How to Improve Customer Experience: A Step by Step Guide

Customer experience plays an important, if not the most important role in success of any business. Nearly all companies (89%) believe that customer experience will be their primary basis for competition. How do you stand in that competition?

Customer experience management brings discipline to this somewhat vague and soft area: by establishing a systematic process for collecting, analyzing and acting on the customer feedback, you’ll be able to start taking the customer experience in control. This will lead you to reduce churn and increase your revenue.

Why do you need Customer Experience Management? 

Customer experience refers to how customers perceive the interactions with your company. Customer experience can not be changed in a day and it can not bring you results in a day. Improving customer experience is a never-ending process, that will pay you off in long-term.

According to the statistics, 70% of buying experiences are based on how the customer feels they are being treated and at the same time 55% of consumers would pay more for a better customer experience. 

 
why every company needs customer experience management
 

Customer experience matters across all the channels and all the touchpoints of customer journey. Customer experience management, if done properly, will result in better business KPIs, incl. customer churn and retention, higher advocacy and finally revenue.

Voice of the customer: where to start?

Although customer experience management is a complex process, that differs in every company and industry, it can be adjusted to the same plan.

 
customer experience stats
 

Many businesses are participating in customer experience race: “whose cx is the latest and the greatest”. Not many of them understand that customer experience race is not a sprint, but a marathon. First, it requires long-term thoroughly planned preparation. Second, you often have to work across functions, geographies or customer segments. 

If you want to bring customer voice into your organization, recruit a cross-functional team and consistently work on understanding the customer needs. Our step by step guide helps both to start and develop a voice of the customer program.

 
voice of customer
 

A.   Define roles

Who in your organization owns the customer experience? It could be your customer experience team, it could be the top management... In fact, all the departments should work together to be able to influence the customer experience.

Customer service is not a department, it’s everyone’s job.

customer experience roles ceo customer service

Above is how the roles in organization are typically defined. In a successful organization, everyone participates in the customer experience management. Can you say the same about your company? Having everyone on board is a necessity, not an option. 

Eliminate company silos

1. Set a common customer experience metric and target for the organization.

Consolidate customer experience insights into one single dashboard and give all the teams the access to the same insights about what is driving the metric up or down.

2. Help all teams to understand the key customer journeys and how their work contributes to the customer experience along the journey.

When there is a shared understanding of the customer journey, people typically manage to widen their perspective outside of their own silo.

3. Empower people to fix issues that go across the silos.

The attitude of taking an extra step when needed, instead of just waiting someone else to fix the problem, is contagious: when employees see other people doing it, they get encouraged to try out as well.

At the end, customer experience depends on the work of all departments: from customer service and customer success teams to marketing, product and HR. At the same time, committed leadership is essential to implement a comprehensive customer-centric approach.

B.    Set targets

Customer experience target setting is essential if you want to empower the whole organization to get onboard at customer experience management. It makes a lot easier to mobilize the company, if a customer experience metric is followed up at the leadership level, along with the other key performance indicators.

customer experience targets.jpg

Setting up common customer experience targets across organization keeps everyone aligned. Clear goals diminish miscommunication and build motivation across the teams.

net Promoter score® (NPS)

Net Promoter System has been proudly called "the only number you need to grow". At Lumoa, we love NPS and widely recommend it to our customers. Why did we choose NPS? The Net Promoter System is a powerful metric for target setting. It's also simple and short for customers to answer. 

 
It's very likely, that you have already answered NPS surveys multiple times yourself. 

It's very likely, that you have already answered NPS surveys multiple times yourself. 

 

NPS consists of only two questions: one provides a number, so you can follow a trend and an open-text feedback to enable you actually to understand the trend. 

Leaders in variety of business industries use NPS, which makes NPS a great benchmarking tool. Although, the only company with whom you should compare NPS is your company in the past. More about NPS ->

other Customer experience KPIs

In addition to the main customer experience metrics based on customer feedback, you could follow several customer journey KPIs. These reliable indicators can provide insights into how your team can improve the customer journey overall. Beware that the choice of customer experience KPIs depends on your business.

  • Retention Rate

No secret, it is more expensive to acquire a new customer than to keep an old one. Knowing your retention rate will help you to understand the loyalty of your customers and help you to understand why your customers are staying or leaving. To understand the retention better, the KPIs such as churn rate, purchase frequency, time between purchases and others. The choice largely depends on the nature of your business.

  • First response rate

First response rate measures how fast a customer received a reply from your company since the first contact made. Most customers expect you to answer within 24 hours, but the earlier, the better.

  • Problem resolution time

It's the time it takes to resolve a customer problem.  Just as with the first response rate - the longer it takes to solve the issue, the unhappier customers are.

  • Contact volume by channel

Knowing the contact volume and ticket distribution by channel will help you to identify the main customer touchpoints that cause problems or are unclear to your customers.

  • Customer Lifetime Value (CLV)

Understanding CLV helps you to align your business goals to customer experience goals. CLV measures the financial value of one customer and has a strong bond to the retention and loyalty. 

C.    Collect customer feedback

After you have understood the targets and metrics and defined roles of customer experience management, it's time for action. Asking customer feedback is the very first step on the way to building a successful relationship between the customers and the brand. 

start by Measuring the overall experience

Some companies measure customer experience at every crucial customer touchpoint. That makes the results difficult to compare and analyze. By measuring the overall experience you receive consistent feedback about what drives customer experience satisfaction as a whole.

Cover the most critical touchpoints

Once you've identified the most critical touchpoints, extend feedback collection to the most critical individual touchpoints. Combining the individual touchpoint feedback results with the overall picture, determine the strengths and improvement needs per each key touchpoint.

Follow up with deeper surveys

If needed extend the depth of understanding with follow up surveys. Send the more specific longer surveys to only those customers who have the particular issue you investigate. That will help you to gain deep understanding of the important topics from the relevant users.

Tip: Measuring customer experience by the Net Promoter System gives you several advantages.

NPS could be easily implemented, it's simple and short for customers to fill in. At the same time, it's also an industry standard metric, which means you could benchmark the results.

phone3.jpg

D.   Analyze the feedback

 

How to analyze customer feedback if you receive 5000+ individual comments per day? How to analyze customer feedback in different languages? Before, you could spend tons of money and hire tens of people, only to process all the feedback. Some also simply ignored it or analyzed a small sample of all the feedback.

Now, with the help of modern technology, there're cost-effective ways to analyze the feedback. Text analytics help you to analyze the feedback in a fast and efficient manner, showing the tailored results valuable to your business.

Altogether, the process of feedback analysis, could look like this:

Screen Shot 2018-02-09 at 14.45.46.png

Important note:

Unfortunately, many brands end their customer experience management journey here. Don't! When customers leave their feedback, they expect it to be heard. Proper customer experience management starts with setting up targets and defining the roles, goes through the stages of collecting, analysing and acting on feedback and ends with communicating the changes and bringing customer to the heart of the business.

Modern technologies have made the feedback analysis a very simple process. Now, all you really have to do is act on it.

E. Act on the feedback

That is the most important step in customer experience management. Listen to what your customers are saying and actually do something about it.

Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.
— Donald Porter

Acting on customer feedback can be done in two ways: resolving individual issues and changing the bigger picture. Both aspects are equally important for customer satisfaction and retention.

The best practices include:

  • Act on time. While bigger changes in the company might wait, the individual issues can't. Critical comments require immediate action if you want to eliminate customer churn.
  • Make it a part of the routine. Report results as a part of regular management reporting rhythm. Customer experience management is a consistent process.
  • Learn from each other. Share best practices across teams and organizational boundaries. Organise workshops, coaching and training within the company. 
  • Empower the whole organization to make improvements. Starting point should be customer journey, not organizational department.
  • Cross organizational silos. Changes implemented within silos seldom translate into significant CX improvements. Be clear about the goals and results of your customer success programs. 

F.  Close the loop with the customers

Communicating the results of your customer experience management is as important as making the actual changes in your company.

