Measuring Customer Experience

Delivering a seamless, easy and engaging customer experience has never been so important for businesses across all sectors.

Whilst businesses face numerous challenges ranging from changing regulations, evolving technologies and new forms of competition, it is execution of a customer strategy that will underpin sustainable growth in the future.

All the evidence points to the fact that businesses, new and established, who are intensely focused on customer experience are the winners in this world of rapidly changing customer expectations.

What then are the customer experience approaches that successful enterprises are adopting to survive and thrive in the fast changing consumer environment and specifically how do they go about measuring improvement.

Commitment

Firstly, it really goes without saying that there needs to a be an uncompromising leadership commitment to customer experience and measurement if it is to be a basis for a business’s future growth.

This will involve going beyond the strategic talk of being ‘customer-centric’ or ‘customers at the heart’ which can be hollow statements without genuine measurable actions embraced by the whole leadership and organisation.

In short, there are four practical ways in which leaders can demonstrate a real serious commitment to a customer experience strategy and the metrics which demonstrate progress;

Definition – Agreeing and communicating a common definition of who the customers are, then alongside this a reality check on what the customer experience is today and can be in the future based on quantifiable measures. Clarity on the measures will also ensure understanding on what the customer experience is not about and enable the business to be very clear on where it needs to focus resources and skills.

Listening – Implementing a range of methods and tools that enable the business to genuinely listen to the customer as well as understand behaviours in a measurable way. Then, crucially, be in a position take action in the appropriate way on this feedback and measurement. Words without deed on actionable customer insight arising from the measures would undermine any strategic intent on customer experience.

Co-Creation – Committing to a decision making process on experience and engagement improvements that includes the customer. A co-creation approach to how the business improves the actual experience not only shows a seriousness to be customer driven but is a very efficient and effective way to ensure resources and investment are focused on areas that make a difference in the short and long term.

This means there needs to be good level of openness and transparency with customer on the measures being used even if sharing less than positive results can be uncomfortable for the business.

Goals – Putting in place clear goals that are understood and committed to across the organisation from the senior leadership team to the individual teams who are engaging with customers on line and off line on a day to day basis.

A set of aligned metrics that enables the business to measure progress on a tactical daily basis as well as at a more strategic level through an executive balanced scorecard. In addition, to reflect the serious approach by the business there needs to be a process whereby measurement is embedded in every persons role and responsibilities irrespective of their functional job.

Measurement

The focus on customer experience can be brought alive by having the right type of measurements in place and these would invariably involve a number of characteristics such as;

Correlation – To gain acceptance and relevance across the whole business, the measures must positively correlate with overall business results. For example, does the metric used lead to improved retention or better revenue outcomes which in turn drives profitable growth.

Simplicity – For the measures to be understandable and useable across the different parts of the business then they will need to be straightforward and clear. 

A complex form of measurement on multiple spreadsheets may be helpful for a few finance experts but is unlikely to gain traction with the broader teams across the business and, therefore, inhibit genuine and impactful action being taken.

Benchmark – The metrics can be useful in isolation to drive positive change in customer experience but adopting measures that can be benchmarked against other organisations enables a business to gauge relative performance.

This is important in competitive markets but also in helping understand customer expectations based on experiences with businesses in other sectors which will inevitably shape their perspective.

Metrics

There are a number of different customer experience metrics, all of which have their advantages and disadvantages;

Satisfaction – This is clearly about asking customers how satisfied they are with products and services and the score is usually on an scale of one to five. It is the traditional metric used by organisations and is relatively easily understood within a business as well as by customers.

However, it is not very precise and there is no correlation between high satisfaction scores and business results nor resulting customer behaviour so can be a bit of a blunt instrument.

Promoter – This gauges a customer sentiment by asking about their level of willingness to recommend and promote the business to a family member or friend. This is determined on a scale of zero to ten. The overall score being determined by deducting the zero to six scores from the nine and ten scores to arrive at a positive or negative net score.

The benefits of such a net promoter measure are its simplicity and easiness to assimilate at all levels of the business, at transactional level or brand level. However, it only measures advocacy and this single item score can be less reliable than a composite score. In addition, it can sometimes be difficult to attribute the level of advocacy to the specific type of experience improvement the business needs to implement

Effort – This is about determining how much effort the customer has to pout in in dealing with the organisation in order for their need and request to be handled. As with satisfaction, this is usually asked on a five-point scale.

This metric is good for understanding how difficult it is to do business with the organisation and as ease is an important consideration when it comes to good customer experience and improving the level of engagement this can be a useful metric. However, it only covers one aspect of the customers engagement and does not really gauge emotional outcomes. 

Loyalty – This metric can take various forms depending on whether the focus is on retention, effort and advocacy. The questions tend to be on a five point range based on the level of agreement or disagreement to a statement.

The benefit of this metric is that it can measure emotional and behaviour outcomes as a composite score and there is evidence that it does correlate to business performance and result.

However, it is not always easy to benchmark as there is not always an industry standard. In addition, the score can sometimes need more explanation as to what they mean and the actions to be taken.

Overall, there is no one simple metric alone that will help a business drive the improvement in customer experience.

The metrics need to be seen as a set of golf clubs to help navigate the whole customer experience ‘course’. You would not expect to complete an eighteen hole round with just one or two specific golf clubs and the same is true here.

Furthermore, it may be necessary to sometimes build you own specific type of measure that is relevant to the customer and business outcomes you are looking to improve. There are numerous third party agencies that can help businesses develop more tailored metrics to sit alongside the standard metrics

Overall, a balanced scorecard approach to the metrics is considered the best approach for many businesses, some of which may be specifically designed to suit the organisations short and long term outcomes.

In addition, a scorecard that includes other quantifiable measures around retention and share of wallet as well as qualitative measures that enable the business to understand customer sentiment and emotion in more detail can be very powerful in driving positive action.

Summary

Forward looking businesses are ensuring they are investing in the right skills, tools and capabilities and this is the basis for executing their customer strategy.

Technology and new skills have transformed how businesses can ask for and act on customer feedback and insight. The new innovations means feedback from customers can be captured real time and related to specific interactions and engagement.

Relying on anonymous, aggregated customer feedback which is collected on an infrequent will not drive progressive improvements in experience and engagement.

Being in a position through metrics to drive personalised responses to interactions inevitably brings about stronger connections with customers which go to improve the overall experience. Then at a more strategic level this can be correlated to deeper customer relationships delivering improved retention, share of wallet and ultimately commercial value.