Insights | By Heidi Wisbach
Get Hard ROI from CX Innovations
What is the value of the Customer Experience improvement program?
One company talked to us recently about a “stalled NPS (Net Promoter Score)” program and their CEO’s desire to report their continuous improvement in CX. If they could not move the dial on NPS, how would they demonstrate value, and prioritize and rationalize CX re-engineering?
Well, the NPS part of the conversation is for another longer Insight article. However, regardless of a company’s survey method (CSAT, NPS, CES, etc.), knowing where the CX gold is buried, how to mine it and how to measure it, is absolutely key for our clients and is the subject of this Insight.
Most of our clients have either a CX organization either embedded in business units or are running a CX Operating Model (CXOM) across the enterprise. Of course, there are different levels of maturity across these companies, as well as within their CXOM’s itself, however, they all start with the same question. What is the best interaction point to work on first?
There are several different perspectives on this very question. One method uses Voice of the Employee as proxies for the customers and targets friction points that cause complaints or inefficiencies. Another method adds in captured qualitative Voice of the Customer through observation, focus groups, and interviews. A third method adds in captured quantitative insights from separate data stores both in the organization and from 3rd parties.
While all of these aims to identify the important interactions within the universe of touch points, they provide varying degrees of confidence to the CX team. Added to that is an underlying assumption that we are researching the “right” personas. Clayton Christensen’s Innovator's Dilemma, rightly calls out the dangers in listening to and building for the wrong customers. Our philosophy focuses on determining the personas, and the “right” persona, while we capture both quantitative and qualitative data.
For this discussion, let’s assume that we are using qualitative VOC and have captured attitudinal and behavioral information for prioritization. In other words, how important is the interaction point and does it meet the customer persona’s expectations. These become the attributes by which we can apply a technique that was created by Professor Noriaki Kano of Tokyo Rika University and his colleagues.
The Kano model categorizes attributes of a product/solution or, in our case, an experience:
- Satisfying basic needs: Must Be’s (or Must-Haves) are Experiences or attributes of the solution, that if missing, causes it to be viewed as subpar or incomplete. These fulfill basic needs and are highlighted by the red bar.
- Satisfying performance needs: Loyalty Builders (One Dimensionals) are the criteria for good performance, reinforce brand expectations and drive more loyalty. These are the blue bar and as the performance of the experience gets better, it drives more satisfaction.
- Satisfying excitement needs: Delighters allow differentiation and delight by delivering on unmet needs. These are the green bar and as we add more of these features, we surprise and delight customers.
The Kano model is built for changing conditions and expectations. Over time, technology moves forward, competitors catch up or innovate new experiences and today’s differentiators become tomorrow’s me-too experience attributes. This march downward of experience attributes is common today. Yesterday’s cool new features are today’s standard equipment and tomorrows must-haves. Kano’s model helps identify and track the change as Delighters become Loyalty Builders, while some Loyalty Builders become Must Haves. And if an experience is missing in Must Haves, then it creates dissatisfiers or friction points in the marketing and sales process.
An example often used to describe this evolution is cell phone battery usage. Initially, they were huge and lasted only a couple of hours, but consumers were excited by the product not being plugged in. Now cell phone power storage has moved down from potential delighters all the way to must-haves, as technology advances have made them a lot thinner and lighter today. In fact, as a must have if we don’t get 8 hours out of them, we are frustrated! Plus many more features are now standard, and we’re looking for the next best feature to Delight.
Another variable to track in CX is the expectation of the customer. As we are measuring whether or not the customer’s expectations are met, or exceeded, it is necessary to understand what expectations they have. Our customer research capabilities allow clients to not only get a good understanding of this but also can be applied over time to allow for changes in those expectations (like the battery example).
Having the capability to identify expectation changes is important to our clients, as they rightly point out when it comes to their customer expectations, “the goal posts are moving.” Customer expectations are impacted not just by your competitors, but what other companies (like Facebook, Amazon, Netflix, and Google – FANG) are innovating as well. Customers may be delighted by a cool experience somewhere else and then expect that new experience everywhere. We use several tools to anticipate future expectations, like trend analysis and technology sensing analysis.
In summary, research gives us the list of prioritized touchpoints for the right customers, and in effect, tells us where the gold is buried. Then, for most organizations, there are still too many improvement opportunities to handle all at once. So we prioritize by friction point, loyalty builders and delighters. Then we look at the impact on our customers. Is a large segment affected? Is it a major frustration or minor inconvenience? In our experience, most programs target a combination, prioritizing the dissatisfiers, adding Performance Criteria that is highly correlated to loyalty and finally look at some of the innovative game changers for unmet needs. Now it is a question of how to mine it, or how to redesign the interaction in a cost-effective way creating an exceptional experience - and we’ll cover how to do that under journey mapping in another Insight.
By the way, the opposite is also true, if we target interactions that are not important, you could be spending a lot of resources and effort on things that will not move the dial (NPS, Profit, Sales, etc.).
At FROM, our customer research capabilities enable clients to get a good understanding of customer expectations using the KANO model, and allows us to build a model for clients can be applied over time anticipating changes in those expectations (like the battery example). We use customer research to track customer expectation changes and Journey Mapping to align the organization, identify technology to enable and innovate the new experiences, and visualize those future state customer experiences. We measure the value of the journey steps to each persona and can utilize this to determine how effective our changes are and what to target for the next set of activities for innovation. Ready to talk? Call us to continue the conversation and find out how we can help your organization get to the next level.