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WHITE PAPER

The Power of Listening Strategies for engaging every customer

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Why this matters Key insightsAs the internet has closed the gap between

customers and brands, the landscape of customer

experience has changed and expanded. The

customer journey is now a multi-channel affair, with

web users interacting with brands via the company

website, email, SMS, third-party review sites,

and social media. As a result, today’s marketing

professionals have access to a wealth of data that

has the potential to give them more control over

the customer experience (CX).

From the top of the funnel until after the sale,

consumers expect to give and receive feedback

to the brands they interact with. Customers also

expect to be able to interact with brands across

multiple platforms of their choosing in real-time.

The companies that win on customer experience

and drive action toward fulfilling business goals are

those that meet their customers where they are,

and that know how to listen and respond.

More than half of all customer interactions take place during a multi-event,

multi-channel journey, according to McKinsey. Accenture-Medallia research

shows that companies that acknowledge this reality and engage with

customers who leave feedback have better business outcomes:

• Companies that use both surveys and other sources of solicited feedback

are 10 percentage points more likely to improve customer experience.

• Companies that use social media, online reviews, and other unsolicited

feedback are 15 percentage points more likely to improve customer

experience.

• Companies that integrate feedback from four or more channels have Net

Promoter Scores® (NPS) that are 14 points higher than those that only use

one channel.

Of course, the customer experience doesn’t simply improve because clients

are able to leave feedback — it improves because companies take action on

that feedback. This means that it is incumbent on CX professionals to take

the data acquired from all feedback channels and use it to improve the

customer experience.

Combining feedback channels (and taking action on that combined

feedback) leads to a better customer experience across all platforms, which

can, in turn, raise Net Promoter Scores. And since companies with the

highest NPS grow twice as fast as their competitors on average, there’s good

evidence to suggest that it’s in your company’s best interest to implement a

complementary program of survey collection and social media monitoring.

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Do you know where your customers are?

And, more importantly, do you know where

they expect you to be?

Today, customers expect to engage with

brands across a multitude of channels.

They want to chat with companies on their

websites, message them in-app, email their

customer service team, take surveys and

leave reviews, talk with them (and about

them) on social media, and the list goes on.

What’s more, customers expect companies

to respond to them in real-time. According

to Salesforce, 64 percent of consumers

and 80 percent of business buyers expect

companies to respond to and interact with

them in real time. This means that brands

must be available on as many channels

as possible, providing value, fixing issues,

offering new products, and listening to the

voice of the customer.

The voice of the customer is the most

important tool for understanding the

customer journey — but are you truly

listening to what customers have to say? If

you’re only listening on one channel, you

may not be getting the full picture. Medallia

research has shown that the more sources

of feedback you receive, the better your

Net Promoter Score® (NPS).

And according to Bain & Company

research, “a company’s NPS is a good

indicator of its future growth.” Companies

with the highest customer scores outgrow

their competitors by more than two times

on average (see Figure 1).

64% of consumers and 80% of business buyers expect companies to respond to and interact with them in real time *Salesforce

higher Net Promoter Score® (NPS)

for companies that

collect feedback

from 4+ channels

compared to those

using just 1 channel.

+14 pts

Gro

wth

(in

dex

ed)

Years

Loyalty Leader

Average

100

0

5 10 15 20

200

300

400

500

>2xCAGR

Source: Bain

Figure 1

Companies with the highest NPS grow twice as fast as their competitors

Source: Four years of data from companies using Medallia; Effects controlling for industry, survey program

type (transactional vs. relationship), primary business audience (B2B vs. B2C), call center vs. other, and number

of employees at each company; p<0.001

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Therefore, your organization needs to be

present and listening on multiple channels

in order to improve outcomes for your

customers — and your bottom line. You can

do this by using both solicited feedback

(such as email, web intercept, in-app, and

SMS) and unsolicited feedback (social

media and online review sites, in particular)

to listen to the voice of the customer. This

enables you to build up a complete picture

of the experience you’re delivering. Once

you have this complete picture, you can

take this information and feed it back into

your organization.

In this report, we discuss the

complementary nature of two of your

most important engagement channels and

sources of customer feedback: solicited

feedback through surveys and unsolicited

feedback through social media listening.

