Richard Snow's Analyst Perspectives

Research Reveals Challenge of Building Customer Relationships

Posted by Richard Snow on Mar 13, 2012 2:51:39 AM

Businesses have long struggled to build ongoing, profitable relationships with their customers.  Our new benchmark research into customer relationship maturity shows that this is not getting easier. 

One reason is that consumers now want to interact with organizations through various channels of their choice. This creates pressures on organizations to support instant messaging, text messaging, video, social media and others; the research shows organizations on average support four or five channels. Another pressure point is to resolve more interactions at the first attempt. To meet this requirement, the most mature organizations use expert employees in several business units to handle interactions. The research shows organizations on average use four or five business units to handle inbound interactions, and four  also handle outbound interactions. With multiple business units using multiple communication channels, organizations struggle to provide consistent information and experiences to customers.

The research uncovers three fundamental issues companies must address to provide consistent information and experiences. The first is to create a single source of customer data. Fewer than half of the organizations we looked at (45%) have a single source of customer data. Just over half (52%) have to struggle with three or four sources, while nearly one-quarter (22%) have to deal with 10 or more. Not having a single source of data leads to the second issue: The majority of organizations struggle to produce a single set of reports and analysis that everyone can use in handling interactions at any touch point. The research shows that fewer than one-third (31%) have such a set of reports and analysis. On average organizations have three groups producing customer reports and analysis. Inevitably, this means that some customer information is not up-to-date; for one-fifth (21%) of organizations the information is more than a week old, so decisions are made using inaccurate information. 

The third challenge is to personalize interactions. Increasingly, consumers want to be recognized as individuals and want responses to be made within the context of their current circumstances, not generic replies. The research shows that while organizations are good at personalizing email, telephone-based and written responses, fewer can personalize responses to social media (31%), e-commerce (29%), self-service (25%), text messages (17%) and IVR (13%). All of these challenges are compounded for organizations that deal with customers through third parties. The research shows that such organizations are more comfortable providing marketing and sales support than customer service.

Mature companies are more customer-focused than others, and this disposition starts at the top. Just over one-third (36%) of organizations involve the executive team when defining their customer relationship strategy, and one-quarter involve the CEO. In the most mature companies, this involvement leads to creation of a cross-business-unit group that interacts directly with customers and supports other teams in their efforts. 

Mature organizations also are early adopters of three process-based techniques that support building customer relationships: personas, customer journey maps and customer feedback, all of which are used by around two-thirds of organizations participating in the research. Personas support the definition of more granular customer segments and allow organizations to build views of different customer groups. Customer journey maps support the production of process-like maps that define how and when different customer groups are likely to interact with an organization throughout the entire life cycle, and so allow organizations to plan the experience at each touch point. Organizations may also collect feedback from customers at the time of interaction and through the channel of customer choice, and from it produce “the voice of the customer,” which can be taken into account as they try to improve the customer experience. Each of these techniques can be put to different uses; the most common is to develop better interaction-handling processes.

Another significant development impacting customer relationships is the growing use of social media. The research shows that while most companies have created a presence on Facebook (89%), Twitter (68%), LinkedIn (57%) and YouTube (45%), they use them mainly for marketing. Few companies use social media to provide proactive customer service, although many have taken initial steps to respond to complaints posted on social media. But 69 percent do not personalize these responses, and an inappropriate response can cause more issues than the original problem. Only the most mature 13 percent of companies have realized the impact that high influencers can have through social media and have begun to differentiate customer service to these individuals. 

Building customer relationships is never easy. Organizations need to look at the maturity of their people, processes, information and systems and how these can be synchronized to become more customer-focused. The key is information. Ventana Research recommends that companies evaluate how analytics can help them derive more insights about customers and their likely behaviors. Using this information, organizations can address the people, process and technology issues that will improve the customer experience and lead to improved customer relationships.

How customer-focused is your organization? Have you got to grips with how social media is changing your customers’ behaviors? How is the use of mobile devices impacting the way customers interact with your organization?  Please tell us by collaborating with me. 


Richard Snow – VP & Research Director

Topics: Predictive Analytics, Social Media, Customer Analytics, Customer Data Management, Customer Experience, Customer Feedback Management, Operational Performance Management (OPM), Social CRM, Speech Analytics, Voice of the Customer, Analytics, Business Mobility, Cloud Computing, Customer Service, Call Center, Contact Center, Contact Center Analytics, CRM, Customer Performance Management (CPM), Desktop Analytics, Text Analytics, Unified Communications, Workforce Management, Workforce Performance Management (WPM)

Richard Snow

Written by Richard Snow

Richard leads Ventana Research’s Customer and Contact Center Performance Management research practice, which is dedicated to helping organizations improve the efficiency and effectiveness of managing their customers, throughout their lifetime and across all touch points, including the contact center. He conducts research exploring the people, process, information and technology issues behind customer operations management, contact center management, and customer experience management. He also works with senior business operations and IT managers to ensure that companies get the best performance from today’s highly complex application products. Richard has worked in management and consulting leadership positions in the technology industry including with Price Waterhouse, Sema Group and Valors. In his work, he has been involved with all aspects of delivering highly complex IT solutions to a variety of clients in the telecommunications, financial services and public sectors. Richard has specialized in delivering customer care and billing solutions for telecommunications operators, and several multi-channel contact centers for organizations in both the public and private sectors.