The Fizzback Customer Engagement Report

Fizzback’s work in 2008 with clients across the retail, telecom, banking, transport and leisure industries has provided us with significant insights into “Best Practice” Customer Engagement. The clear message that shows through both the customer feedback submitted via the Fizzback system and our Primary Research is that business success is directly linked to a company’s ability to listen, respond and react to customers quickly, intuitively and conveniently. Put another way, customers who feel a sense of empowerment are more likely to return and bring their friends with them.

This report explores how customer spend, loyalty and advocacy can be dramatically improved by opening up communication channels, motivating front-line employees and creating new perspectives on the customer experience in order to drive (and measure) operational improvements.

Fizzback and GfK NOP conducted a survey of the retail sector in which found that customers were likely to spend more money and more frequently visit retail outlets where the retailer listened and responded to their feedback. Of the consumers polled:

·      80% are more likely to shop at a retailer that responds to complaints quickly

·      65% are more likely to shop at a retailer that makes it easier to give feedback

·      21% would shop more regularly with a retailer if they’d had a complaint addressed immediately

This represents a clear opportunity for retailers to drive growth by engaging with their customers, especially in times of economic uncertainty.

Recent SMS surveys conducted by Fizzback in collaboration with both YouGOV and GfK NOP, make it  clear that the most loyal customers are those who are most  “engaged” with a brand. The opposite is also true – when a brand is hard to engage with, consumers are deterred.

However, retailers beware: 80% of complainants who don’t get a response will likely never return! This figure becomes even more striking for infrequent retail shoppers: a massive 97% would not return, proving the old adage that you don’t get a second chance to make a first impression!

In mobile telecommunications, customer loyalty is a key indicator of business performance, with attrition (or ‘churn’) averaging around 35% per annum in the UK. Fizzback’s research supports this statistic, with 20.7% of consumers polled rating themselves as either likely or very likely to leave at the end of their contract, with a further 13% undecided. However, interestingly, of the 20.7% who were “likely or very likely” to churn, a staggering 44% said that they would be less likely to switch if their provider offered better feedback channels!  See below:

It is clear that there is a huge opportunity to drive loyalty by showing a clear commitment to listen, respond and act upon customer comments in real-time. This all adds up to potentially powerful benefits: in mobile telecommunications, a 1% reduction in annual churn (say from 35% to 34%) would add around £30MM to the bottom line of the “Big Four” service providers through recovered revenue and reduced customer acquisition costs!

Would you recommend each of your goods and service providers to your friends and family? That’s the ‘ultimate question’ that management guru Fred Reichheld believes is the most accurate measure of customer satisfaction. It’s a compelling argument – we all value the recommendations of those we trust over marketing or advertising campaigns, and in the new age of social networking, word-of-mouth becomes even more important.

Fizzback has conducted significant research into the correlation between customer engagement and positive word-of-mouth, or ‘advocacy.’ In fact, some of Fizzback’s clients ask this very question of their customers during the feedback process. One such client saw a dramatic 26 point increase in their advocacy score after just five months of a customer engagement program, driven by Fizzback.

In research conducted with Gfk NOP, 90% of consumers believed that retailers who make it easy to give feedback show a commitment to good service. But that’s not enough; it’s only when feedback is responded to and acted upon that it starts to drive advocacy. In mobile telecommunications, 24% of consumers who rated themselves as either passive or active detractors of their operator said that they would be more likely to recommend their operator if it offered easy, convenient feedback channels, and the feedback was acted upon.

In summary, true customer engagement requires far more than just paying lip service to the “voice of customer”. In fact, listening is just the first stage, and the more easy brands make it to tap into their customers’ opinions and feedback, the more insight they’ll gain. But listening alone is just the start - it’s responding to customers immediately and in a relevant manner that really drives advocacy and builds trust, giving customers a sense of empowerment.

Ultimately then, listening and responding drives the greatest business improvements, since it creates both immediate and long-term changes based on actual customer experience. True customer engagement finally comes when those same customers are informed of their positive impact on the business – turning them into loyal advocates with real bottom-line impact.