The uptake of AI in customer experience is very visible in its use across diverse industries, from manufacturing to telecommunications. We then concluded that AI is changing the way businesses engage with their customers.

Moreover, with AI-driven personalization expected to significantly impact market growth, it’s clear that AI is not just a supplement but a cornerstone of modern customer experience strategies.

On the downside, relying solely on it, such as a known AI technology which is Generative Pre-trained Transformers GPT presents limitations. Challenges such as loss of the nuanced human touch in customer interactions are notable, with a significant portion of users expressing concerns over the technology making content for example feel less authentic. (Master of Code Global)​.

This article will talk about the comparative effectiveness of using Lumoa and GPT, and a hybrid approach integrating both. By analyzing real feedback across these scenarios, we aim to uncover not only how each performs in isolation but also how they complement each other to deliver superior customer insights and operational excellence.

The Rising Importance of AI in CX

Let’s rewind a bit and check out what’s happening. In our State of AI in CX findings, a notable 70.7% of businesses already utilize AI within their CX strategies, and an overwhelming 86.5% plan to increase their use of AI in the coming years.

This growth is driven by AI’s ability to streamline operations and offer personalized customer interactions, significantly enhancing efficiency and customer satisfaction. For instance, AI-powered chatbots have become crucial in managing customer inquiries, dramatically reducing response times from minutes to mere seconds.

However, integrating AI into business processes presents substantial challenges. Nearly 30% of companies have yet to adopt AI, often due to technical and logistical hurdles or concerns about data security and privacy.

Now let’s talk about GPT. While it plays a role in modern business ecosystems, relying solely on GPT for capturing customer feedback often falls short. GPT’s generalist approach may overlook nuanced insights that are crucial for targeted action. How’s that possible?

Our Approach: Real Feedback, Real Scenarios

Using real customer feedback, we conducted a quick study to uncover the best ways to leverage GPT capabilities with a focus on insights gathering. The study was designed to compare three distinct approaches:

1. Using GPT Alone: This scenario tested the capabilities of Generative Pre-trained Transformers (GPT) in analyzing and categorizing customer feedback without additional support. The goal was to assess how well GPT could handle the data in terms of understanding and insight generation.

2. Using Lumoa Alone: In this setup, we utilized Lumoa’s proprietary AI to analyze the same set of customer feedback. Lumoa’s strengths in data precision and its ability to derive actionable insights from customer data were put to the test, showcasing its effectiveness in a standalone capacity.

3. Integrating Lumoa with GPT: The final scenario combined the data processing power of GPT with the targeted analytical precision of Lumoa. This hybrid approach aimed to demonstrate how the integration of general AI with specialized CX analytics could lead to a richer, more actionable understanding of customer feedback.

Each piece of feedback was processed under these three scenarios to not only evaluate the performance of each tool individually but also to explore how they could complement each other in a real-world application. We carefully selected a diverse range of feedback examples to ensure that our findings would be comprehensive and applicable across various customer interactions.

The 3 Feedback Problem

In our study, we analyzed a dataset of 10,000 public shopping app reviews using the three distinct approaches described earlier. This analysis allowed us to compare the effectiveness of each method in building categories to surface relevant feedback and extract actionable insights that a business could act upon.

To better illustrate our findings, we will focus on three distinct public reviews and observe how they are categorized depending on the method chosen. Below are the public reviews we will use:

1. “Easiest to use, works the best with zoom feature I use as a severely sight impaired person. Love how easily it works with the Clubcard feature as well. It’s great.”
2. “Totally rubbish, keep asking for valid phone number although I had put the correct number in three times.”
3. “Does not give delivery updates as stated.”

The Findings: Clarity, Actionability, and Efficiency

GPT Alone

tl;dr – Almost 65% of our 10,000 app reviews ended up in the category “General”. This is true also for the 3 feedback above, even though they highlight completely different problems.

GPT’s application to topic modeling revealed its limitations in handling nuanced categorization. By testing it against the 3 feedback samples, we discovered that GPT primarily grouped all of it under a ‘General’ category. With  6492 (64.92%) of the total feedback similarly classified, highlighting significant challenges:

• Clarity: The clarity of GPT’s feedback categorization is notably low. Its approach, which broadly sweeps diverse feedback into a ‘General’ catch-all, lacks the granularity needed to distinguish between different customer issues and concerns effectively.

• Actionability: The insights derived from GPT’s categorization are critically limited due to its generic grouping. Businesses seeking to address specific issues or enhance particular aspects of the customer data may find this level of generality confusing and adds more manual work, as it provides little concrete direction for targeted actions.

• Efficiency:  While GPT is capable of processing the data, its approach to topic modeling is often less efficient in terms of outcome relevance and operational utility. GPT tends to group a substantial portion of feedback into a broad category. This tendency highlights an inefficiency in achieving the depth of categorization necessary for targeted business strategies.

As you can see from the visual above, each piece of feedback, representing a range of customer experiences and issues, was indiscriminately lumped together which highlighted these samples within the expansive ‘General’ category. Such merging into a singular, vague category shows a significant drawback of using GPT alone for customer feedback analysis.

Without the capability to finely parse and categorize feedback, GPT falls short in providing the depth of insights necessary for targeted business strategies. This highlights the essential need for more sophisticated tools like Lumoa that can complement GPT’s broad capabilities by providing the necessary detail and precision in feedback analysis.

Lumoa Alone

tl;dr – Only 24% of our 10,000 app reviews ended up in the category “General”. The 3 feedback have been assigned to their proper category.

Lumoa, on the other hand, demonstrated its categorization capabilities by specifically assigning feedback to distinct topics like ‘Usability’. (See visual below)

Unlike the broad ‘General’ category prevalent in GPT’s approach, Lumoa’s AI excelled at drilling down into the details of each feedback piece, accurately assigning them to specific and relevant topics. For instance, issues regarding ease-of-use, which GPT had lumped under ‘General’, were identified and grouped by Lumoa into a dedicated ‘Customer experience’ category along with 3290 similar feedback entries.

• Clarity:  The clarity with Lumoa is markedly improved, with specific customer issues being categorized correctly, thereby facilitating a more focused approach to understanding and addressing customer concerns.

• Actionability:  With feedback correctly slotted into specific topics, the potential for businesses to take targeted action skyrockets. For example, the ease-of-use issue feedback can directly inform IT and support teams, enabling them to prioritize and address this specific area of concern.

• Efficiency: Lumoa enhances operational efficiency by enabling quicker and more effective decision-making. With its more accurate categorization, teams spend less time deciphering feedback and more time implementing solutions that directly address customer needs.

Let’s see what the other two feedback looks like:

This more accurate categorization by Lumoa offers businesses the clarity and actionability they require for direct and impactful responses to customer feedback. The rest of the feedback samples are also in their own categories. With the ability to classify feedback accurately into distinct topics like ‘Quality’, and ‘Delivery, Option and Clothes’, businesses can now channel their resources more effectively, ensuring that every piece of feedback is utilized to its fullest potential to enhance the customer experience. While this is already impressive enough, we didn’t stop here. Let’s see how well can Lumoa + GPT work together. Let’s check out what they look like when we use both Lumoa plus GPT.

Lumoa and GPT Together

tl;dr – A little less than 24% of our 10,000 app reviews ended up in the category “General”. The 3 feedback are assigned to their own proper category, and the category is easier to understand.

The combined use of GPT and Lumoa AI enriches the customer feedback analysis beyond what is possible when each technology is used separately. While the integration does not significantly reduce the ‘General’ category more than Lumoa alone, it enhances the comprehensibility and relevance of the categorizations. Let’s check out the ‘ease-of-use’ feedback and what it looks like now.

The combination of GPT and Lumoa AI has elevated customer feedback analysis to a new level of sophistication. The feedback that was once relegated to the ‘General’ category from GPT alone, and the ‘customer experience’ category from using Lumoa alone, now finds its place in a well-defined topic that resonates with genuine cx and concerns; in this case – Process topic.

• Clarity: The integration of GPT’s natural language processing capabilities with Lumoa’s precise analytics significantly enhances clarity. This synergy allows the system to produce topics that are not only accurately categorized but also phrased in ways that are easily understandable, aligning closely with how humans

• Actionability: By leveraging both technologies, this approach maximizes the actionability of insights. In addition to similar findings from using Lumoa alone, It also enables businesses to swiftly identify and act on specific areas of customer feedback, aligning interventions closely with customer needs and sentiments.

• Efficiency: While the combination of Lumoa and GPT may involve more complex processing, which can extend the time taken compared to using Lumoa alone, the quality of the output justifies this approach. The system efficiently processes and refines feedback into well-defined categories that significantly aid decision-making processes.

The nuanced understanding of “human language” and the interconnectivity of themes that GPT brings to the table, combined with the precision of Lumoa’s topic modeling, translate into topics that reflect a natural, human-like grasp of the feedback content. Let’s see what the other two feedback look like with this combination.

The ‘GPT + Lumoa’ method demonstrates how the fusion of AI and specialized analytics can create a harmonious and potent tool for businesses. This hybrid system doesn’t just process data; it interprets it in a way that aligns closely with human reasoning, setting a new standard for what businesses can expect from AI in customer experience optimization.

This hybrid approach may set a new benchmark for what businesses can expect from AI in optimizing customer experience, making it a compelling choice for those seeking to enhance their analytical capabilities and customer insights.

Addressing Security in AI Feedback Analysis

You can’t ignore the potential risks when implementing AI technologies, especially in sensitive areas like direct customer feedback. Even with its own security measurements and protocols, using GPT directly with customer data presents specific security and privacy challenges that need careful consideration and management.

Potential Risks of Using GPT with Direct Customer Feedback:

• Data Privacy and Security: GPT processes vast amounts of data, including potentially sensitive customer information. Without proper safeguards, this can lead to data breaches and privacy violations.

• Bias and Accuracy: GPT models can inadvertently learn and perpetuate biases present in their training data, which could lead to skewed or unfair outcomes when analyzing customer feedback. Perhaps they don’t really train their GPT models with your data, but are you willing to take that risk? Maybe not.

• Transparency and Control: There is often a lack of transparency in how AI models like GPT generate their conclusions, which can make it difficult for businesses to understand and control how customer feedback is interpreted.

The Advantages of Partnering with a Vendor Like Lumoa: Partnering with a vendor like Lumoa, which is equipped with ISO certifications (ISO 27001) and GDPR compliance, offers substantial benefits in mitigating these risks. Lumoa’s commitment to data protection and ethical AI use provides a robust framework for safely implementing AI in customer feedback analysis.

• ISO Certifications and GDPR Compliance: Lumoa adheres to international standards and regulations, ensuring that all customer data is handled securely and in compliance with the strictest data protection laws. This adherence helps prevent data breaches and ensures that the privacy of customer information is always maintained.

• No Model Training on Customer Data: Lumoa does not use direct customer feedback to train its models, which means the data remains untouched and unmanipulated. This reduces the risk of exposing sensitive customer information and ensures that the integrity of the data is maintained.

• Anonymization of Sensitive Information: Lumoa offers options to anonymize sensitive data, removing personally identifiable information (PII) from customer feedback before it is processed. This not only protects customer privacy but also helps businesses comply with data protection regulations.

Final thoughts

There you have it! Using both GPT and Lumoa, we showed the impact of integrating a powerful AI into customer feedback processes. It not only improves the efficiency and clarity of data processing, but also makes the insights generated highly relevant to specific business needs.

Superior Balance of Comprehensibility and Business Relevance: The combination of Lumoa and GPT provides a balance of comprehensibility and business relevance. Lumoa’s specialized analytics refine the broad capabilities of GPT, ensuring that the data processed is not only comprehensive but also closely aligned with the strategic objectives of the business. This balance is needed for companies aiming to leverage customer feedback effectively, as it allows for a nuanced understanding that is both deep and wide-ranging.

Security and Privacy Benefits: Using a specialized vendor like Lumoa for sensitive data processing offers significant security and privacy benefits. Lumoa’s adherence to ISO standards and GDPR compliance ensures that all customer data is handled with the highest security measures. Furthermore, Lumoa’s commitment to not training its models on customer data and providing options for anonymizing sensitive information ensures that customer privacy is maintained at all times. These practices are essential in the digital age, where data breaches and privacy violations can severely impact a company’s reputation and customer trust almost on a daily basis.

The Importance of Ethical AI Use: Companies are increasingly integrating AI into their operations, so ethical AI usage becomes increasingly important. The combination of using Lumoa with GPT serves as a model for how AI can be used responsibly in customer experience strategies. Transparency, data integrity, and privacy can help companies avoid the pitfalls associated with AI technologies.

For businesses looking to enhance their customer experience through AI, the insights from this article provide a clear message. The integration of GPT with specialized CX analytics like Lumoa offers a powerful combination for turning raw data into actionable insights. We invite businesses to consider this hybrid approach not just as a technological upgrade but as a strategic necessity for staying competitive in a customer-centric market.

It’s both exciting and challenging to integrate AI into customer feedback analysis. But, with the right tools and approaches, businesses can navigate this path successfully, leading to enhanced customer satisfaction and business growth. Interested in learning more about Lumoa’s capabilities? Book a demo now and we’ll help you achieve your goals and KPIs

The post Lumoa and GPT: How Lumoa Complements GPT for Actionable Insights appeared first on Lumoa.

A multi-dimensional CX strategy can be much more beneficial for your brand than one-dimensional customer service. But, developing a CX strategy that works is much more challenging than simply fine-tuning customer service processes. This is because CX involves many factors that are outside your direct control. 

Even so, devoting time and resources to planning your CX strategy is worth the investment because giving your customers sub-par experiences is one of the most effective ways to drive them away. The Salesforce State of the Connected Customer Report found that 88% of buyers say their experience is as important to them as a company’s products or services. 

So, how can your business win over this growing contingent of experience-focussed customers? Reviewing your existing CX strategy is a good place to start.

The Constant Evolution of CX

We already know that CX is an evolved form of customer service with a broader scope. It starts even before a consumer has their first interaction with your company and is an ongoing process that continues even after a sale has been made. Thanks to its expansive nature, CX strategies are constantly in flux. Watch the webinar replay of Redesigning CX programs: Enhancing the Way We Listen, Analyze, and Engage with Customers to learn more.

External factors like market demand, pricing trends, or competitors’ initiatives can arise at any time, setting off a chain reaction that affects your overall CX. Against this shifting backdrop, your business needs a clear and consistent CX strategy to hold on to. 

Hubspot’s annual State of Service Report found that 90% of surveyed CX professionals felt that customer expectations have increased to an all-time high. Adapting your CX to meet these higher expectations can differentiate your brand and the competition. 

One critical step in doing this is to identify key performance indicators (KPIs) that you can track while tweaking elements of your CX. From lead conversion rates (CVR), click-through rates (CTR), and Net Promoter Scores (NPS), companies use multiple metrics to analyze the effectiveness of their CX strategy.

How to Spot Gaps in Your CX Strategy

Tracking this data through CX management software gives companies the freedom to tinker with other aspects of CX, like the number of customer touchpoints or level of personalization, with measurable KPIs to judge the results.

Fine-tuning your CX elements is a constant exercise. While your customers should find familiarity in their interactions with your company, the relationship should never stagnate. That’s why it’s essential to continuously iterate new approaches to see what works best and integrate those into your CX strategy.

How customers experience your brand is more important than ever before. In Hubspot’s 2022 State of Service Report, 85% of the customer service agents agreed customers are more likely to share both positive and negative experiences. Your customer experience strategy can make the difference between having an advocate or a critic who can influence other buyers in their circle.

Is your CX strategy up to the task of meeting customers’ expectations going into 2024? Today, 73% of customers want companies to cater to their unique needs and expectations. Naturally, delivering this kind of personalized service at scale will require a well-crafted plan. 

Since you’re already considering upgrading your CX strategy, it’s quite likely you’ve already covered the basics. That is, you’ve conducted diligent research on your customers to understand their motivations, created buyer personas for each demographic, and solicited inputs from all the CX stakeholders among your company colleagues and business partners (customer service reps, shipping partners, CX software providers, etc). 

Now, it’s time to drill down into the details.

Define Your Brand’s Core Value

When auditing your CX strategy, the first step is to define your brand’s value asset. This is the quality that draws people to your brand. Your new CX strategy should emphasize your brand’s value to your target audience.

Once you’ve answered this all-important question, the answer will give you a better idea of what shape your overall CX should take.

Identify Customer Journey Pain Points

The goal of this CX audit is to identify and hopefully eliminate all of a buyer’s potential pain points in their customer journey. To do so, you need a detailed list of all the potential touch points in the customer journey. Then, use metrics like churn rate, CSAT, and CVR to gauge which touchpoints are negatively impacting CX. 

Benchmark Against Competitors

Competitive analysis is also highly insightful during a CX audit. There’s always something to be learned from your industry peers, especially if they enjoy the support of a large customer base. 

What value are they delivering to their customers that your company is not? Comparing your current CX strategy to brands that enjoy a reputation for great CX will highlight areas where you can improve.

Implement your Customer Experience Strategy

With your CX friction points now clearly visible, the time has come to start smoothing them out. A viable solution and new direction for your CX strategy will look different depending on your findings during the audit. Some companies might need to bring in an external CX agency to affect change, while others might realize that their in-house team is capable of leading the transformation. 

In some scenarios, upgrading the CX means upgrading the company’s tech stack. Multiple CX software as a service (SaaS) solutions like Lumoa are available, which automate many CX tasks, offer a granular perspective for in-depth analysis, and streamline upgrading your CX strategy.

By the way, we also made a Definitive Guide to Creating a Standout Customer Experience Strategy Template with an editable template itself! 

Five Ways to Improve Your Existing CX Strategy

Every company’s CX solutions will be unique. With that said, there are best practices in the CX industry that you should consider when developing a strategy for your own business. These include: 

1. Reduction Friction
   

   Your CX vision should include making every interaction with the customer as smooth as it can be. When you require extra effort from your customers, you risk turning them off the experience. Try not to prolong interactions or resolution times by providing extra services. 

   In 2020, Zendesk’s Customer Experience Trends found that 69% of consumers attempt to solve issues on their own. Clearly, people prefer minimal interactions, even with brands they love. So, your CX strategy needs to ensure your customer journey is smooth, with as few touchpoints and channel switches as possible.

2. Set Clear Expectations
   

   Don’t make the mistake of trying to stand out from competitors by promising customers the world. When communicating with potential buyers or long-term clients, the golden rule is to under-commit and over-deliver. Nothing can harm your standing in a customer’s eyes than making a promise but failing to live up to it.

   Also, your customers will feel more at ease on their buyer’s journey when they know what to expect. By clearly communicating the terms of your shipping policy, returns and exchange policy, and support coverage, you remove doubt from the customer’s mind. This makes them more confident about doing business with your company.

3. Express Appreciation
   

   When customers feel valued by your brand, they will want to keep coming back to relive that experience. They are the ones keeping you in business, and letting them know you are thankful for their support fosters loyalty toward the brand. A thank you note or a freebie sent along with a shipped order is a great way to show gratitude.

   Another key way to let your customers know you appreciate them is to come right out and say it. Highlight your most valuable customers on your social media and website. Make their importance to your business clear by acknowledging their contributions to your success. When you share the love with your customers, they will love you right back!

4. Personalize the Services
   

   Nowadays, CX is all about personalization. Research from Deloitte found that companies that focused on personalization improved customer loyalty 1.5 times more effectively than brands that did not devote resources to it. A growing number of consumers now expect companies to be able to service their requests according to their preferences without having to specify them every time.

   “Warm transfers” are a huge help in this area. This is where customers can switch to a new channel without needing to repeat themselves to a new agent. Don’t let your customers feel like just a number; add a human touch to your interactions.

   AI and ML will be able to offer customers a degree of personalization they have not yet experienced because of their ability to:

   • Deliver individualistic, personalized experiences by analyzing each customer’s purchasing history, browsing habits, and demographic information
   • Offer 24/7 customer support through AI chatbots and interactive guides.
   • Provide valuable insight into customer journeys by mapping each customer interaction
   • Eliminate the possibility of human error impacting a customer’s interaction with the company.
     
     
5. Embrace Technology
   

   It might seem counterintuitive to champion technology as a game-changer for CX since having a human touch plays such a big part. But that doesn’t mean that automation has to feel cold or unwelcoming. If used correctly, CX SaaS can help make customers feel like they are receiving special treatment.

   Automated services like chatbots allow customers to schedule their own self-service appointments. Your customers will appreciate having access to company resources at their convenience. 

   Automation can also be extremely useful for communication services. CX software can be used to conduct automated surveys that gather helpful information about your customers. Automated emails help find new customers, bring back lapsed ones, and build brand awareness among your target audience. To enhance the effectiveness and legal compliance of these efforts, incorporating email disclaimers in automated communications is a smart practice.

