Customer Experience

#41 – Cultural differences, hospitals, CX measurement and improvement, more

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Welcome to the 41st edition of my customer strategy newsletter. The five topics this week are:

  1. Net Promoter System podcast on cultural differences
  2. Customer experience research in hospitals
  3. Latest blog posts – Customer experience measurement and improvement systems
  4. Notable items from other sites
  5. Looking forward
Net Promoter System podcast on cultural differences

If you work for a multinational company, you have probably seen all sorts of performance comparisons between countries. Gross margin differences by country may well be meaningful. Customer experience score comparisons are generally not. Or at least, they should be used with great caution. That is the main subject Rob Markey and I cover in the latest Net Promoter System podcast.

We cover examples from a retail chain that is present in major cities, the IT hardware and software industries, and retail banking. Are the Japanese, Australians, Koreans and Dutch just a bunch of grumpy people, or is something else happening?

We also cover some aspects of communicating data and recommendations across different companies and cultures. Personally, I found this part quite entertaining. The whole podcast lasts less than 20 minutes. Please let us know what you think. You can find it in iTunes, Stitcher or on the Bain website here.

Customer experience research in hospitals

Someone I know had hip replacement surgery recently. It was her second hip replacement at the same hospital. When she left the hospital the first time, she was given a satisfaction survey. She was asked to rate various aspects of the care, from the way she was greeted at the reception desk onwards. I suppose you could call it typical customer journey research. Her first operation was about nine months ago. At no point since then did the hospital’s customer research people ask her (1) how functional her hip now is or (2) whether or not she was happy to have had the operation. From the customer / patient’s perspective, these are the outcomes that matter. The particular hospital is not an exception. Healthcare research seems to concentrate on giving scores to each department, rather than on patient outcomes.

I have to say that I am not surprised by such ‘hospital-centricity’. Way back when I was doing my Industrial Engineering degree, one of my classmates had a sort of internship with the Accident and Emergency unit of the main hospital in Galway. I think this was in 1976. His mission was to improve the efficiency of the operation, and ideally to reduce patient waiting times. This was a typical IE project, involving Operations Research and queueing theory. All such models require a financial value to be put on the time of the various people involved. The problem that was hardest to solve was that the head of the service categorically refused to put a non-zero value on patients’ waiting time. Ever since then, lack of patient-centricity in hospitals has never been a surprise.

 

Our latest blog posts

Here are the latest posts. The three below are part of a series of seven I am planning on the main customer experience measurement and improvement systems. Older posts are still available on the blog page.

image The main customer experience measurement and improvement systems – Part 4 – The Net Promoter System®

Fred Reichheld wrote his landmark article The One Number You Need to Grow and published it in the Harvard Business Review in December 2003. That article was the origin of the most popular customer experience measurement and improvement system on the planet…
image The main customer experience measurement and improvement systems – Part 3 – Customer Effort Score The Customer Effort Score is the metric described in the excellent book The Effortless Experience by Dixon, Toman and Delisi. The primary focus is service-center work and the associated metrics.…
image The main customer experience measurement and improvement systems – Part 2 – CSAT / Customer Satisfaction When you are asked to rate your ‘overall satisfaction’ with something, you have entered the Customer Satisfaction rating system. It is a metric, rather than a system, and different companies do it in different ways. As a metric, it is by far the most common one we see. Read on to learn about its advantages and disadvantages.

Notable customer experience items from other sites

Technology Services Industry Association: Maintenance and Support Revenue Waterfall

It is important to position customer experience work as a growth initiative in addition to the more obvious problem-solving role. The best way I have seen of doing so for many businesses is to concentrate on renwal and upsell rates for existing customers. While the TSIA infographic in this blog post does not directly mention CX, it shows how to position it. After all, if your work is successful, renewal and upsell rates should improve. This may be easier to demonstrate in large companies where improvements may be implemented in one part of the business, but not another. I am planning to write about this subject in more detail soon. In the meantime, this TSIA blog post from 2015 should help.

 CMSWire: Why Customer Focus Eludes so many

This short article by Bill Davis of Tata Consultancy Services caught my attention because of Bill’s focus on the disconnect between listening and acting on the feedback. See what you think here.

 

Looking forward

It is winter in this part of the world, and time for outdoor activities in the snow. Breaks for students in our families mean that my brother and I will probably be less active than ususal for the next couple of weeks. We continue to do our best to persuade people that our books are great end-of-year gifts for friends, colleagues and teams. (There is still time to get the print versions delivered in many countries, and of course Kindle delivery is instantaneous.) As always, Amazon reviews are the way you can help us most, so please do that, no matter what you think of our books. Here are links to each on Amazon.com. If you use a different country site, you can just open the link, then edit .com to .co.uk, .de or whatever:

Customer Experience Strategy – Design & Implementation

Net Promoter – Implement the System

Customer-centric Cost Reduction

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Color edition)

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Black & White edition)

Please share this newsletter with your friends and colleagues and encourage them to sign up for it here. I have put links to past newsletters on the subscription page. Finally, please feel free to change or cancel your subscription using the link below.

You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

To change your subscription, click here.

 

#40 Dunning-Kruger Effect and Customer Experience

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Welcome to the 40th edition of my customer strategy newsletter. The five topics this week are:

  1. The Dunning-Kruger effect and customer experience
  2. Data collection for my annual report on customer versus employee satisfaction
  3. Latest blog posts
  4. Notable items from other sites – Great infographics from Temkin
  5. Looking forward
The Dunning-Kruger Effect and customer experience

When someone asks me “What do our customers want?”, I tend to answer “I don’t know. We should ask them.” My reaction dates from my first experience asking Wrangler customers in Paris what they wanted, way back in 1981. My corporate manager, in Greensboro NC, told me he already knew what our customers wanted, and that I should not do the interviews I planned with the main boutiques around Paris. He was wrong. We got major surprises.

