Capturing Customer Feedback
By Scott Zimmerman
The days of collecting customer feedback through an annual survey are over. Today, retailers are utilizing online and mobile tools that not only serve as “real-time” feedback mechanisms, but also act as bustling hubs of customer conversations and activity online.
From online surveys to written comment forms and customer focus groups, companies have employed a range of techniques to listen to their customers. But while collecting customer feedback can create a competitive advantage, it’s how you act on feedback that really makes the difference.
Every day, companies solicit feedback from customers, yet only a few actually take action or let the customer know their voice was heard. If you handle it right, the dialogue between you and your customers can become the lifeline of your business.
Many retailers are turning to engagement communications to begin that dialogue.
Engagement communications blends advances in technology, such as voice mail, text messaging, e-mail and social media, with a human touch. Together they create points of engagement with a customer rather than just a simple connection. Making a connection might inform but it doesn’t necessarily motivate consumers to take action. Create engagement points and the path is opened up for activation — in this case, giving customers a channel to provide the feedback you need to improve not only their purchase experience, but your bottom line.
Engagement communications involve tailored and personalized campaign-based outreach to determine the kinds of information customers want to receive. Because the messages are sent in a format the customers prefer, they encourage two-way dialogue which keeps customers emotionally connected and willing to provide their honest feedback.
For example, knowing that a certain segment of his customers have school-aged children, a retailer could utilize Engagement Communications technology to send an e-mail message offering special discounts on clothing and school supplies in their store or on their website.
Similarly, a retailer can use their purchase history data to build targeted engagement communications campaigns. Text messages can be delivered to shoppers to promote the arrival of a new shipment of electronics, or a friendly message to notify a shopper that an item in an advertised special was no longer available in order to save her a trip into the store. The messages engage customers in meaningful ways because they are relevant and timely, and the two-way nature of the messages allows customers to provide immediate feedback in real-time. With this real-time view, companies can truly get to know and proactively care for their customers, ultimately fulfilling their brand promises.
Customer feedback programs are most effective when the entire company listens and responds to the voice of the customer. Getting useful customer feedback requires a culture in which your employees are always looking and listening, and, at the right time, are empowered to act. Employees are most valuable to customers when they have the knowledge and resources to address customer concerns. And customers are more likely to give feedback to someone they believe is empowered to act.
Another key to gaining useful input is knowing when to solicit feedback. Don’t expect a customer to complete a survey the minute they walk in your door or log on to your homepage. Rather, allow them to make a purchase, and then use that as an opportunity to follow-up with an e-mail or online poll about how you could improve their shopping experience. Most customers don’t need an incentive to share their ideas and experiences with you. They simply want to know they have been heard and that you value their business.
Once you gather customer feedback, it’s important to use that information to continue to improve on things that are working, and address specific challenges. The action you take gives power to the customer feedback process.
When you have made a change that is customer-driven and meaningful, you can utilize online communications to close the loop with the customers who were part of the feedback process. But when you are correcting a problem, it’s best to get back to that customer with a personal, detailed response. This step is critical, because customers will be encouraged to give input if they know they are being heard and know they may be driving change.
The challenge is that most companies have traditionally been wired from the ground up to operate in a world of company-controlled communication, and they’re simply not equipped to engage in real-time conversations. But, with people sharing more and more of their lives today through online technologies, the rules of customer communication and feedback are changing. It is critical to not just listen, but to understand what’s being said and then to act accordingly. The work is not in the listening, but in the implementation and follow-up.
As a result, companies are rewiring their operations to be more customer-centered, more relationship-oriented, and more transparent by weaving online communication tools into customer service processes. This will improve communication from beginning to end — from initial conversation to ongoing collaboration in the customer relationship.
It just makes good sense. Customer feedback can spur everything from short-term promotional campaigns to business transformation. By knowing what customers want and by using the right communications tools to keep them engaged, retailers can capture the customer feedback they need to deliver solutions that have a positive impact on both the customer experience and their bottom line.
