Modern Thinking for Customer Experience Indexes

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customer experience indexesWhy are customer experience indexes powerful?  To paint a concise picture of growth strength. An index is like an executive summary of your voice of the customer research. It says: overall, our propensity to grow is increasing or decreasing.

One size does not fit all. There are many types of customer experience indexes, and they each communicate something specific, based on certain assumptions, with greatest usefulness to one or more groups in your company. Each index conveys value as seen by your company or by your customers.

These differences among customer experience indexes are pivotal to shaping mindsets and driving behaviors and business results. You should never use indexes and metrics blindly. Like any business decision, it’s always best to step back and consider what makes the most sense (a) for your customers and (b) for your managers.

The picture painted by customer experience indexes you use should be an accurate representation of reality. Secondly, it should generate appropriate behaviors and outcomes.

Old-fashioned thinking for customer experience indexes is to jump on the bandwagon of what everyone is doing. Modern thinking is to use a combination of indexes in harmony with their strengths and limitations, to craft the full picture needed to achieve your goals.

Entering the 2020s decade, it’s time to re-think the picture you’re painting:

NPS:

Net Promoter Score

  • Communicates positive word-of-mouth vs. negative word-of-mouth.
  • Assumes recommendations are for your brand only.
  • Assumes reach, duration and passion of negative = positive.
  • Tends to stimulate score begging: give us a 10.
  • Implies customer behavior’s value to your company.
  • Most meaningful for marketing / sales.

CSAT:

Customer Satisfaction

  • Communicates positive sentiment vs. negative sentiment.
  • Assumes satisfaction is sufficient toward growth.
  • Assumes satisfaction with a remedial interaction measures relationship strength.
  • Tends to focus customer experience strategy on service.
  • Implies your interaction’s value to customers
  • Most meaningful for customer-facing operations.

Customer Health:

Customer Health Score

  • Communicates customer behavior related to your product’s effectiveness.
  • Assumes trouble-free, strong product usage leads to repurchase.
  • Tends to focus customer experience strategy on repurchase.
  • Implies your product’s value to customers.
  • Most meaningful for customer success / product management.

ROI:

Return on Investment

  • Communicates gains vs. costs.
  • Assumes finite, usually short-term horizon.
  • Assumes self-contained, quantified-only gains and costs.
  • Tends to focus on a short payback period.
  • Implies tactic’s value to your company.
  • Most meaningful for simple apples-to-apples decisions.

Money-Quantified Top vs. Bottom Box:

Top Box Score

  • Communicates size of business at-risk or at-opportunity.
  • Assumes known costs or revenues for customer groups.
  • Assumes finite, usually short-term horizon.
  • Tends to stimulate shifting from business-as-usual.
  • Implies action’s or inaction’s value to your company.
  • Most meaningful for compelling action.

Loyalty / Secure Customer Index:

Secure Customer Index

  • Communicates size of business at highest levels of satisfaction + recommend + rebuy.
  • Assumes all 3 factors must co-exist for reliable growth.
  • Tends to stimulate holistic thinking.
  • Implies customers’ sentiment and behaviors’ value to your company.
  • Most meaningful for marketing / sales.

CX Value Quotient:

Customer Value Quotient

  • Communicates positive vs. negative outcomes for customers.
  • Assumes monitoring of your outputs’ outcomes as seen by customers.
  • Assumes weighted offset for reach, duration and passion of negative vs. positive.
  • Tends to stimulate both efficiency and effectiveness.
  • Implies your company’s value to customers.
  • Most meaningful for:

Customer Lifetime Value:

Customer Lifetime Value

  • Communicates size of business growth represented by a customer segment.
  • Assumes known revenue, variable cost and fixed cost by segment.
  • Assumes customer sentiment / behaviors are identifiable by revenue / cost.
  • Tends to balance thinking and behaviors for long-term and short-term results.
  • Implies customers’ value to your company.
  • Most meaningful for:
       

    • Corporate strategy trade-off decisions: perfect compliment to CX value quotient.
    • Compelling action by customer issue originators.
    • Assigning resources appropriately to at-risk or at-opportunity issues.

What’s old-fashioned? focusing only on value to your company and emphasizing indexes that are most meaningful for a subset of your company.

What’s modern? emphasis on value to customers, knowing the limitations of each index, and using indexes to drive customer-centered management at strategic and tactical levels across your entire company. 

In the 2020s my hope is that customer experience leaders will emphasize Value Quotient and Lifetime Value as their most meaningful indexes. The other index types have their place, yet these two indexes paint the essential picture for guiding both senior leadership and work teams in elevating customer-centricity and enduring growth.

Image licensed to ClearAction Continuum by Shutterstock.

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