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You may be like many executives who’ve had more than a few sleepless nights worrying about your customers. Particularly the customers with problems — on average that’s 3 out of 4 of your customers — the ones who light up the phones and fill your inbox with concerns, complaints, and helpful suggestions. Surely if you don’t act and fix their issues, they’ll take their business elsewhere, right?
It’s a common hypothesis that you should prioritize your initiatives around those known problems or the “squeaky wheel” issues. The known issues are causing friction in your customers’ experience and should be addressed; however, they may not deserve the resources or priority that you think. In fact, it’s often the best, most loyal customers who bother to take the time to contact you and complain. They are often not a flight risk because these customers are passionate about your product or service, and they want to make it work.
At the Verde Group, we’ve learned that unhappy customers don’t complain. Over 67% of customers who experience a problem never tell the company about it. Customers cite “it’s not worth my time” and “they don’t believe that complaining will do any good because no one cares.” These are the customers who spread negativity by word of mouth and then vote with their wallets by taking their future purchases elsewhere.
How do you determine what the real customer issues are that may be financially impacting your business?
1. Build a data-driven baseline
In working with a major national brand, we were able to evolve their voice-of-customer program to help them pinpoint the specific issues most damaging to transaction frequency. This was done not by asking customers about how they felt about their experience but by deriving the impact CX friction points have on dependent variables such as likelihood to repurchase the product/service to determine what we describe as “Most Damaging Problems (MDPs)”.
We then reviewed 24 months of transactional data to explore the correlation between an increase in MDP frequency and the impact they had on transaction frequency. The relationship was very clear. More MDPS = fewer transactions regardless of customer segment.
By examining the data we were able to extrapolate the annual impact of specific issues to economically quantify their impact to the business and Executives took note, using the data to inform annual strategic plans.
2. Share your learnings for buy-in
At this point, you have detailed customer feedback in one hand, and objective, measurable data in the other. The customers’ experience with your product or service is end-to-end and holistic. What you learn through this process will not fit nicely into just one area of the business or function.
To put plans in place to address the top drivers of churn, you will need cross-functional support and leadership buy-in. This is a critical and often overlooked step in the process but having economically quantified experiential data helps to cut through organizational silos and break-down cultural barriers. Two key points that should not be overlooked. Don’t forget that the insights you uncover may be completely new to an audience. It may take some time to help colleagues understand these threats to business performance and why they haven’t heard about them before.
3. Build your action plan
Once you have organizational alignment, you’re ready to prioritize the issues you’ve uncovered and start building a plan to address those specific issues. Start with what you consider to be the easiest fixes that will have the most substantial revenue impact. Don’t overcomplicate the solution but rather stay laser-focused and have clear metrics in place to measure the impact. Be mindful of scope creep or before you know it, you will be attempting to build a plan that is unattainable.
Clarity of ownership is critical in getting plans off the ground. Make sure everyone involved knows their role and expectation in solving the issue at hand. With established roles and tasks, move to evaluate the more complex and resource-intensive solutions.
4. Don’t rest on your laurels
Once you’ve moved from reactive mode to proactively addressing customer issues, don’t make the mistake of stopping, or even slowing down. You will need to repeat the data review/customer conversation cycle on an ongoing basis to stay in tune with your customers’ experience and keep raising the bar on your performance.
Ultimately, it’s not the customers who complain the loudest or most frequently that should keep you up at night. It’s worrying whether you really understand your customers’ experience and if you are truly addressing the issues that put your business at financial risk. If you leverage your data, have genuine conversations with your customers (and ex-customers), build organizational support, and create a measurable action plan, you might just sleep like a baby.
Paula Courtney, Chief Executive Officer of The Verde Group
This article was originally published on September 9, 2018 by the Verde Group. It was updated on November 30, 2023.
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