Future Trends to Incorporate into Your CX Strategy

The tips above are evergreen advice; they always have and will always positively affect customer experiences. But in CX, for every piece of timeless wisdom, there is a trend-based development that is very much a product of its time. 
In the coming months, as 2024 brings new changes and trends, the CX industry is going to be shaped by the following movements. Being mindful of them can help you optimize several aspects of your CX strategy.

Increased Use of AI

As AI technology increases its capabilities, it will directly impact chatbot quality. Newer AI language models use Natural Linguistic Programming (NLP) to authentically replicate human speech patterns and have advanced sentiment analysis capabilities that let them register emotion. All these upgrades will lead to a new generation of chatbots that sound just as human as yours or I!

Also, data analysis in CX will become much more exhaustive as customer relationship management (CRM) software becomes adept at gathering data. This CRM software will need AI and machine learning (ML) features to present a meaningful analysis of all that data.

If you’re curious to know the role of AI in customer feedback analysis, we’ve got it covered with a practical guide and explain how you can be more successful using AI-powered tools.

More Data-Driven Analytics

Advanced analytics is enhancing the CX industry.. Gartner’s 2023 Top Priorities for Customer Service & Support Leaders Report identified customer data and analytics as integral for success. 

Many customers are also willing to share controlled amounts of personal data if it can help personalize their experience. Finding the right CX solutions is going to need a lot of data crunching in the coming year.

Renewed Emphasis on Safety and Privacy

Today, more than half of all consumers (57%) prefer to engage with brands over digital channels. This puts the onus on brands to provide a secure online environment for their customers. Also, since customers voluntarily share personal data, brands need to handle it responsibly in order to respect their customers’ privacy. 

Combining Online and Offline Channels

Shopping today has become a hybrid experience, unfolding in the virtual world and physical world simultaneously. Brands use virtual reality (VR) and augmented reality (AR) to let customers browse their products before buying them from a store or website.

Finding ways to let customers seamlessly switch between online and offline channels will be crucial for brands looking to up their CX game in 2024.

Investing in Customer Loyalty

Improved customer service and hyper-personalization are two tactics that are going to be used frequently in CX strategies across industries. The Deloitte report titled “Embrace Meaningful Personalization to Maximize Growth” has 71% of CX leaders saying that personalization plays a significant role in their CX strategy. 

Your CX initiatives should be considered investments, with customer loyalty and repeat business being the outcome.

Use Customer Insights to Enhance Your Customer Experience Strategy

Most business owners see customer feedback in binary terms, as either negative or positive. But CX very rarely deals in absolutes. 

In its original, unfiltered form, customer feedback might come across as merely negative or positive. But after meaningful analysis, you might have a nuanced enough perspective to see silver linings in the bad reviews and spot concerning warnings in the good ones.

When you promptly respond to customer feedback, it lets your audience know you take their needs seriously. Even critical reviews should receive a response, one where you announce the steps taken to correct the issue faced by the customer. A proactive approach to inviting customer feedback and then taking decisive action based on it can lead to a more free-flowing exchange of ideas between the company and its customers.

Benefits of Upgrading Your Customer Experience Strategy

An effective CX strategy is essential to your brand’s success. You can save costs by eliminating redundant touchpoints and under-utilized channels. Customer behavior patterns can be predicted, allowing you to plan your operations and identify growth opportunities. Better CX means happier customers, which in turn leads to positive word-of-mouth coverage as well as third-party coverage. If the triple blessing of customer satisfaction, increased sales, and lower costs haven’t yet convinced you to relook at your CX strategy, consider the following points:

• CX promotes cross-functional collaboration between departments
• CX gives all stakeholders a common goal and KPIs to achieve
• CX increases positive brand awareness among potential new customers in your target audience
• CX empowers employees to act independently in order to achieve the common goal

Choose the Right Tools for CX Management

Customer experience strategy today is highly data-driven and analytical. You need a dedicated team that works to ensure the quality of your customers’ experiences never slips, but they can’t do it without the right kind of assistance. Modern workplaces need modern CX solutions, which usually involve sales CRM software and AI- and ML-enhanced analytics.

To find the right CX software, you must first outline exactly what you need in terms of reporting capabilities and analytics features. Even if you think you’ve found the SaaS solution that matches your requirements, don’t jump on it right away. Stop to consider how the software will integrate with the rest of your tech stack.

One CX software that works well for most companies is Lumoa. It allows CX teams to see all the sensitive feedback and track every important metric on its clutter-free, easy-to-read dashboard. 

With Lumoa collecting and collating a wealth of data, it’s possible to conduct deep analysis that leads to actionable insights. Lumoa is a new way to manage every aspect of CX, from customer surveys to social media monitoring.

Once you’ve found the right software, you will notice a difference in the quality of your data and the resulting insights. All the benefits of an effective CX strategy will be within your reach. Invest in your business’ growth by adding the CX solution you’ve been missing all this while.

The post How to Upgrade to an Advanced Customer Experience Strategy appeared first on Lumoa.

Have you ever traveled to a country where you didn’t speak the language? If you have, you must know how exhausting it can be to get help with the simplest of requests. I remember spending over 40 minutes trying to get change for a €20 bill in Paris until a kind stranger finally understood what I was asking for.

After that frustrating experience, I had a newfound appreciation for customers who have to deal with unresponsive customer experience (CX) teams that fail to act on customer feedback!

Just like a hapless tourist, customers are eager to share details of their experience. CX professionals know they can share it as constructive feedback (if you’re lucky) or harsh criticism (if you aren’t).

Whatever shape the feedback takes, it contains valuable information that can be used to improve your business’ performance. However, first, you have to know where to look!

That’s where text analytics in customer feedback proves to be one of the most valuable tools for any business. If you want to satisfy—or dare I say, delight—your customers, you need to understand their wants and needs. That will give you a clear goal to work toward and guide your organization’s decision-making processes.

The Role of a CXO in Leveraging Text Analytics

All businesses share one common goal, no matter how different they are in terms of scale or industry: Customer satisfaction.

Customer satisfaction drives key metrics like your Net Promoter Score (NPS). Satisfied customers are also paying customers, so keeping them happy also helps your bottom line. In 2024, delivering quality CX is so critical to business success that no Customer Experience Officer (CXO) can afford to overlook it. In fact, a report from 2020 found 95% of senior marketing executives agreed that CX roles were essential for business growth.

As the CXO, your world revolves around understanding and enhancing the customer experience. You have to dig deep into your customers’ minds to understand their behavior. And if you want to become a real change-maker in your organization, you need to learn how to extract insights from customer feedback.

When to use text analytics

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

If there’s 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 into comments about their behavior, knowledgeability, responsiveness, etc.

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

Transforming Analytics into Action

Remember that the true value of text analytics in customer feedback can only be realized when it impacts decision-making and actions within a company. Thus, basic text analytics is just the first step toward transforming data into value:

1. A better, more insightful text analytics tool to understand the most relevant drivers of customer experience improvement. Results must be meaningful from a business perspective and reveal areas for improvement.

2. Making informed decisions that consider both the impact of proposed actions on the customer experience as well as the cost and benefit of the proposed measures.

3. An organization that can act on feedback.

4. Most importantly, the company needs to improve in various areas.

A CXO’s Perspective on Text Analytics in Customer Feedback

Customer experience (CX) operations aren’t left to any one department. Every employee, from the product designer to the in-store salesperson, all the way to the after-sales customer service rep, has a role to play. Essentially, CX is intertwined with every aspect of a business. When one improves, the positivity rubs off on the other.

For a Customer Experience Officer (CXO), dedicating resources to analyzing text feedback from customers can have several benefits:

• Dissecting Customer Segments: Text analytics in customer feedback allows you to delve into the nuances of different customer groups, understanding their unique preferences and expectations.
• Harvesting Rich Data: With this tool, you get more than just numbers; you get stories. Large volumes of qualitative data turn into actionable insights.
• Enriching the Customer Journey: Every piece of feedback is an opportunity to refine the customer journey, making each interaction more meaningful and satisfying.
• Pattern Recognition: Spotting trends in customer behavior becomes easier, helping you anticipate needs and tailor experiences.
• Personalization at Scale: This technology enables you to treat each customer as an individual, offering personalized experiences that resonate and build loyalty.
• Problem-Solving: Identifying and addressing issues within the customer journey becomes more efficient, ensuring a seamless experience for every customer.

Mastering the basics of text analytics gives CXOs more context and information, which they can then use to drive data-driven decision-making and process optimization for the business.

Strategies for CXOs to Implement Text Analytics in Customer Feedback

Ultimately, the CXO has to use customer feedback to better the business. That means they need to be able to pick out potentially valuable information from a vast pile of data as if they were picking a needle out of a haystack.

You’re likely to encounter all sorts of data when going through customer feedback: Quantitative and qualitative, structured and unstructured, and most importantly, insightful and non-insightful.

Your role involves discerning which data points can be transformed into actions that enrich the customer experience and drive business value.

Here are some CX strategies to refine your ability to spot and utilize valuable data through text analytics:

• Amplify the Voice of the Customer (VoC): Place a stronger emphasis on understanding and responding to the VoC. This means not just listening but also interpreting and acting on what customers are communicating.
• Action-Oriented Data Discovery: Seek out meaningful data that can lead to concrete actions, enhancing customer satisfaction and loyalty.
• Engagement Through Feedback Surveys: Implement feedback and feature request surveys. This direct line of communication allows customers to express their needs and desires, providing a rich source of data for analysis.
• Social Media Insights: Keep an eye on social media channels for both positive and negative mentions. This real-time feedback is a goldmine for understanding public perception and immediate customer sentiments.
• Entity Analysis: Identify related entities such as competing brands, different product models, or packaging materials mentioned in customer feedback. Understanding these relationships can provide insights into customer preferences and market trends.
• Metric-Driven Improvement: Regularly measure and track key metrics like Net Promoter Score (NPS) and Customer Satisfaction (CSAT). Use these metrics to gauge the effectiveness of your CX strategies and guide continuous improvement.

Does that sound like a lot to handle, especially for someone with a CXO’s busy schedule? Well, thankfully, software from Lumoa simplifies every aspect of customer experience and feedback analysis.

This AI-powered CX tool can truly do it all: Gathering customer feedback no matter the source, processing it, and preparing reports based on the processed data.

Lumoa gives CXOs a detailed look at the inner workings of their company’s CX, letting them make informed, data-driven decisions.

Lumoa’s software is also enhanced with cutting-edge technology.

Along with its perfect record-keeping and feedback-gathering features, this platform also boasts generative artificial intelligence (AI), machine learning (ML), and natural language processing (NLP) capabilities, allowing it to prepare smart, actionable customer feedback reports for CXOs to act on.

Challenges in Standard Text Analytics Practices

Clearly, text analytics is a powerful tool that can transform customer feedback data into action plans that benefit the business. But nothing good comes easy. If you want to enjoy the benefits of customer feedback analytics, you need to prepare for the challenges that come with text analysis.

Semantic Confusion

Traditionally, text analysis has always been more challenging to execute than numerical analysis. Numbers have fixed values, but the meaning of words changes depending on the context. For example, the word “star” could either mean a heavenly body or a major celebrity, based on whether you’re reading a scientific journal or a tabloid.

Since text is more open to interpretation, organizing it into reliable data comes with its own set of challenges.

Noise in the data

Smartphones are truly amazing devices. More people are using their phones to access the internet than ever before. In 2024, over 55% of web traffic is from mobile devices.

But for all the advanced features manufacturers pack into phones, the touchscreen keyboard refuses to be tamed. Typos are rampant in text messages, comment sections, and emails everywhere you look. It’s a classic case of perfect machinery being wielded by imperfect users. Spelling errors, odd abbreviations, and misused expressions can make text data hard to process.

All the noise must be eliminated from text data before any analysis can begin.

Data Volume

Customer text data comes in so many forms that it can be hard to keep track of them all! Feedback forms, customer service tickets, online reviews… the list can go on.

Frankly, if you are diligent about gathering text data for customer feedback, it will be far too much for any employee to sort through. It’s essential to find an analytics solution that can scale with the volume of data; otherwise, valuable information could slip through the cracks.

Language Barriers

When it comes to text data, overcoming language barriers is one of the most challenging problems to overcome. Many companies cater to diverse, multilingual demographics, but since their analytics team only speaks one language, feedback in other languages is not given the same weight. Automated translation can be a potential solution to this issue, offering a quicker and more cost-effective way to understand multilingual text data.

However, one possible solution—hiring professional translators—is both time-consuming and expensive. Perhaps that’s why many companies prefer working with numerical data over multilingual text data for customer feedback analytics.

Overcoming Text Analytics Challenges with CX Platforms

Today’s businesses run on data. Despite the challenges in processing text data, the benefits that can be gained are too valuable to pass up. The search for a solution will bring most decision-makers to CX software with the ability to perform powerful analytical functions on large volumes of text data.

AI-enhanced software can process huge datasets much faster than human workers. Add in the way ML lets computer programs learn and improve with every interaction and the way NLP has improved AI’s comprehension of spoken languages.

The result? Data processing efficiency you have never seen before!

Even the problem of multiple languages can be easily solved by training AI to translate to the CX team’s primary language.

Tools and Technologies Driving Advanced Text Analytics for Customer Feedback 

Finding the right CX tool to take your text analytics to the next level is an important decision. Many developers on the market currently offer robust CX software that aids in processing customer feedback. Here’s a selection of three that you could use at your company:

• Lumoa: The first-ever CX platform to come with an in-built Generative Pre-trained Transformer (GPT), Lumoa is well-suited for advanced text analysis. Users can ask the software qualitative questions and expect to receive detailed answers in real time. Lumoa lets you track VoC across multiple channels and monitor customer journeys as they progress.
• Qualtrics: If you’re looking for CX software with comprehensive text analytics capabilities, Qualtrics could be a good choice. Its features include sentiment analysis, language detection, and AI-driven insights, which cater to a wide range of business needs.
• Medallia: With multilingual support, omnichannel text analytics, and AI-driven insights, Medallia is a versatile tool for handling customer feedback in all its myriad forms.
• AskNicely: One of the best ways to track important metrics like NPS, CSAT, and CES, AskNicely lets brands create customizable email, web, or SMS surveys. It allows you to close the loop with customers by prompting them to post positive feedback as a review, and it also supports over 15 languages.
• SurveyMonkey Enterprise: Customer surveys are one of the best ways to gather in-depth feedback from your target audience. SurveyMonkey Enterprise is an easy-to-use tool that lets you dig out insights from large volumes of survey data while also protecting sensitive information with robust security measures like data encryption.

Turn Text Analytics Data into a Competitive Advantage

There’s a reason customers are so vocal with their feedback. They genuinely want a good experience. The Future of CX report from PwC underscores the need to focus on customer feedback analysis. Among today’s customers, 32% are ready to stop supporting a business after just one bad experience.

But on the bright side, many consumers are willing to pay prices up to 16% higher for an elevated experience. The company that best prepares to deliver what the market wants will be in a position to reap major rewards.

Encourage Your Organization to Invest in Advanced Text Analytics

If you want to grow your business in 2024, you must transform how you approach CX. For a CXO, this involves not just envisioning but actively leading the charge in crafting and implementing a forward-thinking CX strategy.

The goal of switching up the CX must be clearly stated, whether it be raising your NPS or attracting more customers through referrals. Establish exactly how achieving those goals will add value to your organization, either through increased revenue through sales or by increasing your market share.

What CX success looks like is different for each company, and you can only come up with an effective strategy if you’ve already done your homework by analyzing customer feedback. Incorporating conversational analytics into this phase enables a deeper understanding of customer needs and preferences by analyzing customer interactions across various communication channels. This analytical approach can uncover insights into customer sentiment, frequently asked questions, and common issues that might not be apparent through traditional feedback methods.

Once the plan is in place, executing it might require wholesale changes across the organization. Any new tools required, like CX software, need to be brought online, and employees should learn how to use them. As you improve your company’s technology and capabilities, the CX experience will also improve.

Conclusion

Once your CX strategy starts yielding results, every department in the organization can enjoy the benefits. The marketing team finds it easier to reach the audience, customer service reps are more empowered to contribute positively, and salespeople find leads easier to convert.

Watch “Redesigning CX Programs: Enhancing the Way We Listen, Analyze, and Engage with Customers,” to truly maximize these outcomes. Learn techniques for listening to your customers, analyzing their feedback with a new level of sophistication, and engaging with them in ways that truly resonate and drive enduring loyalty.

The post Text Analytics in Customer Feedback: The CXO’s Secret Weapon appeared first on Lumoa.

Customer feedback is a precious resource for understanding what’s effective and what needs improvement. However, manually sifting through and evaluating this feedback can be incredibly time-consuming.

Around 30% of IT professionals worldwide have reported that their organizations are witnessing time-saving benefits thanks to implementing new AI and automation software.

In this article, we’ll explore five innovative and creative ways to leverage AI for sentiment analysis. From enhancing customer support experiences to predicting market trends, AI empowers businesses across industries to make data-driven decisions that resonate with their audience.

Traditional sentiment analysis

Traditional sentiment analysis, often called manual sentiment analysis, relies on human analysts to evaluate and interpret text data to determine the sentiment expressed within it. This process involves reading and assessing the content to classify it as positive, negative, or neutral. 

Analysts might also assign a numerical score to indicate the intensity of sentiment. Traditional methods often use sentiment lexicons or predefined lists of words and phrases associated with specific sentiments.

However, this manual sentiment analysis has its limitations and challenges. Firstly, it is time-consuming and labor-intensive, making analyzing large volumes of data impractical. Human analysts can also introduce bias, as their interpretation of sentiment can be subjective.  

AI-driven sentiment analysis can be a valuable tool for businesses that seek more accurate and scalable sentiment analysis solutions.

Types of sentiment analysis

Within sentiment analysis, various types are tailored to specific use cases:

• Aspect-based sentiment analysis. This type focuses on breaking down text into specific aspects or features and assessing sentiment towards each one. Regarding a product review, it can analyze sentiments related to various product attributes, such as design, performance, and price
• Fine-grained sentiment analysis. Fine-grained sentiment analysis goes beyond the typical positive, negative, or neutral classifications. It aims to provide a more nuanced understanding of sentiment, often categorizing it into multiple levels, such as very positive, somewhat positive, neutral, somewhat negative, and very negative.
• Emotion detection. Emotion detection involves identifying and categorizing the emotions expressed in the textual content. This type of sentiment analysis aims to understand whether specific emotions are involved, such as happiness, frustration, or sadness.
• Intent analysis. Intent analysis delves into understanding the intentions or objectives behind a user’s text. For example, it can determine whether a customer’s comment implies a purchasing intent or help from customer support.

AI and machine learning are key in performing sentiment analysis using two primary approaches: 

• Rule-based approaches use predefined linguistic rules and patterns to classify sentiment, making them useful for simple cases. 
• Machine learning-based methods, like deep learning algorithms, utilize vast datasets to train models that can automatically identify sentiment. These machine-learning models can handle more complex language nuances and adapt to different domains and languages, making them a preferred choice for sentiment analysis tasks.

Five creative ways to use AI for sentiment analysis

AI has opened up opportunities for sentiment analysis beyond its conventional applications. Here are five creative ways to use AI for sentiment analysis:

Use AI to detect emotions and provide better support experiences

AI tools can assess emotions conveyed in substantial text inputs, such as customer reviews or feedback. These algorithms classify the sentiment as positive, neutral, or negative, providing valuable insight into customers’ feelings.

Traditional manual analysis of extensive text data is impractical and time-consuming. With its natural language processing capabilities, AI excels at quickly processing large volumes of text. 

It can help companies pinpoint areas for improvement within customer feedback. This information can later be used to assist and train chatbots to provide more human-like experiences.

Once emotions are detected, AI chatbots and virtual assistants can assess customer sentiment during conversations and tailor responses accordingly. For instance, if a customer expresses frustration in their feedback, an AI-powered chatbot can be trained to respond with empathy and understanding, offering solutions that align with the detected sentiment.

Detect liked or disliked product or service features 

AI for sentiment analysis is a game-changer, not just for marketers. Developers and UX professionals can also tap into its potential to enhance products and services. This aspect of AI sentiment analysis can pinpoint product features that receive praise or criticism.

Let’s say a mobile app receives positive sentiment regarding its user-friendly interface but negative comments about slow loading times. AI can flag these issues, clearly defining where the focus should be. Dev teams can make targeted interface changes and prioritize enhancements directly impacting customer experience.

Unveil and predict market trends

AI goes beyond customer data analysis. Using NLP algorithms like RNNs and LSTMs, it analyzes vast textual data from social media and news to spot emerging topics and sentiment shifts.

Businesses can extract these insights to adjust their strategies according to market trends and consumer preferences. AI has become a vital tool for navigating the ever-changing landscape of consumer behavior and market dynamics.

