into a satisfied one if you show how much you care.

2. Acknowledge

Sounds silly, but when talking to an angry customer, be a human. Acknowledge the problem of the customer and sympathise. 

"First, I remember that their [dissatisfied customers'] anger, in most cases, is not about me personally - it’s a reflection of them having a feeling of undeserved pain, and can be affected not only by the specifics of the current situation, but the ramifications of the situation if it’s not resolved, unrelated stresses from their work and home lives, and their personal ability to cope with stress, and the norms of anger management they’re used to. Since it’s not about me, I can then listen without taking things personally.” - comments Dave Dyson, Sr. Customer Service Evangelist at Zendesk.

3. Apologize

Don't be afraid to say sorry to your customer for the bad experience they received. It might have been your company’s fault, it might have not been. You don’t have to take the blame, but show that you care and sympathise with them. 

4. Act

Your customer doesn’t want to know why or how the problem happened, they want it to be solved. Period.

Resolve the problem in the individual order or if applicable, share the issue with the responsible department. 

5. Accountability

That means that you have to promise only what you can actually deliver and rebuild trust.

"I try first to validate the emotions they’re feeling by accurately reflecting back to them. This is a way of showing that I care. Once they trust that I care, then it’s easier to work with them on a possible solution or workaround. I make sure I’m on the same page with them on what the problem is. I’m honest and as transparent as I can be, even when that means I’m delivering an answer I know they won’t like. I only commit to actions I can follow through on (which includes me not making commitments on anyone else’s behalf). And then I follow through on any commitments I’ve made.

My strategy is simply help solve the problem as best I can. Hopefully that helps repair trust, and if they become a promoter, that’s even better - but it’s not an outcome I have in mind. I don’t want to make the situation about me, in the same way that I wouldn’t ask someone to give me a positive satisfaction rating. I’d rather have their honest feedback, even when it’s negative. Helping decrease people’s stress always makes me feel like a hero” - adds Dave.

At the same time, this process focuses very much on customer service point of view. As you remember, for every customer who complains, there are 26 customers who don’t say anything, so is it possible you encourage your customers to speak up?

Absolutely!

If you want to find out how to make strategic decisions and turn your unhappy customers into promoters, identify if your company delivers great customer experience and how you can make it even better, join our webinar this week on 7th of June !

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Finnish SaaS company Lumoa, which provides AI-powered customer experience analytics software for medium and large sized companies across the Nordics, has announced €650 000 in funding. The investment was led by Icebreaker.vc, along with serial entrepreneur Ali Omar and Business Finland.

Lumoa, headquartered in Helsinki, Finland, offers a simple and intuitive service for analyzing large amounts of customer feedback. Its machine learning powered service makes customer feedback actionable and allows companies to easily pick, in real time, the right improvement actions that have strongest impact on the customer experience. Leading companies in healthcare, telecommunications and banking across Nordics already benefit from real time Net Promoter Score (NPS) analytics that can handle feedback in all major languages. 

"Lumoa brings together multiple customer feedback sources and combines them utilizing NLP (natural language processing) and AI to give the best and most comprehensive direct guidance to the business users on how to improve single points of customer journey. This is a very exciting combination of technologies in a growing market”, says Aleksi Partanen, partner at Icebreaker.vc. 

Ali Omar, growth-entrepreneur and investor, who has led companies from 0 to €100M revenue, comments that “Lumoa is special because it connects customer feedback to actionable insights, bridging the gap between a company and its customers. The team is very strong in their ability to execute the unique product to B2B market and is able to create a world-class solution for industry leaders.” 

“The global customer journey analytics market size will reach $12.22 billion by 2022 growing from $4.76 billion in 2017 at a compound annual growth rate of 20.8%. This growth is driven by the need for providing consistent customer experience throughout the customer journey, reducing churn rate of customers and a rising need for competitive differentiation,” adds Partanen. 

“We founded Lumoa to help companies to create better customer experiences. Currently Lumoa is growing 20% every month. I am extremely happy about the next growth stage we are now entering.”, says Johanna Sinkkonen, Lumoa’s co-founder and CEO. 

