A version of this article first appeared on LinkedIn.
For many leading brands, measuring the customer experience (CX) for the best possible results is no longer a big unanswered question. Collecting data about that experience and translating it into meaningful information is now becoming an essential best practice.
In an increasingly competitive market, with an increasingly distracted consumer whose being offered many choices, your CX strategy is the key to making your brand stand out and driving the success of your business. The next big question for CX leaders is how to motivate your teams to use CX insights to consistently create a best-in-class customer experience.
One powerful way to motivate that behavior is to measure and reward it, by tying improvements in customer experience metrics — like satisfaction (as measured by ForeSee’s FXI) — as part of your team’s performance goals and bonus compensation plans.
Doing so has the trifold effect of motivating team behavior, positively impacting your customer experience, and increasing financial performance of the business. But it can backfire if you don’t do it right; rewarding bad behavior by “gaming the system” by manipulating data to hit a metric rather than using that CX data to create the best experience. To ensure you’re motivating correctly, consider these three guidelines.
- Use the right CX measurements
- Provide context with benchmarks
- Make it real
Using the correct CX measurements
There are issues with relying on any single metric to improve your customer satisfaction, such as “likelihood to recommend” (one way to measure that is Net Promoter Score) or customer satisfaction. For example, “likelihood to recommend” is not a driver of a satisfying customer experience. It is only one of the desired outcomes, among several important outcomes that you should measure, including purchase intent, customer retention, and brand loyalty.
Customer satisfaction is a foundational metric to your program, especially since increased satisfaction directly predicts all of the desired outcomes mentioned above. For the best result, measure a combination of 3 or 4 key metrics. (Aside from FXI/customer satisfaction score, there are three other important metrics that should be included in a well-designed CX measurement plan: “likelihood to purchase,” “likelihood to recommend,” and “task accomplishment.”) The same elements should carry over to a compensation plan that rewards for CX improvement.
Provide context with benchmarks
In addition to your own customer experience, there are outside factors which can influence customer attitudes, and impact your CX scores. These include competitor activities, supplier issues or product availability, seasonality, the overall economy, and severe weather. These are largely out of your team’s control. Mapping your team’s compensation simply to growth over time of any single CX metric — such as “likelihood to recommend” or FXI/satisfaction score — doesn’t provide the full picture without proper context, and may not drive the team behavior that you’re seeking.
Solve this problem, and achieve measurement in context, with a robust database of benchmarks that allows comparison of your satisfaction scores to other relevant brands. Benchmarks, or industry-accepted metrics you can use to assess where you stand among competitors, remove some of the effect of those uncontrollable market variables since all the other companies in the relevant benchmark should be experiencing the same issues. This helps you fairly compensate a team that’s worked hard to maintain your scores in an industry segment with decreasing customer satisfaction scores due to factors outside the control of your team. Maintaining scores or dropping less quickly than your peers in a declining market is actually a win for your brand — even if the scores are lower than last month.
Making it real
Finally, make your CX goals “real” if you want to develop a mature customer experience strategy that fairly motivates your team. Tie CX goals directly to your business goals using “what if” analysis in your CX measurement modeling.
Is your business KPI to increase sales by 10 percent, and decrease customer churn by 15 percent this year? Use the ForeSee model “what if” analysis to determine what optimization initiatives and customer satisfaction score increase is required to make those increases in “likelihood to purchase” and “loyalty” behaviors happen. Then add the required increases in “likelihood to purchase” and “loyalty” scores as goals within the performance plan.
You’ll be well on your way to motivating your team to work together towards the same customer experience goals.Categories: Retail