Here are three examples of AI applications in unveiling market trends:

• Social media sentiment analysis: Some AI-powered tools can analyze social media conversations and identify trends and shifts in customer sentiment related to specific products, brands, or industries. For example, companies can track brand mentions on X, formerly known as Twitter, to track public opinion and identify emerging trends.
• News and content analysis: AI can process vast amounts of news articles and online content to detect emerging topics, keywords, and sentiment changes within specific industries. This allows businesses to stay informed about the latest trends and adapt their strategies accordingly.
• Customer behavior analysis: AI-driven data analysis can reveal patterns in consumer behavior by examining large datasets of customer interactions, purchasing histories, and online activity. This information helps businesses anticipate market trends and make data-driven decisions, such as launching new products or adjusting pricing strategies.

Monitor and understand brand perception 

Monitoring and understanding brand perception is critical, and AI-driven sentiment analysis has revolutionized this process. Applying AI-powered sentiment analysis to market research gives companies a multifaceted view of how customers perceive their services or products. This involves analyzing information from various sources, including customer reviews, surveys, and social media conversations.

AI-driven sentiment analysis can assess whether a brand’s messaging aligns with customer perceptions. This alignment check empowers companies to refine their communication strategies, adopt a customer-centric approach, and cultivate a brand image that genuinely connects with its audience.

Product and employee satisfaction surveys

Through sentiment analysis, AI can determine whether the feedback is positive, neutral, or negative and identify specific product or service aspects that are being praised or criticized. This allows businesses to gain valuable insights into customer perceptions, uncover emerging trends, and pinpoint areas for improvement.

Here are some case studies to show how AI is making this happen:

• Bank of America employs AI-driven sentiment analysis to capture VoC and identify customer pain points. Erica, their advanced virtual financial assistant, has had over one billion client interactions. This award-winning AI technology, launched in 2018, has assisted almost 32 million clients with daily financial tasks. This data-driven approach allows Bank of America to proactively enhance its services, ultimately improving the overall banking experience.
• Ford uses advanced AI-driven sentiment analysis to carefully study customer feedback, helping them gain valuable insights into vehicle performance. This real-time feedback analysis has empowered Ford to identify concerns and implement necessary vehicle enhancements. As a result, Ford continues to deliver an improved driving experience to its customers while staying ahead in the automotive industry.
• T-Mobile developed Natural Language Understanding machine learning models that extract meaning from vast textual data. They manage an extensive dataset comprising hundreds of thousands of daily customer requests and a knowledge repository containing answers to potential customer inquiries. These machine learning models forecast the information required to address specific customer needs, like bill payments or adding phone lines, and then present it to customer service agents. T-Mobile employs AI-powered sentiment analysis to detect and resolve issues, reducing customer complaints.

AI for sentiment analysis extends its utility beyond customer feedback to internal processes. It can be used to evaluate workplace satisfaction and understand the employee’s voice within the company. 

By analyzing employee feedback, whether through surveys, performance reviews, or other channels, AI can help identify areas where improvements can be made in the workplace.

Benefits and challenges of using AI for sentiment analysis

Using AI for sentiment analysis comes with substantial benefits, including:

• Efficiency: AI algorithms can swiftly assess sentiment across numerous texts, making it ideal for handling large-scale data, such as social media comments, reviews, or feedback strategies.
• Scalability: AI systems can effortlessly scale their analysis capabilities to handle an increasing volume of data. Whether a business is dealing with a small customer base or a massive global audience, AI can adapt and accommodate the workload.
• Accuracy: AI algorithms continuously improve their accuracy by learning from large datasets. This enables them to identify subtle nuances, providing more precise and reliable results over time.

Challenges associated with AI sentiment analysis include:

• Context understanding: AI sometimes struggles to grasp the context of language, leading to misinterpretations of sentiments. This is particularly challenging when dealing with sarcasm, irony, or cultural nuances.
• Data privacy: Gathering and analyzing customer data for sentiment analysis raises concerns about data privacy and security.
• Bias and fairness: AI models may inadvertently incorporate biases in training data, which can lead to unfair results. Efforts must be made to reduce bias and ensure fairness in sentiment analysis.

Final thoughts

When it comes to understanding customer feedback, AI-powered sentiment analysis can be a powerful tool. AI enhances analysis accuracy and efficiency by delivering real-time insights. However, ethical concerns, including bias, privacy, and transparency, require consideration.

Exploring these innovative approaches in your domain can be rewarding. AI sentiment analysis trends will include natural language processing, multimodal analysis, contextual analysis, explainable AI, and real-time analysis. Embrace these innovations for a competitive edge and improved customer experiences.

The post 5 Creative Ways to Use AI for Sentiment Analysis appeared first on Lumoa.

When it comes to gauging customer sentiment and loyalty, few metrics enjoy such widespread acclaim as the Net Promoter Score (NPS). Its lean and straightforward formula for measuring customer contentment has made this metric a veritable “gold standard” in the customer experience space. According to CustomerGauge’s 2022 report, NPS sports an impressive 41% trust rating among B2B businesses – higher than any other rating system of its kind!

Moreover, at least two-thirds of Fortune 1000 companies pore over their NPS results religiously, using the metric as a barometer of customer satisfaction and loyalty. Clearly, NPS occupies a special place in customer experience stardom, sitting atop the throne with its crown of glory firmly affixed.

But what happens when your NPS score isn’t quite as rocketing as you’d like? Or, more terrifyingly, when it’s plummeting into negative territory?

Does it spell doom for your business? Should you throw in the towel and brace yourself for the inevitable worse?

Well, not so fast. In this blog post, we’ll answer all these questions and more. We’ll explore the causes and implications of a negative NPS score while providing practical advice on fixing them.

So keep reading if you want to get your NPS score back on track and supercharge your CX efforts.

Causes of Negative NPS Score

You can’t get your NPS score back on track without understanding why it took a downturn in the first place. Before we dive into our remedies, let’s take a look at some of the root causes that could be behind your score going south:

Inadequate or Poor Customer Service

Many customers tend to be unforgiving if their support experience isn’t up to scratch. Whether that’s because of long wait times, an unfriendly attitude from staff, or a slow resolution of their issues – customers are increasingly becoming more and more intolerant of sub-par customer service.

Think about it. Would you ever return to a business that gave you terrible customer service? Or recommend them to your friends and family? Probably not. And you’re not alone in feeling that way. 

Zendesk’s research found that an overwhelming majority of consumers (nearly three out of five) stated that quality customer service is paramount in cultivating brand loyalty. Meanwhile, 50% of consumers will likely switch to a rival after just one bad support experience. 

In other words, failing to provide adequate customer service can be enough to trigger a negative NPS score and, consequently, drive customers away. 

Quality of Product/Service Falling Short of Customer Expectations

As consumers, we all have expectations from the products and services we acquire. We expect the product or service to meet certain pre-defined standards and deliver the promised value. 

But, if it falls short of those expectations, we’re often quick to voice our displeasure. After all, why would any customer want to stay loyal to a product or service that’s not delivering the expected value?

Microsoft’s Zune debacle is a perfect example of this. The product promised to do everything that Apple’s iPod could do—but failed miserably in delivering on that promise. 

And customers weren’t shy in expressing their disappointment, even going as far as to make the president-elect of the United States an unwitting recipient of their disdain. 

Now if a prominent tech giant like Microsoft can’t get away with underwhelming products, you can bet that your business won’t be able to either. So, if your product or service isn’t meeting your customer’s expectations, a dip to the negatives on your NPS score could soon follow.

Negative Online Reviews or Ratings

Your online review reputation goes a long way in shaping consumer opinion about your business. As per research, 79% of customers put as much weight on online reviews as they would on personal recommendations. 

If your business is attracting unfavorable reviews like flies to honey, the perception of your business can take a severe hit. And as those negative reviews mount up, so too can the chances of your NPS score slipping into negative territory.

To illustrate, let’s take the example of United Airlines’ reputation crisis. As a result of being continually subjected to scathing customer reviews, United’s NPS score has hovered around 10 since 2014. That was a far cry from its competitors like Southwest, JetBlue, or Virgin America, all posting scores in the high-60s and 70s. 

But since they’ve gone all out to improve their customer service and received more favorable reviews, United Airlines’ NPS score has improved significantly and currently stands at a much healthier 50. Likewise, if your business is plagued with negative remarks, you’ll want to take steps to fix it ASAP. Otherwise, your NPS score could plummet and carry your customer loyalty along with it. 

Impact of Negative NPS Score

A negative NPS score means your business has more detractors than promoters. 

Detractors are unhappy customers who are quick to vent their frustrations and spread the word about your business in a negative light. And that, of course, is bad news for any business – big or small. 

Everyone from customers to investors and stakeholders will be wary of associating with a company that can’t seem to get its customer experience right. But the damage doesn’t stop there. Here’s how detractors can ruin your business:

Decrease in Customer Retention Rate

The age-old axiom of ‘It’s easier to keep an existing customer than acquire a new one’ will ring true no matter how often you hear it. According to Harvard Business Review, acquiring a customer costs anywhere from 5 to 25 times more than retaining an existing one. This should be a good enough reason why customer retention is something your business takes very seriously.

Unfortunately, with a negative NPS score, you’ve already lost the loyalty of your detractors, many of whom will likely churn soon. Almost 40 to 50% of them, in fact. That’s a huge chunk of customers gone in the blink of an eye. If you don’t take action quickly, the number can get even higher, and you’ll be back at square one, trying to win over new customers. 

Negative Impact on Brand Image

Where positive referrals and reviews are like the breath of life for any business, negative word of mouth is like cancer, capable of spreading at an alarming rate and wreaking havoc in its path. 

A survey of over 3,200 random customers revealed that an overwhelming 75% would likely share their negative experiences with friends and family. In contrast, merely 42% said they’d recommend a product or service they enjoyed. That’s a huge disparity.

Plus, with the proliferation of social media and online communities, it’s become ever more convenient for customers to share their experiences with a larger audience. Your detractors can quickly go online and blast your business with a slew of angry testimonials, damaging your brand image and reputation beyond repair. 

A Decline in Revenue

It goes without saying that a drop in customer loyalty will result in a direct fall in revenue. A bad NPS score means you’ll have fewer loyal customers, which translates to fewer sales. That’s not to mention the additional costs you’ll incur in order to acquire new customers and the steps taken to restore your brand image.

Recent research by SimplicityDX shows that the cost of acquiring new customers has increased by 222% over the last eight years. That’s an alarming trend that you can ill afford to ignore. Plus, with 86% of people refusing to patronize businesses with negative online reviews, you’ll face a costly uphill battle in getting new customers on board.

Solutions to Improve Negative NPS Score

All is not lost, though. You can still take steps to stop the rot and turn your NPS score around. Here are some handy tips to help you get started:

Respond To Negative Reviews and Feedback

Too many businesses squander the treasure trove of information they get from negative customer reviews, consigning it to the dustbin of unheeded customer feedback. That’s a huge mistake. Because even though you can’t change a bad review, you CAN respond to it and use it to turn an unhappy customer into a loyal one. 

For example, Domino’s, one of the world’s largest pizza chains, was under fire because its customers weren’t happy with the taste of their pizza.

Instead of sweeping the problem under the rug, Domino’s took a revolutionary step by listening to the grumblings of its discontented customer base and addressing their concerns head-on. They revamped their entire menu, from the recipe to the ingredients, and even went so far as to launch a marketing campaign around their “pizza turnaround.”

This bold move paid off in spades and helped them return from the brink of disaster. Sales surged, and their stock prices skyrocketed. That’s the power of responding positively to customers’ negative feedback.

While positive feedback can be encouraging and gives you an idea of what to keep, it’s the negative comments that’ll help you make the real changes. Doing so will uncover where customer experience falters and reveals potential areas for improvement, empowering you to take your product to the next level. 

Elevate Your Customer Service Experience

Amazon. Netflix. Starbucks. What do they have in common? If you guessed ‘exceptional customer service’, you’re right. All these companies understand the value of customer service, and it shows in their soaring NPS scores.

Amazon is often hailed as the king of personalized, frictionless, and joyful customer service experiences, going above and beyond to ensure customer satisfaction. They employ a customer-first approach, offering generous return policies and letting customers keep items they accidentally ordered. For example, Amazon’s legendary customer service once again shone through when a customer’s Christmas gift package was stolen from their doorstep. Amazon shipped them a replacement free of charge – no questions asked. Such acts of generosity go a long way in earning customer loyalty.

Netflix, on the other hand, is no slouch, either. The streaming giant offers 24/7 customer support in multiple languages, including live chat and phone support. But that’s not all. Netflix also has a reputation for proactively addressing customer issues before they even have time to complain about them. This was one of the email messages a customer received from them:

This is the kind of customer service that creates and engrains a strong sense of brand loyalty. Another thing that this email makes evident is the witty and engaging tone of voice that Netflix adopts when communicating with customers. By inserting humor, wit, and enthusiasm into their customer interactions, Netflix shows that they are not only listening to customers but also engaging with them on a personal level. Even the CEO is known to take customer service calls every once in a while – talk about customer centricity!

Starbucks’ customer service strategy differs from both Amazon and Netflix but is equally noteworthy. The coffee chain encourages customers to feel like they belong by making them part of the Starbucks community. 

For example, in 2008, they launched ‘My Starbucks Ideas‘ – an online platform where customers could submit their requests and suggestions. This initiative not only gave customers a voice but also helped Starbucks gain a better understanding of its customer base. Over 300 ideas from the website have made it into Starbucks stores worldwide.

Starbucks also trains its baristas to remember customers’ names, creating an ongoing customer relationship. Such a personalized touch helps customers feel valued and appreciated, likely contributing to the high NPS scores that Starbucks has consistently enjoyed for many years.

By taking a customer-centric approach to customer service, these three companies have managed to set the bar for the industry and establish themselves as customer service champions.

So, if you want to take your NPS from negative to positive, start by taking cues from these customer service superstars. Go the extra mile for your customers – surprise them with offers, ask for feedback, and use it to improve their experience. When you focus on meeting and exceeding customer expectations, you’ll be rewarded with lasting brand loyalty.

Train your Staff to Become Customer-centric

How do you create a customer-centric culture? By starting from the inside. Your customer experience team is the first link in the chain of your company’s customer care journey, so they should be the ones to set the tone and lead the charge toward customer-centricity. Some things your customer experience team can do to show customers they are valued include:

Speed Up Response Times

Mckinsey’s research found that slow response times are one of the biggest frustrations for customers. Avoid letting an unaddressed issue fester for days or even hours. 40% of business buyers become highly disgruntled when response times drag on. 

Show Empathy

Statistics show that the vast majority – 79% – of consumers favor human-driven service over dealing with a chatbot or self-service options. The reason behind this preference is understandable; customers can often sense when an agent is following a script, leaving them feeling like just another problem to solve. When customers contact you, they want to feel like their concerns matter and that you understand where they’re coming from. Engage in natural dialogue and voice empathy to make the customer feel validated and understood.

Underpromise and Overdeliver

Nothing frustrates customers more than an unrealistic promise. Train your customer experience team to be honest with customers. It’s better to underpromise and overdeliver than vice versa. This way, you’re more likely to keep customer expectations in check and leave them feeling satisfied with the service they received.

Employ the Latest Tech Tools

You can’t douse the flames of customer dissatisfaction with outdated or inefficient customer service processes. The digital age has ushered in a host of incredible technological marvels, greatly enhancing the customer service landscape. Some of the latest digital tools you can employ to bring your customer experience up to speed include:

Task Management Apps

No matter how adept you are at steering the customer experience ship, eventually, you’ll reach a breaking point. It’s in times like these that task management tools can come to the rescue. Using them, you can streamline and organize customer service tasks, ensuring all customers get the same consistent service they expect from your business. You don’t even have to be tech-savvy to get up to speed with these tools. 

Most of them come equipped with easy-to-follow step-by-step instructions and many helpful resources to help you get started. But if you don’t have the time to learn all the bells and whistles or the budget to justify the premium price tag that comes with these apps, you can always rely on the miracle worker that is Google Sheets to get the job done without a fuss. Just find the right Google Sheet task management template that suits the depth of your projects, and you’re good to go.

Customer Insight Platforms

Customers often leave behind a trail of valuable crumbs in their digital journeys ripe for exploitation. These crumbs can provide invaluable insights into their purchase intent, customer preferences, and brand loyalty – if you know where to look. But, without an insight platform to help you pull all the pieces of a customer’s digital footprint together in one place, it would be impossible for you to take advantage of the data. 

Fortunately, customer insight platforms like Lumoa assist in making the customer data-gathering and analysis process a whole lot easier. With their sophisticated analytical and visualization capabilities, you can quickly identify and address any underlying issues causing customers to jump ship and make necessary changes to improve the customer experience.

Resource Capacity Planning Tools

Although resource capacity planning is commonly associated with dynamic company projects like product development or software engineering, it can also be applied to more static fields – like customer service. In recent years, sophisticated capacity planning tools have sprung up to help CX pros plan and manage their project workloads more efficiently.

Poor capacity planning in your customer service team can lead to overworked and understaffed agents, negatively impacting work quality and productivity over time. Inadequate planning also leaves no room for managing unforeseen events that could increase workload demand, such as a product outage. Deploying the right resource capacity planning tool can help you maneuver your way around such challenges and ensure your CX team is always ready to tackle customer service tasks head-on.

Customer Sentiment Analysis Tools

Gone are the days when you had to manually comb through customer feedback or comments to determine their sentiment. Disruptive tech trends like artificial intelligence and machine learning have spawned some very potent sentiment analysis tools capable of uncovering customer sentiment in real-time. 

These tools can help you gauge how your customers feel about your product or service, allowing you to refine and strengthen your customer experience before you lose their loyalty. That way, you can nip any potential customer dissatisfaction in the bud and ride the wave of disruptive tech advancements to position your business as a leader in the customer experience domain. 

Workflow Automation Platforms

Getting lost in the thicket of digital chaos is a common plight of most modern business verticals. That’s where workflow automation tools come in. These tools integrate seamlessly with your existing CX tools and technologies, allowing you to design automated processes that connect the dots between different pieces of your workflow.

With automation tools, your customer service team can rest easy knowing that the right tasks are being completed at the right time with minimal room for error. Moreover, many of these tools feature no-code or low-code configurations – perfect for busy CX pros who typically don’t have the time or resources to learn complex coding techniques. So, if you want to streamline your workflow and add an extra layer of efficiency to your customer service operations, workflow automation tools are the way to go. 

Use a Presentation to Present your NPS results

To help your team understand your current NPS score, its implications, and the necessary steps to improve it, consider presenting the NPS results through a presentation. An editable NPS presentation template can help you effectively communicate the importance of NPS and the changes you need to make within your organization and a C-level audience.

QR codes 

The comeback kid of 2020, QR codes, have impacted many business verticals – including CX. Quick Response codes are now popping up in retail stores, helping customers access product information and create a more seamless shopping experience. However, the power of QR codes extends far beyond retail: they can also be used to track customer service requests and provide customers instant access to relevant information, such as sharing customer support details or even making a call directly from the QR scan.

With QR codes, you can make the entire customer service experience more accessible and faster – bringing it closer to your customers and enhancing their overall engagement. What’s more, these 2-D codes are super easy to create and deploy. All you need is the right QR code generator tool, and you’re good to go. So start exploring the possibilities of QR codes to bring your customer service game to the next level.

Turn NPS Scores Around and Make Your Customer Experience Great Again

Few things are essential to the success of a business as the understanding of their customer’s sentiment and loyalty. And yet, achieving a top-notch NPS score isn’t always as straightforward as we’d like it to be.

But all hope isn’t lost. With the right knowledge and approach, you can easily turn a negative NPS score around and start seeing your business’s customer experience efforts take off. Start by recognizing the cause of your negative NPS score and then work your way up to developing strategies and solutions to address those issues. We hope this article has given you the information and inspiration you need to determine the best solutions for your unique situation. So what are you waiting for? Take the first step in turning your NPS score around today!

The post Understanding Negative NPS Score: Causes, Impact and Solutions appeared first on Lumoa.

Simply put, this process closely examines current and potential customers’ characteristics, traits, and preferences. Analyzing such data helps businesses learn the ins and outs of their target audience—and a company that knows its audience can further its own growth.

Even with such a simple explanation, it’s clear to see how conducting a customer profile analysis can result in business growth. But how exactly does profiling feed into this?

This article will explore five of the most notable impacts of customer profile analysis on your company.

Improves business profitability

Any company that wants to thrive has to keep profitability in mind—and a customer profile analysis is a gateway to boosted profitability.

Think of it this way: as a business, you have to optimize your resources to ensure you sell more products (or services) without increasing spending. Efficiently targeting your intended audience can decrease spending while increasing revenue.

Customer profiles and ERP (enterprise resource planning) systems work together to make this happen, which is why implementing an ERP system is such a good idea. ERPs help you find and access customer information efficiently, so you’re able to use profiles to their full potential.

