A Great Customer Experience Isn’t Something You Can Script

John_Abraham_headshot2By: John Abraham

Several years ago, I met a successful customer service director in a retail bank. She had led the charge to bring customer experience thinking into the bank’s branch operations and call centers, defining how the company’s brand promise should be reflected in customer interactions. In fact, they had developed a specific greeting that employees were supposed to use. Every time a customer entered a branch or called a call center, the bank employee greeted them with exactly the same phrase.

While there is a good reason to set standards for customer experience delivery, this example raises an important question about the best approach to take. When customer experience standards become too rigid and scripted, interactions that should feel personal can lose their authenticity — leaving customers with an awkward feeling at best.

Too much rigidity can also get in the way of basic customer needs being met. Research from McKinsey & Company has found that over 50 percent of customer interactions occur as part of a multi-event, multi-channel journey. When customer experience standards try too hard to script how an individual interaction should play out, they leave less flexibility for employees to deal with the nuances associated with each customer’s unique situation. You can’t predict every customer’s needs — and often, customers won’t distinguish between an employee who is not allowed to adapt their approach and one who is simply unwilling to help.

So how can companies deliver experiences that feel personal without adding harmful inconsistency?

Often, the most impactful strategy is to find small, systematic ways to demonstrate an understanding of each customer’s perspective. Accomplishing this starts with learning more about the underlying needs behind different customer interactions. Digging deeper into the customer’s perspective — often though a journey mapping process — can reveal the higher-order concerns customers bring to individual interactions. It’s also helpful to let employees follow up on relevant customer feedback, so they can learn to spot these concerns in the context of real conversations.

Armed with this knowledge and intuition, employees will be better able to anticipate common questions and sources of anxiety for customers. Being offered the right solution without having to ask can feel almost magical — and shows customers they’re dealing with someone who really understands them.

USAA offers an excellent example of this approach. The company is famous for its military-inspired employee training courses, but its insight into its servicemember customer base extends deeper than knowing the sound of an angry drill sergeant or the taste of an MRE. USAA is committed to learning about the professional and personal events that inspire even the simplest customer requests, so its employees always know how to respond. Wayne Peacock, USAA’s Head of Member Experience, said of this approach, “We’re serving our members from the time they’re teenagers and young adults all the way through the adult years and leaving a financial legacy, so we thought it would make a lot of sense to have them talk to us about what’s going on in their financial lives.”

Of course, even the most perceptive and well-informed employees need the flexibility to do something with their knowledge. This does not have to mean eliminating all customer service rules, or following Ritz-Carlton’s example in giving employees discretionary funds for creating customer delight. Rather, a good approach is to remove specific policies that your frontline knows are getting in the way.

Windstream Communications, a leading provider of voice and data networks, offers an example of this strategy. After noticing frequent miscommunication between customers and servicing technicians, the company decided to allow customers to contact technicians directly rather than going through a scheduler. Windstream found that this strategy helped individual technicians learn specific customers’ needs over time and use that understanding to provide more personalized service. And Windstream’s customers got a dedicated, familiar ally, rather than a sequence of different technicians.

Ultimately, moving away from the script can feel uncomfortable. It puts a heavier burden on front-line employees to know their work and their customers. But don’t underestimate the impact of investing in thoughtful policy changes and customer-oriented training. When you give your employees deeper insight into customer needs — and the freedom do something with that insight — they can move successfully beyond the script to deliver a personalized experience that is consistent with what your brand aspires to be.


John Abraham leads the Medallia Institute, which develops educational programs in customer experience best practices. Prior to joining Medallia, John was GM of Net Promoter Programs at Satmetrix, a consultant with both Andersen Consulting and Booz Allen & Company, and a marketing executive in the software industry for more than 10 years.

Join the Center for Services Leadership at Compete Through Services Symposium on November 5th, 2015, to hear John Abraham, Medallia Institute, and Michael Morton, Best Western International, speak on Breaking Barriers Between Service Metrics and Customer Experiences.


Bridges for Transforming People and Cities

How extraordinary service communities cultivate human flourishing

By Christopher P. Blocker and Andrés Barrios

Service experiences are so common we often forget when we are “experiencing” them. As a society, we spend quite a bit of time, money, and energy in service settings like healthcare, education, entertainment, food, government, and transportation, to name a few.

For better or worse, the vast majority of these experiences fade into the normal routine of our lives. Some make us quite mad, others happy for the moment, and many are apparently worthy of our social media posts.

Still, in the grand scheme of life, most services experiences are quite, well…ordinary. They satisfy our needs for the time being, and we move on.

However, sometimes a service experience can be truly extraordinary – meaning it changes us somehow for the better. We are different, even transformed, for having participated in them.

Extraordinary services are bridges

Beyond amazing customer service stories like ones at Zappos or USAA, extraordinary service experiences have the potential to improve our well-being. They act as a bridge from an undesirable “today” to a desirable “tomorrow.” And, increasingly, great companies and thought leaders are curious about what these experiences look like and how they work – especially for people who experience vulnerability from things like poverty, discrimination, or poor health.1

Some of the big questions being asked are …

  • What distinguishes everyday, routine service experiences from profoundly meaningful ones that are undeniably transformative?
  • How do service providers create “transformative” experiences that improve the well-being of people involved as well as broader society, like neighborhoods, or even cities?
Looking for transformation in all kinds of places

Marketing researchers have mined many kinds of service experiences (see examples in image) tolearn how they create value via entertainment, personal growth, achievement, community, and spectacular environments. These studies shed light on the trend of cultivating vibrant “brand communities.”Service_Experience

In our new study in the Journal of Service Research, we explore the idea of creating “transformative value” in service experiences. Here, the focus is on unpacking what social transformation can look like in a service context and how it fuels uplifting changes for people.

