Despite a whole “customer experience” bandwagon, the industry is building “slag heaps” of data and feedback rather than having a clear “best service is no service” strategy, according to a customer feedback survey.

The results show that most companies are still missing the simplest strategy to improve customer experience and consequently improve costs.

The survey of 71 UK companies was conducted by produced by Budd and the Professional Planning Forum.

“What is striking is how little has changed in 2 years since we last looked at feedback, voice of customer and metrics” comments Peter Massey, MD of Budd. “Removing the need for service just is not on the radar for most companies. Companies are, for the most part, working very hard on improving what they do and reducing cost”.

But they are not changing what they cause customers to do. They are not avoiding the need for dumb contacts and for service at all.

The implications for businesses are:

• More than 50% don’t use contact rates per customer
  The questions people found most challenging to answer related to not knowing how many customers they have, and how often each customer is contacting them.
• More companies have reduced handling costs by more than 10% in the last year
  More companies in the 2008 survey have managed to reduce contact handling costs by more than 10%. 16 in 2008 compared with only 2 in our 2006 Fast+Simple survey. 6 of these 16 have reduced their costs by 10-20% and 3 respondents by 20-40%.
• Local government is keeping costs steady whilst demand increases
  Responses are generally mixed within sectors. As a sector, Local government demonstrates most consistency here with the majority of respondents reporting no change in costs even though they have experienced an increase in contact volumes (mostly in the 10 - 20% range). New initiatives, e.g. relating to removing waste, are accounting for some of this increase.
• 25% are using non-linear satisfaction measures
  25% of 70 respondents are using ‘customers who are very satisfied/satisfied/dissatisfied’ as their top KPI. This shows a good understanding of the non-linear relationship between satisfaction and customer behaviour.
• More than half (57% of 65 respondents) are still struggling to take systematic action on the customer data they collect
  It is worrying that things do not appear to have changed that much over the last 2 years, despite the significant investments made in feedback and other customer experience initiatives.

Root causes of customer issues are often hard to resolve because taking actions on customer feedback requires action outside the business unit.

Sample size
73 was the sample set but only 59 were able to finish the contact rate question at the end.

The customer isn’t seeing improvements in the customer experience. Increasing “transparency” – the ability to see past marketing messages to what happens to other customers – means this is a big problem for telcos, banks, insurers and utilities.

Paul Smedley, Executive Director for the Professional Planning Forum comments:
“The first step is listening to our front line teams and customers, finding out why they call and what they want. We then need to apply this information so that the organisation is able to use it in managing change across the silos. Taking the customer angle is shaping our programme for 2008 that reflects the growth of call centres into operations that integrate across the whole organisation.”

A massive opportunity to differentiate
Of course this means there is a massive opportunity for competitive differentiation. “Optimising the experience drives out cost. Driving out cost makes service worse”.

It doesn’t matter which way you collect the data about your customers, it’s what you do with it that matters - because it is ‘taking systematic action on customer feedback’ that ultimately drives performance.

It’s about the way you act, not the specific way you collect feedback

You can download the full report free from our library at www.budd.uk.com

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