Measuring Customer Effort - Is it all too hard...?

I worked out the other day that in the course of a calendar year I do close to 200 presentations to banks in Australia. This translates to approximately one presentation for every work day of the year. In each and every one of those presentations there is Q&A and robust discussion (and in some cases laughter and tears).

I am very privileged to have these regular interactions, not in the least because they make it possible for me to spot trends in the questions asked and the topics of interest. In fact, I would go as far as to say that that I would be a terrible analyst if I wasn’t able to see these patterns.

One of the patterns I have noticed recently is that the subject of ‘customer effort’ seems to be raised with increasing regularity. That is the measure of how easy it is for customers to conduct their banking.

The customer effort score as a micro-measure

The customer effort score (CES) concept is something that was promoted by the Corporate Executive Board initially as the question:

? Q. How much effort did you personally have to put forth to handle your request? Answered on a 5-point scale from 1) Very low effort to 5) Very high effort

Sometime later CEB rejigged it, using actual English as:

? Q. To what extent do you agree with the following statement: The company made it easy for me to handle my issue? Answered on a 7-point scale from ‘Strongly Disagree’ to ‘Strongly Agree’

The measure is touted as being 1.8x more predictive of customer loyalty than customer satisfaction and more than twice as predictive as Net Promoter Score (NPS).

The issue with this comparison is that the question as designed by CEB is meant to be asked of customers who have just been through a customer service interaction (micro measures), which means it necessarily misses out on measuring what happens in the general course of a banking relationship – e.g. when a customer is using their banking products or logging into mobile banking. On the other hand, customer satisfaction or NPS are most often measured across an entire customer base (macro measures), regardless of whether the customer has had a specific customer service interaction at any particular point in time.

Working with macro-measures of customer effort

All of this got me thinking about whether there is a more the comparable indicator of customer effort that we might measure across an entire customers base. It’s unlikely that banks will wholesale change their focus from one corporate strategic measure such as NPS to another like customer effort in a short period of time. It is therefore critical that any macro measure of customer effort be shown to impact on the ‘corporate strategic’ measure, otherwise, it will never gain traction.

Through RFi Group’s XPRT tracking service we have been measuring and monitoring a number of attributes relating to customer effort. The bonus is that the XPRT survey has the benefit of a sample size of n=48,000, so when we report on a 6-monthly average basis, we are basing a view on the responses of n=24,000 banking customers. Even when looking at the attributes we have been tracking over time, there are a few which we could associate with customer effort. These are all asked across the entire customer base and ‘agreement’ questions, in that responses, are gathered on a scale (0-10) with the extent to which a respondent agrees that their bank “does” or “is” a certain thing.

These attributes are:

? Handles any problems quickly and efficiently

? Enables me to conduct the transaction I want through my preferred channel

? Has product and service information that is easy to find

? Has conveniently located branches

? Has conveniently located ATMs

? Is easy to bank with

? Is flexible

Not all of these are closely correlated to NPS and interestingly, the footprint-related attributes – branch and ATM convenience – are the least correlated. The attributes that most correlate to NPS is actually “Is easy to bank with”.

I like this for two reasons, firstly, it has the bonus of simplicity, and secondly, I would suggest that all of the others contribute towards being easy to bank with, which means that we can effectively track it for a particular bank and understand why it moves through the measurement of the other attributes.

At the end of the day, the topic of customer effort is important, and it is becoming a bigger and bigger part of the conversation into banking. We, therefore, need to take it into account when we talk about customer experience, but we also have to be cognisant of the differences between micro and macro measurements. Micro measurements are good for understanding the specific interactions we have with our customers. Macro measurements tell the broader picture of customer service.

I hope you enjoy these blogs and welcome any feedback you may have - Alan