Gaining customer experience insights that matter

Published July 2019 by Professor Janet McColl-Kennedy

McColl-Kennedy, J.R., M. Zaki, K. Lemon, F. Urmetzer and A. Neely (2019), “Gaining Customer Experience Insights that Matter”, Journal of Service Research, 22 (1) 8-26. https://doi.org/10.1177/1094670518812182

Significance

  • Customer experience (CX) management is listed in the top ten priorities of CEOs around the globe, but do firms know how to measure it and use the data correctly to enhance the customer experience?
  • Using NPS alone is misleading. Often, open-ended feedback that firms receive is ignored or simply categorized broadly as a complaint or a compliment. 
  • Rich customer feedback can be used to identify previously unrecognised, critical touchpoints in the customer experience and to take specific actions to strengthen the customer experience, thereby enhancing revenue growth, customer loyalty as well as employee and customer satisfaction.

What’s new

  • Our model enables a firm to (1) identify critical touchpoints from the customer’s perspective – including potentially new touchpoints that had been previously unknown, (2) understand what really matters to the customer about each touchpoint, (3) map each touchpoint to its root cause, i.e., the specific firm action or strategy that influences the touchpoint, (4) take specific actions to improve the touchpoint and the overall customer experience.
  • Our model uncovers customers at risk of leaving the firm, which can include customers who give high satisfaction scores (and NPS scores). Customers with high satisfaction scores are typically viewed as “satisfied”, and “very likely to recommend”, and therefore not identified by the firm as needing attention. Yet we find that these customers are clearly voicing their concerns in the comments and being ignored.
  • We uncover an entire “hidden” segment of supposedly highly satisfied customers who voice significant concerns. Our analysis shows that 42% of customers who give scores of 9.5 and above (out of 10) complain, as do many who give scores between 7 and 9.4 (44%). Complaints made by customers who gave satisfaction scores of 7 or greater were often ignored, despite these customers being worth over $250,000 on average and accounting for a significant portion of sales. Sales figures show that when these customers’ concerns were not addressed sales went down significantly. For instance, one such “satisfied” customer reduced their purchases from over $200,000 to less than $2000.
  • The key insight? Ignoring small details identified through our text analytics model can mean big losses for firms.

Bottom line

Our approach enables firms to link customer-centric CX elements from our conceptual framework (identified as potential pain points) to specific firm functions and jobs (identified as root causes) to take specific actions to strengthen the customer experience. Although this may sound complex, we provide a step-by-step guide for implementing the approach, highlighting what really matters to customers and what actions are needed by managers. CX is central to business excellence. Providing a meaningful customer experience is viewed as essential to achieving a competitive advantage. Organizations that carefully manage CX reap rewards including increased customer satisfaction, revenue and employee satisfaction.

7 point plan

  1. Don’t rely on one single quantitative metric to measure customer experience.
  2. You certainly should not rely on the NPS score as the “one number”. NPS is misleading!
  3. Rather you should combine several quantitative scores such as satisfaction, churn rate, time to response etc. with qualitative comments from customers e.g. satisfaction surveys or from social media.
  4. Take measures across the touchpoints and over time.
  5. Use text mining tools to help you identify the root causes of the problems customers are facing as well as the root causes of their positive experiences.
  6. Consider using our text mining based analytic tool that addresses problems with prior CX measures.
  7. Use the multidimensional data to prioritise actions to improve the customer experience.

Learn more about Service Innovation Alliance.