A few years ago, I had the rare privilege of visiting the Chinese cities of Jinan and Jining for my job. They are in Shandong provice, not far from Qufu, where Confucius was born. One of his quotes could be the original version of the Dunning-Kruger effect: “Real knowledge is to know the extent of one’s ignorance.” Confucius was 2,500 years ahead of social psychologists David Dunning and Justin Kruger, who managed to prove that Confucius was right. In short, people performing badly at certain tests believe they perform really well, while those doing really well tend to underestimate their performance. Dunning and Kruger posit that this is true in all domains. You can get a quick overview of their work in this Wikipedia article.

Here are examples of where you see the effect in customer experience work:

  • Your leaders affirm that you have ‘industry-leading customer satisfaction’, and have no competitive research that backs this up.
  • Your company publicly says it has ‘an NPS of 92, compared to an industry average of 40’. This is a real example. The 92 was from a small survey of call center users. The 40 was from a properly-done competitive benchmark study. This is an ‘appples and oranges’ comparison.
  • Anecdotes are used to represent reality. I suggest doing searches on terms like “Delta’s disasterous customer service” or the same for American Airlines, or indeed for airlines in general. A few viral videos of people being ejected from overbooked flights or other bad experiences seem to allow journalists to say airline service is awful without anyone questioning it. In fact, customer satisfaction with airlines serving US consumers has never been better. Here is a link to the latest American Customer Satisfaction Index data for airlines, from now back to 1995. When I brought this up to a journalist who had written the opposite, he replied that the ACSI data was ‘obviously wrong’. Dunning-Kruger effect.

The Dunning-Kruger effect is pervasive and there is little you can do about it. CX leaders need to assume it exists, and continue their ongoing education on the science of listening to customers and driving improvements. Not everyone is scientifically literate, so success can only be partial. Like life, it’s a journey.

Data collection for my annual report on customer vs. employee satisfaction

Among the most read articles I have ever written are two on the relationship between employee and customer happiness. In short, my research showed that there is no relationship between the two in general, and that this also holds true for most individual industries. Since I have to assume there is a time lag between employee happiness trends and customer happiness, I have just completed the data collection on employee satisfaction. I should have the final customer data in March, I hope. My employee satisfaction data covers 350 companies and the scores have changed by less than one percent, year over year. For the first half of the year, customer satisfaction has improved slightly for the same companies, and it will be interesting to see the full year results and trends. Here is a link to what I wrote on the subject in January.

Our latest blog posts

Here are the latest posts. The most recent is the second in a set of seven articles I am planning on the main customer experience measurement and improvement systems. Older posts are still available on the blog page.

image The main customer experience measurement and improvement systems – Part 3 – Customer Effort Score The Customer Effort Score is the metric described in the excellent book The Effortless Experience by Dixon, Toman and Delisi. The primary focus is service-center work and the associated metrics.…
image The main customer experience measurement and improvement systems – Part 2 – CSAT / Customer Satisfaction When you are asked to rate your ‘overall satisfaction’ with something, you have entered the Customer Satisfaction rating system. It is a metric, rather than a system, and different companies do it in different ways. As a metric, it is by far the most common one we see. Read on to learn about its advantages and disadvantages.
image The main customer experience measurement and improvement systems – Part 1 – Smiley Buttons There are quite a number of customer experience measurement and improvement systems in use around the world. They are not all equal. This post is the first in a series of seven articles about the main systems.

Notable customer experience items from other sites

Bruce Temkin: Great collection of infographics

I am sure I am not alone in liking infographics, at least as things to post on office or cubicle walls. Bruce Temkin and his team have published quite a few over the last year. Click here to be taken to a LinkedIn page where you can download each individually or the whole collection as a collage.

 

Looking forward

My brother and I are doing our best to persuade people that our books are great end-of-year gifts for friends, colleagues and teams. (Hint, hint!) As always, Amazon reviews are the way you can help us most, so please do that, no matter what you think of our books. Here are links to each on Amazon.com. If you use a different country site, you can just open the link, then edit .com to .co.uk, .de or whatever:

Customer Experience Strategy – Design & Implementation

Net Promoter – Implement the System

Customer-centric Cost Reduction

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Color edition)

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Black & White edition)

Please share this newsletter with your friends and colleagues and encourage them to sign up for it here. I have put links to past newsletters on the subscription page. Finally, please feel free to change or cancel your subscription using the link below.

You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

To change your subscription, click here.

 

Peter FitzGerald: The hardware problem

The main customer experience measurement and improvement systems – Part 3 – Customer Effort Score

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The Customer Effort Score is the metric described in the excellent book The Effortless Experience by Dixon, Toman and Delisi. The primary focus is service-center work and the associated metrics. The authors present a compelling argument that what matters most for some customer interactions is how hard it is for the customers to get what they want. The single topic that surprised me most was their data that shows that the majority of people who phone a company to get something done are simultaneously trying to resolve their issue or answer their question on the company website. Furthermore, you have to get to the 60+ age group for the proportion of simultaneous interactions to drop below half.

Delighting does not work

A central message from the authors is that “delighting” customers is pointless in most situations. Remember the main focus is customer service interactions. Their data suggests that delighting customers does not usually make them more loyal than simply meeting their expectations. They show that a service interaction is four times more likely to cause disloyalty than loyalty. You should take from this that the best service interaction is no interaction at all. As you build your strategy, think of another point the authors make, which is that spending resources on delighting customers displaces those resources from things that are more important.

Best practices of low-effort companies

Particularly in customer service interactions, customers want to spend as little time as possible to get what they need. They just want to get on with their lives. The authors found four ‘best practices’ that were common to companies that successfully reduced customer effort:

  1. Low-effort companies make self-service channels as effective as possible, minimizing the need to call in the first place. Personally, I dread phoning service centers, passing through ambiguous recordings that ask me to classify my request according to how their company is organized, rather than the problem I have, and spending long periods on hold. I do all I can to avoid it.
  2. When customers do call, low-effort companies train their people to head off the next problem as well, based on their experience of what problems are likely to be related to each other.
  3. These companies work hard on the delivering an appropriate emotional and psychological experience on the phone. In my reading, this is more about empathy than being nice to people.
  4. Low-effort companies favor quality-related metrics for their representatives over volume and call-duration metrics.

