The top customer experience metrics that help you gauge engagement success
- 06 July, 2017 15:07
Customer experience and a customer-centric approach remains top of the agenda for most marketing leaders. But according to recent research from Forrester, only a third of Australian brands added or improved on their CX measurement in the past year.
Forrester’s Australia Customer experience Index, 2016 showed for the past few years, Australian companies have been slow to respond in prioritising CX measurement, with only the banking and insurance sectors leading the way to change.
So just what does it take to measure your customer experience efforts successfully?
According to Qualtrics managing director for Asia-Pacific and Japan, Bill McMurray, organisations have spent too long looking exclusively at data about the past, known as operational data [O-data], and failed to leverage experience data [X-data].
“X-data is the human-factor data; the beliefs, emotions, and sentiments that tell businesses why things are happening so they can predict what will happen next,” he told CMO. “But most organisations are O-data rich and X-data poor, and this has led to a huge gap between the company’s ability to know what’s happening and why it’s happening, and how to adapt programs in real time.”
To deliver a superior customer experience, McMurray said organisations must bridge the ‘experience gap’.
“When they can do this, they are more likely to generate higher revenues and grow faster than their competitors,” he said. “Businesses should therefore be looking for ways to optimise the foundational experiences they provide as a business for their customers, products, employees, and brand.”
But not all customer metric tools are created equal, and many of them require companies to invest time and resources in conducting surveys then extracting and analysing the data, McMurrary said.
“And unfortunately, many companies are too time-poor to invest in such a resource-intensive task, making customer metrics tools less effective than they could be,” he said.
NPS score is more than a measurement tool
One of the staple measurements when it comes to customer engagement is Net Promoter Score (NPS). Increasingly adopted by organisations locally and globally, NPS has also become a measurement that’s recognised and understood in the boardroom, adding to its clout.
But experts say other methods are coming into play. Bain & Company’s partner and lead of customer strategy and marketing practice for Australia, Katrina Bradley, said thousands of companies today are using NPS, yet recent analysis shows only one in 10 getting it right.
“When Bain created the Net Promoter System more than a decade ago, our aim was to develop something simple that could act as a barometer of customer relationship health, and also correlated with growth,” she said. “Yes, the Net Promoter System has evolved into something much more than a measurement tool. The companies that use NPS effectively use it as a management system, not just a customer metrics tool. Though the science is still young, it is more than just a metric - it’s a management system, an entire way of doing business.”
As an example, Bradley said companies are linking NPS to underlying operational metrics to identify where and when customer issues are arising before they get customer feedback.
“Leading NPS practitioners are also becoming more sophisticated in tailoring NPS surveys to their knowledge of the individual experience a customer has been through,” she said. “For example, if a customer has just taken a delayed flight, sending them a generic NPS survey asking them if they are a promoter is likely to further anger the customer. “
To gauge customer experience and to paint a rich picture of experiences customers are having, leading organisations should gather data from multiple sources, Forrester’s senior analyst, Tom Champion, said. That means from solicited and unsolicited feedback, structured and unstructured data, via direct and implied methods.
“Customer experience measurements are not one-size-fits-all and which metrics to use depends entirely on the organisation and their CX and business strategy,” he said. “NPS is still a mainstay, but we're hearing more and more from organisations developing their own bespoke measurement frameworks which may or may not include NPS, CSAT or CES.”
In order to be strategic, these metrics are often overlaid on journey maps to pinpoint how they're tracking at the signature moments as well as along the journey overall, Champion said.
“These end-to-end metrics have been particularly successful at breaking down siloed thinking, though I'd say the biggest mistake organisations are making is not linking their customer experience metrics to business metrics.”
The metrics evolution
Measurement tools have certainly evolved over the years. Just look at the growth of the customer feedback management market in Australia, reflected through the growing coffers of Qualtrics, MaritzCX, Medallia, Confirmit, Verint and others.
“Beyond these platforms are also libraries of software add-ons like Statwing or Compellon, which specialise in things like predictive analytics or verbatim analysis at scale and places their power in the hands of CX professionals - without the need for data scientists,” Champion continued. “In fact, some of the most effective tools think about the full cycle of a metric, which means how it's socialised, drives action, informs decision making and the story it tells.
“The tools are improving in leaps and bounds when it comes to how data is gathered and how it's analysed. This will only continue to improve as we get better at things like video analytics, emotional analysis and plugging in third-party data.”
At Qualtrics, three fundamental key customer behaviours that organisations are measured: Belief, attitude and intention.
“Belief is what a customer thinks of your product, service or company, whether they have interacted or not,” McMurray explained. “Such brand awareness is typically measured through market research.”
‘Attitude’ is what a customer actually experiences through an interaction with your product, service or brand, which McMurray stressed was an essential metric in measuring and managing the customer experience over time. Thirdly, ‘intention’ is what a customer intends to do or say about your product, service or brand based on their lifetime of experience with your organisation to date, he said.
