Five Recommendations For De-Emphasizing Benchmarking

Benchmarking, benchmarking, benchmarking… it’s a popular subject.

I’ve been publishing CX benchmarks for more than 10 years, so you might be surprised by my point of view on the topic: benchmarking is often overused and misinterpreted. I’m not saying to give up on the entire activity, but people often spend too much time and energy focusing on industry comparisons that aren’t necessarily an accurate reflection of the genuine customer experience.

Let me start by saying that benchmarking is a perfectly good activity. It makes sense to periodically evaluate your performance relative to competitors, especially as an input to your strategy. And it’s also healthy to look at your performance relative to companies from other industries.

While benchmarking provides value, people often let it distract them from more important activities. So here are five recommendations on how to think about benchmarking:

  1. Focus on improving, not comparing. When it comes to the use of your insights activities, it’s critical that an overwhelming majority of your efforts are aimed at finding opportunities to improve — not scorekeeping. Many executives seem to feel as though a benchmark provides a security blanket of sorts—one that shows their remit within the business is in line (or better than) the competition. Whether it’s from internal metrics or external benchmarks, knowing where you are and where you’ve been is not nearly as valuable as knowing where you should be heading. Companies often use up a lot of their feedback capacity to ask customers (and employees) questions solely for the purpose of fueling a benchmark. My advice: Optimize everything you do on driving improvements, even if it means dropping some benchmarking questions.
  2. Obsess about customers, not competitors. One of the risks of relying too much on benchmarking is that it can mask your performance when there are shifts in the market, such as new competitive options or evolving customer requirements. You may be doing well against current competitors and with existing customers while the market is slipping away from you. Your critical strategic question should be are we delivering the right experiences to the right customers?, not how are we doing versus our competitors?
  3. Compare data within studies, not across them. Every industry benchmark is based on a specific methodology, with it’s own target audience, sampling approach, timing, collection mechanism, questions, and calculations. Each of these items has an impact on the results. As I often say, sampling patterns really, really matter. It’s often ineffective to compare results across different studies unless you control for all of those items, which can be very difficult. So don’t spend too much time trying to reconcile an industry benchmark with internal results.
  4. Set goals around key drivers, not necessarily industry benchmarks. As you think about setting goals for your organization, don’t fall into the trap of relying on benchmarked metrics just because the data exists. You should be setting goals for the items that drive the overall performance of your business, which may or may not look anything like the industry benchmarks. What’s unique about your brand and what creates a loyal customer? We recommend following five steps for creating a CX metrics program, starting with higher-level goals and working your way down to metrics on key drivers.
  5. Rely on internal insights, not external data. While external benchmarks can provide a high-level snapshot of relative performance, they lack the depth and adaptability to dig into critical company-specific topics such as the needs of target customer segments and your performance during key moments of truth. The additional value of internal insights are also dramatically amplified when you combine experience data (X-data) with operational data (O-data). The ability to dig into key questions and find more meaningful insights makes building internal insights capabilities a much more valuable endeavor than digging into external benchmarks.

The bottom line: Choose actionable insights over competitive comparisons… everyday!

Is NPS A Dubious Fad?

Okay, it’s that time again. Every few years someone ignites the debate about whether Net Promoter Score® (NPS®) is a great or terrible thing. A recent article in the WSJ (The Dubious Management Fad Sweeping Corporate America) has sparked the discussion this time.

Rather than write something entirely new, I decided to share something I wrote in 2015 that addresses the issue. Before I share that post, I also suggest you take a look at these:

Below is the 2015 post, Is Net Promoter Score A Savior Or A Demon?

**********

Every couple of years, I get a resurgence of questions about Net Promoter® Score (NPS®). These surges typically coincide with research that shows how NPS is either an excellent predictor or a terrible predictor of company performance. That data often ignites a religious battle between the NPS lovers and NPS haters.

Well, it’s one of those times.

Let me start by saying that I’m an atheist in this NPS battle. We’ve had the opportunity to study and work with hundreds of companies that use NPS. I’ve recommended to some companies that they adopt NPS, to others that they stop using NPS, and to others that they start with a totally different set of metrics (see our VoC/NPS resource page).

Let’s look at what we know for sure about NPS…

The reality is that the metric itself is much less important than how it is used. I’d rather use a sub-optimal metric in a way that drives positive improvements across an organization, than have a perfect metric that doesn’t result in as much impact.

