In my experience and study (hard knocks and hard data) I believe there are three key areas to focus on:
- Customer engagement monitoring
- Customer interaction improvement
- Customer feedback on ramps
Most software execs know that customers engage at differently levels. The most common model is to view engagement as series of concentric circles (the onion model) where customers in the inner core are the most engaged and the customers at the outer layers are the least engaged.
The inner core represents your “raving fans”. Your zealots. Where you go for case histories and testimonials. The source of most of your positive word of mouth advertising. They buy and use everything you have to offer. They’re on the highest levels of your service plans, use most or all of your products, faithfully are on the latest updates, buy your latest add-ons and upgrades and probably are the customers you use to help design new and improved offerings. Oh, to have more of these!
As we move out from this golden group, we begin moving away from lesser levels of engagement. Support, maintenance, upgrades, new products all are “markers” of engagement. A simple and elegant way to measure engagement, in addition to these, is the old RFM analysis: Recency of purchases, frequency of purchases and amount purchased are great “markers” as well. I also use RFM to evaluate a customer base to find those high value segments worth greater focus and attention as well, but that’s for another blog.
So, how do you turn this all into customer experience monitoring system? By identifying the key markers or boundaries of these various engagement groups you can then define the key metrics that you will use to segment and monitor your customers. You can then, and this is very important, score each customer based upon their engagement level. You are now set up (with a bit of help from an analytics tool) to monitor movement of your customers among this group. Migration towards the golden center indicates increased customer engagement and, of course, the opposite direction indicates less.
Over time you’ll be able to know the quantity, direction and velocity of customer movement. But this only answers the “what” it doesn’t tell you the “why”, for these you need to move to the next area that I call Customer Interaction Improvement. In Part 3 of this series, I’ll explore how we can dramatically improve customer experience proactively by focusing on the human factor of product and service experience delivery. This can yield a 10% decrease while improving customer satisfaction scores by up to 30%!
Postscript: Why the Gap in my Blogging
So it’s been nearly 2 months since my last blog and some of you may have noticed this. For those of you who have (and care to know) I’ve begun a new part of my journey which is quite exciting and fulfilling for me. For over 20 years I’ve been an active member of Rolling Hills Community Church in Tualatin, Oregon and care deeply for the mission and purpose of this ministry. Over the last few months I’ve been in active discussions with the leadership there about joining the staff as the business manager, replacing the previous individual who retired over two years ago. Long story short, I was offered the position after board approval, gladly accepted and joined the staff February 1st.
What does this mean for VALUE:driven Group? I will continue to lead VDG and actively communicate through this blog and participate, as time allows, in other organizations and events, most notably the Oregon Entrepreneurs Network. I will just need to be a bit more selective (and disciplined) in how I spend my time! For purposes of this blog, I plan to move back to a two week (or so) frequency as I am committed to serving an industry that I care deeply for, that has provided me such a great career and allowed me to get to know so many wonderful people over the years.
As always, I love hearing from you; dialogs are so much richer than monologues!