THE PROBLEM: Given the soaring cost of customer acquisition, retaining customers has become a major priority.
THE SOLUTION: New strategies for effective customer engagement are required. Traditional customer satisfaction indicators do not provide sufficiently detailed information to help you reengineer your complex customer retention strategies. You need in-depth customer insights to guide you regarding how customers define true engagement and what you need to change to increase retention.
Life Line Screening is a leading provider of community-based preventive health services. The company provides affordable, high-quality screenings that are essential to the early detection of risk for stroke, heart disease, diabetes, osteoporosis and other conditions. This relationship marketing innovator's direct-to-consumer model is at the forefront of consumer-driven healthcare.
According to Eric Greenberg, Life Line's Executive Vice President of Marketing,
Our goal was ambitious: To double the total number of returning customers from 2009 to 2012. Initially, our focus had been on the familiar Net Promoter Score (NPS), which measures the consumer's answer on a one-to-ten scale to the question, "How likely is it that you would recommend our company to a friend or colleague?" In support of increasing scores using that metric, senior management undertook a number of important initiatives, including improvements in customer feedback and response systems, "training blasts," internal incentives, the "adoption" of certain lower-performing teams, and the circulation of a fourteen-point Customer Guarantee.
These initiatives led to improvements in the NPS scores, which already were at very high levels. But, management felt the improvements weren't as significant as they expected. According to Eric,
We knew that what we had been doing was adequate, but we weren't convinced it was superior. Our customers are quite satisfied with the service we provide and the value for the money.Yet, sometimes customer satisfaction is not enough. Your customers can be quite satisfied with your product or service but view their experience with you as a worthwhile single event, not the beginning of an ongoing relationship.
Life Line Screening realized that in order to achieve the projected magnitude of increases in customer retention, they needed a much deeper understanding of customers' expectations for a more satisfying experience and relationship. So they initiated a research study using in-depth, 60 minute Voice of the Customer (VOC) interviews with a cross-section of customers. As Eric explains:
What we are learning from the VOC research is that our customers trust us and value what we provide them. But, they are looking for deeper and ongoing engagement. This means that they are looking for us to be more proactive across all the customer touch points. If we want customers to truly value us as a part of their healthcare team, we have to more proactively engage with them -- whether that means an outbound service call to allay their fears before their first screening, or a call to ask if they understood their screening results, or ways to help them feel comfortable and at ease during the screening process. They want us to provide information, solutions, and ideas that can help them stay healthy and independent.
Results: By implementing retention programs per the in-depth feedback from their customers, Life Line Screening has already achieved a 40 percent increase in returning customers. Ongoing changes will drive further increases in retention.
- Develop strategies for providing deeper and ongoing engagement. These strategies should enable you to be more proactive across all the customer touch points.
- Pre-test these strategies with customers to determine if these are appropriate and effective.
- Don't rely on just one research methodology. Deploy different techniques based on the complexity of your objectives.
- In-depth VOC research is appropriate when you have complex objectives which require detailed information to guide development of strategies and action plans. The 60 minute interviews enabled Life Line Screening to benefit from in-depth discussion with customers which enabled them to identify, in great detail, the many steps required to significantly improve the customer experience.
- NPS was helpful to Life Line Screening because it helped them to launch important new initiatives that ultimately led to greater customer satisfaction. However, since NPS is based on responses to just one question, it is limited in the detailed guidance and direction it can provide for making changes.
Ernan Roman is President of the marketing consultancy, Ernan Roman Direct Marketing. Recognized as the industry pioneer who created three transformational methodologies: Integrated Direct Marketing, Opt-In Marketing, and Voice of Customer Relationship Research.
Clients include Microsoft, NBC Universal, Disney, Hewlett-Packard and IBM.
Ernan was named to "B to B's Who's Who" as one of the "100 most influential people" in Business Marketing by Crain's B to B Magazine.
His fourth and latest book on marketing best practices is titled: Voice of the Customer Marketing: A Proven 5-Step Process to Create Customers Who Care, Spend, and Stay.
Ernan is also the co-author of "Opt-In Marketing: Increase Sales Exponentially with Consensual Marketing" and author of "Integrated Direct Marketing: The Cutting Edge Strategy for Synchronizing Advertising, Direct Mail, Telemarketing and Field Sales."