Voice of Customer 2.

0:
Social, Agile and Integrated

Bob Thompson
CEO, CustomerThink Corp.
March 2010

Sponsored By:

Copyright © 2010 CustomerThink Corp. All Rights Reserved.

 Voice of Customer 2.0: Social, Agile and Integrated

Executive Summary

Not very long ago, social media was viewed as a fun way to keep in touch with friends and
family. Many business leaders considered it a time-waster best reserved for kids.

How times have changed. With incidents like United Breaks Guitars now commonplace, it’s
painfully clear that social word-of-mouth has tremendous consequences when brands fumble a
customer encounter. Of course, there’s upside too. Social media is a veritable goldmine of
insights that can help a company innovate and improve its competitive position.

Participating in social media—via online communities, blogging and networking sites—is now
thought of much like the Internet a decade ago. A company is conspicuous in its absence of a
social media plan, especially if it sells to consumers.

So, where to start? Well, marketing is one obvious application for social media, to amplify
communications and to gain insight. Customer service is another key application. With Comcast
and JetBlue leading the way, customers increasingly expect that complaints aired on Twitter
should be handled promptly by company representatives.

This paper will provide a perspective on the growth of social interactions with businesses, Voice
of Customer pitfalls and the role of sentiment analysis to mine insight from unstructured data.

The main point, however, is that the age of Social Customers means that it’s time to rethink
Voice of Customer (VoC) programs in three key ways.

♦ First, social media is an important new source of feedback, not only from customers, but
also from market influencers. Use it!

♦ Second, enterprises must capitalize on dynamic unstructured and unsolicited feedback to

spot emerging trends and flashpoints before they turn into a public relations nightmare.

♦ Third, and most important, executives must translate insight into action. And that
requires deep integration into existing customer support processes.

The age of Social Customer is here. Are you ready to engage?

© 2010 CustomerThink Corp. 2

 Voice of Customer 2.0: Social, Agile and Integrated

Social Interactions Growing

According to a March 2009 Nielsen report, two-thirds of the world’s Internet population visit
social networking or blogging sites. Facebook, Twitter and LinkedIn are widely viewed as the “Big
3” of social networks, and are used for both business and personal use.

In CustomerThink’s June 2009 survey, nearly 70 percent of U.S. consumers said they frequently
exchange messages with friends or colleagues and more than half frequently view social content.
About one in three contributed new content at least weekly through new posts, comments and
links. While not every consumer is using social media, the trend is clear and companies must
take note.

Happy consumers can create a groundswell of support (think free marketing), which has helped
lift online retailer Zappos to $1 billion in annual sales in just a few years. Or, a few mistreated
consumers can cause tremendous damage to brands (think “Dell hell”) by blogging or posting a
video on YouTube.

Fortunately, as we learned in CustomerThink’s 2009 survey of business managers, one in four

state that their organizations are already using both external social media and company-run
communities. Another 20-25 percent plan to implement within the next year. So roughly half of
businesses are participating in the Social Economy now, or will soon.

Not surprisingly, marketing is one key area of interest. Based on our survey, around 70 percent
of managers believe that external social media can provide better marketing or customer insight,
or help them influence
prospective buyers.
U.S. Consumer Preferences for Company Usage of Social Media
But consumers have
different priorities. About Identify service/support issues and contact
two-thirds of U.S. consumer to resolve
consumers believe that
companies should ramp up Host an online community on the company
web site
social media usage to
“identify service/support Participate in relevant communities run by Agree
issues and contact consumers Disagree

consumer to resolve.” If a
customer expresses a Monitor conversations to research consumer
issues and requirements
problem on Twitter,
Facebook or company Form a group on third party site, such as
community, consumers Facebook, LinkedIn, etc.
generally welcome a
company representative 0% 10% 20% 30% 40% 50% 60% 70%

reaching out to help.

As you can see from the chart, there is also strong support for companies hosting an online
community and participating in consumer-run communities. Monitoring conversations and
forming groups on external social media sites got more of a mixed reaction. Write-in comments
from our survey indicated support for companies joining the conversation to add value.

© 2010 CustomerThink Corp. 3

 Voice of Customer 2.0: Social, Agile and Integrated

Voice of Customer Pitfalls

It’s now commonplace for companies to ask for customer feedback by email, phone or even the
mail. But multi-channel feedback is just one factor to consider. CustomerThink research has
identified the following five major pitfalls to VoC success

1. Lack of executive support to drive change

Being customer-centric is easy to say but hard to do without executive leadership. For example,
despite proclamations of being “customer-driven,” a large software company found itself out of
touch with consumers who felt the vendor pushed the technology and didn’t pay enough
attention to implementation and ease-of-use issues. A comprehensive VoC program identified
the issues but what really mattered was the CEO driving action. The key to their success,
according to the VoC program leader, was that top executives “believe with heart and soul in the
importance of a VoC program and then drive real cultural change.”

