My CX key performance indicators are not moving! Why?by
Your customer experience efforts aren't moving the numbers... so what's going wrong? Colin Shaw shares some thoughts on how to get to the bottom of this problem.
We've got a pickle. I love a pickle. Tonya Dunn, an insurance professional, wants to know why her customer experience efforts aren't moving the numbers. She wants to know what we think they should do.
For those who don't know, Tonya listens to our podcast and is using our "I'm in a Pickle" feature. The pickle is a business problem with which she wants help. I am sharing her pickle here also because I am sure some of you have the same problem. We all need to move the numbers, as it were, so it's a familiar business problem, and the advice will be widely applicable.
There is a lot we can talk about here. (And if you want to watch us talk about it, check out our Intuitive Customer YouTube Channel) So, let's begin from an academic viewpoint with some theoretical explanations for Tonya's pickle.
Let's start with reference points
The first that comes to mind is 'reference points'. This theory is a favorite of mine because it explains a lot of customer behaviour. Reference points describe what we use to compare one thing to another. This theory is helpful because we always evaluate things by comparing them to something else. That's how our mind works for everything, including customer experiences. No experience is good or bad unless you compare it to something else, right?
So, suppose we want to know why our customer experience scores are not improving and why our customers are responding positively to objective improvements that we've made. In that case, part of the problem might be that we don't know their reference point.
It is essential to know what customers use for comparison. It could be our previous performance or our direct competitors. It might be some experience they had in a completely different industry. So we need to know what that reference point is.
Moreover, there are two reference points here, the customers' and Tonya's companies. The customer puts you up against their reference point, whatever that may be, and the organisation is comparing against one, too, probably using its performance in the recent past.
These are not right or wrong. Each entity uses different perspectives to evaluate an experience. However, it might be contributing to Tonya's pickle.
Most organisations, in my experience, don't look at competition from a customer satisfaction perspective. I'm not saying all, but most don't know how their Net Promoter Score (NPS) stacks up against their nearest three competitors. However, comparing the competition's NPS is essential because your customers might be doing that. So, even if you have performed better than you did last month and score way lower than the competition regularly, customers might not be ready to up their evaluation of you yet.
However, this comparison to the competition works the other way, too. For example, if someone moved to Sarasota and wanted my advice about a cable company, I would tell them to choose one over the other. My NPS score for the cable company I recommended would still be low; they are not great. However, I would, in reality, recommend them because they were marginally better than the other one, which was loads worse.
It's a bit like politics, too. In a two-party system, there are likely two candidates you are not wild about in every way. However, one is marginally better than the other, so they get your vote.
Making experiences easy to evaluate
The mention of politics reminds me of another theory that might relate to Tonya's pickle. It's the Evaluability Heuristic. You'll remember that heuristic means a shortcut for decision-making. With the Evaluability Heuristic, we view a complex decision and make it simpler by using a metric that is easy to evaluate. So, for example, with politicians, people sometimes vote for the candidate that would be more fun to have a beer with rather than examining their stand on every social and economic issue or, if they were already in public service, their voting record for the past ten years. In this case, the candidate's likability matters more than all that, and it's because it's easier to judge.
I have an example from my customer behaviour. As you might know, Europe has an energy crisis at the moment. So, I am considering adding solar panels to my home in England. However, I got the quote from the solar panel company, and it was three pages long and full of things I couldn't make heads or tails of. So, instead of going through this whole thing line by line, I compared how many kilowatt hours I used versus how many kilowatt hours the system would output.
The solar panel industry is very technical and has many brilliant people working there. So much of that information I skimmed over probably matters and is impressive, indicating a higher quality or product than the competition. But, like most people, I am not an expert in electrical engineering, so it isn't very meaningful to me.
In Tonya's case, they might have made improvements in the areas of the insurance experience that regular people can't evaluate. So, those improvements have yet to affect their NPS. But, finding a way to make it straightforward for customers to assess the experience might help.
Other factors affecting Tonya's pickle
Some other factors might affect Tonya's results. It could be that they are measuring the wrong things.
