Leadership Toolset #6: Customer Advocacy
While it takes all departments working together to champion the customer perspective, Marketing plays a critical role in coordinating customer feedback, challenging the status quo, and operationalizing customer experience excellence.
DocuStar is pleased to welcome Jeff Borcherding, Vice President of Marketing at Paycor – a leading provider of online payroll and HR products and recipient of the Cincinnati AMA’s 2012 Marketer of the Year Award – to the Marketing Organizational Leadership blog series. Jeff has nearly 15 years’ experience in brand management and marketing, with past roles at P&G managing smaller, entrepreneurial brands and $1B global brands alike. Jeff holds an MBA in Marketing and Strategy from Northwestern University’s Kellogg School of Management.
Customer Advocacy: Who’s Responsible?
“Customer advocacy isn’t limited to the Marketing department alone, and passion for the customer can be found in any department,” says Jeff. “At Paycor, Client Service leads customer relationships, and Marketing helps by providing best practices for conducting market research through channels such as customer surveys, focus groups, and social media. We also work closely with Product Development to incorporate feedback mechanisms in the product development process that help to ensure products really deliver what customers need.”
Customer advocacy doesn’t naturally fit into one functional group or another, says Jeff. “Operational capacity challenges can force a focus on doing the most with limited resources. People are stretched thin, so you have to do as much as you can with limited resources. Marketing can help other functions by taking either a leading or supporting role depending on the project.”
How Marketing Facilitates Customer Feedback
As much as possible, Paycor personalizes the customer experience. Paycor employs User Voice, a third party application, to identify customer needs and help guide the Product Development process. The User Voice tool is an online community that enables customers to submit product and service suggestions and to vote on suggestions submitted by other customers. Paycor uses sweepstakes to help drive participation in the community, which, in addition to being a channel for customer feedback, also serves as a support knowledgebase providing basic end-product support solutions.
“Getting feedback from our largest clients is easiest because of their scale and the number of internal users our largest clients have. We have found that it’s most cost effective to run sweepstakes to solicit feedback from the largest clients (such as a chance to win an iPad for participating), but we also use campaigns with 100% incentives (everyone gets something for participating) when we want to ask deeper probing questions surrounding product usability in user group and focus group formats,” says Jeff.
Paycor also collaborates with Sales and Client Service to get closer to the end-customer perspective by “riding shotgun” on sales calls and client visits. “Since we aren’t specialists in these functions, Marketing is able to listen from a less technical perspective and focus more on the tone of the conversation for insights into the customer perspective,” says Jeff.
Understanding the Customer Perspective
Below are three steps to improving customer focus and intimacy and examples of how Paycor has applied them.
1. Improve existing processes and feedback mechanisms. When Jeff started at Paycor, Client Service was already conducting monthly customer surveys; however, Jeff’s team wanted to introduce quantitative validity to the survey in order to determine how customer satisfaction scores correlated with customer retention. Through an internal process change, the Net Promoter Question (NPS) was added to the monthly customer survey, based on extensive research supporting NPS as a customer satisfaction index. The introduction of the NPS question, “How likely are you to recommend Paycor to a friend or colleague?” to the survey was a low-risk process change, and data sets derived from this question over a period of several months quickly proved to be a better predictor of retention than previous metrics. The Net Promoter score is now measured and reported on a regular basis internally and has helped to reduce turnover risk.
2. Strategic focus on 80/20 initiatives. “At Paycor, the culture is always focused on who [which department] has the capacity to make initiatives happen at any given time, and responsibility for customer advocacy shifts between departments depending on time and resource constraints,” says Jeff. “Our Marketing department has been able to help execute customer initiatives, by either spearheading projects directly or by providing best practices in a consulting role for quantitative and qualitative research studies. For new market research projects, we often use the P&G approach of putting together a one-page research proposal to help specify research objectives and how we plan to use the insights we gain from the study. Through this process, we flow into a natural definition of roles between Marketing, IT and Client Service.”