To answer some of the big questions mentioned above, we went looking in non-traditional places. We found one service experience that not only impacts the well-being of individuals involved but also has a transformative effect on a city.


Meet the Church Under the Bridge (CUB). For over twenty years, the CUB has met under an interstate highway (rain or shine) and directed its energies toward reducing the struggles of homelessness, poverty, and addiction while promoting social integration and human flourishing through physical, emotional, relational, and spiritual benefits.  Importantly, the CUB has maintained a multi-cultural mission among people from all backgrounds and socio-economic strata. Other than its identity as a Christian church, the CUB strives for diversity and avoids distinctions created by ethnicity, income, age, or anything else that can divide people. Over the years, the CUB has served hundreds of homeless and non-homeless individuals from the region and has received overwhelming support from a broad array of businesses, non-profits, universities, news outlets, as well as federal, state, and city representatives and offices that span the spectrum of partisan values. Given the impressive evidence of micro and macro-level social transformation as well as the fact that attending a religious service is a common weekly activity, we chose the CUB as a case study.2

Unpacking the transformative value of a service experience

Using ethnographic analysis, we analyzed the CUB experience to uncover aspects of Quote“transformative value” in its service design and practices. Throughout our extended engagement and observation, participants living in a homeless situation shared stories of breaking free from destructive views of themselves, regaining dignity, absorbing new perspectives and skills, and being “encouraged and uplifted mentally, physically, and spiritually.” People from higher socio-economic backgrounds told us how their cold assumptions had unraveled over time and were replaced with “deep concern,” “joy,” and “seeing themselves and others in a whole new way.” Beyond social transformation for individuals involved Quote2at the CUB, our extended analysis with non-participating community members (e.g., local business, police force, mayor office) and archival review of public newspaper articles revealed ways that services can also create transformative value at a city level. In particular, public consensus analysis revealed that the CUB, over twenty years, has truly raised the “town’s social conscience,” transformed the “face” of a “homeless person” and stimulated widespread and sustained social action.

The contours of transformative service design and practice

As we continued our analysis, several aspects of service design and practice at the CUB came into view. First, “holistic” value propositions engage the whole person, that is, mind, body, spirit, and relationships. Furthermore, the physical environment (the “servicescape”) creates an atmosphere where people from all backgrounds can break free from their normal social positions and see themselves in new and creative ways. Additionally, service practices facilitate “boundary-crossing” and the co-creation of a community that freely shares resources and perspectives.Service_Experience_as_Bridges_for_Social_Transformation

Finally, we identified four dimensions that differentiate routine from transformative service experiences.

First, transformative service experiences prompt critical reflection (where am I in life? what is my story?) and inspire people into projective modes of thought and action (where do I want to go? how do I get there?). Second, this process of reflection and imagination fuels “global meanings” (this has changed me) that transcend the day-to-day situational meanings arising in routine service experiences. Third, these experiences influence real, observable change that promotes well-being. People make new choices, invest in new things, and build new capabilities. Finally, there is a clear “virtuous trajectory” evident in people (and cities). Although seldom linear, positive changes are layered on top of each other, and as in the butterfly metaphor, transformations occur and it is hard to imagine going backwards.

In sum, we find that extraordinary service communities design and co-create transformative value that can act as a bridge for helping individuals and even cities flourish.

The article The Transformative Value of a Service Experience, featured in the post, was co-authored by Christopher P. Blocker (Colorado State University, Fort Collins, CO, USA) and Andrés Barrios (Universidad de los Andes, Bogotá, Colombia). It is one of the 3 finalists for the 2015 Transformative Service Research Best Paper Award, sponsored by the Center for Services Leadership. The article is available on the Journal of Service Research website.


Dr. Christopher P. Blocker is an Assistant Professor at Colorado State University. His research focuses on understanding value creationwithin marketplace relationships. In addition to business and consumer relationships, Chris’ research explores value creation in contexts of global and domestic poverty, subsistence marketplaces, and social enterprise. Articles he has written have appeared in Journal of Consumer Research, Journal of the Academy of  Marketing Science, Journal of Service Research, Journal of Public Policy & Marketing, among others, and he serves on the advisory board for Transformative Consumer Research.

Dr. Andrés Barrios
is Assistant Professor of linkedinResearchGateMarketing at Universidad de Los Andes – Bogotá, Colombia. His research focuses on marketing and consumer behavior in contexts of poverty. He has developed studies about poverty from different research perspectives such Transformative Consumer Research, Consumer Culture Theory, and Subsistence Marketplaces. Andrés’ work has been published in the Journal of Business Research, Journal of Public Policy & Marketing, Research in Consumer Behavior, Advances in Consumer Research, and the Transformative Consumer Research 2012 Book.


  1.  Understanding how services improve well-being through “transformative service” was recently identified as a top priority by 19 different service center networks around the world. Also, the idea of companies creating value that leads to greater well-being for employees, customers, and society continues to be a pressing topic (https://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/pr)
  2. There are over 300,000 religious service organizations in North America alone, and increasingly these organizations integrate aspects related to health, recreation, leisure, and personal interest, which influences weekly engagement (Lindner 2012). At the same time, there is often dialogue around understanding one’s past, present, and future which interfaces with identity and existential beliefs. Thus, this kind of service offers an opportunity to study both habitual and transformative experience.