Self-service

The key points made relate to the fact that most customers are happy to self-serve. Your company needs to work on how to keep customers in the self-service channel. Don’t fall into the trap of just making it hard to talk to a live individual. When reading this, I was reminded of a story one of my INSEAD lecturers told us. He was asked to help Galeries Lafayette improve their customer complaint and suggestion system at their flagship store in Paris.

At the time, Nordstrom was still relatively new and had made a name for itself with its process. My lecturer mainly seemed to copy the Nordstrom process, installing stands around the store where people could fill out a form with their comments. A management change happened after the project ended. The new management noticed the rise in complaints. Their response was to remove the stands and install a complaints desk in the basement. Complaints dropped dramatically. Success? Definitely not! The Effortless Experience authors suggest that the main improvement you can make to self-service is to simplify it, using several suggested techniques.

Conflicting metrics

I loved the book’s message on the conflict between company metrics and human perception. Companies typically report first-contact resolution rates of 70 to 80 percent, while their customers report rates of half that. Some of this is because a different channel is used for the first contact than the one being measured. A lot of it is because the customer’s real problem, say with an invoice being late, has not actually been resolved. Customers call back on related issues that they consider to be the same thing, but company metrics start from scratch. I have had this situation with Air France where in resolving one issue, they accidentally changed my street address in their system, so I phoned them again, using the same incident reference number. We fixed the address. They then closed the service event without resolving the first issue. I phoned again and had to start from scratch as they had closed the first event. The authors suggest a way of changing the metric definition, so that a repeat call is one from the same person within seven days, no matter what the reason. This seems like an excellent idea.

Training service reps

Training of the service center people matters a lot and quite a bit of what the authors describe works against classical metrics associated with reducing call time and getting as many calls done as possible per day. I particularly liked their work on personality-based resolution processes. (The customer’s personality, not the service representative’s.) Overall, I believe the book is essential reading for all service center leaders. It is experience-based and outstanding.

Back to the Customer Effort Score (CES)

The authors refer to their current metric as v2.0. It has evolved, both in terms of the question asked and the scale used. They tried many variations of the question and settled on one that translates well into most languages. With their current question, customer behavior changes radically by response. As they put it, “For instance, 94 percent of customers who had low-effort experiences reported that they would repurchase from the company, while only 4 percent of customers experiencing high-effort interactions reported an intent to repurchase.” The Customer Effort Score is the response to the question, “To what extent do you agree or disagree with the following statement, ‘The company made it easy for me to handle my issue.’” It is measured on a scale from 1 to 7.

Better than CSAT

The authors found that when comparing CES to Customer Satisfaction scores, across thousands of customers, CES was 12 percent more predictive of customer loyalty, as measured by stated intent to repurchase. They did not determine whether the customers actually repurchased.

Suggestion

If you are already using Customer Satisfaction, or indeed NPS, as a metric in a service center, I suggest adding CES and tracking both for a time. Then compare trends with your financial trends to find out which is a better predictor of success.

Conclusion

I freely admit to being attracted by the common-sense nature of Customer Effort Score. My personal experience with service centers drives me to agree with the authors of The Effortless Experience. While I recommend their book, I do of course have to recommend my own books too. This article is a slightly modified part of a chapter in Customer Experience Strategy – Design & Implementation, one of four books written in collaboration with my artist / cognitive psychologist brother Peter. The others are Net Promoter – Implement the System, Customer-Centric Cost Reduction, and a book of Peter’s illustrations, with learning points: “So Happy Here” – The Absurdist but Essential Guide to Better Business. All make great gifts for your friends, colleagues and teams.

And as always, feel free to comment on this article below. Next time: NPS and the Net Promoter System.

#39 – Net Promoter for People, irritating surveys, customer culture, customer lifetime value

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Welcome to the 39th edition of my customer strategy newsletter. The five topics this week are:

  1. New podcast on ‘Net Promoter for People’
  2. Another irritating survey
  3. Latest blog posts
  4. Notable items from other sites
  5. Looking forward

New podcast on ‘Net Promoter for People’

Many companies, and I suppose all large companies, run annual employee surveys. The process usually runs something like this:

  • The CEO announces the annual survey and how important it is, committing to drive improvements based on the research.
  • The survey is open for two or three weeks, to ensure that people who are on vacation get a chance to respond.
  • Particularly for large companies using external survey vendors, the analysis and benchmarking of the results takes time, often several months.
  • Since most research uses large numbers of questions with rating scales, but no input on why the ratings were given, companies find out that particular things have bad ratings, but don’t know why. They then form focus groups of just a few people who decide why the particular rating was so low an what should be done about it. This takes time, and may not reflect the reasoning of the larger population. And of course, the fact that one of the 80 question son the list had a low rating does not make that question important.
  • Reporting out on the results is sometimes delayed to avoid communication conflicts with quarterly financial resporting.

The result of all this is often improvement initiatves that employees do not recognize as relevant, announced so long after the survey itself that employees feel the company does not care. And that’s the ‘best case scenario’. Senior leaders are also known to say “Ah yes, there was that thing going at at the time of the survey that makes your proposal irrelevant. Let’s wait to see whether employees say the same thing next year.”

The new Net Promoter for People is designed to address many of these concerns. It has been covered by Bain’s Darci Darnell in the latest Net Promoter System podcast. It adds an additional rating question the standard three-question NPS format. The new question is ‘To what extent do you agree with the following statement: I am inspired by my job.” The standard questions are the NPS ‘How likely are you to recommend [your company] as a place to workl?’, ‘Why?’ and ‘What could we do better?’ The Bain research shows that verbatim comments relating to recommendation are mainly about basic needs and things about which they are dissatisfied. The inspiration question produces verbatim responses that are about their higher-level need and suggestions for a positive future. I consider the podcast to be essential listening. You can find it here.