Solicited customer feedback: SurveysWhy would a person begin a transaction

and then abandon the transaction without

completing it? Western Union, a financial

services company that helps people send

and receive money around the world,

began to ask that question when they

noticed that there were geographical

differences in abandonment rates for

transactions on their website. In order to

improve their completion rates, they would

have to improve the customer experience

(CX). But how?

One of the best and most direct ways to

find out what your customers are thinking

and feeling before, during, and after an

interaction with your brand is to simply ask.

Solicited feedback invites diverse customers

to talk about specific aspects of their

experience and gives your organization the

opportunity to ask targeted questions that

allow you to perform quantitative analysis

on the attributes you care about.

Because different customer segments

interact with brands on different platforms,

solicited feedback can take many forms.

Surveys can be collected in-app, via

email, directly on your website, and over

SMS. Surveys are effective because they

remind your customer to interact with

you. Customers may not take the initiative

to visit your website to leave feedback

themselves, but if you follow up either

directly or shortly after an interaction,

there is a much higher chance that they’ll

respond. More importantly, customers who

express their opinion about how to improve

a service or product feel more ownership,

which translates into greater goodwill

and greater advocacy (more referrals).

In a recent study conducted in

collaboration with the Stanford Graduate

School of Business, the Medallia Institute

found that customers who responded to

surveys made three times more referrals

than those who chose not to complete a

survey (see Figure 2).

Surveys provide actionable feedback

around your most important business

goals, while also serving as an extension

of your company’s brand. Companies can

embed targeted feedback surveys into

digital touchpoints to better understand

in-the-moment experiences and tell a more

complete story about what happens before

0.8

2.5

Non-responders

Re

ferr

al R

ate

Responders

3X

Figure 2

Providing survey feedback is a strong predictor of referral behavior

Effects controlling for visit frequency the previous month, age, gender, and referral condition. n=11,603 members; p<0.001.

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and after a transaction, while showing

customers that your brand is actively

engaged in improving their experience.

In Western Union’s case, this meant

designing an intercept survey that would

solicit real-time feedback as soon as a

transaction was canceled. The marketing

team deployed targeted surveys to better

understand and improve the customer

experience online. Over 110,000 surveys

were collected in the first six months,

allowing the company to discover the story

behind their abandonment metrics, solve

for the problems that they didn’t know their

customers were having (and, as a result,

make dozens of improvements across

the site), and better support customers in

successfully completing their transfers.

This not only had the effect of adding to

the bottom line as customers were able to

complete more transfers, but also improved

the efficiency of teams from Customer

Care to Product Marketing and supplied the

marketing team with ad hoc research to

support new campaigns.

By identifying the critical moments before

and after your customers transact, you can

build a program of solicited feedback that

allows you to understand how to improve

the customer experience and boost sales,

customer retention, and referrals.

Unsolicited customer feedback: online reviews and social media posts While solicited feedback can help you

make improvements to the overall

customer experience over time, current

customers may have other preferred

channels on which to provide their

feedback. And when customers want their

individual experiences to be shared in a

public community, they turn to social media

and third-party review sites.

We live in a social media-driven world.

When Pew Research Center began tracking

social media adoption in 2005, just five

percent of American adults used at least

one platform (i.e. Facebook, Twitter,

LinkedIn, Pinterest, etc.). By 2011 that share

had risen to half of all Americans, and today

69 percent of the public uses some type

of social media. At the same time, online

reviews for businesses on sites like Google

and TripAdvisor have grown exponentially,

while many new online review sites have

emerged globally. Medallia research has

found that in the hospitality industry,

for example, hotel reviews have grown by a

factor of 20 since the start of the decade.

Customers want other consumers to hear

about their experiences, good and bad,

because they care enough about their

Social media use over timePercent of US adults who use at least one social media site

Source: Pew Research Center

2018

2005

2011

5%

50%

69%

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“ It’s extremely important to manage social media channels because of the impact they have on our revenues.”

Michael Morton, VP of Member Services for Best Western

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experience with you to want to affect your

brand’s success. People post on social

media because they know that brands

are listening and they hope to engage in

a dialogue whether to rectify a negative

experience or share an incredible one.

The most successful companies are those

that choose to engage wisely in these

dialogues with customers on social media.