You can find out more about Lumoa by looking at our media page. For a comment, please get in touch: 

Johanna Sinkkonen, CEO, Lumoa 

+358 50 486 0598, johanna@lumoa.me

Aleksi Partanen, Partner, Icebreaker.vc 

+358 40 585 9392, aleksi@icebreaker.vc  

About Lumoa 

Lumoa provides a simple customer experience analytics solution for medium and large enterprises across the Nordics. Headquartered in Helsinki, Finland, Lumoa was founded in 2016. In 2017 more than 1,500,000 customer feedback responses were analysed using Lumoa. www.lumoa.me

About Icebreaker.vc 

Icebreaker.vc is a venture capital fund and a community that support companies’ success stories by investing in them and leveraging the support of their community. Icebreaker aims to act as a catalyst for early-stage startup scene in Finland. www.icebreaker.vc

 

See also:

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Happy customers are a dream of any business owner. As the famous saying goes, “Satisfied customer is the best strategy of all.” 

But what happens next, after you identified who your happy customers are

Even if you don’t actively cooperate with your happy customers, they will, on average, tell nine other people about their experiences with your company (according to American Express). Imagine, how much you could achieve if you actually worked with your promoters! 

Before you start “promoting to your promoters”, decide on your strategy and needs. There are four main ways how you could involve promoters in growth strategy with different outcomes at the end. 

1. Identify what drives the promotion

=build a business that people will love

2. Introduce a referral program

=find new sales leads

3. Upsell to existing customers

=increase customer lifetime value, or CLV

4. Make advocating simple

=increase organic marketing

Let’s go deeper in each of them. 

1. Identify what drives the promotion (=build a business that people will love) 

Understanding the reasons why your promoters love your product is one of the easiest, yet most often forgotten ways to benefit from them. If you collect NPS (or other customer experience metric) in the right way, this information is already available to you. How? 

People often forget that customer experience is not a number. The most precious information you can get from customer feedback is actually the text feedback that will help you to shape your business strategy. 

Find out what parts of your business your customers enjoy the most and share it with the new audiences. Most likely, new customers will also enjoy features/services that please your happiest customers. 

You might start to wonder "how to do this kind of analysis?”. Many businesses use complex excel files and help of data scientists to extract the trends behind customer experience. However, if you want to complete it quickly and cost-effectively, there’re modern tools (like Lumoa) to help you. 

 

That's an example dashboard of impact drivers. Now you know that most customers are happy about your central location!

 2. Introduce a referral program (=find new sales leads) 

Referrals rule the business world. It’s no longer a secret that people who love brands will talk about those brands with their friends and family. 77% of consumers are more likely to buy a new product when learning about it from friends or family and people are 4 times more likely to buy when referred by a friend. (source

Referrals generally drive new sales leads, and these leads are much more likely to respond/register/buy your product compared to the cold outreach - the people, who have never heard about you before. 

Many companies have adopted referral programs. For example, Skillshare offers free premium time for both the referrer and their friend. "Refer a friend” is highly promoted on their web site and this is what you’ll see if you want to refer Skillshare to someone. 

   

Dropbox introduced a similar strategy of offering free storage space for referrals and the program is driving at least 35% of the company’s daily signups. Dropbox explains how referrals skyrocketed their business faster than any paid advertising in the slides below. 

 

Dropbox Startup Lessons Learned  3. Upsell to existing customers (=increase customer lifetime value, or CLV) 

Selling more products and add-ons to your existing happy customers helps you to increase the customer lifetime value, or CLV. Upsell is often associated with negative “pushy" type of sales, however it doesn’t have to (and shouldn’t be) that way. 

 

Check this example: Slack suggests users to choose a paid plan by offering value in the right moment.

 

The key is not to sell things your customers don’t need, but actually find a need and offer your customers more value. And the best part? The probability of selling to a new prospect is 5-20%. The probability of selling to an existing customer is 60-70% according to Marketing Metrics

Upselling is a common practice in many industries, one particular example being the low-cost air travel. Have you ever paid for additional luggage space, travel insurance or on-board catering? 

4. Make advocating simple (=increase organic marketing) 

Before we continue, take a look at these two restaurants. Which one are you more likely to choose? 

If you chose the one on the right, you stand together with more than 90% of online customers, who rely on reviews to make buying decisions. Now that you see the importance of reviews, how can you actually drive online reviews? 

To start with, it’s important to define your preferred channel. For restaurants it might be Facebook, for hospitals it might be Google, for SaaS companies it’s often Capterra or ProductHunt. The choice of the channel is a crucial strategic decision and largely depends on your target audience. 