Yet another irritating survey

I have been in Los Angeles this week, attending the Bain Net Promoter Forum. I had to transit via Zurich, and got a pop-up survey request as soon as I logged into the Wifi in the Swiss lounge there. As I usually do, I tried to decide what I wanted to say before starting the survey. There were 34 questions in the survey, plus demographic questions. I could not really say what I wanted. It was clear that the survey is designed primarily to give scores to each of their own departments, rather than to find out what the customers want.

I suppose I should write this one up in more detail. Why can’t companies just stick to a three-question NPS format or something similar? The Swiss people used the recommendation rating question, but did not follow it with ‘Why?’ and ‘What should we improve’ questions. I just can’t understand this sort of thing. Why would you need anything more? If people don’t make any comments or suggestions about the reception area, it just does not matter.

Our latest blog posts

Here are the latest posts. The most recent is the secondin a set of seven articles I am planning on the main customer experience measurement and improvement systems. Older posts are still available on the blog page.

image The main customer experience measurement and improvement systems – Part 2 – CSAT / Customer Satisfaction

When you are asked to rate your ‘overall satisfaction’ with something, you have entered the Customer Satisfaction rating system. It is a metric, rather than a system, and different companies do it in different ways. As a metric, it is by far the most common one we see. Read on to learn about its advantages and disadvantages.
image The main customer experience measurement and improvement systems – Part 1 – Smiley Buttons

There are quite a number of customer experience measurement and improvement systems in use around the world. They are not all equal. This post is the first in a series of seven articles about the main systems.
image What B2B customers and resellers want – A perspective that goes beyond research

While I have been pushing a scientific approach to building and implementing a customer experience strategy for a long time, let’s put that aside for a moment. After working on customer experience since 1981, here are some things I believe B2B customers want, and that you won’t discover directly from your customer research.

Notable customer experience items from other sites

Wownow: CX Framework Series #6 – Customer-centric culture

Far be it from me to say that my way of thinking is the only one that matters. Rosaria Cirillo Louwman has designed an overall customer experience framework that includes six disciplines. This final blog in a series of six in the framework covers a set of interesting suggestions about how to establish a more customer-centric culture in your organization. Personally, I think culture is the hardest thing to change, because it requires so many soft skills and so much consistency. I think you will find it a useful read here. She has also recorded a TEDx talk that you can find on the Wownow site.

CMO Australia: Why so many organisations keep getting NPS wrong

Excellent article in which Brian Andrews of Medallia talks about his extensive experience leading NPS implementation over a long period. He led the first major NPS implementation, which was at Intuit in 2003, and is now ‘Senior CX Principal’ at Medallia. The points I like best in the article are about tying the NPS results to revenue.

Customer Lifetime Value is the terminology I use for this. As Brian points out, it is useless to develop a model for this in isolation. Your CFO or her delegate must design the model with you. Once your company has an agreed model for how much one point of client retention is worth over time, it becomes far easier to decide on investments necessary to drive that improvement. You can find the article here.

Looking forward

We have had our first sales of the new book of Peter’s drawings, so thank you for that. As always, Amazon reviews are the way you can help us most, so please do that, no matter what you think of our books.

Please share this newsletter with your friends and colleagues and encourage them to sign up for it here. I have put links to past newsletters on the subscription page. Finally, please feel free to change or cancel your subscription using the link below.

You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

To change your subscription, click here.

 

Employee satisfaction

The main customer experience measurement and improvement systems – Part 2 – CSAT / Customer Satisfaction

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When you are asked to rate your ‘overall satisfaction’ with something, you have entered the Customer Satisfaction rating system. The most common way of doing this is to ask you to rate satisfaction on a scale from 1 to 5, where 5 means ‘extremely satisfied’. There is a minor challenge in the rating scale, as with all scales that do not contain a zero. A small proportion of the respondents will believe that 1 is the best rating, rather than 5. After all, you want to be number one, don’t you? At the level of your overall brand, the satisfaction metric does not predict revenue as well as the ‘willingness to recommend’ metric used in the Net Promoter System. At least, that is the case for most, but not all industries. In that context, it is worth noting that Enterprise Rent-A-Car is used as an example in The Ultimate Question 2.0, and they discovered that overall satisfaction was a better predictor than willingness to recommend. In general, for surveys about telephone, web and chat support, the Customer Effort Score (to be covered soon in another article) is a better revenue predictor.

“Top box” satisfaction

A common method of communicating results is to talk in terms of ‘top box’ satisfaction or “top-three box”, for example. This means arbitrarily deciding that people who give you the top score, or the top two or three scores on a five-point scale are ’satisfied’. I have not been able to find studies of differences in customer behavior between the different categories or groupings. However, based on Net Promoter System studies, it seems unrealistic that someone who gives you a 3 is actually satisfied. The NPS research would suggest that someone who gives you a 5 is likely to recommend your product or service, and someone who gives you a four does not care much either way. A three would already be a sign of negative views. Note that some companies use seven-point scales.

The principal communication challenge

The lack of a single standard customer satisfaction scale and definition causes communication issues. It is quite easy to find companies that say “92% of our customers are satisfied.” What does that mean? On a five-point scale, which of the five are they counting to get to 92%. Since there is no single definition, anyone explaining the metric has to explain where it comes from, and risks losing time in an argument with someone in the audience who measures it a different way.

CSAT is a metric, not a system

While CSAT is probably the most common satisfaction metric, it is not a system. It is entirely up to you to work out what the number means, what customers actually want you to improve, and how you should go about it.

