Interview with Partner Advisory Board Member Dennis Gershowitz, DG Associates: Customer Experience
TSIA has recently launched our very first Partner Advisory Board, consisting of technology, service provider and consulting partners in the TSIA partner network. This is a great opportunity for us to stay current on marketing and spending trends in other industries, as well as track emerging best practices in our own industry. We have an impressive list of partners on the board; here is a link to view the complete list.
Over the next few weeks, I will be bringing you interviews with our Partner Advisory Board members. This week’s interview is with Dennis Gershowitz, Principal, DG Associates. Dennis specializes in helping large and small companies enhance Customer Loyalty Programs, understand more about their customers, develop improved tools for meeting customer expectations, conducting surveys and benchmarking analyses and helping organizations develop or further their CEM (Customer Experience Management) strategy.
John Ragsdale: Thanks for taking the time to speak with me today! We are thrilled to have such a long time supporter of the AFSMI, and now TSIA, as a founding member of the partner advisory board. Could you start by giving us some background on DG Associates?
Dennis Gershowitz: Our firm specializes in developing CEM Playbook Strategies for hi-tech organizations whose objective is to drive revenues and profits. We incorporate a proprietary 12 component approach that has been developed through several hundreds of projects in various industries over 25+ years.
John: Customer satisfaction and loyalty are gaining more visibility, all the way up to Wall Street, as executives begin to understand the importance of lifetime value tracking and its impact on the bottom line. What are some of the trends you see today in satisfaction and loyalty programs?
Dennis: John, we are starting to see a deeper understanding of the importance of employee engagement in the successful customer loyalty formula. Although the leading companies know about the correlation of employee engagement and customer loyalty for some time, it has often been ignored by the rest of the pack. I see the trends in three (3) phases over time. The first phase, focus on revenue then customers. The second phase, focus on the customer and the revenue will come. The third phase, focus on the employees (they are your first customer) then the customer. One example of employee engagement is where the employees are directly involved in improving the customer experience the result will drive both customer and employee loyalty. Many organizations now have implemented a reward system linked to customer satisfaction/loyalty. A simple example is the customer facing groups being surveyed monthly and rewarding individual employees who achieve a minimum 4.0 customer rating out of 5.0. The rewards are laddered (4.0-4.1 /$25 gift card; 4.2-4.3 / $50; etc.) base on the survey results. Another example is empowering employees to resolve customer issues that are under certain dollar values in the initial customer call. Remember without the employees’ commitment and engagement with your customers your brand promise and customer loyalty will never truly be achieved.
John: I know this is a fundamental question, but it is one I receive a lot and would appreciate your views. What satisfaction scale do you recommend? We have members using 10 point scales, 11 point scales, 5 point scales, 7 point scales…on and on. It makes benchmarking very complicated. What is your preferred scale and why?
Dennis: John, we see for companies measuring customer satisfaction a 5- point scale. For loyalty measure both a 5-point scale and NPS 0-10 scale are most commonly used.
The most common satisfaction 5-point scale ratings are:
5 = Exceeding Expectations
4 = Performed Above Expectations
3 = Met Expectations
2 = Performed Below Expectations
1 = Did Not Meet Expectations
The 5-point scales major benefit is the ease of use by survey respondents that results in a more consistent accurate response by survey participants. The 5-point sale provides easy to understand gradients. For loyalty measure both a 5-point scale and NPS 0-10 scale are most commonly used.
The loyalty 5-point scale ratings are
5 = Definitely Recommend
4 = Likely Recommend
3 = Maybe Recommend
2 = Unlikely Recommend
1 = Definitely Not Recommend
The same benefit applies for the loyalty 5-point scale as the satisfaction 5-point scale.
The NPS is used by many organizations due to the popularity of the ultimate question book. The NPS rating is based on the question “How likely are you to recommend (company x) to a colleague or friend?”
0 = Not at all likely to recommend
10 = Extremely likely to recommend
John: Something I see as a worrisome trend is more companies creating some sort of customer success index, bringing in data from multiple areas to create some sort of analytic that supposedly tracks customer success and loyalty. But sometimes the analytic is so abstract, including data from so many sources, that I wonder if the numbers even mean anything. If the average goes up or down, can you even tell the root cause? Are you seeing these indexes, and what are your thoughts on this approach?
Dennis: A challenge always facing a business is having the right information to make informed decisions. Often times, we find that the executives are looking at the myriad of data they collect and putting together what they think is the set of analytics that tracks their customer. The problem isn’t their lack of data, not at all, in fact, most businesses are consumed in tracking data points ranging from basic to sometimes very abstract. The result is that businesses will tend to drown in data, while at the same time, searching for insight that does not take them close to the root cause. This is why we will often work with clients on three (3) fundamental measurements, satisfaction with product and services. Next, identify loyalty ratings between product and service. Lastly, conduct key driver analysis to pinpoint the customers’ key issues, to effectively utilize your resources, so the result will be higher satisfaction and loyalty ratings. This approach seperates the issues between product and service essential to procuring actionable data. The three (3) indexes are based upon data that reflects what drives the customer and how the company is being impacted.
John: Let’s talk customer experience. I’m seeing more companies today creating a role with experience in the title, such as “Customer Experience Officer” or “VP of Customer Experience.” In your experience, who is the primary owner of the customer experience in technology companies? Is it support, or marketing, or sales, or a cross-functional team?
Dennis: Definitely a cross functional team whose primary reason to exist is to deliver a centralized customer experience that is coordinated on a cross-functional basis and receiving the operational support required. This approach enables being Customer-focused companies with the right processes and systems in place built upon actionable insight. Being cross functional will permit integrated communication plans to ensure customer insights is delivered and understood. Complexity should give way to progress and a well thought out Customer Experience Management Strategy.
John: Customer experience is obviously larger than support—it includes brand awareness, the buying experience, the product experience, etc. When you go in to help a company improve their customer experience, where do you start? Any common problems you have seen that you are willing to share?
Dennis: John, there are two common problems we run into all the time. One is not knowing or accepting the fact that the company is NOT as customer centric as they think they are. We use a technique called the Clear Customer Intelligence Methodology (CCIM) that utilizes a 360 alignment survey that compares the company’s executives, managers and frontline personnel’s view of how they think customers will rate them compared to the actual customer rating. This is then tracked throughout the year, which provides consistent understanding where they need to improve the customer experience. The second one is then not taking responsibly cross functionally in the organization. What is needed is not “ghost busters” but “silo busting”! All functional groups need to share in the responsibility to creating a great customer experience. There needs to be a common customer experience goal that ties all the functional groups together that is tied to their compensation.
John: TSIA recently launched a new discipline for Service Revenue Generation in response to so many member companies looking for increasingly creative ways to generate revenue from service. I know that one of your specialties is Account Management. It seems that once sales closes the initial deal with the customer, account management sometimes disappears. What are some of the account management principles you recommend companies adopt, and how do they help generate incremental revenue in the long term?
Dennis: John, it is extremely important that the customer life cycle be management in a transparent manner. The transition from sales to implementation to ongoing account management needs to be seamless. Therefore, having the account manager introduced early on in the sales cycle is a good best practice. It not only helps the sales process by reinforcing your company’s capabilities, but lays the ground work for an ongoing relationship. Another good practice is to incent the account manager on the overall satisfaction, retention and revenue growth of the account.
John: Thanks for taking the time to talk with me today, and again, we are thrilled to have you as a founding member of our partner advisory board!
Dennis: And thank you John, I appreciate the work that TSIA and it staff does for our industry. You guys are the best.