Scott Zimmerman, president of TeleVox Software, is a regularly published thought leader on Engagement Communications. He leads all aspects of TeleVox operations including client operations, sales, information services, product development and marketing.
Target on track with 2Q comp acceleration
MINNEAPOLIS — July same-store sales at Target increase 4.1% on top of a prior year gain of 2%, with increase transaction size the primary driver of an increase toward the upward end of the company’s guidance.
Target had forecast an increase of low-to-mid single digits, and for the second month in a row the company’s actual result was toward the upper end of the range. Target reported a 4.5% comp increase in June, offsetting a weaker than expected showing in May to give the company an overall second-quarter same-store sales increase of 3.9% that was characterized as a meaningful acceleration from the 2% comp increase recorded in the first quarter. Target is scheduled to release second quarter results on Aug. 17 followed by a meeting with financial analysts in New York the next day.
“We’re very pleased with Target’s July sales performance, which again was at the high end of our expected range,” said Target chairman, president and CEO Gregg Steinhafel. “In addition, back-to-school sales are off to a solid start, contributing to our confidence in the strategies we have in place and our ability to execute them, especially as we head into the 2011 holiday season.”
In July, commodity categories saw the strongest growth, with grocery category comps in the mid to upper teens, while health care, beauty and household essentials increased in the mid-to-upper single-digit range. Strength in apparel continued in July, with a comparable-store sales increase just below the company average. Within apparel, the company said sales were strongest in intimate, hosiery and performance categories along with women’s and men’s apparel. The softest results were seen in jewelry and accessories.
It was a different story in hardline categories where comps decreased in the low single-digit range, with the strongest performance in sporting goods and the softest performance in music, movies and books. Comps in home were down slightly, with the strongest performance in housewares, which grew faster than the company average, and the softest performance in decorative home.
Also of note, the company reported less regional volatility in sales results, with all areas of the country experiencing same-store sales growth. Despite the broad-based strength and early success with back-to-school, Target maintained low-to-mid single-digit same-store sales expectations for August. The company’s guidance reflects a reality that even with encouraging acceleration in same-store sales trends the potential exists for uneven results in the months ahead due to persistent turbulence in the economy.
Kraft reveals plans to split business into two independent, publicly traded companies
NORTHFIELD, Ill. — Kraft Foods is planning to create two independent public companies, which will include a global snacks business and a North American grocery business.
The company expects to create these companies — the high-growth global snacks business, which carries an estimated revenue of approximately $32 billion and the high-margin North American grocery business, which touts an estimated revenue of approximately $16 billion — through a tax-free spinoff of the North American grocery business to Kraft Foods shareholders.
The announcement was in line with the release of Kraft’s second-quarter results, which included a 13.3% increase in net revenues to $13.9 billion and operating earnings per share of 62 cents, a 3.3% rise. The company also boosted its expectations for organic net revenue growth from at least 4% to at least 5%, and operating EPS from at least $2.20 to at least $2.25.
"As our second-quarter results once again show, our businesses are benefiting from a virtuous cycle of growth and investment, which we fully expect will continue," Kraft chairman and CEO Irene Rosenfeld said. "We have built two strong, but distinct, portfolios. Our strategic actions have put us in a position to create two great companies, each with the leadership, resources and strong market positions to realize their full potential."
Kraft said its global snacks will consist of the current Kraft Foods Europe and Developing Markets units, as well as the North American snacks and confectionery businesses. The North American grocery business would consist of the current U.S. beverages, cheese, convenient meals and grocery segments and the nonsnack categories in Canada and food service.
"The next phase of our development recognizes the distinct priorities within our portfolio," Rosenfeld said. "The global snacks business has tremendous opportunities for growth as consumer demand for snacks increases around the world. The North American grocery business has a remarkable set of iconic brands, industry-leading margins, and the clear ability to generate significant cash flow."