Composite satisfaction metrics

Some companies use the term ‘customer satisfaction score’ or CSAT, and actually use a different method of calculating it. Predicting customer loyalty, meaning the desire of customers to keep on buying from you, can of course different forms. The more sophisticated satisfaction surveys also include several questions that are not about satisfaction. The most common questions ask customer to use the same type of rating scale to answer questions such as “This company has earned my loyalty”, “How likely are you to repurchase?”, “This company is a leader in its field”, “How likely are you to recommend this company or product to a colleague?” and so on. Several metrics can then be aggregated to form a satisfaction index. Where this is done well and with representative customer samples, it can be an excellent revenue predictor. I will cover some composite metrics in an article proprietary measurement systems.

Lists of things to rate

Satisfaction surveys usually ask you to rate a list of things. The list can be very long. For years, I participated in a survey panel that covers the travel industry. I have received surveys that only have satisfaction rating scales and took more than half an hour to complete. The main problems with lists of things to rate are:

  • It is your list, not the customers’ list. Most commonly, these lists are set up by the way your organization is structured. You want to get some sort of feedback for everyone. This may not correspond to what the customer wants to tell you about. Notably, if a competitor does something that you do not, only asking about what you currently do will prevent the customer giving you that feedback.
  • It creates the illusion that each of the factors you ask about is equally important. It is particularly difficult to undo this subliminal message. Imagine you have 50 things that you ask customers to rate. Imagine further that seven of them have the worst rating possible. Once these ‘red’ items are visible, you will be forced to turn them around, even if they have no importance whatsoever.

Conclusion

The lack of a standard definition of what we mean by ‘Customer Satisfaction’ causes major communication challenges and is the principal argument against using CSAT. However, no matter how you define the metric, its trends relative to the trends of your competitors are still meaningful. If you can find a reliable way of finding out why such trends are happening, you may well have something useful.

As always, I have opinions, usually based on fact. That does not make me correct. Please feel free to comment below. And this article is a slightly edited part of a chapter of one of our four books, in this case Customer Experience – Design & Implementation. Our fourth book So Happy Here came out recently and is available on Amazon. It is a heavily-annotated book of my brother’s business cartoons. Most have appeared in our first three books, in my blog posts or Tweets. This and all of our books make great end of year presents for your colleagues and teams.

Next time: Customer Effort Score

Smiley Buttons

The main customer experience measurement and improvement systems – Part 1 – Smiley Buttons

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There are quite a number of customer experience measurement and improvement systems in use around the world. They are not all equal. This post is the first in a series that covers some of the most common ones. Some consulting companies offer proprietary systems, and I will cover their main measurement principle. There are wide variations in approach for these proprietary systems, but all have one common feature.

The systems I will cover in the series are:

  • Smiley buttons
  • Customer Satisfaction / CSAT
  • Customer Effort Score
  • Net Promoter System
  • Wallet Allocation Rule
  • Consultant-provided proprietary systems
  • Journey Mapping

Smiley Buttons

Smiley buttons are gaining popularity in consumer businesses and have only marginal potential in B2B situations. HappyOrNot and Agoraopinion are examples of companies who provide low-tech solutions in this area. Changi airport in Singapore has a more high-tech version. The general principle is that you tap on one of three or four emoticons to show how happy you were with an experience you just had. The first time I ran across it was in Heathrow airport, just after the immigration counters. They also have them just after security as you leave. If you are just looking for a number to track, this seems like a simple way. The challenge with the low-tech approach is that you have no idea why people are pushing a particular button so cannot use the input to drive improvements. The weirdest place I have seen such buttons was at the passport control desks in Beijing airport. Theoretically, you are supposed to push a button while the immigration officer is looking at your passport. Really? Can he/she see you push the red button and what are the consequences? You can see a typical button layout in the image at the top of this article.

In my local Media Markt

The HappyOrNot buttons have been installed in my local Media Markt electrical goods and media store in Geneva. They have been positioned just behind the checkout desk, facing the cashier. “Please rate our service today,” The first time the buttons were there, my wife and I had had difficulty being served when buying an electric kettle. Were the buttons there for us to rate the service in the whole store, or just the check-out, which was efficient? The lady at the checkout desk did not know what was being done with the feedback. Once again, there was no way of indicating what we were happy or unhappy about, so no conceivable action could be taken by Media Markt.

Extracting value without providing any

I was in our Cambridge UK office one day when a US visitor arrived. She was only too pleased to tell me she had seen the smiley buttons just after immigration at Heathrow. I asked her whether there was any indication anywhere of the number of people who pushed each button, what they had learned, or what they were doing with the feedback. The buttons have been there more than four years now. As in all other situations where I have seen the smiley buttons, there was no feedback loop. They seem to be extracting value by having you push buttons, but are not providing any value back. There are plenty of people and companies who are not actually serious about improvements and just want a number. This seems like an excellent way to do just that.

Lest the above be perceived as excessively negative, note that HappyOrNot list some major companies as clients, including McDonalds, Microsoft, Lego, eBay and American Express. The references on their site indicate some happy clients.

Emerging high-tech solution

When I last went through Singapore’s Changi airport, I came across a somewhat better smiley system in the rest rooms and elsewhere. A touchscreen asks you to “Please rate our toilet” and gives five choices. If you choose Poor or Very Poor, you are taken to a second screen asking why and giving a choice among eight reasons, including the smell or lack of toilet paper. My Swiss half was worried about touching a touch screen that may just have been touched by someone who had not washed their hands, though the screen was marked “This screen is sanitized regularly.” There did not seem to be any way to explain positive feedback, and there was no explanation about improvements that had been made from past feedback. A similar system using screens and software from Dr. Voxx is in Brisbane airport, or at least was a year ago.

Relevance to B2B

There are very few B2B situations where you could ask your customer to push a physical button. The system could be used by government administrators that require you to go to their service counters to register your company or for other simple transactions. While you could clearly use smileys as your scoring interface for a web-based survey, this crosses the line into more conventional measurement systems. There is no real difference between asking a customer on your website to give you a score on a rating scale or on a smiley scale.