Transformative Service Research: A Multidisciplinary Perspective on Service and Well-being

Interview with Laurel Anderson and Amy Ostrom, Editors of the Special Issue of Journal of Service Research, Transformative Service Research: A Multidisciplinary Perspective on Service and Well-being

In August of this year Journal Service Research published a highly anticipated special issue on Transformative Service Research, a Multidisciplinary Perspective on Service and Well-being. The entire issue will be available free of charge till November 2015 and can be downloaded from the journal’s website. We’re very excited to feature the special issue in this podcast and on our blog, where we’ll be sharing posts by the authors of the three finalists for Best Paper Award.

Darima Fotheringham: Today I’m talking to the guest co-editors of the special issue, Professors Laurie Anderson and Amy Ostrom from Arizona State University. Professor Anderson, Professor Ostrom, thank you for talking to us today.

Laurel Anderson, Amy Ostrom: Thank you, it’s good to be here.

Darima Fotheringham: As you mentioned in the editorial, Transformative Service Research is a fairly new research area that’s been gaining momentum. For those who are not familiar with the term, can you start by defining Transformative Service Research, or TSR, and explain why it is receiving so much attention and interest in the research community today?

Laurel Anderson: We define TSR, Transformative Service Research, as focusing on services and well-being, and in particular, as research that has to do with creating uplifting changes. And one of the key things about the definition is that we look not at just individuals but also at collectives like family or communities, ecosystems, society. These aspects are some of the things we found in the papers that came in that were different from a lot of the research in service.

Darima Fotheringham: And going back to the second part of the question, why do you think there is so much interest from the research community in this particular topic?

Amy Ostrom: There’s always been some interest in studying well-being issues in general, but I think we’ve seen an increase interest in the last five or six years. Some of it, likely due to discussions about what should research priorities be in the service field. And as part of some research priority setting efforts, this idea of studying service and well-being really came to the forefront. We’ve seen really a community of service researchers form, who really want to better understand this connection between service and well-being. And as that community has grown, we’ve seen more and more special sessions at conferences, research projects at a significant nature getting started, and it’s really been very exciting to see.

Darima Fotheringham: The TSR special issue includes ten very diverse articles. They’re from around the world and cover different industries, discuss different cultures. In the editorial you identified three big themes. Can you talk a bit about those themes and share a couple of examples that would illustrate some of the new interesting concepts that the readers can take away?

Laurel Anderson: We were just really excited to see the diversity of the papers that came in. That’s part of what we wanted to accomplish also, to indicate how broad this field is both in method, and cultures, and content, and theories conceptually. So the three themes that we found arising from the data were ones that we thought were innovative, and provocative, and had a lot of heft to them. For example one is the de-struction of value. We always talk about the co-creation of it, creation of value, but haven’t really given time to look as much at some of the destruction of value. That is a really interesting topic. And as the papers in this area point out, sometimes it is unintentional, sometimes it’s unknowingly destructive, and sometimes it’s intended.

So for example, the article, the lead paper, which was the award winning article by Per Skålén, Kotaiba Abdul Aal, and Bo Edvardsson, looks at what they call strategic action fields. It looks at the incumbents in that field and it looks at challengers in this service area. This is amazing data because it looks at Syria and how the regime, as incumbents, took away services to many of the population. Then how that population reacted and created new services under the constraints that they had. So the destruction was an important part. That one is a very vivid, kind of unusual example. But sometimes it is also more everyday kinds of things, like chronic illness, where people really don’t want to be in a service. They’d rather not be participating in the service. There are a lot of negative aspects to the chronic part. We want to make sure that we’re looking at some of the negative aspects of services so that we can deal with those, which I think is really important.

Amy Ostrom:  One of the other themes that we highlighted involved co-production or co-creation, which are really looking at the roles and activities that consumers play as part of service. And while questions around co-production and co-creation have been the focus of a lot of research, not much of that work has really looked at well-being. We definitely had some articles where that was the focus, trying to understand how the activities and roles that consumers took as part of the service, how that ultimately impacted their well-being.

So for example, one of the papers authored by Jillian C. Sweeney, Tracey S. Danaher, and Janet R. McColl-Kennedy looked at what they call ‘effort in value co-creation activities.’ So really looking at how much effort consumers, in this case patients who are dealing with chronic illness, what kind of activities are they taking on? The whole idea behind their work was this notion that some of these activities or the roles are actually more effortful than others, and that patients or these individuals dealing with chronic illness will take on the easy activities first and then progress to the more effortful activities. So they were able to really look at the nature of these activities, things that they’re doing for themselves, things that they’re doing related to other people. What’s really fascinating is that they were able to look at the effort that these individuals were expending in terms of these various activities and relate that to things like quality of life. It really highlights, spotlights, how consumers and roles they’re taking on, the activities they are engaging in part of a service, really can impact their well-being.

Laurel Anderson:  We’ve looked at providers before to some extent, and the production, the co-creation, but not emphasized consumers and their well-being as much.

Amy Ostrom: It’s kind of exciting that we’re actually starting to see some research where we’re looking at more innovative measures. Oftentimes some of the research involves more perceptual measures. We are seeing that researchers are starting to use actual behavior measures or maybe more objective measures to really understand the nature of well-being, changes that are happening. So for example Martin Mende and Jenny van Doorn look at co-production in the context of consumers participating in debt management programs, and they look at, over time, the impact of consumers who are in those programs—their co-production and its impact on an objective measure, a change in credit scores, as well as things like increased stress perceptions. So we’re really seeing some interesting relationships between, again, how people are co-producing or their role within the organization and their level of well-being.

