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Closing the Loop with Customers: CX Leaders Have a Bias to ACT 

Bob Thompson | Dec 17, 2014 639 views 5 Comments

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A few months back I had a bad experience with Thrifty Car Rental. They enticed me with a great offer, and the car was fine. Unfortunately, I had some issues picking up the car — the service rep apparently tried to slip in something extra I hadn’t ordered. The drop-off experience was also underwhelming; it simply took too long.

My overall impression was that their strategy was to promote an aggressive offer, then turn it into a better deal (for them) by upselling. I don’t mind that, but the counter rep’s approach seemed deceptive.

On the airport shuttle bus to my terminal, I remember thinking, “this would be the perfect time to get a survey. I’ve got nothing to do the next few minutes, and would like to vent give constructive feedback.” But, no. The survey arrived a couple of days later, I was busy and just didn’t do it.



Thrifty lost an opportunity to learn from me, and couldn’t take any action to make it right. As a result, they also lost any chance for me to try Thrifty again, and I certainly won’t be recommending the company to anyone else.

Feedback Design

My experience illustrates why it’s important to design the feedback experience correctly. Transactional surveys should be offered as soon as possible, and make it easy for consumers to give feedback on their mobile phones. VoC vendors like Confirmit, InMomment, Medallia, and many others now offer mobile-optimized surveys, and that’s critical.

Survey timing is also important to give the consumers a chance to give feedback while their experience is still fresh in their minds. And so is acting quickly if the feedback warrants. And, where possible, companies that actually close the loop with customers quickly can really stand out.

Eric Smuda, VP Customer Insights and Experience at Avis Budget Group, has been wrestling with this problem since being installed in his position a couple of years ago. With a Voice of Customer (VoC) program dating back some seven years, and one million surveys per year, the company had plenty of quantitative data. Smuda’s mission was to shift the focus from data collection to action.

To accomplish this, the post-rental survey was redesigned and shortened to about a dozen questions that could be answered easily on a mobile phone. Open-end questions were included. Equally important, using tools from Medallia, the survey was distributed within 15 minutes of the car rental return, and rules were set up to alert local managers immediately based on survey responses.

For example, let’s say the customer had a problem with the car. Without immediate feedback, the car will be back in service with another customer, propagating that defect to others. Or, if a customer had a bad pick-up or drop-off experience like I did, they could be called by the store manager to discuss and resolve.

Inner and Outer Feedback Circles

You see, Avis suffered from the same problem as the majority of large organization. In my recent benchmark study, I found only about one-third of all respondents reported doing a good job (top 2 box) systematically closing the loop between customer feedback and action.

However, a comparison of “leader” (better than average business performance) vs. “laggard” organizations (everyone else) revealed something startling. Nearly half (47%) of leaders said they effectively closed the loop, compared to less than one in five (18%) of laggards. This made closing the loop one of the most predictive indicators of business performance, and prompted me to take a closer look.

The situation is obvious. Why go to the trouble of collecting customer feedback if you’re not going to do something with it? That “something” could be responding to an individual customer complaint, part of what Bain calls the “inner circle” of feedback management.

Source: Loyalty Insights: From feedback to action, by Rob Markey and Fred Reichheld

The more strategic “outer circle” could involve complex changes. Avis, for example, uses a monthly “CX council” meeting to review bigger issues that require system changes, policy updates, etc., according to Smuda. Eventually, as improvements are implemented they’ll be communicated to employees and customers, thus closing the loop in a different way than simple transactional issues.

No More Excuses

Why is closing the loop so difficult? Industry experts point to a number of issues:

  • Conflicting data can lead to analysis paralysis
  • Lack of the right systems to quickly analyze and distribute alerts to responsible managers
  • Hard-to-use systems at field locations which take personnel away from their jobs
  • Central group collects data and identifies issues, but lacks the clout to get action taken
  • Poor incentives to identify and act on issues, systematically
  • Lack of the necessary analytical skills

Overall, however, I think what separates leaders from laggards is more cultural: A bias towards action.