Leverage your promoters

Promoters, who originally belong the Promoter segment of the Net Promoter System, are also the people, who spread positive word-of-mouth, they're evangelists and recommend your business to friends or colleagues. Some ideas how you could utilize your promoters include:

  • Understand the reasons why promoters love you - use those reasons in marketing. What some people love about your business might interest other people as well.
  • Encourage promoters to promote to new people, start a referral campaign.
  • Ask promoters to leave public feedback: to write a review or share their experience in social media.
  • Upsell to the promoters and introduce new/additional services and products.

deal with the detractors

Detractors, also a segment of Net Promoter System, are customers on the edge of churning, that are highly dissatisfied and spread negative word about your business. Turning your detractors into promoters might seem an impossible task at first, but it might be easier that it seems.

  • Fix the issue in the individual order, if possible.
  • Learn the reasons why your detractors are unhappy.
  • Provide guidance and communicate changes.
  • Show that you care - you won't always be able to provide a solution, but you should always reach out to each individual and provide help and assistance whenever possible.

Let everyone know that you listen and care

Communication is the king. Simple as that.

  • The customers who have provided you feedback, deserve to hear back from you
  • Aim to be more specific, besides just plainly thanking them.
  • Share what you have done based on the feedback.

G. Enhance customer-centric culture

Customer-centric culture is not born in one day. Customer-centric culture should developed and supported. 

You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied.
— Jerry Fritz

Here're the essential assets you need to set up if you want to become a customer-centric company:

1. Shared targets

Set targets and incentivize. In many organizations the best way to ensure a wide participation in customer experience improvement, is to include a CX metric, such as NPS, in corporate scorecards and bonus systems. This is particularly important for employees, who face customers only indirectly, but still have a significant influence on their experience.

2. Shared understanding

Bring customer obsession into the everyday life of your company. Make sure, everyone in the company is aligned across customer experience expectations.

Share data and results of the customer experience analytics in an easy to use tool. This ensures that there is a shared understanding of what matters. The company can shift from rumors and opinions to fact based decision making.

3. Let the customer voice be heard

Ensure that people can access not only the analytics results but also the customer comments – hearing the customer voice and reading the real comments with all their emotions can be a strong tool to motivate people to act on the feedback. Knowing that the leadership also reads customer comments helps in the customer-centric cultural transformation as well.

Now it's your turn!

How do you manage customer experience? Are there any other tips you might add for getting an entire company inspired to really WOW their customers? Share your thoughts by leaving a comment below!

 

 

Customer feedback is never just a score.

There's a company X that collects customer feedback. Company X prefers the Net Promoter Score® (what is NPS?), yet it could be any other metric. They ask the very familiar NPS question: "How likely is it that you would recommend [brand] to a friend or colleague? (on a scale from 0 to 10)" after each customer purchase or interaction. But guess what? The company X doesn't ask why the customers are giving the score. A number, a score is all what they track. 

You might rightfully ask: what's wrong with that?

Let's continue. The company X's NPS in January was 45, which is a very positive score. This month they have released a new product and NPS fell down to 12. Why did it happen? No-one knows. They could've started to blame the product designers or try to improve the features which they thought seemed to be lacking. This could've taken their time, effort and money away from the actual problem.

Luckily, they didn't do that. The company X started to contact its customers and finally ask why. They learnt that the customers actually liked the new product, but it was way too expensive. They also found that the speed and friendliness of customer support left much to be desired. 

What's the moral of the story? The company X could've spent thousands of euros fixing the wrong thing - the one, as they believed, needed improvement, or they could've even simply ignored the issue. Instead, they listened to the voice of the customers, thus saved money and made their customers happy

Listening to the voice of the customer is no longer an option, but a necessity.

There are too many companies, which just like the company X, don't collect open-text feedback from their customers.

 
customer feedback scores
 

So, what is the right way to collect customer feedback?

Customer experience is more like an iceberg. You could see the numbers and trends on the surface, but dive deep down and you'll discover what actually drives it and, more importantly, how your company can achieve business goals making improvements on the basis of customer feedback.

One more time, why should you collect text feedback rather than scores?

For starters, customer feedback is an asset in many ways and for the whole organization.    When you start collecting open-text customer feedback, it'll become easier to:

1. Understand what drives your customer satisfaction (and essentially the revenue)

Very often, there's a correlation between the revenue and customer satisfaction. According to the research, if NPS increases by 7%, the revenue increases by 1%. In order to actually work on NPS, you have to understand what drives it. Thus, you have to know what stands behind every promoter or detractor.

2. Improve customer retention and decrease churn

Sounds complex, but in reality it's simple. Boost what your customers love and avoid what your customers hate. For that, you need to know what they actually say about your product. 

3. Improve your product and services

Customer feedback is an endless source of inspiration for development. Customers are the reason you exist, they pay your salaries. Use their ideas when planning the next product release or update, and don't forget to let them know that they're  being actually heard.

The best customer experience strategy is very simple.

If your customers give feedback, they expect it to be heard. 

Don't ask customers for feedback if you don't have a follow-up plan in place. "Capturing VoC (Voice of Customer) data, but not using it to influence customer conversations, is a short road to customer experience failure." Not capturing feedback at all is even a shorter one.

The power of customer feedback only realises when you act on it. 

15 CX Experts talk about the Future and Challenges of Customer Experience in 2018 [part 2]

The future of customer experience is decided. Isn’t it?

Probably not.

We asked 15 experts with world reputation in Customer experience the same question and the results might surprise you.

Some time ago we released the first part of the interview answers, and this week guests are Lynn Hunsaker, Peter Lavers, Jane Treadwell-Hoye, Melinda Gonzalez, Matt Dixon, Vicki Amon-Higa and Raul Guillermo Amigo.

Every each of them answered the following questions:

  • How do you see the future of customer experience? 
  • What are, in your opinion, the top challenges in customer experience that companies should be aware of in 2018? 
  • How to overcome those challenges?

Now, luckily for everyone and especially the customers, more and more brands put more and more effort into developing its customer experience.

So, what should we expect in the nearest future?

More brands will (and should) bring up customer feedback to the decision-makers in the company, and with the help of some new amazing technologies we’re changing the way businesses see their customers.

Read the full answers here below.

Lynn Hunsaker, CEO and Head Customer Experience Consultant at ClearAction

@clearaction | blog

“Customers’ discernment of providers’ motives will continue to sharpen in the future. Customers are being educated about customer experience by providers and fellow customers, and as employees within provider organizations.

Top challenges for providers are (a) to be smarter than competitors about customers’ realities, (b) to rally all functional areas to improve customers’ realities, (c) to make customer-centred management a way of life.

To overcome these challenges:

  • treat customer experience excellence as a context for every job role company-wide,
  • foster true outside-in perspectives: not how can more customers recommend us, but how can we be flexible toward empowering our primary customer segment’s priorities? (which leads to more recommendations, by the way),
  • identify patterns in customer experience data from all sources to create greater insights as impetus for managers to make changes for the greater good, to motivate collaboration, and to inspire customer experience excellence as context for everything the company does,
  • facilitate collaboration across functional areas and business units to prevent silos, bridge silos, prevent recurrence of issues for the whole customer base, and create mutual value for customers (internal collaboration is the surest path to strengthening customer trust),
  • strengthen momentum of customer experience excellence as a way of life by embedding customer-focus in all company rituals (planning, reviews, capital expenditures, budgeting, succession, hiring, recognition, decision-making, handoffs, etc.)”

 

Peter Lavers, Customer Experience and CRM Expert

@PeterLavers | blog

"Customer Experience is here to stay! Companies do marketing, sales and CRM – the customer does the experience! If your business isn’t interested in CX then it’s effectively saying “we don’t care who buys our product, as long as somebody does” – this WILL find you out in today’s connected, empowered world.

One main challenge for the next year is short termism. It distresses the market, resulting in over supply and brand devaluation; it leads to bad decisions for quick sales that ultimately damage trust; it educates the customer on how to ‘beat the system’ e.g. only buy when there’s an offer; it can lead to illegal or unethical practices such as ‘pulling sales forward’ to meet targets; it rewards counter cultural behaviours and makes scorecards meaningless; and it inevitably runs out of steam because there are only so many tactics to deploy!

Short termism is mostly the result of a product-centric and “numbers focused” culture, which inevitably results in a “race to the bottom”. Customer centricity is the answer, backed with a credible customer profitability lens that gives an alternative view to traditional product sales/market share KPIs.