I had a similar thing happen recently with a company we consult. If you are familiar with my model for customer-centricity, Naïve to Natural, then I would describe them as 'transactional', which isn't the least customer-centric. Still, it is only the next level up from it. The company is very process and quality driven, which is fine but doesn't consider the emotions of the business. Getting into emotions would move them to the next level of customer centricity, Enlightened.
One of the impediments to progress was their current scores were very high in the metrics they used to measure performance. They couldn't see that they needed to change anything else because they were getting nearly 100% on these metrics, so it didn't seem worth spending resources to improve.
However, they weren't measuring customer emotions. If they had been, they would have seen they had enormous potential for improvement. (To their credit, this company took our advice and is making the necessary changes to take this on in their experience.)
My point with this story is that there are different levels. It could be that Tonya's company is measuring its performance on metrics that are too basic to see an NPS move. For example, if a hotel asks you if they provided a bed or if the room was clean, you might say yes, but not change your NPS evaluation of them. Why? You expect a room you pay for to be clean and have a bed. However, you might not expect a cocktail hour, free high-speed internet, a way to use your Netflix on the TV, etc. These are next-level hotel experiences that matter to you. Getting those things might change your score.
If you don't measure what moves the NPS needle, you have a problem with your methodology.
In Tonya's pickle, it could be that things are not moving because they are measuring things that don't move that needle for customers. Going for improvement there might also be a waste of time because it's already great. Getting it perfect will probably not be worth the time and resources needed for such a marginal improvement.
Another factor might be that Tonya's company is measuring the right thing in its self-evaluation of improvement, but the methodology is flawed. For example, the company might be using the wrong idea or aspect of the experience to track progress. That idea or part might not drive value for customers. Or it could be getting the number wrong, so you don't have an accurate assessment.
If you don't measure what moves the NPS needle, you have a problem with your methodology. The improvement you make should be in areas that customers value the most. Providing those things will show in any metric you measure, from NPS to revenue to customer emotions.
Finding what those things are is always tied to emotions. For example, in our work with Maersk lines, which we discussed in a recent podcast, we asked many questions, but the ones that pushed value were emotional. If Maersk had improved the questions they scored lowest on without considering the emotional engagement with that area, they might have spent a lot of money on something that didn't fix their problem, such as a low NPS score.
In another example, an auto insurance company did make that mistake. They asked customers on a survey what they needed to improve. The answer was that their billing required improvement. So, the company spent a fortune on fixing the billing, but customer satisfaction did not increase. Why? The customers didn't care much about the billing system, despite what the survey results said.
Those who have read my newsletters for a while know I often discuss this concept with a Disney Theme park example. Disney had asked theme park guests what would improve their dining experience in the park. Guests told them they wanted the option of a salad. However, Disney knows that people don't eat salads at theme parks. So, they improved their possibilities of food that people like, which are squarely in the junk food category.
So, what should Tonya do about her pickle?
To answer Tanya's question about her pickle, what should she do? We have a few things:
- Determine what improves your experience from the customer's perspective: This requires understanding customers' reference points. If you don't know what they use to compare you, you can't identify where your opportunities are.
- Ensure you measure the right things: Do the metrics you use to drive the outcomes you want in the marketplace? If not, change the measurement to get an accurate read of where you are.
- Provide what customers really want: If you improve areas that don't matter (or don't matter enough) to customers, then you spend valuable resources where you shouldn't. Make sure that the improvement area you identified is something that matters to customers and would change their perception of your organisation.
Hopefully, this advice will help Tonya in her efforts to improve their scores. Do you have a business pickle? If so, contact us here and let us know. We might choose your pickle to solve on our podcast and YouTube feed. So, let us help you.
Colin Shaw is an original pioneer of 'Customer Experience.' LinkedIn has recognized him as one of the 'World's Top 150 Business Influencers', where he has 291,000 followers.
Shaw’s Customer Experience consulting company, Beyond Philosophy LLC, has been recognized by the Financial...