Analyzing a Customer's 'Moments of Truth' to Reduce Churn

A ‘Moment of truth’ is “an instance of contact or interaction between a customer and a firm (through a product, sales force, or visit) that gives the customer an opportunity to form (or change) an impression about the firm” as defined by Business Dictionaries, an online business service.

Relying on customer satisfaction surveys to determine the quality of customer service and related departments is risky. According to an article in 1995 by the Harvard Business Review, the authors noted that customer retention levels of around 40% correlated to an average rating of "satisfied" and did not reach 80% until the average rating reached "very satisfied".

All customers face these moments of truth which can enhance their perception of a company or irreparably damage it. CRM solutions can effectively provide the necessary support required to make each moment of truth a positive experience for the customer, enhancing the perception in a customer’s mind. For CRM to provide this support, however, the company must challenge themselves to understand why these moments of truth are so important.

The two major challenges
Multi-channel communication: moments of truth occur during all interactions with a company - through multiple channels, multiple business units and numerous times. The ability to monitor customer reactions to interactions is something that few companies have become effective with. Companies can address this challenge in one of two ways.
  • Customer profiles - develop profiles, which include the motivation and behaviour patterns of a customer; enabling the company to plan the most beneficial way to deal with customer interactions. 
  • Profile the customer journey - examine from the customer viewpoint, the moments of truth they are likely to come across at different points in the life cycle of dealing with the company. By examining the timeline of contact, the company can plan responses appropriate to the specific entry point.
While it may appear simple to address this challenge, companies must remember that consumer behaviour has changed considerably over the past few years. Consumers are more demanding in expectations of personalized service and immediate responses. If a response on the customer journey is even slightly skewed, the company runs the risk of customer churn in the future.

Instant responses: moments of truth happen in real time and if the company is unresponsive in that “real time moment” there is little that can be done to repair the damage. With multiple competitors for every product or service, an unhappy customer will look for an alternate option and usually coax their friends too.

Companies must be encouraged to acquire feedback in real time – in other words right after a transaction is completed. The advent of the smart phone and social media has made it possible for customers to post comments on transactions almost instantaneously and this can be disastrous if a moment of truth is mishandled.

CRM and Moments of Truth 
Historically, CRM has been an internally focused system – management of marketing campaigns, tracking of sales opportunities and the analysis of customer service. In other words - "customer retention". For a CRM solution to be effective for moment of truth management, it must reverse this focus and monitor "customer experience".

Traditionally, two types of moments of truth have been pinpointed which CRM solutions can be identified with-
  • The first type is when a customer 'sees' the product. 
  • The second type is what the customer 'feels' after purchasing the product. These moments can be tracked in sales and repeat purchases.
These two types can be tracked by the success of a marketing campaign. Pete Blackshaw in a recent article on Clickz, however, identified a third and possibly the most important moment of truth “the dialogue customers participate in with the company.” It is this third moment of truth where most CRM software often fall short.

Capturing customer interactions
CRM solutions designed to capture customer experience must also capture customer dialogue. The analysis of this dialogue is what will drive the customer-centric aspects of the system and enable management to tweak the price, place or promotion of the product. It will also enable the system to more accurately predict the ideal customer, based not only on purchase history but on similarities in dialogue. This information can be captured through an effective CRM software using the following-
  • Automated call-scripts to ensure consistency and allow staff more time to capture additional details when interacting with manifold customers on a daily basis. 
  • Convert Tweets to Cases to ensure specialized users can effectively interact with a customer who has shared his comments related to your products or services. Details of related communication through multiple channels can be detailed through the CRM system's interface. 
  • Sentiment Analysis Reports can be generated to quantify satisfied and unhappy customers discussing your brand on a social network. Common factors associated with either frame of mind can be pinpointed - store's name, pricing, agent's soft skills, etc. 
  • Custom fields can be created to capture unique details associated with a specific new product or service. Also, call center staff can capture a customer's temperament during a specific call interaction - irate, neutral, friendly, etc.
True customer-centricity
Companies should ask - "How customer-centric are we?". They should also assess the following 'personal factors' that heavily impact a customer's perception -
  • What level of concern are they showing to an individual customer. 
  • What level of friendliness are they showing to a customer. 
  • The level of civility shown to a customer. 
Showing genuine concern to a customer waiting in a long queue, but making their next interaction easier in a friendly and helpful manner, can nullify the negative impact created on their perception of your organization.

By analyzing what each customer segment requires at a moment of truth, organisations can improve the perception and memory of interactions that are important.

No comments:

Post a Comment