How do you measure Customer Experience and a key lesson from UBER on what NOT to do.

Hi, I'm Jason S. Bradshaw and it's great that you've taken the opportunity to watch along live or to catch up on the replay as we continue the series on the most asked questions on Google around customer experience. And so today's question is how do you measure customer experience? I'm also at the end of this video, going to share with you a lesson from Uber on what not to do when measuring the customer experience. Okay, so let's be clear. You should measure the customer experience, but which metric you use is not as simple as just saying I'm going to measure customer experience because the metric you choose needs to be aligned to your business goals. It needs to be considerate of industry trends and and also needs to take into account what your customers are used to dealing with. And different industries tend to favor different sorts of metrics. Now I'm not saying that you should use metric A because your competitors use metric A. I'm saying you should use metric A if it's the right one for your business and one that your customers will understand. Because remember, customers don't judge their experience with you based on their last experience at a competitor. They base it on their best experience anywhere. So I have a couple of overarching principles that I think you also should apply when considering which metric or metrics to use when measuring customer experience. The first one is, can it be easily deployed in your business? Is there a tool or some system or process that you can deploy to easily start measuring whatever the chosen metric is? Second, will this metric give you the information required to measure what matters to your customers and on your commercial success? Third, will I get information beyond the number? So this is somewhat programmatic, but if you just ask the customer to give you a score on a rating system, whatever rating system, but then you don't ask why they gave that score, you're really not learning a lot. So when you're considering the tool or how you will measure the metric, make sure you consider your ability to get information beyond a number or a number of stars or a number of something. Right? It's why they gave you the number where the real gold is the wisdom and the insights that will help you improve that number. And the final question I have, the final guiding principle I have when considering which metric or metrics to use is will I still be happy to use it in five years time? I'm not saying you have to use the same metric forever in your business, but if you're only using the metric for a year or two years, how will you actually be knowing for sure, for certain that you're improving, that the experience that you're delivering is actually, in the eyes of the customer, getting better. Because if you flip and change metrics, period to period, year after year, you'll be measuring different things. Although they might on the surface seem the same, they'll be different. And you'll understand that when I go through some of the popular metrics, there's also no single metric out there that in and of itself will give you the full picture of the customer's experience. Because at any time you are really taking a pulse, check a point in time, check on your customer's experience, and however you might choose to define that. So with that being said, there's a couple of things to consider. Do you want to measure the customer's perception of you? Do you want to measure the customer's transaction with you or interaction with you? Or. Or do you want to measure the actions, the outcomes that customers take, post your their transaction with you, post their interaction with you? Now, there are some metrics that actually can be used to, in my opinion, measure both perception, transaction and outcomes or intent, if you like. And there is others that aren't. You'll understand more as I go through them. I'll highlight the one to you. And the other area of metrics, of course, is around transactional metrics that are focused on internal measures, not customer measures. So I'm only today talking about customer centric measures that the customer gets some input into. So if you're in a contact center, you probably have heard of the metric first call resolution. Personally, I prefer measuring first call resolution over average handling time. I don't care if the call is 5 minutes, I care if the call is resolved correctly the first time. Personal preference, we can deep dive into that another day. But those sorts of metrics, first call resolution, average handling time, those traditional customer contact center measures, which also have their retail space measures, average dwell time, average checkout time, those sorts of things, those measures are very much controlled internally and efficiency measure for the most part, versus a customer experience measure. Although I know many of us have probably created a correlation or said there's a correlation between first contact resolution and customer satisfaction, for example, not going to debate that today, just looking at those measures where the customer has some input. Now let's dive into some of the most popular measures. First off, customer satisfaction, it's been around for a long time. And csat, which is the common acronym for it, is the mean or average satisfaction score of customers for a given experience. And companies out there have all sorts of scales. Five stars, scale of 0 to 5, 0 to 8. I've seen 0 to 10, sometimes 3. And then it's simply the mean or the average of that and that becomes a customer satisfaction score. You're effectively saying to the customer, how satisfied are you with this transaction? You