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James Wells

Customer Care

Build Customer Loyalty by Mining Social Media

You can learn a lot from one- and five-star ratings

Published: Tuesday, January 18, 2022 - 13:03

The ISO 9001 standard talks about the relationship between the company and the customer in a couple of places. First is management’s responsibility to make sure that customers’ needs are a top consideration, and that their requirements are met. Then that customer satisfaction is improving, and customer satisfaction data are analyzed.

Many books deal with improving customer satisfaction, and a few focus on loyalty. Loyalty is a topic unto itself because it’s significantly different from satisfaction and is inherently measurable through behaviors that customers exhibit. In many organizations these three topics are treated as separate entities that don’t connect with each other. Many companies have siloed customer requirements from customer satisfaction measurement, and many don’t even look at customer loyalty. However, these three things are innately related to each other. One cultural development has enabled a strong connection among the three: social media.

Customer requirements

Traditional approaches to defining customer requirements involve creating specifications on a technical level, perhaps involving discussion with the customer about the specifics of what they expect. Other approaches, for companies that produce and sell products into retail markets where a direct discussion with the customer is more difficult, run the gamut from internal brainstorming sessions to focus groups to surveys and trade shows. Traditionally, customer requirements is a discussion about the details and particulars. Then we translate those requirements into specifications, then design, produce, and deliver the product or service to the specification. This process is a core of the ISO 9001 standard.

Customer satisfaction

We’re required to measure and improve customer satisfaction. The ISO 9001 requires it, and survival mandates it. As W. Edwards Deming once said, “It’s not necessary to change. Survival is not mandatory.”

What this means is that we must take the measure of our customers’ satisfaction with our products and services and use that information to improve. Many organizations struggle with this. They struggle with gathering satisfaction information, then they struggle with what to do with it once they get it. Part of the problem with traditional approaches to gathering satisfaction information is that they don’t generate enough specific information to reveal what actions should be taken. Surveys, focus groups, market research, and interviews with customers are typical methods used, but these fall short of providing a road map to success. The stacks of books on customer satisfaction are evidence that this is a topic that we in the quality profession struggle with. The rapid social media culture we now live in amplifies this struggle.

Customer loyalty

Customer loyalty is a topic that, on the surface, appears to be a twin sibling of customer satisfaction but in reality is not the same at all. We can have satisfied customers who are not loyal, and we can have loyal customers who are dissatisfied. The difference between satisfaction and loyalty is this: The first is a feeling, and the second is a behavior. Satisfied customers have already purchased your product or service, and they either have a good or a not-so-good feeling about the experience. Loyal customers will buy it again, even when they have other choices, or they have a few bad experiences.

Further, loyal customers will buy other products and services from you and recommend you to their friends and family. A satisfied customer can become a loyal customer, but there’s no guarantee. Satisfaction is fleeting; loyalty is much more lasting. Satisfied customers will switch if they have a bad experience or a better deal comes along. Loyal customers will forgive a bad experience... a few times.

So, satisfaction is that warm, fuzzy feeling you get when you get great customer service, or a product performs as expected. Loyalty is a bond that goes much deeper. No matter what people may say, the truest indicator of how they feel about your company and its products are their buying decisions. Loyalty is complex. Some organizations distill loyalty down to one simple score based on a few key questions about buying behavior and recommendation behavior. Typically this is represented by what’s called a net promoter score or loyalty score. However, loyalty is actually much more complex than a simple score. Walker Research, a leader in the field of customer research, expresses loyalty in its customer loyalty matrix that combines attitudes and behaviors.

Figure 1: Customer loyalty matrix. Credit: Walker Research


In regards to loyalty, the most desirable state for a customer is “truly loyal,” and the least desirable is “high risk.” High risk customers are actively searching for other options and intend to leave you as soon as possible. Truly loyal customers trust your brand, and will buy from you again, will buy more as you offer more, and will chose you over others with similar offerings. Loyalty is the ultimate end game of any voice of the customer (VOC) process.

As simple as the concept of loyalty is to explain, it is infinitely more difficult to achieve than satisfaction, and the social media culture we live in has made loyalty a much more difficult proposition. But it also provides us with some key tools to help overcome the difficulties.

The social media revolution

It’s impossible not to have noticed the revolution in our culture during the last 15 years. Social media has turbocharged what was already the seemingly transparent culture of the internet age. Now we can know what anyone thinks about anything via the computers in our pockets. This has enabled a change in consumer behavior that is significant for the quality profession. Traditional consumers of 30 or more years ago had limited tools in their toolbox when making a purchasing decision. They could talk to people they knew who may have had an experience with the product or service, or perhaps “knew someone” who had an experience. They could also talk to “experts,” who also happened to be the people trying to sell them the product. Ultimately, the consumer needed to just take the plunge and make the decision, living with the consequences. Another way to think of this is to draw a circle around the typical suburban household that included the local retailers and neighbors. That was the circle of influence at that time.

By contrast the modern customer is a very educated, discerning customer. The internet and social media have widened the circle of influence considerably. The new normal behavior when a purchase decision is being made is to research the functionality of the product or service, compare different offerings on the internet, read some reviews or maybe just observe the ratings of the products, then make the buying decision. The “expert” no longer has credibility in educating the consumer about the buying decision. The social media universe has replaced the “expert opinion.” The anonymous reviewer is now the most credible opinion in the room, and the modern customer has changed their buying behavior as a result of the explosion of available information about a potential product or service.

