Retail Sector Retreats to Long-Term Shopper Satisfaction Levels

My teammates at The ACSI’s February report on the retail sector shows customer satisfaction down 2.6% year over year for the 2015 holiday season, as consumers may be looking for more in their shopping experiences. Shopper satisfaction overall hit a high mark two years ago amid a post-recession economy where businesses were trying harder to please customers.

As recovery settles in, that honeymoon is over and five of six retail categories return to customer satisfaction levels that align with long-term ACSI averages. While most retailers show ACSI declines compared with 2014, consumers continue to prefer the online shopping experience.

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What Drives Customer Loyalty Now?

Matt Heather UFC 194If you think customer loyalty is driven by personal relationships or because of your hard work, then not only are you wrong–but you’re putting your revenue at risk.

The reasons for customer loyalty have changed dramatically in the past decade, according to research published in the book, “The Challenger Sale” by Matthew Dixon and Brent Adamson. Relationships and hard work now come in second and third on the list of what customers value most–and what will drive them to change providers.

Instead, customers today are looking for sales people to be experts–not in the products or services that they offer, but rather in the customer’s own business. Sales people who can demonstrate that expertise in the sales process are winning big deals away from formerly entrenched competitors.

Here’s how customers consider your value, from lowest to highest:

  • If you know your product, you are a human catalog
  • If you know your services, you are a technician
  • If you can match your products and services to the customer’s needs, you are asales person
  • If you know a customer’s problems and business, you are a consultant
  • If you know a customer’s industry, market challenges and competitors, you are anexpert

Customers are moving their business from sales people to experts. If you want to be the big winner in your market, you have to increase your expertise and demonstrate that expertise in meaningful ways to your customer.

Here’s a course of action.

1. Learn your customer’s industry, business challenges and competitors. You don’t have to become an encyclopedia of information to be of increasing value. Instead start with just a few steps:

  • Read and subscribe to your customer’s industry’s top two or three blogs.
  • Put keyword notifiers in your Internet search tool for the top three or four key terms for your customer’s industry issues.
  • Read the trade association newsletters and website materials of your customer’s industry.

2. Ask your customers about changes in their industry. Focus on these four categories: technology, regulation, mergers/acquisitions and innovations. These categories are forward-looking and often are the market drivers with which customers need the greatest help.

3. Suggest how you might help your customers. Explain how your products and solutions address their upcoming challenges. When you are demonstrating expertise, the language you use is important. Focus on their issues more than your offerings. Use the language of:

  • Time: How you can help them to be faster and more responsive to the market and to compliance deadlines.
  • Money: Saving and making money is always a motivation for a buyer considering the value of expertise. In addition, there is the measurement of money in relationship to the market. How will working with you change their position in the marketplace in the area of value, price, cost or share?
  • Risk: The impending negative impact of something that you point out can be a powerful motivator for action. Loss of market share, penalties for non-compliance and the risk of being technologically overrun by competitors are all threats that can help customers see you as a valuable expert.

Achieving a level of expertise value has a big impact on customer loyalty. Increasing your relevant expertise can help you trump your competitors’ hard work and personal relationships.

Retaining existing customers is a challenge for any business. But you can’t address an attrition problem without first understanding what’s driving your customers away.

Matt Heather UberOn Super Bowl Sunday, my wife Heather and I (like thousands of others) took an Uber to Levi’s Stadium. I had time to think about, what it is about Uber that keeps me retained as a customer?

Retaining existing customers is a challenge for any business. But you can’t address an attrition problem without first understanding what’s driving your customers away.

There are many causes of attrition. Customers may be leaving for lower-cost options, for example. You can test this by looking at attrition rates in various price bands. Divide customers into thirds by price and examine whether the highest-priced third attributes more frequently and the lowest-priced third leaves less frequently. This may indicate if your pricing is out of line.

Customer dissatisfaction could be another factor. Test this through partnerships like the ones teams of consultants and analysts at CFI Group build; we are able not only measure customer satisfaction but tell you the EXACT drivers behind why customers and go from your business. — and, not just among existing customers, but those who have recently left. Our clients quickly discover whether their delivery or customer service operations have put you at a competitive disadvantage.
Retaining Customers

ACSI: Decline in Federal Government Satisfaction Slows

16jan-ACSI-fed-deptCitizen satisfaction with services of the federal government continues to slide, albeit at a slower pace, according to a report released today by the American Customer Satisfaction Index (ACSI). Satisfaction with the federal government drops 0.8 percent to an ACSI score of 63.9, falling for a third year in a row.

Improvements in some areas, however, suggest a rebound may be in the offing. Citizens report better (76) and more timely (69) service. Also, people find information (71) to be clearer and more accessible compared to a year ago. Quality for federal websites is unchanged at 72.

“Deteriorating customer satisfaction was widespread in 2015, and the slump in citizen satisfaction is similar to what we observe in the private sector or among voters in the political arena,” says Claes Fornell, ACSI Chairman and founder. “But if the small gains in the drivers of citizen satisfaction take hold or continue to rise, we might finally see a bit of a turnaround.”

Though overall customer satisfaction in the U.S. economy also has been slumping, user satisfaction with federal and local government services remains significantly below the private sector. The national ACSI score, a combination of all public and private sector ACSI measures, is 10 points higher. But the gap between public and private sector has narrowed slightly, as customer satisfaction in the latter has suffered a larger deterioration over a longer period of time.

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There is a wide range of scores for federal departments. The Department of the Interior, which includes the National Park Service (NPS), leads the pack with an ACSI score of 75. The NPS will celebrate its centennial this year and is the primary citizen-facing service offered by the Interior Department. The Department of State is next with a score of 71. Most citizens interface with the State Department for passport processing. The Defense Department at 70 ranks third among measured departments.