Darima Fotheringham: In your editorial you also identified specific areas within TSR that required further research. Can you talk about these areas and share examples of research questions that you personally find especially important or intriguing?

Amy Ostrom: One of the areas that we continue to talk about, and I know that others are really devoted to studying it as well, is what’s called Base of the Pyramid, or studying individuals, really billions of people in the world who are living under a few dollars a day. And a lot of the research that’s done in service work and just academic work in general in any area doesn’t tend to pay attention to individuals living in those particular types of circumstances. So there’s much to learn about consumers living in those situations, and a lot to learn from them, and the creativity that’s demonstrated in individuals that are living in what we refer to as the Base of the Pyramid.

Laurel Anderson: Another area, that we believe is very important, has to do with stress, being really cognizant of stress and the impact of stress on consumers. One of the other methods or approaches that we also feel is very important is an interdisciplinary approach where we’re bringing in knowledge from maybe the biological sciences, neurology, some of the other fields like nursing, or medicine, or law. One of the areas where there’s just fascinating research on stress has to do with the impact of stress on the body of a person. We’ve known for quite a while that stress impacts the well-being of a person, but there’s some very interesting research now that looks at the impact of stress on the body and then on how it’s passed on to the next generation—I think it just emphasizes the importance of well-being for the consumers that are participating in services and incorporating some of the interdisciplinary research that’s out there on the impacts of stress. So it’s a very fruitful and important area to pursue.

Amy Ostrom: The other area that we talk quite a bit about that’s not too surprising is the impact that technology is having in services that are based on technology and the relationship with well-being. And in this day where so much of our behavior can be tracked and monitored, issues around what that means for privacy and service settings and potential harm that can come from that. The fact that service providers now can know information about us and be continually tracking our behavior, the potential that raises for all sorts of potentially harmful well-being aspects, but at the same time a lot of benefits, when you think about monitoring and health related aspects, that can be really empowering for consumers to be able to live their lives knowing that the service provider, a doctor, is able to know at any time if there are any issue. But it does change the nature of the dynamic.

Laurel Anderson: It does, and it raises something we found throughout, which is trade-offs. There are trade-offs in some benefits to well-being and the negative aspects of, for example, technology and monitoring. Those are really important aspects to talk about and to research too. In addition, as far as trade-offs are concerned, sometimes there are trade-offs between the well-being of one group and the well-being of another group. And who decides then which is going to be prioritized in their well-being? So there are some really complex questions around well-being and trade-offs that we saw coming out of some of the research.

Amy Ostrom: I think it highlights the need to look broader than just the dyad, the trade-offs at community levels and service system levels. It is the key to why we have to look at the broader picture than often times we tend to do. It’s hard research to do, and very difficult, but very important given the nature of these kinds of interaction trade-offs that are effecting so many of us on a daily level.

Darima Fotheringham: You conclude the editorial by recommending specific actions that can help TSR make a real impact on society. The call to action is mostly directed to the research community, but as you mentioned we can all benefit from data in the field. Is there anything as consumers, as customers, or as individuals can do to support this research?

Laurel Anderson: I think that one of the areas that is challenging with regards to consumers themselves and well-being is a trend that we’re seeing that’s called responsibilization. What that means is that services, and governments, and policy are putting more responsibility for wellbeing onto the consumers. And it demands a high level of literacy on the part of the consumer, and so for example health—consumers have to know so much more now about the health, and their bodies, and the medical field because the responsibility is being put more on them than in the past. So as far as consumers are concerned that’s one of the issues as far as trade-offs. Yes, more of the choices on the consumers parts, but also more of the responsibility and decision making, maybe without some of the expertise to be able to do that. So things like literacy, having the time to do that, the resources and capacity I think are real challenges for consumers to manage. And if you have to do that in all the different areas of service, from health to legal to financial, it’s a lot to expect of consumers.

Darima Fotheringham: It’s very taxing.

Laurel Anderson: Right.

Amy Ostrom: When I think about what consumers can do, from the research perspective, what I hope is that the consumer would be willing to participate in some of the research that we and academic research, really globally, are interested in doing. The type of work that we do and the questions that we’re trying to answer really require partnerships with consumers to understand how the services they’re using day and day out are in fact impacting their well-being. Whether it’s healthcare, financial services, it requires that kind of participation. So I hope going forward that people will be willing to participate in research and share their thoughts, as I hope that organizations, individuals who work with consumers in different service settings are willing to collaborate with researchers. A lot of the research questions really require partnering with organizations, and one of the real goals of Transformative Service Research is to have impact—to actually improve the lives of consumers, and the only way that happens is really through organizations, companies who are basically effecting consumers day and day out—Learning what can positively impact well-being and doing more of those things, and learning what reduces well-being and stopping doing those things. And it’s those kind of partnerships that are actually going to lead to the impact that we’d want to see in the community and individuals.

Laurel Anderson: And I think it’s so important to listen to the customers in whatever service they’re in—the voice of the consumer. And it’s interesting because when we don’t, now consumers are creating their own research. There are communities of consumers that are doing research on topics that they think are important and that aren’t being followed up on by researchers. For example, a site called Patients Like Me where they’re monitoring themselves, and doing research, and finding significant results because the questions weren’t being addressed. So I think it’s really important to not just look at things from our research point of view, but to be listening to the consumer and to be incorporating those aspects that are frontline to them into our research too.