Another is silos – unless there’s perfect collaboration they lead to inconsistent or competing objectives, marketing, service and measurement. All too often it’s the poor customer who ends up having to stitch together the disconnects in their experience by re-keying and re-explaining their requirements or situation.

Silos is often the result of the same product-centricity as above, this needs to be fixed from board level downwards, with equal accountability and collaboration between the heads of customer, product, and omnichannel.”

 

Jane Treadwell-Hoye, CCXP and Managing Director at epifani

“The future of CX is at a cross road.  There are many organisations embracing a people-centric approach to business (be it employee engagement on CX or on developing strong CX programmes) but there remain a large number who fail to fully grasp the need for change.  Many of the traditional ways of doing business are under threat from smaller, faster, more agile disruptive businesses so organisations need to be more focused on truly understanding their customers, delivering better experiences and engaging in new ways.

The top challenges that companies should be aware of in 2018, I see are:

  • That senior leadership teams view CX as a passing fad or a short term campaign, and do not truly understand the enormous value a customer-centric approach to business brings – be it engaged employees, retained customers with increased share of wallet or new customers. 
  • That few seem to understand that CX is a long term programme of transformation that cannot be measured in 12 week quarterly financials.  Any organisation taking on a CX programme needs to recognise it’s hard work and will take time – it’s worth it and you need to celebrate the wins along the way – but there is no magic quick fix.
  • It’s too easy to overlook the employee engagement and try to deploy CX outside of an holistic organisational approach.  Your people deliver the customer experiences so organisations need to look at how to ensure everyone is brought along on the CX journey and understand the role they play in the customers’ experience.
  • It’s more than just digital.  Digital is but a channel to the customer but a truly customer-centric approach embraces the customer at all touch points in the journey.
  • It’s not about software or a number – if you focus only on the NPS score you will never deliver the game-changing customer experience.

How to overcome those challenges? 

  • Recognise your business is about the customer and not you. Listen more, understand their pain points, validate ideas and co-create with your customers.
  • Be prepared to pilot new things – try, fail and learn fast before trying again.
  • It starts inside the business - communicate, communicate, communicate and educate, educate, educate. Get everyone to see their role through the customer’s lens.
  • Celebrate small successes and share stories.  Become better story tellers – we are after all, people dealing with people.”

 

Melinda Gonzalez, CEO at Melinda Gonzalez Advisors, CX Consultant

@RealMelindaG | blog

“I see the future of CX as bright, vast, and continuously evolving. Technology advances will continue to inspire new innovations in customer experience. But, most companies will still continue to struggle with CX fundamentals.

CX is a tough business. It requires patience and the ability to maintain a “long view” on business results, especially in solving larger systemic issues. It will continue to be challenging for CX advocates to get meaningful organizational and executive support if customer centricity isn’t already a part of the value system.

Ensure strong C-suite investment & buy in (exhausting as it can be). Customer experience starts with a strong customer-centric culture, and that tone is set from the top. Assess the business to identify the people, process, & technology/infrastructure blockers. Is customer centricity already part of the company DNA and culture? Are there efficient processes in place for analyzing customer data or communicating customer insights? Is the ecosystem of customer engagement tools and technologies integrated and seamless, or are they siloed? Always leverage quick wins wherever possible, but a strong operational framework for CX management is critical to long term success.

Also, new tech solutions such as AI and machine learning have been getting a lot of attention. And why not? They have many great CX applications, and it’s always exciting to work on cutting edge solutions! But if not applied within a strong operational CX framework, technology can distract and actually move leadership and employees farther away from understand customer emotions, motivations, and expectations. 

Customer engagement technologies should be introduced once an operational model for managing the customer experience has been established and embraced. If the basic program investments aren’t in place, tech solutions will only be a hindrance. What are CX program basics? Understand customer needs, measure the right things, identify root cause of challenges and opportunities to improve, and, most importantly, take action!"

 

Matt Dixon, Keynote Speaker and Author, Global Head of Sales Force Effectiveness Solutions at Korn Ferry Hay Group

@matthewxdixon | blog

“I see the end of the traditional customer survey as we know it.  AI and machine learning make customer listening and Voice of Customer analysis—at scale—suddenly possible in a way it wasn’t before.  This means two things: (1) CX leaders will need to shift their teams from “survey administrators” to true internal consultants responsible for identifying and rectifying CX issues and (2) we will see break-through advances in CX happen with greater regularity as companies embrace these new technologies and their CX teams take up the mantle of CX reengineering on a large scale.

I think the biggest challenge is that CX has revolved around a set of assumptions—for instance, that customers will reward them for moments of delight, that customers want a relationship with the companies they do business with, that customers prefer live interactions over self-service, that customers want empathy when things go wrong, that customers want choice, etc.—that have rarely, if ever, been called into question. They are sort of the “pillars of faith” in CX.

While there’s been plenty of research in recent years to suggest that many of these assumptions are misplaced, CX leaders still refuse to acknowledge that they may have gotten it wrong—perhaps because there is so much pressure to embrace the conventional wisdom within their own companies or because they’ve lacked the data about their customers (thereby falling into the “we’re different” trap).

Stop surveying your customers and start listening to them.  You have more Voice of Customer data at your fingertips than you could possibly imagine—and it comes in the form of recorded phone conversations between your frontline staff and your customers.  Voice data—analyzed by AI—is the next great frontier that will enable a level of customer understanding heretofore not possible and will equip CX leaders with the insight they need to overturn many of these age-old assumption and achieve CX break-throughs that will deliver significant improvements to customer loyalty.”

 

Vicki Amon-Higa, CCXP, CX Coach and Consultant at Amon-Higa & Associates

“Customer Experience will be a key driver of growth for companies going forward -- it will continue to be an 'and' game of great products that deliver the outcome customers need AND a great experience end to end so that customers can find and buy those products as well as easily start using them and get the help they need to continue to get the benefits from them.

 A delightful customer experience alone is not enough and great products alone won't get found and purchased. Marketing and Product Organizations need to play well together to create these experiences and be the catalysts for this growth, together.

The top challenges I see are that everyone wants Customer Experience to be the latest and greatest ... it is a continuation of the quality journey started in the USA after the historic 'If Japan can, why can't we' wake up in the late 1970s. It is an evolution of more and more aware customers who are influenced by their B2C experiences and expect the same, if not better from other experiences as a customer.

To overcome these challenges, we need to stand on the shoulders of those giants before us, and continue to play with each other, it truly is a team sport! “

 

Raul Guillermo Amigo, CEO and Founder at Umuntu CX Design, Speaker and Author

@raulamigo | blog (in Spanish)

“CX is called to be one of the strategic pillars of modern business administration.

Marketing, Customer service. Market research, Customer understanding, Service & process design, Brand positioning, and Revenue generation will be functional to this new area of the company.

In my opinion the next big challenge for CX are:

  • To step forward from the basic Customer understanding, and take it to an on going flow of insights feed Customer Operations and Marketing,
  • To build a unified vision inside the organization about what customer experience is,
  • To ensure CX turning it into an actionable area of the company
  • To create a culture where all employees are part of the solution and not part of the problem.

To overcome those challenges, you have to have an experiential framework per customer segment to explain the meaning attribution process, enriched with an AI tool to update it. Create an internal CX certification program to ensure the common understanding of what is and how to manage the customer experience. Apply design thinking to turn voice of the customer into design input and involve upper management to create a corporate strategy around CX.”

Everything you need to know about text analytics

If you work in a big company with large number of customers (or users), you most probably receive a lot of feedback: people write about their experiences, complain about the things that do not work and tell about the things they love.

Most companies collect feedback in some specific format, such as Net Promoter Score. Some companies use other metrics, such as Customer Effort Score or Customer Satisfaction. These standard metrics include not only the number, but also free text feedback revealing why your customers like or dislike you or your product. Feedback arrives in other forms as well: pure text sent via various channels directly to the company, comments in social media, reviews in application stores and online stores etc.

When your customer sends you their feedback, they expect it to be read. They expect to be treated individually and respectfully. They expect actions and communication. But it might be easier said than done – you might get a lot of feedback.

