STRATEGIC ACCELERATION SERVICES Measuring Customer Experience By Donnovan D. Simon This document examines the process of gathering metrics to support customer experience investment. The categorization, collection process and best practices related to use of the metrics are also discussed.
Measuring Customer Experience If it cannot be measured, it cannot be improved. One of the more difficult areas of a customer experience (CX) program is in measuring and determining success. The challenge is often in establishing the correct attribution of effect of the different things that are done within a CX program. The challenge is compounded by the fact that other parts of the business also claim ownership of some outcomes. For example, the marketing initiatives could take credit for outcomes of increased loyalty and ultimate customer lifetime value (CLV). What is agreed is that measuring is critical to success. There are different types of data captured related to customer experience. These data sets are categorized in different ways by analysts. There is the operational, or descriptive, metrics which are usually related to output and interactions managed by internal teams. In the context of customer experience, the work in contact centres and support teams usually gets focus here. There is also the perception, or customer emotion, metrics which are related to the way customers respond, or feel, about their interaction with an organization. There is a direct correlation between some metrics from the operational side and the perception metrics. Another category of data is the trend or outcome metrics which reflect the deduction or causality that was alluded to earlier. The increase in customer retention and its impact on total revenue would fall within this category. Organizations must determine the important elements of their customer experience and collect data related to those areas. Align metrics to customer experience cycle or customer journey There are varying ways to construct the measurement framework. The most practical is to align the metrics to be captured to the customer experience model being used. In highly structured programs, this would be based on a customer experience cycle. Cycles vary in nomenclature but all capture the same stages e.g. Awareness, Knowledge, Consideration, Selection, Satisfaction, Loyalty, Advocacy which aligns to Pre-purchase, Purchase, and Post-purchase. i In all cases, the measure of success should be aligned to specific areas of investment. Within each stage of the customer experience cycle are important decision points for customers. These decision points, or moments of truth, are key data points to determine the success of customer experience investment. In the process of aligning metrics, it is advisable for organizations to develop a data collection strategy that acknowledges these critical customer decision points. Determining meaningful customer experience metrics Figure 1: Customer Experience Cycle Strategic Acceleration Services 2013 Page 2 of 6
The benefits of data collection hinge on the process applied to determining the right metrics to gather. There is often the tendency to skew metrics by looking at operational performance and the impact on key business drivers or key performance indicators (KPI). While the overall health of the organization is important, the application of focus on the issues that are important to customers will provide best value. In arriving at key customer experience metrics therefore, it is recommended that there are CX metrics reflecting: - Operational excellence e.g. First Call Resolution (FCR) ii - Customer perception Customer Effort Score (CES) iii - Business results - Churn iv It is often challenging to determine some metrics, especially perception metrics, as there are limited options (see table 1) and also very finite ways to collect the data. It is therefore not unusual to see organizations concentrate heavily on descriptive or quantitative metrics with limited infusion of perception or customer emotion metrics. Collecting the data and turning it to information Once the metrics to be collected are determined and aligned to the customer experience cycle, there is the important stage of data collection. The methods to collect the desired metrics may vary by organization. The metrics usually most difficult to gather are the perception metrics as they are generally external to the organization and therefore require more thought and planning. Surveys, direct conversations, focus groups and ethnography are some of the options available for collection perception (customer emotion) metrics. Irrespective of the option(s) selected, organizations are increasingly keen to avoid survey fatigue. There is also the consciousness that recency and other factors may influence perception. The translation of data into useful information is a very important part of the measurement framework for customer experience. Owners of the CX function must be able to provide an executive scorecard which shows the return on investment. The focus should be on establishing direct impact and outcomes based on the CX activities. The impact of tools (discussed below) on the information provided to executives is significant. Analytics has steadily grown to be a core part of the customer experience realm. CX analysis must include accurate interpretations of data to drive reasonable conclusions. Tools available to support CX measurement A number of tools are available to support the different stages in measuring customer experience. There are some excellent benchmarks created through indices already accepted within major industries. These indices include: American Customer Satisfaction Index (ACSI) v Net Promoter Score (NPS) vi Customer Effort Score (CES) vii Customer Experience Index viii Strategic Acceleration Services 2013 Page 3 of 6
Why are these useful? They provide organizations with clear models which are generally accepted including scoring methods for the responses provide by customers. In addition to these models, there are numerous technology solutions available. Most applications supporting CX measurement are software-as-a-service (SaaS) offers which are often integrated with Customer Relationship Management (CRM) solutions. The tools allow organizations to infuse their data collection processes with voice of the customer (VoC) initiatives. Some of the popular CX SaaS tools are ix : Cxbenchmark.com ForeSee Strativity Business variables that impact measurement All categories of metrics related to customer experience are likely to be affected by business and market events. The potential impact of these events/activities should be acknowledged and in some cases factored into the execution process. For example, the launch of a highly anticipated new product could have an impact on CX metrics contact centres are overwhelmed leading to longer wait times, longer handle times and increased dropped calls. The customer may have been disappointed with the new product and this coincides with a perception survey. Other variables that could impact measurement includes new technology solutions, changes in market conditions, changes in executive personnel and product related issues e.g. product recall. In some cases those responsible for CX measurement do not have enough foresight to make the adjustments to the data collection, analysis or sharing processes. The biggest challenges While some aspects of measuring CX are relatively simple, there are others that create challenges for some organizations. The areas of biggest challenges are often: - Finding the most effective ways to collect perception metrics another survey may not be the answer. - Correlating the customer perception ratings to the operational metrics should they reflect the same trends - Incorporating CX metrics into the executive scorecard. To successfully overcome these challenges, here are proven ideas: a) Ensure an executive owner for customer experience clear, visible and effective leadership is important to move an organization to consistently deliver on CX goals. The changes and investment required need advocacy at the most senior levels. b) Employ various tools and interactions to capture the customers perceptions these can include advisory councils, focus groups, occasion highlights e.g. customer anniversary, complimentary Strategic Acceleration Services 2013 Page 4 of 6
