After decades of steady improvement, coinciding with the emergence of customer experience (CX) as a discipline, the America Customer Satisfaction Index now reports that customer satisfaction has been on the decline since 2019, erasing years of gains.
This despite organizations focusing on and investing more in CX than ever before.
SuperOffice’s survey of 1,920 business professionals shows that 46% say CX is their top priority in the coming year, beating out pricing or product. Consulting.us quoted a North Highland survey of 700 senior US and UK business leaders in companies with more than $1 billion in annual revenue that found CX to be the top strategic priority for driving growth in 2020.
So, what gives? How can so many companies be focused on improving the customer experience, yet customer satisfaction continues to decline?
I say it’s because a limitation on how organizations measure customer experience leads them to miss what most matters for customers. As a result, they invest in the wrong areas to improve customer outcomes.
According to “Beyond NPS: CX Measurement Reimagined,” a new global survey by Harvard Business Review (HBR) Analytic Services in collaboration with Genesys, only 38% of respondents say they are “very proficient” at measuring the customer experience. I suspect even that figure – self-reported and subjective as it is – is overstated. Either way, this is obviously a widespread weakness.
Worse yet, 41% say they can’t explain why CX metrics go up or down. I suspect that figure is understated.
This data shows something many of us know, but don’t like to talk about: What gets measured gets managed. So, it follows that if you’re not accurately measuring customer experience, you can’t systematically improve it.
But there is hope. Our research showed that about one in four CX programs (22%) could prove that their work resulted in a stronger business. We call these programs Change Makers.
If you’re like most programs, you rely largely on surveys. But while surveys definitely do have their place, they only measure a small part of the experience.
These Change Makers use a comprehensive approach to measure the customer experience, drawing on more sources of data and more technologies to monitor and improve the customer experience.
At Heart of the Customer (HoC), we initiated this research two years ago and have continued to go deeper in interviews. But until recently, we hadn’t found any other organizations diving into how successful customer experience programs measure the customer experience.
That’s why I was thrilled to read the “Beyond NPS” white paper, which uses data to understand how brands are doing at measuring their customer experience. Even though our data sources are different, their conclusions match ours: Great programs (they call them “Leaders” instead of “Change Makers”) take a more comprehensive approach to measuring the customer experience than less successful programs.
So how do you measure the customer experience?
If you’re like most programs, you rely largely on surveys. But while surveys definitely do have their place, they only measure a small part of the experience. In addition, in most programs, fewer than 20% of customers even respond to any given survey.
That indicates that the small minority that does respond is likely to skew the results. I love the phrase in the report originated by Bart de Langhe, an associate professor of marketing at ESADE, a business and law school in Barcelona, Spain. He describes how respondents tend to be biased on one end of the satisfaction spectrum or the other, creating what he calls a “brag-and-moan bias.”
Surveys also typically rely on recall, and responses can be influenced by circumstances unrelated to the actual experience, which introduces different kinds of bias.
Invest the time to learn how and where customers engage with you, including identifying their Moments of Truth.
For example, one of our clients produces cancer screenings. They report that when they survey on the process of taking their test, patients whose results indicated they were cancer-free reported the process as being easier than do those who received an indication of cancer. In other words, even though the testing process was exactly the same, the test results skewed patients’ view of that process.
In light of all this, what is a CX practitioner to do? How can you supplement surveys to get a clearer picture of your customers’ experiences?
The answer is data.
Your customers communicate with you regularly through their behaviors. Yet few CX programs mine or leverage this rich source of information. Change Makers, however, take the behavioral data customers provide every day, then match it up with operational, descriptive, sentiment, and financial data to create a complete picture of the customer experience.
