“Most companies are struggling with the pressure from investors or the board to improve measurements, indexes, reports, but truth is that in most cases, reality is detached from those indexes.”

In the ever fierce battle to retain the best customers and improve the bottom line, companies understand it is of paramount importance to measure and control the relationship with cus-tomers. CEOs and other C-level executives jumped on the bandwagon and ventured to put a number to that measurement, going as far as linking that number to employee compensation. For that purpose, three indexes have outshined other. They are:

Customer Satisfaction Index (CSI): The oldest of the indexes, the CSI introduced the concept of evaluating the relationship with customers by measuring their overall satisfaction, through questionnaires and statistical analysis. “Are you satisfied with our product/service?”, followed by a myriad of questions that try to capture a clear understanding of the underlying issues customers are facing and to leverage the company’s strengths.

Customer Experience Management: From Indexes to Action

Manuel Abat CasasManaging Director

Practical InSights

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Net Promoter Score (NPS): This introduced the simplicity of measuring the relationship by asking one single question: “On a scale of 0 to 10, how much would you recommend our product/service?”. Normally this is followed by an open-ended second question to highlight the main reason for the previous answer (in the customer’s own words). NPS splits cus-tomers into three groups: Promoters (scor-ing 9-10, are those who demonstrate brand loyalty and are advocates of the company); Passives (scoring 7-8, not loyal and only pas-sively satisfied); and Detractors (scoring 0-6, dissatisfied and disaffected customers). NPS is then calculated as the difference between Promoters – Detractors. The objective is to convert detractors into passives and passives into promoters.

Customer Effort Score (CES): This rating introduced the concept of making custom-er’s life easy and effortless. CES asks the question, “On a scale of 0 to 5, how much effort did you have to put forth to satisfy your request?” This is followed by an open-ended question to gather the reasons behind the answer. The goal is to understand what the company can do to make customer ’s interactions painless and simple.

There are a lot of companies advocating for one index or the other, with some companies even claiming that the best is to use a com-bination of them (which I tend to agree with). Clearly, this is a very recent topic with very little consensus on what does or does not work. Let us not forget that we want to mea-sure “loyalty” to our brands, products and services and their intention to repurchase… and that cannot be an easy task regard-less of the metric we use. Some claim that customer loyalty & intention to repurchase can be measured through a single question (either by being a promoter or by the effort customers had to invest), while others try the battleground of CSI and research. Most companies are struggling with the pressure from investors or the board to improve measurements, indexes, reports, but truth is that in most cases, reality is detached from those indexes and employees live in “a different world.”

To make matters worse, in order to try to narrow these gaps, companies react to index fluctuations by launching initiatives or programs, but fail tremendously at mea-suring the real impact of those initiatives.

The bottom line is that employees fail to see how exactly their daily actions impact those indexes. In fact, those measurements are perceived as “management” indexes and far from reality. And that is the main issue with those indexes: there is no perceived cause-effect, no clear understanding of the operational or Human Resources Key Performance Indicators (KPIs) that have to be changed, by whom, by how much and by when. Without a plan, without clear ob-jectives, accountability, timelines and KPIs which employees feel are “their KPIs” – and that they can have a certain influence on – … all the previous indexes and discussions are ineffective.

That is why I believe that it is critical to trans-late any customer experience index related findings into operational/HR/transactional KPIs, with baselines, targets, owners, ac-countability and timelines. We want employ-ees to understand their mission through a da-ta-driven, unbiased, undisputable and easy manner. Some of our customers have called this the Customer Excellence Index, consist-ing of all KPIs that are the focus for the next quarter and which employees see as “theirs”. This is the index being used as a steering wheel to drive the company.

Other customers refrain from creating another index but still use a collection of KPIs to drive actions and changes. That is what really matters: directed changes. Companies want to know what to change and for that CSI, NPS and CES might give us a glimpse, however we must take into account the employees perspective and give them a sense of owner-ship of these indexes by defining clear KPIs and objectives they agree on, they can influence and they can ultimately, strive to attain. Otherwise, we will be running after indexes that no one really understands and supports.

Companies tend to react to fluctuations of traditional indexes by launching initiatives or programs to try to cover the gaps, without knowing how to measure the real impact of those initiatives.

“It is critical to translate any Customer Experience index related findings into operational and transactional KPIs.”