could I guess, create a how satisfied are you with this brand type question. But it's in my opinion, a transactional focus. It does not talk to the intent of the customer taking any further action with you. And for those reasons, it's not one that I personally have used a lot. I've tended to exit that metric from organizations I've been involved with and replace it with a different one. But customer satisfaction, you simply understanding the average happiness level of a customer post a transaction customer effort score. Now this one is interesting in the fact that you are measuring a transaction or an interaction, but you are also understanding whether you have a competitive advantage, potentially at least in your industry, about being easier to do business with. We both know that the more friction you have in the experience for the customer, the less likely they are to want to repeat that experience. And by extension of that, less likely to want to recommend the experience. The more friction there is. And this is in many ways the more important thing to consider. The more friction there is, the more reasons that we're giving the customer to try a competitor. Because potentially the customer or the competitor won't be as difficult to do business with. So it's a really interesting measure. And so in and of itself, I don't personally recommend using customer effort score as the sole indicator of the customer's experience, but I do think it's an interesting one to include in your voice of customer program. And importantly, if you were going to have a four question, five question survey, and I am a big believer in simple, small, quick surveys, then customer effort score is one of those that I would recommend that you consider including. Again, it's very much interaction focus. You're measuring the relative effort required by a customer to work through an interaction. Whatever that interaction is, you could use it on your website as a pop up server. How easy is it to use our website compared to what you expected? For example, you could use it, and many companies do, at the end of a interaction with a contact center. How easy was it to have your issue resolved today? There's many places to use it. It's a great measure to measure that effort or the perceived effort, but in and of itself, I don't think that it is a predictor of loyalty shall we say? And this measure can be used as both a customer perception of you. So how much effort does the customer perceive they'll have with your brand? But it is mostly used as an interaction measure. How much effort was involved in that interaction? Good measure, though. Important one to understand how difficult or easy your business is compared to what customers were expecting. And then the next popular one, perhaps the most popular of the measures, is net Promoter score. Now, while it is very popular, it is also very misunderstood and a number of businesses are starting to consider moving away from it. Now, I believe that most organizations that decide to move away from MPS is because they haven't done a great job of understanding it, they haven't used it correctly, and perhaps haven't connected both the metric and the reason for the metric. So the heart and the mind together with their people. Quite often with any of these metrics, they fall over because people either learn how to game them or. And you haven't put in measures to prevent that, or of course, that people don't understand them in the first place and they pay no attention to them. So what is net Promoter score? Well, it shows the percentage of customers who would recommend you to others. And if someone is going to recommend you or is prepared to recommend you, they are also more likely to buy from you again. So I consider it to be a indicator proxy for repeat and referral business. The heart, the cheapest form of marketing, of course, is referral business. And customers here in pure net promoter score world are asked to give a score between 0 and 10. Those individuals that give a score of 9 to 10, they're called promoters. These are the people that go out there and advocate your brand. They recommend your brand. And then there are people that can give you a score of 7 or 8. We call them passives in net promoter score. Sitting on the fence. They don't love you, they don't hate you, they're unlikely to recommend you. And they're probably going to pay attention to competitor ads and competitor information. They're not necessarily loyal, but they're not necessarily causing your brand any harm. And then the remainder, zero to six. We call them detractors. And the reason why they're called detractors is not only do they not want to ever do business with you again, they're going to tell their friends and families not to do business with you. And then to calculate net promoter score, and we don't have time in this video to go into it all, but to calculate net promoter score, you take the percentage of detractors from the percentage of promoters and then you come up with a score between negative 100 and positive 100. Anything on the positive side is great. Really fantastic organizations have a net promoter scorer in the 70s, but they are far and few between. Because you're asking customers, have you met the bar deserving? Have you earned the right to be recommended? Now the thing I like about net promoter score is that you can use it from a perception point of view. You can use it in a transaction point of view and it is a proxy for the outcomes that customers are going to take because they're literally being asked, would they recommend you? That's net promoter score in two minutes or less. Definitely lots of information on the topic. What I would say is every