3. Advocate for customer focus and intimacy. The introduction of proactive calling has greatly improved customer focus and intimacy at Paycor. Every year, the company makes about 40,000 proactive calls to clients to understand pitfalls, risks, and gaps in their product and service offerings. Jeff refers to the ongoing calling campaign as an organizational “temperature check”, as calls have helped to reveal macro service trends and to uncover situations where customers may have hidden frustrations. The proactive calls have had a measurable impact on the company’s success: Client retention has improved every year for 4 consecutive years.
No matter how your company is structured, customer advocacy is a team effort across all departments. While Marketing may not have direct interaction with customers on a daily basis, there are many ways for Marketing to champion the customer perspective, including helping to coach other departments in best practices for market research and in providing credible, practical, and agile support. As Jeff has shared from his experience at Paycor, Marketing often serves as an internal market research consultant, providing direction about how to gather and apply qualitative and quantitative data and insights to the customer experience, ultimately improving customer retention and reducing operational risk.
What is your experience with Customer Advocacy? Submit a comment below or join the discussion in the LinkedIn group, “Marketing Organizational Leadership.”
Marketing’s Three Roles in Customer Advocacy: A Checklist
Is your Marketing department --?
1. Credible – Marketing provides customer data and insight
2. Practical – Marketing support is pragmatic (given time and resource constraints) and scalable over time
3. Agile – Marketing moves easily between lead and supporting roles in advocating for the customer perspective
Customer Advocacy DO’s
1. DO champion the customer perspective in coordination with all customer-facing departments
2. DO provide leadership in market research best practices across channels such as customer surveys, focus groups, and social media
3. DO help to instill customer feedback mechanisms to gather insights supporting the new product development process
4. DO introduce quantitative validity to customer satisfaction measurement with measures such as the Net Promoter Score
5. DO be flexible in supporting other departments and help to organize customer research projects with a market research proposal
6. DO actively listen for customer insights from a non-expert perspective on sales and service calls
7. DO leverage incentives and sweepstakes to help gather customer feedback
8. DO utilize a mix of feedback programs (e.g. proactive calling, user voice tools, customer surveys, and focus groups) to help understand the customer perspective and minimize turnover risk
Customer Advocacy DON’Ts
1. Don’t expect to own customer advocacy exclusively: Be supportive of all customer-facing groups in contributing ideas and in challenging the status quo
2. Don’t ignore customer feedback: Actively review feedback received from all channels and respond proactively to improve customer relationships
Questions to Help Structure Your Market Research Proposal
Who is the audience?
What information will we be gathering?
How will we use the insights we gain?
What are the steps for making the data we gather actionable?
Quick Study: What is the Net Promoter Score?
The Net Promoter Score is a customer satisfaction metric calculated by asking customers the following question, “On a scale of 1 to 10 (where 10 = extremely likely), how likely are you to recommend Company X to a friend or colleague?” The question is used to determine the difference between the percentage of Promoters (score 9 or 10) and Detractors (score 0 to 6). A low or negative difference in the percentage of Promoters minus Detractors can indicate high organizational risk.
Just as with any measure, while NPS is a valid gauge of customer loyalty, loyalty is insufficient as an end unto itself. As Bain & Company states, “NPS merely measures the quality of a company’s relationships with its current customers, and high-quality relationships are a necessary but insufficient condition for profitable organic growth.” NPS is strongest as a metric when the following industry conditions hold:
The industry includes a substantial number of players, so customers have a real choice
Network effects are minimal, so customers can easily switch providers
The industry is mature, with widespread adoption and use of its products or services
Notwithstanding the above conditions, NPS is a valuable and widely adopted metric in Customer Experience measurement and used by companies such as Apple and American Express. According to the report, The State of Customer Experience Management, 2011, 48% of large companies with revenues of $500M+ are currently using the Net Promoter Score.