Darima Fotheringham: Great, thank you so much. We were talking to the editors of a JSR special issue on Transformative Service Research, a Multidisciplinary Perspective on Service and Well-being. You can find the entire issue, including the editorial we talked about on the website. Professor Anderson, Professor Ostrom, thank you for talking to me today.

Laurel Anderson, Amy Ostrom: Thank you, Darima


Laurel Anderson is Associate Professor of Marketing at Arizona State University. She has degrees in both marketing and community health. She is deeply involved with development of Transformative Service Research (TSR).  In particular, she focuses on creativity and innovation, going between cultural worlds, health well-being, challenges and strengths related to poverty, culture and immigration and services as social structures. Previously, she was Director of the Institute for International Management at Arizona State University. Prior to academics, she developed community health programs focused on children and families, including a crisis intervention center for children.

Ostrom-Amy (Small) 2015

Amy L. Ostrom is the PetSmart Chair in Service Leadership Professor in Services Leadership, Chair and Professor of Marketing at the W. P. Carey School of Business at Arizona State University. She received her Ph.D. from Northwestern University. Her research focuses on issues related to services marketing including customers’ evaluation and adoption of services, customers’ roles in creating service outcomes, and transformative service. Ostrom, who was selected as the 2004 Arizona Professor of the Year and the 2007 ASU Parents Association Professor of the Year, has supervised numerous undergraduate Honors theses. She has shared the service blueprinting technique with small start-ups to Fortune 500 companies to help improve their service processes and develop new service offerings.

When Designing Multiple Channels, Mirror Attributes Matter

Center for Services Leadership:

Offering a seamless multichannel service is a priority for many companies. This research offers a model that can help marketers focus their effort in achieving customer satisfaction across different channels. The research team introduces the 5C model of customer satisfaction that can be used to benchmark performance across various channels. Getting these “mirror attributes” right within each channel as well as across various channels will set you up for a more consistent service and higher customer satisfaction in multichannel environments:

  • choice (assortment breadth and depth),
  • charge (availability of fair prices),
  • convenience (efficiency of the purchase process),
  • confidence (security of transactions), and
  • care (assurance of promised quality).

The article “Channels in the Mirror: An Alignable Model for Assessing Customer Satisfaction in Concurrent Channel Systems” is currently available free of charge in the OnlineFirst section of Journal of Service Research

Originally posted on Management INK:

[We’re pleased to welcome Maik Hammerschmidt of the University of Göttingen in Germany. Dr. Hammerschmidt recently published an article in the OnlineFirst section of Journal of Service Research with Tomas Falk of Aalto University School of Business in Finland and Bert Weijters of Ghent University in Belgium entitled “Channels in the Mirror: An Alignable Model for Assessing Customer Satisfaction in Concurrent Channel Systems.”

Contrary to popular belief, customers who are shopping do not seem to change 02JSR13_Covers.inddmindsets when switching between offline and online channels. This finding—implying that the attributes consumers use for evaluating offline and online channels mirror each other—represents the punch line in our a recent study published in the OnlineFirst section of Journal of Service Research.

In our paper, we introduce the 5C model of customer satisfaction, which shows that five “mirror” features are mainly responsible for customer satisfaction in multichannel environments. Those channel features that have corresponding attributes in…

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How Valuable Are the Net Promoter Score and Other Customer Feedback Metrics?

customermetric_bigBy Evert de Haan and Peter Verhoef

A large and growing amount of firms rely on Customer Feedback Metrics (CFMs) to monitor the customer base and the performance of the marketing department. Examples of these metrics include Customer Satisfaction (CS) and the Net Promoter Score (NPS). Recently, new customer feedback metrics, such as the Customer Effort Score (CES), are gaining traction with a promise to outperform the existing CFMs.

While the positive relationship between customer satisfaction and firm performance, including revenue and profitability, is well documented in academic literature, most findings are mixed for the NPS. In regards to the new Customer Feedback Metrics, such as the Customer Effort Score, third party empirical proof is relatively nonexistent, keeping managers in the dark about the reliability of these metrics. Despite the lack of academic literature and empirical proof, many firms rely on a single metric, specifically the NPS, as their key performance indicator.

Our research team aimed to shed more light on popular Customer Feedback Metrics by investigating the following issues:

  1.  The extent in which different Customer Feedback Metrics are appropriate to monitor the customer base, and
  2. The effectiveness of using multiple metrics as opposed to using one single metric.

The research performed by our team proved that the NPS is as good as Customer Satisfaction in predicting customer retention. We also found labeling customers as Promoters, Passives, and Detractors works well for many firms. The NPS, combined with information regarding Customer Satisfaction, further improves the ability to monitor the customer base. Using multiple Customer Feedback Metrics is therefore highly recommended.

Table 1. Customer Feedback Metrics (CFM)

CFM Measurement
CS (Customer Satisfaction) “All in all, how satisfied or unsatisfied are you with [company X]?” (1 = very unsatisfied, 7 = very satisfied).
Top-2-Box CS The proportion of customers of the firm that gave a score of 6 or 7 on the CS question.
Official NPS (Net Promoter Score) “How likely is it that you would recommend [company X] to a friend or colleague?” (0 = very unlikely, 10 = very likely). Respondents who gave a score of 0–6 are “detractors,” those who gave a 7 or 8 are “passives,” and those who gave a 9 or 10 are “promoters.” Subtracting the proportion of promoters by the proportion of detractors provides the Official NPS.
NPS (Net Promoter Score) This is the average untransformed NPS score (0–10 range) provided by the customer.
CES (Customer Effort Score)  “How much effort did you personally have to put forth to handle your request?” (1 = very low effort, 5 = very high effort).