It’s no surprise, then, that the ERP software market grew by nearly 10% in 2019 as more people realized how helpful this type of tool can be.

Optimizes marketing efforts

Imagine you’re trying to sell a watch to someone. You know which styles, colors, and brands that person likes, and you know how much they’re going to be able to spend on the watch. That information makes it much easier to complete the sale successfully.

On the other hand, trying to sell it to a stranger who might not even like watches will be significantly more difficult.

Customer profile analysis lets you similarly perfect your marketing strategy. As it relies on fully understanding information to market more effectively, customer profile analysis optimizes your marketing and sales funnel.

Boosts customer engagement

When you’re looking to increase customer engagement, one of the best things you can do is ensure everything you’re putting out is exciting and relevant to different types of customers. By analyzing their profiles, you can do just that.

Customer profiles contain details on the type of content your target audience tends to engage with and the platforms they prefer to see it on. This helps you craft posts, ads, videos, and other content they’re more likely to enjoy or find useful.

Enhances customer retention strategies

Customer retention is vital to businesses. In fact, increasing it by just 5% yields a 25-95% profit increase, which shows why it’s important to focus on.

Retaining customers is much easier when you understand their needs and preferences. Why? Because this insight allows you to tailor your retention strategies to observed realities rather than projected estimations. In other words, having precise data is better than guessing or making assumptions.

For example, your customer profile analysis might reveal that customers are frustrated with your shipping options. With this valuable insight, you can focus on improving or adding new options. In turn, this improves customer satisfaction and ensures customers won’t switch to a competitor.

Creates opportunities for business scaling

When you use your enterprise resource planning software to make your customer data available across all your departments, you can create a more cohesive approach to business growth. This makes it easier for your company to scale up effectively.

When the whole company has access to information on what your customers love, you can sustainably gear each department towards improving customer relations. This also makes it easier to create lasting connections with new customers and/or leads.

It’s clear that conducting a customer profile analysis has numerous benefits. Customers are at the heart of any business, so putting in the time and effort to get to know them will always pay off. Ultimately, this will help support your company and help it grow.

5 Best practices when profiling customers

It’s one thing to understand the benefits of adopting a new process such as customer profiling. However, it’s crucial to know how to implement it effectively.

Study customer buying behavior

A sure way to improve the customer experience is to make sure you’re fully aware of the patterns your customers follow when they want to make a purchase.

They may click on a product once and buy it straight away. More likely, they’ll do research first, compare choices, and then eventually make a purchase in light of the information they’ve gathered.

When you understand the driving factors that lead to this final decision, you can use that knowledge to improve your standing in customers’ minds.

 Identify customer demographic

Who are your marketing campaigns aimed at?

The more you know about your target customer or demographic, the better you can target them. Are you mainly aiming at people of a particular age or gender? Do your customers share preferences or values?

For example, you may want to target consumers who are searching for ethical and sustainable products. If that’s the case, highlight your company’s eco-friendly policies to better appeal to that demographic.

Perform customer surveys

It’s always a good idea to learn from what your customers tell you directly—and customer surveys are an excellent avenue for them to talk to you.

As you poll customers, be sure to ask the right questions and avoid open-ended ‘yes’ or ‘no’ questions. For example, you may want to know their opinions on a particular product. In that case, ask questions like ‘How would you rate this product on a scale of 1-10?’.

Research customer interests

You’re always looking to make your brand look more appealing to customers. What better way to do this than understand their likes and dislikes?

A company that only ever says “Our products are great” may sound biased. On the other hand, a business that can explain why their products are relevant to customers’ interests will leave a lasting impression on its customers.

Moreover, when you show your customers how your product makes it more fun to engage with their interests or easier to solve a specific problem for them, selling will become significantly easier.

Map out the customer journey

It can be difficult to understand your customers if you’re unsure about the steps in the customer journey. After all, you can’t put yourself in their shoes without knowing the path those shoes are walking.

That’s why you must understand what their journey typically looks like, from the moment they search for your products or services to after they make a purchase. 

The more information you have, the more you can understand their purchase intent, shopping behavior, and pain points. What’s more, understanding customer journeys helps you shape them.

And remember…

Customer profile analysis is your ticket to a deeper understanding of your customers. Anytime you focus on this analysis, you’re giving your company a chance to learn everything it needs to know to effectively market to your target audience.

This insight helps you learn how to make customers happier, which increases brand loyalty and reduces customer churn.

That’s why customer profile analysis drives business growth—and why it’s always worth performing.

The post The Benefits of Customer Profile Analysis for Business Growth appeared first on Lumoa.

You probably know this. But where do you start? One of the best analysis techniques available is the voice of customer (VoC) template. It will help you gather valuable feedback, identify customer pain points, and work towards better solutions.

This article will explain what VoC is, how to use it, and tips on creating your own voice of customer template for your business.

Ready to dive in?

What is Voice of Customer(VoC) and Why Is It Important?

A voice of the customer (VoC) is the process of gathering customer feedback to discover what they need, want, and expect from you.

The goal is to better understand your customers, earn their trust, and improve customer experience. The voice of the customer can also help you identify and address any issues preventing you from achieving key goals.

Additionally, the voice of the customer encompasses both positive and negative feedback on a variety of topics. It could cover products, services, prices, and brand perception. In recent years, VoC has gained popularity as new technologies have expanded how companies receive and process customer feedback.

We’ll say it here – It’s impossible to overemphasize how important customer feedback is. Without it, you’ll never know what a customer wants or expects. Business owners have always sought out customer opinions. But in our digital age, receiving feedback has never been easier. Thanks to the Internet, customer feedback has never been so accessible. 

Learning what your customers think about your products or services isn’t difficult. Customer experience templates, customer survey templates, or customer satisfaction survey templates allow you to make informed decisions on improving the customer journey.

Without customers, there is no business. That’s why the voice of the customer is an essential part of any successful business strategy. 

By understanding what your customers want and need you can ensure that you are providing them with the best possible service or product which will help you stay ahead in an ever-changing market.

When to Use Voice of Customer

Before we cover building your own VoC template, let’s talk about when to use this type of analysis. Remember, you should always care about what your customers say. Using the voice of the customer isn’t something you only use once and never turn to it again. It should be a regular part of your customer experience strategy.

Instead, you should see VoC as a tool to gain unique insights. Let’s look at several reasons you should consider using VoC.

• Verifying customer feedback. Use VoC to verify customer feedback, enabling businesses to make more informed decisions based on actual customer experiences. In addition, VoC can provide insights into customer preferences, allowing companies to tailor their communication, featured items, or other offerings. 
• Quantifying customer feedback. It might feel impossible to put a number by feedback. How do you “rate” an emotional response complaining about a problem with your website? The good news is that you can assign a rating or score based on the relevance and importance of each insight. These insights can help you make better decisions. They will also help you train your customer service reps in de-escalation.
• Launching new initiatives. Insights from data analytics can help create new product designs or services. Data can also inform pricing strategies for a better return on investment.
• Keeping up with industry standards or new trends. You need to remain competitive in the market and make a profit. But you also need to maintain relationships with your customers. Continue to create meaningful connections with customers while still keeping your business profitable.
• Improving brand perception. This can include analyzing customer reviews and surveys, understanding what customers are saying about the brand online, and taking steps to address any issues that may be affecting your reputation. By doing this, businesses can ensure that their brand is well-regarded by customers and potential customers alike.
• Increasing customer loyalty. Feedback will reveal what customers want and how you can improve your products or services. This information helps create targeted campaigns that will help increase customer retention rates and build long-term relationships with customers.

How to Create a Voice of Customer Template

A voice-of-customer template helps you collect and interpret customer feedback. The template is a framework for setting goals, involving the right people, identifying solutions, and tracking progress throughout the process. 

While a VoC template may be different depending on the company profile and industry, each template should have the following elements.

Setting Your Goal

By gathering customer feedback, you’ll gain a better understanding of where your customers are coming from and what they want. Use this data to identify opportunities for improvement and insights so you can better meet their needs. In the end, you want to see increasing customer satisfaction and loyalty. 

Everyone involved in the VoC process must understand how important it is for the success of the business. 

Identifying Key Stakeholders

When it comes to collecting, analyzing, and acting on customer feedback, involve every key stakeholder. This includes departments such as customer service, marketing, product development, sales, and even executive leadership. 

Each department will bring its own unique perspective to the table. You want as many valuable insights as possible to inform decisions that will improve the customer experience.

Gathering Direct Feedback

Obtaining feedback from customers is essential. But how do you get well-rounded data? Only if you get direct feedback using every possible medium. With an omnichannel approach, you’ll gather feedback from the following:

• Online surveys
• In-App surveys/rating request
• Chatbots
• Customer interviews
• Your Net Promoter Score
• Online product reviews
• Social Media mentions and DMs

You’ll gain deeper insights into a customer’s behavior and preferences by collecting their direct feedback. Being proactive here will help you get ahead of the curve by measuring customer satisfaction. 

As you work through the template, you’ll see that this collected feedback will be used to identify areas for improvement in service delivery, product design, and more.

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Finding the Primary Request

Every piece of customer feedback, no matter how lengthy or detailed, can boil down to a primary request. To do this well, customer feedback must be carefully analyzed and interpreted to identify the underlying issue that needs a customer has. 

This might mean some translation work on your part. Not every customer will state explicitly what their main problem is. It’s important to read between the lines to find any hidden issues.

Providing Solutions

In certain cases, large feature updates may be needed to successfully resolve an issue while in other scenarios, smaller bug fixes and modifications as well as ensuring that customers have the right information about a product or service. The choice of which fix to use depends on the complexity of the problem, availability of resources, and time constraints.

When trying to enact changes in your organization, it is important to rank them based on your resources and the time available. This is where prioritization comes into play.

Prioritizing the Needs

After completing the preceding steps, rank each solution based on its potential value and return on investment. Due to limited resources and bandwidth, you should focus on those initiatives that will have the greatest impact. Which need would benefit the largest number of customers in the shortest amount of time?

You’ll want to consider the main project goal as you do this. If not, you’ll spend time, energy, and money on priorities that won’t help reach your desired outcomes or increase the bottom line.

Here’s a visual representation of what a template could look like:

Using this template will help you act quickly and efficiently when customers provide feedback. It is valuable for short-term and long-term feedback strategies. And it will help your company stay agile amidst changing customer needs. 

Voice of Customer Best Practices

Now that you have a framework for creating your own VoC template, here are five best practices to help keep in mind.

1. Personalize the Questions You Ask

Customers expect to receive personalized attention. Companies that wish to cultivate loyalty and strong communication should focus on providing more personalized interactions with their customers. This can help them to build a better relationship with their customers.

Your goal is to build stronger relationships and customer loyalty. How you phrase questions can help you do this. Craft questions that put the customer at the center of attention. The way to do that is to help them feel like an individual. Not a number or someone lost in the crowd. This helps the customer feel valued in communication and it creates a more positive customer experience.

2. Gather Feedback at the Right Time

Best practices for obtaining customer feedback involve not only determining which platform they feel most comfortable providing their opinion on, but also the timing of the request. It is usually best to ask them immediately after their experience so that you will receive more accurate responses.

Even as you gather feedback, you want to enhance the customer experience. So try to time interactions with customers according to their individual journeys. Great moments to engage are when a customer’s behavior changes or when an already-purchased product is upgraded or bought again.

3. Share Feedback with Your Whole Company

The success of any business depends on all employees functioning efficiently and effectively together. Though some team members may not have direct interaction with customers, their roles still contribute to the ultimate goal of customer satisfaction.  A comprehensive business plan template serves as a guiding framework to align these collective efforts toward achieving organizational objectives. All departments must work as one for a company to thrive.

So that customer feedback is maximized, it should be made available to every employee in the company. The customer success team can create a detailed profile of customers which includes their demographic information, buying preferences, past purchases, as well as other relevant data which can then be shared with every department. 

This will enable each department to have better insights into the needs and wants of their target customers. Most importantly, it will help the business as a whole make informed decisions about product offerings.

4. Continue to Listen to VoC

Fostering strong customer relationships often depends on recording their order history and online clicks. In an omnichannel Voice of the Customer (VoC) approach, customers can be asked to periodically answer questions about their lifestyles, routines, and preferences. This helps to deepen the understanding of their needs.

A continued conversation about the customer and their lifestyle, rather than just their immediate needs, can yield deeply useful data to help shape future engagement.

5. Always Respond to VoC

You want all customers to feel appreciated and valued. So it is critical to act quickly and meaningfully upon any feedback received–whether they’ve purchased a product or yelled at a customer service rep on the phone. 

Preparing for potential risks in advance is critical to any business’s success. It will help reduce the damage and allow for timely and efficient decision-making.

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How to Analyze Your Voice of Customer Data and Generate Actionable Insights

You built your template, followed best practices, and gathered feedback. Exciting! Now, what do you do with the data?

Analyzing VoC data is just as critical as getting the data. It will help you develop strategies to improve customer pain points and satisfaction levels.

Here are three things to help analyze your VoC data.

1. Prepare and Structure Data

Unstructured data sources are pervasive in business and need to be effectively managed. You’ll likely pull data from many sources: text, audio, email surveys, in-person feedback, etc.

Audio recordings are a prime example of unstructured data. An audio file is would need to be manually transcribed for usability purposes. Speech analytics tools allow you to transform a voicemail into a transcription that is organized and searchable. Once you do that, you’ll have an accessible transcript of the message that allows you to convert your data into usable files.

2. Import Data into a Reporting Tool

So you’ve received all the data. And it could be a lot. You’ll need a tool to help you

The reports you end up generating should focus on answering these initial questions. For example, if you are the Director of Customer Experience at a call center, you will likely want to structure a report that highlights caller sentiment, call outcomes, time to resolution, and other customer-centric data points.

Thankfully, we’ve got you covered. You can import your data from a third-party tool. Or you can create your own survey directly with Lumoa and then get started analyzing. Get a free demo of our text analytics or survey analytics tools.

3. Gather Analytics Insights

Analyzing customer feedback is the most important part of the process. You can have data for days, but what’s the point if you don’t learn from it and make the data actionable?

Look for trends in your customers’ emotional and sentiment responses, positive or negative. These will give insight into why they bought something and if they’re likely to be a repeat customer. Don’t forget to focus on the big picture, too. How does the brand appeal to your customers? Do they recommend you to others? Do they leave feeling positive about your brand?

As you take action on these insights, you will make better decisions for your customers and the long-term health of your company.

Wrapping It Up

Creating a great voice of customer template is key to understanding customer feedback and making data-driven decisions. By following the tips outlined in this article, you can create a VoC template that will help your business capture the right information from customers and use it to make more informed decisions.

Your VoC template will lead to valuable insights into customer sentiment and preferences, allowing them to better serve their customers and improve their experience.

Lumoa’s call and voice analytics solution helps you automate the process of listening to your customers share what’s important to them. It automatically detects topics, sentiments, and insights so you can analyze calls at scale. Start your free trial today.

The post How to Create a Voice of Customer Template for Your Business appeared first on Lumoa.

This article looks at how customer service can be optimized for better results. 

What is a Customer Experience Audit Checklist?

When shopping, have you ever encountered a salesman who was rude or unhelpful? Or used a service and had an issue with the customer support staff? Did it make you rethink your decision to patronize that particular store or service?

A customer’s experience (CX) is an essential part of every transaction and can affect brand loyalty and sales. Not to be melodramatic, but reports say that if your CX isn’t up to par, you could be sounding the death knell for your business.

So what can be done?

A customer experience audit evaluates the customer’s experience while engaging with a business or a brand. This audit examines all customer interactions with your brand from first contact, including phone support, email support, live chat options, and so on.

It helps provide an objective look at the problems of a business’s customer service and enables teams to focus on what needs fixing. These audits are often conducted by third-party firms or agencies specializing in the field. However, if you don’t have the budget for this type of research, you can also run your own audit using a checklist and some simple tools.

Most consumers consider the customer experience crucial when purchasing, but only half of them feel that organizations are doing a good job. To close this gap, start with a customer experience audit checklist.

Benefits of Using Customer Experience Audit Checklists

There’s an old saying that goes “you can tell a lot about a company by how they treat their customers.” It sounds like sage advice, right? After all, happy customers are not only loyal but will become valuable ambassadors for your brand. That’s why having a customer experience audit checklist is so important. Yet, many businesses neglect to make one despite its many benefits – more engaged and satisfied customers, direction and focus on areas to improve, and lots of growth opportunities!

So whether you’re just starting out or looking to revamp your existing checklist – let me show you why it might be time to embrace the power of CX audits!

Identifies Gaps For Improvement

A gap is an area where your company falls short. For example, it could be problematic staff, a lack of a return and exchange policy, or slow responses to customer inquiries. Conducting an audit will reveal any weak spots and direct your attention to the most critical problem areas, where you can then come up with workable remedies.

Pinpoints Where Quick Fixes Can Be Made

A customer service audit will typically identify some areas in the customer journey that can be immediately fixed. It could be a typo on a restaurant dinner menu, fonts on signages that are too small or illegible, or even just poor lighting in your store. These changes might appear minuscule but can be quite impactful.

Provides Direction For Training

Sometimes, there’s a delay in answering customer requests or inquiries because your team doesn’t know how to or can’t access the necessary information.

An audit checklist will gather such data and help pinpoint skill gaps that can be closed by retraining existing staff.

Improves Your Marketing

You’ll be able to recognize the factors that influence customer behavior. An audit will also highlight the most effective platforms. Using this data, you can develop platform-specific marketing to better serve your customers.

Steps for Creating a Customer Experience Audit Checklist

Before you can create your customer experience audit checklist, you’ll have to properly map out your customer’s journey. It’s a visual representation of how your customer moves through each interaction with your brand and what experiences they have.

Remember that the customer journey is not always linear. Mapping can be difficult because different customer types will interact with your business in various ways. It also entails data gathering and analysis that will guide your decision-making as you craft the necessary solutions.

Here’s a step-by-step guide for crafting your customer experience audit checklist.

Step 1: Map Out the Customer Journey

A customer journey map is helpful in conducting an audit of the customer experience since it allows you to examine every part of that journey. Follow these steps to start mapping your customers’ journeys:

Create Customer Personas

This is an idealized representation of your customer and investigates the psychological and behavioral elements at play when they engage with your company.

Identify Customer Touch Points

Touchpoints are where your brand and your consumers meet and interact. Any interaction with a customer- whether before, during, or after a sale- should be counted as a potential touchpoint for audit purposes.

Here are a few touchpoints to consider:

• Social media. In today’s digital age, your brand’s social media pages are often where customers see or get to know you first

• Ads. Both online and offline ads are common first touchpoints at the introduction stage

• Conversations. Any time a customer reaches out to your brand, it is a touchpoint as well

• Point of sale. A crucial touchpoint as it’s where customers are ready to make a payment

• Shipping notifications. For online stores, order confirmations, shipping updates, and thank-you emails can reinforce customer loyalty

• Customer support. When customers face an issue with your product or service, their experience with your CS is a critical touchpoint

Try to dissect the customer experience at every touchpoint. This will help you identify what channels they used to interact with your brand and what happened during their encounter. Describe in as much detail as you can the steps that were taken by the user at each point of the journey, and indicate whether or not there were any pain points along the way.

Step 2: Identify Customer Pain Points

A customer journey map can help you determine where you’re thriving and falling short. The sooner this information is collected, the sooner improvements can be made. At the same time, knowing what your customers are dissatisfied with can help you make the necessary adjustments to your products and services, leading to greater customer satisfaction.

You can start by looking at different customer journey stages and asking the following questions:

Initial Engagement

This can come in many forms, from a customer signing up for an account on your website or app, to signing up for newsletters or promotions.

How do new customers initially interact with your company? Is it the usual method they use? Or is it through your preferred channels?

Transitions

How and why do customers move between each touchpoint? Do these transitions naturally happen, or are they imposed on the customer? Are there transitions they didn’t expect or like?

For example, if customer feedback indicates that certain transitions cause confusion or dissatisfaction, then it’s necessary to simplify the transition process or provide more detailed customer education.

Obstacles

Is there something stopping customers from interacting with your company the way they want to? Is there anything that’s holding them back?

End of the journey

How does the customer experience conclude? Are customers satisfied or dissatisfied with it? After the initial stage of consumer interactions, are you taking any actions to re-engage them?

You’ll also need your staff to be part of the customer experience audit to get an unbiased overview of customer pain points. You can engage your employees through a questionnaire, a team meeting, or a special workgroup. Here are some areas to look at:

Customer Complaints

What complaints do staff commonly hear from customers? Are there any recurring customer complaints?

Technology

Do employees ever encounter issues using your company’s resources, tools, and platforms? Which areas do they find most conducive to their work? Where do customers have the most positive experiences?

Areas of Inefficiency

Does anything prevent employees from acting or responding to customers quickly? What structures and processes could have a significant impact?

