Posts Tagged ‘NPS’

Gone Fishing for Customer Experience Benchmarking? Or Salmon Fishing in the Yemen?

September 25, 2012

A Guide to Customer Experience Benchmarking

You’re preparing for the next Board session on “Customer”. Your CEO wants more context. Competition? Best-in-class? What is it these people are doing? Where do we need to focus? How can we do better? It’s a key moment. You need some benchmarks and quick but what type and how? The wrong type and you’re sunk. The right type and you’ll have everyone on-board and sailing off into the Horizon on the Good Ship Customer.

In the film, Salmon Fishing in the Yemen, a fisheries expert is approached by a consultant to help realize a sheik’s vision of bringing the sport of fly-fishing to the desert and embarks on an upstream journey of faith and fish to prove the impossible possible. Its quite a lot like the journey a CX professional goes on to convince an organization to invest in Customer Experience.

Done right, benchmarking can create a compelling need for change, stretch thinking and help everyone to understand where and how to improve.

Done wrong and the critics will be proved right. “It’s not relevant to us, it stiffles creativity and innovation. Or its only skin deep. Sure it tells us we’ve got a problem but not what we need to do.”

So as you go fishing for customer experience benchmarks, the first thing you’ve got to be aware of are there are three specific types of benchmark that help you answer very different questions. In reality you’ll need all three to answer the CEO’s exam question in full.

  1. How well are you fishing?
    Normally answered in the context of the competitive set and best-in-class. Strategic outcome measures of both Customer Perception and Customer Financial Performance are used to determine the answer. Normally plugging into one of three industry wide measurement standards or extending your own surveys to non-customers will provide this answer.
  2. Selling you fish – where are there more fish?
    Getting into the delivery specifics of touchpoints & channels.  Here you are answering the questions: Is it our specification (service standards), is it the sophistication of delivery (bells and whistles) or the effectiveness of delivery (how well you do it)?
  3. Teaching you to fish – how can we improve our fishing?
    Improving your organisational fishing technique requires reviewing and  comparing management practises at a deep level. Are the best companies using different approaches? If so are they relevant to us and can we adopt them. Normally applied at the four stages of understanding, designing, delivering and managing the customer experience. See Smart Organisation CE Model.

You can think of these three questions as the What, Where and How of benchmarking. An alternative way of viewing these is the 3 P’s – Performance, Practice and Process. The Table below gives an overview of the different benchmark types and the pro’s and con’s of each type.

What, Where and How of CE Benchmarks

WHAT

There are main standards in strategic perception measures that can be benchmarked. All three types claim a direct link with business performance. Organisations normally have their own customer metrics and can tie into the industry wide standards to benchmark performance.

Customer Satisfaction – Satisfaction generally has a low correlation with behaviour. However, the American Customer Satisfaction Index has shown a causal relationship with GDP Growth. The latest report showed Amazon has just regained its top spot from NetFlix with a score of 87%.

Experience Studies – Other studies that look at consumer perception of experience (functional emotional and accessibility).  Sam’s Club and Publix earned the top two spots in the 2012 Temkin Experience Rankings. Forrester’s study of 7,700 US consumers using their CxPi methodology shows retailers and hotels score highest.

Net Promoter Score – The “One number” that takes detractors away from promoters made famous by Reicheld that has claimed a direct correlation to growth in every sector. Though I know many clients that have struggled in practice, there is no doubt that its simplicity can be compelling. The European Studies show Apple leading the way.

Commitment – The concept developed by Jan Hofmeyer explains how deeply committed customers are to brands and how suseptible to conversion. It too has a high correlation to consumer behaviour and results.

WHERE

This is generally more difficult to benchmark as the information is less widely available.

Standards – A key question if you’re not doing very well, is whether its your promise that isn’t up to scratch or the delivery. Desk research will reveal what service standards are prevalent in the market place. Understanding delivery against these standards required deeper competitive research (see delivery below)

Touchpoint Sophistication – At HOWTOEXPERIENCE, we use best practice maturity models to look at the sophistication of treatment by or across touchpoints. Organisations like Shopworks will conduct bespoke benchmarking of retail experiences, with broader retail studies available from ICE. The CXM Maturity Model developed by Henley Mgt Centre, Cranfield and Chordiant is a capability based model that looks at the degree to which real time, multi-channel, data-driven marketing is seamlessly in place.

Delivery – Mystery Shopping and Touchpoint specific satisfaction comparisons is a common way to achieve this and compare against competitors. Many providers will provide multi-channel “Voice of the Customer” solutions here, including Carpeo. Omnibus studies can also be useful, one example is Global Reviews.

HOW

Leading organisations know that asking themselves the tough questions of why and how, is essential to improve.

A number of survey-based studies are available. These ask respondents to self-score on importance. Recent studies by CIM show 69% of CMO’s believe that investing in Customer Experience is the best way to build their brand but only 31% believe their leaders understand what that means and only 22% of staff understand their role in delivering this. Other studies show that the biggest gaps in how Organisations are approaching CE is in CE strategy, having a disciplined approach, and articulating the business case.  These give useful guides to priorities but don’t get deep into the reality of an organisations own practices and what needs to be done.

The HOWTOEXPERIENCE model is a disciplined approach to CEM that gets right into the specifics. Derived from the best practices we’ve observed over the last 10 years, you can benchmark yourself against the very best and a broad spectrum of others. It builds in the 16 CEM disciplines that Smart Organisations exhibit and helps people answer the key questions:

What do the best do? How do I compare? Where are my priorities? What do I need to work on specifically?

Just like the film, whether its fishing or Customer experience, if you use the rights tools and find the right expert to help, you’ll be amazed at the hurdles that can be overcome and the amazing visions realised.

For more information on Customer Experience Benchmarking please click here… or contact us on: info@h2x.biz.

CE Benchmarking Pro’s and Con’s

About HOWTOEXPERIENCE: We consult to the world’s leading organisations on customer experience. We have a toolkit of licensable methodologies to help practitioners make real progress quickly.

About the Author: David Williams has been working across the globe with big blue-chips and innovative start-ups on customer-based transformations for the last 15 years. He’s helped many customer practitioners and executive teams shape and realise their customer and business goals. A key note speaker and regular publisher of articles, including chapters on customer experience within the IDM Guide.


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