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Executive need to listen

COLUMN | January 10, 2022 | 7 min read

How to be a customer-experience ninja

Five steps to building a world-class listening program that guides business decisions

By Matt Lombardi, global head of customer experience strategy at ServiceNow and Emma Sopadjieva, head of customer experience analytics at ServiceNow

Today’s customers are quick to punish companies for negative experiences. Nearly two-thirds of consumers say that within the past year they have avoided a brand because of a bad experience, according to a recent Medallia study. Investing in customer experience (CX)—a customer’s perception of your brand based on every interaction they have with it—pays off quickly and helps offset bad customer experiences. Forrester research shows that CX leaders grow revenue five times faster than companies that deliver a poor customer experience.. Companies that made CX a top priority saw gains of up to 20% in customer satisfaction and employee engagement while their customer service costs decreased by 20%, according to McKinsey.

Great CX starts with listening to your customers at key moments in their journey and using their feedback to drive business decisions. Companies that listen at scale are positioned to continually hone and improve their holistic customer experience. According to McKinsey research, brands that build comprehensive customer listening programs typically see their net promoter score (NPS)—the key metric that measures customer experience and predicts business growth—jump 10 to 25 points in the first year alone.

Despite the ever-increasing amount of attention around customer experience, a recent Qualtrics assessment found that about 80% of B2B/B2C organizations are inexperienced at developing customer experience programs. Many of these companies lack a comprehensive listening architecture, a robust CX governance model, strong analytics capabilities, and leadership accountability required to create customer-centric change.

To help those companies at the beginning of their customer listening program—or those that have hit a lull in their current efforts—we’ve laid out five battle-tested steps to jumpstart customer listening initiatives that build customer loyalty.

To get executive buy-in for investment in your customer experience program, start with the numbers. Tie your existing customer experience data to your financial and operational data to prove that providing a superior customer experience is good for the bottom line.

In a B2B environment, you can use regression modeling to show that satisfied customers grow revenue faster compared to their dissatisfied counterparts, while controlling for other variables that can impact revenue growth such as customer size, initial spend, location, tenure, and number of products owned. In this way, you will isolate the effect of customer experience on revenue growth and be able to quantify the relationship between CX and the bottom line for leadership.

80%

Percentage of organizations that lack experience developing CX programs

If you do not yet have voice-of-customer survey data, you can build the initial case for investment by citing existing research on the return of investment (ROI) of CX from consultancies such as Forrester, McKinsey, and Bain. In recent years, an extensive body of research has emerged across industries, geographies, and business models.

Once you have executive buy-in, it’s time to assess your organization’s customer listening landscape. Multiple feedback programs or survey platforms in use across the company can lead to data silos, obscure the end-to-end view of the customer experience, and scuttle cohesive improvements across the customer journey. That’s why it’s crucial to consolidate all survey tools and implement one robust customer experience management platform to house all of your company’s CX data.

When choosing among the multiple experience management applications in the market, look for these key capabilities:

  • Allows for multiple feedback collection channels such as email, website intercepts, text messaging, voice, mobile application, and in-app.
  • Enables the centralization and real-time analysis of direct and indirect customer feedback (surveys, social media listening, support case notes, interview and focus group data) and operational data associated with a customer’s journey (purchase history, website clickstream data, number of support interactions).
  • Provides best-in-class tools that convert customer feedback into actionable insights, such as dashboards, customer journey maps, and text and sentiment analytics to help you make sense of unstructured data and detect customer pain in real-time.
  • Offers a robust closed-loop workflow system that enables customer-facing employees to act on feedback and solve customer issues in the moment.

Stakeholder management is key. Consider and secure the support you will need from internal teams to implement and maintain your platform, including the IT function (to integrate your CX platform with the current tech stack); the data-engineering team (to enable the flow of customer experience data into the data warehouse and company dashboards); and the analytics organization (to help turn customer data into actionable insights and enable customer-driven decision-making).

To keep your team on track and accountable, outline your quarterly action plan for the next three years. Take a phased approach.

Start with a survey program that collects your topline experience score. This is the survey that will ask your customers about their overall satisfaction with your brand and will be the guiding customer experience metric for your organization. Most commonly, this topline metric is your NPS, due to its proven effectiveness at measuring customer loyalty. High NPS scores correlate strongly with business growth, and the ubiquity of NPS makes it a useful tool to benchmark your CX program against competitors.

