Measuring the Customer Experience-Best Practices

What matters to customers?

Before looking at current options for measuring the customer experience – what should be measured? What matters?

Ipsos Mori conducted research with customers who had experienced a problem with a company and asked.. ‘Apart from fixing the problem – which one of these factors would have done most to make you feel or act positively towards them?’

customer satisfaction measurement 01

As is shown, ‘Treated you as a more valued customer’ was 45% of the responses. A problem is obviously an important touch point but in fact at every touch point, customers want to feel valued and important – not a number and not a nuisance!

When customers describe dealing with companies whose staff make them feel ‘valued’ or ‘special’; where they say they were treated as an individual; they felt listened to; they had the opportunity to ask questions – customers are more likely to be extremely satisfied; more likely to recommend the company; more likely to place more of their business with that company. Various research studies show correlations of extreme satisfaction factors and high levels of ‘soft’ behavioural factors.

Companies need to be easy to do business with!

However, when making contact with a company about an issue – even more fundamental than feeling valued or special – is that the issue is resolved – and, ideally, at the first contact. Customers don’t want to waste their time; they don’t want to make unnecessary effort: companies need to be easy to do business with! They need to minimise or remove unnecessary contact for customers recognising that when it occurs it annoys customers; damages the relationship – and, in addition, it costs the company money!

It’s important for staff to recognise when a customer is making contact about something that adds no value to the customer. And, to realise that the chances are it adds no value to the company as well! Typically non-value adding contact results from:

• Something that the product, the wider business, or a third-party didn’t do
• Difficulty in finding the people who can give the answer
• Repeat contact generated by incomplete or wrong answers

All too often, staff handling such contacts don’t acknowledge that for the customer this adds no value – the matter is simply handled in a process-driven manner with perhaps no apology and every risk that it can reoccur. The opportunity for learning and future avoidance is lost.

Companies frequently collect data on what customers called about but few companies collect data on why customers had to call – without this, organisations cannot learn. Better for both the customer and the company is that the organisation learns and stops doing things that generate unnecessary calls. So, what matters to customers – and therefore what should be measured – is on the one hand:

• factors around making it easy for the customer
and
• factors around making it ‘special’ so that the customer feels valued.

These two sets of factors focus on different aspects of the customer experience – in effect, the key ‘dis-satisfyers’ and the key ‘satisfyers’. They may not both be equally important to an organisation at the same time. If a business isn’t ‘making it easy’ for the customer – this should be the priority; but once it is (reasonably) easy, the company should monitor the factors that make it special for the customer and drive high levels of satisfaction.

Current outcome measures

When it comes to measuring the outcome of the experience – a number of measures are currently being used:

• Customer satisfaction – still the most widely used customer outcome measure
• Net Promoter® Score – introduced in 2003 – now widely used by many large organisations and, in some cases, it is seen to be so important that senior executives are bonused on the score
• Customer Effort Score (CES) was first talked about a couple of years ago and is gaining in popularity.

Customer Satisfaction

It is widely accepted that in competitive markets it is only totally or extremely satisfied customers that are loyal. Indeed, on average, it is reported that 84% of customers would say they are satisfied (or more) but only 41% loyal. So, if customer satisfaction is the chosen measure it is important to only look at the ‘top box’ score (extremely or totally satisfied). Many organisations report their results by adding together their satisfied and totally satisfied scores creating a false and rosy score – which does not encourage them to focus effort on improving their customer experience.

Net Promoter® Score

First published in 2003 by Fred Reichheld of Bain & Co, Net Promoter® had a massive effect on organisations due to the research claiming Net Promoter® Scores (or customers’ willingness to recommend a business they have dealt with to others) could be directly related to growth within such organisations. Whilst opponents disputed this, it caught the imagination of senior management and is now adopted widely.

Despite its detractors, customers’ opinions of their experience features on management agendas more than ever before, which can only be a positive!

A more in-depth discussion on Net Promoter can be found here.

But what drives ‘recommendation’?

This focus on a simple question and a simple calculation understandably has great appeal but what drives recommendation and – more importantly – what to do to improve it – did not appear as part of Reichheld’s work.

From Cape Consulting’s work plus literature research, we believe there are 4 factors that impact recommendation:

1. the brand relationship – whether people feel positive or negative about a brand influences recommendation
2. the experience customers have of the products – features; their relevance and their pricing
3. the ease of doing business – simplicity, efficiency and reliability
4. the touch point experience – essentially how valued or special customers feel.


The final two factors – which contribute, we believe, about 60% or more of total importance – are operational – and are typically easier to influence than the first two factors.