Here are some quick answers to key questions:

  • Is NPS the best indicator of customer loyalty and business performance? In many cases, no.
  • Can other metrics be used to drive positive change? Yes.
  • Does NPS provide an easy to understand metric that can be widely adopted? Yes.
  • Can NPS be used to make an organization more customer centric? In many cases, yes.
  • Will a company improve if it increases promoters and decreases detractors? In many cases, yes.
  • Can NPS be used inappropriately? Yes.
  • Can any metric be used inappropriately? Yes.
  • Would I ever recommend NPS for every touch point? No.
  • Should companies consider their specific business when selecting metrics? Absolutely.
  • What’s more important, the metric or the improvement process? The improvement process.

The bottom line: NPS is neither a savior nor a demon.

P.S. In case you didn’t know, NPS® and Net Promoter® are registered trademarks of Fred Reichheld, Satmetrix, and Bain & Company.

 

Exciting News From The XM Institute

The time has finally come for me to tell people to stop purchasing Temkin Group research reports. Are we eliminating them? No. Are they irrelevant? No. We’ve just decided to give them away for free on the Qualtrics XM Institute site.

That’s right, you can now get access to almost our entire research library for free. One of the reasons we joined Qualtrics was to be able to help more people and organizations. This move shows you the commitment that Qualtrics is making to help the world understand and deliver on the promise of Experience Management (XM).

One of the things you’ll notice on the XM Institute page is a filter to select reports based on Six XM Competencies. Yes, we’ve created a new model. It’s based on the following six competencies:

  • Lead. Architect, align, and sustain successful XM efforts. Driving XM transformation requires a strong program and active support from senior leadership.
  • Realize. Track and ensure that XM efforts achieve business objectives. For XM efforts to have lasting, positive impact, they must align with the overall priorities of the organization.
  • Activate. Create the appropriate skills, support, and motivation. People generally gravitate towards the status quo. To help overcome that inertia, the organization must ensure that employees have all the appropriate XM-related training and support needed.
  • Enlighten. Provide actionable insights across an organization. At the center of XM is the constant flow of data being transformed into useful information and shared with those most capable of taking the appropriate action.
  • Respond. Prioritize and drive improvements based on insights. An organization must act on what it learns by making constant improvements as insights are uncovered.
  • Disrupt. Identify and create experiences that differentiate the organization. Truly successful XM efforts go beyond simply reacting to problems to proactively developing innovative experiences that give the organization a competitive advantage.

That’s just a quick summary. We will be publishing much, much more on this model in the future. It will be the primary lens for all of our content, which is why and we’ve created categories on this blog for the Six XM Competencies.

Enjoy all of the free content on the Qualtrics XM Institute site!

Six Categories Of X&O Data Insights

Last week I attended SAP’s SAPPHIRE and CX Live events in Orlando. It was great to see 35,000 or so of my new friends. As you might expect, Experience Management (“XM”) was a dominant theme. Just about every SAP or Qualtrics keynote speech discussed XM, and it was a topic at many of the concurrent sessions. I really enjoyed seeing the XM message come to life in so many different ways.

One of the cornerstones of XM is the combination of operational data (“O-data”) and experience data (“X-data”). While each type of data can provide valuable insights on its own, the combination can unlock new levels of intelligence across an enterprise. These more inclusive datasets will increase in value as organizations expand their use of predictive analytics, as the combined data is inherently more insightful.

To help you think about where you can find valuable opportunities to combine X- and O-data within your organization, we identified the following six categories of use cases:

  • X Why: Find something happening in O-data and look for an explanation in X-data
  • O Drivers: Find something happening in X-data and look for operational situations that are causing the situation
  • X&O Predict: Build projections based on an analysis of X- & O-data
  • X&O Personalize: Adjust how you treat people based on a combination of X- & O-data
  • X&O Alert: Send alerts and other proactive information based on a combination of X- & O-data
  • X Value: Measure the value of improving experiences by examining the impact that those changes have on business results

1905_CategoriesOfXODataInsights_v2

The graphic above provides some customer experience (“CX”) and employee experience (“EX”) examples, but it’s not meant to be an exhaustive list of use cases. Hopefully the table provides you with a good sense of the insights that can be unlocked with the combination of X- and O-data.

Now that you understand some of the ways for gaining insights from X- and O-data, think about how the combination can impact your organization. If you have some ideas or examples of how it’s worked for you, leave them in the comments section of this post.  I’ll try and highlight some of the most interesting items.

The bottom line: Combine your Xs & Os to unlock more insights.

 

CX Myth #6: Compensation Drives Good CX Behaviors

CX Myths: Debunking Misleading Beliefs About Customer Experience

Many common beliefs about customer experience are misguided, based on oversimplifications or a lack of consideration for real-world constraints. In this series of posts, we debunk these myths.