Now you have to remember, that customers who have had a bad experience are two to three times more likely to write an angry review than customers who have had a great experience are to post a happy review. That means that often your online reviews might be worse than what you actually get from surveying your customers. Thus, you should encourage your promoters to leave a positive review. 

We do it by directing promoters to the external review pages right after they shared the feedback directly with us. Many businesses also offer different kinds of incentives or simply promote the channel of their choice and ask for reviews by email. 

It’s important to understand that you could (and should) combine any of the four methods above. Find new opportunities and let your brand advocates share and spread their love. After all, it’s a win-win for both.

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Who in an organization should own the customer experience? Some people say it is the CEO, some people claim it should be the CMO. Some IT infrastructure led organizations have even given the ownership to the CIO! Some people say it must be the whole organization. And some people argue that if the ownership is shared across the organization, no-one really has the responsibility to make things right.

The truth is, large part of the organization does indeed influence customer experience. And therefore, everybody needs to step up and improve things in their own territory. Most of the functions in an organization have something to do in improving the customer experience. 

Use the navigation, to move around the post faster

To understand things better, we asked around a hundred Customer Experience Directors and Managers, CMOs and Customer Success Specialists on which departments are responsible for Customer Experience in their company, despite the Customer Experience/Success/Support departments.

You can see the very surprising results below.

As you see, in most companies, marketing takes care of customer experience as a whole. Luckily top management and CEO now understand more often that customer experience is rather a necessity than a cost. However, the back-office functions, like HR or Finance are involved into CX very seldom.

Although, the situation progressed massively during the last 10 years, alignment of CX activities across the whole organization still shows up to be a problem.

Organizational roles in customer experience management

Let's go deeper in each of the roles.

Marketing

Marketing, which often substitutes or fulfils the role of Customer Experience management, must tailor the customer communications to align with customer segments. In many organizations, marketing has an overall responsibility for the customer experience improvement initiatives and customer insights. Marketing needs to ensure that the customer feedback and insights are utilized across the whole organization, but at the same time its role is not limited to "traditional CX activities".

Marketing is about creating brand experience. Nowadays, 68% of online buyers will spend considerable time reading content published by a brand they are interested in (source). It makes up almost two thirds of online consumers and the likeliness goes even higher if the product is a B2B service! Because of that, Customer Experience has been often called the "New Marketing". 

"In the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts." - Jeff Bezos, CEO at Amazon

But hold on in there, marketing doesn't (and shouldn't) manage the whole customer journey alone.

Top leadership

Top leadership (C-Suite leaders and senior management) should set and communicate a clear customer centric vision, set targets and follow them up.

The top management commitment is critical for any cultural change to happen.

81% of companies with above average CX maturity have a senior executive leading their CX efforts compared with 53 less mature companies without one.  State of CX Management by Temkin.

Top management of the company are also leaders. If top management see customer experience as a priority, engage and show an example, in most cases, the whole company takes customer experience as a priority as well. 

Sales

The role of Sales, just as the role of Marketing, is enormous in building customer experience, especially the initial impression of the brand. Sales need to understand the feedback per customer or customer group and ensure that the action plans are shared with customers.

One simple reason why your sales department should be more than ever excited about building fantastic customer experiences is the fact that customer experience doesn't start when a prospect becomes a paying customer. Customer experience covers all the interactions a company had with a person, before, during and after that person pays for the service. And usually, the personal interactions start exactly with sales.

CEO

CEO, that leads customer-centric transformation, ensures a much faster output than if the change was happening from within the company. Usually, it's very simple: if CEO takes customer experience as priority (and constantly advocates), the whole company follows. If customer experience is not a priority for the CEO... You guessed it, it's not a priority for most of the organization.

That is why Tony Hsieh, the CEO of Zappos, works the customer support phones every holiday season, and why at every branch of Umpqua Bank, the self-proclaimed "World's Greatest Bank", there’s a hotline phone, right in the middle of the lobby, that allows customers to call the Umpqua CEO. There's a fantastic number of inspirational examples how CEOs are showing the whole company that customers are truly the heart of the business.

However, working on front-line is never enough and behind every successful customer-centric company, there's a well thought process (find out how you can improve customer experience in your company). Customer-experience leaders gain rapid insights to build customer loyalty and make employees happier armed with advanced analytics . It's possible to achieve revenue gains of 5 to 10 percent, and reduce costs by 15 to 25 percent already within two or three years. (source) No wonder, customer experience is the engine of growth in 2018.