With all the debate about which metric is best, the deluge of “big data,” and other issues as noted, it’s easy to come up with good excuses reasons why it can’t be done. Leaders do it anyway. If you want to perform better, you should, too.


Disclosure: This post is part on my independent coverage of industry developments. No endorsement is implied for any companies mentioned in this post. Please visit our sponsor page for information on companies that have supported this community.

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5 Responses to Closing the Loop with Customers: CX Leaders Have a Bias to ACT

  1. maz iqbal December 21, 2014 at 3:17 pm (79 comments) #

    Hello Bob,
    The only ‘mechanism’ that we have at our disposal to impact the world is action. Only action. Not data, not knowledge, not insight. Just action. And here I leave you with the counsel of Niccolo Machiavelli:

    “I hold strongly to this: that it is better to be impetuous than circumspect; because fortune is a woman and if she is to be submissive it is necessary to beat and coerce her. Experience shows that she is more often subdued by men who do this than those who act coldly. Always, being a woman, she favours young men, because they are less circumspect and more ardent, and because they command her with greater audacity.”

    If we can overlook the language (I do not condone violence against women) then it occurs to be that Machiavelli was and continues to be on to something. Just look at the companies that are excelling in this brave new world and the men that set them up: Steve Jobs, Jeff Bezos, Mark Zuckerberg, Larry Page, Sergey Brin, Tony Hsieh……

    For my part, I do not expect any audacity from professional managers who are over 40, and in charge of large established countries. Why? Because they are in the mode of protection rather than conquest. In the mode of protection, they are minded towards loss than gain. So they move cautiously if at all.

    All the best
    maz

  2. Bob Thompson December 23, 2014 at 9:03 pm (224 comments) #

    Yes, I completely agree. As the saying goes, actions speak louder than words.

    That’s why my recent book is about 5 customer-centric “habits” (routine organization behaviors) and not 5 speeches or sound bites.

    My favorite quote is from Ralph Waldo Emerson: “Who you are speaks so loudly
    I can’t hear what you’re saying.” And our actions express who we really are.

  3. Lanla April 9, 2015 at 8:16 pm (2 comments) #

    For me, Closing the loop isn’t only about addressing problems. It’s also an excellent way to find out what your company is doing right—what sorts of experiences are wowing customers and turning them into promoters—so you can do more of it. It helps

  4. david May 20, 2015 at 1:27 pm (1 comment) #

    that “survey lite” has its own issues – in shortening the survey, they assured that the data collected would be more ambiguous.

    in fact, they need to *lengthen the survey*, if they want to get at the root of a customer’s complaint.

    to accomplish both goals (full data & celphone ease) they could include “are you willing to take a longer survey” in the survey – they’d get another chance to dial in the input data while still giving the manager crucial real-time data re mechanical or interpersonal, issues.

    i’d love to speak with mr smuda about some incredibly poor practices in the service chain at budget/avis, since it seems that his intentions are not being met by the realities going on in his corporate interface with potential & actual customers.

    i’m impressed to read about the innovations and practices detailed here, but i wonder whether he knows that he is losing customers every day due to what others might call “program glitches…

  5. David Smith June 23, 2015 at 12:12 pm (1 comment) #

    Smuda is failing at his goals as is his rental company at customer service.
    I rented a car from Budget in Indianapolis from May 28th to June 1st. On the way into the airport to return the car I stopped at the Shell station, on airport property, to fill the tank. Upon arriving at the return garage the attendant conducted what appeared to be the normal check in tasks; check the dash for mileage and fuel gage and ask if everything was ok. I asked if she needed to see the receipt for the fuel and she responded “not necessary”. On June 3rd when the Shell change hit my credit card for the correct amount I discarded the receipt; no charge from Budget yet. Nineteen days later the Budget charge finally hits my credit card for the wrong amount; it included Fuel Service charge of $60.61 plus tax. I immediately called Budget Customer Care (they don’t care). I was told that I would have to produce the Shell pump receipt (evidence from the credit card statement would not do).
    The “receipt” was delivered on June 20th and survey was delivered on June 22nd.
    Clearly when it takes 19 days for their computer to complete the transaction, something is wrong with the check-in software in the first place.

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