Marketing Manager: “Net Promoter Score is the one number we need to grow!”
Customer Intelligence Manager: “Nonsense! ‘Satisfaction’ predicts customer loyalty better than ‘likelihood to recommend’ – it says so in the wonky business journals I read!”
Marketing Manager: “You don’t understand how business works!”
Customer Intelligence Manager: “You don’t understand how math works!”
The sad thing is that in a micro sense they’re both right, but in a macro sense they’re both wrong. The reason? They’re each taking an inside-out point of view based on their own specialties.
Where NPS Fits In A Customer Experience Measurement Framework
In our research into customer experience measurement, we see many organizations that use Net Promoter Score. Some use it poorly because – like the fictional marketing manager above – they don’t understand the limitations of what NPS can do.
Here’s how they should think of it: Customer experience is how customers perceive their interactions with a company along each step of a customer journey, from discovery, to purchase and use, to getting service. NPS measures what customers say they’ll do as a result of one or more of those interactions. It’s what Forrester calls an “outcome metric.”
But outcome metrics are just one out of three types of metrics captured by effective customer experience measurement programs. The best programs gather and analyze:
My coauthor, Harley Manning, and I are thrilled to announce that our new book, Outside In: The Power Of Putting Customers At The Center Of Your Business, is released today! We encourage you to read this book if:
You want to figure out what the heck customer experience really is.
You need to make the business case for customer experience.
Your company understands the power of customer experience, but you’re not sure where to start.
You’ve got some customer experience initiatives underway, and you’re ready to take your efforts to the next level.
You want rigorous, battle-tested customer experience tools that have been implemented by companies around the world.
If you’d like to know more about the ideas in Outside In or would like to engage directly with Harley and me, please:
Bring your questions to our #OutsideIn tweet chat next Wednesday, September 5, from noon – 1PM Eastern time.
Join us for one of two free Webinars on Wednesday, September 19. If you miss us at 9AM Eastern, you can catch an encore presentation at 2PM Eastern.
Customer experience is fundamental to the success of every business. For most companies, in fact, customer experience is the single greatest predictor of whether customers will return — or defect to a competitor.
Customer experience goes to the heart of everything you do: how you conduct your business, how your people behave when they interact with customers and each other, and the value you provide. You literally can’t afford to ignore it, because your customers take it personally each and every time they touch your products, your services, and your support.
In our new book, Outside In, my coauthor, Kerry Bodine, and I explore the real meaning of customer experience; prove the business benefits of delivering a great experience; and describe the six disciplines of customer experience leaders like American Express, JetBlue, Office Depot, and Vanguard. Our goal is to help readers understand why and how customer experience leads to profits — which it does, but only if you treat it as a business discipline.
Why is customer experience so important?
“Customer experience” is literally how your customers perceive their interactions with your company.
Those interactions occur at each step along a customer journey. That journey begins when people realize that you offer a product or service they might want, then compare your offer to other options. If things go your way, they’ll buy from you. Then they’ll use what they bought. If they encounter a problem, they’ll call for support.
No matter how solid your strategy is or how carefully you design your customer experience, it’s simply impossible to plan for every single customer interaction at every last touchpoint. At some point, you need to put your trust in your company’s most valuable resource, its employees, to do the right thing for customers. Similarly, sharing customer insights, measuring the results of your work, and introducing customer experience governance programs will only get you so far if your company’s workforce — from your top execs down to entry-level staff members — isn’t ready to embrace new ways of working.
That’s why building a customer-centric culture is critical to customer experience success.
In Forrester’s soon-to-publish book, Outside In, Harley Manning and I illustrate the importance of a customer-centric culture through a case study about John Deere Financial, one of the largest providers of financial services to agricultural and construction customers in the US. Like many companies, it had a product and process focus for decades. Then, as part of a recent call to action to become more customer-focused, the company developed a new set of customer promises:
You’re at home when your phone rings. It’s your child’s summer camp calling to tell you that she never arrived. No one knows where she is.
Make your gut churn? Yes, if you’re a parent — or even if you’re not.
If you were following the news last week, you know that Annie and Perry Klebahn did get that phone call. That’s when they found out that their 10-year-old daughter Phoebe hadn’t gotten off a United Airlines flight to Traverse City, Michigan.
Here are the highlights of what happened.
