The Simple Way to Measure Customer Experience. First Briefing Paper

Transcription

1 The Simple Way to Measure Customer Experience First Briefing Paper 2014

2 1 The Simple Way to Measure Customer Experience 1.1 Measuring Customer Experience Customer experience ( CX ) is the sum of all the experiences a customer has with a supplier over the duration of their relationship with that supplier. The lived customer experience is based on how the customer perceives their interactions with an organisation. Better understanding the customer experience is a key to developing a brand or growing market share. The evidence shows that organisations that provide a 'great, differentiated customer experience' generally out perform their competitors. Single CX metrics are increasingly popular approach to understanding customer experience. These metrics are easily understood, shared and compared. Using a single metric also minimises the burden for the customer during or just after their experience. There are a number of popular single CX metrics, generally measuring customer experience by asking about advocacy (because the literature demonstrates that advocacy and loyalty are strongly linked to customer retention). When a customer describes their likelihood to recommend, they are describing their satisfaction with the experience in a way that also measures the potential outcome of their satisfaction (i.e. positive or negative word of mouth). The most common single CX metrics are: n Net Promoter Score n Word of Mouth Index n Customer Effort Score The following outlines the advantages and disadvantages of each: 02 RESEARCH FIRST

3 1.2 The Net Promoter Score In the Net Promoter Score approach, survey participants are asked how likely they are to recommend an organisation (or product or service) to a friend or colleague who was looking for <the services or products of this organisation>?. This recommendation question is scored on an intuitive ten point Net Promoter Score scale: Figure 1.1: The NPS Logic Net Promoter Score % Promoters % Detractors This Net Promoter Score calculation divides respondents into the following three groups: Promoters (those who give the organisation an overall score of 9 or 10 out of 10); Passives (those who give the organisation an overall score of 7 or 8 out of 10); and Detractors (those who give the organisation an overall score of 6, or lower, out of 10). In the Net Promoter approach, promoters are viewed as valuable assets that drive profitable growth because of their repeat/increased purchases, longevity and referrals. Similarly, detractors are seen as liabilities that undermine profitable growth because of their complaints, reduced purchases, defections, and negative word-of-mouth. To track how well an organisation is performing, an overall score can be calculated by subtracting the percentage of detractors from the percentage of promoters. This can be used to track how the organisation is perceived over time (and / or across different stakeholder groups). Where questions are asked about multiple organisations, meaningful comparisons between organisations can be made. 03 RESEARCH FIRST

4 1.3 The Word of Mouth Index The Word of Mouth Index (WoMI), sometimes called the next generation of NPS, gives greater prominence to the views of the dissatisfied customers (the detractors ). Advocates of WoMI argue that this measure provides a better insight into customer advocacy and loyalty than NPS, as NPS may place undue emphasis on detractors, emphasising negative word of mouth. WoMI asks the same question as the NPS model, (how likely the customer is to recommend the company/product/service) but then asks: How likely are you to discourage others from doing business with this company/ using this product/service? This question is also asked on a 0 to 10 scale. While promoters are classified in the same way as NPS, the detractors are classified as those respondents who gave a 9 or 10 to the second question, rather than those who gave between 0 and 6 to the first question. To calculate the WoMI score, the percentage of detractors is then subtracted from the percentage of promoters. The logic of WoMI, and how it differs from NPS, is set out in Figure 1.2 Figure 1.2: The Logic of the Word of Mouth Index Vs The Logic of the Net Promoter Score True Promoters True Detractors Promoters Detractors Recommend % Discourage % Recommend % Recommend % WoMI = NPS = of 9s and 10s of 9s and 10s of 9s and 10s of 1s through 6s Asking specifically if customers are likely to actively discourage others not only identifies the worst experiences, it allows for a more precise measurement of the negative word of mouth potential. As with NPS, WoMI is best followed by asking respondents for the reasons behind their scoring. This again allows for specific actionable items to be developed. 04 RESEARCH FIRST

5 1.4 Customer Effort Score The Customer Effort Score (CES) begins with the premise that, in service interactions, customers are not interested in being delighted and are looking for service that is quick and easy. CES is a measure of how much effort a customer must expend to achieve a satisfactory experience. Respondents are asked: How much effort did you personally have to put forth to handle your request? Answers are generally gathered on a Likert 1 5 scale, ranging from very low effort to very high effort. Figure 1.3: The Customer Effort Score Customer Effort Score (CES) Q. How much effort did you personally have to put forth to handle your request? 1 Very low effort 5 Very high effort The CES promotes ease of use, simplicity, and effortless interaction, so is primarily applicable to specific service interactions, such as a contact centre call or a website process. CES is an appropriate metric for measuring disloyalty and dissatisfaction, but is not as clear about positive experiences and loyalty. As a standalone metric, CES is also less explanatory while it provides a good overview of customer effort, it does not offer insight into the drivers and must be supported by a further main reason question. 05 RESEARCH FIRST