If you're a CEO of a company, you might think "Yes! I'm already leading customer experience transformation!" Beware, whilst 72% of CEOs consider themselves in charge of leading customer experience transformation initiatives, only 27% of their colleagues believe this is the case (source). Talk to your team to make sure you're on the same page.

Product development

Product development needs to design and redesign experiences utilizing the feedback. Depending on the industry this can mean anything from taking the feedback into account when designing a new hardware product to fixing issues in the software immediately after they have been noticed.

Although, this might sound time- and resource-consuming, it doesn't have to be. For example, Leadfeeder, an online platform for lead generation, involves customers in every product decision. "Customers are highly involved in testing of the new features. For example, we have our own user group on Facebook, where we launch new features first and ask if some of the customers want to volunteer to test the features and give us feedback, - shares Jesse Pärnänen, Director of Business Development at Leadfeeder, - This helps us to stay connected and engage with our customer base."

The digitalization also means that the product development cycles in many more traditional industries get shorter. For instance, if you publish school literature, you can no longer wait for three years before implementing the planned changes in the new version of the book. The digital editions and support materials can and should be improved immediately when the need arises. 

IT

IT typically runs or enables running the data gathering and analytics process. They also support integrations e.g. enabling feedback to flow back to CRM system or help Customer Support department in fixing the issues in real-time.

Business Development

Although, the daily life of business development might differ depending on a company, generally, business development focuses on growing the organization by creating business relationships, entering new markets or market segments. That makes business development's essential role to improve the life of their customer through business innovations.

Surprisingly, only 29% of companies involve business development department into customer experience activities (for some reason, more companies involve IT department into CX transformation rather than business development). 

Finance

You might ask "How could a finance department influence customer experience?"

Remember when you received a wrong invoice from your phone company? Remember when you received an invoice that was hardly understandable? Were you a happy customer at that exact moment? Turns out, the job of finances is no longer hidden from consumers.

You might argue that your company has no possible way of making an invoice mistake. That's fair. Finance should also understand and control the financial impact of the customer experience initiatives. Huge amount of CX professionals have stated a lack of resources one of the main challenges in the upcoming year.  

Note, it's not a secret anymore that bad customer experience costs a company much more than customer experience management.

HR

The role of Human Resources in building customer experience and customer centricity is mostly underestimated. HR must ensure not only that the customer experience metrics are included in the bonus and incentive schemes and develop organizational capabilities accordingly, but also help to shape the culture of the company by hiring the right people with customer-centric mindset.

"If you could do only one thing to improve customer centric culture, it would be who are you hiring, who are you bringing in to the company. That’s going to have the longest effect on the culture," - Dennis Snow, Customer Service Keynote Speaker and Author

Human resources should more than anyone else understand that happier people do better work. How to make your employees happy is a question for another day, but here's an inspiring story of Kayako, a company that provides help desk software.

Kayako found a fantastic way to motivate the employees to deliver better customer service, cooperate and engage with other employees.  "We share positive customer feedback on a 'customer love wall' near our breakout areas - every day there's a new card that people see and talk about over lunch, - shares James Doman-Pipe, Product Marketing Manager at Kayako, - Sharing customer feedback improves empathy for customers and motivates our team. It reignites their belief in the 'mission' and refreshes their understanding of how well the company is doing in the eyes of the customer".

Customer service/support

Although, customer service was not mentioned earlier, its role is essential for customer experience management. Its function must understand the customer feedback, make improvements and communicate the changes done back to the customers when appropriate.

"If you got feedback from a customer and  you go work with them to improve what that they didn’t like, that’s it. You’ve just improved the experience of that one customer," - Michael Redbord, General Manager at Hubspot

More and more companies are adopting so-called "wide support days". For example, in Buffer, a SaaS platform for social media, once a quarter each teammate not on the support team gets paired with a support teammate and does support for a day.

"While doing support, you actually get to experience your customers, in the wild, interacting with your product or service. You get a sense for their workflows, for their habits, and most importantly: where you fall short," - shares Mel Choyce in "Why every new employee should do customer support" (highly recommended to read!)

At the same time, although customer service can achieve fantastic results alone, you can't rely solely on it. Customer service are the front-line employees that answer your calls and emails, but customer experience management as a whole is about building a business that you customers will love.

