Wednesday, May 29, 2019

How Do Your Customer Experience Scores Compare to Competitors? Who Cares?

Photo by Element5 Digital on Unsplash
Virtually every customer experience (CX) leader struggles with one common issue: How do I acquire the attention and commitment I need from bosses and peers? How do I get them to care so that the CX program can secure the necessary budgets, collaboration, and resources?

Some CX leaders turn to benchmarks--the relative scores received by the company versus its competitors--to gain consideration within their organizations. These leaders hope to earn attention by demonstrating their brand lags in key CX measures such as net promoter score (NPS), customer satisfaction (CSAT), customer effort score (CES), and other operational metrics (such as average hold time, abandon rate, etc.) Telling those inside the company that a hated competitor is beating your brand’s NPS may seem an excellent way to engage your peers’ competitive spirit, but there are problems and dangers with relying on third-party benchmarks to drive attention. These problems include:
  • Consistency and quality of data: A company’s NPS or CSAT score scraped off the internet is an unreliable measure. Too much depends on who the company asks (the sample), what questions precede the NPS questions (the survey design), any preceding interactions that trigger the survey (the methodology), and other factors. The only reliable and consistent way to compare one company’s score against another is to ensure uniformity of sample, survey, and methodology, and this is best done within a single study. This is why brands interested in benchmarks rely on services that collect brand perception and customer satisfaction data using consistent, objective processes, such as those managed by JD Powers or the American Customer Satisfaction Index.
  • Pertinence: Every category, every brand, and every audience will have unique factors that impact customer satisfaction. We wouldn’t expect the CES scores for a value brand to compare to a luxury brand, or for a brand focused on selling in retail store aisles to correspond to one that controls the entire end-to-end experience with direct-to-consumer e-commerce. By selecting benchmarks that may lack relevance to your brand’s unique situation, you could be setting the bar too high or too low. Many CX leaders with whom I speak wish to benchmark themselves against the best companies in the world, such as USAA or Amazon, but few companies share the same customer base, mission, leadership, history, offerings, and strategies as these companies. Your brand needs to be the best in its unique situation—just as USAA and Amazon have done in theirs.
  • Goals: The goal of CX is not to achieve a better score than someone else; it is to improve customer relationships in ways that drive financial success. If all a brand delivers with its CX efforts is to beat competitors’ scores, has it really achieved anything vital to business outcomes? Even if your company earns better ratings than competitors, who’s to say there isn’t more financial benefit to be created by driving to even greater levers of satisfaction, loyalty, and advocacy? Brands that achieve game-changing CX don’t only attain higher scores than others but use their NPS, CSAT and CES data to recognize what drives customer dissatisfaction, uncover problems, reveal unmet needs, and learn what earns the most durable trust, retention, repeat purchases, and WOM. Benchmarking yourself against competitors does not uncover those critical drivers of business success.
  • Focus: And, one of the primary problems with benchmarks in CX is that they encourage a focus not on the customer—which is, after all, the whole intent of CX—but on the competition. The strongest CX efforts are those aimed at knowing and delivering on customer wants, needs, and motivations, not ones that focus on the actions or scores of competitors.
In our experience, benchmarks do not drive more attention, commitment, and support within organizations. What does is using your data to demonstrate the relationship between customer perception scores (such as NPS) and customer behaviors that drive business results. Using your data, from your customers, buying your products, can help you prove that your promoters (when compared to detractors) buy more frequently, spend more, churn less, have a lower cost to service, refer more business, and offer better online ratings that drive more sales. If you can demonstrate that your most-satisfied customers provide more top- and bottom-line financial results than do your least-satisfied customers, you’ll crush the barriers that prevent you from attaining the attention and support your CX initiatives require.

Senior executives have a hard time knowing how much (or whether) to invest in improving customer experience when the only goal is to beat some other brand’s score. Sure, it feels good to beat the competition at something, but you cannot take NPS to the bank. The most successful CX leaders are the ones that focus not on competitive benchmarks but on ways to validate why CX matters to business outcomes. Current Gartner clients can learn more in our research report, “Tailor Customer Experience Data and Metrics to Improve Customer Centricity, Drive Action and Validate Business Outcomes.”

Monday, May 13, 2019

Moments of Fallacy: Your Customers Don't Leave But Are Invited To Do So

We get the language of customer retention and attrition all wrong. We say things like "customers abandon us," "they leave," or "they attrite." But in framing our brand's retention issues in this manner, we swap the subject and object of our sentences. We make the customer the subject and our brand the object, as if they've done something to us, but the reality is precisely the opposite. We are the subject--our organizations are the ones accountable for the customer experience (CX), for ensuring customer satisfaction, and for earning customers' loyalty and dollars. Our brand is not victimized by ungrateful customers who leave us but has a duty to create an experience that invites customers to remain.

This isn't just about language but about the way we think and act. Our mental models influence the language we use, and the language then reinforces those same mental models.

Your brand may not intentionally "fire" the customer, but make no mistake: If you neglect customer needs and expectations, ignore their feedback, consistently prioritize profit over customer satisfaction, and expect loyalty in return for mediocre and undifferentiated experiences, you may as well engrave an invitation for your customers to quit your brand. To influence customer-centric change in your organization, start with the right vocabulary and mentality. Stop blaming your customers for leaving, and embrace your obligation to offer experiences that invite customers to stay.

Another example of the way our language betrays us is the term "moment of truth," which has been popular in CX for years. The idea that your brand has some limited number of consistent and eternal "moments of truth" that are essential to every customer in every situation falls apart pretty quickly when you poke at it gently.

Any moment can be a moment of truth if your brand disappoints or harms a customer. Moreover, satisfied and loyal customers don't abruptly seek competitive solutions simply because your brand dropped the ball in one, big, predictable moment of truth; instead, you lose customers when your brand suffers a sustained loss of trust, loyalty, and satisfaction due to a series of effortful, disappointing or frustrating experiences. In the battle for customer retention, every touchpoint is a moment of truth, and the decision on which moments matter most is not yours but each customers'.

To read two examples that illustrate how brands invite customers to leave, explore brands' "last-touch attribution" issue with attrition, and begin to improve the customer-centric language and mindset at your organization, please continue reading this post on my Gartner blog.