Customer satisfaction is always a hot topic, and analytics and ROI (define) continue to be priorities. But how do you connect them? Larry Freed, president and CEO of Foresee Results shared his insights to making this happen as well as some predictions of where the industry is headed.
Shane Atchison: Foresee Results is doing fantastic building your product and brand. What do you attribute your success to in the market?
Larry Freed: Thanks! It’s been a great year. You really need two things to be successful: fiscal responsibility and satisfied customers. By doing a great job of satisfying our customers, we get the benefit of long-term relationships with our customers and the impact of positive word of mouth. The second component (which contributes to fiscal responsibility) is our customer satisfaction methodology (used in the American Customer Satisfaction Index). It’s the only one out there that’s ever been scientifically proven to predict future success. It’s even been linked to stock prices.
SA: Can you share some examples of how ROI is measured?
LF: Sure, but it’s definitely a complex question. We currently have over 600 active measures, and we’ve found that our clients measure ROI in a lot of ways, depending on the strategic role of their Web site to their organization…
For clients in any industry, our metrics can identify which Web site changes will have the greatest impact on loyalty, sales, or whatever future behaviors they want to measure. This can provide huge cost savings by focusing efforts and resources on changes that will drive results, often preventing expensive investments in bells and whistles or back-end technology that customers don’t want or need. In fact, when we looked at the top 100 e-retailers, we saw that increasing satisfaction by just one point drove over $112 million in additional sales.
SA: How does this translate to different industries?
LF: E-retailers use our customer satisfaction analytics to project future sales both online and through offline channels. Other services-related clients, like utilities and financial services companies, have found that they can use our metrics to increase customers’ likelihood to use the Web site instead of a call center, or access and pay bills online instead of through the mail, which can provide tremendous cost savings.
Other kinds of clients, such as hospitals, evaluate the impact of improving satisfaction online on increases in acquisition of new customers (including lifetime value of those customers over a several-year timeframe) or increased use of online functionality and resources to support operations (such as in-network referrals of health providers). Even information-based or social networking sites, who know the dollar value of a recommendation or an eyeball, have used our metrics to increase things like likelihood to return and recommend, which translates directly to more market share or advertising dollars, depending on the business model.
SA: The Web analytics space has been incredibly hot the past year. How do you differentiate from the other players in your space?
LF: There are certainly other vendors out there doing online surveys and others claiming to measure customer satisfaction, but none have any real legacy of accuracy, precision, credibility, or reliability of the American Customer Satisfaction Index (ACSI). It’s more like these other so-called methodologies were developed in some guy’s basement — homebrewed customer satisfaction metrics, if you will. And we’re the only company licensed to use the ACSI online, so that’s our differentiator right there. In the online space, we have 30 benchmarks and 28 million completed surveys, and we’ve been around for seven years. So it’s pretty easy to rise above the pack and show that what we have to offer is qualitatively different than anything else in the marketplace.
SA: Who are your direct and indirect competitors?
LF: Broadly, we’re considered a voice-of-customer (VOC) analytic. But really we are much more than that. In the VOC (or survey tool) space, the players most often lumped [with us] are iPerceptions, OpinionLab, Vovici, and Zoomerang. But we take voice of customer and add a scientific measurement approach to it. This creates a customer satisfaction (and customer experience) measurement system that is truly unique. There are research firms that dabble in this, but their solutions are very different. Then there are free (or near free) surveys, like Survey Monkey.com and 4Q, but they’re really aimed at mom-and-pop Web sites, not national and international e-businesses.
SA: Down to the nitty-gritty: how do you make money?
LF: We sell a full-service annual subscription. Included in the subscription is the ability to continuously monitor satisfaction and collect feedback; get in-depth, tailored analysis; and [get] detailed usability recommendations for the areas of the site that were identified as being the highest priority.
SA: We’re experiencing an economic slowdown. Why should an organization move forward with your solution as opposed to other marketing solutions?
LF: When things get really tough, competition will be tighter than ever, and customers will only give money and loyalty to companies that are truly satisfying them. Since our methodology can tell companies precisely which Web site changes to make to maximize sales, loyalty, returns, and recommendations, it will be an invaluable tool for companies to have. We’re actually seeing our business grow and increase faster than ever as companies figure out they have to innovate and evolve to survive. All of our research and experience shows that if companies can get their Web site to the point where they are fostering loyalty and growth, they’ll have a lot less to worry about as offline activity slows.
SA: What are the big opportunities for your business, your customers, and the market as a whole in 2008?
LF: The big opportunities for our customers are to optimize their investments in the Web and maximize the value the Web can provide. Those that focus on the customer will be the ones that have the most success. The market, and by the market I mean the Internet space, will continue to thrive. In a tough economy, investments are being moved from traditional channels to the Internet. The reason is the Internet provides the most economic way to grow revenue (reach more customers in more places for less investment) and to cut and control costs (switch more expensive customer support to Internet-driven self support). The high gas prices we face will also shift people to the Internet as an information and commerce source. The challenge for the Internet industry is to continue to improve, to continue to satisfy customers. Said another way, to meet their customers’ needs and exceed their expectations. For Foresee Results, the opportunity is to continue to expand on the capabilities and value we provide to our customers.
The use of psychology in marketing and sales is not new, but it may be more useful than ever in an attention economy where time is precious and focus is rare. How can you tap into a demanding consumer to check whether there is an actual interest in your product?
Two weeks ago, Foursquare announced what could be the most important component of its data business: the Pilgrim SDK. So what does it do, and what does it mean for location-based marketing?
Combining clickstream data with machine-learning technology, behavioral analytics helps enterprises create a tailored online experience for each visitor to their web or mobile sites.
Video performs better than any other type of content – with better engagement, more memorable adverts, and better recall experienced by viewers. But once you start creating video content, how do you know when it’s been successful?