Phoebe had been traveling alone. Her parents had paid United a $99 fee for the “unaccompanied minor” service and had every reason to believe that their daughter was in good hands. According to the complaint letter that her parents wrote to United, when they dropped Phoebe off at the San Francisco airport, a United employee put an identifying wristband on her and told her to “only go with someone with a United badge on and that she would be accompanied at all times.” But when Phoebe arrived in Chicago to change planes, no one met her. The little girl reportedly asked flight attendants three times to let her use a phone to call her parents, and they told her to wait. She also asked if someone had called camp to tell them she had missed her flight, and they said they’d take care of it (but then didn’t).
Firms are increasing their focus on and investment in digital touchpoints. Why? Because digital touchpoints are critical parts of the customer experience ecosystem that offer your customers access to your firm anytime, anywhere. But when these touchpoints aren't optimized to reflect the way customers want to interact, firms:
Lose customers entirely. Seventeen percent of frustrated digital customers report walking away from a purchase, and 11% give up shopping entirely when they can't complete their online research. More alarmingly, when trying to purchase a product or service online, 17% of US consumers who fail to complete their goal take their business elsewhere. These missed opportunities can result in $30 million or more in direct revenues lost per year.
Damage their brands. In today's world of empowered consumers, the stakes are higher than ever. Poor experiences can have a ripple effect that not only damages the brand in the eyes of a single customer but also can spread like wildfire through social media.
Last week my son, Alex, had reconstructive surgery to repair his torn ACL (the ligament that holds the inside of a knee together).
He’s 11 years old.
I have to admit that this procedure worried me like hell for all sorts of irrational reasons. Sure, things could have gone wrong. But the surgeon who operated on my son literally invented this type of surgery, which is only used on children and pre-adolescents who are still growing. Plus we had the procedure donev at Boston Children’s Hospital, which topped the U.S. News & World Reporthonor roll of best children’s hospitals.
All that gave the left part of my brain comfort, even as the right part of my brain tried its hardest to give me high blood pressure. Fortunately, the operation was an unqualified success, and as I write this, we are three days into the recovery period, which is also going well.
Now normally I wouldn’t blog about something this personal. But throughout the process, Alex — who knows what I do for a living — kept telling me that he was having a great experience and that I should write about it.
Frankly, I was quite curious as to why Alex thought — and forgive me for being graphic — that getting his leg opened up and put back together with a bunch of new parts was “a great experience.” So I asked him.
Harley: You’ve said a number of times that you had a great experience at Boston Children’s Hospital. From your point of view, what made it a great experience?
Alex: Everyone was really nice to me. And they did a great job at keeping my pain level down.
Recently we’ve seen a lot of interest in the emotional aspects of customer experience by some of the smartest practitioners we know — chief customer officers. There’s a reason for this. Recent advances in the behavioral sciences now give us a better understanding of how people make decisions, experience pain and pleasure, and recall their experiences.
Maybe you’ve read about some of these studies in books like Predictably Irrationalby Dan Ariely, Thinking, Fast and Slow by Daniel Kahneman, or Switch by the Heath brothers. If you have, then you picked up on the fact that we now know our customers to be inherently irrational, making most of their daily decisions without any particular logic.
For example, we know that people experience the pain of loss more acutely than they feel the pleasure of gain. That’s the reason why people dump shares of well-run mutual funds when the economy turns down, irrationally converting their paper losses to real losses. It’s also why it’s easier to lose a customer than to gain one — people are less likely to forgive you when you inflict pain on them (got the order wrong, didn’t resolve the problem) than they are to love you for satisfying them.
Despite the fact that measurement is deeply embedded in business functions like finance and IT, companies still struggle with measurement when it comes to customer experience. In fact, I was chatting to a seasoned executive next to me on a plane a few weeks back, and he said, “This customer experience stuff is so important. But you can’t really measure it, right?” Wrong! Customer experience can be measured — you just have to know how.
In Forrester’s soon-to-publish book, Outside In, Harley Manning and I illustrate the importance of measurement through a case study about JetBlue. The JetBlue customer experience was designed to “bring humanity back to travel” with features like more legroom, seatback TVs, and snacks that people actually want to eat. But for many years, the young airline didn’t measure how well it delivered on all that — and as a result, JetBlue employees really had no way to assess how well they performed their jobs every day.
To remedy the situation, JetBlue implemented a comprehensive set of measurement tools. The workhorse of the program is an email survey that asks passengers to grade each part of their end-to-end travel experience, starting with making a reservation and continuing on through the end of a flight. When the survey responses come back, an internal system attaches operational data like what channel the customer used to book her flight and whether that customer experienced any problems on board, like a broken TV. In addition, JetBlue looks at what customers say they’re going to do as a result of their experience, like fly JetBlue again or recommend the airline to a friend.
These are the three building blocks of a solid customer experience measurement framework: