Stop Moaning about the State of CX… and Start Measuring Performance vs. Customer Expectations

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“CX Quality among brands in the US declined for an unprecedented second year in a row.” (Forrester, 2023)

 

“From late 2018 to mid-2022, U.S. customer satisfaction declined almost every quarter as the ACSI fell to its lowest level – 73.1 – in nearly two decades.” (ACSI, 2023)

 

“Almost two-thirds of brands included in (the UK customer experience excellence [CEE] score) saw their scores decline . . . compared with the findings of last year’s study.” (KPMG)


Trend reports are catchy, especially when presenting numbers about how crummy things are going and the writers are in the business of selling those numbers, not to mention services that purport to reverse those trends.

This is not an apologia for the state of customer experience. Nor am I suggesting that the numbers are inaccurate, that consumers aren’t somewhat disenchanted, or that companies should not take heed. But a bit of context is in order.

While perception is reality for consumer behavior, in objective terms many aspects of customer experience are better than ever before. We take for granted that you can:

  • Get a quote and buy insurance in less than 10 minutes
  • Send money anywhere to anyone with a smartphone or can deposit a check via your phone
  • Track the progress of anything from the arrival of your Uber and your package delivery to the status of your auto repairs and restoration of power after an outage
  • Order virtually anything online and have it delivered (and often in silly-fast time)
  • access a wide array of channels for interacting with companies
  • Monitor and manage numerous aspects of your health
  • Eat sushi and go to a vegan restaurant in Omaha, buy cowboy boots and hats in New York City, and go to a water park on a cruise ship (surfing included)

While we don’t need to look too far back to recall when these everyday standards weren’t so standard, we don’t applaud or even appreciate these and countless other examples of dramatic improvements in customer experiences because we have come to expect them. CX is a game of rising expectations in which customers are always assessing performance against what they expect, not some absolute standard. The reality is that expectations are constantly rising, so companies are being evaluated against a bar that is continuously climbing.

That’s human nature. Behavioral Economists refer to this as habituation: we become accustomed to things and set our expectations accordingly. As our expectations rise, the standard against which we evaluate experiences becomes more demanding. Expecting real-time everything, anything less is disappointing.

This does not mean companies do not face substantial customer experience challenges. They do, and the challenges are real and growing. But they aren’t growing because firms aren’t improving the experiences they deliver; they are growing because the expectations bar keeps ascending, especially as other companies innovate, and customers become habituated to ever more exacting expectations. CX performance is improving, but it is not keeping up with the pace of customer expectations.

Seen in this context, criticisms that investments in CX aren’t paying off completely miss the point. The market is spinning faster and faster; those investments are essential to keep pace, and even more is needed to move ahead. This is the world of Alice in Wonderland where the Red Queen “must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.” Therein lies the challenge of meeting and exceeding customer expectations.

This is not to suggest there aren’t also examples of declines in customer experience measured in objective terms: the airline industry comes to mind, with its seemingly endless push to provide less for more. In that circumstance, we see the downside of habituation: squeeze in an extra row of seats by taking away an inch of legroom at a time so no one will notice or add a nominal baggage handling fee. Then, and as customers become habituated, slowly repeat in small increments.

So What?

So stop thinking in terms of absolutes and recognize that CX is relative to customer expectations. At the simplest level, consider measuring performance relative to expectations. This can be accomplished by scales anchored at failing to meet minimal expectations / regularly exceeding expectations.

Hammer home to leadership that this is precisely why the customer experience is an ongoing journey and not some “mission accomplished” endpoint: today’s success stories become tomorrow’s baseline.

Acknowledge that expectations are set by broader customer experiences, not just what your company does. Measure against competitors. While you may not compete with Amazon (or Disney or Ritz Carlton), experiences with those companies help frame the mindset of consumers and create expectations in other sectors.

The customer experience is a journey taking place in a dynamic setting of leap-frogging competitors, new market entrants, ongoing innovation, and rising customer expectations. Companies don’t have the option of stepping out of the race if they want to remain viable competitors. So they must run, knowing that no matter how fast they run, most of them will not run faster than the pace of expectations.

Howard Lax, Ph.D.

Supporting better informed decision making with technology, research and strategy. With a focus on CX/VoC/NPS, Employee Engagement and emotion analytics, Howard's domain is the application of marketing information and SaaS platforms to solve business problems and activating CX programs to drive business objectives.

5 COMMENTS

  1. Thanks, Michael. So many firms take a minimalist view and think it is sufficient to be good enough to have the customer recommend the company or indicate that the customer is highly satisfied. The reality is that these are relatively low bars, as customer often are “willing” (as opposed to actually have recommended) recommend multiple firms and see little differentiation between brands/companies/products.

  2. Absolutely agree about customer experience being a continuous journey! It’s frustrating to see companies fall into the ‘mission accomplished’ mindset instead of embracing the always-evolving nature of CX. The ‘Red Queen’s Race’ analogy is perfect.

    I’m particularly interested in the challenge of measuring performance against customer expectations. Traditional CX metrics are valuable, but capturing that subjective, shifting target is key. Has anyone found effective strategies for tracking expectations alongside those traditional metrics? I’d love to hear real-world examples!

  3. I have used scales based on performance relative to expectations with numerous clients, Sarah. Given the premium of survey space and the desire to avoid what might be seen as redundant questions, I usually use the expectations scale in lieu of the traditional satisfaction or (worse yet) agreement scales that traditional are used.

  4. Great points about the relative nature of CX! It’s a constant race against evolving expectations. A couple of additional thoughts:

    1. The ‘Effort Gap’: Even when customers feel service quality is high, a big driver of dissatisfaction is how much effort they must expend to resolve issues. Ease of doing business is now a core aspect of CX.

    2. Experience Inequality: Expectations may be rising across the board, but there’s a widening gap between top-tier experiences (ex: Amazon) and average ones. This creates frustration when customers encounter less-sophisticated providers.

    Proactive CX is Key: This makes it even more important for companies to track expectations proactively through tools like SogoCX rather than solely reacting to satisfaction scores. The goal should be to pre-empt rising expectations before they lead to dissatisfaction.

    Interested in hearing how others manage the challenge of rising expectations!

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