Research

Uncovering the “why” delivers higher research ROI for CX leaders

Uncovering the “why” delivers higher research ROI for CX leaders
Note: This article is part of our ROI Matters series, which explores the value of research ROI to C-suite executives and leaders in product innovation, customer experience, marketing and customer insight. 

It’s not enough to treat the symptoms of an illness—you need to understand the cause. Similarly, customer experience (CX) and market researchers must look beyond just fixing individual transactions and in-the-moment interactions with consumers to effectively demonstrate the return-on-investment (ROI) of their research efforts to the executive suite.

Although there are many effective tools available to measure and monitor CX performance, too many focus on discrete transactions and don’t provide a holistic view of the customer experience. Further, they don’t contribute to the systematic design of superior experiences. Data from key indicators such as Net Promoter Score (NPS) and Customer Satisfaction (CSAT) studies only deliver trend line data that is either going up or going down, when what teams need is insight into the key drivers of change at a more granular level.

What they need is a full picture—the “why” of customer behavior. CSAT and NPS are both important metrics, but they don’t reveal the attitude, emotion and intent of customers. Ongoing engagement with customers can help bridge this gap.

Give NPS and CSAT some context

Many smart companies use NPS and CSAT studies to measure how well they’re meeting the needs and expectations of their customers. NPS is a measurement system that tracks a brand’s promoters and detractors with the goal of gauging business performance from the perspective of the customer.

Although it offers many benefits, NPS does have some disadvantages. First, the score depends heavily on one experience: the customer’s most recent one. Second, it contributes to survey fatigue, as response rates for NPS and other surveys have declined significantly in the last decade. Third, it’s become susceptible to manipulation since gaining traction, as many companies started tying bonuses to these metrics, thereby incentivizing staff to game the system.

Perhaps most importantly, NPS doesn’t provide the why. It doesn’t tell you what to do next; it doesn’t identify parts of the customer journey that should be improved or how to fix those issues. So while NPS is a good starting point, companies shouldn’t stop there.

CSAT, another way of measuring customer experience, also has disadvantages, primarily that these types of studies are conducted well after the transaction.

That’s why it’s essential complement these with other sources of customer intelligence. Ongoing dialogue with your customers can provide the necessary context missing from NPS and CSAT to give you a fuller picture of your customers.

Research experience is customer experience

It’s not enough to just add another channel to gather customer insight. For research to drive better CX results, the research experience needs to be great to begin with.

Unfortunately, most people don’t like their experience participating in market research, according to the 2017 GRIT Consumer Participation in Research study. If companies don’t do anything about this issue, they risk losing the trust and participation of customers. The research experience is really an opportunity to improve your relationship with customers. But to do that, you must start by respecting the fact that the research experience matters.

At the very least, researchers and CX professionals should avoid sending long surveys or asking for information you should already know. Most customers today are not prepared to spend more than 20 minutes filling in a survey.

How insight-driven companies improve and enhance NPS

Forward-thinking companies are avoiding the inherent disadvantages of NPS through ongoing engagement with their customers. For example, Telstra, Australia’s leading telecommunications provider, adds context to NPS by creating “relationship memory” through My Telstra Experience (MTE), a customer insight community. It acts as sounding board that welcomes ongoing conversations with more than 11,000 customers who have contributed to over half a million customer engagements.

Telstra has generated seven years of robust longitudinal insights and a deeper understanding of its customers by connecting these engagements with NPS and transactional data sets. As a result, the company has improved customer experiences over time rather than just responding to something that’s happened in the past.

Alliant Energy has also leveraged its insight community, Power Thinkers, to bring residential customers closer to the business. The utility company needed to rethink how it showcased its low-cost, clean energy options, and through Power Thinkers, it’s able to tap thousands of residential customers for feedback that help make decisions about new offerings and marketing communications.

Better still, Alliant has improved the overall customer experience. The organization has seen regulatory complaint numbers drop by 50% in the span of two years, while its customer satisfaction increased by 15 index points. Meanwhile, Alliant Energy’s Net Promoter Score increased by 88%—growing from 17 in 2014 to 32 in 2016.

Relationships bring better customer experiences

At Vision Critical, our experience working with thousands of brands tells us that a relationship-based approach to customer intelligence delivers better research and customer experience, and independent research backs this up.

A study conducted by Forrester to investigate the ROI of this approach found Vision Critical’s platform helps companies make the insight gathering experience a positive one, driving actions that reinforce customer relationship and build loyalty. In addition to the insight collected contributing to a better customer experience, the very act of cultivating these relationships through insight community also contributed to a better customer journey. Further, Forrester found this relationship-based approach improved the overall customer experience leading to higher engagement, better response rates and stronger customer relationships.

Most of all, an insight community gives you context, so you can understand the why, and go beyond just fixing individual transactions and in-the-moment interactions with consumers. And that’s where research really yields ROI.

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