“The best customer metric solution in the world will be useless if the business doesn’t act on the feedback it receives,” McMurray said. “Companies need to review the insights from customer metrics and understand how to change policies or procedures to deliver the exceptional experience customers are demanding.
“This is the final and most essential piece of the puzzle because customers who provide feedback want to see that the company has listened and taken their thoughts on board. Failing to do so sends a message that the customer’s opinion isn’t actually important or relevant, and can alienate customers.”
Volkswagon’s proactive customer metrics strategy
For Volkswagon Group Australia’s director of customer experience, Jason Bradshaw, the focus is not on the measurement method itself, but what the company does on improving CX.
“We use Net Promoter Score, Customer Satisfaction, Customer Effort Score and so on, but what is more important to me than the score is what you do about the customers feedback,” he said. “Here at Volkswagen, we are focused on improving our customers experience and we do that by listening to and acting on customer feedback, not just the score we achieve.”
Every Volkswagon customer that purchases a new vehicle or has their vehicle serviced receives a survey, with questions based around two key metrics: Net Promoter Score (NPS) and Customer Satisfaction (CSS).
“I fundamentally believe it is essential to understand the nuanced differences between a customer who is satisfied and one who is a true advocate of the dealership/brand, as measured by NPS,” Bradshaw said.
In addition to these surveys, Volksawgon seeks feedback from every customer who interacts with its Roadside Service and Central Customer Contact Centre.
“We have also deployed rich text analytics and machine based learning tools to analyse and interpret customer comments in real-time,” Bradshaw said. “Customer verbatim comments are where the true insights to driving improvements to customer experience lay.”
Australian health insurer, nib, is another that’s employing a number of tools to gain a better understanding of our customers’ needs, including the traditional NPS method as well as voice of customer demand, group executive of Australian residents health insurance, Rhod McKensey, said.
He said the ability for nib to measure the customer experience has greatly improved in the past few years.
“However, I believe the greatest change has been in the industry approach to measuring customer data,” he said. “Listening, analysing and acting upon customer data is now a key component of any successful business.
“It allows us to deliver the best customer experience possible based on hard data ‘straight from the source’, rather than just what our management teams believed was right for our customers. This has helped us become better operators and deliver a tailored customer experience that allows our customers to see real value from their health insurance.”
Up next: What ING does to measure customer success
ING’s transparent weekly metrics strategy
Over at ING, executive director for customers, John Arnott, also said there is no ‘one secret number’ that tells you everything.
“What we do at ING is we create a weekly report or weekly dashboard we call ‘The Voice of the Customer,” he explained. “That is what we use to send to our employees, our shareholders to really give an overview of what customers have been saying each week.
“This looks at four different sets of data points, which gives us a score card of customer health.”
Within this weekly report, the first set of data points is derived from NPS. Arnott said that gives ING a headline number which it can measure itself against.
“It’s a number that also allows us to benchmark against competition and other players in the industry,” he said.
Secondly, his team spends time working out what the customer moments of truth are and what are those ‘aha’ moments that are really important to ING customers. “We also measure our execution against those moments of truth and understand how we track those by what we call ‘easy scores’,” he added.
Thirdly, ING uses a customer poll, looking at social media sentiments and mobile app ratings, which customers provide on a regular basis.
“We also pilot with a third party that allows customers to vote and say how happy they are with ING – and that gives us a real tangible metric around customer experience,” Arnott said.
The fourth thing ING does is pull together customer stories and takes a look at what’s working, what’s not working, and how the company can do better.
“We can then get a good insight into the voice of the customer, which we then distribute across the entire organisation to give us focus and direction as to what we need to do to execute against that in the following week,” he said.
Historically, ING used customer satisfaction as a core metric, but over time, Arnott said the organisation realised there was a need to have a more balanced scorecard.
“It was a good score, but it didn’t really give us any insights, and it didn’t correlate to will customers think we stand out from the pack and recommend you for their product and services,” he said. “Customers may be satisfied, but they might not have a connection of engagement with your brand.
“We felt didn’t give us the value we needed or the insights we needed to move forward and execute against a customer-centric strategy.”
Since 2009, ING has been using NPS to better obtain customer feedback throughout the customer journey. “Within our NPS survey to customers, we also measure customer satisfaction, customer effort, and touchpoint experience,” he said. “In addition, we also measure Voice of Customer Demand across customer touch points to classify customer demand as either value demand or failure demand.
“Similar to our Net Promoter System, this data is analysed and acted on with the failure demand categorised and a program of work and action plans developed. We have also been measuring failure demand since 2012 and through our process of collecting, analysing and acting on this customer data we have seen failure demand reduce significantly.”