CX Myth #6: Compensation Drives Good CX Behaviors

What’s Wrong: Many organizations try to drive behavior change by tying employees’ compensation to customer experience metrics. While some level of compensation tied to CX can be helpful, it is often overdone. When you overly compensate on a single metric, it can often lead to unintended and detrimental consequences. Symptoms of these counterproductive behaviors include pestering customers for scores; focusing on activities that may improve scores, but aren’t good for the business; and actively debating the accuracy of the metrics. Rather than engaging in these activities, we want employees focusing on ways to improve customer experience.

What’s Right: Don’t use compensation to drive behavior change; instead, use it to reward good behaviors. With that in mind, you need to find other mechanisms to drive change, such as appealing to employee’s four intrinsic needs; their sense of meaning, control, progress, and competence. As I’ve previously written, keep in mind these three underlying principles about compensation:

  1. If there is significant compensation tied to any metric (including customer feedback), then people will look for ways to manipulate the measurement.
  2. If people don’t understand a metric, then tying compensation to it will have little impact on their behavior and any downside in compensation may create negative behaviors.
  3. If people don’t understand how they personally can affect a metric, then tying compensation to it will have little impact on their behavior and any downside in compensation may create negative behaviors.

What You Should Do:

  • Treat CX as a team sport. Your customers’ experience is almost never the result of a single person, even if that person is the only one interacting with the customer. So focus on team-level metrics and compensation that encourages key groups of employees to work together towards a shared objective.
  • Use an organization-wide CX metric. Developing a core CX metric for the entire organization that is tied to some compensation (not too large), is a great way to show commitment to improving CX, and it will encourage a regular dialogue about your overall CX performance.
  • Bias rewards towards the upside. Consider starting with a compensation plan that is biased towards upside. In other words, you may want to introduce the plan where there is little negative impact on compensation if the group doesn’t hit a goal, but there is positive impact of they exceed it. This can help eliminate some of the negative perceptions early in a program.
  • Celebrate good CX behaviors. Compensation is not the only reward system in an organization. If you want employees to behave in a certain way, then provide them with positive role models. Find ways to highlight employees who are demonstrating the behaviors that you would like others to emulate. This can include monthly or quarterly awards, shout outs at company meetings, or highlights across your internal communications.
  • Make it unacceptable to game the scores. When an employee asks a customer to “give me a 10 on a survey or I’ll get fired,” can you really count on the accuracy of that customer’s rating? This may be an extreme example of “gaming feedback,” but many versions of this behavior occur all the time. To keep gaming feedback in check, it’s important to be explicit with employees about what the company considers to be unacceptable behaviors.  I’ve identified five rules that you should strictly enforce with employees, which includes not talking with customers about survey questions, scores, or consequences.

The bottom line: Use compensation to reinforce, not force, good CX behaviors.

What’s All This About X- And O-Data?

1811_XODataYou might have heard Qualtrics discussing X-data (experience data) and O-data (operational data), and wondered, should we care? The answer is yes, and here’s why.

Let’s start with a basic premise that no individual experience exists in a vacuum. People form their opinions about any experience based on a collection of different factors. The more we can understand those factors, the better we can extrapolate the insights about a single personal experience to form a deeper understanding about other people’s experiences.

Now to my discussion of Xs and Os, starting with customer experience (CX)…

Let’s say that your company has this data:

  • X-Data: NPS responses
  • O-Data: Customer product ownership and support history.

With X-data, you can calculate an NPS for the customers who responded. You can also dig into their feedback, and hopefully understand what’s causing promoters and what’s causing detractors.

That’s extremely valuable, but it only tells you what’s going on with the people who happened to respond to the survey.

By combining O-data with your X-data you can examine (especially through predictive analytics) what types of products and service interactions lead to promoters and detractors, and use this data to calculate the NPS for large portions of your customer base–—even for customers who never responded to a survey.

It could be that ownership of a certain version of a product tied together with a specific type of customer service problem is highly likely to create detractors. You can identify all the customers with that profile and take proactive measures to correct the issues — even though they may never have complained.

Result: More loyal customers and more targeted use of your resources.

This works across all areas, even with employee experience (EX). Let’s assume you have this data:

  • X-Data: Employee satisfaction study
  • O-Data: Employee tenure, promotion history, most recent performance rating

With X-data, you can determine how employees feel about their next steps at the company. You can also dig into their feedback, and hopefully understand what’s causing higher vs. lower levels of career satisfaction.

By combining O-data with your X-data you can examine what influence tenure, promotion history, and performance may have on satisfaction, and use this data to identify segments of employees to invite to participate in a high-potential development program.

Result: More high-performing workforce because you’re investing in the right employees.

Hopefully you can see how the combination of X- and O-data can increase your CX and EX insights. The same dynamic also holds true for brand experience (BX) and product experience (PX). By combining and analyzing the different types of data, you can use feedback from a few people to build an understanding of many, many more. This allows you to better prioritize investments, while making more targeted and impactful changes.

