Becoming customer-centric: 3 toolkits to measure your Customer Experience
Customer-centricity is key to survival in today’s highly-competitive and rapidly-innovating world.
Businesses that fail to understand how to address their customer’s needs will inevitably lose to new, more-focussed startups. And public organisations who fail to adapt their processes, vision, and programs through deep-dive consultation will be considered out-of-touch and bureaucratic.
Examples can be found everywhere:
- Regional banks are now competing with traditional big banks, fintech startups, and must prepare to compete against GAFA (Google, Apple, Facebook, Amazon)
- City recreational services need to reinvent themselves because attitudes towards fitness are changing and they are losing revenue to fitness businesses with superior CX
- Charities who once focussed only on championing science and impact now must carefully re-invent themselves to balance cost-effectiveness, clever engagement programs, micro-donations, and shifting perceptions about causes
This article aims to support marketing, product, and design leaders within private and public organisations to take the first step to becoming truly customer-centric: measuring CX.
At our consulting firm, PH1 Media, we help organisations research, measure, and design customer-centric programs and services. Our clients deeply understand their businesses and their customers. They have a pulse on what is working for their customers and what isn’t. What they are lacking Is a way to prove to the rest of their organization the impact and priority level of their CX opportunity or challenge.
In this article we’ll introduce three toolkits that any organization can implement to measure, evaluate, and improve their customer experience. We’ll also outline our preferred CX research strategies and how we use the Qualtrics Customer Experience Management platform to measure CX.
But before we dive into those let’s first look at the most common ways of measuring CX today:
Net Promoter Score (NPS)
NPS is now used by pretty much every large consumer-facing corporation in the world. Customers are asked a simple question “How likely is it that you would recommend [brand] to a friend or colleague?”
While this methodology has been proven to predict corporate growth, the broadness of the approach makes it ineffective for evaluating customer experiences. While the qualitative insights collected via the typical NPS-follow-up open-ended question may identify pain points, they are unstructured and therefore a difficult and often ineffective diagnostic tool.
Churn / Customer Attrition
Many organisations measure the effectiveness of their teams and experience delivered by tracking how many customers they are losing. When tracked week-over-week or month-over-month this metric is a very effective way to ring alarm bells that something is wrong.
However, tracking the number of customers you’re losing is a lagging indicator, not a leading indicator. More simply said, tracking churn is like being told “it rained yesterday” instead of “there’s a 60% chance of rain today.” These types of metrics don’t provide teams the information needed to improve experiences. CX is about being able to go one step further to understand and predict the weather conditions tomorrow, or longer.
Customer Satisfaction Score
Have you recently called customer support and then received an email asking you “how satisfied are you with your experience?” These types of automated emails collect data about specific experiences and provide quantitative and qualitative CX data.
The challenges with this method are: a) average email click rates of 1% to 4% are limiting; b) these forms of customer reviews provide insights that are highly-polarized and biased towards very happy/unhappy customers.
3 toolkits to measure customer experience
So what are better ways to measure and optimize your organisation’s CX? Here are three of the tools that we use.
1. Automated Voice of Customer System
Customer Satisfaction Score as a standalone tactic will deliver limited results, however as part of an automated voice of customer system, it will transform your organization.
Voice of customer (VOC) strategies are nothing new. They require regularly measuring customer satisfaction via email and phone surveys, followed up by individual interviews to get in-depth insights.
The next generation of VOC focusses on better understanding customers satisfaction about experience, and uses automation to innovate quickly. For example, our firm uses the Qualtrics experience platform to configure an automated voice of customer system which measures satisfaction from various touch-points and then automates the delivery of these insights to teams to immediately implement improvements. Custom rules can be created to suit each organization’s needs and can define whether positive or negative insights should be sent to the marketing, product, sales, or customer success team.
2. Competitive Customer Experience Benchmarking
Market leaders have failed in the past because they relied too much on the opinions of their staff and customers. This was the story behind the downfall of Kodak, Nokia, Blockbuster who didn’t recognize that customer interests and expectations were changing.
Many forms of bias influence this type of blind spot in business decision making: cognitive bias, irrational escalation bias, status quo bias. We highly recommend all our clients look beyond their own customers.
To stay competitive tomorrow, it requires understanding the customers you haven’t been able to win and analyzing your direct competitors and indirect competitors from other industries. For example, in higher education and financial services, they are being disrupted by competitors who often go ignored until it is too late. Those competitors often grow quickly because they deliver exceptional customer experiences that redefine expectations and set a new standard that incumbents cannot match until they’ve lost market share. Or even harder to prepare for, these competitors did not appear as competitors until too late.
Competitive CX benchmarking is an approach where you regularly measure your CX against several competitors. The goal is to evaluate your advantage against competitors, including startups. Standardized and specific questions asked to your customers, your competitor’s customers, and non-customers provide powerful insights about key experiential elements, like onboarding, support requests, product setup, reporting, etc.
3. Passive Experience Evaluation
Becoming a customer-centric organization requires business leaders to compare two often conflicting data points: what customers say they want; the actions that customers actually take. Unfortunately many do not have the data to do this.
While businesses do a fantastic job of tracking transactions (revenue, sales) and conversions (signups, views), they generally do not configure their analytics to measure behaviours and experiences. UX designers at Google created the HEART framework to measure behaviour and product usage.
This framework requires teams to define key experience indicators in the following areas:
- Happiness: the joy of interacting with a product or experience
- Engagement: the level of user involvement, such as high-activity users or those who are super users of one specific feature
- Adoption: measuring the level at which a specific feature or customer touchpoint is being used for the first time
- Retention: the rate at which existing users are returning
- Task success: how successful is a product or experience at meeting the desired user goal
The Google HEART framework is especially focussed on measuring UX, however this approach empowers CX professionals with the data necessary to evaluate experiences. Additionally, creating a data archive of experience benchmarks can power predictive algorithms and AI functions.
Tell us about your organisation
How does your organisation measure and evaluate Customer Experience?What challenges are you having becoming customer-centric?
We’re always happy to chat about CX. Contact us at firstname.lastname@example.org.
And if you’re in Canada join the CX Challenges Community. We host events in Vancouver and Toronto, plus webinars across the country.