What Is The Perfect Customer Experience?

I recently ran across a definition of “the perfect customer experience” in probably the perfect place to find it: The Perfect Customer Experience blog. Dale Wolf, the author, does a really nice job on the blog — you should check it out. His definition of the perfect experience was:

The perfect customer experience is one which results in customers becoming advocates for the company, creating referral, retention and profitable growth.

But, I felt like the definition was not quite right. So I posted the following comment on his blog:

The perfect customer experience is a set of interactions that consistently exceed the needs and expectations of a customer. While the outcome of delivering great customer experiences will hopefully turn many customers into advocates, I don’t think an experience is any less great if a customer keeps her satisfaction to herself.

Interestingly, Wolf’s response to my comment describes the differences between our definitions in terms of Net Promoter scores (NPS). Hmmm. I’m not sure that’s the way I would have summed up the differences. The whole point of my comment was to get people to recognize three unique things:

  1. The actual experience (the reality of what happened)
  2. The customer’s perception of the experience (how the customer views it relative to her needs and expectations)
  3. The customer’s reaction to the experience (what the customer does based on the experience)

The perfect customer experience relates to #2, the customer’s perception of the experience. The experience is no less perfect if the customer does not end up becoming an advocate (which is a part of #3 above).

I don’t think that it’s valuable to define the world of customer experience in terms of NPS. It’s not that I dislike NPS, I just want companies to think about it in the context of an overall voice of the customer program.

The bottom line: In terms of figuring out the perfect definition of perfection, I think Yogi Berra said it best: “If the world was perfect, it wouldn’t be.”

“LIRM” More About Net Promoter vs. Satisfaction

Well, it looks like my post on Net Promoter ignited some passionate debate — take a look at the comments posted on this blog if you’re interested. As this battle continues on, I want to make sure that people keep their eye on the toughest part of implementing any relationship tracking system — whether it’s based on Net Promoter, satisfaction, or some other measure. 

My suggestion: “LIRM.

“LIRM” (from my report Building Your Voice Of The Customer Program) represents the elements firms need to put in place to make any voice of the customer program effective. The acronym stands for:

  • Listen. All components of a VoC program need clear mechanisms for capturing everything from customers’ perspective on specific interactions to their satisfaction with the company.
  • Interpret. Customer feedback needs to be examined by asking questions like “Is the issue we’ve uncovered isolated or systemic?” And “Where in our organization can we best deal with this situation?”
  • React. For each component of a VoC program, firms need explicit processes for making changes throughout the organization – based on what is learned from customer insights.
  • Monitor. As with any well-run corporate program, each component of a VoC program needs automatic feedback loops that track work plans and results.

The bottom line: When it coms to this Net Promoter debate, listen and LIRM.

Net Promoter And Satisfaction Battle For King Of The Ring

Let’s start with a confession: I’m a big professional wrestling fan; so I really enjoy a good battle. One thing that I’ve learned from the WWE, is that it’s the storyline that makes a battle come to life. And the Net Promoter vs. Satisfaction debate has all of the story trappings of a great tag team match!

One one side of the ring in the blue trunks is the tag team of Fred Reicheld, “father” of the Net Promoter System (NPS) concept and Satmetrix Systems, implementor of NPS-based survey systems. On the other side of the ring in the red trunks, we find Claes Fornell, “father” of the American Customer Satisfaction Index (ACSI) and ForeSee Results, implementor of ACSI-based survey systems.

Both of these teams are fighting for their approach to be recognized as “THE” measure for tracking customer relationships. To put this into perspective, this type of measure represents only one of the five levels of a voice of the customer program (see my earlier post on voice of the customer programs).

Let’s start by handing out some awards to the teams:

  • Best marketed: Net Promoter (Reichheld is very good at touting his concept — and in writing compelling books about it)
  • Most mature: Satisfaction (The ACSI has been tracking data since about 1994 and satisfaction has been around as long as I can remember)
  • Most quantitative: Satisfaction
  • Sexiest: Net Promoter (it’s caused a lot of hooplah)

Net Promoter has gained a lot of momentum over the last few years as many large companies have adopted it. The methodology is pretty straightforward: ask people if they’d recommend your firm. Based on their response, they get categorized as a Promoter, Detractor, or neither. You take the percentage of Promoters and subtract the percentage of Detractors and that leaves you with a Net Promoter percentage.

This debate was enhanced by a recent study cited in the Journal Of Marketing which found that…

Using industries Reichheld cites as exemplars of Net Promoter, the research fails to replicate his assertions regarding the “clear superiority” of Net Promoter compared with other measures in those industries.

