How Relay won the customer feedback race

How customer feedback built stronger customer relationships, trust and process efficiencies – a case study. Published in Customer Management June 2005

To measure the man, measure his heart, Malcolm Stevenson Forbes

Most companies use some form of customer satisfaction measure. In fact customer satisfaction is such a common term these days that organisations rarely stop to think if this is what they really aspire to. Is ‘satisfaction’ the emotion they want customers to feel, having experienced their product or service? Some companies talk about the ‘wow’ factor. Do they truly want their customers to have a ‘wow’ experience each time they have contact? There’s an interesting paradox here - the vision of a customer experience is often expressed in emotional terms, yet the indices used generally measure the physical aspects of a customer experience. And here is another paradox – many measurement tools are focused on ‘inside out’ not ‘outside in’ – they focus on internal process rather than customer need. Often, organisations register the customer feedback, and do nothing about it; or if they do something they fail to let the customer know what has been changed as a result. An American hotel, for instance, not only responded to my feedback form but outlined the changes they had made as a result, and why they were not taking action on some suggestions. This not only created a positive experience but demonstrated recognition that every customer interaction forms part of building a relationship – whether it’s with individuals within the business or a positive association with the brand name.

This article is about one company, Relay Technical Transport, and its encounter with an innovative assessment tool which measures customer experience in a different way. Relay Technical Transport, a haulage contractor, delivers electronic equipment around the UK and Europe from the manufacturers to customer sites or between customer sites.

Relay assumed it knew what its customers thought about its service. However the management team was curious about whether their assumptions were correct. This was in the face of losing two important customers overnight. Even though they knew the reasons why, they wanted to ensure they could maintain their high customer retention levels. They decided to use an online tool, deep insight™, which goes beyond traditional customer satisfaction surveys around brand quality, product benefits and service quality and measures trust and relationship commitment too.

A customer may be satisfied with a service but will not necessarily be loyal or prepared to buy again – they may be open to poaching. In a four year research study of some 600 firms across the business spectrum, it was found that the percentage of satisfied customers who intend to maintain their relationship with a particular firm can be as low as 21%. The main reason that customers leave is that they do not trust the firm. Their lack of trust is mainly to do with the firm’s behaviour and poor communication. If the probability to re-sell to lost customers is between 20-40%, and the probability of success for new prospects is between 5-20%, then companies are potentially losing a lot of money in seeking new business rather than keeping existing customers.

Hugh Reid, Managing Director of Relay, was attracted to deep insight™ because, “it is simple to understand, quick to complete, easy to implement, and is web-based, so we felt we were moving with the times”. He was impressed with the response rate. The initial round generated 60% response rate and a follow-up reminder brought in another 10% of respondents’ feedback. The main reason for non-responders was not lack of interest but a desire to avoid duplication since a colleague had already represented their viewpoint. With larger customer organisations, multiple respondents were included in the sample. The response rate was fairly even across all levels from director to administrative staff.

Prior to this initiative, Relay held formal and informal review meetings and followed a formalised customer complaints process. However, they did not have an overview of what would make a difference as a business. The results from deep insight™ were generally positive, yet there were some key messages. They needed to work on Reliability and Differentiation in order to help their customers. In Hugh Reid’s view, he gained a wider perspective from the results. “We were only looking at our narrow performance – our review meetings were supplier led, following our agenda. We weren’t looking at how to save our customers money or how we could help them improve their processes”.

The first step Relay took was to find some easy-to-implement ways to save their customers money as part of their differentiation strategy. They educated their sales force to assess sites before the arrival of equipment to ensure that delivery logistics were managed well. By noticing that the stairs had a narrow corner or that a red route was involved, they were able to save some unexpected delivery charges. They bought a new online tracking system so that customers can log on to an extranet and find out the delivery status at any time; and the drivers were given electronic manifests. This cut down on customer calls and paperwork. Monthly requirements could be reviewed on screen. The improvements were customer driven and feedback has been positive with the perception that Relay offers a cutting edge service.

In addressing ‘reliability’ Relay identified a number of areas for improvement. Staff absenteeism, problems with equipment handling, late collections or arrivals, and communication problems were resulting in the perception that service was not what it used to be. By monitoring absence patterns Relay introduced a ‘carrot and stick’ approach. Staff were rewarded with extra wages for achieving less than target absenteeism levels and were counselled and maybe disciplined for patterns that appeared not to be correlated to sickness, such as five Fridays off. Training programmes were provided on all aspects of machine handling and drivers as well as office staff attended customer care courses. Together with better site assessments from sales staff, Relay was able to achieve its target of 98% delivery on time.

While the customer care courses addressed some communication issues with customers, Hugh Reid instituted meetings with his account management staff to review their key accounts and develop more proactive strategies for enhancing their relationships. deep insight™, provided specific information on every account, thus enabling account managers to take action to address specific needs. He is also introducing a motivational bonus system which rewards staff for increasing their skill set and encourages them to develop transferable skills. His next step is to identify ways to support his account management staff. He recognises the premise of the Service-Profit chain theory – that profit comes from customers satisfied with the service and relationship and that satisfied staff are key to enabling customers to have a positive experience.

Relay learnt that their customers were largely happy with the service and relationship, and had no immediate plans to change supplier. However, they were acutely aware that, had they not addressed niggling concerns, the stability of their customer base was likely to be threatened in the future.

So what would Relay do differently? While they used a consultant, familiar with deep insight™, to facilitate the senior management interpretation of the results, they decided to ‘own’ the analysis and present the results themselves to their Operations Management. They were not trained in all aspects of interpretation, and lacked the skills to facilitate a discussion on interpreting the results, which would engage the next management level. Although they rescued the situation, it took a lot of time getting Operations on board again. For Hugh Reid, it’s crucial to have an experienced person to present the results to key stakeholders. They had planned a newsletter to thank customers for participating but it got postponed. A small thing, but Hugh Reid now believes that customers not only should be thanked, but also informed about what is being done as a result of their feedback. He fully intends to use deep insight™ at least yearly, possibly six-monthly to monitor relationships. It is part of his company’s strategy to let customers know that improvement is on the agenda and customers are being listened to.

The Return on Relationship Investment (RORI) graph indicated that there were no low value customers taking undue time and money, though immediate action would have been taken had this been the case. There were some surprises in how customers were segmented compared to Relay’s perceptions of where they stood. The business has, as one of its six months’ goals, to elevate the number of Rationals (those who are positive about the relationship but still open to poaching) to the Ambassadors category (those who are loyal advocates and would refer the company to anyone). It also plans to drop those customers who fell into the Opponent category as they were able to establish that these organisations were after things that Relay could not readily provide.

In summary, Relay is now able to track commitment on an ongoing basis, to have high quality conversations with its customers, to respond to their feedback in a focused way and to provide them with a positive experience. It has a clear direction on where to get the best Return on Relationship Investment.

Co-written by Amanda Vickers and Jackie Smith