Information Access

Do employees have all the information they need to provide consumers with fast, reliable service? Is this information easily accessible to them?

Training

Is there anywhere your staff is having trouble? Do they feel unqualified or under-trained?

Next, you’ll also want to get information from your actual customers. This entails conducting market research. Keep in mind that you should collect both quantitative and qualitative data.

A survey, where customers can rank their satisfaction on a scale from 1 to 5, can be a quick way to get quantitative data. Asking customers a few questions about how they feel about the brand, their experience, and what made them want to purchase – are good options for qualitative data.

Lastly, you’ll want to engage both new and existing customers. By doing so, you can be sure of having a sufficient sample to draw meaningful conclusions.

Step 3: Compare Perspectives

Once you’ve completed and analyzed the data you’ve gathered, you can compare the perspectives of your employees, customers, and upper management. Consider the following:

Agreements

Watch for areas where your perspectives coincide or echo one another. If the comments are favorable, it’s best to keep working and seek suggestions for improvement in other areas of the customer experience. If it’s criticism, be ready to make adjustments.

Disagreements

When perspectives don’t match, you need to investigate why. Sometimes managers can get tunnel vision, and their perspectives can differ from employees out on the field. At times, customers may see things differently from your employees. Look at why.

Connect the Dots 

Now that you have your data, it’s time to look at it and discover what you can find. Take some time to view the data from different angles and see if there are any patterns or trends that jump out at you. Bring it up for team discussion and see what comes up as hypotheses or ideas.

For instance, you might come up with a theory like, “Long lines at the counter or fitting room scare our customers away.”

Then perhaps you would need to make adjustments to your POS or establish other ways to check out.

Step 4: Building a Roadmap

After identifying the issues at hand, you can move on to considering potential solutions. Sometimes these can be straightforward, like streamlining the checkout process, but other times it can be challenging. A roadmap can help prioritize which steps should be taken first.

Establish goals for reducing the amount of friction at every touchpoint and set up metrics to measure your performance. Plot down when you will start implementing these solutions.

Your timeline can be short or long, depending on the size of your company. Smaller companies may be able to address issues faster than large organizations with many moving parts.

How to Use Customer Feedback and Customer Journey Mapping to Create an Effective Customer Experience Audit Checklist

A customer journey map and customer feedback can provide you with a holistic view of how your customers experience your brand. If you don’t know your target audience, their wants, and their problems, you can’t properly evaluate your performance, diagnose or develop solutions.

It’s only after you’ve gathered feedback and mapped out their encounter with your brand that you can start to look at how your customer service is performing. Many marketers launch initiatives without doing the necessary legwork, significantly reducing their efficacy.

Feedback from your consumers and a customer journey map remove the guesswork and offer you real, actionable data that will help you better understand your customers. It guides you to ask the right questions.

How Customer Experience Audit Checklists Can Help Improve Customer Service and Customer Satisfaction

Maintaining a high level of customer satisfaction requires constant attention to detail. A customer experience audit checklist can help you keep track of everything you need to check off to ensure a top-notch customer service experience for every customer, every time. It enables you to see the whole customer experience, from their perspective, in an objective manner.

A customer experience checklist helps you:

• Increase awareness of customer needs

• Pinpoint gaps in your customer service

• Identify areas for improvement

• Find out how to increase your CX in practical ways

• Boost customer satisfaction

• Boost sales and profits by earning customer loyalty

For instance, if one of your stores is receiving a lot of complaints, it might be time to look at what’s happening in-store. Is there something wrong with the display? What about the signage? Or perhaps you need to retrain your staff?

The data you gather in your customer experience audit will reveal patterns and trends in your customer’s experience with your company. This gives your company a better understanding of who your customers are and how they see your brand. Moreover, it will help highlight their experiences and pain points.

With this information in hand, the necessary adjustments can be made with more accuracy and relevance, ultimately leading to happier customers.

Conclusion: What to Consider When Creating a Customer Experience Audit Checklist

Ready to work on your list?! Let’s face it, a customer experience audit checklist is like a treasure map for businesses. It guides us through the journey of discovering the hidden gems of customer satisfaction and helps us avoid the pitfalls of poor service. Just like a treasure hunt, it may take some time and effort, but the payoff is worth it. Imagine the look on your customer’s face when they finally find the treasure, er, we mean the perfect experience they’ve been searching for.

Now, don’t be fooled by the simplicity of a checklist. It’s not as easy as just ticking off boxes. You need to have a thorough knowledge of your customers and your business as a whole. Whether it’s a customer journey map or gathering feedback, you need to be equipped with all the tools necessary to succeed.

In the end, when you finally reach the treasure, er, we mean the ultimate customer satisfaction, you’ll be like a pirate with a chest full of gold, er, we mean a business with a loyal customer base. So, don’t wait any longer, grab your customer experience audit checklist, and set sail on the adventure of a lifetime.

The post Improve Your Customer Service with a Customer Experience Audit Checklist appeared first on Lumoa.

This comprehensive guide will take you step-by-step through the essential elements of measuring customer satisfaction. So let’s get started and find out just what it takes to make sure your customers are as satisfied as possible!

The Basics of Customer Satisfaction Measurement

Before you can begin measuring customer satisfaction, it’s important to understand the basics. What exactly is customer satisfaction and why is it important to measure?

What Is Customer Satisfaction?

Customer satisfaction is the degree to which a customer’s needs and expectations have been met. It’s an important factor in measuring the success of any business and can help you identify areas that need improvement. A satisfied customer is more likely to be loyal and purchase more products or services from your business.

Why Is It Important to Measure Customer Satisfaction?

By now, we all know that measuring customer satisfaction is essential for any business. Measuring customer satisfaction will help you better understand customers’ needs and expectations, identify areas that need improvement, and ultimately increase customer loyalty and repeat business.

By measuring customer satisfaction, you can also identify potential problems and take action to prevent them from occurring in the future. In short, measuring customer satisfaction is essential for ensuring your customers are happy and healthy!

Techniques for Measuring Customer Satisfaction

Once you understand the basics of measuring customer satisfaction, you can begin exploring different techniques for measuring it.

There are three main approaches when it comes to measuring customer satisfaction: interviews and surveys, focus groups, and online feedback and reviews. Each of these methods has its own pros and cons, so it’s important to consider which method will work best for your business.

Interviews and Surveys

Interviews and surveys are a great way to collect feedback from customers. These methods allow you to ask specific questions that can help you gain insights into customer experiences. You can use interviews or surveys to get an overall picture of customer satisfaction and more detailed information about individual customers.

It’s important to make sure that the questions you ask are clear and relevant so that you can get accurate results.

Conducting interviews and surveys may be good but on the other hand, they do have some drawbacks. One major disadvantage is the time required to conduct interviews or surveys. It can be more time-consuming to gather customer feedback through these methods than it would be with other methods such as focus groups or online reviews/feedback.

Additionally, interviews and surveys are often seen as intrusive by customers, which can make it difficult to get honest and accurate feedback.

Overall, interviews and surveys are a great way to measure customer satisfaction. They allow you to ask specific questions that can help you gain insights into customers’ experiences with your business. While there may be some drawbacks such as the time required for conducting interviews or surveys, they remain an effective method of measuring customer satisfaction.

With proper preparation and execution, this technique will provide valuable feedback on how well your business is meeting its customers’ needs and expectations.

Focus Groups

Focus groups involve gathering a small group of customers together and asking them questions about their experiences with your business. Moreover, having focus groups can provide more detailed insights into customer experiences.

Unlike interviews or surveys, focus groups allow you to have an interactive conversation with customers and get their opinions on various topics. This makes it easier to identify areas of improvement, understand customer needs and expectations, and gain valuable feedback that would not be possible with other measuring techniques.

One disadvantage of having a focus group is that, like interviews and surveys, can be more time consuming and costly than other measuring techniques. Additionally, customers may feel uncomfortable speaking in front of a large group and this could impact the accuracy of feedback collected.

Overall, focus groups are an effective way to measure customer satisfaction and gain valuable insights into customers’ experiences with your business. However, it’s important to keep in mind that focus groups require time, money and preparation before they can be conducted successfully.

With proper planning and execution, measuring customer satisfaction through focus groups will help you understand how well your business is meeting its customers’ needs and expectations so that you can make informed decisions about how best to serve them going forward.

Online Feedback and Reviews

Online feedback and reviews are another great way to measure customer satisfaction. Many businesses use online review platforms such as Yelp or Google My Business, which allow customers to leave detailed reviews of their experiences with your business. These reviews can provide valuable insight into how customers feel about your business, as well as any potential problems they may have encountered.

A study by Bigcommerce shows that the likelihood of a product selling is 270% higher if it has five reviews.

One disadvantage of getting feedback and reviews online on the other hand, is that it does not always provide the most accurate representation of customers’ experiences. Online reviews are often biased and customers may be more likely to leave negative reviews than positive ones. This can make it difficult to get an accurate picture of customer satisfaction, as some customers may post reviews out of spite or even malice.

Additionally, customers may not be willing to provide detailed feedback online, as they may feel uncomfortable disclosing too much personal information.

Nonetheless, online feedback and reviews can provide valuable insights into customer satisfaction levels. However, it is important to be aware of potential biases in online reviews and ensure that you are getting an accurate representation of customers’ experiences.

Tips for Maximizing Customer Satisfaction Measurement Effectiveness

One of the most important steps in measuring customer satisfaction is to maximize effectiveness. This means ensuring that the measuring techniques chosen are reliable and accurate, as well as providing customers with an enjoyable measuring experience. Here are some tips for maximizing customer satisfaction measurement effectiveness:

Know Your Audience

Knowing your audience is an essential part of measuring customer satisfaction. It’s important to understand who you are measuring and what their needs, concerns, and expectations are in order to obtain accurate feedback. It’s also important to consider the customer’s experience when measuring customer satisfaction, as this will affect the accuracy of the data.

Utilize Automation Tools to Streamline the Process

Utilizing automation tools can help streamline the measuring process and make it more efficient. Automation tools such as surveys, chatbots, or customer feedback platforms can be used to quickly collect data from customers in an efficient manner. Additionally, automation tools can provide valuable insights into customer satisfaction levels that would otherwise be difficult to obtain.

Analyze and Act on Your Data

It’s not enough to simply measure customer satisfaction levels; it’s also important to analyze and act on the data that is collected. This means taking the time to review customer feedback and using it to inform decisions about how to improve customer service or product offerings.

Additionally, measuring customer satisfaction should be an ongoing process that is continually monitored and improved upon over time.

You know what they say: it’s not enough to just hear your customers – you have to listen and act on their feedback too! Closing the loop with customers is essential for measuring customer satisfaction, as it allows you to really understand how they feel about your products or services and make adjustments accordingly.

Make Use of Quality Assurance Strategies

When measuring customer satisfaction, it’s important to make use of quality assurance strategies. This means taking steps to ensure that data is reliable and accurate. For example, double-checking survey responses or making sure the right questions are asked in focus groups can help ensure that the data collected is valid.

Additionally, using a combination of measuring techniques such as surveys, focus groups, and interviews can help provide a more comprehensive view of customer satisfaction levels. Quality assurance strategies ensure that measuring customer satisfaction is an accurate process.

Offer Incentives for Customer Participation

In order to maximize the effectiveness of measuring customer satisfaction, it’s important to offer incentives for participation. Incentives such as coupons or discounts can be used to encourage customers to provide feedback and reviews.

It can also be a good benefit to offer rewards to provide and ensure detailed and more comprehensive feedback data is collected. Let’s also not forget that offering incentives also helps make measuring customer satisfaction an enjoyable experience for customers, which further increases the accuracy of the data.

There are various incentives you can choose to give or do but here are some common examples of an incentive or rewards:

• Freebies
• Money
• Discount coupons or giftcards
• VIP access

Regularly Monitor Your Metrics and Measurement Techniques.

Measuring customer satisfaction is an ongoing process, and it’s important to regularly monitor your metrics and measuring techniques. Keeping track of customer feedback and measuring results can help identify areas where improvement may be needed.

Staying up-to-date with the latest measuring trends can ensure that you are utilizing the most effective measuring techniques for accurate customer feedback collection. By monitoring your measuring techniques and metrics, you can ensure that measuring customer satisfaction is an effective process.

Conclusion

We’re finally on our last part! Just remember this. Measuring customer satisfaction is an important part of any business. It provides valuable insights into how customers are feeling about the products and services they receive, and it can be used to make informed decisions about how to improve customer experience.

Utilizing automation tools, analyzing and acting on data, making use of quality assurance strategies, offering incentives for customer participation, and regularly monitoring measuring techniques are all important steps to take when measuring customer satisfaction.

When done properly, measuring customer satisfaction can be an effective process that helps businesses better understand their customers and make improvements to their products or services.

The post Measuring Customer Satisfaction: Tips and Techniques appeared first on Lumoa.

Here, we’ll discuss some best practices for designing effective surveys – everything from creating questions that elicit actionable responses, to logic-checking your data to ensure accuracy. 

So grab a pen (or popcorn) and let’s dive into the world of survey design! 

Carlos Del Corral is an expert on crafting quality surveys. With a track record of working at tech giants like Microsoft and Nokia, he offers top-notch advice to boost response rates while generating deeper insights from survey responses. In this video, Carlos imparts his knowledge gained through extensive experience in market research and product/service design – giving you all the tips needed for successful survey creation!

Survey Design Best Practices

Principles of Survey Design

Designing surveys is an important part of market research, and it requires a great deal of thought and care. It’s essential to keep principles of survey design in mind when constructing questionnaires or polls.

These principles include being aware of respondents’ behaviors, making sure questions are phrased clearly and objectively, ensuring the survey is reliable and relevant to demographic characteristics, as well as minimizing bias.

Additionally, testing survey questions beforehand to ensure they make sense is important before asking respondents to answer them. Those who are responsible for designing the survey should also consider how long a questionnaire should take and whether certain questions are worth asking in light of the target audience.

A well-designed survey has the potential to bring about valuable insights that can be used for future decision-making.

Here are things to keep in mind when creating a survey design:

• Start with the end goal in mind
• Simplify
• Avoid bias and priming
• Optimize for automated insight generation

Start with the end goal in mind

When it comes to surveying design, the most important principle to keep track of is to start with the end goal in mind.

This means that before you even begin constructing your survey, you should take some time to think through and clearly define what result you want to achieve with this survey.

The goal that you set for your survey will define every aspect of the survey, including its complexity. Here are some things to consider:

• Who do you need to interview?
• What kind of results are you trying to get?
• Are you looking for feedback on a new product or service?
• Are you trying to understand customer preferences?
• Are you trying to measure public opinion on a certain issue?

Answering these questions will help guide the design of your survey and ensure that it is tailored toward getting the insights you need.

Simplify to maximize response rate and reduce work

Once you have a well-designed goal, remember to keep things simple when designing your survey. Too many questions or overly complex questions can confuse participants and make them less likely to complete your survey.

Survey fatigue can also be an issue if too much time is required for participants, so keeping your surveys concise and relevant will reduce participant fatigue and increase response rates.

Structure your survey to avoid bias and priming

Avoiding bias and priming is also essential when designing surveys. Bias refers to any question that may lead respondents towards one answer over another, while priming occurs when a participant’s answers are influenced by previous questions or statements in the survey.

Here are 3 simple steps that will help you along the way:

1. Start with a screener
2. Continue to generic questions and concrete questions
3. End with classification questions

Screener – Knowing who should take your survey is essential to getting the results you want. That’s where screener comes in – they help you identify specific demographics so that only those who fit the criteria will respond to your questions. Knowing the demographics for example is a common criterion used for screening surveys – whether it be online or offline market research.

Ask generic questions first and then concrete questions – Start by posing broad questions to understand the overall subject matter before getting into more specific details. This can help ensure meaningful conversations and efficient use of time.

“In Lumoa’s case, if we were interested in knowing more about customers’ overall relationship with the brand, we would first ask about their relationship with us. Only then would we ask about other topics afterward.” Carlos Del Corral

End with the classification questions – These are questions about demographics. For example, age, gender, household income, etc.

These questions are at the end of the survey for two main reasons:

• By asking classification questions at the beginning, people may wonder “why do they want to know all these things about me?”. It’s better to start with questions that are close to the surface of the things you’re interested in.
• Second, this type of classification question is usually very clear to the respondent. For example, an age of a person is extremely easy to determine. And when you don’t have to make an effort to answer the question, they’re quick to get answered, and the drop rate will be smaller.

Remember: Being aware of potential biases, avoiding leading questions, and testing out questions on potential respondents prior to launching surveys can help guard against biased results.

Optimizing survey design for insight generation

Finally, optimizing for automated insight generation is key when crafting surveys. The main point here is that in most cases, you can actually go by, or solve with a simple Key Performance Indicator (KPI) and a “Why?” question.

By asking “How satisfied are you with our product?” and “Why?”, you don’t need to ask multiple different questions about the different features of the product. You’ll find out in the “Why?” question.

“This way of asking questions, (“Why?”) hasn’t been used since there haven’t been tools to analyze those open-ended questions properly. But now that you have tools like Lumoa, you don’t need to ask for many concrete things.” – Carlos Del Corral

Utilizing features such as branching logic (showing different sets of questions based on earlier responses), sentiment analysis (measuring how positive or negative customers feel about particular products or services), and open-ended text analysis (allowing respondents to type in their own explanations) can all enable richer data collection and provide more valuable customer experience analytics into customer behavior or public opinion.

Different Types of Questions in a Survey

By now, we know that surveys are one of the most efficient ways to capture accurate data, which can then be used to inform decisions. But having too many (or few) questions on your survey can have a negative impact and make it difficult for you to collect meaningful insights.

That’s why it’s important to carefully consider all the different types of questions you should include in a survey so that you can get reliable and valuable responses from your respondents.

Here are some common types of questions in a survey:

• Behavioral type of questions
• Attitudinal type of questions
• Classification type of questions

Behavioral Questions

Behavioral questions focus on the actual behavior of respondents, such as what they have done in the past or what they’re currently doing. They’re designed to provide information about how people behave. Some examples are:

• “How often do you visit the doctor?”
• “How much spread do you buy in a typical week?”
• “How often do you purchase groceries online?”

NOTE: It would be ideal if you already know your customers’ digital behaviors. For example, how often do they access a particular service (Google Analytics), or how much do they purchase (CRM), etc. Thus, these questions aren’t really needed in your survey.

Attitudinal Questions

Attitudinal questions seek to uncover how people feel about a given topic or product. These questions help researchers understand a respondent’s attitude toward an issue or concept:

• “How would you rate our product?”
• “How likely are you to recommend…?” (e.g. typical NPS questions)
• “Why did you give us that score?” (open-ended questions)

Open-ended questions are important since they allow you to express your feelings, emotions, and sentiments. They’re not just saying that they love your product, but also answering why. This is different from just getting a score of 9 in an NPS rating. Getting insights from the data is easier because it’s richer.

NOTE: Whoever is designing a survey should be careful to ask neutral attitudinal questions that don’t lead in any one direction.

Classification Questions

Classification questions ask respondents to identify themselves in terms of their demographics such as age, gender, race, and other categories. These types of questions help researchers understand their target audience better.

NOTE: In today’s “woke culture” we need to ensure that these questions are phrased in a non-discriminatory manner.

Creating Questions Do’s and Don’ts

Survey designs should always aim to keep surveys concise and easy to understand so that respondents are more likely to complete them. Let’s go through some do’s and don’ts when creating questions.

Avoiding Bias: Symmetrical Scales

The most commonly used scale for surveys is the Likert Scale, which is a symmetric 7-point scale ranging from strongly disagree to strongly agree. Survey designs should have question-wording that reflects this symmetry.

For example, if the question is “I’m satisfied with my purchase”, then the Likert scale should have seven points ranging from “strongly disagree” to “strongly agree” and not just three or four points.

Avoiding Bias: Leading respondents

Leading questions are those that suggest a particular answer to the respondent and will influence their response. Survey designers need to be aware of this and should ensure that their questions are neutral, and framed in a way as to not lead respondents toward a particular answer.

Ask One Question at a Time

One should avoid asking more than one question in the same statement. This can confuse you and your respondents. Leading them to give inaccurate or incomplete responses.

Simple, Specific, and Short Questions

Surveys should be kept simple and on point. Remember to make the questions as easy to read and clear as possible while avoiding the use of complex language or jargon. Survey respondents have limited attention spans and will be more likely to finish the survey if the questions are straightforward and easy to understand.

Avoid Jargon and Acronyms

Following the above note, avoiding jargon and or abbreviations that may confuse respondents should be avoided. If terms have to be used, they must be explained clearly in the survey question itself.

Avoid Questions that Require Respondents to Perform Calculations

Questions that require a respondent to calculate an answer should be avoided as much as possible unless necessary. Because it can lead to inaccurate responses. A workaround would be providing ready options for respondents so that they can select the answer with ease.

