Customer Feedback in a Wired World

By Courtney Macavinta

Michael Schrage, co-director of the MIT Media Lab's eMarkets Initiative, vividly recalls the day he came up with a genius "$50 million" idea for his credit card company. While begrudgingly filling out his expense report -- meaning cutting and pasting line items from his electronic credit card statement into his employer's official form -- he realized that his credit card company could save him time and rack up more profits by offering an online expense report tool. What followed was a 24-hour odyssey in which Schrage says he tried every possible avenue to simply share his idea with the company.

What Schrage found was that there was no meaningful way to pass on his feedback to his credit card company -- never mind that he's considered a top-tier customer. Though he gave up on pitching his idea, he did end up writing a column about the incident for the online publication CIO. Schrage's point: Companies would be wise to listen to their loyal customers.

"As an organization you have to ask yourself, how do you learn from or listen to your best customers?" says Schrage, who is also the author of Serious Play: How the World's Best Companies Simulate to Innovate. "The best ideas in the world don't have to come from the company but can come from customers. Aren't your customers smart?"

While it's true that organizations in many fields -- government, health care, banking, among them -- have been trying to move customers to self-service Web sites, the effort hasn't necessarily been duplicated when it comes to gathering meaningful customer feedback via those same channels. But now that could be finally changing.

A new survey by Forrester Research found that companies are starting to invest more in gathering customer feedback -- from using Web analytics to track customer behavior to testing new products through focus groups. Nearly half of the Forrester survey respondents plan to increase their spending on Web analytics and customer behavioral research this year, while one-third said they planned to spend more on customer satisfaction surveys as well.

What is also set to shift is who within an organization solicits customer feedback about Web services. Whereas customer feedback was traditionally under the charge of the marketing department, CIOs are now increasingly getting involved, experts say. Larry Ponemon, founder of the Ponemon Institute, which surveys Fortune 500 companies about privacy management practices, says CIOs actually should take the lead when it comes to getting customers' feedback about their online experience. There is a payoff: CIOs could harness customer ideas to make a company's Web services better or to discover new lines of business.

"In some companies the customer experience is all about the Web site, so CIOs are starting to look at that and make sure the overall experience is a good one," Ponemon says. "If the CIO wants to be less of a cost center and more of a revenue player then he or she needs to be involved in the collection and analysis of customer feedback."

Soliciting and considering feedback
CIOs can start to create a useful customer feedback loop. Schrage and Ponemon offer these suggestions on the best way to put the feedback into play and positively impact the bottom line:

• Use data that already exists As Schrage points out, any organization that has a Web channel already has valuable data on the books. If CIOs want to understand what customers think of their Web services, Schrage says they should look at how customers currently use their Web site, when and where they drop off, and what features are popular or going unnoticed. Ponemon adds that CIOs should continue to stay on top of Web service performance and infrastructure issues -- from the time it takes customers to complete a task to adequately protecting their data: "To consumers, these issues are what drives their behavior," he says.
• Be proactive Schrage says CIOs are in a good position to listen to customers and make improvements based on their feedback: "The Web channel, marketing, customer support, and sales -- they are all united by IT in a well-designed organization." According to Ponemon, more CIOs are trying to get to the table earlier to improve services based on customer feedback. They no longer wait to get bits and pieces of information from the marketing team. He says CIOs need to be involved in the design of the research methods, to make sure they have IT people looking at the data to find solutions to problems. In addition, CIOs can use the data to prioritize some IT projects based on what has the most favorable impact on the consumer.
• Make it simple According to Forrester Research, customer satisfaction data can be a good, high-level barometer for overall channel success. But Schrage says CIOs should try to avoid launching complicated and expensive customer feedback programs. Instead, he says, they can start small with simple surveys or email feedback forms. "Look at where you're already interacting with good customers and come up with the cheapest way to test an idea," he says. "Put up a simple feedback button on the site for 90 or 100 days and see who responds. If nobody clicks that tells you something. But if you get 10 or 50 good ideas, then you can go to other people in the organization and say:  Is this a resource we should be tapping more?" Companies can also offer incentives like a gift for customers who offer helpful feedback.
• Mind privacy Though tracking technology from cookies to RFID tags can give CIOs a pretty clear picture of what customers do on their Web sites or with their products, Ponemon says part of getting meaningful customer feedback for the long haul is to respect their privacy. "You want to try to understand what motivates them and makes them tick, and new technologies can help understand the behavior of the customer," he says. "But you have to do it in a way that doesn't violate the privacy of the customer." In other words, CIOs need to clearly disclose to customers how they gather data about their experience, how they use their feedback, and how a customer can opt-out.
• Monitor the help desk CIOs already have a great resource to find out what customers really think: The customer support center. CIOs could do better to aggregate customer feedback from the help desk to improve Web services, Schrage says. CIOs would be smart to tie improvements based on customer feedback to increasing revenue or lowering costs. Or as he puts it, CIOs can leverage feedback gathered via customer support calls or emails to "turn a bug into a feature. Because so many people are visiting your digital assets, you have all kinds of opportunity to create and share value."
• Open new lines of communication It's one thing for CIOs to solicit customer feedback but it's another to actually take it to heart and to the boardroom. "If you really care about customer feedback and want to learn from customers, act like it," Schrage says. This could include assigning a team to read through emails and suggestions or creating a customer panel to find out what they think of the ideas before launching new Web services. Ponemon agrees that for CIOs it comes down to giving customers a clear way to communicate with an organization. And then he says, "Listening to the customer is always a good idea."

Conclusion
Information technology has become such an important component of the way organizations interact with customers today. CIOs and IT managers can use the Web as a way to gather information from customers about how the business can be improved because they never know who will come up with the next $50 million idea.

Courtney Macavinta is a Silicon Valley-based business and technology writer. Her articles have appeared in CNET News, Business 2.0, Red Herring, Wired News, and The Washington Post.