The bottom line: X- and O-data together provides an analytics goldmine.

CX Myth #4: Net Promoter Score Is The Best/Worst Metric

CX Myths: Debunking Misleading Beliefs About Customer Experience

Many common beliefs about customer experience are misguided, based on oversimplifications or a lack of consideration for real-world constraints. In this series of posts, we debunk these myths.


CX Myth #4: Net Promoter Score Is The Best/Worst Metric

What’s Wrong: People often argue that Net Promoter Score (NPS) is the greatest metric, while other people argue that it’s a terrible metric. Both of those points of view are off the mark.

What’s Right: We rarely see a company succeed or fail based on the specific metric that it choses. That doesn’t mean that you can chose a ridiculous metric, but most reasonable metrics provide the same potential for success (and failure). In many cases, NPS is a reasonable choice, as our data shows that it often correlates to customer loyalty. The way you use a metric is often far more important than the metric that you chose.

What You Should Do:

  • Pick a simple metric. It’s important that you choose a metric that employees will understand, so they are motivated to help improve it. The metric can be based on customer attitudes (like NPS), behaviors (like repeat purchases), or even results (like first call resolution). Just pick a simple metric that aligns with your business goals.
  • Follow our five steps. To drive improvements using the metric, follow Temkin Group’s five steps. to a strong CX metrics program: 1) Determine a core CX metric, 2) set achievable goals, 3) identify key drivers, 4) establish key driver metrics, and 5) make the suite of metrics actionable.
  • Focus on all four action loops. People often discuss an action loop with CX metrics, but we’ve identified four customer insight-driven action loopsImmediate responsecorrective actioncontinuous improvement, and strategic change. Any CX metrics program should put in places processes to close all four loops.
  • Don’t compensate too much. When companies establish CX metrics, they often establish compensation based on them. While this can be a valuable approach to raise awareness and alignment, it can also be a problem if the level of compensation is too large (can encourage bad behaviors), it focuses on individual results (CX is a team sport), or the goals are too precise (some metrics are inherently jittery).
  • Have very clear sampling strategy. The approach for sampling often has a very significant impact on results. If you have multiple segments of customers and they each have a different profile (as many do), then your overall scores can change wildly based on the mix of those customers that are included in your calculations.

The bottom line: Obsess about your metrics program, not your metric.

Report: Tech Vendor NPS & Loyalty Benchmark, 2018 (B2B)

We just published Temkin Group’s annual Tech Vendor NPS & Loyalty Benchmark Study. Here’s the executive summary:

Temkin Group Net Promoter Score (NPS) & Loyalty Benchmark Study of B2B Tech VendorsFor the seventh year in a row, we have calculated the Net Promoter Score® (NPS®) of over 60 technology vendors and analyzed the correlation between NPS and four client loyalty behaviors – likelihood of repurchasing from that technology vendor, likelihood of trying new offerings, likelihood of forgiving the vendor if it makes a mistake, and willingness to act as a reference for the vendor. To gather this data, we surveyed 800 IT decision-makers from large North American firms about their relationships with their technology providers. Through this research, we found that:

  • Across the 61 tech vendors we examined, NPS ranged from +51 to -22.
  • VMware, IBM software products, DellEMC, and Microsoft server software earned the highest NPS, while Check Point, Splunk, and Alcatel-Lucent received the lowest.
  • Overall, the average NPS for the tech vendor industry stayed steady from last year, declining only slightly from 21.4 in 2017 to 21.2 this year.
  • Our analysis shows that NPS is strongly correlated to customers’ willingness to spend more with tech vendors, try their new products and services, forgive them after a bad experience, and act as a reference for them with prospective clients.
  • In addition to examining NPS, the research also provides a benchmark of several areas of loyalty. IT decision-makers are most likely to purchase more from DellEMC and Microsoft server software, try new offerings from Oracle outsourcing and Dell outsourcing, forgive Oracle outsourcing and Micro Focus if they make a mistake, and act as a reference for AWS and IBM outsourcing.

This report includes a .pdf report and a spreadsheet with the company-level data. You can see a sample of the data spreadsheet (.xls).