Optimize open-ends for rich results

We know already that open-ended questions are a great way for survey designers to get more detailed feedback from respondents, but they can be difficult to analyze. So remember to make sure that the questions are phrased in such a way as to ensure that the response can provide useful insights.

BONUS: Metric Selection – Optimizing for impact within the organization

Selecting metrics and scales can be controversial. On the other hand, remember that there is no one-size-fits-all. Consider what type of business you have and what works for you and everyone who’s involved in it. Let’s quickly discuss the two.

Metric Selection

There are many different metrics to choose from, such as CSAT, NPS, and CES. KPIs can be optimized for different touchpoints, and there’s a lot of theory about how to do that.

Our recommendation is to simplify rather than optimize for marginal improvements. Using fewer metrics and scales, as well as being consistent with those metrics will help make the process as simple as possible.

“As far as metric selection is concerned, Lumoa has a very pragmatic approach to it. We believe that your organization should drive impact in whatever you do.” – Carlos Del Corral

Achieving change within an organization and driving customer-centricity is already challenging, especially in larger organizations. Every time you add a layer of complexity, it becomes more complex.

For example, If you only have NPS, you only need to explain one metric to your stakeholders, or the organization. Adding more to the equation may result in a loss of understanding of what they mean, and practicing becomes more difficult.

Remember these and thank us later:

• Simplify
• Be Consistent
• Reduce the number of metrics in use

NOTE: NPS is not the only metric; there are other widely known/used metrics that can be used instead (NPS is not without its pitfalls)

Scale Selection

Scale selection generates much debate in market research. To achieve consistency,  you should measure across touchpoints and business areas using the same scale, if possible, across all touchpoints.

Just focus on improving, but keep the scale consistent so you can compare and measure improvements.

The scale will be largely determined by the KPI you will choose. Some use standard scales like NPS (1-10).

In selecting a scale, we strongly recommend avoiding creativity. If you do this, it’s impossible to follow the benchmarks. It’s recommended that you stick to the definition of a standard metric or KPI if you choose one.

It may be necessary to force a choice in some cases. Suppose you want to force your customers to tell you if they’re happy or not. If this is the case, a 4-point scale is a good option, since you can have very dissatisfied, dissatisfied, satisfied, and very satisfied. The key again is to be consistent and keep measuring improvement and change.

Generating Insights from Results

With Lumoa, it’s never been easier to gain powerful insights from customer feedback. Whether you’re looking at surveys, transcripts of phone calls and chats, or collecting online reviews – everything can be integrated into one platform!

Forget manual work as all the touchpoints are organized for you in an instant. You’ll also benefit from real-time analytics in over 60+ languages so nothing goes unnoticed. But that’s not all – after gaining your insight, use Lumoa to close the loop by following up on tasks and making sure everyone is held responsible for the voice-of-customer.

Conclusion

Designing surveys is essential for market research but it can be difficult to know where to start. By keeping the principles of survey design in mind, you can create questionnaires that are simple and easy to understand, which will result in more reliable data.

With the help of Lumoa, collecting and analyzing customer feedback from a variety of sources becomes easy. Moreover, you can get the insights you need to make informed decisions about your business.

Now, we can say that you’re definitely ready to start creating your own survey!

The post Survey Design Best Practices And Guidelines appeared first on Lumoa.

One tool businesses can use to capture valuable insights is the transactional Net Promoter Score (tNPS). This metric measures the likelihood of a customer recommending a business or product after experiencing it firsthand, revealing key information about customer satisfaction. 

In this article, we’ll look at tNPS in depth, explaining how it works, how you can use it to understand consumer sentiment, and how it can help in improving your customer experience.

What is a transactional NPS (tNPS)?

Alright, we get that it’s important for businesses but, what exactly is Transactional Net Promoter Score (tNPS)? Transactional Net Promoter Score (tNPS) is a measure of customer satisfaction. It’s a collection and the result of gathered data and feedback about an individual’s experience with a business or service.

TNPS surveys are usually sent out immediately after a customer makes contact with the business. These surveys provide valuable insight into how the interaction went, and whether it was either satisfactory and likely to result in customers promoting the business further.

“TNPS surveys ask the right questions to your customers at the most critical moment – after a transaction,” explains Colin Palfrey, CMO of Crediful. “By asking your customers how they feel immediately after interacting with your business, you can gain a truthful insight into their customer journey. TNPS gathers touchpoint-specific data to give you an overview of the strengths and weaknesses within your business.”

By quickly sending out tNPS surveys to customers and analyzing the results, companies can easily identify where their customers fall on the scale of Promoters, Passives, or Detractors based on their responses.

This type of feedback allows executives to adjust and quickly pinpoint customer satisfaction success or failure, as well as anticipate future areas that require improvement.

How to calculate transactional NPS (tNPS)?

Going back to the basics, the Net Promoter Score (NPS) is a way to measure customer satisfaction and loyalty. It does this by asking customers to rate their experiences based on a scale of 0-10, with 0 being the least satisfied and 10 being the most.

NPS divides customers into three categories:

• Promoters: are very satisfied with the company they’re talking about and will highly recommend it to others; they rate 9 or 10 on the scale.
• Detractors: are not satisfied at all – they typically give a rating between 0-6.
• Passives: are somewhere in-between, giving ratings of 7 or 8.

By measuring the ratio between these different segments of customers, companies can get an idea of how their services are performing and how loyal their customers really are.

Calculating tNPS is straightforward – just subtract the percentage of detractors from the percentage of promoters. That’s it! Knowing these stats can be really useful in helping you quickly identify up-and-coming trends and feedback from customers.

What is the difference between transactional NPS (tNPS) and Net Promoter Score (NPS)?

We now know that the Transactional Net Promoter Score (tNPS) is a simple way to get a snapshot of how your customers feel about the transactions they’ve had with your company. But what is the difference between tNPS and NPS?

Transactional Net Promoter Score (tNPS) and Net Promoter Score (NPS) are two common measurements used to understand customer feedback. While they’re both useful, they measure different facets of the customer experience.

TNPS takes a closer look at individual customer interactions and helps to identify potential issues that need resolving in order for companies to keep their customers happy.

On the other hand, NPS looks more broadly at the overall satisfaction of customers. This score provides an indication of how well a company is doing as a whole by asking customers for ratings and collecting survey results.

“Sending a tNPS survey to a new customer is a great way to see if your business is driving away potential customers,” says George Tsagas, Owner and Founder of eMathZone. “Asking new customers to complete a tNPS survey will reveal whether your onboarding process is effective. You can use tNPS for any interaction you have with your customers to check if your clients are happy.”

Traditional NPS surveys ask the customer how likely they are to recommend a business without asking detailed questions. NPS surveys ask simple questions such as “how likely are you to recommend us to a friend?” This type of survey can tell us whether the customer is happy or not but without the finer details.

Meanwhile, a typical tNPS question may ask, “Based on your recent free trial, how likely are you to recommend our products to a friend?” Targeted questions through tNPS surveys can identify specific pain points your company fails to address.

By using both tNPS and NPS, businesses can get an idea if any specific issues are affecting customers’ opinion of them as well as get an understanding of how satisfied people are with their service in general.

Using tNPS to improve your Customer Experience

“Exceptional customer service plays a vital part in the growth of any business. 89% of customers say they are more likely to complete a purchase after a positive customer service experience,” explains Jim Pendergast, Senior Vice President of altLine Sobanco. “Customers are more likely to forgive mistakes after receiving excellent customer service. Using TNPS can help you enhance your company’s CX and prevent customers from leaving.”

Transactional Net Promoter Score (tNPS) is a great tool for improving your customer experience. With tNPS, you can measure your customers’ satisfaction as suited to their individual experiences with you and use this feedback to hone in on where additional efforts should be made.

From gathering feedback on the efficiency of delivery, to learning what product features are most appreciated by customers, using tNPS helps companies uncover insights and make improvements, which leads to happier customers who will be more likely to trust in a brand’s products or services.

Types of transactional NPS (tNPS) surveys

The main goal of tNPS is to gauge customer satisfaction with the transaction and to identify any areas where the company can improve its service. On the other hand, there are various types of tNPS surveys.

These surveys provide valuable insights into how well a company’s products or services meet customers’ expectations and can be used to improve customer experience, drive product innovation, and build better customer relationships. Let’s check out each one of them.

Post-purchase Surveys: Post-purchase surveys are sent to customers after they’ve made a purchase from the business. This type of transactional NPS survey allows businesses to measure how satisfied their customers are with their purchase decision. It also helps them find out what areas could use improvement, such as product features, delivery speed, product value, customer service, etc.

Post-purchase surveys give companies an opportunity to create more meaningful customer relationships by acting on any feedback they receive quickly and effectively.

Post-service Surveys: Post-service Transactional NPS surveys are sent to customers after they’ve received a service from the business. This type of survey is helpful for measuring customer satisfaction with the quality of service delivered and allows companies to identify areas of improvement for future services or products.

Acting on this feedback quickly gives companies the chance to build trust with customers and make sure that each customer experience is positive and memorable.

Event-specific Surveys: Event-specific Transactional NPS surveys are sent out after an event has taken place, such as a conference or trade show. These surveys allow businesses to track audience sentiment in real-time and understand how successful the event was in terms of delivering value to attendees.

The insights gleaned from event-specific Transactional NPS surveys can be used to inform future events, ensuring that each one maximizes its impact on attendees while providing the business with maximum ROI.

Follow-up Surveys: Follow-up Transactional NPS surveys are sent out at intervals after a purchase or service has been delivered in order to track long-term satisfaction levels over time.

Companies can use these kinds of surveys to get detailed feedback about various aspects of their offerings and make sure that their products or services remain relevant and up-to-date according to changing customer needs over time.

By proactively taking action on any negative feedback received through follow-up Transactional NPS surveys, companies can stay ahead of any potential problems before they become full-blown issues down the line.

“Understanding the strengths and weaknesses of your competitors is a vital part of building your CX strategy,” says Jarret Austin, Owner of Bankruptcy Canada Inc. “If your customers are choosing your competitors, then you need to find out why. Looking at their customer feedback will help you understand their products, services, and customer service abilities and why customers rate them higher.”

What are some factors that influence transactional NPS (tNPS)?

The factors that influence tNPS scores can vary greatly depending on the business’s product or service offering, but in general, they can be broken down into three categories: customer experience, brand awareness, and product reputation.

Customer experience encompasses everything from ease of use to customer service; improving this will have a direct impact on TNPS scores. Brand awareness refers to how familiar customers are with your company and its offerings; if they recognize your brand, they’re more likely to be satisfied with their purchase or service.

Finally, product reputation reflects the opinions of existing users; if their experiences have been positive, then this will have an effect on TNPS scores as well.

Improving your tNPS score isn’t a one-size-fits-all kind of task; it requires a comprehensive approach that takes into account all of the factors mentioned above. To start off, make sure you focus on providing an excellent customer experience through quality products/services and top-notch customer service – no one will want to recommend something that didn’t meet their expectations!

Additionally, leverage social media and other channels to spread awareness about your brand and its offerings – letting potential customers know why you’re different from competitors.

This will help build positive impressions before they make a purchase decision. Finally, make sure you pay attention to what existing users have to say about your products/services.

Responding quickly and appropriately when issues arise can help ensure that those users remain satisfied with their purchase decisions even after using them for some time.

“Obtaining a TNPS score of 100 is impossible for any business to achieve,” explains Kyle Zien, Director of Growth Marketing at Felix. “Getting a positive TNPS score is possible for businesses who use customer feedback to their advantage.

Asking your customers to give feedback also shows that you value their opinion. Giving your customers a voice will strengthen customer relationships and turn loyal patrons into brand ambassadors who will recommend your products.”

Having a high TNPS score has numerous benefits for businesses both small and large alike. For starters, it serves as an indicator of how loyal your customers are which can provide valuable insights into future growth strategies (e.g., which areas should be emphasized for improvement).

Furthermore, having high marks in terms of customer loyalty means that more people may be willing to recommend your product or service – leading to greater word-of-mouth advertising without any extra effort on your part!

Key Takeaways

•TNPS is a metric that measures the likelihood of a customer recommending a business or product after experiencing it firsthand, revealing key information about customer satisfaction.

• TNPS surveys are usually sent out immediately after a customer makes contact with the business and provide valuable insight into how the interaction went.

• NPS divides customers into three categories: Promoters, Passives, or Detractors based on their responses.

• Calculating tNPS is straightforward – just subtract the percentage of detractors from the percentage of promoters.

• Transactional Net Promoter Score (tNPS) and Net Promoter Score (NPS) are two common measurements used to understand customer feedback but measure different facets of the customer experience.

• Post-purchase Surveys, Post-service Surveys, Event-specific Surveys, and Follow-up Surveys are all types of tNPS surveys businesses can use to gather feedback about various aspects of their company in order to improve customer experience.

The post What is tNPS? Understanding Transactional NPS appeared first on Lumoa.

Furthermore, customers remember their good and bad experiences with brands. Having the right people in your customer experience team not only strengthens your relationship with your customers but also encourages them to become repeat customers of the brand. This means they will voluntarily advocate for your brand and promote your business by word of mouth.

Here’s your ultimate guide on how to build a customer experience department.

Preliminary Steps

Having the right people behind your customer experience department is vital. But when you’re looking for new people to fill roles your organization has never had, it can be quite a challenge.

We’ll walk you through the key steps to building a successful customer experience department in this guide. We will discuss topics such as defining the department’s goals and objectives, assessing the current state of customer service, and developing a strategy.

These preliminary steps will help you create a customer experience department that meets your customers’ needs and achieves your business goals. By implementing a structured approach with the help of a customer experience strategy template and conducting a thorough customer experience audit, you can lay a solid foundation for a department that not only understands but also enhances the customer journey at every touchpoint.

1. Identify the Company’s Goals

Before you start looking for people or draft your CX strategy, your first step should be to clarify and understand the wider objectives of your organization.

What does the company want to achieve? This is true both in terms of Customer Experience – e.g., are there strategic goals around CSat or NPS? -, and in terms of broader business objectives – e.g., increasing market share, reducing churn, cutting costs, etc.

Whether your company is using the Balanced Scorecard, OKRs (Objectives and Key Results), SMART, or simple KPIs, this will help you align the work of your future customer experience department to goals everyone in the company cares about. And it will make it easier to build strong relationships and a strong culture of customer centricity.

What’s more, it will help you build a link between your CX team goals and the broader company goals. For example, you will be starting to ask questions like: how does a shorter average response time help us achieve better retention? How is NPS increase related to revenue increase or reduced churn? And so on.

2. Map Your Current Customer Journey

To gain a better understanding of how exactly your customers interact with your business, you will need to map out the current customer journey. A customer journey map provides a detailed visual representation of how your customer moves through each interaction with your brand and what experiences they have.

There are different ways to create a customer journey map, and it’s essential to keep in mind that the customer journey is not always linear. Different types of customers will interact with your brand in various ways, they might go back and forth between different touchpoints, and that’s why mapping can be quite the challenge.

One way or the other, mapping your customer journey means answering the following questions:

1. Who is the customer? – What are they like? What motivates them to buy? What are they concerned about?
   
2. How many different ideal customers (personas) do we have? – What are their key characteristics (pro tip: consider both demographics or psychographics)? Where do they hang out? What are their goals?
   
3. How do they get in touch with us? – Do different types of customers have a preferred way to buy? What are the key touchpoints for different personas?
   
4. How can we measure the interaction? – What’s the goal at the different stages? What’s something measurable that can tell how well we are doing?
   
5. How does the map look like? – To keep it simple, you can start with three stages: Awareness, Consideration, and Decision. Then expand with Retention and Advocacy (if that’s relevant).
   

Without going too much into detail here, it’s also worth remembering that there are four ways to map customer journeys.

• Service Blueprint provides an organized visual representation of the customer journey, showing all the touchpoints between a customer and a company’s services in an easy-to-understand format. It’s an effective tool for uncovering potential pain points and identifying opportunities for improvement.
• Current state mapping helps organizations pinpoint where they are currently failing to meet customer expectations, as well as any areas that could benefit from further optimization. This type of mapping is useful for pinpointing gaps in customer service and uncovering areas of improvement.
• Future state mapping focuses on identifying the desired outcomes that an organization wishes to achieve as part of its customer experience strategy. It helps organizations create a roadmap for future development and determine what changes need to be made to reach those objectives.
• Day in the life mapping is an excellent tool for visualizing a customer’s journey through their entire experience with a company. By creating a detailed narrative of what the customer does and how they move throughout their journey, organizations can gain valuable insight into exactly where customers are getting stuck or where their experience could be improved.

Current State & Future State from cx-journey.com

3. Decide When and How to Collect Data and Feedback

Utilize your customer journey to its full potential by identifying the data you collect at each stage and determining what more information you need to gather.

Remember, not all data is created equal. Set clear start and endpoints for your data collection efforts.

Tracking website visitor data over a long period of time, for example, requires setting up the necessary tracking mechanisms.

In contrast, if you are running a specific campaign and need customer experience data for a limited time, then you should focus your efforts on that period. If you collect data intentionally and selectively, you will gain valuable insights that will help you improve the customer experience and drive business success.

4. Identify What Other Departments Need to Be Involved

Customer experience extends beyond a company’s customer-facing roles. In an organization, there are different employees handling customer data or interacting with customers at various points in their journey. To ensure customer satisfaction, key members of different departments who have direct contact with customers should be involved.

The departments may include customer-facing functions such as marketing and customer service, as well as internal functions such as product development, manufacturing, and fulfillment. They play an important role in shaping the overall customer experience, and it is crucial that they know what their role is in the customer experience strategy and how it impacts the brand.

Also, their understanding and engagement in the company’s customer experience strategy is vital to its success. Here’s when you can leverage your knowledge and understanding of the broader company goals.

Pro Tip: Building strong relationships with other departments is not a one-off thing. To ensure alignment between the strategy and the needs of these employees and their customers, regular feedback should also be collected from them and they should always be kept in the loop. It’s hard work, we know!

Building Your Customer Experience Department

Are you ready to kick customer experience up a notch? Sure, customer service is important, and that’s a fantastic first step for many companies. But what would your business look like if you set the bar even higher and started building an entire department that focused on creating great customer experiences?

Some think having a focused CX team can be expensive, yet they don’t realize that no matter what size of a business they are, having an effective CX strategy and team is essential. Dedicating time and resources to build out their customer experience isn’t just important now – it’s downright paramount for businesses who want to stay ahead of their competitors in our ever-evolving digital age. So, let’s get started!

Here’s what you need to keep in mind as you build a customer experience team.

Background and Expertise

The department’s role in implementing changes is crucial, so you’ll want to fill it with people who are up to the task. Your team must be skilled in market research and analysis, be the voice of your consumers, and be the driving force behind change and the elimination of pain points.

For these reasons, customer experience departments will benefit from people who have a background in:

• Market and customer research, to tackle the collection and analysis of data, that is essential to the success of CX.
• User experience design, to be able to apply concepts such as human-centered design to cross-functional projects.
• Project management, to ensure that projects are well organized, completed on time, and meet key metrics.
• Communication and problem-solving, to promote team initiatives and manage change within the organization.
  

A recent report on customer experience professionals supports the areas listed above by stressing how the people you hire for your CX department should be able to:

• Conduct and analyze market research
• Handle responsibilities related to VoC (Voice of Customer)
• Implement programs involving customers, employees, product, and brand experience

Ideally, you will hire people who have already worked in Customer Experience, Customer Service, Customer Insights, and other related fields. But since that is not always possible, prioritize the skills we listed above, as those will ensure you have the right background in your newly formed customer experience department.

Pro tip: If your customer journey is mostly digital (e.g., website, apps, etc.), you may want to consider looking for people with relevant skills and experience. For example: website optimization, content marketing, and digital analytics.

Roles and Structure

The titles and the structure you will be giving to your CX team will of course depend on the size of it, and ultimately on the size of your organization.

Start-up and Small/Medium Businesses (CX teams of 3 to 5 people)

Compared to a large organization, a startup’s customer experience department may be smaller and less formal. Structures may be flatter and cross-functional, with employees wearing multiple hats and some of them also dedicating only half of their time to customer experience initiatives.

Here’s an example of how a startup’s customer experience department might be structured.

Customer Experience Manager / Director

This leadership role is responsible for overseeing the CX team, setting up the key processes and goals, establishing relationships with the rest of the organization, and reporting to executives and the board. They have responsibilities for both people management and project management.

Voice of Customer / Customer Insights Manager

This is the more analytical role, and it needs someone skilled at understanding data, customer experience analytics, taxonomies, conversational analytics, and in general customer feedback. They also need to be able to make sense of them, build reports, and recommend actions.