Because customers do not always directly

communicate with brands on social media,

you may need to use technology like text

analytics to mine online comments and

uncover patterns and topics of interest.

Once those patterns are uncovered, you

can take action based on what you learn.

A 2018 Accenture-Medallia study revealed

that companies that use text analytics

to mine unstructured feedback are

22 percentage points more likely to

improve the customer experience.

It is also important for companies to

respond to the comments they do receive

or that are made about the brand. When

customers post complaints on review

sites or other social media, a company’s

response — or lack thereof — is visible

not only to the customer who wrote the

review, but also thousands of others.

How you respond to social reviews

therefore affects how a potentially large

number of consumers perceive your

goods and services.

The hotel industry offers a great example

of how responding on social media directly

affects business: in a study of 4,400 Best

Western hotels, properties that responded

to social media reviews more frequently

than their competitors outpaced those that

didn’t. Specifically, hotels that responded

to 50 percent or more of their TripAdvisor

reviews saw their Net Promoter Score

increase significantly. The study also

showed that not responding on social

media, however, has more than a neutral

effect: it can actually hurt your brand.

Hotels that responded to fewer

than 10 percent of reviews saw their

NPS decrease.

Higher NPS scores as a result of more

customer engagement on social media

and review sites can correlate to a better

bottom line. Properties that responded

to 50 percent or more of their online

reviews grew their occupancy rates by

6.4 percentage points over a 12-month

period and achieved subsequent TripAdvisor

ratings that were, on average, six percent

In the hospitality industry, hotel reviews have grown by a factor of 20 since the start of the decade

Source: A survey of 450 senior customer experience and marketing executives across the US, Canada, UK, Germany and Australia. Effects controlling for other factors that can impact customer experience improvement (company revenue, CX performance, industry, and whether the company was B2C or B2B).

Companies that use text

analytics to mine

unstructured feedback are

22 percentage points

more likely to improve the

customer experience.

+22%pts

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higher than those of their local competitors.

Michael Morton, VP of Member Services

for Best Western, sums it up best: “It’s

extremely important to manage social

media channels because of the impact they

have on our revenues.”

Survey and social feedback are complementary Responding to customers on social

channels can be highly effective, but too

many organizations concentrate all of

their resources on social, excluding other

sources of feedback. In order to truly

understand your customers’ wants and

needs, social media and survey data should

be considered complementary sources

of information.

The reason? The ways that customers

interact with brands differ depending on the

channel. So while you may think a survey

gives you the full picture of a customer’s

experience, you may be missing the

message they left about you for their friends

and family on Facebook. Or while you are

monitoring Twitter for sentiment from

customers that have already transacted

with you, you could be missing out on the

reasons why potential customers cancel

transactions on your website.

Using data from over 6,100 hotels globally,

we looked at how customers talked about

their experiences in over 360,000 online

reviews and survey responses. Notably, we

found that social scores and survey scores

for the exact same hotel differed as much

as five percentage points on average.

There are several reasons for those

differences. Older patrons preferred to

respond by survey only, whereas younger

guests, particularly Millennials, responded

through both survey and social media.

Specifically, we found that survey-only

respondents are about 2.5 years older, on

average, than social and survey respondents

on average. Millennials are 1.34 times more

likely (than older generations) to respond

to both social and survey feedback. People

who took surveys also differed from social

respondents in what they were rating.

Social media users were more interested

in the location of the hotel and in its

competitors, whereas survey respondents

were more likely to talk about the price or

value of the hotel.

Survey-only respondents are about 2.5 years older than social and survey respondents on average

2.3percentage

points annual occupancy rate growth

<10% social

response rate

>50% social

response rate

6.4percentage

points annual occupancy rate growth

Hotels that

respond

to more social

reviews grow

their occupancy

rates faster

Effects controlling for brand, number of rooms, starting occupancy rates, and distribution of guests according to gender, age, purpose of travel, and loyalty status. Sample, n=1,834 hotel properties, p<0.001.

H O T E L

H O T E L

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Millennials are 1.34 times more likely (than older generations) to respond to both social and survey feedback

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What this tells us is that leaving surveys out

of your strategy means missing a chance

to engage an important subsection of your

customers. If these hotels only looked at

their social media responses, they might

have missed out on an opportunity to

respond to customers who were concerned

about the price and value of their stay.

