Customer Experience: Easy to Measure, Hard to Change

Research into customer experience shows that a majority of consumer-facing industries are not rated very positively by the customers. Temkin Group researchers surveyed 10,000 U.S. consumers to come with this conclusion. Amplified Analytics’s analysis of 12,832,246 customer reviews published during the same time period produced similar results, although measured on Social NPS® scale.

Temkin Experience RatingsI think most executives would not question the importance of customer experience to long term viability of their companies.

The real question is why these companies cannot figure out how to improve it.

Don Pepper offers a brilliantly simple answer:

“The overwhelming majority of businesses measure their financial success based on current sales and costs, while customers are focused on the customer experience they anticipate.

Most companies don’t have analytics systems refined and ambitious enough to estimate the magnitude of an increase in a customer’s lifetime value, so they ignore it altogether. Instead, they focus solely on the dollars-and-cents involved in this quarter’s transactions. They are laboring under the ridiculous idea that the more easily measured something is, the more important it must be.”

I think at the core of this problem is departmentalization of an enterprise culture. I refer to the infamous “silos” every strategic corporate initiative promise to break down, but never does. There is a good reason why the silos exist – they make an enterprise run efficiently. However, efficiency is not a sufficient condition for an enterprise survival. Without effective serving of its customers, even an efficiently run enterprise cannot survive in an era of Digital Darwinism.

In practical terms, instead of misguided attempts to destroy the silos, companies need to link their operational and financial metrics (inside-out), to the ones that measure dynamics of customer experience (outside-in). When that is done, every decision made in a silo will show an impact on customer experience that will predict a likely financial result of this decision. Many Customer Experience Management professionals are too obsessed with methodologies of measurement and not enough with making them actionable. It matters much less how CX is measured than what action it instills.

NPS, Net Promoter, and Net Promoter Score are registered trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld.

Social NPS® is extracted from customer reviews by Opinion Miner© software that estimates a customer’s response to the question – “How likely is it that you would recommend [your product] to a friend or colleague?”

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3 Responses to Customer Experience: Easy to Measure, Hard to Change

  1. Pingback: Customer Experience: Easy to Measure, Hard to Change part 2 | Amplified Analytics Blog

  2. Data is only valuable if it results in actionable insights. In regards to customer experience, companies need to view customers as people- not just digits in a spreadsheet. It’s the actions and insights that aren’t quantifiable that might give you the best ideas.

  3. Gregory says:

    Jason,

    Couldn’t agree with you more. Data cannot produce actionable insights, but intelligent analysis of data can point to the place where such insights are likely to be found. It is much easier to pronounce that “companies need to view customers as people – not just digits in a spreadsheet” than to provide a manageable path to that change in value paradigm. Wherever you find your best ideas, if the output cannot be quantified, the change is unlikely to follow.

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