User Experience Specialist or Manager

This position is in charge of improving the customer experience through human-centered, design-thinking methodologies. Throughout all touchpoints and channels, the User Experience Specialist is responsible for creating an enjoyable, seamless, and intuitive customer experience. The role might need the support of a User Interface designer or a Digital designer if your company’s offering is mainly digital.

Customer Experience Specialists

Depending on your budget or company size, you might be able to hire additional Customer Experience Specialists to complete your Customer Experience Departments. Their duties are various, they have a supporting function, and they help implement the overall CX strategy. In this sense, it is good to look for junior people who can complement the skills of the other members of the team and can grow within the organization.

Larger Organizations and Enterprises (CX teams of 10 to 20 people)

Typically, a large organization’s customer experience department has a complex structure and is a significant part of the company. In addition, it may be composed of a number of teams and functions, each with a specific role and responsibilities.

Here’s an example of how an enterprise customer experience department might be structured.

Chief Experience Officer (CXO)

The Chief Experience Officer is the highest level and is responsible for promoting Customer Experience in the organization, while at the same time ensuring that the Customer Experience team has everything they need to achieve their targets and execute their strategy.

An organization’s Chief Experience Officer (CXO) is responsible for the organization’s overall customer experience strategy and direction. Typically, the CXO is a member of the senior leadership team and is responsible for ensuring the customer experience is integrated across the entire company. For that reason, a big part of their responsibility is to sell the value of customer experience to other stakeholders.

A CXO must develop a long-term vision for customer experience and ensure that it aligns with the organization’s overall goals and strategy.

Note that large organizations often also have a Chief Customer Officer (CCO), and their responsibility is mainly related to managing the customer service and customer support function of the company. In some cases, the two roles might be combined though.

Customer Experience Operations Manager (CXOM)

Data and methods of data gathering can vary per department, which can create silos. The CX operations manager’s role is to unify everyone involved and guide the team in the best ways to use the tools available to the company. These tools can be automation software, communication apps, or help desk suites.

While the CXO is responsible for the overall customer experience strategy, the CXOM is responsible for the day-to-day operations and management of the customer experience team. The two positions work closely together to ensure that the customer experience is aligned with the organization’s overall strategy and goals.

Customer Experience Analysts / Voice of Customer Managers / Customer Insights Managers

This role utilizes advanced analytics and research techniques to analyze customer feedback to identify areas for improvement. They also monitor customer behavior and trends to inform product decisions and track changes in customer sentiment over time.

Additionally, they use surveys, focus groups, and other methods of soliciting direct customer input to create actionable plans that drive better experiences for customers. Ultimately, their goal is to provide strategic recommendations based on meaningful insights that will help shape the future growth of the business.

As we are addressing the needs of a larger organization, there might be 4 to 8 such professionals in customer experience departments, each one responsible for a specific business unit, or part of the offering.

Service Design Managers and/or UI Managers

They are responsible for creating and maintaining a customer-centric service design process, as well as managing, monitoring, and evaluating the performance of services and products against set goals.

With the help of analysts in the team, they research and analyze current trends in the market and in service design, and then identify areas for improvement within the existing products and services. Additionally, they are responsible for working with cross-functional teams to ensure cohesive delivery.

Customer Experience Managers and Customer Experience Specialists

They are in charge of executing against the overall strategy and implementing initiatives that translate data and insights coming from the analysts into concrete actions. They manage projects of different complexity, often involving other stakeholders and departments.

Their primary goal is to ensure that customer experience is alive within the organization and that customers actually perceive the company and brand as active and proactive in understanding their needs and wants.

Customer Support

In some cases, the customer support function might be part of the larger customer experience department. When this happens, the size of the department increases exponentially, including roles such as Head of Customer Support, Customer Support Managers, Technical Support Specialists, Customer Support Representatives, Head of Quality Assurance, Quality Assurance Specialists, and more.

It is worth noting that most companies keep customer experience and customer support separated, each one of them reporting to different executives. This is mainly because the customer support function can be extremely complex. The overall goal is nonetheless the same: creating experiences for customers that exceed their expectations and make them want to come back for more.

The difference between a small and large organization

Designing Customer Experience Processes

​​Crafting the customer experience is a combination of many different processes that need to be in place. These processes are:

1) Feedback and Data Collection

Having processes in place to facilitate consumer feedback collection is essential. You can collect feedback through customer interviews, polls, reviews, surveys, or installing the proper customer feedback tools. It’s important to remember that your organization probably already has a lot of customer data available, so starting with an assessment of what is there and what instead might be missing is a good first step.

2) Feedback and Data Analysis

The next question is, how do you make sense of all the data you’ve gathered? For the team to derive insights from the data, it must first be organized and compartmentalized. It requires the expertise of a data analyst, an agency, or an automation tool.

3) Feedback and Data Reporting

This stage is about developing methods for translating the insights into a digestible format that makes sense to those consuming it. You will soon realize that there is no one-size-fits-all report that you can distribute to everyone.

This is why it is important to establish relationships with the different stakeholders and clearly understand their goals and motivations. Build this aspect into your processes.

4) Closing the Loop and Measuring Success

Data collection, analysis, and reporting are nothing without action. When you build a customer experience department, make sure you have processes in place to translate data into actions, and actions into successes, both for your team and for the company.

Tech Stack For Your Customer Experience Department

Another crucial step as you build a customer experience department is to figure out what tools and software your customer experience department needs to implement its strategy.

Depending on the maturity of your company, you or other colleagues might already be using some of the following tools, so even in this case it is worth it to start with an assessment of what tools and systems are already in use.

Before we get to the different categories of tools you might consider, be aware that there are solutions that aim to cover the full spectrum of needs of a customer experience department.

Platforms such as Lumoa allow customers to:

• collect feedback via surveys or import customer data from different sources
• analyze customer feedback, categorize it, assess the impact on key metrics, and make sense of it
• assign tasks to colleagues throughout the organization
• and report on the results

The real benefit of these customer experience platforms is that they consolidate customer data in one place, therefore making it easier to establish a real customer-centric culture that goes beyond the customer experience department.

Now that you know how to look at customer experience tools holistically, here is a brief review of the main areas where tools are available.

Survey or Feedback Collection Tools

Survey tools are used to collect and analyze data. They allow users to create surveys, polls, and questionnaires that can be distributed online or via print. They also typically provide basic reporting capabilities. Some of the most popular tools are:

• SurveyMonkey
• SurveyHero
• QuestBack
• SurveyPal

Image from PC Mag

Feedback Analytics Tools

The importance of feedback analytics tools lies in the fact that they allow organizations to collect and analyze customer feedback in a systematic and efficient manner. Moreover, they can identify patterns and trends in customer satisfaction, dissatisfaction, and preferences, thereby improving their products, services, and overall customer experience.

Furthermore, these tools can be used to identify areas for improvement in an organization’s business, as well as track progress over time.

Here are some examples of tools you may want to take into account:

• Lumoa
• Birdeye
• AnyRoad

Lumoa, for example, looks at any customer interaction, automates the analysis, and highlights the items with the biggest impact on your key KPIs. This is a huge help, not only when trying to take ownership of customer experience metrics such as NPS or CSat, but also when attempting to have customer experience impact business metrics.

Project Management Tools

Because of the sheer amount of tasks that will fall under the customer experience team‘s purview, a tool that helps you keep projects, tasks, milestones, and deadlines on track will be indispensable.

Here are a few stellar choices:

• Asana
• Basecamp
• Teamwork
• Trello
• Zoho Projects

Pro tip: While the mentioned project management workflow tools and task management software offer a range of features to streamline your workflow, consider incorporating AI-powered tools to enhance your project management capabilities. AI project management tools can automate repetitive tasks, provide real-time insights and analytics, and even predict potential roadblocks, empowering you to make informed decisions and keep your projects on track.

Reporting Tools

By presenting data insights visually appealingly, insights can be easily understood. Those who are less familiar with data analysis can benefit from this by making the data more accessible and engaging.

Here are some examples of tools you might consider:

• Qlik
• Zoho Analytics
• Tableau
• PowerBI

Pro tip: Remember also to determine whether there are any other company-wide tools (such as CRM systems or help desk software) where important customer data might be stored. Integrating CRM of helpdesk software with feedback analytics tools such as Lumoa, for example, will unlock the possibility of looking at insights by customer segment or customer value, therefore improving your chances of determining real business outcomes with your customer experience initiatives.

Evaluating the Results of Your Efforts

To measure customer experience efforts, Ed Thompson, Distinguished VP Analyst at Gartner, recommends the following six categories and practices:

Customer Satisfaction (CSAT)

This is a basic metric that gauges how well your company has satisfied- or met- the demands of its customers. CSAT can be obtained by surveying consumers and asking them to rate their degree of satisfaction with each item. For instance, “On a scale of 1 to 10, how satisfied are you with our service?”

To calculate your CSAT score, divide the positive replies by the total number of responses, then multiply by 100. Your answer should be in percentage.

Customer Loyalty/Retention/Churn

This considers how many customers come back and stay regular customers and how many stop using your company’s products or services over a certain period. Some measurements to use are purchase frequency, average order size, repeat orders, and the number of loyalty program members.

Advocacy/Reputation/Brand

This determines the customer’s willingness to recommend your products or services. Some metrics you can use are price sensitivity, social media sentiment scores, trust ratings, and event attendance.

Quality/Operations

This looks at how well your products or services meet customer standards and requirements. Thompson says that when a product or service fails to meet those standards, the customer experience will be terrible no matter what is done to fix it.

Employee Engagement

When employees see many failed attempts to improve customer experience or experience executives who only want quick results, they can get disengaged. Employee engagement then becomes a CX strategy challenge. 86% of organizations have cited employee engagement as having an equal or more significant impact than other CX challenges.

To the list by Thompson, we believe it is worth adding the Net Promoter Score, which many consider the gold standard to measure Customer Experience.

Net Promoter Score (NPS)

If you’re a business looking for ways to measure customer loyalty and satisfaction, Net Promoter Score (NPS) is your go-to metric. NPS relies on asking customers to rate their likelihood of recommending a business or product on a 0-10 scale. Ratings from 9-10 are considered “Promoters,” 7-8 are “Passives,” and 0-6 are “Detractors.” The Net Promoter Score is then calculated by subtracting the percentage of Detractors from the percentage of Promoters. With this metric, you can gain insight into how satisfied customers are with your business or product.

Integrating text analytics and AI into the customer experience evaluation process enhances this metric’s value, enabling businesses to delve deeper into customer feedback. By analyzing open-ended responses associated with NPS surveys through text analysis, companies can uncover the reasons behind their scores, offering more nuanced insights into customer experience. This AI-driven approach allows for a more comprehensive understanding of customer loyalty and satisfaction, transforming raw data into actionable intelligence for improving customer experience.

Tips For Leading a Customer Experience Department

Invest Time in Cross-functional Relationships

Collaboration among cross-functional team members can help the team flourish. For the team as a whole to succeed, members must learn to work and rely on each other. But first, the team should mutually respect each other’s contributions and place in the team.

A good strategy to foster these cross-functional relationships is to have team members regularly celebrate the successes of their colleagues. One approach is through the use of a communication platform that enables members to recognize one another publicly.

Train in Reporting and Story-telling

Data reporting is a crucial skill that entails gathering, evaluating, and structuring data into an understandable format. It is a process that helps analyze team performance and supports decision-making; thus, it must be done effectively. 

As statistics and data can become dull over time, more and more businesses are turning to storytelling to improve employee engagement. When the speaker can elicit emotion from their audience, they can present the report more effectively. People will remember the insights better if they can relate to them than if the information was just read to them.

Develop Career Paths For Your Team Members

To keep the team motivated, you need to invest in their growth. Please keep track of your team’s progress by establishing clear career paths that will help them move up in their positions. This means giving members goals to work toward and telling them what skills, knowledge, and experience they need to move forward.

Let Them Hang Out Where Your Customers are

While data is the backbone of building a successful customer experience strategy, letting the team experience firsthand what customers do can be an eye-opener. To give them a real-world experience they can learn from, encourage members to assume the role of the consumer and make a purchase or inquiry.

This should enable them to identify any room for growth and areas where the company thrives.

Conclusion

A customer experience department is essential for any company that wants to retain happy and loyal consumers.

To develop and implement a customer experience strategy, a company must understand its goals and current status to build a customer experience department.

As a result of the investment in customer experience, customers will develop brand loyalty, act as brand ambassadors, and advocate for the company, increasing customer retention and overall business success.

Finally, remember that it’s important for companies to understand that investing in building a customer experience department is not only a cost but also an investment in long-term growth and success.

The post The Ultimate Guide: How to Build a Customer Experience Department appeared first on Lumoa.

That said, there are a huge number of factors that influence the customer experience or CX of your financial institutions. This includes an ever-changing landscape, increasing competition, and new technologies, among many other variables. 

Keeping up with the latest trends can help you understand the impact that these tendencies have on your banking customer experience. This, in turn, allows you to build better products and features designed to meet your customers’ biggest needs, all while making timely adjustments that produce better results. 

Let’s take a look at the trends that will shape the customer journey in banking in 2023 and beyond.

The Current State of Banking CX

Before going over the biggest banking customer experience trends, let’s take a moment to analyze today’s landscape.

There is no doubt that the COVID-19 health crisis has heavily influenced the current state of customer experience in banking. From a business perspective, banks and other institutions were left scrambling to adapt to their customer’s needs, which changed practically overnight. 

This new set of requirements included better digital features, the ability to handle a higher number of user inquiries, and new financial products. 

Let’s take a closer look at the impact, which we can still see today. 

Balancing Digitalization for Better Financial Relationships

Consumers have wholeheartedly embraced the transition to digital banks. But, this doesn’t mean they’re ready to go fully digital. 

It’s estimated that 61% of bank customers interact with their institution’s digital channels on a weekly basis. On the other hand, 32% of customers actually prefer to avoid branches altogether.

With the above in mind, there’s a significant number of users who want access to branches in order to solve certain problems. According to Samsung, 77% of customers still seek in-person assistance when facing an unusual or complex account issue. 

Having a hybrid synched system is the only way to ensure a great experience across all customer demographics. In turn, this will lead to customers migrating to financial institutions that offer such experiences.

The fact that consumers have a wider range of alternatives (and are willing to exercise them) means that the relationship between banks and their customers has become more vulnerable than ever before. This means that banks need to pay close attention to their customers’ behavioral patterns and make improvements to keep clients happy. After all, consumers are now looking beyond the elements that banks have traditionally focused on for decades, like a large number of branches. The paradigm shift in consumer expectations necessitates a strategic approach to banking customer relationship management, ensuring that every interaction is meaningful and aligned with the evolving needs and preferences of the modern consumer.

Real-Time Everything

Consumers rely on real-time support for everything from assistance to financial transactions.

As a matter of fact, 79% of consumers prefer live chat support because it means that they receive assistance right away. Likewise, consumers react extremely well to short holding times when calling customer service and prompt email replies. 

Now, banks are not only expected to provide immediate assistance but also to adopt real-time payment technologies. Real-time payments have well-documented advantages for both banks and customers, plus this type of technology is already a standard in many financial institutions. 

Direct Banks and Non-Bank Financial Institutions

Modern consumers are in the process of drastically changing their banking habits, including the institutions they work with. 

According to PwC’s data, direct or digital banks now hold 20% of the market share, doubling since 2019. Large traditional banks hold around 42% of the market share, but community banks and other small institutions have suffered.

This is especially true if you consider the rise of non-banks, which are companies that don’t traditionally compete with financial institutions, yet have started to offer similar services.  

Personalized Offers and Self-Serve Alternatives

Self-serve options and personalized offers that are tailored to every customer’s unique circumstances are already essential. 

A whopping 72% consider personalization in financial services as very important, according to data from Capco. This represents great news for banks as consumers are also more willing to use apps from (and share personal data with) their financial service providers.

Modern consumers are also extremely self-sufficient. So much so, that 4 out of 5 customers expect to see more self-service options from financial institutions. Thus, having functional self-service channels that provide value to customers is also critical for a positive experience. 

Future Trends for Customer Experience in Banking in 2023

Now that we’ve covered its current state, let’s take a look at the customer experience banking trends that will shape 2023 and beyond. 

Personalizing Digital Interactions, Including Chatbot, and Human Interactions 

According to Gartner, 86% of financial organizations already look to compete on a customer experience basis. Additionally, customers are more likely to spend around 140% more on companies that provide a great experience.

Digital personalization can help financial institutions improve their CX while meeting the growing demand for a great experience. When asked if they would like to receive personalized alerts with important advice, 37% of customers expressed interest in receiving such alerts. 

Banking chatbots are a superb way to deliver more personalized alerts and support. A great chatbot interaction can actually improve the way your customers see your brand 72% of the time. 

But, even though the use of chatbots in the financial sector has increased by 200% since 2020, the key to delivering a great experience is to balance both chatbots and human interactions. 

For example, one in three customers wants more personal interactions with their banks after the pandemic. Meanwhile, 82% of customers still rank the ability to visit a branch as a high priority when choosing banks.

Improving Products and Services Through Big Data

Big data, which is the vast amount of information collected from different customer touchpoints, has already fueled the growth of the financial industry.  

In the past, the biggest challenge wasn’t the collection, but the analysis and interpretation of this data. Today, technologies like Artificial Intelligence or AI (more on this later) have allowed banks to digest huge amounts of data and detect user behavior patterns. 

Building a great experience is already the main focus of big data research for 65% of bank executives. This is in large part because banks are up to 70% more likely to sell services to existing clients and big data can be the key to unlocking its potential. 

Adapting Customer Service in Real-Time

Four out of five industry leaders believe that non-traditional providers are a legitimate threat to conventional banks, a huge spike compared to the 55% registered in 2019. 

One of the biggest issues with traditional financial institutions is their lack of real-time support. More than 65% of customers see real-time interactions as a must when it comes to financial institutions. Yet, fewer than half of all major banks provide immediate assistance.

The adoption of real-time technologies is projected to be a superb way to boost customer experience in financial services. While chatbots and other similar features can be helpful, remember that the quality of support is important across all channels.

Having a tool that allows you to measure consumer sentiment and other markers you use to track customer satisfaction can be a great way to stay on track. 

Engaging Customers Proactively About Financial Management/Advising

The global financial outlook has become a source of stress for many consumers, especially the most recent post-pandemic projections. In some areas, 77% of consumers feel anxious about their current financial situation. 

Not only this, but only 7% of CEOs expect financial conditions to improve significantly, which only adds to the relatively bleed outlook.

One way that banks can help relieve this pressure and improve their CX is to proactively engage customers about financial management. More than 60% of millennial customers affirmed that they would like to receive more financial advice. Banks can help users shape their experience early on by offering financial management tips proactively.

Widening the Role of Artificial Intelligence in Banking CX

The revenue of the banking AI industry will exceed 64 billion US dollars by 2030. 

There is no denying that Artificial Intelligence already has a strong presence in banks and financial institutions. But, since the AI industry is constantly evolving, financial institutions also have to unveil better ways to leverage this technology.

Improving the customer journey is a great use case for AI. This technology allows seamless integration with non-banking apps, aids during frictionless payments, and helps provide personalized offers. What’s more, AI can already help identify the need for personalized financial advice and offer savings recommendations, as well as deep customer experience analytics all of which result in a better experience. 

With that said, it’s important to note that many functionalities are still in the development or live testing phases. This includes the ability to handle more complex processes, the incorporation of ethical concepts in AI, and better connectivity to customer feedback analytics tools. 

Maintaining the Best Possible Technical Performance 

Cornerstone data suggests that 70% of banks focus primarily on delivering great customer service, a 14% uptick since 2019. 

Yet, technical problems like poor mobile adaptations and a slow onboarding process are still among the biggest obstacles for financial organizations.

For example, European financial institutions lose around 6 billion US dollars during the customer onboarding process. In some countries, abandonment rates during the onboarding process are as high as 63%, even when performed through a digital platform. Although that’s the case, some banks have already adopted 2-minute onboarding that’s yielded great feedback, especially from younger audiences. This brings good news for more than three-quarters of consumers who use their primary bank’s mobile app at least once every 12 months. Undeniably, banks that improve their mobile app functionality and offer regular updates and new features exceed customer expectations and are able to create a positive experience on a more consistent basis.

Becoming a (More) Transparent and Responsible Organization

Environmental, economic, and social factors have all contributed to a significant boost in consumer awareness levels.

More than half of consumers in certain regions evaluate social and environmental commitment when deciding whether to remain with a bank. 

In addition to green initiatives, banks are now expected to contribute to their immediate societies in more ways. This is the reason why 41% of millennial investors focus on understanding a company’s corporate social responsibility practices before making an investment. So, it’s reasonable to believe they will apply the same logic to their main banks. 

The Biggest Hurdles with Digitalization and Personalization

Providing online alternatives to common services and personalizing offers can help you build a stronger bond with current and future customers. But, banks and other financial institutions have to overcome a variety of hurdles to master both of these practices. These include:

Changing Regulations

Banks have to abide by local laws and regulations, but this in itself can become a challenge for implementing digital solutions. 