Today, the customer can sit down and digest reviews from many sources about the product, check the company website for product availability before making the trip heading to the brick-and-mortar store or webstore to execute the buying decision they made before they ever left home. This is the new paradigm about customers. If you’re providing products and services to the general consumer market, you’re subject to the whims of anonymous reviewers.

This is a huge change as well as a double-edged sword for the quality professional. On the negative side, your brand reputation and sales can be adversely affected by too many negative reviews, while on the positive side, there’s exponentially more customer satisfaction data available than there was in the past. The challenge is how to take lemons and make lemonade.

Making lemonade

Along with the revolution in social media, there has been a revolution in tools to understand what the anonymous reviewer is saying and develop a strategy for what to do about it. Most of the large brick-and-mortar retail outlets also have a webstore presence. Everyone is familiar with the success story that is Amazon. “Black Friday” is now followed by “Cyber Monday,” where online purchases exceed those at brick-and-mortar retailers. All of these webstores have at least one thing in common: They give the purchaser the opportunity to rate the product and service they received.

In my experience, there’s an inherent low tolerance for negative reviews. One or two might be dismissed as coming from picky people. More than two or three reviews that say the same thing about the product gains credibility in the mind of the reader. Potential customers will look at the total number of five- and one-star reviews without ever reading any of them, and make their buying decision based on too many one-star reviews showing in the graph. If you have a proportion of one-star reviews that approaches one-third to one-half of the number of five-star reviews, you may not get a second look.

Companies like Amazon are so sensitive to customer ratings that they will suspend sales of products where the average star rating becomes too low. The anonymous customer review is all powerful in today’s consumer environment.

In his groundbreaking book, The Customer-Driven Company (Perseus Books, 1991 revised edition), Richard Whiteley discusses saturating your company with the VOC. The advent of social media-savvy customers gives us a powerful toolset to do this. The data are there for us to mine and use to improve customers’ experience in very specific ways.

Reading anonymous consumer reviews of a product is time-consuming and difficult. There’s the challenge of trying to make some sense out them in terms of possible improvement strategies. Web-scraping tools allow the user to automatically gather data from websites. Several of these tools focus on data related to the reviews section of a webstore product page. Web scrapers automatically gather the content of webstore reviews into a file that makes reviewing easier.

Although this is a great step forward in efficiency, it’s still not enough to make it a workable process. That’s where data visualization techniques come into play. Data visualization is, at its core, a frequency chart. Data visualization counts the frequency of word mentions and creates a visual display indicating how these mentions compare with other words. There are several data visualization techniques out there, but one that I prefer is the word cloud. This approach makes a word bigger the more times it’s mentioned. Figure 2 below shows an example of a typical word cloud.

Figure 2: Word cloud

The power of the word cloud in the VOC process is to reduce the “noise” and inefficiency of having to sift through hundreds or perhaps thousands of reviews to glean key insights. The word cloud provides the road map of which reviews to focus on and which to ignore. Using the word cloud technique, generate a cloud of five-star reviews and a separate one of one-star reviews. The reason for the separation by star rating is that reviewers at the ends of the spectrum tend to have the most passion for their reviews. This provides a richer context and more insights about what reviewers care about. After sorting the five- and one-star reviews, focus on two main categories of words: functional and emotional.

Functional words describe product features and functions that customers have commented on in their reviews. Functional words can reveal insights about features and functions that customers expect to see or wish they had in the product. These insights are particularly useful when developing new products to ensure that they have the right feature set to be competitive.

Emotional words (e.g., love, hate, great, terrible, awesome, like, easy) describe how customers feel about the features and functionality that they are reviewing. These insights are powerful because emotional words reveal where improvement is needed in existing products, or feature enhancement is needed in new product development. Focus on the emotional words to reveal what customers love or hate about your or your competitors’ products.

Figure 3 is a flow-map representation of the process.


Figure 3: Process flow map for analyzing VOC

Bringing it all together

Considering that truly loyal customers is the goal of the VOC effort, now we have all of the elements needed to move our customers from any of the other three quadrants to the truly loyal quadrant. All we have to do is follow the voice of the customer. Following the VOC typically takes two paths—improving existing products and developing new products.

Improving existing products via a process improvement methodology can be greatly enhanced by the adding insights from a VOC process. In some cases, VOC is the main reason to do such an improvement project. Tangible improvements in response to VOC can lead to warranty cost reduction, complaint reduction, and increased sales.

VOC in new product development is where the real excitement lies. Applying VOC insights to new product development can prevent future warranty issues, complaints, and lost sales. One-star reviews in particular are valuable for this because they are a rich source of opportunities to better the competition on features where competitors underperform to customer expectations. More important, it can help move customers toward the truly loyal quadrant in a loyalty matrix.

Discuss

About The Author

James Wells’s picture

James Wells

James Wells has been a quality professional for over 23 years, implementing quality management systems compliant with ISO 9001, ISO 14001, TS16949, FDA cGMP and TL9000 requirements. Wells has led four Lean Six Sigma deployments and accumulated over $140 million in savings over 15 years as a Master Black Belt and Lean Specialist. Wells is certified as a Six Sigma Master Black Belt and Lean Specialist. He is the Principal Consultant at Quality In Practice. He can be reached at info@qualityinpractice.solutions

Comments

Excellent Article

Great article and on the money. Looking forward for more articles around this topic.

Excellent!!