What if customers have issues which are not a responsibility of a single organizational function?

When everyone knows their role, you’ll normally see things improving gradually. The most difficult cases, however, are the ones that fall between the cracks: the ones where customer service team blames the product team for the product being bad while the product team believes that the marketing function has made false promises to the customer. But the angry customer doesn’t care who made the mistake. She just wants her issues sorted out.

If the organizational silos prevent customer experience improvements, the company has a problem. The solution is straightforward on paper but requires hard work within the organization. The key steps include:

1. Set up a target.

Set a common customer experience metric and target for the organization. (Want to know more about the Net Promoter Score?) Give all the teams access to the same insights about what is driving the metric up or down.

2. Build a shared understanding. 

Help all teams to understand the key customer journeys and how their work contributes to the customer experience along the journey. When there is a shared understanding of the customer journey, people typically manage to widen their perspective outside of their own silo.

3. Empower people.

Empower your employees to fix issues that go across the silos. The attitude of taking an extra step when needed, instead of just waiting someone else to fix the problem, is contagious: when employees see other people doing it, they get encouraged to try out as well.

In the end, the whole company needs to acknowledge that the customer experience is everyone’s business. Sales, marketing, product development, customer service – none of them can fix things alone. The front-line people have a direct impact, but the other parts of the organization have important roles as well. If things go really badly, none of the function leaders alone have the power to solve the situation. The CEO must therefore be fully committed to ensure alignment across functions happen.   

So, whose business is it? It is everyone’s business. And the CEO should own it.

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A story of how a startup nailed customer relationships since day one.

Many startups think that customer experience management equals unnecessary work and financial costs. However, more and more startups that emphasise the uniqueness of customer relationships are growing faster than ever. Some of the familiar names include the two fastest growing companies in the world, Slack and Intercom.

What unites these two amazing companies?

You might already have guessed that customer is in the heart of all their operations.

To understand that better, I talked to Jeff Gardner, Head of Platform Partnerships, former Director of Support and Customer Success at Intercom. Jeff joined Intercom as the 4th employee, customer support engineer, in 2012 and since then has built a large customer support and customer success team. Worth mentioning, that Intercom has been investing in building customer relationships from day 1 and believes that customer-centric strategy is what every company should follow.

I wanted to learn what stands behind Intercom’s mission "making business personal” and how other tech startups could use their experience.

Lesson #1 Bring value to your customers

Often, many early-stage startups totally miss out with their product, as they go way off too deep to "delight and impress". In reality, they end up having a product that doesn’t bring much value. That means that the company spends tons of time and money on a product that people don’t necessarily need.

You have to work together with your customers to build a product that answers their needs. Let it be functional rather than having advanced visual design.

Lesson #2 - Everything is going to change. All the time.

"I used to tell my team - if you don’t like what we’re doing right now, it’s fine. Just wait for 6 months and we’ll be forced to change it anyways."

Intercom used to reorganize, redefine, redo everything they do about every 6 months. In the early days, it was even faster than that. If you’re comfortable with that level of change and you are ready for “imperfection”, it’ll be a great journey for both you mentally and for your business. Jeff shared that providing 80% of solutions is often already enough for most startups most of the time.

Lesson #3 Measure customer experience. Constantly.

You should constantly measure customer experience. Constantly ask if you’re doing a good job for your customers. Are you not only deliver a value and a good product, but also looking after your customers properly? Do you treat them as humans, building relationships? Are you proud of how of how you dealing with them?

"Use all the metrics you want, but in the end it comes down to “How many customers would you be terrified to run into someday in public? Would you be afraid that they attack you after you said something in support message last week? Would they give you a hug?”- Jeff jokes.

Lesson #4 Don’t be afraid to make radical decisions

Perfection comes hard way in a startup and everything what you do, not excluding customer care could relate to that. "You need to know that you will have to let some customers go every now and then. You need to know that you will let down some customers, overtime. And that’s going to be ok." Pricing raises another discussion. Customers often get angry if you change prices, but these changes are necessary parts of growing a business. "If you’re going to take more perspective, it will be a lot easier."

Lesson #5 Metrics help to understand the bigger picture. Feedback will let you dive deeper into it.

