What is the single measure I should use for measuring the customer experience?
So what is the single measure you should measure from customer feedback? There’s plenty to choose from – Satisfaction, Recommendation, Trust, Ease of doing Business, Customer Effort, Value, Loyalty … We’ve reviewed the alternatives out there and summarised what might be the best measure for you and your customers.
In our view, the overriding factor has to be that the measure will provide an effective framework for a business to be able to understand the feedback, and improve its customers’ experience relative to the competition. If you can do that the traditional business measures of success will naturally follow.
So what are the single measure of customer feedback options?
If we go back say 30 years in the UK, and perhaps even further in some other countries, when the concept of listening to customers’ overall opinion was first gathering pace you would have heard an almost universal cry of it being Satisfaction, and hence a whole industry of customer satisfaction measurement was born. Reporting top box customer satisfaction scores was the refinement against this score, yet increasing numbers of companies started to find that the link between customer satisfaction and customer behaviour wasn’t as strong as they had hoped for. Customer Satisfaction Measurement is far from dead though and still today companies talk about their CSM (Customer Satisfaction Measure) score or their CSI (Customer Satisfaction Index) score.
After Customer Satisfaction, came Customer Delight, we heard CEOs claiming they wanted to delightcustomers. Nobody really knew what that meant, and actually found the first challenge was to identify who their customer was. And so grew the mega IT industry of CRM (Customer Relation Management). This focus on building databases was going to be the ultimate answer but it struggled with two crucial issues:
- CRM provided the framework and analysis tools, but the quality of the data being input was dependent upon employees, and often there was no clear incentive for this additional effort to share their insight with colleagues
- CRM was built on the premise that “once we have this great system we will be able to do all of these things to our customers”. The company was looking to manage the relationship with the customer, and they didn’t realise it is the customer who increasingly determines what the relationship is going to be not the supplier.
So, if Satisfaction isn’t the be all and end all of measures what are the alternative customer measures?
Over recent years Boards of large organisations have been calling out to have an NPS (Net Promoter Score) score. This has to be the best marketed measure to senior executives, but, as we have seen before, is this just a fad and will another method of measuring the customer feedback be along in a minute? If you’ll indulge a purely subjective view, I attended a recent European Customer Experience World conference where the talk was dominated by NPS, and as its architect Fred Reicheld himself said, it was cited as the “Ultimate Question”. Presenter after presenter was falling over themselves to announce they were using NPS.
Two years later at the 2011 European Customer Experience World conference, NPS seems to have turned into the Marmite of measures, you either hate it or love it. Emerging measures such as Trust, Ease of doing Business and Customer Effort, are picking up traction as the new buzz around the perfect measure. Not surprisingly, there were many people in the audience claiming complete confusion on what now was the most effective measure they should be looking to implement. So perhaps NPS isn’t the single measure of customer feedback.
There are alternative customer measures are out there; they may not have been marketed as well as NPS but they are at least as effective. One that was initiated in the USA some twenty years ago and still today provides an accurate predictor of customer behaviour is Customer Value Management (CVM). It is fundamentally built on the premise that customers in any industry always balance what they are paying in time and money, with what they are receiving in return (is it worth what you paid for it?), and then compare that with the alternative offers in the market.
Perhaps the answer to finding the perfect single measure of customer feedback is to measure what is important to you and your customers.
Ultimately it comes down to whether you want to invest simply to gain a headline figure for a PR story or invest in implementing a customer measure that will be the foundation stone for delivering outstanding customer experience, which in turn delivers outstanding performance (i.e. financial in the private sector or business efficiencies in the public sector). Surely you should be asking your customers how they would rate your performance in what they value most in the relationship they have with you. It is unlikely to be a general description such as Satisfaction, but it could be that you are easy to do business with, it could be that they have a very high degree of trust in you, or perhaps they just believe you deliver value for money. You may also want to understand how they see your competitors performing as well!
When these measures are linked to the KPIs of the business then you genuinely have an enviable correlation between customer experience insight and your business’s performance. You will also need to understand what drives their perception of this overall score, and what actions you therefore need to implement.
So our recommended starting point would be:
- Understand what your customer values most in the relationship
- If it is more than one key issue you may have to ask multiple questions initially
- Track the responses to your questions
- Identify the link between the single customer experience measure and your KPIs, not other companies’ – what works for one company is not guaranteed to work for you and your customer base
- Identify the drivers behind that single measure so that the insight becomes actionable
- Make sure resource is available to plan and action improvements.