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Manage uncertainty: Using data to chart your course

30-second summary:

  • O-data is data from sales, finance, HR and other operations. It tells you about win rates, profitability by product line and employee attrition.
  • X-data is the emerging category that drives initiatives like CRM: beliefs, emotions, sentiments. It’s the human feedback that points to gaps between what you think is happening and what is really happening.
  • By combining O-data with your X-data, you can ferret out what types of products and service interactions created promoters and detractors. Then you can use this data to calculate the NPS for large portions of your customer base.
  • Today’s younger generation in the workforce does not have the time or desire to be a part of an organization that is not explicitly trying to connect with them on a personal level, and also share those beliefs and mentality outside company walls.

Sentiment has always been a driver of consumer behavior. It plays an even bigger role now that more of our day to day interactions with brands are digital. The question for brands is “how do I measure sentiment about my consumers’ experience in a way that makes it actionable?”

The first step is to recognize the “experience gap” that’s challenging businesses today. Companies have been trying to close these gaps for years – but they’re been doing it with the wrong kinds of data.

They’ve done a great job collecting what we call “O-data” – data from operations. They’ve started to collect “X-data” – another name for experience data. But enterprises have done a poor job of leveraging X-data and an even worse job of correlating it with O-data to generate true insights.

What is O-data and X-data?

O-data is data from sales, finance, HR and other operations. It tells you about win rates, profitability by product line and employee attrition.

Businesses have invested heavily in automating the collection and distribution of O-data. You used to have to get finance to spend weeks reconciling the books to get you a detailed P&L analysis. Now you can click a button and crank out a report.

X-data is the emerging category that drives initiatives like CRM: beliefs, emotions, sentiments. It’s the human feedback that points to gaps between what you think is happening and what is really happening.

Businesses across industries are collecting more data than ever. The solution isn’t necessarily to collect more data. Rather, it’s to collect the right data and do a better job of connecting the X’s and O’s.

For example, say your company has two sets of data: Net Promoter Scores measuring customer loyalty (X-data) and customer product ownership and support history (O-data). With the X-data, you can calculate an NPS for the customers who responded.

You can examine their feedback and try to understand what’s driving the behaviors of the promoters and the detractors. You can learn from this, but the insights only apply to the people who happened to respond to the survey.

By combining O-data with your X-data, you can ferret out what types of products and service interactions created promoters and detractors. Then you can use this data to calculate the NPS for large portions of your customer base.

Perhaps ownership of a certain version of a product tied together with a specific type of customer service problem is highly likely to create detractors.

You can identify all the customers with that profile and take proactive measures to correct the issues — even though they may never have complained.

The example above is hypothetical. But we’re seeing real examples in the field of companies closing experience gaps with more skillful management of X-data and O-data.

Driving employee retention

Volkswagen recently embarked on a campaign to increase customer loyalty across its 104 dealerships in Australia. It had been collecting customer experience data from Australian customers, but it was taking 3-4 months to share results with dealer employees.

The car-maker had also maintained statistics on employee retention at each dealership, but it wasn’t making any connections between employee retention and dealership performance.

Volkswagen changed tactics. It started collecting more employee experience data through multiple touchpoints, using predictive analytics. It started sharing customer experience data with dealerships in real time.

Correlating the customer experience data with employee advocacy data and retention stats, Volkswagen noticed that the 10 dealers in Volkswagen’s Australian network with the greatest employee retention and advocacy also had the greatest proportion of customer promoters.

The car-maker responded by working to close experience gaps in its facilities – listening to workers, investing money, and updating buildings.

The result: Volkswagen posted the strongest employee retention rates and customer experience scores in 15 years. Dealerships improved their net promoter scores by 20 points in under 12 months.

Turning up the dial on customer satisfaction

ComEd provides electric service to more than 3.8 million customers across Northern Illinois. It ranked as the lowest electric utility on a recent JD Power Customer Satisfaction Index.

Of the 40 factors making up the overall score, ComEd ranked in the lowest quartile for 39 of them. The utility had plenty of O-data to evaluate its operations. But it hadn’t done an in-depth customer satisfaction analysis, so it had no insight into why its scores were so low.

ComEd decided to gather more X-data. A driver analysis showed low customer satisfaction ratings were fueled primarily by poor communication and misunderstanding over pricing.

Customers also didn’t understand that ComEd wasn’t responsible for the majority of the charges on their bills (utilities deliver energy but don’t supply it). Customers developed strong negative perceptions about ComEd, concluding its prices were unfairly high.

Armed with these insights, ComEd revamped its bills, creating several new designs. The company conducted a series of online billing trials to determine how customers were reacting with existing and proposed designs.

The result: In less than a year ComEd circulated a new billing statement to its 4 million households. It increased its customer satisfaction score more than any other large electric utility company projects. JD Power references ComEd’s bill redesign as a best practice for utility companies.

Conclusion

It’s taken brands a few years to finally catch up to the hype of customer experience and service, and how it impacts their reputation.

Today’s younger generation in the workforce does not have the time or desire to be a part of an organization that is not explicitly trying to connect with them on a personal level, and also share those beliefs and mentality outside company walls.

If companies buckle down and take hold of their X and O data, they can compete with the best of the best.

2020 is a time for companies to revamp their business priorities, pull together customer data, and analyze how to meet the needs of both their employees and customers.

Success begins on the inside and translates to a perception from the outside. Take data and run with it. Take it from ComEd – you never know what awards you’ll find yourself with.

Peter Maier is the President of the industries organization of SAP. He and his team are globally responsible for the SAP business with companies and organizations in the following industries: Aerospace & Defense, Automotive, High Tech, Industrial Machinery and Components, Chemicals, Defense & Security, Mill Products & Mining, Oil and Gas, Utilities, Public Sector, and Travel & Transportation, Sports.

The post Manage uncertainty: Using data to chart your course appeared first on ClickZ.

Reblogged 7 months ago from www.clickz.com

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