The lowest-scoring federal department, as usual, is the Treasury Department (55). Its low score is largely due to its responsibility for collecting taxes through the Internal Revenue Service (IRS). Even though the IRS performs a service that is difficult for most people to feel a fondness for, it is not impossible to improve the satisfaction of tax filers. E-filers have a satisfaction level that is 20 points higher than paper filers (76 and 56, respectively). The Department of Veterans Affairs at 60 and the Justice Department at 59 round out the bottom three.

“The disparity between the Department of Defense and Veterans Affairs is notable because it speaks to the vastly different experience of our military personnel,” says ACSI Director of Research Forrest Morgeson. “Services are great when you’re enlisted, but the federal government has many challenges in delivering health services to its massive and growing population of veterans.”

Matthew Eaton

Vice President Management Consulting
CFI Group USA, L.L.C.
625 Avis Drive, Ann Arbor, MI 48108 USA
T: +1.303.803.7372
cfigroup.com
 

 

Understanding Your Customers to Build Brand Allegiance

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In today’s modern shopping environment, retailers are compelled to have a comprehensive web presence to cater to the growing number of online-savvy customers. As such, executives and other decision makers need to leverage features to help set their company apart from the competition. Features such as loyalty programs, customer product reviews and other online offerings may be good options, but it is important to understand how and why these elements are currently being used in the marketplace.

My team at CFI Group and eBay Enterprise surveyed 500 consumers about their shopping experience. The results underscore not only the significance of a comprehensive web presence, but also the importance of understanding what consumers expect from online offerings.

Two of the key takeaways from questions about loyalty programs:

  • An overwhelming amount (91 percent) of respondents cite the ability to receive special promotions as the reason for signing up for loyalty programs. While consumers could select multiple factors, no other was mentioned more than 41 percent of the time.
  • While 80 percent of respondents have signed up for loyalty programs, consumers’ most frequent reason given for not signing up for specific programs is insightful: Fifty-six percent cite a concern about disclosing personal information. Limiting that exposure will attract more participants.

The importance of customer product reviews is also evident, with 93 percent of respondents calling them an influential factor in their purchasing decision. One quarter of those customers go specifically to a retailer or brand website to find those reviews, making it imperative for retailers to have product information and customer reviews readily available.

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Credit Union Satisfaction Index 2015

CFI_CUSI_2015The results of the Credit Union Satisfaction Index 2015 study highlight the evolving landscape of financial institutions, most notably the growing presence of online and mobile banking, as well as the importance of other differentiating factors such as reward programs and local community involvement. Although the market is changing, the study also indicates that credit union members continue to value the availability of physical branch locations.

The customer satisfaction level of credit union members continues to be among the highest of all industries measured by CFI Group, and like all financial institutions, technology is playing a key role in credit unions’ customer satisfaction. In fact, the report indicates online and mobile banking has more influence on satisfaction than any other aspect of the credit union relationship.

But while online banking with credit unions continues to rise – with 82% of customers reporting they completed at least half of transactions electronically – there has been no corresponding decrease in the importance of branch locations. Only 11% of those surveyed indicate they consider branch locations to be of little or no importance.

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To download the full report, click below:

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Matthew Eaton

Vice President Management Consulting

CFI Group USA, L.L.C.
625 Avis Drive, Ann Arbor, MI 48108 USA
T: +1.303.803.7372
cfigroup.com

Government Contact Center Satisfaction Index 2014 (GCCSI)

This is the seventh year that my team at CFI Group has conducted our extensive study of customer satisfaction with government contact centers using the proven methodology of the American Customer Satisfaction Index (ACSI).

Overall scores for government contact centers improved 4 points in 2014 to 67, a rebound from a 9-point fall in 2013 that provides hope for a positive trend going forward. For comparison, the CFI Group CCSI 2014 study found private sector contact centers had an overall score of 72.

The overall improvement was largely driven by two departments: The Center for Medicare & Medicaid Service (CMS) improved its score 7 points to 68 and the Department of Education (DOE) improved 6 points to 76. Other notable department scores include Social Security Administration (70), Department of Veteran Affairs (65) and Internal Revenue Service (64). State and local governments scored 68.

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Please call me at 303-803-7372 with any questions

Matthew Eaton

Vice President Management Consulting

CFI Group USA, L.L.C.
625 Avis Drive, Ann Arbor, MI 48108 USA
T: +1.303.803.7372
cfigroup.com 

CFI Group’s Government Contact Center Satisfaction Index (GCCSI)

CFI Govt Contact Centers 7.6.15CFI Group’s Government Contact Center Satisfaction Index (GCCSI) reports that after a 9 point fall in 2013, the GCCSI reversed its direction and rebounded 4 points to 67 in 2014. The 2014 private sector CCSI has also rebounded from a substantial fall in the previous year. While the trend is similar, it should remain the goal of government contact centers to close the gap with their private sector counterparts. Doing so will eliminate the perception that services provided by a government contact center will be less satisfactory than those available in the private sector and instill an additional level of trust in the various government agencies. Read more tips on closing the gaps.

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Mercedes-Benz Financial Services: Using Customer Experience Analytics to Drive World-Class Customer Satisfaction

2014-mercedes-benz-g63-amg-6x6-front-mid-air-jumpPrior to partnering with my team at CFI Group, MBFS’ customer feedback programs followed a marketing-based approach primarily focused on attracting customers and less focused on retention and satisfaction. Sensing a need for a more analytical approach, MBFS formed a project team to investigate alternatives. This research ultimately led them to CFI Group.

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