Forrester Wave Report
Leslie Stretch, Medallia CEO, and Borge Hald, Medallia Founder, Reflect on Being Named A Leader by Forrester in The Forrester Wave™ Customer Feedback Management Platforms, Q4 2018 Elena:...
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Last year, the Consumer Insights team at Microsoft released a startling study about online attention spans. The findings—that we’re becoming less attentive as result of increasing digital activity—did not come as a shock. What was a surprise was how far we’ve come: The average human attention span has dropped from 12 seconds in 2000 to just eight today.
That’s one second less than the attention span of a goldfish, the study said.
The decline strikes us as a sign of another trend: the inevitable death of traditional customer satisfaction surveys. Increasingly, companies that do not evolve in the face of this trend are putting their customer relationships—and the success of their business—in serious jeopardy.
Evidence of the death of surveys is clear. Overall response rates are declining, with the Pew Research Center finding in 2012 that phone survey responses had fallen from 36 percent to 9 percent over the previous 15 years. Customers have also become impatient with the surveys they do take; a 2015 Medallia retail industry study found increases in abandonment of two to four percentage points for every additional minute of survey length.
This is a steep decline, but it’s hardly surprising in a world where humans and goldfish have comparable patience.
Many companies have papered over this problem by increasing the volume of surveys they send, to the point that billions now go out every year via cost-effective digital channels. Yet behind this technology-driven approach often lies a surveying mindset that’s decades old: asking lots of questions, operating on the company’s preferred schedule, and focusing on abstract, strategic issues instead of what matters to individual customers. Success is measured on the amount of feedback collected, not on the benefit customers derive from providing that feedback.
And even if that was the goal, it’s hard to argue that current survey practices do much to make customers happier.
In fact, they often have the opposite effect. Over time, barrages of tone-deaf feedback requests send a clear message: “We don’t think your time is valuable.” In a world where a company’s reputation depends increasingly on the quality of the experiences it provides—and where, according to a recent UCLA study, customer relationships drive almost twice as much enterprise value as a company’s brand—such disregard grows riskier by the day.
We think it is time that companies face these facts. A 10 percent response rate is the same as a 90 percent defect rate. You don’t need a Six Sigma black belt to realize that that is a broken process. It is time to stop thinking about surveys and start thinking about a direct, two-way communication channel with customers. Here are three qualities that future surveys must embody if they are to become real relationship builders.
Relevant and convenient for customers
A survey request often feels like an imposition. The survey of the future will prevent this by using formats, channels and tailored launch triggers that lead to far more relevant, convenient, and natural experiences for the customer.
Medallia’s recent retail study found that the single largest lever to drive responses was perceived relevance and convenience. For the majority of retailers, between 7 and 23 percent of customers even opened survey requests, showing that the decision to engage depends on the context in which the request arrives.
What goes into this context? Through our work, we’ve identified several factors:
Certain B2B companies have been addressing these factors for some time, albeit through manual effort. Before sending a single survey, they ask clients: Which leaders in your company should receive survey requests? What frequency is appropriate? When is the best time to collect that feedback, and what format would you prefer? A third-party insurance claims administrator we have heard from used this strategy to achieve a response rate of 50 percent.
Of course, not every company should ask every single customer how and when they’d like to be surveyed. But most companies know enough about customer preferences—which interactions matter to them most, and what channels they’re using in those interactions—to deliver future surveys at times, and in formats, that align with existing habits.
Delta Air Lines offers an example of this strategy. It recently upgraded its surveys to be more accessible on mobile devices. Now, 60 percent of Delta customers complete surveys on a smartphone—twice as many as the industry average of 26 percent. And Delta’s response rate nearly tripled to 22 percent in a matter of months.
Conversation starters, focused on customer priorities
Ideally, every interaction with customers should feel worthwhile. But with today’s survey spam, how likely are customers to see responding to surveys as something productive that strengthens their relationship with a company?
The survey of the future must minimize the customer’s investment and ask only the vital few questions. It will function as a conversation starter that triggers organizational learning and action. In doing so, it will show customers that the company really cares about them, not just about gathering intelligence that can make it more profitable.
Response rates already indicate that this approach is far more appealing. We often see short two-question Net Promoter surveys achieving 30 to 50 percent response rates from consumers and 50 to 70 percent from businesses.
Future surveys will also ask different questions. Today, the majority of surveys are clearly meant to evaluate prior performance through the lenses headquarters cares about—for example, rating every aspect of a hotel stay. Instead, the survey of the future will balance how well that hotel did with how it can do better for the customer next time.
A large property and casualty insurer we have heard from recently applied all of these techniques to its survey process. Key improvements included radically shortening the survey to a few questions and open verbatims, personalizing the invitation, and having it sent from a real employee rather than a generic company account. As a result, the survey felt like the beginning of a dialogue rather than a request for market intelligence—and response rates tripled.
A catalyst for visible action
Perhaps the worst offense of today’s surveys is that they rarely lead to change. What customer wants to invest time and attention in providing feedback if it falls on deaf ears?
To change customers’ minds, the survey of the future will have clear outcomes that are visible to the customer. If feedback is positive, the customer will receive a sincere thank you and, if appropriate, a request for permission to post the comment online. If there’s a problem, someone will follow up who has the power to resolve it. If that person can’t achieve resolution, he or she will clearly explain how it’s being escalated.
This seems rather obvious. But how often does your company do it right now?
Achieving this level of responsiveness will require the right technological infrastructure and organizational processes. For the change to succeed, responses to surveys of the future must be visible to employees up and down the organization, and delivered directly to those who can do something with them. The purpose of the process will not be to enable fancy analytics and statistics, but rather to drive learning and action that customers will see and feel.
Thus far, we’ve called the survey of the future by many names: a conversation starter, a dialogue in a customer relationship, a trigger for visible action. But beyond any single quality, it must be something that customers feel good about participating in. You’ll know you’ve gotten there when friends, family, colleagues, senior executives, board members, and investors—people whose time is very valuable—look forward to receiving and responding, because they receive a clear, relevant benefit. You’ll know you succeeded when customers who receive survey requests exhibit increased loyalty behaviors, like referrals and repeat and increased purchases, that underpin sustainable, profitable growth.
Here are several questions to consider as your start on your way: