Is There A Single Most Actionable, Contemporary, and Real-World Metric for Managing, Optimizing, and Leveraging Customer Experience (and Behavior)?

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Jeff Toister recently had a blog on CustomerThink addressing the topic of customer delight (http://customerthink.com/customer-satisfaction-vs-delight-why-you-need-both/ ) and customer satisfaction. He defined delight as occurring when service exceeds expectations, and satisfaction occurring when service meets expectations.

His contention is that both metrics are needed. As he notes: “So, is customer delight truly a business imperative? Or, is focusing on customer satisfaction enough? The answer is somewhere in the middle. Delight and satisfaction actually co-exist quite nicely. In fact, they need each other.” He concludes by advising organizations to be consistent, and get the basics right. Little argument there, but the challenge in his approach is that the use of two metrics to evaluate experience and performance may serve to only confuse and obfuscate performance and experience initiatives. What, ideally, are we trying to achieve with customers?

My colleagues Tim Keiningham and Terry Vavra wrote the definitive work on customer delight, in a book published several years ago (The Customer Delight Principle, 2001), and in a number of incisive articles representing studies they had conducted. As they said in a description of their delight principle, “Delight-creating performance issues offer businesses a unique opportunity to surprise and elate customers, differentiating themselves from competitors. But they are only relevant if the basics are satisfied.” Their approach was, from my read, directed at customers in pain (whom I’d describe as negative and/or alienated), those merely satisfied (whom I’d describe as ambivalent), and those who are delighted (whom I’d describe as positive, advocating, or bonded). This is a more complete understanding of customer states following transactions and overall experiences, and gets us closer to a single metric or framework.

Let’s go a little further, and look at newer metrics: Net Promoter Score (NPS) and Customer Effort Score (CES). Both have gotten a lot of attention, and a high level of application. And both offer more than their share of granular application (process, communication, positioning, etc.) challenges, which have been well-covered by many practitioners, myself included.

One of the better, and more accurate and insightful, recent discussions of NPS’s analytical and application issues comes from Jericho Consulting Limited, in Oxford, UK: http://www.jerichoconsulting.co.uk/nps-understanding-traps/ There is, first of all, recognition that recommendation is different than CSAT. As discussed on multiple occasions, CSAT is a far more tactical and transactional than experiential metric, better representing passive, benign, reactive and rational elements of value But, more important for initiative and management decision guidance purposes: “NPS certainly isn’t the same thing as Customer Experience. NPS identifies the fact that a business has a problem; however it doesn’t tell you why or how to solve the problem, which is the broader role of Customer Experience Management”.

The blog also contained some useful discussion of what occurs, or can occur, when the ingredient of CES is added to the customer experience metric stew:

“Another consideration is whether NPS is the best possible metric a business can be using. In recent years, some companies have been moving away from NPS and towards CES, which stands for Customer Effort Score. Advocates of CES argue that, rather than looking at the likelihood of the individual recommending the business, we should consider how much of an effort it is for a customer to deal with a business. In a world in which some people seem to have increasingly less time (cash rich, time poor!), it can be understood as to how the amount of effort that has to be expended by a customer can be considered to be a more indicative measure of their satisfaction. There are a couple of things to consider here. Firstly, in surveys that have used both techniques together, it has been found that the results tend to track/match each other. Secondly, it can be argued that the validity of each of the two techniques is reliant upon the nature of both the product being sold and the customer making the purchase. For a more generic, utilitarian product with fewer unique selling features, you can see how CES may be of greater relevance; whereas for something like a luxury product, NPS might be better. Likewise, for ‘cash rich, time poor’ customers, CES might be more relevant; whereas NPS might be a better measure for ‘time rich, cash poor’ customers.” So, now we need to consider not only what metric to use, but on what products and services to use it.

Delight, satisfaction, NPS, and CES – None of these customer experience metrics takes brand favorability and volume/type of positive and negative online/offline word-of-mouth into consideration. And, as many consulting organizations have determined, today these factors are critical for both understanding leveraging downstream customer behavior. Advocacy and bonding, principally based on positive/negative customer word-of-mouth and impression of the brand or vendor, has tremendous power and potential to create desired high-end customer behavior. Word-of-mouth, however, is a double-edged sword; and customers’ negative communication, as much as praise, can have a damaging effect on other customers and non-customers, as well as the communicating customer.

When we’re involved in presentations, forums, and webinars, this question often arises: Is there truly is a single metric, or a framework, which represents the most actionable, contemporary, and real-world, basis for managing, optimizing, and leveraging customer experience? After a decade of researching and validating the causative downstream behavior predictive powers of word-of-mouth and brand favorability drivers, and in many b2b and b2c verticals around the world, my belief is that it is customer advocacy and bonding. It’s also one of the most effective experience research and analytical templates for leading any enterprise toward higher levels of customer centricity.

I’m happy to engage in dialogue, and defend this position, with anyone so inclined.

Michael Lowenstein, PhD CMC
Michael Lowenstein, PhD CMC, specializes in customer and employee experience research/strategy consulting, and brand, customer, and employee commitment and advocacy behavior research, consulting, and training. He has authored seven stakeholder-centric strategy books and 400+ articles, white papers and blogs. In 2018, he was named to CustomerThink's Hall of Fame.

9 COMMENTS

  1. Hi MIchael

    After all that has been written about the fallacy of looking for a single measure to represent the totality of customer experience, I can hardly believe that you are proposing customer advocacy and bonding as a pair of measures.

    There are so many different factors that affect customers’ perceptions of touch points, episodes and experiences that it is obviously foolish to suggest that a single measure or a pair of measures, particularly lagging measures, can represent all of it.

    A few years back, I worked on management dashboard for a European airline’s frequent flyer programme. Management were very keen to have just one or two measures to capture the heartbeat of the programme to report to the airline’s Board. They had a couple of lagging measures in mind. We created a systems dynamics model that showed the flows of resources and information within the programme, and with other parts of the airline. It showed quite clearly that there were a handful of ‘nodal measures’ that actually represented the heartbeat of the airline much better. The handful of measures didn’t include the two lagging measures that management had in mind before we started the analysis. Upon being presented with the model, the nodal measures and the key ratios, management reluctantly gave up on their lagging measures in favour of a more comprehensive balanced scorecard of measures.

    Business is far too complex to be able to rely on a single or a pair of measures. That goes for advocacy and bonding too.

    Graham Hill
    @grahamhill

  2. Thanks very much for your comment. You’re entitled to your perspective, and I respect it; however, my position is based on a decade worth of evidence, in many b2b and b2c verticals, and in scores of studies conducted around the world and in data verified through panel findings, models, and actual marketplace results. Many practitioners, myself included, agree that there are significant analytical and granular application deficiencies associated with the ‘holy grail’ metrics of CSAT, NPS, the newest incarnation, CES, and in some of the other metrics espoused by leading research organizations. Customer advocacy measurement,along with bonding, which is an enhancement to incorporate the impact of brand passion on decision-making, is everything I’ve described: contemporary, relevant, real-world, actionable, and monetizing on a consistent basis.

    Further, customer advocacy/bonding is the only metric I’ve identified which is an effective enabler for customer-centric enterprise development. Here are a few examples, drawn from many articles, white papers, and blogs on this subject, for everyone’s review:

    http://www.slideshare.net/lowen42/wragg-lowenstein-customer-advocacy

    http://customerthink.com/monetary_linkage_between_customer_experience_and_customer_advocacy_behavior/

    http://www.greenbook.org/marketing-research/customer-advocacy-branded-experience-00524

    http://customerthink.com/inside_out_advocacy_creating_and_sustaining_customer_centricity_and_loyalty/

    For further insights, I’d refer everyone to my two most recent books: The Customer Advocate and The Customer Saboteur (ASQ, 2011) and Customers Inside, Customers Outside (Business Expert Press, 2014).

  3. Hi Michael

    Firstly, congratulations on joining Beyond Philosophy. I hold Colin and his team in the highest of regards in the domain of customer experience.

    Thanks for your response.

    I think you didn’t quite get the point of my original comment. I will explain it another way just so that there is no misunderstanding.

    I have no problem with the measures of brand advocacy and brand bonding as measures per se. A quick look at the academic literature shows that they have been widely modelled, measured and discussed in prestigious marketing journals. I have no problem with CSAT, NPS or CES either. Like brand advocacy and brand bonding, they have also been widely modelled, measured and discussed in marketing journals. All the different measures have gigabytes of data that support them and equally passionate advocates for them. But that is rather beside the point I was trying to make.

    The point I was trying to make is that there is no single measure, or pair of measures, that fully captures the complex inter-relationships between the many parts in a business system: customers, their context, their expectations, the usage experience, competitors actions and market dynamics to name but a few. Brands are by definition an emergent phenomenon from the myriads of known and unknown interactions between the parts. Setting just two lagging measures, brand advocacy and brand bonding, as the sum of all the interactions over time is self-evidently a gross simplification of reality. A simplification too far.

    Financial Times economist John Kay eloquently describes the problem in his writing about ‘obliquity’ (numbering added)… “(1) But surely we will be more successful in achieving something if we adopt it as our goal? That would be true if (2) we were clear about the nature of that goal, and knew not just all there is to know, but all we might hope to know, about the means of achieving it. We find out about (3) the real nature of our goals in the process of accomplishing them, and our understanding of the complex structures of personal relationships or business organisations is necessarily incomplete. We not only do not know what the future will hold but cannot anticipate even the range of possible events. (4) The world in which we operate changes, partly as a result of our actions.”