Download report for $695+
ROI of Customer Experience (CX), 2018

Here are two of the 11 graphics in the report:

Download report for $695+ROI of Customer Experience (CX), 2018


Report Outline:

  • Net Promoter Scores for 61 Tech Vendors
    • VMware Earns Top Net Promoter Score
    • Net Promoter Score Correlates to Multiple Aspects of Loyalty

 

Figures in the Report:

  1. Net Promoter Score (NPS) of 61 Tech Vendors
  2. Average NPS for Tech Vendors, 2012 to 2018
  3. Likelihood of Repurchasing from Tech Vendors
  4. NPS Versus Likely to Repurchase
  5. NPS Responses Versus Likely to Repurchase
  6. Temkin Innovation Equity Quotient(TIEQ) of Tech Vendors
  7. NPS Versus Temkin Innovation Equity Quotient
  8. Temkin Forgiveness Ratings (TFR) of Tech Vendors
  9. NPS Versus Temkin Forgiveness Ratings
  10. Willingness to Act As A Reference For Tech Vendors
  11. NPS Versus Willingness To Act As A Reference

Download report for $695+ROI of Customer Experience (CX), 2018

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

CX Myth #3: You Can’t Manage What You Don’t Measure

CX Myths: Debunking Misleading Beliefs About Customer Experience

Many common beliefs about customer experience are misguided, based on oversimplifications or a lack of consideration for real-world constraints. In this series of posts, we debunk these myths.


CX Myth #3: You Can’t Manage What You Don’t Measure

What’s Wrong: When people talk about CX, they often repeat a popular saying “you can’t manage what you don’t measure.” That’s just not true. Most of the things we manage in life don’t have a formal measurement. Every day we wake up in the morning, get dressed, and get to work – all without any specific measurements. The same is true at work, and with CX. If we see an employee make a client upset, we don’t need a score on a customer survey to know that it’s a problem.

What’s Right: The correct saying should be “you can’t manage what you don’t understand.” Unfortunately, leaders sometimes just slap measurements on CX, which leads to the suboptimal approach of blindly managing by the numbers. When you talk with customers and employees about different aspects of customer experience, you can often discover insights that either never show up in your measurements, or appear long after you should have known about them. Ideally, you use CX measurements to enhance your understanding, not to replace it.

What You Should Do:

  • Increase leadership CX IQ. If you want leaders to be less metrics-centric and more successful at driving an organization towards becoming more customer-centric, then those leaders need to have a clear and consistent view of how a customer-centric organization operates. A good place to start is by having leaders review Temkin Group’s CX Competency & Maturity Model. After that, you can create measurements that map to the leaders’ understanding of CX.
  • Prune action-less metrics. Since leaders are often enamored with metrics, they tend to track an increasingly larger number of them over time. The growth remains unfettered, as very few organizations have a good approach for stopping measurements once they’ve been created. Every year or so, companies should have a metrics cleansing period, during which time there’s a pro-active focus on removing metrics that have not recently provided demonstrable value.
  • Prioritize qualitative research. The push to metrics often causes organizations to put most of their market research budget on quantitative studies that result in trackable measurements. But deep insights into customers often comes from qualitative studies that examine why customers think and behave the way that they do. Look for places to explicitly fund more qualitative studies by cutting back on the least impactful quantitative studies.
  • Measure collective results. CX success requires efforts across an entire organization. So watch out for measurements that isolate the activities of individual people or teams. The narrower the measurements you use, the more likely you are to de-incentivize collaborative behaviors. Focus on metrics that capture real-world team-based activities.
  • Look for leading indicators. Most metrics represent backwards-looking scorecards, describing how an organization performed in the past. While a retrospective view can be helpful, it’s more valuable to understand what activities will impact your organization’s future CX trajectory. Use predictive analytics to identify what activities with different customer segments will most improve your CX metrics in the future.

The bottom line: CX insights don’t always require CX metrics.

Report: ROI of Customer Experience, 2018

ROI of Customer Experience (CX), 2018We just published a Temkin Group report, ROI of Customer Experience, 2018. Here’s the executive summary:

To understand the connection between customer experience (CX) and loyalty, we examined feedback from 10,000 U.S. consumers describing both their experiences with and their loyalty to different companies. The CX scores used in this model come from the 2018 Temkin Experience Ratings (TxR), which evaluated 318 companies across 20 industries. Our analysis shows that:

  • The correlation between CX and repurchasing is very high (Pearson correlation= 0.82).
  • There’s a 21-point difference in Net Promoter Score between consumers who’ve had a very good experience with a company and those who’ve had a very poor experience.
  • CX is made up of three components – success, effort, and emotion. While all three elements impact customer loyalty, an improvement in emotion drives the most significant increase in loyalty.
  • We built a model to estimate how a modest improvement in CX would impact the revenue of a typical $1 billion company across in 20 industries. On average, companies can gain $775 million over three years. Software companies stand to earn the most ($1 billion over three years), while utilities stand to earn the least ($476 million over three years).
  • The report contains data charts showing how loyalty levels change based on customer experience across 20 industries.
  • We also describe a five-step process for calculating the ROI of CX for your organization.

