What Do You Know?: Share Your Customer Intelligence With Your Team

I have a suggestion that will raise your odds of winning--and it won't cost you any money. To clarify what I mean by improving your probability of winning, let me contrast that with an example of winning by chance.

The game Battleship was first popularized in the United States as a board game in 1931. It was also published by Milton Bradley as Broadsides, the Game of Naval Strategy. To win the game, you have to sink the other player's ships before he sinks yours. To start the game, each player secretly arranges a number of ships on his side of the game board. The players then take turns "shooting" at each other's ships. Today, we play Battleship on home video game consoles and mobile phones too.

But despite the updates in gaming technology, what hasn't changed is this: Battleship is a guessing game. It is not a game of strategy at all. Because in the middle of the game board is a shield that prevents the players from seeing each others' ships. Unlike in chess, where you can see every position on the board and make decisions accordingly, Battleship is a game of luck. You can't really aim at anything because you can't see anything.

If you could somehow see through, around, or over the shield, and your opponent could not, you would have a real competitive advantage. Otherwise, it's just a game of chance. My point? In the real world, in this stingy economy, the odds of keeping your customers cannot simply be left to chance.

You need to know more

Without information about your customers, you are just guessing about what to do. You need to see through, around, or over the shield between you and your customers. With reliable information about customers, you can act smarter to win their loyalty. You have to "win" customer loyalty because you have a lot of competitors trying to do the same thing. If your competitors know more about customers than you do, your odds of winning, or even surviving, just got worse.

To lead the field, you need a deliberate customer retention strategy, one supported by actionable customer intelligence.

Strategy comes from the Greek word strategos--which, roughly translated, is the art of the general, which is the art of positioning forces on the field of battle. An effective strategy requires an understanding of the market (field of battle). A deliberate customer retention strategy depends on understanding why customers defect. (For a copy of the Harvard Business Review article, "Why Satisfied Customers Defect," email me, below.)

Gathering intelligence refers to collecting data about customers and past customer experiences. In his book, On Intelligence, Jeff Hawkins (founder of Palm Computing) says, "Intelligence is measured by the capacity to remember and predict patterns in the world." So beyond remembering what happened in the past, intelligence answers questions like: Where are the opportunities to improve customer retention and increase customer likelihood to recommend next month?

Strengthening customer strategy

Almost all of the largest franchise firms survey their customers to learn which elements of the customer experience drive customer loyalty. As a multi-unit franchisee, you already have access to the "Voice of the Customer." That detailed customer intelligence is crucial because profitable sales growth comes from winning customer loyalty and with it, high levels of repeat business and positive word-of-mouth (free) advertising. If you haven't been studying and paying close attention to these customer satisfaction reports, now is the time to start.

An effective customer experience reporting system provides you with opinions from 400 to 600 customers per location per year, including:

• overall customer satisfaction;
• customer intent to return within the next 90 days;
• customer intent to recommend a particular location;
• verbatim comments describing what customers did and did not like about their last experience; and
• customer evaluations on the key drivers of customer loyalty (e.g., taste of food in a restaurant).

This is actionable customer intelligence that is specific to each of your locations.

You should also get data from your franchisor that compares customer satisfaction and intent to return at your locations to the system-wide average performance. Maybe you don't have the highest sales, but surely you can be in the top 10 percent of your franchise concept in customer satisfaction (a leading indicator of higher sales next month and next year).

So if you find yourself asking, "What can I do in this lousy economy?" here it is:

Share your customer satisfaction results with your managers and employees. Engage them by asking them to share ideas you can use together to deliver a better customer experience than you are delivering now. Every day, check your customer comments and share them to keep the focus on moving the needle on customer satisfaction. What gets measured and talked about is what will improve. The business gain is that you will increase customer retention beyond what it would be if you just left it to chance. So start now!

Jack Mackey is vice president of Service Management Group. Contact him at jmackey@servicemanagement.com or (816) 448-4556. For information about accurately measuring customer satisfaction, send him an email requesting "Five Things We Learned from Talking to 100 Million People."