We Have Metrics — Now What?
Convergences are cool when they happen, and for the past two months, I’ve been experiencing one around customer experience measurement. Today, I was on the phone with a massive government agency talking about the way it measures customer experience and why it’s not working. Next week, I’ll have another discussion with a major communications company about rebuilding its customer experience (CX) measurement system from brownfield and will also meet with a leader from a major software company on overhauling customer experience measurement globally. Two weeks ago, I met with the head of digital at a top-five bank about rethinking how to measure the digital customer experience.
CX measurement has always been a hot topic, but judging from my convergence experience, it seems to really have picked up steam. The uptick in firms’ mandate to fix CX measurement isn’t super surprising. Companies today are competing in an era that Forrester calls the age of the customer in which customer obsession is the critical driver of market leadership. As such, the discipline of customer experience has taken over as a top-five priority for most firms — Forrester’s global survey of more than 6,000 business and technology leaders shows that improving customer experience is the top business priority for more than 75% of companies. If the management axiom that you can't manage what you don’t measure has taken root, the strategic focus that is customer experience should therefore result in a major push on CX measurement at most firms — but Forrester’s research shows otherwise. Most companies are struggling:
- Only about half of the companies we surveyed consistently measure how customers perceive their interactions with their company.
- Only 34% review customer experience program status and metrics regularly.
- Only 21% model the influence of customer experience metrics on their business outcomes (like retention or revenue growth).
So it’s really no surprise that overall, according to Forrester’s Customer Experience Index research, only about 1% of brands deliver an “excellent” experience and only another 26% deliver a “good” experience. This is in line with an overarching data point: 81% of firms have immature CX programs.
In our recent consulting work, we’re seeing that despite advances in metrics, methods, tools, and vendor capabilities, some fundamental challenges with CX measurement are not going away. At the risk of oversimplification, the firms experiencing them fall into two broad camps. Camp No. 1 is firms that may have some broad data about their customer experience but have not settled on key CX metrics and don’t measure customer perceptions of the experience with real consistency. For these firms, determining actions based on CX measures is essentially moot since the metrics don’t exist in any meaningful way. If you are in Camp No. 1, I hope that you are on a mission to build the baseline capability — customer experience won’t improve with any real consistency (and likely many mistakes will be made) until you have a credible system of CX measurement.
Camp No. 2 has the firms that do a fair to good job of tracking CX metrics within and across customer journeys and at the brand level. There are reports and dashboards, benchmarks, and briefings, and some goodness is resulting in terms of activities like focusing efforts on top customer pain points and communicating the importance of customer experience across employees and partners. Firms in this camp often find themselves challenged with making the connection between measurement analytics and actions to improve customer experiences. Many have trouble, despite the data and analyses, with gaining agreement on or acceptance of CX key performance indicators (KPIs) and the business implications of current scores and trends among senior leadership. It is one thing to gain tacit agreement from an operationally driven leader of a functional or business silo that improving customers' perceptions of their experience will drive loyalty, which, they will agree on, can drive revenue. It’s quite another thing to win investment approval and for leaders to sign up for the revenue that raising CX performance will generate. And partially because of this, the funding and leadership support necessary to improve or transform customer experience performance is insufficient at many firms to move the needle in a significant way.
Regardless of whether you are in camp No. 1 or No. 2, or in some other camp, here’s what we are seeing in terms of successfully making CX measurement impactful.
One: Make CX measurement integral to the CX program and transformation plan.
This is about defining the role that CX measurement has in raising overall customer experience maturity. To be best-in-class in customer experience, firms need a best-in-class CX measurement system. Forrester’s research shows that firms that move from a state of low maturity to the next level and beyond need basic measurement capability. That’s because CX measurement (along with voice of customer and other customer understanding capability) is needed to determine where to focus for greatest impact to the business. It’s also needed to understand whether or not the firm’s actions to address a top customer pain point or deliver that moment-of-truth interaction has had the desired effect. Many repairs that firms take to improve broken experiences are not measured post-fix to close the loop.
A great CX measurement capability is one-half measuring the right things with a quality framework that paints a picture of CX performance. The other half is making use of those measures — things like targets, systematic processes for taking action based on the insights, and communication of results. At one life-sciences company we worked with, the core issue was disparate measurement systems and a lack of understanding about CX measurement among management ranks within and across business units. Bringing CX metrics together as one unified system will simplify and improve the use of CX metrics for decision-making and increase credibility, while reducing costs and customer survey fatigue.
Two: Use CX measurement to build a business case for change.
Many CX measurement systems fail to make the connection between perception metrics, descriptive metrics, and outcome metrics:
- Perception metrics. What did customers think happened, and how do they feel about the experience and outcome metrics? Was the experience easy, effective, and engaging?
- Descriptive metrics. These are objective observable events that happened, like average handle time and clicks to complete a transaction.
- Outcome metrics. What did customers do, or plan to do, as a result of their perceptions, such as renew their contract, recommend to a friend, or make an additional purchase?
At one large financial services company we worked with, the upfront assessment showed that while there was strong data coming from Net Promoter Score and voice of the customer analytics, there was no consistent measurement of what idid (descriptive metrics) related to how their customers perceived the experience. Nor was there a viable analysis of how perception metrics related to financial performance. A new framework that provides CX and financial KPI reporting at each stage of the end-to-end experience is leading to new insights on where to focus investment and, most importantly, clarity on the case for change and alignment among the executive team on the plan to transform customer experience.
Three: Convert analysis to action by linking CX measurement to customer understanding and outside-in experience design.
CX measurement oftentimes leads to more measurement and analysis than action. The acquisition of more data and the creation of more synthesis and insights can be mistaken for taking action. In other cases, there’s sometimes a gulf between what the metrics are saying about the experience and how to improve it. The metrics might say the firm is getting a low Net Promoter Score versus competitors on transactions done by phone. Or survey results and driver analytics are saying there is a priority around improving the simplicity of pricing plans. Okay, what's next? How do you solve for that? Think of measurement as a flashing red light or the needle gauge on the dash saying there’s a problem with the car. It will tell you the tire pressure is low, but it won’t tell you whether there’s a nail in the tire or you just need a little air. Similarly, we often see an expectation for more precision and answers that you should not expect from CX measurement. What exactly needs to be fixed or how to fix it in order to raise scores won’t come entirely from the measurement system. But a good measurement system will provide the focus and set the priorities. After that, the task is getting those insights to cross-functional and/or design teams and applying customer research, voice of customer insights, and tools like journey mapping and experience co-creation with customers to make incremental changes or rethink the experience.
A large communications firm we worked with was planning the next version of a major service plan rollout. This firm has a sophisticated customer measurement and voice of the customer program that identified a set of focus areas to improve. But the insights were not enough for design teams and operations to take specific action. Process and value maps had been created to take the insights further, but the resulting actions were more internally driven to achieve operational KPIs instead of CX KPIs. By applying deep customer understanding, personas, and customer journey and ecosystem mapping with a cross-functional team, they applied the measurement and customer understanding insights and developed more focused customer-driven improvements at key interaction points, while validating and refining the value and process mapping work. The corporate team also used the case to test a journey mapping tool set and process that can be applied across the company as a way to move from insights to action on raising customer experience performance.
The takeaway I hope this blog offers is that CX measurement can be tough to solve, but it needs to be treated as an essential capability, not only to generate the numbers but also to define the systematic way that those numbers help drive performance improvement. The good news is that there are best practices, tools, and resources available, as well as various in-source/outsource models that can be applied, to build the discipline and create a credible and effective, or even best-in-class, CX measurement program.