Looking Beyond TripAdvisor and Online Surveys
Why You Should Listen to More Than 3% of Your Customers
By Felix Boos, Co-Founder and Director, FeedbackNow
Co-authored by Julius Jung, Co-Founder, FeedbackNow USA
Are you approaching customer feedback reactively, trying to patch up holes in order to prevent damage to your reputation? Or, are you using it as a source of information to help you become more profitable? If the latter, then you need to know and understand the different channels for feedback, and select and combine them according to your needs.
The tools to measure customer experience and satisfaction are key success drivers for your business, but in many cases, these tools are not used to their full potential. Service-driven businesses must optimize their way of listening to their customers in order to receive timely and objective feedback. This helps toward improving customer experience and, in turn, your business' profitability.
The Purchasing Decisions of New and Existing Customers
Since the rise of the internet and social media, our businesses--and their reputations--have become more transparent. From services to consumer goods, a multitude of media platforms are available that provide access to crowd-sourced reviews and ratings. Customers can rate your business' quality of service and performance with a few simple clicks, and they can share it with the world. For potential customers, this transparency holds many benefits and has become a major factor in individual purchase decisions.
Studies have shown that 90% of customers new to a business or product will use online reviews to decide which service or product to buy. That still leaves 10% who will base their decision on their attachment to your brand, or on firsthand feedback from friends, family, and colleagues. But what about the other side of the equation, your existing customers? In service-driven businesses, the customer experience is more important than ever before. When deciding to stay at your hotel again or not, a returning hotel guest will rely on their experience from their previous stay rather than on online ratings. It's important to capture the loyalty of existing customers who will repeat business with you and who will also influence new customers who rely on their reviews and firsthand experiences.
Customer Feedback Channels and Methods
Following is a short summary of available channels and tools, with a short explanation of both their benefits and drawbacks:
There is no question that a better rating on an online review site, such as Yelp or TripAdvisor, in comparison with your competition, will lead to an increase in new customers and increased flexibility with pricing. Not only do you have to manage these in order to protect your brand and reputation, but it also allows you to receive valuable feedback from real customers. You can take appropriate action, for example, to improve on a criticized area such as breakfast service, or when trying to satisfy a disgruntled customer.
It is important to remember that while new customers take your online ratings as an all-encompassing measure of your service, you shouldn't do the same. Top rated hotels receive on average 150-250 reviews per year. This represents anywhere between 1-3% of all their customers. By focusing solely on online reviews, you ignore 97% of your customers and their experience. While some argue that these reviews are representative, studies have shown that people with unusual experiences (positive or negative) are more likely to provide an online review than those with average to good experiences. This generally over-represents a specific customer type that is willing to spend the time to offer personal criticism. Their experience can be the same as everyone else's, but it may also differ significantly.
Surveys are spread and collected via different channels: email, company websites, scanning a QR-code, following an internet link, by phone, or in person. These surveys can provide valuable qualitative responses to the questions most important to you. This enables you and your team to work with targeted feedback (complaints and praises) that is easier to consolidate, and if you've asked the appropriate questions, this information should lead to actionable items.
However, surveys are not necessarily an objective measurement of your customer's experience. Like online ratings, surveys still require time and willingness from the customer to complete them, and double-digit participation ratios are not very likely. Consequently, you cannot assume that those customers who took the time to complete the survey are representative of all customers.
In addition, most surveys come with time delays, meaning there are often significant time gaps between the customer's experience and the point at which feedback is provided. This can negatively affect you in two ways:
A customer has a legitimate complaint but due to when the survey was taken and the time it took to compile the survey results, you hear about it too late and you have lost the customer.
Especially in larger hotels, possibly 50-100 customers could have had the same bad experience before you were able to act on it.
In January 2017, Elon Musk demonstrated that social media is a viable source for actionable customer feedback. In reaction to a tweet from a dissatisfied Tesla customer, Musk responded by promising action. Subsequently, the change was officially announced by Tesla, no less than 6 days after the tweet. Because of Musk's quick response, his company was able to rectify an issue that would have otherwise alienated customers.
Due to social media's immediate visibility and extensive user base, it is being used more often by customers to publish their dissatisfaction. At the same time, businesses can leverage this and provide resolutions quickly and with efficiency. Offering customers a tool to communicate via social media with your business, and responding to feedback received via social media, is a great way of showing your customers, and anyone who reads the published communication, that you care about customer satisfaction and that you take action.
A drawback, however, is that a large portion of social media posts pertaining to your business will always be hidden from you if they are not posted on your Facebook page or not posted for public viewing. Many customers will only post on their personal pages, and these posts will only be visible to you if shared with one of your employees or picked up by the media. In addition, the systematic analysis of these posts is challenging and carries the disadvantages of delayed feedback and low participation rates.
While the trend towards using social media and online sites for customer feedback and communication is steadily increasing, unfortunately there are many associated challenges with the structured analysis of these posts. Big Data in this context refers to software driven SaaS solutions that analyze a diverse set of inputs such as various online review sites, social media, surveys, online chats, and call centers. The software lets you understand patterns in your sales, service input, and customer feedback. It is a tool that is more geared toward larger hotel chains, where the pure amount of feedback from the above-mentioned sources is too overwhelming and not manageable in an Excel data sheet. Big data is not a direct customer feedback tool, it gathers meaningful information from available data.
You can also capture feedback directly from your employees' interactions with customers. While this does not necessarily provide you with ready-to-use data, when conducted in a positive and constructive manner, personal engagement will have a positive impact on your customers as well as your staff. However, in a face-to-face setting, the majority of customers are generally not confrontational and therefore may provide your staff with less critical feedback than what they would if they had participated in an anonymous survey or an online rating.
Mystery shopping is another method used to evaluate a company's service level. While this provides you with very detailed insight into what works and what doesn't, it is quite expensive. Furthermore, frequent monitoring is key to measuring the success of implemented changes. Once a year, mystery shopping will inherently have a significant time delay on learning about how much impact the training of your employees has had, for example. Another consideration is the employee's perception that this is a customer feedback gathering method and is not perceived as a management control tool.
Onsite Feedback Devices
A new and upcoming technique used to capture feedback is through dedicated devices (e.g. wireless devices, tablets) at selected customer touch-points. This has the advantage of getting feedback about a specific location or service (e.g. at the gym, the restaurant at breakfast time, a certain floor) as the customer is experiencing it. The results are typically limited to quantitative feedback, which could be considered a disadvantage when compared to the other tools earlier mentioned. However, some providers offer solutions with real-time access to results that provide a direct link to staff, locations, and help to extract qualitative conclusions from the quantitative data.
Again, the participation ratio will depend significantly on how convenient and quick it is for customers to use an onsite device. As it is already more specific due to location (e.g. at the exit of a restaurant), questions are typically basic (e.g., location specific questions on the customer's experience) leading to significantly higher participation rates of up to 60%. A high participation ratio, in combination with access to real-time results, supports quick response times and immediately distinguishes the general areas of complaints from individual incidents and helps drive change-management initiatives with your team.
In summary, looking at the stated examples of common feedback tools, there are 5 challenges that current feedback management faces:
- High participation rate vs. low participation rate
- Biased vs. unbiased feedback
- Personal vs. anonymous feedback
- Real-time vs. delayed feedback
- Qualitative vs. quantitative feedback
A high participation ratio is mandatory to support a day-to-day service excellence approach, fostering feedback measuring and discussing improvement opportunities with your teams. "You cannot manage what you cannot measure" has often been quoted and is especially true in connection with change management. A business investing in employee involvement and training will only succeed if the employees receive frequent positive feedback from a representative sample of their customers. One customer review every other day will not be enough to drive this change and support the service excellence initiative. A sampling of only 1-2 hotel guests' feedback, out of 50 or more, can't be seen as an objective measurement of your service, or your staff's service, on that particular day.
