Choosing the right CX metric

Net Promoter Score, customer satisfaction and customer effort are all among the mix of metrics used to understand customer engagement success. So which is right for your business?

With so many organisations now focused on improving the experience they provide to customers, it’s not surprising to see multiple methods have emerged for measuring the quality of that experience.

Much of the discussion today is focused on Net Promoter Score (NPS), while other measures such as Customer Satisfaction (CSAT) and Customer Effort Score (CES) have also proven popular.

But with organisations looking for ever deeper insight into how their customers feel, even these three metrics may not prove sufficient to derive the level of insight now demanded. Hence, many organisations are adding additional layers of metrics to their basic polling, or digging into the content of unstructured feedback to uncover new measures of CX performance.

“At the end of the day, you are trying to use metrics to change the way you do business, so that can deliver better value to customers and a better customer experience,” says principal consultant at Qualtrics, Vicky Katsabaris. “When we talk about metrics, we are taking about the gap between what you think is happening and what is actually happening.

“It doesn’t actually matter which one you use. As long as you focus on it and understand what drives it.”

NPS provides a broad scoring of a customers’ relationship and loyalty to the service provider. The this scoring is derivable through the analysis of responses to a follow-up open ended follow-up question, such as; ‘why did you give this score?’.

CSAT is more commonly used to measure feedback at a transactional level, and together with CES, is beneficial in determining processes that might require refinement to improve overall customer experience. For instance, an airline might seek CSAT or CES data on specific interactions, such as the flight or check-in experience, or arrival times, whereas NPS provides a score on how the consumer feels about the airline overall.

Choosing your metric

One of the most important factors in choosing a metric is whether the goal is to gather feedback on a specific transaction or the overall relationship. While NPS provides a score of how the customer feels about the brand overall, a high score can mask dissatisfaction with specific processes. To this end, CSAT and CES may prove more useful.

“The number one thing is to understand from a business standpoint what you are trying to accomplish,” senior director for customer experience strategy at InMoment, Andrew Park, tells CMO. “CX metrics are valuable, but they are not nearly as valuable unless you are able to tell a bigger story, and tie together other pieces of information.

“They also need to pull in transactional information and loyalty data into the feedback as well, so they can tell a better story about who that customer is and better understand how they interacted with your brand.”

Park says an increasing number of customers are investing in text analytics to better understand the context of the CX scores they are receiving, and through doing so, gaining better insights into the changes they can make to improve them. Done well, Park says this unstructured feedback can actually alleviate the need for score-based surveys.

“What our analyst teams find is they are able to predict very closely what someone overall satisfaction of loyalty or NPS score would be based on the way they talk in the comment,” Park says. "Being able to understand how consumers talk differently when they are a promoter as opposed to how they talk when they are a neutral or a detractor tells a lot about what the individual is thinking.

“So it is very important to allow the customer to tell you in their own words why they rated you the way they rated you.”

Bridging the unknown

While NPS, CSAT and CES are have proven to be useful measures of customer experience, they only paint a part of the picture for marketers – and say little about the would-be customers who got away. To combat this, marketers are turning their attention to measuring the experience of a much more elusive group – non-customers.

“That is the silver bullet every retailer out there is looking for right now,” Park claims. “We have worked with a number of customers using apps, or to do studies where they hand out cards within the stores to provide an incentive for customer to come back, but also give their feedback as well.”

Global head of CX strategy and insights at Medallia, David Lambert, agrees chasing the feedback of non-customers can prove vitally important, particularly for those organisations that already have a high CX score. It also provides a second opportunity to convert them.

“The way to identify opportunities to improve isn’t always about existing customers, but those who drop out,” Lambert says. “They will tell you how to fix the process. And that is also where your biggest opportunity is to bring them back and rescue them, as you close the loop with them.”

Lambert says this is proving especially important in the US, where several retailers are finding their NPS score no longer predicts financial performance.

“It used to, but Amazon has disrupted that business too much now,” Lambert says. “What they are now installing is ways to get non-purchaser feedback, through simple means things like apps, tablets and kiosks, that are part of the store experience as customers leave.”

The desire to move beyond simple CX scores is also being driven by those organisations that already boast strong CX - and particularly brands in luxury categories.

“If you have really high numbers, you might be delivering very high levels of experience, but the score-based data in an environment like that hides the opportunities to improve,” Lambert says. “If you are spending $7000 on a raincoat, it is really hard to give a low score to that brand, so your scores are usually upwardly biased.”

The gold, he says, lies in the verbatim responses.

“What you want to look at there is a net sentiment score,” Lambert says. “You want to look at the positive comments, minus the negative comments. You will often find your net sentiment score is 10 to 20 points less than your NPS score, and that is where you can identify opportunities to improve from your passive and promoters from the NPS system.”

Sharing and transparency

Of course, having all the metrics in the world will be of little benefit if the organisation is unwilling to act on them. To this end, Lambert cites the example of one organisation, European insurance company, Generali Group, which reports on a very unusual activity-based metric - the number of structural changes it has made to its business as a result of customer feedback.

“Celebrating the small wins is really key for an executive like a CMO to keep track of,” Lambert says.

But even before action is taking, there can be great benefit to an organisation simply through the sharing of CX data among a wider pool of workers.

“If I have an app, how often are they (staff) logging in, and what pieces of information are they logging in for,” Lambert says. “These are leading indicators that your organisation is on board and is actually getting the data they need to be able to improve.”

While NPS, CSAT and CES are all important to CX professionals, for many organisations they are only a proxy for a metric that matters far more – financial performance.

“None of this actually matter unless you are impacting business metrics,” Lambert says.

 

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