Your customer experience efforts aren’t moving the numbers… so what’s going wrong?
Let’s start with reference points
This theory is great because it explains a lot about customer behaviour. Reference points describe what we use to compare one thing to another. This theory is helpful because we always evaluate things by comparing them to something else. This is the simplest way to describe how our minds naturally work for everything in life, including customer experiences. No experience is good or bad unless you compare it to something else, right?
So, suppose you want to know why your customer experience scores are not improving and why your customers are responding positively to objective improvements that you’ve made. In this case, part of the problem might be that we don’t know what their reference points are.
It is pivotal to understand what customers use for comparison. For example, It could be:
- Your previous performance.
- Direct competitors.
- An experience they had in a completely different industry.
Moreover, there are two reference points here – 1.) The customer and 2.) your company/companies. What happens next is that the customer puts you up against their reference point, whatever this may be, and your organisation is being compared against any of the above points. Each customer uses different perspectives to evaluate an experience.
Most organisations, in our experience, don’t tend to look at competition from a customer satisfaction perspective. There are a lot that do, all of which have the success to prove it, but most don’t know how they stack up against their nearest three competitors.
In today’s market, comparing the competition is essential because your customers will be doing the same, and even if you have performed better than you did last month, and frequently score way lower than the competition, customers might not be ready to up their evaluation of you just yet.
However, this comparison to the competition works the other way, too. For example (personal context) if a friend of mine moved to Auckland and wanted my advice about a plumbing company, I would likely tell them to choose one over the other. In this instance, my NPS score for the plumbing company I recommended would still be low; they are not great. However, I would recommend them because they were marginally better than the other one, which was much worse.
Another factor that might affect your results could be as simple as the fact that you are measuring the wrong things.
A few weeks ago we spoke about customer-centric vs consumer-centric business, the focus here being that a more consumer-centric company is more “transactional” – very process and quality driven, which is not the end of the world but it does mean that they don’t tend to consider the emotions of the business. Learning to understand and utilise emotions would move a company to the next level of customer centricity, which ultimately betters the customer’s experience, fosters customer loyalty, retention and will inherently increase your revenue.
An issue we often see that limits progress is a company’s current scores might be very high, based on the metrics they have used to measure performance. Therefore, they are blind in understanding what needs to change elsewhere simply because they were scoring nearly 100% on these existing metrics.
Our point here is that there are different levels. It could be that your company is measuring its performance on metrics that are simply too basic to see an NPS move.
Another factor might be that your company is measuring the right things, but the methodology is flawed. For example, you might be using the wrong idea or aspect of the experience to track progress. That idea or aspect might not drive any value for customers.
If you don’t measure what moves the needle, you have a problem with your methodology.
The improvement you make should be in areas that customers value the most. Providing those things will show in any metric you measure.
For example, a life insurance company asked customers in a survey what they needed to improve. The answer was that their billing required improvement. So, the company spent a fortune on fixing their billing system, but customer satisfaction did not increase. Why? The customers didn’t care much about the billing system, despite what the survey results said.
So, what is the solution?
- Determine what improves your experience from the customer’s perspective: This requires understanding customers’ reference points. If you don’t know what they use to compare you, you can’t identify where your opportunities are.
- Ensure you measure the right things: Do the metrics you use drive the outcomes you want in the market? If not, change the measurement to get an accurate read of where you are.
- Provide what customers really want: If you focus on improving areas that don’t matter (or don’t matter enough) to customers, then you will be spending valuable resources where you shouldn’t. Make sure that the improvement area you identified is something that truly matters to customers and would change their perception of your organisation.
How can we help?
We often hear from our clients the difficulties they have when sifting through the clutter of information they need to first deal with, before they can contemplate goal setting and achievement. This is where expert advice and help becomes extremely valuable.
The team at HOED Research can help with any of the following:
- Customer Experience Management
- Business Health Check & NPS
- Consumer Insights
- Competitor Research
- Mystery Shopping
- Customer Satisfaction Feedback
- Qualitative & Quantitative Market Research
- Compliance Audits (both covert & overt)
- Comparative Price Checks, and more!
If you are not getting the results you desire, contact us today and we can organise an online Teams call or physical meeting to present ways in which we can help you.