Download report for $195+
ROI of Customer Experience (CX), 2018

Here are two of the 14 graphics in the report:

Correlation between customer experience (CX) improvement and future purchase intentionsRevenue increase from improvement in customer experience (CX)

Download report for $195+ROI of Customer Experience (CX), 2018


Report Outline

  • Customer Experience Is Highly Correlated With Loyalty
    • Correlates with repurchasing
    • Links to Net Promoter Score
    • Significantly impacts emotion
  • CX Improvements Results: Up to $1.1B In Revenue Over Three Years
  • CX and Loyalty Across 20 Industries
    • Recommend a company
    • Repurchase from a company
    • Trust a company
    • Forgive a company
    • Try a new offering right away
  • Build Your Own CX ROI Model

 

Figures in the Report:

  1. Customer Experience Correlates to Future Purchase Intentions
  2. Customer Experience Correlates to Net Promoter® Scores (NPS®)
  3. Impact of SuccessEffort, and Emotion on Loyalty (Average Across 20 Industries)
  4. Elements Used in Model to Derive Revenue Impact Based on Improvement in Customer Experience
  5. Improvements in Customer Loyalty From Modest Improvements in Customer Experience
  6. Revenue Increases From A Moderate Improvement in Customer Experience
  7. Revenue Increases From A Moderate Improvement in Customer Experience (Details)
  8. Loyalty Differences Across CX Performance Levels
  9. Recommendations Based on Customer Experience
  10. Likelihood to Repurchase Based on Customer Experience
  11. Trust Based on Customer Experience
  12. Forgiveness Based on Customer Experience
  13. Try New Products Based on Customer Experience
  14. Steps for Calculating the Value Of Customer Experience

Download report for $195+
ROI of Customer Experience (CX), 2018

CX Myth #2: You Need A 360-Degree View of Customers

CX Myths: Debunking Misleading Beliefs About Customer Experience

Many common beliefs about customer experience are misguided, based on oversimplifications or a lack of consideration for real-world constraints. In this series of posts, we debunk these myths.


CX Myth #2: You Need A 360-Degree View of Customers

What’s Wrong: If companies had an unlimited set of resources to plow into their customer insights efforts and an equally unlimited number of people prepared to take action on those insights, then shooting for a 360-degree view of your customers would be viable. But this is not the case for most organizations. So striving to understand everything about every customer (360-degree view) pushes organizations to over-invest in data and squeezes out the critical focus on taking action on the insights.

What’s Right: Organizations need to focus their insights efforts in areas where they are prepared to take action. Rather than aiming for a 360-degree view of all customers, organizations would be better served with a more targeted approach, focusing their insights investments on understanding key customer groups during specific parts of their journeys.

What You Should Do:

  • Separate the notions of Detect and Diagnose, which are two parts of the Six D’s of a Voice of the Customer Program. You can track the high-level feedback from a large number of customers (“Detect”) and then use those insights to identify areas where you should dig deeper to drive action (“Diagnose”).
  • Identify the actions that your organization is prepared or willing to take based on customer insights. This includes items across all four action loops: immediate response, corrective action, continuous improvement, and strategic change.
  • Define the target customers that you need to understand in order to support actions. This should include the type of customers and the specific stages of their journey that you’re most interested in understanding.
  • Make it as easy as possible for people across your organization to use the insights. Tailor the information to the specific ways that people in your organization make decisions. Minimize the requirement for non-analyst users to interpret and manipulate the data to uncover actionable insights.
  • Whenever you’re presenting customer insights, try not spend more than 20% of the time discussing data. Use the majority of the time talking about what the data means,  implications, opportunities for improvement, and next steps.
  • Help stakeholders across your organization understand new and more impactful ways that they can use customer insights to drive action. They may not immediately understand how to best use insights, so you may need to help them evolve through seven stages to a data-centric mindset.

The bottom line: Focus on developing the most actionable insights.

Report: Employee Engagement Competency & Maturity, 2018

Purchase report: Employee Engagement Competency & Maturity, 2018We just published a Temkin Group report, Employee Engagement Competency & Maturity, 2018. Here’s the executive summary of this annual review of employee engagement activities, competencies, and maturity levels for large companies:

To understand how companies are engaging their employees, we surveyed 178 large companies and compared their responses with similar studies we’ve conducted in previous years. We also asked survey respondents to complete Temkin Group’s Employee Engagement Competency & Maturity (EECM) Assessment. The EECM Assessment places companies in one of five stages of maturity and evaluates their performance across five employee engagement competencies: Inspire, Inform, Instruct, Incent, and Involve. Highlights from our analysis of their responses include:

  • Team leaders of non-customer-facing groups are the least supportive of customer-centric activities.
  • Nearly 70% of companies measure employee engagement at least annually, yet only 40% of executives consider acting on the results to be a high priority.
  • The top obstacle to employee engagement activities continues to be the lack of an employee engagement strategy.
  • While only 19% of companies are in the top two stages of employee engagement maturity, 49% are in the bottom two.
  • When we compared companies with above average employee engagement maturity to those with lower maturity, we found that employee engagement leaders have better customer experience, enjoy better financial results, have more coordinated employee engagement efforts, have more widespread support across employee groups, are more likely to act on employee feedback, and face fewer obstacles than their counterparts with less engaged workforces.
  • You can use the results of the EECM Assessment to benchmark your own employee engagement activities.