It is also important to diversify your

feedback channels, because people may

be more likely to provide you with details

on one channel than another. Comments

made on online review sites are much

longer than comments made in surveys

when respondents have extremely

positive or negative experiences. It is

important to pay attention to not just the

sentiment or rating left by a customer, but

also to the reasons for their sentiment.

In cases where people are truly unhappy

or overjoyed with your brand, more detail

can help you solve future problems or

replicate positive experiences.

Interestingly, using social and surveys

together can tell you complementary

information about the same customer.

In the same study of hotels above, a subset

of 20,000 responses for nearly 2,000

global properties revealed that guests

often left different reviews for the exact

same experience on their survey and social

media, respectively. Nearly one-fifth of the

guests left differing reviews, and they were

often more lenient in their private survey

ratings than they were in the public social

reviews. In 76 percent of the cases where

the scores did not match, survey scores

were higher. Still, though survey scores

were higher, they contained more negative

emotions. This could perhaps, be due to

the fact that surveys often ask directly for

constructive criticism. At the same time,

social responses were lengthier than survey

scores. This can probably be attributed to

social being a more personal realm in which

people are accustomed to telling stories,

whereas people often view surveys as a

short exercise in sharing direct feedback.

Engaging customers on both channels pays offRegardless of industry, the leaders

in customer experience know that

engagement starts by being present on the

channels that customers prefer. That means

knowing your audience and anticipating

their different needs at particular moments

along the customer journey.

When companies engage their customers

on the channels they prefer, they are able

to build up a complete picture of the

2X differencesin the length of social and

survey responses for both

detractors and promoters

extreme detractors

extreme promoters

Social

50% 21%vs.

Respondents who write 4 sentences or more

extreme detractors

extreme promoters

Survey

23% 12%vs.

Respondents who write 4 sentences or more

Source: 360,000 online reviews and survey responses posted in 2017 from over 6,100 global hotels.

Legend:Extreme detractors: respondents with the lowest scoresExtreme promoters: respondents with the highest scores

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experiences they are delivering to every

customer. Once they have this complete

picture, they can analyze it, learn from it,

and improve the experience in real-time.

A 2018 Accenture-Medallia study revealed

that companies that utilize structured

surveys and other sources of solicited

feedback are 10 percentage points more

likely to improve customer experience,

while companies that collect social media,

online reviews, and other unsolicited

feedback are 15 percentage points more

likely to improve customer experience

(see Figure 3). An improved customer

experience means more completed

transactions, return customers, referrals,

and positive brand associations, all of which

mean better business outcomes for your

organization as a whole.

ConclusionAs a marketing professional, you have the

ability to obtain more data about your

customers than at any other time in history.

Your customers are talking about your

brand, and they want to be heard. Listen

to the voice of the customer is one of the

most important ways for you to enhance

the customer experience and improve

business outcomes. To fully understand

your customer, however, your business

can’t be listening to only one source.

Leaders in customer experience see both

solicited and unsolicited feedback as

indispensable tools. A complementary

program of social media/online review site

monitoring and targeted survey collection

can help you better comprehend customer

sentiment and integrate suggestions and

feedback into your processes, products,

and services.

Figure 3

CX leaders develop listening posts to hear from customers

Source: A survey of 450 senior customer experience and marketing executives across the US, Canada, UK, Germany

and Australia. Effects controlling for other factors that can impact customer experience improvement (company

revenue, CX performance, industry, and whether the company was B2C or B2B).

Likelihood to improve CX (comparing companies that collect feedback vs. not)

Social media, online reviews, and

other unsolicited feedback

Structured surveys and other

sources of solicited feedback

+15%pts

+10%pts

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Pros and cons of social media

Track trends and customer sentiment. Track sentiment about your brand or product.

Manage online reputation. Fix an issue before it goes viral

and boost your online reputation by showing customers you care.

Build a community of brand ambassadors. Identify and interact with top brand advocates and influencers in your niche market.

Benchmark with your competitors. Monitor conversations and understand how your brand stacks up against similar brands.

Win back lost customers. Quickly resolve issues for upset customers and demonstrate why they should trust your brand in the future.