In our survey, we found that Change Makers rely more on technology (and use more kinds of technology) to measure and improve their customer experience. When we asked about 12 categories of technology, Change Makers indicated they used 50% more categories in their CX efforts. The biggest disparities we found are illustrated below:
|Customer Journey Mapping Software||25%||52%||Improvement|
|Web Content Personalization||40%||66%||Improvement|
|Text/Voice Analytics Tools||32%||57%||Measurement|
The HBR study asked about different categories but got similar results. They, too, found that Leaders use more technology than companies that don’t perform as well:
The report then dove even deeper and asked about the sources of data that organizations used to measure their customer experience. Unsurprisingly, they found that Leaders tapped more sentiment than Laggards (e.g., CSAT, NPS, and CES). But the difference was greatest in the usage of data (e.g., churn and retention rates, customer lifetime value, share of wallet, and average time to resolution).
Leaders used a whopping 61% more data than Laggards.
Ironically, to use data and technology wisely and most effectively, you need to start with the analog rather than the digital. Invest the time to learn how and where customers engage with you, including identifying their Moments of Truth, those key touchpoints that have a disproportionate impact on customers’ perception of the journey.
Journey mapping is a great way to accomplish this, as well as determine all the ways customers interact with your brand.
From the HBR report:
Eighty-six percent of surveyed executives agree that listening to the customer—putting yourself in their shoes, really hearing what they’re saying, meeting them on their journey, and addressing their questions and concerns—is a critical, if hard-to-measure, component of delivering a good customer experience. Yet only 22% say their organization is successful at empathizing with the customer. Even among leaders, only 46% say they are good at it.
It’s critical to establish empathy before you can identify which data points actually matter. Without that customer-focused empathy, most brands only measure what matters to the organization. That’s a recipe for failure.
Once you identify what matters to your customers, translate those findings into behaviors and connect them with behavioral and financial data. When one of our distribution clients began this process, they had eight different ways to measure on-time delivery! How can you possibly drive improvements with eight priorities pulling you in different directions? Learn which metrics best reflect your customers’ viewpoint on their journey, then use those to drive internal change.
Without that customer-focused empathy, most brands only measure what matters to the organization. That’s a recipe for failure.
The next step is to create compelling dashboards. We like to use an approach HoC Chief Technology Officer Shawn Phillips calls the “Sentiment Sandwich.”
You’re probably already communicating the sentiment, e.g., NPS, CES, etc. But your executives don’t think in terms of surveys. So your dashboards are unlikely to be getting a ton of views. If you surround that sentiment with behavioral and operational data on one side and financial data on the other, you’ll attract a lot more interest.
You’re also going to want to make sure your messaging conveys urgency. We had one client in the insurance space with dashboards that showed an error rate of 0.68%. That certainly sounds like a result worth celebrating, doesn’t it? But that figure translated to 3,601 issues that needed to be reconciled every single week. Framing it that way paints a very different picture.
One surprise in our survey – at least for me – was the importance of journey mapping software (used by a quarter of the Laggards in our research and more than half the Change Makers). I hadn’t really been a fan, but our findings led me to change my opinion. I discovered that some CX programs were creating Living Journey Maps, which incorporate live data streams.
We consider it a best practice to include operational, behavioral, and financial data in our static journey maps. But now we also utilize CJM software to provide ongoing updates for that data. Having it populate in real time is a tremendous asset for agile teams, as it provides immediate feedback on the impact of their work, such as a reduction in calls to the contact center or increases in order size.
When you take this approach and combine empathy with data, you might find yourself dealing with my favorite CX business problem, which I first encountered during our CX interviews.
I was shadowing the customer experience leader of a global chemical manufacturer. While leading a global CX working session, she reported an unusual situation:
The company had created dashboards reflecting both sentiment and business data. The result was so compelling and powerful that leaders throughout the organization regularly reviewed the dashboards to monitor how the organization was progressing.
In fact, the dashboards were so popular that even though the company had the capacity to enable 1,000 viewers, they ran out of licenses. They had to renegotiate with Qualtrics to enable unlimited viewers just so leadership could stay informed on the current state of the experience.
Now that’s a business problem I want all CX leaders to have! And the surest path there is to combine empathy with organizational data.