Loyalty Building Experiences™ create more Promoters

At Cape Consulting we have conducted touch point research for clients for many years – asking the Net Promoter® Score plus 8 Loyalty Building Experiences™ – factors that we have shown increase the number of Promoters – and therefore improve Net Promoter® Score. Our book ‘Customer loyalty: a guide for time travelers’ explains the 8 Loyalty Building Experiences™ in detail and how a business can focus on improving them.

They are listed below – and – they are not surprising. Why would they be? A key point of their simplicity is that staff understand them and management can spot them being delivered.

LOYALTY BUILDING EXPERIENCES™

• “It was easy to access to someone who will help”
• “Person sounded / appeared positive and eager”
• “Person listened well to what I had to say”
• “I was given enough time and I didn’t feel rushed”
• “I got a chance to ask questions”
• “Person seemed to have a good level of knowledge”
• “Gave me the impression they enjoyed serving me”
• “The interaction was concluded to my complete satisfaction”

 

 

 

customer satisfaction measurement 02

Recently, we’ve looked at all of the data we have collected across a number of clients to see what we can learn. From the full data set we have selected those customers who gave staff 10/10 across the LBEs – i.e. perfect 10s; in effect the staff could do no more. When this is the

 

case, 79% of customers are Promoters – see top bar of chart.

If we then take a look at the data set for customers scoring 8/10 across the data set – 8/10 being not a bad score and frequently the measure of quality that companies looking for in their staff – we can see that Promoters drop from 79% to 33% – a massive reduction (see lower bar of chart). And, Net Promoter® Score drops from 71% to only 14%.

So, if staff performance drops from 10/10 to 8/10 we see a massive impact of Promoters and therefore Net Promoters. This clearly demonstrates that staff behaviour can have a major impact on Promoters and that good simply isn’t good enough!

Customer Effort Score

Since about 2010, people have been talking about the Customer Effort Score and wondering if it is a better measure than Net Promoter® Score – should they change their customer experience metric to this?

In the Harvard Business Review of July/August 2010 entitled ‘Stop delighting your customers’ they describe the research behind the Customer Effort Score. The key message is – stop trying to delight your customers – simply give them a satisfactory solution to their service issue by reducing the effort customers make. In effect make it easy for customers to deal with you.

The article makes the very good point that customers are more likely to leave and tell others of bad service experiences than they are to reward and talk about good service. The authors say that their research shows that loyalty has a lot more to do with how well companies deliver on the basics than on how ‘dazzling’ the service experience is. It advises against what they see as wasted investment in free products and services with attempts to surprise or wow.

The authors say their research shows there are common obstacles that don’t make it easy, the number one cause of undue effort being non-resolution of issue on the first call. They list 5 specific and common obstacles that can erode loyalty. These are…

• Having to repeatedly contact the company to resolve an issue
• Having to re-explain an issue
• Having to switch from web to the phone
• Expending moderate to high effort to resolve an issue
• Being transferred

customer satisfaction measurement 03

At Cape Consulting, we have calculated a Customer Effort Score by asking: – “I’d like to ask you about the effort you have made. On a scale out of 5 where, 0 = no effort and 5 = a very high level of effort…How much effort did you personally have to make to handle your request?”

 

However, as with all ‘outcome questions’ just asking this outcome question doesn’t help in knowing what to do about it. Therefore, in our research we asked “what makes you say that?” And have tested a number of questions that have worked well and have captured the key issues that are creating medium or high customer effort. These ‘drivers’ of customer effort are shown below for both B2C and B2B markets.

 

Net Promoter® Score or Customer Effort Score? ………both have a place, we believe.

If customers feel they are making too much effort a company needs to know about it do something about it. They need to understand what is causing high or moderate high customer effort, learn from it and do less of it. These factors will probably be the same as those creating Detractors.

Companies need to minimise contact that is non-value adding for the customer – learn from the contact and educate the wider business. Customer effort factors tend to be operational and often more about a cluster of events – not an isolated activity.

However, this alone is not enough, especially in markets or in circumstances where there is an opportunity to add value through the customer contact. In these situations, companies need to understand what delivers high added value – what drives Promoters – and do more of it.

In summary

In considering how best to measure the customer experience and drive improvements, our key pointers would be as follows: -

• The only point of any measurement system is to drive improvements. Yet, all too often there is an obsession with ‘the number’ but an insufficient focus on strategies to drive improvements in ‘the number’ – it shouldn’t be a goal in itself. Ask ‘why do you score that?’
• Work on root causes of dissatisfaction / Detractors / high customer effort – and remove or minimise – this is a benefit to customers and a cost reduction for the company.
• Good isn’t good enough to drive the desired business outcomes of keeping and growing customers – focus on what extremely satisfied customers / Promoters love – and do more of it!
• You don’t want average performance – so don’t report averages.
• Finally, measure, report and expect excellence!