Well, if you’re wondering what I really think about this Battle Royale, then here it is. Just like wrestling — the storyline is much more exciting than the reality of the battle. Here’s my take on the contest:

  • Net Promoter is not the “ultimate” measure for a customer relationship
  • Then again, neither is satisfaction.
  • But companies are better off when they have more satisfied than dissatisfied customers and more Promoters than Detractors.

My recommendations:

  • Don’t expect any single measure to be eutopia. Both measures are good, but neither one has enough information to fully guage customer relationships and to provide enough diagnostic information to make all of the necessary improvements.
  • Focus on one measure to build alignment. Picking a single measure to focus on (whether or not it’s perfect) can be very valuable in aligning the organization. If you can get your entire company focused on either raising satisfaction or increasing the number of Promoters, then you will likely see some significant improvements in the reallt important metrics: retention, sales, etc. So, if in doubt, pick one and move on.
  • Evolve your metrics over time. The previous two bullets may seem to contradict each other, but they don’t when you look at it over time. The value from locking into a single measure like Net Promoter is as much from aligning the organization as it is around the perfection of the metric. But after the organization gets aligned, firms will need to build out the portfolio of metrics — and find out for themselves which measures are both predictive and diagnostic.
  • Look at Customer Advocacy. The ring was too crowded to add another contestant to the match earlier in this post, but for some industries we’ve found another measure that is a powerful indicator of loyal customer behavior. So, in the purple trunks is Customer Advocacy, the perception that the firm does what’s best for customers, not just what’s best for its own bottom line. We strongly recommend that financial services and healthcare firms take a very close look at this measure.

The bottom line: Don’t get too caught up in determining the winner of this battle. Just make sure that you do something and are prepared to learn and evolve over time.

If you’re a client of Forrester, then I also recommend that you read these two research documents:

Are you listening to the voice of the customer?

Voice Of The Customer (VoC) is a term that many people use, but few people can define. That’s the type of environment in which I love to do research. So I ended up writing two research documents on the topic: Building Your Voice Of The Customer Program and Voice Of The Customer: Five Levels Of Insight (as always, only Forrester clients can read the full reports). To start with, I developed the following definition for a VoC program:

A systematic approach for incorporating the needs of customers into the design of customer experiences

This definition contains three key elements:

  • A systematic approach. Most companies take an informal approach to gathering customer feedback. A VoC program should augment — not replace — those ad hoc approaches with a more structured way to gather and use customer insights.
  • Customer needs. Companies often have access to a great deal of customer data — but customer insights don’t automatically surface from data. A good VoC program uncovers the current and emerging needs of key customers — and helps identify areas where those needs are not being met.
  • Experience design. Gathering customer insights is only an interim step to improving customer experience. Why? Because VoC programs deliver the most value when companies actually make changes to better serve the customer needs uncovered by the research.

My research also identified five distinct levels of activities in a VoC program:

  1. Relationship tracking. Organizations need to track the health of customer relationships over time. That’s why companies often ask customers to fill out surveys — typically quarterly or annually — about their perception of the firm. Using this feedback, companies can create metrics that are simple to understand and easy to trend. Why is this important? Because an easy-to-grasp report card helps align everyone in the organization around a common purpose.(Note: I won’t get into the debate between “satisfaction” and “NetPromoter” metrics in this post, but I’ll definitely be touching on that in the future)
  2. Interaction monitoring. Every customer interaction — from an online transaction to a call into the call center — is important. Firms need a way to monitor how effectively they handle these customer touches. That’s why many companies do post-interaction surveys — asking customers for feedback on recent interactions.
  3. Continuous listening. Structured feedback through customer surveys provides enormous opportunities for analysis. But one of the strengths of these approaches — providing data — is also a limitation. To avoid this data-only view of customer relationships, companies put in place processes for executives to regularly listen to customers. There are many opportunities to hear what customers are saying, such as listening to calls in the call center, reading blogs, reading inbound emails, and visiting retail outlets.
  4. Project infusion. The following statement is probably not too controversial: Projects that affect customers should incorporate insights about customers. Despite the clear need for this type of effort, many companies lack a formalized approach for infusing customer insights into projects. To make sure that this doesn’t happen, some firms are incorporating customer insight steps in the front-end of their Sigma processes.
  5. Periodic immersion. Every so often, it’s valuable for all employees — especially executives — to spend a significant amount of time interacting directly with customers or working alongside frontline employees. These experiences, which should be at least a half day, provide an excellent opportunity for the company to question the status quo.

Here’s a graphic that shows more details on the five levels… Five Levels Of A Voice Of The Customer Program

Hopefully this helps to create some common language around the Voice Of The Customer.

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