And we mean it. You might get even more feedback than you can manage.

And we mean it. You might get even more feedback than you can manage.

Many companies receive thousands of rows of feedback per day. And even if you received only some tens or hundreds of feedback items per day, you still don’t necessarily have the resources to read everything through and process it manually.

And there is another problem. Even if the feedback is read, it is not necessarily aggregated into leadership level in a way that would enable management decisions. Even if your customer service agent or customer insight analyst reads all the comments and even responds them, do you know what decisions you need to make in the leadership team?

So, there is a problem.

Part of the problem results from the sheer volume of data. But the volume alone is not making the problem a very complex one. Instead it is the unstructured nature of the data which makes it challenging to tackle with any traditional means of analytics. It is a challenge to find meaning in a data that is text-heavy.

This situation is where automated text analytics is brought in: it can help in sorting out the key topics talked about and reveal the general sentiment per topic.

Text analytics helps in understanding the feedback.

What is text analytics, or text mining, and why is it so relevant in the context of customer feedback analytics?

Text analytics includes a set of techniques that structure information arriving in text format— in this case, free text customer feedback. The purpose is to convert unstructured text into meaningful structured data to support business analysis and decision making. Topic analysis reveals topics that are most talked about.

Sentiment analysis involves analyzing subjective material and extracting attitudinal information. Simple sentiment analysis divides the sentiment into three buckets: a sentence can be positive, neutral or negative. Machine learning technologies can detect the degree of sentiment as well: if someone hates your product, the negative sentiment is stronger than if he just dislikes it. Similarly, if someone loves your customer service personnel, the positive sentiment is stronger than if they just feel it’s good.

If you do text analytics in the context of customer feedback, what you typically get is topic volumes and volume trends and a sentiment for each topic.

The analysis can e.g. reveal that in March 35% of the feedback was about your customer service personnel and 70% of that feedback was positive. The results can look like this:

 
Picture1 copy.png
 

If there is a lot of data, the categorization can be a very detailed one: instead of personnel the categories can separate customer support personnel from sales personnel or divide the feedback about personnel in comments about their behavior, knowledgeability, responsiveness etc.

Careful and well implemented text analytics can easily reveal dozens of improvement ideas. Based on the text analytics you would know that the people talk negatively about your customer service response times, the info available on your website, the attitude of your sales personnel, the features of your latest product release etc.

But the management doesn’t care about all the 100 things that someone is complaining about.

They need to know what are the top-3 improvement needs. Which one should be tackled first? Is it important enough to justify the cost related?

Basic text analytics is helpful, but it is not enough. Frequencies and volumes (what is being talked about) do not fully reveal how important things are. Even if you know the sentiment (if the feedback is positive or negative) you still don’t know how important things are. Shortly, the results are not actionable.

Read more about the role of Artificial Intelligence in text analytics.

What does actionability require?

When thinking about feedback collection or any data and analytics activity within the company, a key thing to keep in mind is that the value of analytics is only realized when the analytics impact decision making, and actions are being done. Therefore, the basic text analytics is only the first step between data and value creation.

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To move from data to value, you need many things:

1) Better, more insightful text analytics to understand the most relevant drivers for customer experience improvement. The results must be meaningful from the business perspective and reveal the critical improvement needs.

2) Fact-based decision making considering not only the customer experience drivers but also the financial cost and benefit of the proposed actions.

3) An organization empowered to act on feedback.

4) And most importantly, improvement actions in various parts of the company.

Text analytics is actionable, if it supports decision making in an optimal way and if the results of the analytics can be shared in a way the organization is empowered to act.

Text analysis results need to be meaningful from business perspective

Text analytics tools are different. Some cluster and categorize data from bottom-up, while some categorize sentences to the pre-defined categories. Both approaches have their merits. The first one can more easily reveal new topics organically. The latter one can be more fluently directed to support decision making. Why is that?

1. The structure

1) If the business can influence the structure of categories used in text analytics, they are understandable and relevant for the business. They are not meaningless.

One of our customers, who has a long experience working with other text analytics providers, complained that the top categories in their data are always their own brand and customer service. None of these categories makes any sense to them. When we define categories top-down, we can skip these meaningless options and include only ones, which are somehow actionable for the business.

 
Example on categories and sub-categories. Do you see what drives customer experience?

Example on categories and sub-categories. Do you see what drives customer experience?

 

Maybe the customer service category is not useful as such, but the company wants to follow how people feel about the service response times, issue resolution and the knowledgeability of customer service personnel. The brand itself is seldom a useful category, but any commentaries where it is compared to the competitor brands can be useful.

2. Follow up!

To support decision making, the text analytics results should allow follow up. This requires that the categories don’t just disappear organically.

When a category can be followed up after an action has been done, the impactfulness of the action can be verified. If a category can just disappear organically, how do you know if it disappeared because your action was effective or because the data was just organized differently bottom up?

It is clear that top-down categorization alone doesn’t guarantee meaningful business driven logic to the topics followed. It requires industry and business expertise as well. We ensure this by working closely together with our customers to ensure the vocabulary used in the categories matches that of our customers.

Text analytics should help you to understand the drivers

The basics need to be right. If you use good quality text and sentiment analysis, you should at least know what your customers talk about. But that is just the first step.

I had a conversation once with one leader in banking sector, which could be summed up like this:

— I get this info that 22% of our customers are talking about our credit and debit cards. So what? What am I supposed to do with this data point?
— Nothing. That data does not give you any insights you could utilize.

And he is right. No one can make much sense with a data point like that.

What you need instead is a thorough understanding of the drivers – how each topic impacts the customer experience. How much higher is the impact of high cost of credit cards compared to the impact of rude customer service?

The key is to understand the relative importance of each topic – and how much each of them impacts your overall customer experience. Only that way you can start to make choices in a rational manner.

The results need to be understood in the context of business and financial numbers

Then what? If you know the top-three improvement areas from your customers’ point of view, you have already come a long way. Most likely you can plan on how to gradually start improving the things people most dislike. However, if there is a high cost involved, this might still not be enough.

In companies, decisions are not purely based on what is best for your customer. The financial implications need to be understood as well. What you need is a business case. And the business case continues to be unclear, if the leaders don’t understand the financial impact of the improvement. If the costs are high and the benefits are unclear or questionable, the action doesn’t make sense from business perspective.

Picture3.png

The more explicitly you manage to establish the link between customer experience improvement and financial value, the better. This can be done by analyzing the historical performance of most and least satisfied customers, for instance the churn rate difference between NPS detractors and promoters.


How to link the NPS improvement efforts to the financial benefit in practice?

Start by analyzing the difference in value between your detractors and promoters. Here, NPS typically has a very high correlation with retention: the happier the customer, the more loyal they are and therefore the more revenue they generate for you during their customer lifetime

Look at your customers behavior in history. Of the promoters, which you had 1 year ago, how many of them have stayed? How many have left? Most likely these numbers are very different for the detractors.

When you have, based on the historical data, established a clear link between your customer experience metric and churn rate, you can immediately start to understand how big of a financial impact your X-point NPS increase has. A study done in London School of Economics in 2005 found that 7 point NPS increase led to an average 1% revenue increase.

 
NPS growth business
 

But you shouldn’t assume industry averages apply to you directly.

There are huge industry specific differences – in competitive industries customer experience differences easily lead to a situation, where your customer decides to switch vendors. In industries, where consumers have very limited choice, they can stay as your customer for a long time even if they hate you. In B2B the user and buyer can be different persons and the decision-making dynamics therefore complex.  Therefore, I warmly recommend to know your own numbers.  

Keep in mind that there are also other ways the customer experience improvement impacts your bottom line. Higher NPS typically correlates with higher advocacy, which brings you more customers and revenue. Your most loyal customers also typically buy more from you. You have a chance to up-sell and again increase your revenue.

The benefit can result from the cost savings as well. The higher your NPS, the smaller the number of customer complaints and returns. This can make you save in customer support and repair costs.

To summarize, there are some standard ways through which NPS improvement (or customer satisfaction increase) translates to financial value. You should quantify at least some of these for your company. Once you have done that, you have a good understanding of what is the financial value of one-point NPS increase – that makes it easy to assess, whether a particular action targeted to drive the NPS up, makes sense or not.