Download report for $195+
Buy employee engagement competency and maturity report

Here’s an excerpt from two of the 19 graphics that shows the maturity levels of employee engagement efforts in large companies and their effectiveness across five employee engagement competencies:

Employee Engagement Competency & Maturity ModelEmployee Engagement Competency & Maturity Levels of Large Organizations

Download report for $195+download employee engagement competency report


Report Outline:

  • Employee Engagement Efforts Are Underway
  • Assessing Employee Engagement Competencies and Maturity
  • Employee Engagement Leaders Versus Laggards
  • Propel Your Employee Engagement Efforts

 

Figures in the Report:

  1. Importance of Employee Engagement and Customer-Centric Culture
  2. Support For Customer-Centric Activities
  3. Employee Engagement Measurement
  4. Overview of Employee Engagement Activities
  5. Employee Engagement Obstacles, 2016 to 2018
  6. Employee Engagement Competencies and Maturity Levels
  7. Employee Engagement Competency & Maturity Assessment
  8. Results From Employee Engagement Competency Assessment
  9. Results From Employee Engagement Competency AssessmentBetween 2016 and 2018
  10. Highest Performing Employee Engagement (EE) Competency Elements
  11. Lowest Performing Employee Engagement (EE) Competency Elements
  12. Customer Experience and Financial Results: Employee Engagement Leaders Versus Laggards
  13. Organizational Culture: Employee Engagement Leaders Versus Laggards
  14. Executive Priorities: Employee Engagement Leaders Versus Laggards
  15. Overview of Employee Engagement Activities: Employee Engagement Leaders Versus Laggards
  16. Employee Engagement Measurement: Employee Engagement Leaders Versus Laggards
  17. Support For Customer-Centric Activities: Employee Engagement Leaders Versus Laggards
  18. Employee Engagement Obstacles: Employee Engagement Leaders Versus Laggards
  19. Percentiles of Results From Temkin Group Employee Engagement Competency Assessment

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What is Net Promoter Score? (Video)

Net Promoter® Score (NPS®) is one of the most popular CX metrics, so we are often asked to discuss it with clients. In addition to helping build successful NPS systems, we often provide a basic overview for executive teams and broader audiences of employees. That’s why created this video. It’s meant to explain what NPS is all about and why it may be a valuable approach for some companies. It’s a great video to share across your organization if you are using or considering using NPS. If you’d like more information, check out our NPS/VoC program resources.


CX Sparks: Guides For Stimulating Customer Experience DiscussionsThis video is a great introduction to a discussion with your team. That’s why we’ve created a CX Sparks guide that you can download and use to lead a stimulating discussion.


Video Script:

You may have heard of Net Promoter Score, which is often referred to as NPS. It’s a popular customer experience metric. Let’s examine what it is.

Walt Disney once said “Do what you do so well that they want to see it again and bring their friends.” He understood the incredible value of customers who actively recommend a company.

NPS is a measurement system that helps companies track and increase the likelihood of customers recommending an organization.

First of all, let’s describe the actual NPS measurement. It begins by asking customers a simple question:

“How likely are you to recommend this company to a friend or relative?”

Customers choose a response from an 11-point scale that goes from 0 “not at all likely” to 10 “extremely likely.”

Based on their response, customers are placed into one of three categories:

  • If they choose between 0 and 6, then they are DETRACTORS.
  • If they choose 7 or 8, then they are PASSIVES.
  • If they choose 9 or 10, then they are PROMOTERS.

NPS is calculated by taking the percentage of Promoters and subtracting the percentage of Detractors. You then multiply the percentage by 100 to get a whole number between -100 and +100.

Calculating Net Promoter Score (NPS)

Let’s say that 100 people answered the question, and 40 are Promoters, 50 are Passives, and 10 are Detractors. To calculate NPS, we would take the 40% for Promoters, subtract the 10% for Detractors, which leaves 30%. After multiplying it by 100, the NPS is 30.

While NPS provides a score, 30 in this case, the power of the system does not come from overly focusing on the number.

