Published: January 28, 2023 | Comments
Almost every company these days says that they are customer-centric, that “Our customers are our most important asset”, and that they intend to improve customer experience. However, few companies know how to measure customer experience and fewer still mount the comprehensive program required to enlist and engage all of the functions, or what we like to call “the whole of business”.
Based on recent research that my coauthor and I summarized in our recent book, The Frictionless Organization: Deliver Great Customer Experiences with Less Effort, there are 3 processes and 3 actions that you should consider taking in order to become more customer-centric.
Process #1: Reach out to all deep detractors and to those customers who never contact you.
The Net Promoter Score (NPS) metric has become very popular, but it usually is expressed as an average score. For example, it may be expressed as “NPS last quarter for all of our customers was 38, and in the prior quarter it was 36; therefore, things are getting better.”
But of course, we all know that averages lie. Inside of the calculus for NPS are customers who give the one of the three lowest possible scores of 0, 1, or 2, a score range which now unfortunately has a new name: “deep detractors”. While an average NPS might be 38, there still may be 10% to 20% of customers who are deep detractors and, therefore, potentially very damaging to the brand and most likely ready to leave the business. It's important to identify who they are, reach out to them quickly (same day or following day, ideally) with as personal a communication method as possible, find out why they gave such a low score, and then bring those reasons back into the organization so that all the functions can figure out how to improve their well being and the overall customer experience.
Similarly, many customers don't even bother to contact a company for support or fill out surveys or post on social media. In some cases companies mistakenly believe that these are “happy campers” who don't need to contact them for support. On the other hand, what if these were “silent sufferers” who don't even bother to contact you for anything and may also be on the way out? Here again, it's important to reach out to them and find out how they're doing. If they're doing fine, then thank them and perhaps share with them some news about new product releases. If the answer is “No, I am not pleased”, it's an ideal opportunity to gather information and to process it as with the deep detractors.
Process #2: Get every CXO to listen to customer calls, review email threads and chat sessions, and then debate “Why?”
As companies grow, the senior leadership team gets further away from the customer. They might read reports as noted earlier showing an overall NPS rising slightly, or they might be forced to listen to the squeakiest wheel that gets to complain to them directly. What we have found over the years is that there's nothing better than for every manager and director and above in the company, but especially the CXO level, to listen to and figure out what's going on with customer contacts and communications. As already noted, not every customer bothers to contact you but this is a rich treasure trove of information that may include complaints about product design, billing accuracy, competitive preferences, and all sorts of things that can be useful for many managers and heads of department around the organization. For starters, I'd recommend that every CXO carve out three hours per week to do this with other senior leaders and begin to build a rich inventory of opportunities for improvement.
Process #3: Eliminate Digital-First.
Over the last ten years or so, the Digital-First movement has been hugely popular, but it's mainly been driven by tech vendors who would like you to be able to add sophisticated AI chat bots, complicated IVR trees, apps or portals, and other forms of digital solutioning. While digital solutions can be very useful and popular with some customers, it's essential to understand whether they are actually working in terms of high levels of containment rate and satisfaction. What you don't want is for customers to start out on your website, app, chatbot or other self-service channel only to have it fail and need to contact someone for support.
Moreover, what we've discovered in our research is that a larger percentage of customer contacts and the costs associated with them need to be eliminated rather than seeking some sort of a digital solution. On average, 40% of the total cost to resolve falls into a category that we call “eliminate,” which means that the issues are irritating to customers and are not wanted by the company for support, such as “My bill is wrong” or “My Internet keeps dropping”. By conducting root cause analyses, companies are able to chip away at this very large cost basis and source of customer pain. This also produces a significantly higher churn than issues that might need to be digitized such as “Did you get my last payment”” or “I need to change my credit card on file”.
Action #1: Monitor usage of customer accounts and programs.
Some customers sign up for programs or features that they never needed or no longer use, while other customers are exceeding their usage plan and might get hit with penalties or extra charges. A far better approach is for companies to monitor closely the usage of all customer accounts and programs and then “right size” customers to the correct program, even if it means a reduction in revenue per customer because that is the better solution for customer experience. Back in the ‘90s when I was a VP with the MCI Telecommunications company on the business side, I was always impressed that MCI's consumer business would issue refunds or credits automatically to customers when they were no longer using international dialing plans or other features that they had once signed up to use. It was usually a very positive surprise and shock for customers and one reason why MCI consumers’ customer loyalty was very high during that period.
Action #2: Calculate CPX and target its decline.
Most companies do a good job collecting the total number of customer contacts across all the different channels, but very few of them ask, “What is the rate of those contacts?” versus a driver, such as the number of orders shipped (CPO), the number of embedded base units in the field, or even the number of customers. Fewer still differentiate between the rate of contacts for new customers versus customers that have been with the company for, let's say, three or four months.
Using a contacts/costs per X metric (CPX) can be very revealing and really shows the true health of the customer experience in your organization. When CPX goes down, customers don't need to contact you, and in general they are much happier. When CPX goes up, it usually reveals an increase in the number of and rate of failures or confusion that customers have to navigate.
Back to new customers versus experienced ones, we see a 3 to 5 to 1 ratio of contacts from new customers, signaling the need to improve onboarding so customers are much more familiar with what their first bill looks like, what their service or features are going to be, and how to use self-service if that is a preferred method. Amazon started using the CPO metric before I joined as its 1st WW VP of Customer Service, and we vastly expanded it and enjoyed a 70% reduction over the next 3 years.
Action #3: Remove handle time for leverage reasons.
After a long period of time where average handle time (AHT) was held up as one of the key metrics, most companies have thankfully moved away from AHT, at least as the principal performance metric for their frontline agents. Granted, AHT is still important for overall forecasting and scheduling purposes but not when it comes down to dealing with the customer directly. If customers are upset, if they are confused perhaps because they don't speak your native language, if they have a gnarly repeat contact problem which we call “snowballs”, or for several other reasons, AHT is simply just that -- an average -- and the customer service rep needs to spend more time trying to understand and resolve the issues.
Moreover, there is a subset of reasons beyond those that need to be eliminated or digitized that we call the leverage reasons, ones that are valuable for customers and also valuable for the company. Examples include “Tell me more about your new program”, “I want to cancel my service or account”, and “How can I take advantage of ___?” The middle one about canceling a service or account might be served with a digital solution, but many companies are finding that it's important to find out why the customer has gotten to the point of no longer needing the service or account and then attempt to save them; this helps companies to understand the root causes so as to apply possible solutions for other customers in similar circumstances.
Try your hand with these 3 processes and 3 actions to become more customer-centric, and stay tuned for more ideas in the months to come.