In our research, we surveyed an extended group of customers from 98 firms across 19 different industries. In this survey we measured three different Customer Feedback Metrics, including Customer Satisfaction, the NPS and the Customer Effort Score. Information regarding these three different Customer Feedback Metrics can be found in the above table.

For Customer Satisfaction and the NPS, we used the untransformed scores as well as two popular transformations. The first transformation, the Top-2-Box CS, indicates the proportion of customers providing one of the two highest scores on Customer Satisfaction at a firm level. In other words, the Top-2-Box CS is the proportion of customers who are (very) satisfied. The second transformation is the official transformation for the NPS; grouping customers into Promoters, Passives, and Detractors. Further detail regarding NPS can also be found in the table above.

Two years after the initial survey measuring the Customer Feedback Metrics, we asked the same customers if they were still customers at the surveyed firm. This allowed us to test how accurately different Customer Feedback Metrics can predict actual behavior of customers. Given the historical strong, positive correlation to overall firm performance and firm value, our team looked at customer retention.

The graph below shows the strength of the relationship between the different Customer Feedback Metrics and customer retention, while controlling for firm- and industry heterogeneity, customer demographics and relationship length. Our research found that all Customer Feedback Metrics are significant in predicting customer retention, since all Customer Feedback Metrics perform better than having no Customer Feedback Metric information (i.e. the bar most to the left in the graph).

Transforming Customer Satisfaction and the NPS do significantly improve the predictions. This is indicated by the higher bars of these two Customer Feedback Metrics compared to their untransformed counterparts. The difference between the Top-2-Box CS and the Official NPS is not significant, so these two Customer Feedback Metrics work equally well in predicting customer retention. When looking at the three bars on the right you can see that combing the Top-2-Box CS with one of the other Customer Feedback Metrics leads to even better predictions. The combination of Top-2-Box CS and the Official NPS leads to the best predictions.

Predictive Strength of Customer Feedback Metrics

Predictive Strength of Customer Feedback Metrics

The Customer Effort Score, although statistically significant, is the least predictive Customer Feedback Metric compared to the other predictive measures. This finding contradicts the promises made by the developers of the Customer Effort Score who stated that it would outperform both Customer Satisfaction and NPS. Although this may be the case in some conditions, on a broader level this Customer Feedback Metric performs quite poorly. Therefore, we highly recommend firms and managers not rush to adopt Customer Effort Score, especially as a single metric, until it has been objectively shown that it is a good indicator of future customer behavior and/or firm performance. Customer Effort Score, as an indicator of future customer behavior and/or firm performance, can be proven by independent (scientific) research, or tested by the firm.

In conclusion, we recommend firms to continue using the NPS to track customers and performance, but also include the Top-2-Box CS in the dashboard of metrics. This dashboard enhancement will enable firms to better monitor and predict customer behavior and firm performance. Furthermore, we recommend firms to not only measure these Customer Feedback Metrics, but also link these metrics to customer behavior and firm performance. Doing so will result in a better understanding of the consequences of changes in the Customer Feedback Metrics, and help to make a more educated decision about which Customer Feedback Metrics to include, or exclude, in the dashboard. This approach can better enable firms to financially quantify the impact of marketing initiatives, which ultimately can help improve the position of marketing departments within firms.

The article The Predictive Ability of Different Customer Feedback Metrics for Retention featured in the post was co-authored by Evert de Haan (University of Groningen, The Netherlands), Peter Verhoef (University of Groningen, The Netherlands), and Thorsten Wiesel (Westfälische Wilhelms-Universität Münster, Germany). It is published in the International Journal of Research in Marketing, Volume 32, Issue 2, Pages 195-206.


foto evert_smallEvert de Haan is a PhD candidate at the Department of Marketing of the University of Groningen, The Netherlands. In September 2015 he will start as a Junior Professor in Marketing at the Department of Marketing of the Goethe University in Frankfurt, Germany. His research interests concern customer feedback metrics, marketing accountability, the effectiveness of (on- and offline) advertising, the customer’s online journey and the role of mobile devices play in this. He has published in the International Journal of Research in Marketing.

Peter VerhoefPeter C. Verhoef is Professor of Marketing at the Department of Marketing, Faculty of Economics and Business, University of Groningen, The Netherlands. He also holds a visiting position as professor at BI Oslo Norwegian Business School. He obtained his Ph.D. in 2001 at the School of Economics, Erasmus University Rotterdam, The Netherlands. His research interests concern customer management, customer loyalty, multi-channel issues, category management, and buying behavior of organic products. He has extensively published on these topics. His publications have appeared in journals, such as Journal of Marketing, Journal of Marketing Research, Marketing Science, International Journal of Research in Marketing, Harvard Business Review, Marketing Letters, Journal of Consumer Psychology, Journal of the Academy of Marketing Science, and Journal of Retailing. His work has been awarded with the Donald R. Lehmann award for the best dissertation based article in the Journal of Marketing and Journal of Marketing Research in 2003, the Harald M. Maynard Award for the best paper published inJournal of Marketing, and the Sheth Award for long-term impact of the Journal of Marketing in 2013. He is currently an editorial board member of the Journal of Marketing, Journal of Marketing Research, Marketing Science,  Journal of Retailing, Journal of Service Research, Journal of Interactive Marketing, and the International Commerce Review. He functions as an area editor forJournal of Marketing Research and he International Journal of Research in Marketing. He has extensive teaching experience for undergraduate, graduate and Ph.D. students. He is also involved in executive teaching on customer management and is the founder of the Customer Insights Center, University of Groningen. He is department chair of the marketing department.