Pros

Target only a limited demographic based on each

social site. Social media is biased toward younger, digitally-savvy individuals, and each platform’s user base differs by demographics.

Miss out on demographic/identity data. Social media users often withhold non-required demographic information, providing an incomplete picture for the companies who interact with them directly.

Overlook people not on social media or without internet access. Social media feedback is limited to people who avidly use its platforms.

Receive biased data. People tend to post about brands on social media mainly when they have an overwhelmingly

positive or negative review. Moreover, previous public ratings

bias new ones, and fake reviews can skew the sample.

Inability to ask targeted questions. It is hard for brands to start a conversation on social media, making it difficult for to capture targeted feedback on social media.

Inability to run high-quality tests. Ad hoc surveys on social media give some useful data, but because of the bias inherent in the platform, tests can’t be run with high accuracy.

Inability to close the loop with all customers publicly. Not

all sites let property owners respond to reviews publicly.

Cons

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Reach a representative sample. Reach a representative sample of your customer base or target a specific demographic, including people who don’t use social media.

Ask targeted, actionable questions. Employees can act promptly on the information gathered from the survey.

Gather quantitative data. Drill down into potential issues

with a key driver analysis. Effectively analyze multiple variables and understand statistically significant events.

Create personalized engagement. Personalize future

customer interactions with data gathered from the survey and further engage customers by ensuring your survey is a representative extension of your brand.

Run high-quality experiments. Run fast, efficient A/B tests on targeted customer segments and get results immediately by simply adding questions to your existing surveys.

Rigidity. You only get answers to the questions you ask, rather than what respondents want to say.

Cost. In some instances, surveys can be expensive (e.g., telephone interviews are more expensive than email/online or SMS surveys).

Survey fatigue. Unless you put in place appropriate quarantine rules (designating times when you won’t ask for feedback), you may risk customer burnout.

Effort. Designing an effective survey program takes some thought and effort. You must carefully select the touchpoints on the customer journey and the channels to survey on (e.g. in-app, SMS, email, on location etc.)

Pros Cons

Pros and cons of surveys

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RecommendationsGo beyond a single channel with targeted

moments of customer engagement and social

listening to better understand your customers’

needs and improve the bottom line.

Find the “why” behind the “what.” Learn from

both customer experience scores and customer

verbatim comments through text analytics.

Encourage your customers to extend their

feedback beyond surveys to social media

reviews, Facebook, Twitter, and more. This will

activate customers on social networks to boost

your online presence.

Close the loop with customers quickly on both

survey and social reviews. Address feedback and

demonstrate to customers how you have made

changes or improved processes as a result of

their feedback.

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About Medallia

Medallia, the leader in Experience Management cloud technology, ranked #15 in the most recent Forbes Cloud 100 list. Medallia’s vision is simple: to create a world where

companies are loved by customers and employees alike. Hundreds of the world’s largest companies and organizations trust Medallia’s cloud platform to help them capture

customer and employee feedback everywhere they are, understand it in real-time, and deliver insights and action everywhere—from the C-suite to the frontline—to improve

business performance. Medallia has offices worldwide, including Silicon Valley, New York, Washington DC, Austin, London, Buenos Aires, Paris, Sydney, and Tel Aviv. Learn

more at www.medallia.com.

© Medallia®, the Medallia logo, and the names and marks associated with Medallia’s products are trademarks of Medallia and/or its affiliates. Net

Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc. All other

trademarks are the property of their respective owners.

Copyright © 2019. Medallia Inc. All rights reserved. 15medallia.com

Perman Gochyyev

Perman Gochyyev is a research statistician at the University of California, Berkeley, and is a former research & analytics manager in Medal-

lia’s CX Strategy Research group. Prior to joining Medallia, he was a research associate at WestEd and a doctoral student in UC Berkeley’s

Quantitative Methods and Evaluation program doing research in psychometrics and

behavioral statistics.

Emma Sopadjieva

Emma Sopadjieva leads Medallia’s Research Practice responsible for developing insights and frameworks that define how companies will

win in the future through customer experience. Prior to coming to Medallia, she was a consultant for over five years in Deloitte’s Financial

Advisory practices in the US, the UK, and Spain. She has an MA in international economics and management from the School of Global

Policy and Strategy at UCSD, and a BS in business administration and management from Bucknell University.