The tools need to support empowering the organization to act

In addition to clever analytics and great understanding on what value you can get via improving your customer metric, there is one more critically important thing required, to make the feedback actionable: you need to empower your organization to make the changes needed.

Empowerment requires shared understanding of the issues, common targets to solve them and company culture that encourages people to act – also across organizational silos.

Text mining typically is the part of customer experience management, which is most clearly just for experts. Text mining and analytics tools are not being shared across the organization – and for a good reason. They are difficult to use and require expertise. The recent Temkin study shows that the use of predictive and text analytics is the least distributed customer experience-related capability in the organizations.

 
1706_DistributedCXCapabilities.png
 

If you want to empower your organization widely to act on customer feedback, you need to be able to share the insights effectively across the organization. The problem when limiting the usage of analytics tools to a very small number of people is that the improvement actions require involvement from various people in many parts of the organization.

I have rarely seen a case where a very centralized analytics function wouldn’t have become a bottle neck in action planning. Typically, with high impact items, there are many teams and individuals who need to get together to make improvements. Therefore, the targets and understanding should be shared.

Unless you have great resources in the analytics team, I recommend having an easy to use tool where anyone can see the insights and understand them.

In addition, you need to empower your organization to act on the feedback. And an organizational culture that encourages people to act and co-operate across organizational silos.

Analytics is just an enabler. But a powerful one if it provides insights people can act on. And when the data shows how the action led to an improvement in the experience, you end up creating a virtuous cycle: people will feel more and more motivated to act next time as well. Positive impacts, positive comments and positive changes after a problem has been tackled are extremely important for the employee motivation and the employee motivation highly impacts the experience your customers will have.

Read more about whose business customer experience management is.

Results and value only realize when improvement actions are taken

Acting on customer feedback doesn’t mean doing one thing. It means doing many things on many levels of organization. Depending on the organization impacted, this can include (for instance) some of the following items:

1) Fixes to the existing product (e.g. sw bug fixes, wrong information corrected on the web site)

2) Product development decisions: reprioritizing things on the product development roadmap taking the feedback into account (e.g. including an improved camera in the next generation of the smartphone)

3) Training and new incentives to personnel to adjust their behavior (e.g. more friendly behavior in customer service)

4) Marketing to take the info into account in better targeting (e.g. upselling to the most loyal customers)

5) Process changes (e.g. informing the customer more often how the repair is proceeding)

Actions also include engaging back to customers. Letting them know what has been done. Replying is not enough, if nothing changes inside the company. And if the feedback has led to some concrete changes in the company, it is waste of resources to not tell about it to your customers.

It can be useful to separate the long-term actions, such as product development changes and process changes from the short-term individual actions. In the former, aggregate data with good volume is needed. In the latter, good text analytics can help in better targeting messages on individual level. The response can be instant.

Similarly, automated text analytics can help to filter those individual comments, that require personal involvement. We often label these as “Critical comments” and include comments from people with a clear risk of churning.

I don’t value one of these above the other. Both are needed. 

Facing your customer on an individual level makes them feel heard and respected. But they quickly realize if no-one is walking the talk. The frustration increases if they need to face the same issue when they interact with you next time. Therefore, the customer experience and customer feedback cannot be left to customer service to deal with.

The most relevant feedback does require decisions made by the top-management and some fundamental long-term changes. And while the changes on aggregate level are important, you cannot expect your customers have the patience to wait until they have been implemented, if they are facing a very burning issue. Take both action types seriously to transform to a customer centric organization.

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How to make customer feedback relevant on C-Suite level? To summarize the long story short: just show them the value. The value of customer feedback analytics only realizes through decisions and actions. Therefore, the most important criteria, when choosing text analytics from decision-maker point of view, is to ensure that the results of the analytics are actionable.  

Actionability is the result of analytics leading to concrete decisions and changes and actions within the company.

The value of feedback is in the results. The value of analysis is in the actionability

 

15 CX Experts talk about the Future and Challenges of Customer Experience in 2018 [part 1] 

Customer experience has been already a hot topic in business during 2017 and is promising to be even of higher importance in 2018. “CX transformation is no longer a nice-to-have, it's a necessity” – concludes Forrester, one of the most influential research and advisory firms in the world. It’s predicted, that by 2020 customer experience will overtake price and product as the key brand differentiator when making consumer choices. 

We were curious to know what CX professionals should pay attention in the coming year and asked the leading CX experts for their opinion.  

That’s what we asked each of them: 

  • How do you see the future of customer experience?  
  • What are, in your opinion, the top challenges in customer experience that companies should be aware of in 2018?  
  • How to overcome those challenges? 

Some hints: big data, omnichannel, personalisation, AI and organizational culture. 

Read the full answers: 

Ian Golding, CCXP, CX Consultant and Trainer

@ijgolding | blog 

“CX is at a very interesting point in its evolution. There is no doubt that across most industries, the end-to-end CX has improved over the last twenty years. Much of the improvement has been driven by advancements in product innovation and digital technology. HOWEVER, I also argue that despite that, too many consumers continue to endure ‘random’ or ‘unexpected’ experiences as a result of the inconsistent delivery of the end-to-end customer journey.  

Too many organisations are still focused on ‘making money first’, with the customer coming a distant second. That is why although CX is evolving, it is doing so far too slowly – hence the need for CX Professionals and anyone with a passion for CX, needing to continue building a revolution within companies to get those business leaders who still do not understand the fundamentals of CX to wake up and smell the coffee. As more industries continue to be disrupted by smaller, more agile, niche specialists who are better able to meet the needs and expectations of customers, larger, legacy businesses are at serious risk of losing relevance with their customers and potentially ceasing to exist. 

In my opinion, three things that are essential for CX in 2018 include: 

  • Restoring trust – 2017 has seen more examples of organizations continuing to fail to meet basic customer expectations. In Europe, the Ryanair debacle is the most prominent case of all. In 2018, all brands across all industries are going to have to work hard to restore trust with the everyday consumer. 

  • Value for Money – we live in a world where disposable incomes continue to be challenged on an annual basis. Consumers will continue to look for brands that offer the best value for money for the ‘end to end’ experience. That includes how much it costs to deal with things when they go wrong. 

  • Honesty and transparency – the brands that continue to do what is right for their customer, when things go right and wrong, are the brands that will continue to flourish in 2018 and beyond.” 

 

James Dodkins, CX Revolutionist, Keynote Speaker and Author

@JDODKINS | blog 

“I see the future of customer experience being ‘hyper-personalisation’, moving away from process standardisation and towards experience personalisation. Understanding that each customer and each experience will be different every time and creating your business to incorporate, embrace and excel at this. 

The biggest challenge, in my opinion, will be trying to meet all of these new customer demands within industrial age organisation structures, structures that were never designed to deal with ‘customer experience’ let alone the customer experience of the 21st century.  

How to overcome those challenges? Stop organising by function and skill set, start organising by ‘ability to deliver customer success’ create ‘experience teams’ of people with different skills and different core competencies that can manage the entire customer life cycle and reward them together for the achievement of customer success, not completing tasks and activities.” 

 

Blake Morgan, Customer Experience Futurist, Keynote Speaker, Author

@BlakeMichelleM | blog 

"The future of customer experience is around providing tailored and personalized customer experiences. Customers want you to know them. At this point we have the technology and data prowess to actually know our customers - and predict their needs - but we still aren't there yet. With advanced data and personalization, we should be able to provide truly personal and omnichannel experiences to customers. As more companies figure out how to do this, in the future customers will demand it or leave. 

The first challenge is the focus for most companies on quarter profits. Once we stop obsessing over wall street and quarter to quarter how we are perceived - we will be able to achieve transformational growth. But that requires being misunderstood for long periods of time. Consider the words of Laurence Fink, co-founder and Chief Executive of BlackRock with 4.6 trillion in assets recently said, “Today’s culture of quarterly earnings hysteria is totally contrary to the long-term approach we need." 

How to overcome those challenges? 

Talk to your board. Find someone to champion customer experience at the c-suite and give them influence and resources to actually get things done”. 

 

Chip R. Bell, Customer Loyalty Keynote Speaker, Trainer, Author. 

