Do your KPIs justify inaction; or drive change?

For most companies KPIs like Net Promoter Score, Customer Satisfaction or Customer Effort are important tools intended to monitor the customer experience and to drive change. However most companies find that far from driving change their KPIs are used, unconsciously, to justify inaction.

Do you KPIs galvanise people to act, or justify why change can wait?
Do your KPIs galvanise people to act, or justify why change can wait?
Extract from ‘CX – Practical lessons from the front line’ presented by Martin Wright to Marketing Network, Bristol, February 2017.

I guess we shouldn’t be surprised. Humans have a strong instinct to paint themselves in the best light, to prove what a great job they are doing and to protect themselves and their team from ‘yet more work’.

Let me illustrate what I mean. Here are three of the most common ways companies choose to present customer experience data, all show the results for the same data where customers were asked (on a scale of 1 – 10) how satisfied they were with the service they had received.

 

CSAT

(% of customers who are Very Satisfied, Satisfied or Neutral)

 95.3%

 

Average score  8.4/10

 % scoring 1 – 3

% scoring 8 – 10

 2.9%

75.7%

Table 1: The same satisfaction data presented in three common formats

What do you think these scores say about the service customers experience? I think it paints a very positive picture and suggests that this company “just needs to do some fine tuning” and that “we’re doing a great job”.

The third of these methods in the above table also implies that the scores of 4, 5, 6 or 7 are “not something to worry about”, that  those scores are OK.  But what do  customers mean when they give a company a score of say 7 or 8 and what is the impact on the bottom line? We have recruited and interviewed customers who have given each of the different satisfaction scores; here is what those customers felt.

 1 – 3  I’m angry
 4 – 7  I’m disappointed
 8  I’m content
 9 – 10  I’m delighted
Table 2: What customers mean when they give these satisfaction scores

Furthermore, data analysis that correlates satisfaction with repeat purchase and complaints shows there is also a significant increase in repeat purchase and decrease in complaints for customers who score 8 compared to those who score 7.

This is further evidence, if any is needed, that the bar has risen. For a growing proportion of consumers who have choice, ‘7’ is no longer acceptable. In response to these trends we are helping our Clients to reduce poor experiences (scores of 1 – 7) to less than 5%; in our view this is the new best practice benchmark.

Using the same data above the % of customers who scored their service experience a 1-7 was 24.3%.

Whilst its not a disaster looking at the data in this way certainly helps clearly identify the size of the opportunity and to stimulate action rather than justify inaction.

An additional point to note is that for some companies although moving customers from 7 to 8 has a big impact on revenue and lifetime value there is no evidence that improving the experience further to achieve a 9 or 10 improves retention.

Lessons we would encourage companies to take from this are:

  • Be sceptical. Customers’ actual end-to-end journeys are usually worse than traditional quantitative data analysis will have you believe.
  • Raise the bar. Busy people rarely vote for more work, only by raising the bar in response to rising customer expectations can you begin to create change.
  • Focus on the % of customers who score you 1- 7, not on averages, nor the % of customers giving you the best scores but on all those who are disappointed or angry. Consider a target like no more than 5% of customers scoring you 1 – 7 for the quality of your interactions.
  • Go beyond the numbers, create an emotional connection between your staff and customers’ end-to-end journeys.  If your people care they are far more likely to put in the discretionary effort required to make change happen.

This article is an extract from ‘CX – Practical lessons from the front line’ presented by Martin Wright to Marketing Network. If you would like a presentation like this to your staff then please do contact us.

* Service experience accounts for 55% of loyalty, product and brand 19% each, price 9% www.ced.group. Brands that improve the customer journey see revenues increase by 10 to 15 percent and cost to serve reduce by 15 to 20 percent. http://www.mckinseyonmarketingandsales.com/best-of-both-worlds-customer-experience-for-more-revenues-and-lower-costs. 55% will recommend based on outstanding service, more than either product or price. 95% of people have taken action as a consequence of a bad experience – 79% told others. 86% of people will pay more for a better experience. https://www.visioncritical.com