Avoiding wrong statistics, measure what matters to customers (part 2)By Paul Laughlin
This is part 2 of Gerry Brown’s series on baseball, I mean why you need to measure what matters to customers.
Gerry’s advice builds on our month of advice about applying analytics. Annette Franz shared why predictive analytics matters for CX leaders. Peter Abraham shared why better measurement of marketing effectiveness needs to precede media spend.
Now, over to Gerry again, to build on part 1 & focus on a positive response to his challenge…
Customer experience lessons from the Oakland A’s
There are significant parallels between the A’s and business today, and how many companies still use outdated and irrelevant statistics to delude themselves into thinking they are delivering a great service, and that their customers love them. Realistic, forward thinking businesses are developing new approaches to customer experience by rethinking customer engagement and being smarter about what data they use to build and maintain their strategy, and how they use this insight to retain and ‘sign’ new customers.
In the early 21st century, many businesses were as profligate as football teams and threw large sums of money at technology companies that flashed their eyelashes at them. This resulted in the business opening their kimonos to let them install high priced CRM systems, flashy CTI solutions and other shiny new toys that, like many footballers, blew the money, garnered the headlines, but never delivered the goods.
Companies would have been better to have been a disciple of Bill James, rather than solely worshipping at the altar of Hi-tech. His overriding message in his Abstracts was that people like Billy Beane were on the receiving end of a false idea of what makes a successful baseball player, and that if you challenge conventional wisdom you’ll find ways to do things much better than they are currently being done. This is a seemingly obvious reverse play on the definition of insanity.
The new wave of Customer Engagement & PCOs
Organizations that are redefining customer engagement are now implementing that advice without perhaps realizing its genesis and are starting to reduce the inefficiency caused by sloppy data or tired, outdated metrics such as NPS or CSAT. It’s not that I have anything particularly against either of these, but they both represent a single number metric and, in terms of truly and fairly valuing the experience that each customer has, both are inadequate. And in those cases where a deeper, more meaningful long-term relationship is desired, it’s wholly lacking in emotional or personal context.
Asking a customer whether they would recommend a company to their friends or colleagues (and surely never knowing if they have) and whether they are satisfied seems mildly interesting, but far from conclusive in identifying both current company opinions and future decisive actions. And I’m not alone in this view. A poll conducted by Marketforce showed that 66% of respondents believed that a combination of metrics, especially those featuring experiential and emotional values, will be the most widely used method in the next 5 years.
Understanding the relationship between customer actions, attitudes, responses and value created will identify what makes a difference in customer terms and creates Positive Customer Outcomes (PCO). This is a measure based on a combination of values that I’ve developed and started to use with customers as an effective and enduring measure of success in individual interactions and over the longer term. As it is far more definitive in both name and value, it also reflects positively on the employee or business process as it’s difficult to have a high PCO score without an equally positive employee performance. That in turn can be translated into increased sales, customer retention, employee engagement and other more qualitative metrics that are more easily understood and can be measured and analysed for their effect on the overall business.
The early baseball statistics innovators realized that each event on the field had an expected run value and contributed to the overall performance of the team. This in turn showed how to account for a player’s performance by the number of runs scored. But how much each event on the field was worth was much harder to figure out. On drilling deeper, teams found that it contained rich seams of data that could provide the answers that had never previously been recorded or investigated fully.
Find the real value and what counts most for customers
Similarly, in business, every action has a PCO value and the statistics that you need to consider and combine will change depending on the type of business, the role of the contact centre and/or other interactions across various channels. But they’re uncovering. As an example: rather than just figuring out success based on overall sales volume or individual purchases, we should look deeper. An organization I worked with started to take a more in-depth look and went beyond the basics to ask some much more creative and illuminating questions:
- What is the ratio between store visits, web sessions or phone calls per £ of sales?
- How many customers does each customer service agent speak to for every £ of revenue?
- What is the average call length of successful (sale) and unsuccessful (no sale) calls?
- Does a customer buy more when they call early or late in the day?
- Does this depend on hold time, or how easy it was to get to the right place, or speak to the right person?
These may seem inconsequential, irrelevant or difficult to uncover, but in this world of excessive excitement caused by an unrealistic overdependence on often expensive Big Data, this data already exists, is available and at a low-cost because you already own it or can quite easily get it.
As Billy Beane discovered, just because nobody else was interested in a certain player, didn’t mean they weren’t valuable. In fact, for him, as time went on and his quirky selections were vindicated, this made them even more potentially valuable.
Bringing Data to Life – Turning Insight into Action
Maximizing the value of your insight may seem obvious, but it’s clear from my own interactions as a customer that very little that I say or do, or how I use products or services, is ever used creatively to deliver a better experience.
Many organizations continue to operate with beliefs and biases, many of which are long held, honestly formed, but fatally flawed and operationally inaccurate when used to evaluate performance and determine customer needs and preferences. As the grandfather of customer experience, Heraclitus, once remarked, “The only thing that is constant is change.” Billy Beane showed that by continuing to expand his statistical view, he found traits and player attributes that everyone else was overlooking. Even when it was clear that the A’s were onto something, many in baseball derided it as just luck and continued to believe that baseball statistics were the pure accomplishments of men against other men, or perhaps in business parlance, one company against another. But this was wrong, and as Bill James noted, “They are accomplishments of men in combination with their circumstances”. A subtle, but extremely critical difference.
But, innovative journeys into data and insight don’t just benefit customers. In his recent eBook Design Driven Feedback, Max Israel puts it succinctly when he describes the value in combining art with science to elevate enterprise feedback management. “Over time, design-driven feedback has come to encompass not just how feedback feels from the point of view of a person asked to share it, but also the legions of employees to whom we direct it. In short, design-driven feedback is a movement dedicated to leveraging not just technology and analytical skills but also design and creative ones to make feedback deeply engaging for consumer and worker alike. It has the power to do both.”
Humanising Data & a leap of faith
These deeper and more personal insights revive and enhance how companies use customer experience data. By ‘humanising’ data, you can also inform staffing decisions, technology investments, new product introductions and in turn develop huge advances in organizational engagement. This has a waterfall effect and can cascade over many parts of the business refreshing, cleansing and bringing fresh new life to help the business grow and prosper. This is vital as customers are changing fast and conventional wisdom may have had its place in the sun.
Businesses must take a certain leap of faith and start looking in places and finding stats that don’t appear to interest others, and to turn that data into insights that create rich and contextual customer experiences. Much as we hear about ‘intangibles’ among top athletes, there are additional layers of creativity, innovation and personalization that go beyond just connecting with customers, as there are connecting bat to ball. So, don’t slow down or stop swinging for the fences. As Babe Ruth said, “Never let the fear of striking out get in your way.”
Are you measuring what matters to customers?
Thanks to Gerry for that advice & timely challenges. I’m always going to be a fan of someone who spreads the message of acting on insights & humanising data. As I mentioned in Part One – you can find more of Gerry’s nuggets of wisdom in his latest book: “When a Customer Wins, Nobody Loses“.
How do you respond to Gerry’s challenge? Are you confident that you have the right metrics in place already? Have you slipped into just measuring what others do or has been agreed in the past?
Perhaps now is a good opportunity to stop & reflect. Where could you find the insights to guide you? Time spent ensuring you are measuring the right things can be huge time saved in wasted execution of fire-fighting. Enjoy your reflections.