@ChipRBell | blog 

“We will continue to struggle with the proper balance between technology and people. Many organizations are currently enamoured with the promise of technology and big data. However, research shows most customers still value an emotional connection with the people fronting the organization.  

With rising customer expectations, good service is no longer good enough. Customers want unique, special and innovative. Organizations will want quantitative justification of their investment in great customer service. Organizations will continue to look for more effective ways of gaining real-time customer intelligence rather than rear-view-mirror methods like surveys. All will take leadership deeply committed to customer experience as a significant marketplace differentiator.” 

 

Adam Toporek, Customer Service Expert, Speaker and Author

@adamtoporek | blog 

“The future of customer experience will involve finding ways to use technology to create and maintain positive emotional connections with customers. Despite the human brain’s remarkable inability to distinguish the artificial from the real, organizations will still need to find the magic balance between technology-faced and human-faced experiences. 

The shifting sands of artificial intelligence will keep many organizations on unsure footing in 2018. For larger organizations, the top customer experience challenge will be figuring out how to strategically invest for the present while staying nimble for the future. For smaller orgs, the challenge will be figuring out how to gain and sustain competitive advantage in the face of larger competition that is able to use technology to deliver faster, more personal experiences at significantly less cost. 

For larger organizations, the best path is to focus on the current experience while keeping an eye to the future. You don’t need to worry about being left behind in five years if you can’t keep your customers for the next five weeks. Smaller organizations need to maximize their competitive advantage by delivering experiences that larger orgs can never truly emulate, no matter how good their technology.” 

 

Diane Magers, CEO at CXPA 

@DianeMagers 

“Customer Experience has been a catalyst for organizational change.  As we understand the customer’s varied interaction with our brands, their needs and wants, it has shaken the foundation of many organizations – the way they work, how they make decision, how they collaborate, how they use data, how they build products and services. The focus on acquisition, scores and fixing issues has been replaced with outside disruption, market ecosystem expectations (i.e. Blockchain, GDPR) and coordination.  This will push more aggressive change driven by Customer Experience professionals.    

  • Organizations will have to rethink how work gets done. Organizational alignment will be most critical – both internally and to the market and customer expectations.  

  • A talent shortage will be evident.  Not just talent in general, but workers with cross functional skills, collaborative and design skills.   

  • Data, digital and technology transformation will be critical and many organizations have only scratched the surface to keep from becoming just a functional utility.   

Successful organizations will drive deep, orchestrated transformation rather than just fixing customer issues or tracing scores.  It will require experience professionals to help drive more collaboration and alignment of operations, measures, metrics, processes, governance, workflow – true and real strategic organizational transformation.  

Aggressive action will be required for many organizations – business model changes, more extensive rigor on digital enablement, acute awareness of customer behaviour in the market and knowledge of ever changing impacts on organizations (i.e. data security, gig economy, AI, machine learning).” 

 

Rüdiger Pläster, Executive Managing Director at ORT Medienverbund 

“I do see a bright future of all facets of CX. Never underestimate the customers expectation in CX. It will be growing and growing. Once the customer had a positive CX, it will set a new benchmark. It will also be thrilling to see how UX, customer centricity and empathy will be connected to the field of AI. 2018 will be the year of CX and AI.  

Finding talents that understand the challenge and will be able to work on the ongoing convergence of analog and digital, will be still the top challenge. Also, companies really need to transform their structures to reflect customer centricity. This includes breaking down silos, which is still an issue. Let’s think in customer touchpoints instead. As I often refer to in my presentations: CX is not a package tour, it’s an expedition.  

Don’t underestimate culture. Plan transformation, reflect what business case makes it necessary, and take your co-workers and customers with you, that’s what we are doing. Start experimenting, build your hypothesis, fail fast and learn – and start all over again. A lean and agile culture will definitely support you in that matter. We call it discovery and delivery track – internally we call ourselves the “dual track agency." 

Jeremy Watkin, Director of Customer Experience at FCR 

@jtwatkin | blog 

“Customer experience doesn’t begin with awe and delight as much as we love reading about this on social media. It’s about bringing all groups within an organization together with a focus on making each experience more effortless for customers. This is hard work but it’s that work that ultimately brings about happy, loyal customers. More and more companies will focus on having top leaders who are instrumental in bringing everyone together. 

We will continue to hear more about artificial intelligence and chatbots in the coming year. When it comes to using technology to allow customers to self-solve issues, some companies automate too much and some don’t automate enough. These new technologies are here to stay and we’re wise to vet and implement them carefully, testing frequently to ensure they are truly improving the customer experience rather than detracting from it. 

How to overcome those challenges? 

Three words: voice of customer. With any changes and enhancement to the product or service, it’s critical to keep a finger on the pulse of the customer. Customer surveys, deep dives into customer service contacts, and conversations with key customers are great ways to fuel continuous improvement. I’ve asked many customer service professionals and customers alike for their feedback and have never had a shortage of insights for improving the customer experience.” 

What do you think is the future of Customer Experience? Download our guide to CX to know more.

From corporate world to entrepreneurship: what have I learned?

My first full year as an entrepreneur has come to an end. Our company, Lumoa, has now been there for a bit more than one year. In fact, we celebrated our one-year anniversary on 14th of November. What have I learned?

First of all, it has been a great year. I’ve enjoyed it tremendously. It actually surprises me, how fun it has been. We started Lumoa with Carlos and Suvi after leaving Microsoft in August 2016. I was personally driven by a strong need to do something totally different after 12 years in large corporations. I wanted to learn new things and make a difference.

Since that we have launched a product, acquired our first customers, grown from the 3-person founding team to a 7-person team. It has been busy. I’ve worked longer hours than during my corporate years. But as an entrepreneur, it has felt like my own choice. There have been some tough days as well but most of the days have been good.  

Being a first-time entrepreneur, I’ve obviously learned a lot about business and, more importantly, about myself:

  1. The best thing about running a startup is the opportunity to step out of my comfort zone regularly. It is fun to learn new things almost every day. And it is extremely rewarding to be in a situation where I am regularly pushed out of my comfort zone. Because that is a way to learn more and even faster. 
     
  2. You don’t need to be a risk taker to be a good entrepreneur. I always believed in the stereotype, that risk-averse people (such as myself) cannot become entrepreneurs. I was wrong. Risk taking is not what is needed. What is needed is the ability to juggle many things at the same time without getting too stressed out and ability to live with uncertainty and constant change. While I am analytical and risk-averse, I still don’t worry too much about the future which keeps me functioning even when some other people paralyze.
     
  3. The team is the most important thing. If people are not feeling well, you cannot get too much done. If people are great and doing well, you can make miracles. Building a team, seeing young professionals learn and develop is the biggest joy of my everyday work. I am super proud of our whole team.
     
  4. Simplicity is valuable. Many companies have built complex solutions for simple problems. They are not willing to let them go because their middle management is very dependent on the complexity: a large part of their jobs exist to maintain that complexity. They have suppliers selling them complex IT systems and an army of analysts to make sense of complex data in a complex manner using expert solutions very few people can even access within the company. And often the status quo is not challenged because the complexity is a great smokescreen: very few people understand it and is, therefore, able to question it. Our service is an antithesis of this approach: it is super simple, anyone can use it and it solves a big problem in an easy manner.  
     
  5. Good advice comes from many directions. Most people are nice, and many are willing to give advice. Not all of the advice is good but large part is still worth listening to. We as a team have learned to listen carefully, consider and adjust quickly if the advice has been good. Not all entrepreneurs are like that. Some are stubborn and some just hate changes. We believe that the best way to progress is to listen, learn, adjust and move on.
     
  6. As much as I love stepping out of my comfort zone and challenging myself, I cannot make myself love mandatory admin work such as invoicing or sorting out the receipts for our accounting company. It is boring and drives me mad. The only good thing about admin work is that I can joke about how much I hate it.
     
