April 13, 2018 | Peter Malamas

Customer Loyalty: How to Achieve the Customer Experience Golden Rule (Part II of series)

This post was originally published on LinkedIn on April 10, 2018.


Part II of my series on Customer Loyalty through Customer Experience Best Practices. See Part 1 here

In achieving customer loyalty, recommendations are the lifeblood of a business. Positive customer recommendations are highly valuable to brands, so we want to measure and maximize that behavior. Recommendation intent is a great question to ask.

Recommendation intent is also often promoted as a magical single question metric and measurement solution. However valuable, it still presents some challenges as a single question metric. Why? Both Loyalty and Recommendation behaviors are outcomes of a satisfying experience. Problems arise when looking at recommendations out of context because, since they are an outcome, they are an unreliable proxy metric for predicting another outcome, like customer loyalty. Also, some customers may be loyal, but simply aren’t extroverted “recommendation types”.

Think about your own behavior as a consumer. You are highly satisfied with a product or service provider: they give you what you want 100% of the time, and it’s easy. You may or may not recommend them, depending on your personality, but you you’ll almost certainly stay loyal as a customer. Or you may have a product or service that doesn’t lend itself to public recommendations from even the most satisfied users, (just a few B2C and B2B examples: personal hygiene products, plastic surgeons, bankruptcy lawyers, etc.).

If you’re using NPS (Net Promoter Score) as a Recommendation intent measure, you also introduce the challenges of volatility and diminished precision of the measurement itself to the challenges of using the recommendation measurement as a single question metric alone. The conversion of the 0-10 point answer scale down to only 3 categories of Detractors, Neutrals/Passives, and Promoters, means that NPS alone can often result in business users seeing false negatives, making you think things are worse than they really are in your customer experience. For me personally, like many consumers, answering a 5 or 6 on a recommendation question signifies no major difference in my actual behavior, and the one point difference will result in no active positive or negative recommendation behavior from me. However according to NPS, that single point signifies the difference between me being a Detractor actively bad-mouthing your brand on Yelp or Twitter, or a Passive that will do nothing to help or hurt the brand.

Measuring a customer’s recommendation intent – either through NPS or another recommendation question – just tells you their likelihood to recommend. This is important, but not a guaranteed indicator of your customer’s loyalty or overall satisfaction across the scale. While a positive recommend score is a decent correlative indicator of customer loyalty, a “negative” score under the NPS scale is not as reliable in determining negative customer behavior like churn.

The bottom line: while the causation of customer satisfaction as a precursor and driver of the customer loyalty outcome is very strong, as wonderful as it would be, there is no single golden metric that I would use to run a business. Customer experience is a complex multivariate set of actions, and there’s no single metric that will provide you the full context that’s needed. What is required to uncover and move the big boulders to powerfully optimize your complex B2B or B2C Customer Experience? It will be a measurement-driven closed-loop process that combines behavioral monitoring, with scientifically-based measurement driving predictive analytics viewed within the context of YOUR customer journey. These include of a range of primary attitudinal metrics such as: level of effort, task accomplishment, recommendation intent, and especially overall Customer Satisfaction, plus behavioral and performance outcomes like sales/conversions and customer churn.

While there may not be one CX golden metric, there is the CX golden rule: Customers prefer brand experiences that anticipate what we want, deliver it with minimal effort required from us, and exceed our overall expectations.

How do we achieve the Customer Experience Golden Rule?

  • Institute a rigorous CX measurement process: Use Voice of Customer, centered around customer satisfaction as a core metric, to inform every customer experience design decision as a foundation of your business strategy.
  • Take CX seriously at the highest organizational levels: Management should hold everyone accountable towards using CX insights to make all CX design decisions. Why would you ever NOT listen to voice of customer to keep your customers loyal, and gain significant competitive advantage?
  • Make it real and personal: tie great Customer Experience and scores to individual team member performance metrics and merit-based compensation
  • Use predictive analytics to drive optimal CX from your customer’s perspective: Always view the data and insights within the context of YOUR customer journey to best anticipate your customer’s needs, and predict their behaviors.
  • Drive sophisticated real-time customer journey personalization and optimization: Use CX insights to design and field AI algorithms that dynamically present the best, most personalized customer experience possible in real time.

The Customer Experience Golden Rule will drive your most desired consumer behaviors and business outcomes: more conversions in real-time, and better customer loyalty over the long term, by helping you achieve what the most wildly disruptive and successful businesses already do: present a highly satisfying personalized experience to always make each customer feel that you know them as an individual, in real time, at scale.

I welcome your thoughts and comments!

About the Author

Peter Malamas is Director, Enterprise Accounts at ForeSee. His specialty is online solutions that help companies acquire new customers and build stronger relationships with existing customers, using customer experience analytics, digital marketing, and social media. Peter’s experience ranges from individual sales contributor to a leader who’s started-up and consistently grown product lines and business units as Director of Strategic Partnerships at eWayDirect, VP Sales & Product Management at SGA Executive Tracker, and President at idEXEC, an infoGroup company. Peter is an Advisory Board Member to the CX@Rutgers Customer Experience Certification program.

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