2. Garbage in, garbage out

With VoC programs, you’re collecting customer feedback (input) so you can get insights to act
upon (output). If you ask customers the wrong questions, that’s just garbage in. Furthermore, if
your VoC program is built on faulty logic about what really impacts customer loyalty, you’ll waste
time and money making changes that don’t matter, or actually make things worse. For instance,
a worldwide restaurant chain found that while good food was essential, the key differentiator was
in fact the “hospitality” of team members. This insight helped the chain make better hiring
decisions and invest in training that would improve brand reputation.

3. Employees aren’t motivated to be customer-focused

Employees are people and tend to do things in their own self interests. So it shouldn’t come as a
shock if rewards to decrease “average handle time”—a measure of efficiency—motivate call
center agents to rush to get customers off the phone. Sadly, these tactics usually don’t save
money, because the customer calls back or uses other support channels. Take a tip from Zappos,
a popular retailer founded 10 years ago as an online shoe shore. In the Zappos call center,
“customer loyalty representatives” are measured on first call resolution, and rewarded for the
quality of conversations, not speed.

4. Listening with only one ear

Analyzing only quantitative feedback from customers is like listening with one “ear.” The other
ear should be used to understand customers through the unstructured, and often unsolicited,
feedback they provide. To start, text analytics can help listen to customers via their written
comments on surveys. But many other sources can provide unsolicited feedback, such as web
site forms, email messages, chat messages and call center agent logs. One U.S airline was able
to tie comments to a specific aircraft or even a seat number to help find and fix problems that
had a direct impact on the customer experience.

5. Ignoring social voices

Consumer usage of social media has exploded in recent years, including blogs, review sites,
Facebook and more recently, Twitter. There are now lots of options to rave about great
experiences or vent about bad ones. It’s true that social media is a chaotic and noisy world
where it can be challenging to “separate the wheat from the chaff.” Plus, how do you know that
the complainers are really your customers? Despite these challenges, you can’t afford to turn a
deaf ear to social voices. We’ll dig deeper into social feedback later in this paper.

© 2010 CustomerThink Corp. 4

 Voice of Customer 2.0: Social, Agile and Integrated

Fuzzy Insight from Sentiment Analysis

For those not familiar with the term, “sentiment analysis” means the use of text mining/analytics
to help determine whether written text has a positive or negative tone (hence, sentiment) and in
many cases also provides insight into why the writer was happy or mad.

Text mining has a long history and lot of complicated algorithms at the core, but in recent years
the explosion of social media has ramped up interest. The massive amount of content generated
by users on Twitter, blogs, forums, etc. is an excellent opportunity to gain insight, improve the
user experience and spot developing problems before they show up on CNN!

As the term suggest, text mining is the discovery of information by analyzing natural language
text. Contrast with data mining, which extracts information from structured databases. There are
two approaches to text mining: linguistic and statistical.

♦ The linguistic approach involves identifying elements of language and structures that
relate them to each other. Those elements are the keys to meaning. This is much like
parsing or diagramming a sentence to identify parts of speech. If you have an adjective,
for example, what noun does it modify?

You don’t need human intervention to train a classifier, but you do want to identify parts
of speech (which is done easily with a conveniently packaged list known as a
“dictionary”); words that are commonly used by people who are angry (which can come
from a dictionary or thesaurus); and information about sentence structure (if you have
two nouns, which is the subject and which is the object? Did John throw the ball or did
the ball throw John?).

♦ In the statistical approach, words and phrases are treated as abstract objects. You use
purely their mathematical relationship to each other. This approach most often involves
machine-learning. Is your customer angry? Is he pleased? Is another customer talking
about your latest product? Using a sample of the text and assignments in a number of
categories, the computer scans them for common elements.

The machine learns by example based on training data assigned by human beings. If a
business receives 100,000 emails a day, you would take a small sample—say, 500 to
2,000 emails—and manually classify them. Then the computer would scan the sample to
identify relationships in the text that hold clues for whether a particular email may be
from a happy or unhappy customer. People using obscene language tend to be unhappy,
so simply scanning for profanity in your sample can distinguish email from irate
customers.

But it is important to note that text mining is not an exact science. Well-trained people might
achieve a 90 percent success rate in categorizing text documents. Effective automated methods
might hit 70 percent to 80 percent, but it all depends on the task, how the application is trained
and tuned, and the methodology being used. Some text analysis problems are nearly impossible
to solve, like understanding sarcasm and metaphors.

In short, you won’t get the precision with unstructured information that you expect with real
data, but text mining is the only effective way to deal with huge volumes of input from
thousands to millions of consumers. Given the choice between fuzzy insight and no insight, most
business leaders will choose the former.

© 2010 CustomerThink Corp. 5

 Voice of Customer 2.0: Social, Agile and Integrated

Towards Voice of Customer 2.0

In 2007, CustomerThink research found that nearly 80 percent of respondents were conducting
customer feedback surveys at least annually, up from 70 percent in 2004. That percentage has
almost certainly increased since then. Generally consumer-focused companies conduct
“transaction” surveys after an interaction, and periodic “relationship” surveys to assess customer
satisfaction and loyalty.

The limitation of earlier VoC efforts is that they depended primarily on structured surveys
delivered to known customers, with a set of predetermined questions. If an unhappy customer
was not surveyed, or chose not to respond, input from social and other unsolicited sources is not
used. The enterprise is thus not prepared to handle a dynamic competitive environment where
the specific issues are not known in advance, or can’t be quickly added to a survey.

Also, acting on feedback, whether structured on unstructured, is often not tightly integrated into
core enterprise processes such as customer support. This creates inefficiencies and potential for
issues not being handled promptly before they escalate via social word-of-mouth.

Therefore, today’s social customer, along with our fast-moving competitive world, demand more
of a real-time approach. Voice of Customer 2.0 has three defining characteristics:

♦ Social: Feedback is mined from customers and influencers on the Social Web, and used
to quickly surface issues needing attention.

For example, Twitter is becoming a common channel for consumers to voice their
complaints about poor service experiences. Using the Twitter API, enterprise applications
can search on brand or product names to capture tweets for analysis. Using sentiment
analysis, negative tweets can be identified for priority handling by customer service reps.
♦ Agile: Unstructured feedback is analyzed to gain insights long before a new survey can
be designed with structured questions.

Continuing the previous example, text mining can be used to “drill down” on social
content to identify the specific issue causing the negative sentiment. This intelligence
then becomes part of the knowledge gained, without any survey being designed or
launched.
♦ Integrated: Issues are passed directly into existing enterprise processes to ensure
prompt and efficient action.

Contact center agents should have critical tweet incidents automatically placed in their
service incident queue. Granted, the individual may not be identified as a customer just
yet, but does that really matter? The agent can take action by tweeting back to the user
with a potential solution, using the Twitter API. Or attempt to bring the user into the
company’s formal support processes, using more traditional chat, email or phone
communication channels.
Voice of Customer 2.0 is a term to indicate an evolution of existing VoC efforts to respond to the
Social Customer and take advantage of new technology and integration techniques. Don’t forget
to also avoid the common VoC pitfalls mentioned earlier!
Best wishes in taking the next steps to listen to your customers on the Social Web and quickly
drive that insight into action to improve the customer experience.

© 2010 CustomerThink Corp. 6

 Voice of Customer 2.0: Social, Agile and Integrated

About This White Paper

About the Author—Bob Thompson, CustomerThink Corp.

Bob Thompson is CEO of CustomerThink Corp., an independent firm specializing
in customer-centric business management. He is also founder of
CustomerThink.com, the world’s largest online community dedicated to helping
business leaders improve customer-centric business strategies.

Since 1998, Thompson has researched the leading industry trends, including
partner relationship management, customer value networks, customer experience
management and social business. In January 2000, he launched CRMGuru.com (renamed
CustomerThink.com in 2007), which now serves 200,000 business leaders monthly through its
web site and email newsletters.

Thompson is a popular keynote speaker at conferences worldwide and has written numerous
articles, reports and papers, including Five Warning Signs for Danger on Your Customer-Centric
Journey. Before starting CustomerThink, he had 15 years of experience in the IT industry,
including positions as business unit executive and IT strategy consultant at IBM. For more
information, visit www.customerthink.com or contact Thompson at bob@customerthink.com.

About the Sponsor—RightNow Technologies

RightNow (NASDAQ: RNOW) delivers the high-impact technology solutions and services
organizations need to cost-efficiently deliver a consistently superior customer experience across
their frontline service, sales and marketing touch-points. Approximately 1,900 corporations and
government agencies worldwide depend on RightNow to achieve their strategic objectives and
better meet the needs of those they serve. RightNow is headquartered in Bozeman, Montana.
For more information, please visit www.rightnow.com. RightNow is a registered trademark of
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You can reach out and chat, email or talk with us by visiting www.rightnow.com/company-
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© 2010 CustomerThink Corp. 7