  7. I like to make people laugh. A common laughter is a good thing in this world. 
     
  8. Corporate cultures are (horribly) different. I and other Lumoa co-founders come from large corporations and in many discussions with our customers that is a great asset: we are familiar with the way most large corporations operate. But still, even large corporations are different when it comes to their culture. Some are fast to try out new things and positive towards change. Some are the exact opposite: they are so afraid of making mistakes that they freeze and end up watching the world go by. The biggest surprise to me on this journey has been that this culture is not always visible to the outside world. Many times, it, obviously, is: in some industries, everyone is able to identify the leaders and laggards very well. But then there are companies, who don’t have a specific reputation, who can be even leading companies in their industries, but who still come across as the most risk-averse and slow. 
     
  9. Finally, we can actually help companies. The world is full of smart people with clever solutions to all sorts of problems. Still, the problem we are solving is so widespread in large corporations that it regularly blows my mind. So many companies collect feedback and receive tons of it but get very little value out of it. This is the best prize easily compensating for the all the hard work and long days: seeing that we can make a difference and help businesses in improving their customer experience.  

Text analytics as future of customer experience? We asked Jim Tincher.

The topic of customer experience has been trending throughout this year. More and more companies put a customer at the centre of their business operations. At Lumoa, we believe that it’s only the beginning. Customer experience and engagement are already changing the way businesses work covering larger and larger industries.

To stay ahead of the time and to be successful, it is crucial to follow the newest trends in CX. There're great professionals who feel the customer pains and embrace their successes. We introduce a new column in our blog - “Experts in the Spotlight” with our first guest, Jim Tincher.

Jim, CCXP (Certified Customer Experience Professional), is a founder of a CX consulting agency, Heart of the Customer, and sees the world in a special way: through the eyes of customers. Jim is a big fan of customer journey mapping and helps companies of all sizes - from startups to largest corporations to improve customer-focused results.

We had a talk with Jim on the future of customer experience and current trends in the field and wanted to share our findings with you.

State of CX - where are we going?

“Since I started, customer experience and, specifically, customer journey mapping have become much more popular than before. The challenge is that you have to adapt, learn very quickly and grow with it.

Right now, companies are working on bringing value through customer experience. How can we drive business value through customer experience? It’s relatively easy to start “doing Customer Experience” in a company, but how can you ensure results that will benefit both your business and your customers?"

The paradox of choice - too much or too little?

"In America and also in Europe, the individual choice rules consumer behaviour in many aspects. Everyone wants to feel unique and make their own unique choices. The companies follow the customer desires - so they provide us with a variety of choice. At the end of the day, sales numbers fall because customers are lost and overwhelmed."

Jim referred to a famous jam study, conducted in 1995 by Sheena Iyengar, a professor of business at Columbia University and the author of “The Art of Choosing.” In a supermarket, the professor with her students set up two jam testing sessions. Every few hours they switched from demonstrating 24 jams to 6. After customers tasted the jams, which on average in both cases were 2 tastes, they received a discount coupon to buy the jam.

As we know, larger choice drives higher satisfaction rates. 60% of all shoppers stopped at a booth with 24 jams and the number dropped to 40% when there were only 6 jams presented. The surprising discovery was that when six jams were presented, 30% of shoppers purchased, whereas when 24 were offered, the purchase rate was only 3%.

20171204.png

"Customers want choices, but it doesn’t necessarily mean that they want to choose.” - Jim concludes, - "When you analyse customer satisfaction, more choices will usually win, but when you check the business results, managing fewer choices works better. Although it’s important to have those choices available, you need to filter them down to a manageable size, then give your customers what they need.”

The future of the feedback analysis - text and voice analytics.

“Collecting customer feedback might seem very easy, but it all escalates very quickly if you don’t have a system in place. Make sure the right people are following the process and the feedback is curated in a sustainable way.

Some larger organisations might immediately get 5.000 to 10.000 individual comments. How do you manage that? Are you going to read through every each of them? Probably not. How can you make sure that all of the comments are reviewed in such a way that they have an impact on your business? You need technology that can sort them out.

I am a big fan of text and voice analytics. There’s a recent study in the automotive sector that the more surveys your customers receive, the less they spend on your services. So, companies need to be smarter about how to collect feedback. We’re moving away from the standard “give-me-a-number“ survey and are going towards “how-did-you-feel-about-the-service“, open-ended questions. Text and voice analytics dive deep into that and essentially, if you wish, create a score based on how customers actually felt. Hopefully, that system will change the way we analyse feedback in 5-10 years."

"Text analytics help you to hear the real voice of the customer.”

Jim mentioned another case, study of Jiffy Lube, an oil change provider in the United States. The company used an NPS® survey, yet they couldn’t tie the scores to any business results. Once they analysed the text, they found if their customers wrote words “ease" or “efficiency” at least 1% more often, the revenue went up by $14k. When customers mentioned words such as “management” or “respect,” sales were lower. “That's where text analytics really help - you understand what your customers are actually saying, not only the numbers they happen to click on the survey.“

It’s not about the score, but the system: NPS.

“Plenty of customer experience professionals refer to NPS as very predictive, while others completely disagree. I say, it varies by the company or the industry. For example, we worked with the financial services company and asked the standard NPS question: “How likely are your to recommend [company] to a friend or colleague?” A surprising amount of people said they don’t discuss finances with their friends nor colleagues. As a result, the scores were low, even though the customers actually liked the service."

Recently, Bruce Temkin found out that 43% of CX professionals prefer NPS to other metrics, but also 42% of those consider NPS just “another metric”. "We’re stepping away from the idea that NPS is "the only" metric and thinking more like it’s "just another" metric.”

"For me, the main problem of NPS is that people focus too much on the wrong ‘S.’ They think about the Net Promoter Score instead of the Net Promoter System. Companies miss out when they just focus on the score, and don’t go deep into the text responses. Text analytics let you see all kinds of customer motivations, and show you whys.

If you want to bring customer feedback into your organisation - the requirement #1 is to have a broad cross-functional team. Have all your employees involved so that they’re interested and active in the process and you don’t have to push your organisation alone. If you want to be successful, you should think strategically, find the right people to join you, and also learn the best practices from others (you could check Jim’s blog for great insights! - author's note). Follow the changes and trends in customer experience, I do believe we’re going to see more of text and voice analytics at work.”

Did you like the article? Are you interested in Customer Experience? Our team has prepared a guide to CX for you. 

Lumoa just got better.

Wow! Have you seen the new update?

We are happy to announce the product update that our team has been working on for the last months. The update touches all your favorite features and turns them into even more a productive toolset, so you can dive deeper into your customer feedback analysis and execute accurate actions based on that.

Watch the video below if you want to know how to get actionable insights with the help of the new and updated features.

Let’s go through the updates one by one.

Search is here to stay!

We are happy to announce that, search, the most requested feature is part or our new release. Find fast answers to business questions searching on the fly from all consumer responses. Keep in mind that, once you search, all the dashboard components will update showing you how NPS scores, trends and impact looks like based only on the comments that match your search terms.

Screen Shot 2017-12-12 at 14.01.36.png

The updated NPS Graph. What do the numbers say now?

The NPS graph now consist of three components; the NPS score, NPS Chart and date ranges for the graph. 

https://gyazo.com/1947154ac7c369c395ab89cb5e29bcc4

NPS Score 

Have you noticed the rolling on the top left corner?  You can now change the period of NPS calculation with options to have a daily, 7-day, 30-day or 90-day range. This example uses a 30-day NPS calculation. This means that the NPS score is calculated using all the data available for the last 30 days.

This choice affects also the darker line in the chart at the right of the picture below. Here, the line is the value for a 30-day rolling NPS. This can be interpreted as at any given date of the chart the previous 30-day average value is drawn as the line value and will give you more accurate measurements of NPS varying on the period of your choice and helps you to analyze and see the changes quicker. 

Tip: use longer periods (30/90-day range) to get a more stable read on NPS if you don’t receive feedback on a frequent basis. Switch to 7-day NPS to track and act on sudden changes or if you receive larger amount of NPS every. 

NPS Chart 

The date range of the NPS chart can be adjusted from the right top right corner of the page. Note, the data range for the chart is different to the one at the impact factors!

Now the chart has three different values. To the rolling value you are familiar with,  we have added the daily NPS and the number of daily responses.

The daily NPS allows you to see sudden changes at a glance (can be highly volatile depending on the amount of feedback received and you might see it negative for example during the service downtimes) while the amount of feedback (bars at the bottom) shows you how reliable the data is.