    Kay’s text identified four key problems with putting brand advocacy and brand bonding on a measurement pedestal. Firstly, they are automatically elevated to be the business’ goals. This is not a problem in itself, but it becomes one when, secondly, we do not know all there is to know about what makes successful brands, let alone all there is to know about the role brands play in the larger business success. Thirdly, elevating brand advocacy and brand bonding suggests that we do not need to pay any attention to the process of accomplishing them, or of measuring the things that signify we are accomplishing them. The development of mixed-measure reporting such as Kaplan & Norton’s Balanced Scorecard and Eccles’ Value Reporting show this to be a problematic. Finally, as countless other stories of measurement-itis have shown us, putting brand advocacy and brand bonding on a pedestal changes the incentives people have to show positive results with all the unintended consequences that brings. The history of CSAT measurements with its many confusing models, simplistic measurement tools and rampant gaming of results should be a warning story for us all.

    To sum up. I have nothing against brand advocacy and brand bonding as measures. But I do have something against them if they are the only measures. As John Kay’s quote shows eloquently, one should be careful what one asks for; one might just get it.

    Graham Hill
    @grahamhill

  4. To my earlier remarks, just a post-script. For decades, C-suite has had a strong penchant for single-number, hopefully universal ‘magic bullet; metrics. Early on, it was Starch Readership Scores, then commercial awareness and Q scores. ACSI had been the defacto source for endeavoring to understand customer behavior, and then came NPS and CES. From a modeling perspective, this was just the tip of the iceberg: http://customerthink.com/modeling_customer_behavior_what_works_what_doesnt_and_why_in_the_real_world/

    Given that this desire for straightforward and actionable metrics is likely to continue, and also given that no metric is ever going to be ideal or perfect, what advocacy and bonding provide is a more reliable basis for understanding, based on verified and personal experience, likely customer downstream behavior.

  5. Thanks for your note. I’m not into oversimplification for its own sake; and advocacy measurement, or any single number, isn’t a Philosopher’s Stone for understanding all of an enterprise’s internal complexities and interdependencies, the dynamics of brand perception, or the outcomes of strategic customer relationships. That said, I do see challenges with the historic analytical claims and outcomes of antecedent metrics like CSAT, NPS, and CES, repeatedly proven to have application problems by academic and practitioner studies. Given that, despite valid, earnest, and well-meaning warnings from economists and management scientists, organizations are going to apply a small number of key metrics and KPIs to business decision-making, advocacy and bonding research have simply demonstrated results which provide a more reliable and useful barometer for evaluating and designing customer experiences and building or recasting positioning/communication platforms.

    Also, uniquely in terms of how development of these metrics has been trending since the introduction of CSAT, advocacy/bonding is the only framework which actively considers the emotional drivers of customer behavior and relationships, which we see in both b2b and b2c products and services: http://customerthink.com/the_new_real_world_dynamics_of_brand_and_customer_decision_making_behavior/

  6. Hi Michael

    I understand your argument.

    I think we are in broad agreement that balanced scorecards of nodal measures (derived from a dynamic model of the business) are superior to single or paired measures (irrespective of where they come from).

    I think we are also in agreement that senior management in most firms is over-enamoured by the promises of single measures, be they CSAT in the 80s, CLV in the 90s, NPS in the 00s and CES, Advocacy or Bonding at the moment. In my earlier days as a business modeller, I never ceased to be amazed at how little senior management in even the largest of organisations knew about how their organisations operated, their operations’ dynamics and thus, which levers were the right ones to measure and more importantly, to pull. Our discussion is not going to change management’s search for the Holy Silver Bullet.

    I understand that you have staked your reputation – via your books – to Advocacy and Bonding. I think they are useful lagging indicators, if not the whole picture. I only wish that doing the right thing wasn’t so easily overwhelmed by the exigencies of doing things right.

    Good luck with your new role at Beyond Philosophy.

    Graham Hill
    @grahamhill

  7. Graham –

    I’m guided by the words of Jaggers, the lawyer, to Pip, in Dickens’ Great Expectations: “Take nothing on its looks; take everything on evidence. There’s no better rule.” Our studies have shown that, among other benefits, customer advocacy and customer bonding don’t suffer from the analytical and granular application challenges associated with CSAT, CLV (which assumes that price must always be a major, and equal, component of the value equation), NPS, and CES.

    Many companies I’ve worked with are active users of NPS. Satmetrix and Bain are great marketers to the C-suite, and their simplicity argument has been effective for a decade. Unlike other practitioners, although I’m not a believer, there’s no benefit in actively arguing against this metric. Instead, what I’ve been able to do for these clients, leveraging advocacy and bonding findings, is help them generate much higher NPS scores than if they had only used NPS analysis. It’s not an “if you can’t beat ’em, join ’em” approach, but, rather, an “If you can’t beat ’em, help ’em do better with what they’ve got” support and advisory approach.

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