The goal of using NPS is to find and correct issues that create Detractors and to find and repeat activities that create Promoters. So it is important to understand what is causing customers to choose their responses.

That’s why most NPS programs include a follow-up question that asks the customer why they chose the score that they did. This question should be open-ended, not multiple choice, so customers can express their views in their own words.

What do you do with the data?

First of all, you want to “close the loop” with the customers who responded. This means contacting at least some of the customers who respond. Companies often try to reach out to all of the Detractors, to find out more about their problems and to see if their issues can be resolved. They also often contact Promoters, to thank them and hear more about what they like.

Next, you want to examine the opportunities to improve NPS by looking at what situations and activities cause Promoters and Detractors. This requires analyzing the responses from each group separately, and often involves incorporating other information about customers. You may also want to examine what drives Promoters and Detractors across different business areas or customer segments.

There’s no value in identifying the items that are driving NPS up or down unless a company does something with what they learn.

That’s why companies establish processes for reviewing, prioritizing, and taking action on the items that they uncover. In other words, the way to improve NPS is to have an ongoing approach for improving customer experience.

When used correctly, NPS helps companies follow Disney’s advice and do what they do so well that their customers want to see them again and bring their friends.

If being customer-centric matters to your organization, then why leave it to chance? Contact Temkin Group, the customer experience experts, by emailing info@temkingroup.com, or visit our website, at TemkinGroup.com.

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

Report: What Happens After a Good or Bad Experience, 2018

To understand how the quality of a customer’s experience – whether it was good or bad – affects their behavior, we asked 10,000 U.S. consumers about their recent interactions with more than 300 companies across 20 industries. We then compared results with similar studies we’ve conducted over the previous seven years.

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Here are some highlights:

  • Purchase and download Temkin Group report: What Happens After a Good or Bad Experience, 2018About 18% of the customers who interacted with TV & Internet service providers reported having a bad experience – a considerably higher percentage than in other industries. Of the companies we evaluated, 21st Century, Comcast, Cox Communications, and New York Life deliver bad experiences most frequently.
  • We created a Sales at Risk Index for all 20 industries by combining the percentage of customers in an industry who reported having a bad experience with the percentage who said they decreased their spending after a bad experience. According to this Index, TV & Internet service providers stand to lose the most revenue (6.4%) from delivering bad experiences, while utilities stand to lose the least (1.4%).
  • When it comes to recovering from delivering a bad experience, Investment firms are the most effective and TV & Internet service providers are the least effective.
  • After customers have a very bad or very good experience with a company, they are more likely to give feedback directly to the company than they are to post about it on Facebook, Twitter, or third party rating sites. Customers are also more likely to share positive feedback through online surveys and share negative feedback through emails.
  • Compared to previous years, customers are less likely to share feedback across almost all channels, with a particularly large drop in the percentage who post on Facebook or Twitter.
  • Across almost all age groups, consumers are most likely to share their feedback directly with the company. Consumers between 18 and 34 years old are the most likely to share their good and bad experiences on Facebook, while older consumers tend to use 3rd party ratings sites more than Facebook or Twitter.

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Here is one of the 12 graphics in the report:


Report Outline:

  • Bad Experiences are Prevalent in the TV & Internet Services Sector
  • Bad Experiences Can Be Very Costly
  • Consumers Give More Feedback After a Bad Experience
    • The Channels for Direct Company Feedback
    • Feedback Differs Across Age Groups

 

Figures in the Report:

  1. TV & Internet Service Providers Deliver the Highest Percentage of Bad Experiences
  2. Companies That Deliver The Most And The Fewest Bad Experiences
  3. How Consumers Cut Their Spending After A Bad Experience, By Industry
  4. How Consumers Cut Their Spending After A Bad Experience, By Industry
  5. Sales at Risk Due to Bad Experiences
  6. How Industries Respond to Bad Experiences Overall
  7. How Consumers Give Feedback
  8. How Consumers Give Feedback to Companies
  9. Changes in How Consumers Give Feedback After a VERY GOOD Experience, 2013 to 2017
  10. Changes in How Consumers Give Feedback After a VERY BAD Experience, 2013 to 2017
  11. How Consumers Across Age Groups Give Feedback After VERY GOOD and VERY BAD Experiences
  12. How Consumers Across Age Groups Give Feedback Directly to Companies After VERY GOOD and VERY BAD Experiences

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Mastering Customer Experience Metrics (Infographic)

As an organization’s customer experience efforts mature, CX metrics become a critical guidepost for all of its activities. You can see different ways to download this infographic below.

Mastering Customer Experience (CX) Metrics Infographic

Here are links to download different versions of the infographic:

Here are links to the research referenced in the infographic: