Bad Customer Experience Kills $45B Deal
In This Issue
"How do you measure the ROI on Customer Experience?"
That's a common discussion topic any time customer experience professionals gather. Everyone knows that there's a payoff to having a better customer experience, but much of the benefit comes in soft forms like increased customer loyalty, brand reputation, word-of-mouth marketing, and similar categories.
Those are inherently hard things to measure, and many in the CX world come from an operational background where costs and benefits are just columns in a spreadsheet. So figuring out the ROI of customer experience can be uncomfortably squishy at times.
But every now and then there's an example where the cost of bad customer experience is so overwhelming it just can't be ignored. I wrote about one case a couple years ago, where Time Warner Cable committed $50M in marketing to try to erase the damage done by years of terrible customer service (spoiler alert: it didn't work).
This month we have an even more eye-popping example with the cancelation of the proposed $45 Billion merger between Comcast and Time Warner.
Clearly, the infamously bad customer service at Comcast and Time Warner were not the only factors leading to the deal being killed. But the poor reputations both companies have earned over the past several years played a big role.
Right at the time when Comcast needed approval from federal regulators, it found itself in an extremely hostile media environment. "Customer abused by big monopoly company" stories are like catnip to the media, and Comcast provided mountains of raw material. The company's own statements about their customer service only fed the fire, making executives sound ignorant or delusional or both.
What's more, all those unhappy Comcast customers allowed the mobilization of political opposition. It's easy to get an upset customer to write a letter to the FCC, FTC, or their senator. It created the impression that the only people standing with Comcast were either paid by the company or afraid of it.
There was no way regulators were going to rubber-stamp this deal. There was too much grass-roots opposition. In the face of what would probably be a lengthy investigation and onerous conditions on approval, Comcast decided to call the whole thing off.
Would a company less loathed than Comcast have been able to pull off this deal? Quite possibly. There have been lots of corporate mergers larger than Comcast/Time Warner, including some which raised similar antitrust concerns. Any deal this size can get dragged into politics, and success in politics means getting more people on your side than your opponent's side. Comcast simply didn't have enough friends.
I'm sure there's going to be plenty of analysis and Monday-morning quarterbacking. But in the end, this $45 billion deal died because the company couldn't rally enough support, and it couldn't rally enough support in large part because of its reputation for mistreating customers.
Bad customer experience killed the Comcast merger.
A lot of things have to happen to build an effective customer feedback program.
The flip side of this that if you have a customer feedback program which isn't effective, there's a lot of potential reasons. Using a systematic approach to troubleshooting the feedback process can help avoid wasting time on implementing the wrong solutions.
So to help with an ineffective survey process, here's a short troubleshooting guide for common survey problems.
Problem: Low Survey Response
General Troubleshooting Questions:
- Are you are getting accurate contact information for customers?
- Does the survey work (no errors, database problems, etc.)?
- Is the survey a reasonable length (one page with no scrolling for online surveys, five minutes or less for phone interviews)?
- Does the survey appear to come from a legitimate source?
- Are you ensuring that customers don't get over-surveyed?
- Can the customer take the survey immediately when asked, or does the customer need to remember to do it at a later time?
- Does the survey require the customer to go through extra steps (copy a code from a receipt, call a phone number, etc.)?
- Does the survey have mandatory questions?
- Is the customer asked to take the survey a long time (days or even weeks) after the transaction?
Troubleshooting Questions for Email/Online Surveys:
- Are survey invitations being marked as spam?
- Does the invitation look professional and legitimate?
- Does the invitation explain why you want the customer's feedback?
- Does the invitation promise that the survey will be short (note: the survey must actually be short)?
Troubleshooting Questions for Phone Interviews:
- Do the phone interviewers sound polite, empathetic, and professional on the phone?
- Do the phone interviewers have noticeable foreign accents?
- Is the Caller ID set to a real phone number which customers can call back to verify the survey is legitimate?
- Does the interview script give an honest estimate of the survey time?
- Do interviewers identify themselves and the sponsor of the survey?
Problem: No Follow-Through With Customers
- Do you have a closed-loop process for customers who may want or need extra attention?
- Is there tracking to ensure customers who need follow-up are actually contacted?
- Are follow-up calls conducted by someone empowered to solve the customer's problem?
- Do you capture and track the root causes of customers' issues?
- Are follow-up calls conducted by someone other than the person who may have caused the customer's problem?
Problem: Survey Responses Are Not Relevant to the Business
- Has the survey been updated recently?
- Have you reviewed the performance of each survey question, and removed questions which are not yielding useful information?
- Have you experimented with new survey questions relevant to current business issues?
- Are you asking follow-up questions when customers have negative feedback?
- Do you ask business stakeholders to provide feedback on what questions are relevant to them?
- Do you regularly update the survey as the business needs evolve?
- Do front-line employees have access to raw customer feedback in real time?
Problem: The Business Does Not Fix Known Problems in the Customer Experience
- Is there a leadership commitment to improve the customer experience?
- Do other parts of the organization get data to show how they impact the customer experience?
- Are you using individual customer stories to persuade the organization that these issues are important?
- Is the customer survey perceived as credible?
- Does the company culture encourage listening to customer feedback?
- Can you connect poor customer experience to financial metrics (through churn, increased operational expense, higher customer acquisition cost, etc.)?
Problem: Too Much Survey Data and Not Enough Useful Information
- Have you reviewed the performance of each survey question and removed questions which are not yielding useful information?
- Are you giving customer-facing employees direct and real-time access to their customer feedback?
- Are you asking follow-up questions when the customer gives negative feedback?
- Do you have a reporting tool which allows easy filtering of customer feedback?
- Are you tracking general categories of customer comments in free response questions?
- Do your categories evolve as the business needs change?
- Do you keep the number of categories manageable, so you don't have categories which are either irrelevant to the business or statistically insignificant?
Problem: Survey Reports Are Ignored
- Is there a leadership commitment to improve the customer experience?
- Does the company have a culture of listening to customer feedback?
- Are survey reports tailored to the needs of the individual recipient, or does everyone get the same reports?
- Can recipients of survey reports modify the reports (filter the data, calculate new metrics, read customer comments, etc.)?
- Have you asked for feedback on survey reports from the people who receive them?
- Do recipients of reports feel they have a stake in the customer feedback process?
These questions get to a lot of common underlying problems we see with customer feedback processes. This doesn't cover everything that can go wrong, but it's a good place to start if you don't think you're getting the results you should.