It’s hard to overstate how much building an emotional connection with customers matters.
According to the XM Institute, when the emotional experience is rated highly, 76% of customers are promoters. When it’s rated low, only 6% are. More importantly, when the emotional experience is rated highly, 63% will forgive you when problems arise.
But if you haven’t created that strong emotional experience? Only 11% will.
That’s the power of a great emotional experience.
We’ve previously mentioned in this space the research we undertook last year to explore the current state of CX as a discipline, identify CX leaders making an impact (we call them Change Makers), and explore what we can all learn from their success.
In our research, we identified four key differentiators for Change Makers: these leaders start by showing organizational value, they recognize the power of emotion, they use a deliberate approach toward change management, and they use technology a bit differently.
We were fortunate to have her as a guest speaker at last month’s webinar, One Singular Sensation(the second episode in our monthly CX Through a Journey Lens series). Together, we explored the power of emotion and how having one overall emotional North Star is critical.
Below we’ve posted excerpts of the tips and stories Nancy shared. Note: You can watch any past webinar in the series on demand…and be sure to join Heart of the Customer’s CTO Shawn Phillips on the first Thursday in June for a walk through the CX Tech Stack.
“I’ve been with the company for 16 years. Hagerty insures collector vehicles, those great Mustangs from the 60s and 70s, Porsches from today…anything you might think about driving for fun vs. commuting.
We started as a niche insurance company 30 years ago, but we really have evolved into an automotive lifestyle brand. In many ways, because we listened to our customers and where they wanted to go with us.
Now we have everything from a drive-sharing service, if, for example, you want a classic car for a wedding. We do a ton around valuations, to help people buy and sell. We also have auction products and put out an award-winning magazine, which does not talk about insurance at all. It is all about this lifestyle of driving cars and escaping in your car.
We design around emotion. But we have 1.2 million members. We consider anyone who has purchased something from us as a member of Hagerty, and we treat them like that. We have about 1300 employees now. I think when I started, there were about 200, and I was running a marketing team with about four people. I think many of us CX professionals start out in marketing!”
“In 2010, the CEO said he had read an article in Harvard Business Review about Net Promoter Score. And he tapped me on the shoulder and said, ‘You know, I really feel like our customers love us. Do you think we should be measuring this?’
So I looked into it and we started a little pilot program. I think we were using Excel, and we just started measuring it. And that was the launch of client experience. As I said, I had been in marketing and then we split off marketing between acquisition and then retention and engagement, which eventually became the client experience group.
I think as CX professionals, we have to continually evolve in how we’re bringing value to the business.”
“We’re almost in our eleventh year. The first two years were very experimental and we were piloting some things.
I think we often when we start, we have this vision that you should just be going straight up. But for many of us, you’re up and down. Some years you make a lot of progress. Some years you might not. But I love the maturity model, because it’s like you’re beginning and you’re launching and you’re advancing.
Here’s a little a little true story: as I said, we started in 2010 with NPS. A couple of years after that, we became client experience at Hagerty and we wrote a charter about what our role was. We really operationalized NPS, believe it or not. We built our own NPS system and we were really investing in improvements.
Like many of us, we started out with that find-and-fix. Fun, right? Because there’s lots to find if you’ve never had a program before. And fixing is really satisfying, because you can check something off your list.
“I think as CX professionals, we have to continually evolve in how we’re bringing value to the business.”
And then we got a little more professional about it. We had a governance committee and some dedicated IT resources, where we were focusing on continuous improvements.
One of the milestones in my career was when NPS became an enterprise KPI, part of the way that we earned our bonuses and were measured as a company. But then we stalled for a while. Around 2017, fear set in and I wondered what unique value we were bringing to the business. Our insights were fewer and farther between in those early days, and the scores stabilized.
And that’s what you want, right? But we realized that we needed to take it to the next level. And emotions really came into play for us there. So we were a total 100% NPS shop up until about 2018.”
“One of our signature membership products is the Hybrid Driver’s Club, which includes specialty roadside assistance for collector vehicles – very white glove, high touch. I can tell you that when you break down in your collector vehicle, it’s a very different emotional experience than when you’re in your daily commuter car.
You’re out to have fun for the day, to show off, to take your family somewhere. And breaking down on the side of the road in a really cool car is embarrassing.
Obviously we don’t have a fleet of towing vehicles across the nation – we have a roadside provider. A few years ago, around 2014, we switched providers. And all of our typical KPI were fine, right? The average time to handle, average time to answer, how fast the tow truck gets there…all were fine. Maybe even a little better than with the previous provider.
But our NPS had gone down.”
“When we read the NPS comments, we still didn’t know what was going on. They would talk about the tow truck was late or something. So we did this really deep-dive root cause analysis, talking to customers and listening to hundreds of calls.
What we realized was that the difference was in the empathy of the agents. They weren’t connecting to that emotion that the client needed. ‘I need special care here, I need you to understand this really stinks…’
So the new provider was getting the job done, but they weren’t taking time to express empathy.