Next, use your NPS survey along with additional qualitative research (such as customer interviews) to identify the experiences across the customer journey that are most problematic for your customers. Those are the touchpoints where you’ll need to set up additional listening programs to get a deeper understanding of what’s causing customer pain and how to resolve it.

Once you are ready to build or revamp your listening program, focus on boosting internal stakeholder confidence through impeccable survey design. First, for every survey program, select at least one high-level CX metric (such as NPS, CSAT, or Customer Effort) that you can use to benchmark against competitors. Competitive benchmarking data can be a powerful tool to rally teams and the entire organization to support CX initiatives.

Second, design your surveys to ensure you collect the accurate data you need to develop action and impact from customer insights. Simply asking your customers which products need improvement without asking why and how won’t help you understand where you need to invest. Also, be sure to include open-ended questions, which produce the richest insights and eliminate blind spots by allowing customers to be unconstrained and explicit in their feedback.

Once the listening infrastructure is in place, turn the customer voice into targeted insights and action everywhere—from the frontline to the C-suite—to improve customer experience and business performance. Moving from listening to companywide accountability to drive change is critical for long-term success. It needs to happen at the micro and macro levels.

  • 1:1 action: Employees are empowered to follow up on customer feedback, fix issues in the moment, and turn unhappy customers into brand ambassadors. Customers need to feel like their feedback is valuable and influential to your business, or they will be less likely to provide robust feedback in the future and more likely to take their business elsewhere. Give your sales, success, support, marketing, and product teams real-time customer feedback to strengthen client relationships, improve existing products and services, retain at-risk customers, and enable renewals and expansions.
  • Act at scale: 1:1 follow-up is not enough to drive systemic change within your company and revolutionize the customer experience. You must act on customer feedback at scale. Aggregate customer insights and equip your executive team and functional leaders with actionable data, helping them prioritize mission-critical improvements. Make sure those leaders are accountable for driving change in the customer experience.

Providing customer insights in reports or decks once a quarter won’t cut it. Use customer experience insights to make team decision-making more customer-centric and continuously demonstrate the business impact of your CX program.

Take full advantage of your insights by building clean, robust, and actionable dashboards relevant to key stakeholders and leaders throughout the organization. Check in with these stakeholders regularly to highlight key customer pain points, recommend clear solutions and improvements, and review progress of key initiatives.

To influence action, you must evangelize your customer data internally. Data by itself isn’t enough—you have to provide a clear, compelling narrative of what your customers are telling you, and the bottom-line risks of not doing enough or doing nothing.

You must continuously prove the impact that your customer listening program has on the bottom line.

Evangelize your customer data internally.

This is the only way to secure the resources and support you’ll need for a multiyear customer experience journey.

The time and effort spent in designing a customer experience program can go to waste if you can’t reliably show the value it will bring to the business. A successful customer-listening program drives CX improvement initiatives that have a measurable impact both on topline customer experience metrics (NPS, CSAT) and key business KPIs (revenue growth, customer retention, share-of-wallet).

You need to quantify and evangelize the business impact of each of the CX initiatives your organization undertakes. Don’t focus solely on how those efforts have driven increases in your CX metrics. Instead, demonstrate their impact on companywide KPIs and financial results.

For example, have you increased the sales of a product line by improving key product features based on customer feedback? Has your new digital experience helped fill the sales pipeline? Are you increasing your first call resolution rate by customer support rep training powered by customer input?

Here are some examples from CX leaders highlighting the business results achieved by acting on customer feedback:

  • PayPal used customer feedback to identify and reduce 20 customer pain points across their business. Result: an eight-point increase in customer service NPS and a $2 billion increase in transactional volume.
  • Farmers Insurance implemented a customer listening program that led to a half- billion-dollar increase in revenue.
  • Sunrise Communications flagged the types of customer comments that predicted negative behaviors and empowered their employees to engage at-risk customers and fix their issues in real time. The company’s NPS improved and its customer churn dropped significantly.
Once you’ve followed these five steps, your customer listening infrastructure should be centralized, coordinated across the entire company, and equipped to drive action at all levels of the organization.

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Author

Matt Lombardi is global head of customer experience strategy at ServiceNow.

Articles by Matt Lombardi

Emma Sopadjieva is head of customer experience analytics at ServiceNow.

Articles by Emma Sopadjieva