time I see net promoter score not working, they've changed the scale. So when you change the scale, all the, all the research behind why net promoter score is so effective just goes out the window. And secondly, people don't understand it and you fail to connect the why someone gives you the score with the score itself. So that's net promoter score. Then the other metric, which I don't believe there is a direct customer experience score. However, there is a reason that people consider it and that's customer lifetime value. Ultimately, what we're measuring here is how much does a customer spend with you through their lifetime journey with you? It doesn't measure how many people they've referred you to. Thinking about where my mother lives, she only has one power company she can buy power from. Measuring customer lifetime value there, while the number might look good, doesn't tell you whether she's happy or dissatisfied with the experience that she's getting. I know that there are other industries like that. The problem with customer lifetime value is it does talk about how much they spend with you, but it doesn't talk about the underlying reasons why. Doesn't give you the any insight into how to improve that number in and of itself. Customer lifetime value is a measure that I absolutely believe you should be measuring in your business. Don't get me wrong. However, there are some fans out there saying that that's a proxy for customer experience. And, and I think that is not necessarily true. And you have to go back to those questions I gave earlier. Are you measuring the right thing to understand how to improve the customer experience so that you can keep your customers being loyal and earning the right for them to recommend you? So they're the just some of the more popular measures. Customer satisfaction or csat, Customer effort score, Net promoter score and customer lifetime value. I, I'VE shared my thoughts on each of those. Now, the one that I am the fan of, if you like, across all of those is Net Promoter Score. Because you can, you, you can run a brand study that, that asks the Net promoter score question specifically from a brand perspective. You can run a Net Promoter score at the end of a transaction. You can run a Net Promoter score survey six months after the transaction. Each of these are great because they, well, they give you a different point in time view. They're the same metric. So you can roll them up into one single whole of business type of score. And of course, with each of these, whatever the metric, I encourage you not only to ask the question, but ask a second question, which is, why did you give me that score? Because that's where the goal is. If someone gives you a 10 and someone gives you a one and you don't ask them why they gave you those scores, you don't, you don't really have any more information other than a number that becomes almost irrelevant in your business. So always ask what the reason is that someone gave you that score. So that's customer experience measurement. Let's call it 101. Because we could spend weeks, if not months dissecting each of those measures and why they can and should be used in your business. But let's talk about something that I believe Uber gets wrong, that I hope if you're doing, you will stop doing it and more importantly, that you never want to do it. So if you ever caught an Uber, at the end of the Uber trip, you get asked to rate your driver a transactional survey. Perfectly okay. They potentially using a customer satisfaction measure, it's a five star rating, zero to five, zero stars to five stars, I guess, or one to five stars. However, have you noticed that if you give them anything less than a five, they consider it that something's gone wrong. Now if I said to you, without saying what company where we're from, based on your recent transaction with us, based on this activity with us, can you give us a score between 0 and 5? Where would you say the middle point or the average performance point is three. It's very common. It's right on the fence. You can have 1 and 2 are bad, 4 and 5 are good, 3 is right in the middle. Perfectly understood by the majority of people that in a scale of 1 to 5, 3 is in the middle. Why has Uber made it that anything less than a 5 is bad or below expectation? Because the minute you press four stars, you get asked, what, what, what is it? What did they get wrong? Was it late? Was it dirty? And as you go down the stars it gets. There's more and more. More questions. It. It baffles me. Why would you try to create a system where the highest score you can give is also just for an average experience? Now, there's nothing wrong with just a as expected average experience getting me from point A to point B. But if. If the best I can give you is a five, how are you recognizing those drivers that go above and beyond average? So whatever metric you're using, the. The key lesson from the Uber story, the Uber example, is don't change it. What does your customer understand that metric to be and work with that metric. And if it. If a 1 to 5 scale doesn't give you the insights or the flexibility you want, make it a 1 to 10 and 5 can be average. But making it that the top score is the only score you can give for anything average and above, it's just crazy. In my mind. As we wrap up this, my final thought is make sure that you share the stories behind the metric. Because if all you share is the metric itself, it will have no real meaning to the people that are responsible for delivering it. And let me be clear. Every single employee in your business is responsible for the experience that customers have with your organization. Until next time we speak, I wish you great success.