Biased feedback is one of the most difficult challenges in feedback management. Why is that? Biased feedback may not only lead to the wrong priorities or actions, but can also have a negative impact on your employees' level of motivation. Biased feedback can occur in two forms. First, customers who provide feedback may not be representative of your different customer segments. Second, customers may provide feedback in person different from what they would state in writing or anonymously.
Everyone talks about improving the customer experience and as such about customizing the services offered to the individual customer. In the hospitality industry, you can customize to a certain extent, but there are of course limits to what can be done. For any individualized service, you need insight into the individual customer's preferences which you must obtain through personal feedback. For example, if you have the capacity to provide different types of pillows to hotel guests, you need to know exactly who likes what. It obviously does not help if you know that 10% like one kind and 50% like another kind, and so on.
When discussing real-time feedback, there are rarely discussions about possible disadvantages. It is undoubtedly a huge benefit to directly link feedback to an occurrence, a location, and in some cases, even to the individual customer in real time and have the opportunity to take immediate action instead of a delayed "repair" of a service shortcoming. In the past, real time was personal feedback, often a complaint, directly given by customers on the spot, and as such was not necessarily representative for a majority of customers and difficult to transfer into meaningful data. Onsite feedback devices can eliminate both disadvantages.
You need qualitative feedback in order to make it actionable. A simple "I like or dislike your hotel" without further info on why or what part is not actionable, will leave you in the dark in terms of what to do. On the other hand, you need a certain quantity of feedback to qualify whether or not the answers given are representative of your customers. Additionally, you can turn quantitative feedback into qualitative feedback by intelligently and strategically combining the available data with the other information you may have.
As Jonathan Barsky wrote some time ago, no single method works with all guests. But going even further: No single method, or tool, works as solid feedback management, and not one single combination works for all businesses. When you know your customers, and have clear objectives including a defined ROI from feedback management, only then can you combine the right methods to gather feedback and decide where to spend time and resources to achieve the greatest impact on improving your customer's experience.
Ideally, feedback provides you with two things: First, an objective evaluation on how your service is perceived in your customer's eyes, and second, actionable items that you can improve and that are relevant for the best customer experience. No single method of the stated alternative tools will provide you with all of that, at the right time, and in the right quality and quantity. The answer is to strategically combine methods with high participation ratios with more detailed research and personalized feedback. This way you will ensure that you identify the important areas for improvement, establish what needs to be done and finally optimize your customer's experience.
This article was co-authored by Julius Jung, Co-Founder, FeedbackNow USA. Mr. Jung is an Internationally experienced entrepreneur and management consultant based out of New York City. In 2016, Mr. Jung co-founded FeedbackNow USA to manage the US-market entry for the leading customer satisfaction solution provider FeedbackNow International (based out of Switzerland). Mr. Jung oversees the East-Coast Sales & Operations and works with clients in industries such as Hospitality, Airport & Retail on customer excellence initiatives supported by FeedbackNow solutions. Previously Mr. Jung worked as Consultant and Project Manager at Porsche Consulting for 6 years working in a variety of industries in both Europe and the United States. Since 2015, Mr. Jung manages his consultancy Jung Management Consulting working with businesses in Hospitality, Retail, Automotive and Aerospace. Further Mr. Jung is heavily engaged in the German American community in New York City, As a mentor for start-ups in the New York area he is helping predominantly German start-ups to set foot on the US-market and acts a ambassador for the Young Professional Network of the German-American Chamber of Commerce. Mr. Jung can be reached at 347 755 1605 or email@example.com
Felix Boos is the co-Founder and Director of FeedbackNow US, a 2016 US startup focusing on improving customer feedback management and customer satisfaction in service related industries. FeedbackNow US offers the unique feedback management solution from FeedbackNow international (Switzerland) as well as consulting services. This intuitive solution achieves highest participation ratios and delivers real time results, closing a gap that hasnít been covered by traditional solutions. Mr. Boos can be contacted at 310-658-0793 or firstname.lastname@example.org Please visit http://www.feedbacknow.us for more information. Extended Bio...
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