Many People Holding a Red Welcome Back in the Sky

What You Need to Know About Customer Win-Back

By V. Kumar, Yashoda Bhagwat, and Xi Zhang   

It’s a hypercompetitive market and you are doing everything you can to retain your customers, yet you know that no matter what you do, you will still lose some customers to competitors. The competition to acquire new customers is fierce. How do you maintain your customer base? Our research team at Georgia State University looked at a large national telecommunications firm and found that it can be profitable to go after lost customers and win back their business. While it may seem counter-intuitive to spend time and money on customers who chose to leave, the reality is that you can’t retain every customer and acquiring brand new customers is expensive. Luckily, the game is not over when you lose a customer and you can revitalize your relationship. To successfully win back profitable customers who are worth your effort, you need to think about three things:

  1. who is likely to give you a second shot,
  2. if they do come back, how long they will stay, and
  3. how much they will spend.

You don’t want to waste time and money chasing lost customers who will never come back or will quickly leave again. In some cases your relationship the second time around can actually be even better than the first- but before you go chasing after lost customers you need to know some basic things about the win-back process.

  1. Your relationship the first time around matters!

The win-back process does not completely wipe the slate clean. How lost customers perceive their experience with you before they left is a strong indicator as to whether they will trust you enough to give you a second chance. Our study found that customers who spread positive word of mouth through referrals in their first lifetime were more likely to come back. Customers who complained a lot were less likely to come back. Customers who experienced a service recovery were more likely to come back.

The takeaway: the better their first lifetime relationship with you, the more willing they will be to trust you again.

  1. Why your lost customers left in the first place can give you some important insights into how they will behave.

The study categorizes the reasons why customers defect into three buckets:

  1. for price related reasons,
  2. service related reasons, or
  3. both price and service related reasons.

Why customers left can help predict how likely they are to trust you again. The study found, customers who left for better deals were more likely to come back than customers who left due to poor service. Customers who left for both price and service were the least likely to come back. More importantly, the reason customers left can tell you how committed they will be to your relationship if they do come back. Intuitively it’s easy to think that customers who left for price related reasons will easily jump ship again when a competitor offers a better deal. Surprisingly, the study found that customers who left for price related reasons stayed with the firm longer than customers who left for service related reasons. Customers who left for service related reasons may have been harder to please and retain. However, customers who left for service related reasons also spent more each month than customers who left for price related reasons. Customers who left for both price and service related reasons switched to a competitor the fastest and spent the least each month.

  1. What you offer your lost customers to win them back has a lasting impact.

Of course what you offer your lost customers will impact whether they give you another chance or not, but it also has a lasting impact on how they will behave if they do accept your offer. You need to know not only what is most effective in winning back lost customers, but how it impacts how long they will stay and how much they will spend in their second lifetimes. Our research team conducted a randomized field experiment in which we sent lost customers a limited time price discount, a limited time free service upgrade, and a bundled offer. While the bundled offer was the most successful in reacquiring lost customers, those customers who accepted it also left the firm again the soonest and spent the least compared to customers who were offered either a price discount or service upgrade. Service upgrades were the least effective at winning back customers but the customers who accepted them also stayed the longest and spent the most with the firm.

So how can you use this information when designing a win-back program? The study conducted a simulation to see what you should offer customers based on the reason they left. Do you want to increase market share and win back as many customers as possible? Then target customers who left for price related reasons with a bundled win-back offer. Do you want to acquire long term customers? Then target customers who left for service related reasons with a service win-back offer. Do you want the customers who will be the most profitable in general? Then target customers who left for price related reasons with a discounted win-back offer.

Customer win-back can be a great last resort strategy. While you should always try to retain your customers you should remember that the ones that got away are not necessarily gone forever. You can win them back and have profitable relationships with them. So in a competitive market where every little bit helps, consider reacquiring your lost customers.

The article Regaining “Lost” Customers: The Predictive Power of First-Lifetime Behavior, the Reason for Defection, and the Nature of the Win-Back Offer, featured in the post, was co-authored by V. Kumar (Georgia State University), Yashoda Bhagwat (Texas Christian University), and Xi (Alan) Zhang (University of Toledo). It is available on the Journal of Marketing website.


Dr V Kumar PictureV. Kumar (VK), the Regents Professor, Lenny Distinguished Chair & Professor in Marketing, and the Executive Director – Center for Excellence in Brand & Customer Management at Georgia State University. VK is recognized as the Chang Jiang Scholar at HUST; China, Lee Kong Chian Fellow at SMU, Singapore; and has received twelve lifetime achievement awards in various areas of marketing including the 2015 Distinguished Marketing Educator Award from the AMS and the Paul D Converse Award.  VK has received the Sheth Foundation/JM Award, Robert Buzzell Award, Davidson Award, Paul H. Root Award, Don Lehmann Award, Tamer Cavusgil Award, and Gary L Lilien ISMS-MSI Practice Prize Award.  He has published over 200 articles in scholarly journals in marketing as well as book chapters. VK has written over 15 books including Managing Customers for Profit, Customer Relationship Management, Customer Lifetime Value, Marketing Research, Profitable Customer Engagement, Statistical Methods in CRM, and International Marketing Research. VK spends his “free” time visiting business leaders to identify challenging problems to solve. Recently, VK has been chosen as a Legend in Marketing where his work is published in a 10 volume encyclopedia with commentaries from scholars worldwide. Finally, VK is the current Editor-in-Chief of the Journal of Marketing.