The heart of Lumoa: the Impact Factors and Comments

The impact factors section has been upgraded as well, categories and subcategories are styled and, just as always, tailored to your specific company or industry.

 
 

Now you can control separately the time period for which you want to calculate the impact. This time period is visualized in the NPS trend chart by the blue box.

Tip: When you click on an impact factors, you can now analyze in even further detail the categories and read the matching comments when clicking the specific category. This allows you to get insights straight from the comments.  

The comment section 

Now you can see the details from each response, allowing you to  get to insight faster.  The information you can find will match the filters from your company. Moreover, now you can also see all the categories and sub-categories your comment is allocated to.

 
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The displayed comments are influenced by the impact range, filters on the left and also by the impact factors themselves.

Tip: Categorizing the feedback by the impact factors helps you to find what your customers love or hate with higher accuracy and implement actions based on the feedback.

What do you think? What is your favourite feature? What do you want to see in the next updates? Share you opinion in the comments below or with #LumoaUpdates.

Do you already have a Lumoa account?

Are Your Customers Happy? CX Insights from Slush.

Helsinki has welcomed 20.000 innovators at Slush, the world's leading startup event. This year among the main topics of "Technology" and "AI in Our Lives",  you could also hear companies, both scaling and large, starting to talk about customer experience.

It has been our second Slush and we enjoyed every bit of it. Slush gave us an opportunity to meet new and already familiar people, secure a couple of deals and have meaningful conversations on customer experience.

Customer-obsessed cultures take a lead.

A fantastic discovery was that more and more companies are paying attention to its customers and build the whole product based on customer wishes.

Are you customers happy? You should constantly ask this question whether you’re a startup or a corporation.  

AI comes to Customer Experience - bad or good?

Digitalisation of customer experience has been one hot topic at Slush. Will AI help in solving customer-related issues? Certainly, yes!

AI is of help when it comes to engaging with customers and, also, analysing the data

Did you know that text analytics at Lumoa are powered by AI?

Transformation of traditional industries

Customers are already getting to the centre of operations of many traditional industries. Despite the revolution of healthcare, food and energy industries are no exception, with more to come in the nearest future. 

What is the end goal?

Customers might drive your business to the skies if you're dealing them properly. Although, at the end of the day, what matters is doing the right thing. At Slush, another important topic was "How can you improve not only a life of your customer, but the wellbeing of the whole planet?"

This year has been a fantastic time for customer experience field. Companies are quickly progressing on the way to understand customers and bring business value through customer experience. Customers are more and more often on the agenda of business and startup events, and what is even more important, in the entrepreneurs' minds.

Start your CX journey by downloading our guide to customer experience.

Collecting customer feedback: too difficult or too easy?

For some companies collecting feedback is easy.

Maybe even too easy: I’ve come across a big corporation, which collects feedback, stores it somewhere and does nothing with it. There are no resources to read it through.

While server space is cheap, and this might feel like an easy way to make customers believe you listen to them, don’t do like this. You are just wasting your customers’ time and fooling yourself at the same time.

This company I came across is not happy with how things are, analyzing text feedback just happens to be too difficult and expensive with their current methods and resourcing. Collecting feedback is too easy for them.

For some companies collecting feedback is hard.

They are often B2B2C companies with no direct link to their end-customer. Many of these companies spend tens or hundreds of thousands of Euros on consumer research, doing annual or biannual surveys leading to very few insights. And when it is done seldom, there is a huge internal pressure to do it properly.

This often leads to overly long surveys which customers hate. In many cases, the results are still disappointing. The data and analytics arrive too late to have any proper value. The management feels they “knew this already” as it can take the research agency as long as 3 months to find the target group to interview, do the study and report the results.

Luckily there are more and more success stories in this field as well: companies who manage to ask the right question in the right place at the right time, not to burden customers with the surveys too much and who have a consistent method for analyzing the data, extracting the insights and acting on feedback.

So that being said...

How to collect customer feedback?

To start with, you should understand the purpose and targets of collecting the feedback. Asking customer feedback is the very first step on the way to building a successful relationship between the customers and the brand. 

Actionable feedback should be one key source of insight behind your business development strategy. Who, if not your customers, know better how to improve your service?

Collecting customer feedback will help you to identify customers who’re at risk of leaving and stop reoccurring problems.

Also, happy customers are the best brand advocates you might ever have. And, as you might guess, the unhappy customers are the worst. According to the statistics, one happy customer will share their positive customer experience with 9 people. Unfortunately, the unhappy customers are even more likely to share their experiences: on average an unhappy customer tells about their bad experience to 16 people.

 
 

Before you start collecting customer feedback, make sure you know exactly:

  • what part of customer experience you want to improve,
  • how are you going to use the data,
  • which channel works when communicating with your customers.
  • All the three aspects are important for implementing a successful customer experience feedback collection strategy.

Resist the temptation

Your immediate reaction might be to create a survey and ask what your customers think about every single aspect of your service. Don’t. The statistics gathered by Quicktap Survey show that the more questions you have, the less time customers spend on every question.

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What to keep in mind when planning the survey? The more questions you ask – the less meaningful data you receive.

Long surveys have another downside as well: the more data you receive - the less likely you’re to go through all the data.  As mentioned in the beginning: asking for feedback and just storing that somewhere is not going to help you nor your customer. 

Keep it short. Our favorite metric system is Net Promoter Score® that consists of only two questions: a recommendation score and an open why-question. The free text feedback is a great source for insights while the numbers can be used in metrics follow up and target setting. You have probably already seen the standard NPS form many times.

 
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The NPS is short, simple and easy to implement and use. From Apple to Airbnb, from Slack to Microsoft, multiple global leaders are already using the metric to their advantage.

Where to ask for feedback?

Customer feedback survey placements largely depend on your customers. What kind of business do you have? What is your main channel of communication with your customers? Taking that into consideration, most common approaches include:

  • E-mail surveys
  • In-app surveys
  • Forms on web pages 
  • SMS surveys
  • But there are many more

Choose a channel which is the most natural one from your customers' point of view. If they are using your app, use an in-app survey. If they have recently made a purchase in your online shop, send them an email asking for feedback about the purchase. 

What is important to understand is that once a customer leaves feedback, it’s your turn to act.

Have a follow-up plan

We have seen small and large companies that collect customer feedback for the sake of... collecting customer feedback. Whenever you are asking for feedback, be ready to take action. Make decisions based on the feedback in a systematic manner. To be able to do this, we believe that the feedback should be analyzed in a manner that leads to actionable insights. (A list of customer comments is not actionable.) Read here how AI can help in making customer feedback more actionable

The golden rule of customer experience is to follow up with your customers.

Ideally, you would respond to every single customer in a unique way, but in order to save your time, automate the process by creating a template for each category of customers, depending on their scores and type of feedback. Building personal relationships with your customers will both raise the response rates in the future and the scores themselves.

Let’s start with negative feedback

Thinking that you can never keep an angry customer is a very frequent mistake among businesses. An angry customer, who leaves feedback, is often open for dialogue. They give you a chance to apologize and take the issue into account.

According to Bain & Company, companies that managed to increase their customer retention rates by as little as 5%, could experience revenue growth by from 25% up to 95%. Accurately solve every negative case adding a personal touch and showing how you much care about each of your customers. If you manage to solve the issue successfully, your unhappy customer, experiencing excellent customer service, might turn into a loyal one. 

Don’t forget about the happy customers!

Another mistake, done by many businesses, is that companies do not take any action with satisfied customers. Needless to say, happy customers often have ideas for service/product improvement, but they also are the biggest advocates of your company. Show them your love!

Even if you don’t reach out to every single happy customer as you might want to do with unsatisfied ones, there are different ways to improve the customer experience for both parties. Grow your happy customers into strong advocates of your brand. Do simple things – just sending a thank you note can work well.

Don’t collect customer feedback to keep it inside of your company. Create customer insights, take action, and, importantly, show your customers how you deal with the feedback they deliver.

Collecting feedback should nowadays be easy for almost anyone. Acting based on the feedback is the more difficult part. Luckily modern technology, and services such as Lumoa's, can help in dealing with that challenge as well.