Do You Know Why Your Customers Are Leaving?

By Chris Truitt

Many of us think of business as a complex organism with many moving parts. While this is certainly true, business concepts can be simplified to two main objectives, Customer Acquisition and Retention. Acquiring customers isn't easy and can often be a costly endeavor. Retaining customers is often a matter of listening to your customer's concerns, understanding their needs and putting your business in a position to meet these needs.

Forward Thinking

This is perhaps one of the most over used terms, and we're only half way through the year. I personally don't know of another way to think. But, before we plan for the future, we must live in the present and deal with the problems of today. This is not shortsighted. Thinking forwardly without dealing with the issues right in front of you would be shortsighted.

Act on Customer Feedback

An important component of forward thinking is strategy. Your strategy for improving your business has to be based on an clear understanding of what is working, what is not working and what needs to be improved. But how can business leaders definitively know and quantify the things that aren't working? The answer to this, is customer feedback. Consider surveying existing customers and customers that request to cancel. Retention managers should immediately know the top reasons for customer cancellations at any time. This is valuable data and insight to your customer's thinking that can be applied to modify your retention efforts, and to improve your business processes.

Chris Truitt is an Email Deliverability Manager with over 11 years of experience. During this time, Chris has consulted with many clients, large and small on best practices and provided strategic guidance on improving inbox placement. His objective is to help businesses on realizing their full marketing potential by first understanding the customer’s needs and interests and structuring alignment of the marketing campaign to meet those needs. As a pragmatist, Chris has an analytical, result oriented approach to business. He believes a dive into data and historical performance can lead us to making well informed decisions. In his new role he has had an opportunity to offer insight to executive leaders and contributed to key decisions and business strategy. Chris resides in Raleigh, North Carolina where he lives with his wife and their two sons.

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Customer Experience is Driving the Need for Ethnographic Research to Understand Why Customers Do What They Do

By Darcy Bevelacqua

Customer Experience is Everywhere

From marketing to customer service to the boardroom, it’s recognized that personalized, efficient and engaging customer experience drives customer acquisition, brand loyalty and customer lifetime value (LTV).

The focus has shifted from knowing how the customer interacts with your brand to understanding the why behind their behavior so you can personalize their experience across channels, locations and time.

Understanding the Customer Journey

The customer journey is the entire end-to-end experience that a customer has with your brand. It is not a single touchpoint or interaction but the collection of interactions at all touchpoints over a period of time. We know that customer experience problems are most likely to occur across channels and the best way to understand them is a detailed understanding of the customer journey.

McKinsey found that companies that understand the end to end customer journey and provide a good experience along the entire journey can expect to increase customer satisfaction by 20%, improve sales by 15%, reduce churn and decrease service costs as much as 20%.

The best way to understand your customer journey is to “map “ the customer journey. The map is a visual way of representing the customer’s story from the point at which they first become aware of your product or service, through purchasing, use, and churn.

Ethnographic Research Helps Us Understand the Customer Journey

In order to understand the customer story, we rely on ethnographic research. Ethnography is the study of human behavior in real life environments. The researchers interact with the participants in their culture through observation and questions to learn more about them. The research provides a deeper understanding of the problem and its impact on the person and their environment.

A good researcher is essential in winning people’s trust and confidence so they can accurately immerse themselves into the lives of their target audience, and understand the why behind why people do what they do. This is important as you can only design a better solution if you actually understand the “problem” and the “tasks” that the person is trying to accomplish in the context of what it “means” to the individuals involved.

How Ethnography Works

Short ethnographic studies can be very useful for understanding the “customer journey” and customer experience. For example: in order to understand the way in which a consumer

purchases eyeglasses, an ethnographer might conduct an ethnographic study by working and interacting with the customers in a retail setting for a few days. The researcher will use participant observation, interviews and surveys to understand what the customer is trying to accomplish and how the current environment contributes to a good or bad customer experience.

Ethnographic research is used at the beginning of the customer journey mapping process in order to understand what the customer is trying to accomplish and how they feel about what they are experiencing. It is a key part of identifying the “moments of truth” and “pain points” associated with the customer journey.

The moments of truth are the places that the customer considers essential to the customer experience. These moments of truth can be positive or negative, but they are essential sets in building a lasting customer relationship and in building trust between the organization and the prospect. Pain points are the areas of the customer journey that are not going well and do not meet the customer’s expectations.

The researcher may take photographs or video of the environment and the customers when they are beginning to document the customer journey. For example, in the case of purchasing eyeglasses we observed women taking photos of each other. When we inquired what they were doing, they indicated they were far sighted and unable to see the new eyeglass frames in the mirrors provides by the retailer, without their current prescription glasses. As a researcher, this information was noted as a poor customer experience and one that needed to be added to our list of things to be solved.

In addition, when consumers first entered the retail store they didn’t know how to “look” for different eyeglass frames. Customers couldn’t distinguish the difference between men’s and woman’s glasses and they were nervous that they might select glasses that did not look attractive on themselves. As a researcher, we were able to uncover consumer’s feelings about glasses and how they reflected on the personal images they wanted to convey. This information would also be added to the list of things to be solved so future customers could easily find the eyeglasses that would enhance their personal image and were appropriate based on their sexual orientation.

Advantages of Ethnography

One of the main advantages associated with ethnographic research is that ethnography can help identify and analyze unexpected issues. When conducting other types of studies, which are not based on observation or interaction, you can miss unexpected issues. This can happen either because questions are not asked, or respondents neglect to mention something. An ethnographic researcher’s on-site presence helps mitigate this risk because the issues will (hopefully) become directly apparent to the researcher.

Ethnography’s other main benefit is generally considered to be its ability to deliver a detailed and faithful representation of users’ behaviors and attitudes. Because of its subjective nature, an ethnographic study (with a skilled researcher) can be very useful in uncovering and analyzing relevant user attitudes and emotions.

Disadvantages of Ethnography

One of the main criticisms levelled at ethnographic studies is the amount of time they take to conduct. Because of its richer output, an ethnographic study will tend to take longer to generate and analyze its data than a standard survey. It is also possible that subjects may not act naturally during a short study. We control for this by repeating the observations in multiple locations with different researchers to try to eliminate as much bias as possible.

Conclusion

Ethnographic research is a valuable tool to really understand why customers do what they do. Good research will help you uncover new needs and help you identify how you improve the customer journey. The customer’s emotions and what they are trying to accomplish can be noted at each touchpoint on your journey map in order to help you “optimize” the customer journey to eliminate the pain points and deliver a better overall customer experience.

Darcy Bevelacqua is a Customer Experience and CRM Strategist. She is currently the CEO of Success Works CX, a leading customer experience consulting company with a staff of experts in market research, personal development, campaign planning, marketing strategy, competitive analysis, journey mapping and design thinking.

Darcy has a BA in Psychology from Hood College and a Master’s in Organizational Design from the New School for Social Research. She also has advanced work in Gamification (Univ of PA), Design Thinking and Innovation (UVA), as well as Human Centered Design (UCA-San Diego). Darcy lives in upstate NY in the summer and in Sarasota, FL in the winter. She loves warm weather and sunlight.

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