Customer opinion and trust

Think about the last time you made a major purchase decision, and consider the criteria you used to make the final purchase decision.

Did you seek out a recommendation? According to Nielson, 61 percent of internet users say they trust customer opinions on review sites. Did you search the product or company online? Of all consumers, 60 percent are now looking on the Web. Once you made your decision, did you rate the product or service online? The PEW Internet & American Life Project suggests that up to 30 percent of consumers now post their satisfaction for the world to read.

These behaviours signal a shift in how customers get and use information about the companies with which they do business. Rather than rely on the companies themselves for information about their products and services, customers are increasingly sharing their experiences, and in turn use that information to make their purchase decisions. Consumers have simply lost trust in the corporate sales and marketing machine.

According to research on consumer trust, the amount of trust consumers place in their peers exceeds that which customers place in government and businesses. No surprise there; however, research has shown that once consumers lose trust in an organisation, they are unlikely to purchase its products or services, and are more likely than ever before to share their negative opinion with friends and family. This means that customers are making purchase decisions based on their experiences, the experiences of others, and the trust they hold in companies.

As the influence of customer opinion on other customers has increased, so too has the reach of this information. Where word of mouth used to spread directly from one person to another, it now moves from one person to many via email, social networks, video sharing sites, blogs, and other media outside the ‘mainstream’. The damaging effects of this viral, experience-based intelligence on corporate reputations are compounded by their longevity and reach, afforded by the internet itself.

What does this mean to financial services organizations? It means that the potential impact of a positive or negative experience is much more significant than it has ever been. But it also means that technology enabling consumer-to-consumer communication also enables business to operate differently. This technology also provides corporations the opportunities to affect changes to customer ‘experience-building.’

As a case in point, virtually every aspect of banking operations has changed over the last 5 to 10 years. Consider online banking, off-shore contact centres, and outsourced data providers. Each of these widely-adopted business practices has ensured that customer experience delivery is now further out of the control of the bank. Considerable time, money, and energy have been invested in these enabling technologies and processes, but the customer experience has been largely left unaddressed. Customers have adopted enabling technologies too, and now, more than ever, are at loggerheads with their financial services institution regarding the level of service they expect, are promised, and are actually delivered. And now, the financial services institution must figure out how to come back around to deliver customer satisfaction by listening to the conversations that customers have with each other.

These conversations – particularly the ones online – influence other customers’ decisions for years after they appear. Just listening to these conversations does not make them disappear. These conversations now form an organization’s reputation. As a result, when customers arrive to do business, they are armed with information and assumptions about what to expect.

Some corporations have tried to take advantage of online customer conversations by participating in them, though not always successfully. There are countless examples of corporate employees posing as customers and countering negative discussion board comments with marketing-approved responses. Customers see through this tactic, and it only inspires more attacks on the corporate reputation.

Other organizations have created corporate pages on popular social networking sites, or created separate sites in which they encourage customers to share their ideas. All of these are tactics to engage customers, but without a clear commitment to and structure for addressing customer feedback, it is difficult to listen to, and act on, customer suggestions on an ongoing basis.

The solution? Don’t just try to get in on the conversation. Give consumers a chance to start conversations with you. In the end, it’s what they wanted in the first place – a chance to tell you what they like, and most often what they don’t like, and what you need to do to keep them as a customer. Financial services organizations that understand this are not afraid to bring the voice of the customer into the organisation; they see this as an opportunity to involve the customer and to invite customer-driven change.

Customer experience management (CEM) solutions bring customer conversations into the business in a structured manner. It provides context to customer experiences so that the company can understand why customers stay, why they go, what steps are needed to improve their experience, and what opportunities for change exist on the front lines.

ResponseTek provides on-demand CEM solutions for some of the world’s leading financial services institutions that transform the voice of the customer into business intelligence that improve the business and its delivered experiences.

When evaluating CEM solutions, here are a few questions to answer that will help you reach your decision: Will the solution measure different kinds of experiences and provide different kinds of experience information? Who will use the information? What will they do with it?

Measuring all customer experiences
Your customers interact with you in multiple ways, and for different reasons. Accordingly, there are different kinds of feedback mechanisms that will help you understand those experiences. For example, specific events, such as submitting an online mortgage application, hold more meaning to customers and carry different expectations than transferring money between accounts. ResponseTek:CEM delivers specialized applications designed to optimise these transactions by gathering event-specific feedback at those meaningful stages in the customer lifecycle. By tying this feedback to a specific event and collecting it as close as possible to the event, your employees receive specific information to help them understand the experiences. When problems requiring immediate attention occur, they can be resolved before customers abandon their transaction, tell others of their poor experience, or become a retention risk.

Furthermore, customers often wish to provide feedback about their overall experience that is not tied to a specific event. This unsolicited feedback is valuable because it can help identify areas causing customer pain of which you were previously unaware. ResponseTek:CEM enterprise feedback management applications use tools to transform what is typically unstructured feedback into actionable information.

Market research – annual satisfaction surveys, Net Promoter™ insight, and Treating Customers Fairly compliance monitoring – is the final type of feedback necessary for complete customer understanding, providing benchmarks and trending required to make strategic decisions.

Information delivery
Understanding which employees can benefit from hearing and acting on the voice of the customer will often help define the solution. Employees across your organisation need to understand the customer experience, but will use it differently based on their level of authority or ownership over customer experience.
Front-line employees who interact closely with customers benefit from customers-at-risk alerting and closed-loop feedback management tools. Line managers can use real-time operational score cards for employee coaching and action management to track issue resolution. Decision makers can use strategic executive dashboards for a complete experience overview and trend analysis to uncover opportunities for strategic improvement. Whether employees are focused on individual experiences or on overall experience, ResponseTek:CEM turns the voice of the customer into the predictive business intelligence that employees need to improve customer-facing business processes.

It is estimated that 10-20% of financial services customers defect every year due to poor experiences. Most of the time, you won’t realize it has happened until it’s too late. Financial institutions have typically addressed this by acquiring more customers, offering greater loyalty incentives, or discounts on pricing. The costs are staggering, but generally go unnoticed as they are accepted as the cost of competition.

Customer advocates have the intent to spend, but now they are also seen as extensions of your new customer acquisition efforts… and perhaps more effective than many marketing strategies.

By implementing effective CEM solutions – and assuming you have the intent and means to turn this intelligence into action – you can manage the shift in consumer behaviour to your advantage.