That was a bit of a catalyst for us to then do a really deep dive in our program into how emotions play into loyalty and satisfaction, and start to integrate that.”
“One of the first things you have to do – and it was a large, long body of work for us – is evaluate what are the moments that matter and why. Because we were an NPS shop and we had NPS on everything, we were measuring too much, we were measuring too often, and we weren’t measuring the right thing.
So the first work we did was to really go through the life cycle, and identify those key moments. Then we did some hypothesizing about what might matter here, that might matter there. You really have to understand that elements of those moments that matter.
We think of moments in three categories. We have table stakes – that’s stuff you have to get right to even have a foundation to build a connection. And then we have critical moments – those are pretty obvious, but they can make or break your relationship.
(For example, if a claim or roadside incident goes bad, we lose you.) And then we have what we call signature moments, which are really unique to Hagerty and build more of that undeniable member value.
That’s how we think of moments, and obviously, we measure them.”
“We have what we call our transactional metrics, which might be very different than our relationship metrics. On most transactions, we measure the three Es (ease, effectiveness, and emotion).”
At the transactional phase, or the interaction phase, those emotions can change based on what the transaction is. For roadside, we talked about a claim. A claim is about care and empathy, and the trust that you’re doing the right thing.
But if you move to the relationship level, our North Star metric is NPS. And our North Star emotion is happy. So twice a year measure the relationship. We’re asking clients to reflect back to what they felt when they experienced Hagerty.
And when it is happiness, the NPS is higher.
What we’ve learned over time is that those three Es can be an early predictors. But that’s on a transaction. Let’s say that we were having issues with our billing, which every company does! You will see effectiveness and emotion go down on that transaction. And if you don’t fix that, over time, it will impact your relationship NPS, which correlates with growth and retention.
So it’s almost like those transactional metrics are early indicators.”
“NPS at Hagerty does correlate with retention and growth. And and we’re blessed, because we are an insurance company. We have a lot of really great actuarial and predictive analysts. So over time, we were able to prove that.
One of the best things to do is start to segment the scores. If you if you look at different constituents, or different products or different processes, and compare your scores, that’s when you start to learn.
For example, we know that people who buy that club membership have a higher NPS than people who don’t. And we know they stay longer over time. That’s how we made that correlation.
It was not easy to get to what emotions we are wanting members to feel. We started out with some focus groups where we did a kind of card-sorting exercise. We were showing them a feeling and asking them what it relates to, and showing them a word and asking what feeling that relates to.”
“We were surprised about happiness, honestly. The thing is, this is a hobby and they drive these cars for enjoyment. We understand that passion. So when they call, we can say, for example, ‘What a beautiful car! I’ve always wanted a ‘67 Chevy!’, or ‘My dad had a Mustang!’ That validates what they’re doing.
That’s what we’ll call a virtual thumbs up. So now they’re happy they’ve got their policy and can go drive.
We did a ton of qualitative work around whether or not it correlates, and over time, we’ve learned that it does.”
“The strategy is around building devotion. We want an army of devoted fans out there, telling their friends. And you have to have an emotional connection to be devoted to a brand.
People will say great service doesn’t drive loyalty, and I would agree with that. But it you don’t have great service, you cannot make an emotional connection.
Often when we’re designing, we’re thinking about how to elevate and celebrate that moment that matters.
One of the more recent examples is when people get in a total-loss claim in their collector vehicle. It’s really emotional. It’s always terrible, but it’s even worse in a vehicle that might have been in your family for 15 years.
So we actually designed total loss care kits, which help them rebuild and get back on the road. And the response has been overwhelming.”
“It’s going to sound cliche, but I do think it’s about celebrating small wins.
Ten years ago, we had no budget, no technology. But we built a program to recognize employees that were mentioned in an NPS survey. That engages employees and builds promoters.
We bought green balloons and tied them to people’s desks who were mentioned. We still have pictures of it. It’s one of my fondest memories.
If you can tie to the financial results of the company, that’s always a huge boon. Frankly, I’ve had trouble doing that on a project level. But we were able to do it on an enterprise level. I struggle sometimes with that sometimes. It’s the right thing to do, but it is hard to show the financial value.”
“We implemented Qualtrics in 2019. We’re still working on aspects of that implementation and integrating it with our other systems, bringing in our operational data. Things like that take time. But what it has done, when you get the tool in place, it gives you those insights that we used to do manually, and then you can focus on what you need to change, how you can make things better.
For us, the technology was a big efficiency play and a big strain off the team, once you get it where you need it to be.”
“My team, specifically, is out of the find-and-fix. As you mature your CX function at an organization, you sort of mature yourself out of a job in some ways. Because our whole company is committed to finding and fixing now. Everybody gets it. And we’re such a larger organization than we used to be that one team can’t possibly be finding and fixing everything.
Where we have really shift our focus is more into insights and developing loyalty initiatives. What are we focusing on? How do we differentiate ourselves? What programs do we introduce?”