Predictive analytics: Better than surveys?
Surveys and other traditional customer feedback tools have always served a valuable business function, and this is unlikely to change soon.
These tools provide an important baseline of customer opinions and issues. Alongside good closed-loop recovery processes surveys make it possible to reach out and respond quickly to customers’ needs.
However, this type of customer data is inherently limited. With response rates typically only 5 to 10 percent of total customer bases, there is a widespread consensus of ‘survey fatigue’.
This feedback is further skewed as responses are often drawn from customers who are either very happy or extremely vexed.
These limitations ultimately create a situation where the majority of information received comes from a very small slice of the total customer base. As useful as those responses may be, success in the long run will hinge on knowing what the wider majority of your customers think and being able to act on their silent needs
Arguably, predictive analytics has been a major buzzword of 2016. Businesses realise that predictive analytics solutions make it possible to identify and remediate silent, at-risk customers quickly and accurately.
What’s more, this same technique can also help organisations turn potentially damaging situations into creative new business opportunities.
Exploring two case studies from a recent MaritzCX study will uncover the advantages of what predictive analytics can deliver to different markets.
Often, the rollout of new products or service offerings can introduce wrinkles and complications that lead to dissatisfied customers. Although a traditional survey can help to identify the immediate issues, actively finding all of the customers who are affected and quickly repairing the damage requires a much more proactive, predictive approach.
Midwestern Financial, a large US bank, completed the launch of a new portfolio of checking and savings account offerings that allow customers to choose from a flexible list of options.
One of the options waives all the bank’s monthly service fees if customers maintain a combined balance of $10,000 across all of their deposit and investment accounts. It’s an attractive benefit, but it did not consider loans or credit card accounts that customers have with Midwestern Financial.
This means that customers were still incurring bank charges although their bank balances were well above the $10,000 threshold.
Survey data uncovered that the situation had created a significant spike in detractors among customers who had opted for the $10,000 minimum balance option. Perhaps even more important, these same customers tended to have high credit scores, large incomes, and multiple accounts with significant balance.
