Are we measuring customer experience (CX) the right way?
Many of the current customer experience metrics used are failing. This is why some businesses who have good NPS scores still lose customers. So, what measures do we need to put in place to drive success? How important is it to make it easy for customers to interact with you? Perhaps we should be paying more attention to emotions and sentiment, as they can reveal more about the state of our relationships with customers and potentially offer clearer insights into customer behaviour. This article explores why we are measuring customer experience metrics and how those can help businesses to improve their service. The ultimate goal for any measurement metrics is that it should provide you with actionable insights to help your business to grow its customer base, to increase lifetime customer value, customer loyalty and reduce your costs by providing customers a more effective and efficient service.
According to Forrester’s Customer Experience Pyramid there are three key elements to delivering a positive customer experience, these are:
- Useful – Were you able to meet the customer’s needs?
- Easy – Did customers have to work hard to accomplish their tasks?
- Enjoyable – How did the customer feel about the interaction?
So, if these are the key areas needed to deliver a great customer experience, how do we measure them?
Measuring customer experience: why satisfaction isn’t enough
Being useful is at the core of delivering a positive customer experience, ensuring a customer can complete a task. If your business can’t do this, you may as well pack your bags now because you won’t be in business for very long.
Many organisations use customer satisfaction (CSAT) which tracks how satisfied customers are with your organisation’s products and/or services. They use CSAT to measure how useful they were in meeting a customer’s needs. Customer satisfaction, is a poor indicator of future customer behaviour and is insufficient in generating business growth, increasing market share or loyalty.
According to Harvard Business Review, businesses that focus just on satisfaction will usually end up with customers who are content. But often these customers have less brand loyalty, so don’t stick around as long, especially if a competitor comes along with a better offering or better prices.
CSAT was one of the first metrics used to measure customer experience, but it is not the best proxy to measure usefulness. If you truly wanted to know how useful customers think you are, then it would be better to ask them a couple of direct questions – “Were you able to accomplish what you needed to do today?” and “If you couldn’t what stopped you”. You could then use speech and text analytics to filter the responses allowing you to identify common themes as to why people weren’t successful and then conduct a root cause analysis to understand what is causing the problems. This would provide you with lots of useful information on how you were meeting customers basic needs and where and what the customer pain points are.
The importance of ease in customer interactions
Being easy is crucial to any good customer experience. If a customer has to spend a lot of effort and time to interact with you, they will simply find a competitor who is easier to deal with.
According to Gartner
- 96% of customers with a high-effort service interaction become more disloyal, compared to just 9% who have a low-effort experience.
- Customer effort is 40% more accurate at predicting customer loyalty as opposed to customer satisfaction
Customer Effort Scores (CES) measure the ease of a customer’s interaction and resolution during a contact. They are being adopted by more organisations in recognition of the importance of ease on customer churn and this has come to the fore in the last year due to the increased use of digital channels. CES is very good at measuring ease and provides businesses with actionable insights to identify weaknesses across different channels and different types of customer interactions.
The role of emotions in building relationships with customers
Being useful and easy are prerequisites before customers can enjoy their experiences and positively connect with you on an emotional level. It’s not what you do but the way you do it that influences customer behaviour. The decisions customers make depend on the emotions you elicit in them. In a recent study conducted by McKinsey, 70% of buying experiences are based on how the customer feels they are being treated.
Work in the field of behavioural economics shows how dependent on emotions people are for decision-making – even very big decisions, where they think they are acting totally ‘rationally’. Harvard Business School professor Gerald Zaltman says that 95% of our purchase decision making takes place subconsciously.
The majority of organisations measure customer experience by the Net Promoter Score (NPS). This score looks to find out how likely a customer would be to recommend your company to someone else. Organisations use this metric as a way of determining how enjoyable the experience was for a customer, since only happy customers would recommend them. Anecdotal evidence suggests that when businesses look at their promoters, they will often find between 8%-20% of them have a ‘but’ statement in their verbatims offering you constructive criticism to help you improve. Some businesses are putting more focus on their promoter’s suggestions for improvement rather than solely concentrating on their detractors.
Many are starting to question if NPS is the best way to measure emotions? Just because a customer may be likely to recommend you doesn’t mean they actually will. NPS measurement looks at a customer’s intentions rather than their actual behaviour. As we all know what customers say they will do and what they actually do can be two very different things.
In addition, businesses are using NPS to measure specific interactions, but a high NPS score for that interaction doesn’t necessarily mean that customers are happy with their overall experience with you or would recommend you or your products.
So many businesses are looking for better ways to measure a customer’s emotions, some have adopted Net Emotional Value (NEV) scores, which measures how your customers ‘on balance’ feel towards you. Others are incorporating emotion questions into surveys, such as – “How did you feel about the experience on a scale of 0-10? and Why did you give it that score?” or asking totally open-ended questions such as – “In a few words please tell me how you felt about your recent interaction?”
Many companies are also using speech & text analytics software to do sentiment analysis across their various customer channels, including social media monitoring.
The purpose behind measuring customer experience metrics is to gather the Voice of the Customer (VoC) enabling you to analyse customer feedback about what they like and don’t like about your brand and their interactions with you.
There is no one customer experience metric that will do it all. It takes a variety of measures to give businesses all the information they need to understand customer experiences, expectations and attitudes to predict future customer behaviour. They involve the measures covered about how you make it easy for customers to achieve their goals. Being useful and easy to interact with are absolutely essential if you want to remain competitive. They are the cornerstones that need to be in place, because without them you will never be able to make customers happy. Once you can consistently provide a useful and easy service to customers you can then move on to making them feel happy and positively engaged, allowing you to deliver a differentiated and better customer experience.
These measures should also be complimented and supported by other key business metrics such as customer churn, First Contact Resolution (FCR), number of complaints to you, regulators or the media, cost to serve and revenue generated.