You're hot and you're cold

Let’s admit it – we live in a business world that is increasingly becoming dominated by Customer Experience initiatives, as organisations attempt to improve the quality of the customer journey and engage customers more deeply with the brand and its products and services. CX is becoming recognised as the true driver of differentiation and competitive advantage, with investment increasingly focused on its improvement – whether through better digital capabilities, more engaging experiences, improved quality of service…

But how many organisations clearly understand what customers value most? How many know exactly where they should spend their allocated investment tokens?

I have seen organisations basing these decisions on wrong data, misleading insights or even inaccurate metrics. In fact, I’m truly surprised that still too many organisations use NPS metrics that are not statistically correct, but based on flawed measurement frameworks – as I highlighted in my previous blog ‘Are you playing Whack-A-Mole or Connect 4?’ For example, the moment that a prominent High Street bank tells you that their NPS is over 80, you cannot but wonder how exactly they calculate it and how accurate that is, especially if you are a customer yourself and therefore have personally experienced their service…

At the end of the day, also NPS is an arguable metric if used in isolation. NPS is about the company’s agenda, an indication of whether the customer would recommend the company, rather than about the customer’s experience. This is why I have always used it in conjunction with a Customer Effort Score, key driver scores and verbatim analysis. In this way, NPS can be used at the overall top-line performance peg, but supported by a more accurate view of what influences it at an actionable level.

Do you know what drives your customers’ experience?

Also when the NPS is accurate, many organisations are not able to truly understand what drives it and the relative importance of those experience drivers for customers’ purchase decisions (you can read more about this in my other blog ‘Weighing the Pig’). For example, I was recently talking to a large UK insurance company who firmly believes in its research that shows that customers buy insurance only based on price – and have therefore decided to de-prioritise investment and focus on the customer experience. My question is: how accurate is that research? Having worked in Insurance for over 4 years, I agree that price is a key driver of customers’ purchase decisions, however it is not the only one and it is certainly not the main one that drives retention and customer loyalty. But more importantly, basing a business strategy on offering the cheapest price is not sustainable in an environment where new players continuously enter the market with much lower cost-to-serve models and more innovative propositions.

While the rational brain of customers will hook up on a low price, it will also immediately query its value versus its quality and base that assessment on the factual information available… which also includes other customers’ ‘ratings and reviews’, word of mouth or social media feeds. This is where the ‘value’ algorithm starts to shake and becomes informed by a combination of rational and emotional factors… and in the end the emotional side tends to prevail, with decisions based on how the customer feels about that company or product: “I feel more confident about…”, “That product feels right…”, “That company feels more trustworthy, reliable, honest…”

Like in Katy Perry’s song, customers can be ‘hot and cold, yes and no, in and out’ and “change mind like a girl changes clothes”, because they are motivated by emotional drivers which continuously react to a variety of experiential factors. In fact, human emotions are complex, unstable, determined by the social and environmental context and, to a large extent, unpredictable.

Do you know what emotionally motivates your customers?

Not many companies include emotional drivers in their Voice of the Customer programmes, as this is an area which is still under development, both from a strategy design and experience measurement perspective (read more about this in my blog ‘Emotions are loud but nobody listens’). In fact, most companies do not even know what type of emotions they want to raise in their customers – therefore, how could they possibly measure them?

Many leading CX experts have attempted to unravel this conundrum by creating a score or metric to capture the role of emotions in customers’ perception. For example, Colin Shaw from Beyond Philosophy created Net Emotional Value (NEV), a net score based on the difference between average positive and negative emotions. Morris Pentel came up with an e-score based on adding a ‘more than’ level at the extremes of the rating scale to capture a more emotional response from customers. TTEC defined the Customer Experience Vector (CXV), which combines data science (segmentation, predictive modelling etc) with behavioural science (analysis of feelings, perceptions etc) to convert emotions into customer journey maps at scale.

Personally, I believe that emotions cannot be measured through a generic one-size-fits-all metric. Relying on averages or generic scores can be misleading and would not provide a true indication of performance or, more importantly, its drivers and motivators.

I find interesting ‘The New Science of Customer Emotions’ study by Harvard Business Review, which is focused on deciphering the impact of emotional motivators on customer behaviours and purchase decisions. This highlights that “customers who are fully emotionally connected are 52% more valuable, on average, than those who are just highly satisfied… across a variety of metrics, such as purchases and frequency of use.” This approach aims to identify which are the key emotional motivators for the individual company, to then define an Emotional Connection Score (ECS) based on them, to measure the share of customers who are fully connected with the brand.    

 Source: The New Science of Customer Emotions, Harvard Business Review

Source: The New Science of Customer Emotions, Harvard Business Review

I believe that this is a much more specific and relevant way to measure the emotional engagement of customers with what the brand wants to stand for. Not only it represents a better measure for customer engagement, but also it provides actionable insight that can be used to improve the customer proposition, align the organisation behind the brand promise and strengthen customer loyalty.

In conclusion, your Customer Strategy should define what type of emotional engagement your brand wants to drive with your customers, and therefore identify and measure these emotional drivers and motivators through a tailor-made metric or verbatim / sentiment analysis methodology, fully integrated within the Voice of the Customer programme.

 

Get in touch today to discuss how I can help you define your customer strategy and CX measurement framework.

 

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