Conclusion

I can see the low-tech method as useful in a single situation, and this is A/B testing, where you are interested in finding out which of two things a customer prefers, and don’t care why. For situations that require deeper insights, the low-tech system provides no way of finding out why customers provide specific feedback, and therefore has no conceivable use as an improvement system. If you only want to measure a score, but use other data sources to act on that score, it may fit your needs. The high-tech screens are an improvement and show promise.

As always, I have opinions, usually based on fact. That does not make me correct. Please feel free to comment below. And this article is a slightly edited chapter of one of our four books, in this case Customer Experience – Design & Implementation. Our fourth book So Happy Here came out today in Amazon Kindle version, and two print versions should be out later in the week. It is a heavily-annotated book of my brother’s business cartoons. Most have appeared in our first three books, in my blog posts or Tweets. This and all of our books make great end of year presents for your colleagues and teams.

Next time: Customer Satisfaction / CSAT

Hygiene factors

What B2B customers and resellers want – A perspective that goes beyond research

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While I have been pushing a scientific approach to building and implementing a customer experience strategy for a long time, let’s put that aside for a moment. After working in this area since 1981, there are a few things I believe are high priorities for most B2B customers. You probably won’t discover some of these points directly in any formal feedback system, though they may be at the heart of many different improvement suggestions.

Remember me

Customers all want to be remembered. This means remembering everyone with whom you have had contact, and what that contact was about. Think about your favorite local restaurant. You appreciate it if the owner greets you at the door and says, “Welcome back Mrs. Smith. It is good to see you here again.” It gets better if the waiter asks, “Would you like the same drink as last time?” You feel that you matter to them.

At its most trivial this means not asking customers for the same information repeatedly if they phone you for support. If your phone routing system asks them for a contract number to route them correctly, you should not ask them for the contract number again. If you have gone through a diagnosis process with a generalist and found that you need to pass it to a more specialized person, the diagnosis information should go with the call. If the person has already phoned with the same problem, or indeed any problem, you should know about it and potentially check that all is still OK. If you have the person’s phone number in your database and the person calls from that number, you should not need to ask their name.

You must participate in the customer’s investment process

Your company probably has a standard format for proposing solutions to customers. If your customer is a large company, they are certain to have their own investment approval process. The person you are selling to has to decide, then propose any substantial investment for further approval at their end. Your proposal needs to fit their process. You should find out what their process is, and make it as easy as possible for them to use it to get your proposal approved.

Continuity of project management

If yours is a service business that relies on project execution, ensure the same project manager is in charge from the start to the end of the engagement. Let’s suppose you have three project stages: proof of concept, pilot, and full roll-out. Different people are needed for each stage of the project. If you have a completely different team for each stage, each new team leader has to get to know the customer organization, and the customer has to get to know them. Customers find full team changes deeply frustrating. The best solution for this is to keep the same project manager in charge the whole way through.

Reduction of your organizational complexity

If you are a large company, you are a complex company. Large customers are complex too, so they will have some empathy for you. A fundamental role of your account team is to reduce the perception and consequences of that complexity for customers. The account manager should be the broker between your different businesses and functions. If you have multiple businesses, each with a separate sales team, you will fail in this complexity reduction and never become a true strategic partner. You will be condemned to have their procurement department as your main contact point. This is not good for your margins.

Your company is always “We”

No matter what your customers complain about, apologize on behalf of your company. The worst type of thing you can say is “Ah yes, another complaint about shipping. Those people have a lot of problems at the moment.” Replace the thinking by “I am sorry you had this experience. We have had a few shipping problems recently and are doing our best to improve.”

What resellers want

If you use resellers to sell complex products, the resellers’ top priority will probably be that you supply accurate, price-competitive quotations quickly. Let’s suppose the reseller is selling to Nestlé, and that you have a global discount agreement directly with Nestlé that gives them a price reduction everywhere in the world. The quotation you give the reseller needs to reflect that. Let’s further suppose that this deal is in Indonesia and that you have had to give a further 15% price reduction to Nestlé in Indonesia the last three times you did business there. You should give the reseller the quotation with the additional reduction without being asked, though with the necessary explanation. Otherwise you, the reseller and Nestlé all waste time.

The second thing resellers want is for you not to compete with them. Unless you have a formal business model that says you work 100% through resellers, their expectation is not realistic. Your most important customers will want to do business directly with you. The best you can do for resellers is to provide them with clarity on your business model, letting them know when they can expect you to show up, and when it is less likely. If you do business in many countries, it is also probable that you have countries where you have no direct presence and will use resellers. Sometimes you will have an exclusive agreement for a country with a single reseller. Be clear about that too.

Remember that cost reduction is not strategic

While your selling proposition to customers may be cost reduction, cost reduction is not strategic for customers. While that might not seem to make sense, try to think about it this way: the strategic decision is what to do with the money that has been saved. How will it be invested? Once you are helping customers with their investments, you access people that are higher up in the organization and develop a true strategic partnership.

Customers get used to positive experience, then expect more

With relatives in Chicago and California, the difference in weather between the two is common subject of discussion. In addition, the Californian relatives have moved there recently. I have observed this phenomenon with others who have moved to much better climates. Personally, I moved from wet and grey Galway, in the west of Ireland a long time ago, and learned to appreciate the existence of summer. However, for me, and for others who have gone through the weather-improvement experience, its impact is strongest at the start, and fades over the years. Nicer weather becomes “the new normal”. So it is with customer experience. No matter how great the improvements you implement, customers will get used to them. Your competitors may also copy them. You need to repeat the whole strategy development exercise and come up with your “next big thing”.

Conclusion

I hope you enjoy these points that are based more on experience than on what comes out of customer research. Feel free to agree or disagree below. As is usually the case for my blog posts, this is a slightly-edited version of a chapter in one of our books, in this case Customer Experience Strategy – Design and Implementation. And the drawing at the top is included in a new book of business cartoons by Peter FitzGerald that should appear within the next week on Amazon.

