Many companies struggle to connect the dots between customer experience measurements such as customer satisfaction and Net Promoter Score with business performance outcomes such as changes in revenue and profits, changes in customer lifetime value, and incremental revenue gains achieved via word-of-mouth marketing.
But as companies become more adept at anticipating and responding effectively to customer inquiries across channels, the measurements used to track performance will also evolve.
“Although companies will continue to measure operational performance indicators such as first contact resolution and call deflection, they’ll also need to assess whether and to what extent the customer was satisfied by their experience with the company,” says Ron Wince, general manager of Peppers & Rogers Group. This can be achieved by using customer data (transactions, sentiment, behaviors) with predictive analytics to make correlations and connect causation between customer experience and metrics such as satisfaction, loyalty, Net Promoter Score, changes in customer lifetime value, etc.
Indeed, customer experience and business-related measurements will become increasingly more analytical and visual to enable senior executives to better grasp the data and to open up fresh insights for applying the data to further improve aspects of customer experience (e.g., website, mobile, in-store). Data visualization and data discovery tools and techniques will also enable business leaders to see trends and to make correlations more effectively between the impact of customer experience on business and operational outcomes.
Hypothetically, for example, the use of a heat map, which visually reflects trends in NPS scores for a retail bank may display a sudden drop among “promoters” over a short period of time. A deeper analysis by business unit leaders into the situation would reveal that a significant number of promoters were upset about recent check overdraft fees that were assessed. Customer account and other data can be analyzed to determine that waiving such fees for high-value bank customers would increase customer lifetime value by X and more than make up for the overdraft fee that was waived.
How measurements will materialize
Of course, not all of the metrics that will be used to measure customer experience in the future have been developed yet. From an operational perspective, companies will increasingly measure the total time of interaction with a customer (e.g., from the time an auto insurance customer has a fender bender, forwards a photo of the damage to the insurance company, and then fills out a claim form).
“The industry will need to devise a metric to determine whether and to what extent a customer has had a frictionless omnichannel experience,” says Brian Shepherd, executive vice president of Customer Strategy & Technology Services at TeleTech. “Because the customer experience hinges on so many different factors and can influence a variety of financial measurements, companies will gravitate toward using a Balanced Scorecard-type approach incorporating a full set of operational, financial, and customer experience metrics.”
Going forward, organizational leaders will continue to rely on operational metrics such as first contact resolution, but there will be a greater focus on the customer’s overall experience and the impact that has on business performance.
“Organizations that skew too much toward a focus on efficiency limit themselves in their ability to gain a greater understanding about the impact of customer experience on business performance,” says Wince.