Think BR: Are you managing what you measure or measuring what you manage?
Organisations should worry less about which KPIs they use and more about how to action change, writes Claire Emes, head of trends & insight, Ipsos.
Metrics need to be considered holistically
Most high level KPIs (eg, NPS, overall satisfaction or composite indices) act as useful bellwethers of opinion and to varying degrees can be linked to business outcomes such as sales, profit and share of wallet.
But companies simply tracking these scores often come to us asking 'so what?' If the score improves they often don’t know why, and if it declines they’re not sure what to do about it.
The fundamental problem is that the KPI is not linked to business processes. Consequently companies all too often focus on the 'pink and fluffy' aspects of the customer experience in an attempt to delight customers, but unless the company is already getting the basics right this will at best fail to delight customers, or at worst actually annoy them.
Link your performance measures to your operational levers
Metrics need to be considered holistically and attention needs to be paid to linking these KPIs to operational levers. Key to this is driver analysis which helps identify which operations have the biggest impact on overall opinion.
This helps us understand the link between a customer having a good or bad experience at a particular touchpoint and their overall feelings and resulting behaviour towards the company. It’s important to note that those aspects which have the power to delight are often different from those which have the power to dismay, and analysis should distinguish between these differentiators and hygiene factors.
When booking theatre tickets over the phone, we expect the agent to be polite and to book our tickets efficiently so this does not impress us (these are hygiene factors, which we tend to only notice when they are absent).
However, we do not expect the agent to pick up on our remark that it’s an 80th birthday present for our grandmother and offer assistance to and from the car, seats with easy access and a complimentary drink at the bar to celebrate - in fact, we are so impressed that we book another trip and tell all our friends about our amazing experience!
Crucially, the inputs to this driver analysis should be selected and designed to provide a line of sight to the business’s internal processes, but all too often the research design is conducted in isolation.
Effective stakeholder engagement at the outset to ensure all relevant units and influencers are involved in the research design should mean that when the results identify weaknesses for improvement or elements for differentiating strength, it is reasonably clear how to action them.
Map the customer journey so you are measuring the right touchpoints
Clearly it’s also crucial that the research reflects the true customer experience. The best way to establish the customer journey is by mapping it, but it requires a highly tailored and focused research process to ensure it is done in a way that combines both the customer and an organisational point of view.
In this way, the customer’s external view of the service or experience provided is mapped on to all the internal departments and processes which create the experience.
This exercise works to clarify customers’ predictive and ideal expectations as well as perceptions of the actual experience. It is also critical that the full end-to-end experience or journey is understood in order to ensure the different organisational functions understand the extent of their role and influence on the customer relationship.
For example, as we all know communications during purchase can often create issues which it then becomes the responsibility of customer services to deal with. Through journey mapping we isolate the pivotal moments that matter for customers and at the same time build understanding of how these can be influenced and improved by internal action.
Although this should ideally be a starting point for any effective customer experience programme, in our experience in itself it also delivers immediate benefits in terms of deeper customer understanding as well as frequently leading to several quick wins.
Focus on the moments that matter - and take into account your competitors
By identifying the moments that matter, a company can make sure it invests only where it matters - and not where it doesn’t. Service providers only need to perform well enough on those hygiene factors which can only undermine but not create true customer delight.
To do this, it’s essential that whatever performance metrics are used take into account competitor positions as well. Five out of ten might not sound great but if all of your competitors are scoring two or three and it’s only a hygiene factor, then you are doing well enough.
Ranking your performance as well as rating it will allow you to work out how to perform well enough to equal the competition - without overdoing it - on hygiene factors - and to beat them where it really matters, on differentiators.
Think and measure holistically
And finally, all of this is in vain if business processes aren’t linked. Here’s an example: a bank was suffering with long queues in branches, so wanted to encourage more customers to use ATMs. However, the bank was continuing to charge customers for withdrawals because it was delivering profit for another part of the business.
Another example: a technology client selling a high-spec, high-end product fell down purely because their packaging was not ‘sexy’ enough - something that was easily identified and relatively easily fixed via journey mapping.
These are clear examples of the need to both think and measure holistically, rather than in individual business silos: as the customer will experience the company and its service as a whole.
It’s essential that the customer experience and corresponding business processes are considered in their entirety, rather than as separate pieces of a jigsaw puzzle otherwise the pieces often won’t fit together or won’t create a pretty picture!
Appoint a chief customer officer
Any company that takes the customer experience seriously should have a clear and authoritative voice for the customer on its board.
This chief customer officer’ should have the ability to create and drive customer strategy across the company, unencumbered by boundaries imposed by traditional silos or business units - and thereby bypassing the issues outlined above.
In 2003 there were fewer than 20 CCOs in the world and today many companies still believe this role can be wrapped into that of the CMO - but for those companies who give the customer a voice on their board it is often proving to be a source of competitive advantage.
In summary, in order to understand and further the contribution of improving the customer experience to business success we should focus our attention on identifying the moments that matter to customers across the entire customer journey, measuring our performance on these relative to our competitors - taking into account which are hygiene factors and which differentiators - and then link these to business processes to action change.
Claire Emes, head of trends & insight, Ipsos
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