Measuring Customer Experience: Where do we go from here?

There has been a dramatic rejuvenation in the measurement
and usage of customer experience data in the past decade. Frederick Reichheld’s
2003 Harvard Business Review article, ‘The OneNumber You Need to Grow,’ sparked a resurgence in the assessment
and importance placed on customer feedback.
For better or worse, Reichheld’s Net Promoter Score (NPS)
grabbed the attention of senior management in ways that customer
satisfaction/loyalty research has struggled to do. Overall, this attention has
been good for our clients and for us as researchers, but NPS isn’t the panacea
that it is sometimes made out to be. There are several material
methodological issues that need to be considered:
  1. The
    scores can be unstable due to using only portions of the scale, and the
    mathematical operation on them. For example, the American Customer
    Satisfaction Index (ACSI) has a margin of error of +/- 3.3%, while the NPS
    score on the same data has a margin of error of +/- 10%.
  2. Consistently,
    NPS is closely linked to customer satisfaction and overall quality; if
    your business is more driven by value and price, NPS may not fare as well.
  3. Differences
    in likelihood to recommend don’t automatically mean differences in
    loyalty.
    • Levels
      of involvement with product are a mitigating factor.
    • ‘Promoters’
      are not equally loyal.
In particular, B2B researchers have struggled to see
the relevance of recommendation as the key measure of
success. Fortunately, there are others to consider, including the
recent emergence of the Customer
Effort Score 
as an alternative to NPS and other more established
metrics such as the Commitment
Score
While the methodological issues with NPS are real and
persistent, there is a portion of the approach that can be adopted
regardless of the key metric used. Specifically, I am referring to
the identification of individual customers who have had a negative
experience (detractors, in NPS-speak) and efforts to address the
individual customer’s issue directly. In my work, it’s this closed-loop
feedback mechanism that drives the success or failure of a program. 
The direct linkage to actual customers allows the
organization to identify and address problems one customer at a
time. Extracting insights from these experiences that can then
be incorporated into the structure of the customer experience is vital,
but, perhaps more importantly, the business is fixing/improving/evolving the
customer experience as it addresses these individual issues. Delivering a
differentiated customer experience is, in many ways, a learned behavior that
requires practice to make perfect.
In the end, what really matters is how you use the
feedback you obtain about the customer experience to truly provide a
differentiated customer experience. There are many ways to inculcate
customer feedback into your organization, but successful efforts seem to share
the following characteristics:
1.       A
top-to-bottom cultural embrace of the importance of improving the customer
experience and buy-in on the measurement program and metrics used.
2.       A
coordinated effort between tactical (interaction) and strategic
(relationship) customer experience measurements.
3.       Clear
linkage between feedback results and other key company metrics and goals.
4.       A
research design that includes sufficient granularity to support tactical
decisions and line-level accountability.
5.  A
flexible measurement system and strategy that stands up to business
changes and evolving needs.
     ABOUT THE AUTHOR
       Mark Willard, Managing Director, Market
Strategies International

  

Mark has more than 20 years of experience in research. A specialist in financial services, Mark most recently held the executive vice president position at Research International, where he led the Financial Services practice and served as general manager of their East Coast offices.

Prior to Research International, Mark was the managing director and founding partner of The Willard and Shullman Group, a full-service research and consulting firm. At Willard and Shullman, Mark managed all consulting and project-related activities and was also the firm’s chief methodologist. Before Willard and Shullman, Mark was an internal consultant for Citicorp, where he was involved in the development of virtually all of its customer satisfaction measurement programs worldwide.

Mark has an undergraduate degree in psychology from Hofstra University and has completed coursework toward his Ph.D. in applied psychological research, also at Hofstra.

Join me and Mary Lee of AAA
for ‘
Revolutionizing CX: How AAA Turned Satisfied
Customers into Loyal Advocates

at TMRE 2014 in Boca Raton (2:30 p.m. on Tuesday, October 21). We’ll share how
a new measurement program and a built-in, closed-loop system revolutionized
AAA’s member experience program and empowered employees across the organization
to make immediate and lasting improvements in customer experience.