 

#36 – Career Advice, and is my new NPS or CSAT metric any good?

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Welcome to the 36th edition of my customer strategy newsletter. The five topics this week are:

  1. Unexpectedly popular career advice post on LinkedIn
  2. So, I have my first NPS or CSAT score. Is it a good score? 
  3. Latest blog posts
  4. Notable items from other sites – Provide Support Infographic and Quora.com
  5. Looking forward

Unexpectedly popular career advice post on LinkedIn

I had someting on my mind after talking to a few former colleagues recently. Since it was not strictly about customer experience, I chose not to write about it on my own blog, but to post it on LinkedIn instead. My own daughters are at university, and I suppose I was thinking of them too. I feel quite strongly about this career advice. About 1400 people have read it on LinkedIn up to now. And some people disagree with me, as can been seen in the comments.

The core advice in the article is as follows: Don’t work for a company whose entire business is cost reduction. Their reduction business model will include reducing you. The working atmosphere is depressing as you are constantly surrounded by people being fired, buildings being closed, and other cost-cutting negativity.

You might think I am talking only about outsourcing, and outsourcing companies are the extreme examples. The advice applies to any type of outsourcing, meaning any business where a client’s work is moved to another company that promises to do that work at lower cost. As I have written in Customer-Centric Cost Reduction, this can be great news for the client companies. They are able to reduce costs in areas that their customers don’t care about, so they can invest more in things that will make a difference. However, it is not great news for the employees of the outsourcing companies. After all, they are the ones that have to do the same work at 20% lower cost. Not fun. You can read more and read about the exception to the general rule on LinkedIn here. 

So I have my first NPS or CSAT score. Is it any good?

I have been busy doing some research for a client this week. It looks like we will get a survey response rate between 30 and 40%, so I am optimistic it will both representative and useful. In any case, there are already lots of improvement suggestions.

Since it is the first time such a survey has been carried out, I am certain the client will want to know whether the resulting Net Promoter Score is good or bad when I present the results next Wednesday. The simple-ish answer is that I don’t know, and that it does not really matter. What matters are the improvement suggestions and what is done with them.

A single NPS number is meaningless in isolation. If you are fortunate enough to have a benchmark study for your type of comany or organization, you are in luck. Otherwise, you just can’t tell, as you have no point of reference. What I will be suggesting is to repeat the research after implementing the first few improvement suggestions. The trend will be useul, and will indicate whether the changes have made a difference. It is a complex subject, so I decided to blog about it. You will find the post at the top of the blog list in the next section.

 

Our latest blog posts

Here are the latest posts, including the one just mentioned above. Older posts are still available on the blog page.

image OK, so I have my NPS or CSAT score. Is it good or bad?

The short answer is… it depends. It is difficult to interpret a first score, but it can be done. Read on for more
image Behavioral Economics and Smoking for 11-year-olds

A story about how an innovative teacher effectively stopped my junior high school class wanting to smoke. I still shudder when I remember it…
image Here is how to avoid getting a ‘Yes’ for your project, but without the people and other resources you need…

It’s probably one of the worst possible situations to be in. You prepare for days, weeks or months. You make a fabulous project proposal to your leadership team. You get approval for the project, but did not quite manage to get approval for the resources you need to be successful. Here are suggestions about how to avoid it.

Notable customer experience items from other sites

Provide Support Blog: Infographic with ‘Top 15 mistakes made by customer service pros’

Beautifully-made infographic with a list of 15 mistakes made by customer service professionals. The focus is on mistakes agents make while interacting with customers on the phone or by other means. It is a good list. I am sure you will be able to think of other items too.

When I think about the subject, I jump straight to what I wrote at the end of Customer Experience Strategy – Design and Implementation. The main thing most customers want is to be remembered. In the call center environment, this includes knowing whether a customer has called before, not asking them to repeat information multiple times when they are passed to different agents, and (probably the most difficult) understanding whether the customer has already tried to resolve the issue by a different means. See what you think of the infographic on the Provide Support Blog site.

Quora.com can be useful

Following the issues with the now-defunct Net Promoter System Forum in LinkedIn, I was looking for other ways to interact with customer experience and Net Promoter System professionals. I found Quora, and it is quite useful. The general rule in Quora is that you have to ask a question. As you might expect, most questions are being asked by people who immediately provide what they believe to be the best answer. However, there are lots of good exceptions and I have found some deep discussions in the Net Promoter System area here and in the Customer Experience area here. Enjoy.

 

Looking forward

On top of thinking about re-doing our website, I am thinking about re-writing the Wikipedia entry on the Net Promoter System. While anyone can edit a Wikipedia entry, I have found it suprisingly difficult to avoid having my changes deleted by others who disagree with them. Have a look at the page, and please let me know if you have improvement suggestions.

Please share this newsletter with your friends and colleagues and encourage them to sign up for it here. I have put links to past newsletters on the subscription page. Finally, please feel free to change or cancel your subscription using the link below.

You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

 

OK, so I have my NPS or CSAT score. Is it good or bad?

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“OK, I have my NPS number. Is it good or bad?” There are two parts to the answer. First, the score does not tell you much on its own. The reasons customers give for the scores and what they want you to improve are more important. Second, the absolute score number is meaningless. What matters are how it compares to your competition and whether it is improving or getting worse. Let’s start by talking about the score.

Scores vary greatly by industry

Not alone are average NPS scores quite different by industry, they vary widely within an industry. The first diagram below shows the results of a NPS Temkin benchmark survey, for example. The overall message you should take here is that a single number is meaningless in isolation. An NPS of 15 is horrible for a supermarket and approaches best-in-class for an ISP or cable TV provider. There is one subtlety in NPS theory that is worth noting here: you gain or lose share when your NPS trend is more or less favorable compared to the leading competitor. The Temkin table considers all competitors to be equal when calculating the average score. Some of the extreme scores below will be for companies that may not be relevant (unless they happen to be your own company). As noted at the bottom, the graph expresses the views of US consumers. Scores also vary by country, and I will cover that another time.