sales/support processes (e.g. product upgrade or renewal, bill payment). The goal should be to make the data capture exercise inconspicuous yet deliberate. c) Find appropriate software tools to do the crunching. While it is fine to have analysts combing data to transform it into succinct information, greater efficiency could be achieved by having the right tool. Often the tool will quickly process and produce multiple perspectives and correlation to other related metrics. Moving from a consistently manual approach is recommended. Summary The framework for measuring customer experience continues to get better as more companies offer solutions. The key elements to getting effective metrics for a CX program are: 1) Proper design to capture data at critical customer decision points. Often called moments of truth these moments define the things that are important to the customer. 2) Clear metrics align with the customer experience cycle. 3) Tools, and processes, to extract and decipher trends that become executive information. 4) Utilizing multiple options including other established business processes to capture metrics related to customer perception. 5) Find benchmarks to provide reasonable context to the information gathered. This framework for measuring elements of a CX program should be comprehensive and consistently applied. Doing this ensures that the organization can reasonably gauge the trend on customer s perception relative to the performance in other parts of the organization. It also provides the owners of the CX function with the validation for investments made based on the returns on those initiatives. In Table 1, an example of aligning metrics to the customer experience life cycle is provided. Each organization will have its own version of a life cycle or categorization of metrics. Choose what works best to capture the relevant information for your organization. Table 1 Measuring CX throughout the CX Cycle Perceptive Descriptive Outcome Engage Customer Effort Score (CES) Page hits Conversion rate Customer Experience Index Click through New customer revenue CS queries Sales lead User Experience (UX) score Likes, shares, tweets Assess User Experience (UX) score Customer Effort Score (CES) Buy Customer Effort Score (CES) Customer Experience Index Security of transaction portal Product download Trial orders Appointments Total sales Avg sales/channel Logistics times e.g. days to ship Page hits System throughput e.g bits/sec Trial registrations Trial extensions Upgrade to full version % Referral Customer Lifetime Value (CLV) Average Revenue Per User (ARPU) Market/Category Share Market index e.g. NYSE Strategic Acceleration Services 2013 Page 5 of 6
Use Net Promoter Score User Experience (UX) score Customer Experience Index Perceptive Descriptive Outcome Hours of use Interconnection Referral Renewal Retention Warranty claims Support Customer Experience Index Customer Effort Score (CES) Average Speed to Answer (ASA) First Contact Resolution (FCR) Average Handle Time (AHA) Total Interaction Volume Self-serve utilization % CSat Index Average Cost to Serve (Support cost/support cases) Repurchase Cross-sell/Upsell About Strategic Acceleration Services Strategic Acceleration Services is a Canadian training and consulting practice focused on Customer Experience. The company assists companies in assessing the state of their customer experience and implementing solutions to achieve desired results from investment in customer experience initiatives. The principals utilize over 25 years of experience in customer facing management roles complemented by strong academic qualifications to deliver programs, ideas and solutions that help teams and companies achieve, and exceed, desired results. Check our site for more information www.strategicaccelerationservices.com i This is a customer cycle used by MCorp Consulting. The concepts of pre-purchase, purchase and post-purchase are standard sales cycle terminologies. ii This is a contact centre metric focused on the number of interactions required to satisfactorily resolve a customer issue. Many contact centres target getting greater than 80% of all issues resolved within the first interaction. iii This is an increasingly popular metric focused on assessing a customer s perspective on the effort required, or simplicity, of engaging with an organization and its processes. A high CES (above 50% on the scale used) reflects an unacceptable degree of perceived difficulty. iv Churn is a term popularly used in the telecommunications sector for the percentage of customers that discontinue service or move to other providers. It could be seen as an antonym to customer retention. v The ACSI is an independent national benchmark of customer satisfaction with the quality of products and services available to household consumers in the United States. This survey is based on approximately 70000 respondents annually and primarily focuses on customer service metrics. While useful, it is limited to the support stage of the CX cycle. vi Net Promoter Score (NPS) is the net percentage of respondents likely to recommend/promote a company i.e. Promoters (those who would recommend) minus Detractors (those would not recommend). Many organizations translate NPS into a perception or customer emotion metric. Other would argue that it is not. vii The use of Customer Effort Score (CES) is a recent addition to the list of CX metrics. It reflects a customer s perspective on the ease (or level of effort) required to complete a request with an organization. Often CES is a complement to usability tests and website optimization. viii Developed by Forrester Research, this index which measures CX performance in American companies, has become very popular in recent years and a base line for measuring CX performance in several sectors. The survey is based on data from approximately 7600 American respondents with a focus on CX based on Forrester s Enjoyable, Easy, and Useful definition. ix The listing of CX measurement applications is not an endorsement of the tools or an assessment of the relative quality or value of these applications. It is merely to provide an idea of tools available in the market to support this aspect of the discipline. Strategic Acceleration Services 2013 Page 6 of 6