Yashoda Bhagwat is currently an Assistant Professor of Marketing at the Neeley School of Business at Texas Christian University. She received her PhD in Marketing from the Robinson College of Business at Georgia State University. Yashoda’s research is primarily motivated by real world business problems and she likes to solve challenging problems for managers using rigorous methodologies. She is particularly interested in better informing marketing strategy by managing customer relationships. She was chosen to attend the 2013 American Marketing Association Sheth Foundation Doctoral Consortium as a doctoral fellow and was a recipient of the 2014 GTA Teaching Excellence Award in recognition of her accomplishments in the classroom. Her work has appeared in the Journal of Marketing and Marketing Science. In her spare time she is a sports enthusiast, foodie, and dog lover.


Xi (Alan) Zhang is currently an Assistant Professor in Marketing, College of Business and Innovation, the University of Toledo. He received his Ph.D. degree from the J. Mack Robinson College of Business, Georgia State University. His research centers on solving relevant marketing problems by using rigorous methodologies. His dissertation titled “Managing a Profitable Interactive Email Marketing Program: Modeling and Analysis” won the Shankar –Spiegel Best Dissertation Proposal Award in 2013. One of his works won the Best Paper Award in the Digital Marketing Track of the 2015 Summer AMA Marketing Educators’ Conference. His research has appeared in the Journal of Marketing and the Journal of Marketing Research. He is the recipient of the 2015 GTA Teaching Excellence Award in recognition of his outstanding teaching performance. He currently services on the editorial review board of the Journal of Business & Industrial Marketing.

The 6 Factors that Influence Product Development Success + The Importance of Being Agile

riccardo_demarchi_500x500By Riccardo de Marchi Trevisan

At the recent Frontiers in Service conference in San Jose, CA, I had the pleasure of introducing a presentation from 3Pillar Global, Rockbridge Associates and the Center for Excellence in Service at the University of Maryland’s Robert H. Smith School of Business that was up for the Best Practitioner award.

The presentation covered a study on factors that influence software product development success that was conducted in the second half of 2014. The study is based on interviews completed with more than 200 professionals in the software development space that have shared or full responsibility for software development purchasing and procurement. The participants represented mid-sized companies in sectors like banking, entertainment or healthcare, that used software products to augment their core services.

The study culminated in the development of a Product Development Success Index – or PDSI for short – that can help companies predict whether or not their development efforts will ultimately be successful.

What did the study find? One of the key outcomes was that it identified 6 key factors that influence whether or not a company will be successful at conceiving and developing new software products. The factors are not all as technology-related, as one might think, and some of them are in fact “softer” factors and are not technology-related at all.

PDSI6FactorsThe importance of the factors was found to be, in order of importance with the weight in parentheses:

Sub-Index Importance to Product Development Success Index

Perhaps the most interesting finding of the study is that Time & Budget, which are the 2 most traditional and quantifiable ways of measuring software projects, actually were shown to have minimal impact on a project’s overall success as defined by the study.

Another key takeaway is that leaders at companies the study found to be successful are committed to agile. Twenty-six percent of companies that the study found to be highly successful engaged in at least five agile practices, whereas none of the companies that were found to be rarely successful engaged in that many agile practices.

The measures of agile development that respondents to the study were asked included:

  • Length of time from idea to working software (3 weeks or less)
  • Whether new software is covered by automated tests
  • Frequency of review and re-planning priorities (every 3 weeks or more often)
  • Frequency of end user testing (every 3 weeks or more often)
  • Frequency of process improvement (every 3 weeks or more often)
  • Whether team members exchange information and learn from each other
  • Whether business and technical teams collaborate on software development projects

Another key finding from the study was that there is a perception gap inside companies between senior management (i.e., Vice President and higher titles) and those directly involved in development activities (i.e., Director or lower titles), which can have a profound effect on their overall success.

Professionals at the Vice President level or higher rate their company better on many areas of the PDSI and also believe their companies are performing better on a variety of software product development business goals. For example, 54% of senior executives say they are successful at meeting customer needs compared to 32% of more junior employees.

Contrary to this trend, Vice Presidents and higher report similar levels of performance on a variety of business outcome metrics, including revenue, brand perception, customer loyalty and customer growth. This indicates that while there is a shared consensus between rank and file and senior executives on the business success of their firms, the senior level professionals tend to be far more optimistic in their view of their organization’s success in new software product development.

One problem that may result from this perception gap is that senior decision-makers may ignore key problem areas that, if addressed, could improve their overall success. Similarly, the rank and file employees may fail to see the total picture, harboring an overly pessimistic viewpoint that could impact morale. Summing it up, this study provides valuable insights into how companies can bolster the success of their internal software development functions. This is an area of increasing importance to clients of 3 Pillar Global who rely on custom software solutions to drive their core business, improve customer value and create new revenue streams.

Please visit www.PDSInsights.com to learn more about the Product Development Success Study, get your organization’s own product development readiness grade, and read related content on how to build an organization that is optimized to build software successfully.


linkedinRiccardo de Marchi Trevisan is the Business Development Executive at 3Pillar Global. Previously, he worked for Forum One and Development Gateway, where he supported international governments, non-profits, and research institutions in the identification of solutions that can solve important issues related to the international development field. Riccardo is a seasoned technologist with experience in community engagement, digital communication, and international relations. He is a native of Trieste, Italy, and has an executive master’s degree in international services from American University and a J.D. from LUISS University in Rome.