The High Price of Ignoring Customer Input and Big Data

most aggressive approaches is to ask customers what problems they have had, aided by a list of the most likely problems they might have encountered. While marketing hates such an approach, acknowledging the possibility of such problems gives customers hope, and response volume and detail increases.

Likewise, complaints are viewed as at-risk customers who are giving the company a chance to retain them. The key message communicated is "We can only resolve problems we know about!"

The survey and complaint data are converted into estimates of revenue at risk, ideally quantifying the damage for each month of inaction on the quality issue.

Focus groups and advisory boards are heavily used, and include customers who are encouraged to share problems and ideas. Intuit has a large customer online community that is encouraged to become deeply involved. Harley Davidson has product engineers ride with Harley Owners Groups for weeks at a time to obtain unvarnished feedback and observe frustrations. Starbucks' and Legos' online communities are a key source of product innovation.

Quality, service, and technology identify key points of current customer pain and where internal data sources flag customer issues in advance. For instance, SoCal Edison uses smart-meter data to identify customers who are going to receive a surprisingly high bill and warns them one-third of the way into the billing period. Rather than complaints, they get calls saying "Thanks for the warning. How can I conserve?" The IT department is critical in linking the operations data to the customer communications channels.

Leadership is still critical, but lacking

The good news is that companies have started to recognize the payoff of investment in quality. Fifty-three percent of companies surveyed plan to increase investment in quality over the next 18 months. The bad news is that many more senior executives believe they already have a quality-driven culture than the quality professionals who lead their internal efforts.

• Seventy-five percent of senior executives say there is an effective culture of quality, while only 47 percent of quality professionals say this is true.
• Seventy-one percent of senior execs say their quality program is state of-the-art or advanced, while only 40 percent of quality professionals would agree.
• Sixty-seven percent of executives say they provide unequivocal support of quality, while 54 percent of quality professionals agree.

Recommendations

Bad news does not get better with age. Each month of inaction costs more customers, revenue, and earns negative word of mouth. To combat this:

• Aggressively solicit complaints and stress surfacing and resolving problems.
• Use surveys that incorporate problem lists as well as focus groups and customer advisory boards to define quality criteria.
• Map the customer experience and identify where big data and operational data systems can flag problems in advance. Link this data to your CRM system so you can proactively warn customers.
• Provide bad news quickly, but accompany it with an estimate of the revenue that can be recouped if the quality issue is rapidly addressed. Point out that you are trying to help the company make more money and enhance its word of mouth.

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John Goodman is an ASQ member and vice chairman at Customer Care Measurement & Consulting. His latest book is Customer Experience 3.0. He can be reached at jgoodman@customercaremc.com or on Twitter @Jgoodman888.

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