“At Intercom, we use NPS to measure customer loyalty and CSAT for customer support. Those are two important numerical drivers for us. We also think a lot about churn and retention. If customers are sticking with us, it’s a good sign that they are happy and are getting something out of our product."

Metrics are used to see the bigger picture, to understand generically how things are going. Very quickly those metrics lead you to start asking deeper questions, so you have to start digging into the NPS and CSAT text feedback. Jeff mentions, that they also actually talk to their customers to understand better what drives customer experience.

"I think NPS is a very helpful number. If you have a system in place when you frequently ask your customers, you will have an idea how valuable your product is. At the same time, I do think that the most important and, at the same time, the hardest is to analyse all the comments that come together. It is not enough just to answer to the comments, you need to categorise them and then deeply understand what’s going on with every category. Is there a variance within it or does every person say the same thing? Only then NPS becomes much more interesting, as it becomes much more qualitative. Now you can start a conversation “Should we do that to improve this?” instead of just looking at the number and asking “should we just turn this feature off?” You understand the motives better”

Lesson #6 Everyone is responsible for customer experience

People are giving or not giving value to your product when they have good or bad experience with it for whatever reason.

It could be a bad customer support, or the product didn't work properly, it could be buggy, or fundamentally they were not getting enough value for the price they were paying - all these things are part of customer experience. "It’s a false myth that customer support, customer success or customer experience teams are the only ones responsible for customer experience. The product team, for example, is also very responsible for customer experience. If the product team builds something which is crap - obviously, people will have bad experience with it.

It’s important to remember that it’s not only the customer-facing teams are responsible for customer experience, it’s the entire company."

Lesson #7 Scale sustainably

Intercom has been growing extremely fast and their challenge is how to scale. "In any business where you’re growing quickly, it is hard to grow at a pace which is sustainable and good for the people within the team. It could be easy to outsource and hire a support team of 500 people, but it will never result in great customer support or in people that feel real connection to the product. You will lose the core of support - caring."

Intercom has spent a lot of time on hiring, especially in the early periods. Now there are a lot of people on the team (20-30 out of 100) who are able to interview and hire. That makes hiring a lot easier and faster. They also put a lot of time to onboard new employees. People who join customer support team get almost 2 months to understand how it all works. The onboarding starts from baseline training like reading and learning and goes to pairing up with the most experienced employees. "We know that after 2 months, they’ll be ready to do really great job."

Lesson #8 Build omnichannel solid experience

Over the last 18 months, Intercom is testing a new approach to support and sales teams. They have basically been united into one large customer-facing team. "The real benefit is that we see all customer journeys, all customer experiences as one thing. Usually support and sales don’t talk to each other. Now we’re actually one team, so it’s easier to get in one room and say “this type of customers should skip support, and go directly to our relationship manager, so let’s make sure that happens smoothly” or “this type of customers should never ever see sales, because they’re too small and sales gets in their way.” It’s nice to think holistically and decide which kind of experience we want to build for this type of customer and how to put that into place.

It worked really well for us because of how customer centric our sales leader turned out to be. Sales is still very sales focused, and Support is still very support focused but we now share lots of the stuff that overlaps, like a great ops team to help forecasting demand, planning headcount, etc."

Lesson #9 Customer support is not a cost

Jeff also shared a recent case of how customer support helped to significantly boost business metrics: "We have known for a while that most of the conversations that a customer will have with us happen within the first 24-48 hours. Almost all the conversations happen within the first 3 months. Then we looked up what were these conversations about and the main topic turned out to be onboarding, understanding the product, understanding the features, and really a lot of questions on how to get make the setup properly with all the installations and integrations.

Our support has been fairly fast - we answered in under an hour 24/7 for years. Now we decided to give instantaneous live chat support to brand new intercom users just for that early period in order to get them through that setup phase and help them see value in our product faster.

What we did is that we set up A/B test for all the sign ups that were coming in: one half of the group had under 1-hour standard email support, the other half of the group - the new live chat support for the first 3 months.

The results have been amazing. both the business metrics like conversion rate improved, and CSAT and NPS of those people also largely improved. It was clear that those customers enjoyed our product more, went through setup and saw value in our product much faster, they became happier customers, stick around longer and paid us more.

A lot of other companies think of live chat style interactions as a very expensive thing. This time we could say that it helped us to earn extra money, we couldn’t have gotten otherwise."  Check this article from Intercom to find more about how real-life support drives higher conversion.

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