Temkin NPS

Validation using CSAT scores by industry

The variations by industry are of course not unique to NPS. Table 2 shows the American Customer Satisfaction Index scores by industry as of today (November 8th, 2017). The pattern is similar to that for NPS scores. Since NPS numbers can vary from -100 to +100, and ACSI numbers only from 0 to 100, it is to be expected that there is far less variation in the ACSI scale. Remember that these are not NPS numbers.

ACSI scores by industry

Communicating the ‘goodness’ of your NPS scores

Once you are confident you understand the range of scores for your industry and geographical coverage, I suggest communicating some round numbers in a consistent way. For example, if you are in the supermarket business in the USA, try saying “30 is good, 40 is great, 50 is world-class.” Make sure you understand where your most important competitor is within the range.

Recognizing ‘marketing’ NPS scores

I suppose I am being polite here. I have seen too many companies trumpeting things like “Our NPS is 92” with no indication of the source for the number. The only acceptable source you should use for such statements is a reputable double-blind benchmark survey. If you use anything else, you should at least provide the source. I have been reading double-blind benchmark survey results for many industries for many years. I have never seen a score of 92.

Conclusion

As always, feel free to disagree below or write to be at mfg@customerstrategy.net. As you might expect, the above is has been adapted from a chapter in our book Net Promoter – Implement the System, available on Amazon.

#35 – Podcast on gaming of surveys, emotion rules, and more

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Welcome to the 35th edition of my customer strategy newsletter. The five topics this week are:

  1. New Net Promoter System podcast: Games People Play
  2. Thank you for the kind feedback on the last two blog posts 
  3. Latest blog posts
  4. Notable items from other sites – Freakonomics, and CX Talks
  5. Looking forward

Net Promoter System Podcast – ‘Games People Play’

The latest in a series of podcasts I recorded with Rob Markey of Bain has been released. I think the subject is the one that attracted the most questions when I used to manage the Net Promoter System Forum on LinkedIn: gaming of customer research.

As soon as you start to measure individuals on scores, or simply put too much pressure on improving a number, people will find ways to cheat. (If you really want to cheat, I blogged about how to do it back in February.) The secret to success is making it clear in your communication and reward system that you value the projects and process improvements that result in better customer experience more than the scores.

The podcast starts with the reasons for gaming and how to avoid it. It goes on to cover examples Rob and I have seen of how people have cheated their company’s systems. When the podcast was edited back, one of my own stories was removed. Here it is. We had some clever call center agents who noticed that they had full access to customer data in their call management system. They decided to use the capability by editing the customers’ email addresses, replacing them with email accounts they had set up for themselves. They then responded for the customers, giving themselves amazing compliments. We fired them, of course. The new podcast is here.

Thank you for the feedback on my last two blog posts

I suppose my most recent blog posts have taken a more personal tone than older ones. I relate things that have happened to me personally.

Several people emailed me about the last one, asking for more details about what happened in the showers after gym class in Seattle when I was 11. Seriously people, that is not the point of the story. The story was about how the school took an approach to smoking prevention that got me emotionally, rather than just burying us in facts. I went on to recommend taking the combined emotion / fact approach when communicating about cusotmer experience.

The prior post was about how to deal with the common situation where your project is approved, but not the people and other resources you need to be successful. That’s a tough one. I suggest ways of making your proposal that ensure you don’t fall into the trap. And yes, I was a slow learner and fell into the trap several times.

 

Our latest blog posts

Here are the latest posts, including the two mentioned above. Older posts are still available on the blog page.

image Behavioral Economics and Smoking for 11-year-olds

A story about how an innovative teacher effectively stopped my junior high school class wanting to smoke. I still shudder when I remember it…
image Here is how to avoid getting a ‘Yes’ for your project, but without the people and other resources you need…

It’s probably one of the worst possible situations to be in. You prepare for days, weeks or months. You make a fabulous project proposal to your leadership team. You get approval for the project, but did not quite manage to get approval for the resources you need to be successful. Here are suggestions about how to avoid it.
image You don’t need a customer experience strategy – You already know what to do (A modern fairy tale for CX day)

Don’t bother wasting time developing a customer experience strategy. You already know what to do! Well, most of us think we do. Including me. We all have lots of ideas…

Notable customer experience items from other sites

Nobel winner Daniel Kahneman speaks during a Freakonomics podcast

Regular readers know I am a fan of behavioral economics in general, and of Daniel Kahneman in particular. (If you have never read any behavioral economics books, I suggest starting with Dan Ariely’s Predictably Irrational before moving on to Kahneman’s Thinking, Fast and Slow, then finishing with Thaler and Sunstein’s Nudge.) The Freakonomics podcast covered a conference organized by the Behavior Change for Good project.

While the whole podcast is worth a listen, I suggest jumping directly to 30 minutes and 45 seconds where Daniel Kahneman will start to explain what he considers to be the greatest lesson in psychology he has ever learned. Please listen to it, then ask yourself why your company and perhaps your customers are not already behaving the way you want them to. The podcast is here, and of course on iTunes and other podcast platforms.

CX Talks – The Effectly Blog

Joakim Thörn of Swedish company Effectly sent me links to several of these CX talks. I suggest starting with the one about outside-in versus inside-out thinking, then move on to the one about how ‘Emotions matter’. You can find the talks here.

 

Looking forward

Yes, October was indeed our record book sales month, as predicted. Thank you for that. Now we are thinking about re-doing our website to focus more on the books and the blog. I think I need a seriously rainy day to get my motivation going, and we just have not had those recently.

Please share this newsletter with your friends and colleagues and encourage them to sign up for it here. I have put links to past newsletters on the subscription page. Finally, please feel free to change or cancel your subscription using the link below.

You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

To change your subscription, click here.

 

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