In many regions, banks have to follow strict protocols that are necessary to ensure consumer safety. But, these same protocols often require network overhauls, external certifications, and other investments that can act as barriers. 

Low Customer Engagement Levels

The implementation of personalized offers and content is relatively straightforward. Yet, it’s common to run into issues once the plan is in motion. 

Low engagement levels can sabotage your personalized content, regardless of how good it is. In most cases, low engagement signifies a poor understanding of the customer’s needs. Improving your feedback collection system can be a great way to learn more about your customers and subsequently boost the success of your tailored offers.  

Lack of Internal Perspective and Rigid Internal Structures

Logistical issues like undefined roles and lack of ownership can greatly hinder the financial CX. Moreover, banks and other institutions that have enough data to combat this are usually hindered by a rigid structure that lacks the flexibility to react immediately. 

These two are among the biggest challenges because, to improve, banks need to make organizational changes. However, institutions that take the time to listen to customers and create processes that allow for the creation of a better experience tend to see better results in the long run. 

In Conclusion…

The financial services industry is in a state of flux, so CX and CI managers need to keep a close eye on the latest tendencies and adapt accordingly. It’s important for banks to build better services and products that meet their customers’ biggest needs, while at the same time ensuring that every change will benefit the business. We hope the above trends help you build a better strategy and prepare for the upcoming changes that will shape the industry. 

To learn more about the latest customer journey banking trends stay tuned to our blog. Want to build a better customer feedback and sentiment analysis mechanism? Contact our team and find out how Lumoa can help.

The post The Future of Customer Experience in Banking in 2023 appeared first on Lumoa.

If you want people in your organization to appreciate the value of customer experience, you need to learn how to sell customer experience (CX) to those who are not dealing with it day in and day out. It’s a rather simple idea to understand, but not an easy thing to do in practice. And that’s why CX is an area of business that’s often underappreciated, undervalued, and overlooked.

As a CX leader, it’s possible to feel a little demotivated by that.

You might get feedback from your team about their perception of not being taken seriously across your organization. Maybe they don’t get included in product decisions or informed when new marketing campaigns are run. They might feel frustrated and unhappy because they see huge opportunities for your company that isn’t being capitalized on.

The only way to change this is by tackling it head-on. You need to learn (and teach) how to sell customer experience to your whole organization. While this isn’t something you can achieve completely by yourself, you can do a lot to influence the perception of CX throughout your company.

You can become a driver of change.

Increasing the standing of the CX team across the company is also the best way to increase investment in your team. The more your company invests in CX systems and teams, the more you’ll feel the positive impact on your customers (and your business metrics).

The research on customer experience value speaks for itself: 

• Research from Dimension Data reports that 84% of companies who invest in customer experience report seeing an increase in revenue and 92% of them see an increase in customer loyalty. 
• Forrester found that CX leaders outperform laggards both on stock price growth and total return, and that has been even more valid in the past two challenging years.

In your quest to achieve those types of goals, it might be a great first step to start asking some questions regularly in your team meetings. For example:

• What do we do to promote the customer experience?
• How do we talk about the value of what we do?
• When is the right time to raise a specific CX issue and how?

And while this is a great place to start, mastering how to sell customer experience is not a trivial task.

Why selling customer experience is challenging

There are a few common challenges when trying to make customer experience value visible across your company:

1. Lack of good data
2. Contact rate
3. Competing priorities

Each of these challenges makes it harder for you to prove the ROI of customer experience and to sell other leaders on the importance of investing in CX.

Lack of good data

Many customer experience and customer insights teams suffer from a lack of good data.

Categorizing, analyzing, and quantifying different parts of the customer experience can be very time-consuming. Every CX team needs to figure out a reliable way to collect data before they can start providing meaningful insights to the company.

Messy and unreliable data makes it more complicated for you and your team to find how to sell customer experience. But fortunately, this is a relatively small hurdle to overcome. It’s often best to start with what you have—even if it’s not perfect—and begin building momentum. Over time, you can work to make that data more comprehensive and trustworthy.

Contact rate

Many people assume that customer experience refers to support tickets. That’s a limited view because your customers have many different touchpoints with your product and brand over time.

Support interactions are an important part of the customer experience you’re creating, but making them the main thing can hurt you. It creates one main challenge: Are the insights you gain from tickets representative of your customer base?

Only a very small proportion of your overall customers likely end up contacting you in a given month or quarter.

This doesn’t mean that you can’t use those insights or that they aren’t valuable. You just need to address this barrier proactively. You can either use data that shows these insights are representative or include other sources of feedback in your CX program to paint a fuller picture of your customer experience across different stages of the customer journey.

Competing strategic priorities

Let’s say you’ve managed to handle the other two challenges. You have some data and you can back it up well enough that it’s validated and taken seriously by other leaders in your organization.

Translating that data into meaningful action is your last and biggest hurdle.

Every company has a huge list of competing priorities. In the famous words of Steve Jobs, “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are.”

Every strategic decision comes down to deciding to focus on one thing over another. It’s on you to make the case that customer experience is one of the things that need to be prioritized.

How do you establish that customer experience brings a great return on investment? How can you even measure the impact of CX?

How to sell customer experience across your organization

There are three big things you can do to promote the customer experience across your company:

1. Measure the impact that CX has on financial or business metrics
2. Proactively advocate for CX across the company
3. Develop the CX team so that you can represent the voice of the customer

Measuring the impact of CX

It’s okay to start selling CX with generic stats about how valuable customer experience can be across industries. You can make a general case about how a great customer experience drives sales and loyalty. This will translate to financial and business metrics, which is the bottom-line impact you’re looking to have.

Moving from generic to company-specific arguments is much more powerful. 

That may sound like a huge and intimidating project. That’s why starting small is the best way to begin. This is much easier to do when you already have some buy-in. You can build a case for CX for your CEO first to justify an initial investment, then branch out from there. 

Another great approach is to prioritize projects within your team that will have the biggest impact on the company’s success. If your product is business-critical for some of your customers, maybe great incident detection and response is how the CX team contributes the most. If you run a B2B subscription model, maybe relationship-building and customer success are what you should focus on.

It’s easier to measure the impact of projects when you’re specific about what you’re prioritizing. Pick one area and make a change to the customer experience. Compare key metrics before and after the change to understand the impact. If possible, try segmenting your customer base and running A/B tests simultaneously to see the impact in real-time. 

Quantifying the business value and ROI of customer experience is tough, but it’s the foundation for mastering how to sell customer experience.

Advocating internally for the CX team

It’s easy to underestimate how much of an impact internal advocacy can have on changing the reputation of customer experience across your company. CX teams are often taken for granted and not given the attention of teams like Product or Sales.

As a CX leader, it’s your responsibility to figure out what to do to promote the customer experience and set the tone for how CX achievements and feedback are perceived across the company.

You can influence this in numerous ways:

1. Build relationships with leaders across your organization. Do you have a good understanding of how CX impacts Sales and Marketing? Does your Product team listen to your feedback? Do you understand other teams’ priorities and strategic goals? CX impacts every area of your company, which means you have a great opportunity to collaborate across the board.
2. Communicate your wins as a CX team. Find ways to track specific positive feedback from your customers. Are there situations where your team successfully retained a customer after a bad product experience? String together enough of these examples and you can make a much stronger case for customer experience value. 
3. Encourage others to shadow the CX team. Look for opportunities to enable senior management, QA testers, developers, and others to interact directly with customers. It’s easy for teams—especially senior leadership—to become separated from your customers. Every time you can draw them closer to your customers you’re building momentum for CX initiatives.

Internal advocacy is worth investing energy into across all parts of your organization. It’s tempting to get stuck on the leadership level. Get buy-in from the top and it will translate to results, right? 

Focusing your attention on one or two teams is great as a starting point, but customer insights can be valuable across all teams. Every team will need something slightly different from you, but tailoring your communication and data to each audience will make it far more impactful.

Representing the voice of the customer

Voice of the Customer (or VoC) is a methodology used to understand how your customers feel about and experience your business.

You can use every piece of feedback and interaction you have with a customer to build this understanding. The goal behind running a VoC program is to enable everyone across the company to know what your customers need and want.

The CX team is often uniquely positioned to collect and share this information. If you’re looking to master how to sell customer experience, getting your CX team involved in building a robust Voice of the Customer program is a great way to get started.

The outcome of our VoC program should be clear analytics and reports describing your customer experience. It will arm you with specific and actionable insights whenever someone in your organization needs them.

Your VoC program should also include regular opportunities to update your company on CX initiatives. How did your latest marketing effort or product change impact your customers? How is your price increase being received? 

Customer experience value lies in your ability to digest data and translate it into meaningful insights to share with other parts of your organization. 

Is The Organisation Sold on CX yet?

After all the effort you have done to learn (and to teach your team) how to sell customer experience across your organization, a final question is legit: how do you know if you’re being successful and all departments truly understand the value of CX? 

This is something you can probably figure out in the long term, but there are some early signs you should look out for. Those are:

• People across your organization proactively ask the CX team for input and feedback.
• More money and company investments are directed toward customer experience.
• Customer metrics and business KPIs, like customer loyalty and churn, see hand-in-hand improvements.

Remember that changing perception across an organization takes time and mastering how to sell customer experience is no trivial feat. And at the end of the day, the more people you get on your side and the more things they will do to promote the customer experience, the more empowered your CX team will be to help your company succeed.

The post How to Sell Customer Experience to Your Organisation appeared first on Lumoa.

According to our State of the Shopping Apps Report for 2022, technical variables have a huge impact on customer satisfaction levels – but the list of factors that users take into account doesn’t stop there. 

Our State of the Shopping Apps Report for 2022 breaks down the customer satisfaction performance of the top shopping apps in the Google Play Store as well as the Apple App Store. In addition to the overall performance analysis, we also detail the specific variables that have the biggest influence on customer satisfaction across three statistical categories.

What’s Inside Our State of the Shopping Apps Report

The digital revolution has brought a myriad of changes to the retail industry, including the birth of online shopping. While effective feedback collection mechanisms have been in place for some time, retailers of all sizes still encounter difficulties when analyzing this data. In many cases, this is due to the format of the feedback or the sheer volume of reviews that need to be assessed individually. 

Through our ecommerce apps ebook, we aim to establish a connection between factors that impact the customer experience and the influence that these variables have on satisfaction levels. 

However, we’re also tackling one of the industry’s biggest challenges to date: transforming tens of thousands of customer reviews into actionable data that can be used to make business decisions.

Our shopping apps performance report includes.

• An explanation as to why users have a better experience on Android mobile shopping apps than on iOS platforms.
• How usability elements and technical variables influence the shopping experience.
• What factors separate leading shopping apps from bottom performers.
• The different elements that are essential to a good mobile shopping experience.
• Insights about the top performing shopping app categories (spoiler: beauty and grocery apps).
• Textual examples of customer reviews that illustrate their pain points.
• Non-app related variables that impact customer experience.

The Impact of Customer Satisfaction and Loyalty

All ecommerce companies want customers that purchase products on a regular basis, are loyal to the brand, and share their experiences with their inner circles.

Ensuring high customer satisfaction levels can help you achieve these goals and place your retail business on a growth trajectory. Here are some of the benefits that, according to PWC, are associated with high customer satisfaction levels.

A Higher Price Premium

Customers are willing to pay up to a 16% price premium across all industries when subjected to a great experience, and this statistic doesn’t factor in higher loyalty rates. Loyal customers can result in more referral sales and a higher loyalty program subscription rate.

More Recurring Customers

Generating sales from existing customers is more affordable than attracting new clients. A great customer experience means that customers are more open to trying additional products and services from your brand. This is because consumers evaluate a company’s overall quality, in large part, from its customer service.

Better Resource Allocation

It’s estimated that 3 out of 5 consumers in the US are willing to share personal data with companies that make them feel valued. This data can be used to create detailed marketing campaigns and to allocate resources to the more profitable channels.

Download the 2022 State of the Shopping Apps Report

Do you want to learn the true impact of customer reviews and understand the elements that impact client satisfaction levels? Download our State of the Shopping Apps Report for 2022 today.

The post The State of the Shopping Apps Report for 2022 appeared first on Lumoa.

A Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction. An NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. This number gives you an idea of how likely your customers are to recommend your company to others. 

We wrote a step-by-step guide that explains what NPS is and exactly how you can work your NPS out. Or, if you need more guidance, our helpful team is always on hand to answer any of your questions. 

This blog post will discuss NPS benchmarks and look at why NPS is so essential to overall customer success. We will also explore what factors influence NPS scores and how you can improve your NPS score and be more competitive. 

So, without further ado… 

Why is NPS important?

An NPS score is a valuable metric to track customer sentiment, and it can help businesses improve customer loyalty, boost sales, and improve customer satisfaction. This makes it an essential consideration for any customer success manager in almost any industry. However, it’s important to remember that the score should not be used in isolation and should be part of a broader customer success strategy.  

Measuring NPS can help your company identify customers at risk of churning and defecting to competitors. This valuable metric allows you to keep track of the loyalty and satisfaction of your current customer base and empowers you to take corrective action before they leave. It’s well-known that getting new business is more challenging than retaining it, so focusing on offering the best possible customer experience (backed up by opinions of actual, paying customers) is an efficient way of running a business and ensuring that you have more promoters than detractors. 

Measuring changes in your NPS over time is also an insightful way to assess your company’s progress and determine whether or not you are on the right track. It’s essential to look at how the score is broken down between promoters, passives, and detractors, plus analyze any comments. The significance and importance of reading text answers and comments from your customers can’t be underestimated. Not only does this give you an excellent insight into their true opinion of your product or service, but these comments will clearly show areas needing improvement and where your team should focus its energy. 

What’s more, looking at it from a purely positive standpoint, your customer NPS score can help you identify which customers are likely to refer you to their friends and thus boost word-of-mouth marketing. You can use this information to reach out to those promoter customers to find out what they did and didn’t like about your service so that you can continuously improve. 

With all of this in mind, it’s clear that measuring and tracking customer NPS is essential for any business wanting to keep tabs on the health of its customer relationships (and improve them over time) and utilizing a customer insights platform such as Lumoa makes this a significantly more manageable task.

There’s several frameworks, metrics, and other tools to measure and manage customer satisfaction and customer loyalty, but Net Promoter Systems stands out among them with its comprehensiveness and universality.

Bill Macaitis, Advisor & Board Member, former CMO of Slack and Zendesk

What is a “good” Net Promoter Score?

NPS scores can vary significantly from industry to industry. For example, the average NPS score in 2021 for the retail sector is 32.9, while the average NPS score for the banking industry is 23.6, and IT services is 42. While on the face of it, it may appear that the IT services industry is “better” than the banking industry, that’s not necessarily true. This is why benchmarking is so important, which we will discuss later. 

There are several factors that can influence NPS. These include customer satisfaction, customer loyalty, and customer engagement. NPS scores are also affected by company size, industry, and country. All of these differentials need to be taken into account when comparing your NPS score to see how you stack up against other companies to see if you have a “good” score. 

There are two ways to assess your NPS; one is by looking at your score relative to your industry (the relative method), the other is to measure your score against an average across all industries (the absolute method): 

If you’re looking to assess your NPS against all industries, the following is a good guideline: 

• A score under 0 shows that a company has more dissatisfied customers than satisfied ones (more detractors than promoters) and that improvement is needed.
• A good NPS score is generally between 0 and 30. 
• A score between 30 and 60 shows that clients are extremely satisfied.   

However, benchmarking—the relative method—gives a more accurate picture of how you compare on a “like for like” basis. An excellent example of benchmarking would be Starbucks comparing their NPS to Costa Coffee – similar companies, similar products, similar customers, and similar reach.

Setting industry NPS benchmarks

Some markets never reach high NPS scores for one reason or another, and it’s particularly relevant for companies in these markets to consider using the benchmarking method to assess their NPS score if they want to get an accurate and informative picture of how they compare to competitors.  

Once you have analyzed the data from your surveys and found out your NPS, there are then several steps you need to take to ensure you’re benchmarking this correctly.  

Compare apples with apples

Firstly, look at your industry only; if you include data from other industries, you won’t be able to get a like for like comparison as each industry has different levels of “good,” as we discussed previously. To explain this further, we can look at the banking and eCommerce markets. In 2022 the highest-ranking bank was First Republic Bank, with an NPS score of 72; one of the lowest was Goldman Sachs, which had a ranking of 5.  

If you compare these figures to the wearables market, Fitbit has an NPS score of 12 and Garmin a score of -2. However, the market is much narrower, so while the difference in comparison to First Republic Bank appears substantial, in reality, a score of 12 is relatively good compared to the rest of the wearables market.  

Remember, location matters ..

Secondly, location and cultural differences can significantly impact NPS scores depending on the levels of enthusiasm of participants in each geographical location relative to numerical-based scoring systems. For example, Europeans tend to err on the conservative side while scoring on a numerical basis and are less likely to give scores of 9 or 10. In contrast, customers state-side are more likely to give the coveted 9 or 10 scores needed to class customers as “promoters.”

Further evidence of cultural bias is that customers in Japan tend to rate their satisfaction levels lower due to high customer service standards. And interestingly, those surveyed in Latin America tend to rate higher than all other areas. 

.. As does the survey channel 

Suppose you ask a willing customer a set of questions over the phone or face to face. You’re more likely to get deeper, more meaningful answers than if you asked the same person the same questions via another survey channel, such as a web form, email, or SMS survey service. It’s therefore essential to consider this when you’re looking at other companies’ NPS scores and choose a comparable, or the same, survey channel to compare your data to. This will give you the most accurate snapshot of their position relative to your own. 

Once you’ve benchmarked your NPS against similar companies, it certainly gives you a good indication of how you compare at this moment. However, tracking your NPS over several months along with that of your relative market is a much more helpful metric that will show how your business is improving or, on the flip side, if standards are slipping.

How can you improve your NPS?

There are numerous approaches you can take to improve your NPS score. Firstly, it’s essential to focus on cultivating customer satisfaction. This can be done by ensuring that your products or services meet customer needs and exceed expectations. And it’s worth remembering that improving NPS shouldn’t be the sole responsibility of the customer success team; ultimately, it needs to be a companywide consideration. 

Second, focus on increasing customer loyalty. This can be done by creating a solid brand identity and developing long-term relationships with customers. Finally, focus on improving customer engagement. This can be done by providing relevant and targeted content, offering personalized experiences, and making it easy for customers to provide feedback.

Sharing your NPS is excellent for building brand reputation and trust with customers; it’s even better if you see your score improving year on year and share that information.  

However, even a mid-tier score could be worth making public when combined with the option for feedback and suggestions. 

This is also a beneficial way of utilizing a digital touchpoint because it offers interaction. It gives customers a way to vent their frustration or provide constructive criticism that you can use to improve. Not only that, but if you listen to and act on customers’ suggestions, you can discuss this in your content and marketing materials – further strengthening your brand’s reputation. 

Final word

NPS is an important metric to consider when looking at an overall customer success strategy and even more critical when you use that score to benchmark against your industry. With over two-thirds of Fortune 500 companies using NPS to understand better the experience their customers have, it’s clear that this formula is helping companies improve their services and customer satisfaction levels. 

Using a tool such as Lumoa is a fast and efficient way to analyze large volumes of data continuously. Combining the benefits of AI and human intelligence to find the most important and relevant information from customer feedback, Lumoa users can quickly act on these valuable insights and improve their NPS and customer satisfaction levels.

Looking to Improve Your CEM System? Leverage the Data Collected with Lumoa

Improving your CEM system is an ongoing process and having an accurate benchmarking mechanism will help ensure that you stay on the right track. The general tips above can help ensure that you benchmark the right types of surveys and zero in on metrics that provide actionable insights.

If you want to learn more about Lumoa and how it can help you assess the data you collect through all of your surveys, contact us today or start a free trial.

The post How to Set Industry NPS Benchmarks and Why It Matters appeared first on Lumoa.

It is vital for companies to know if their clients and customers are happy with their service and products, and NPS solutions are one of the best ways to find out. Net Promoter Score is a benchmark for customer loyalty that tells how your customers understand your business and feel about it. In simple words, NPS software is a tool, that helps businesses measure and track NPS results and get in-depth insights from customers.

Reasons To Invest in an NPS Software

Their perspective represents their sentiments regarding your brand, products, services, and business model. It will help you understand your customers and discover more valuable approaches to enhance your products or services. Here are some of the top reasons why NSP you should invest in NPS software:

Minimizes Customer Churn Rate

Business growth can be understood by measuring the inflow and outflow of the customers in the business. Churn rate those numbers of customers who left your company because of having a bad customer experience. These churn customers are the biggest threat to your brand, as they can spread negative words. NSP software will help you control churn by keeping your eyes on the software.

Measure Customer Loyalty

NSP software is beneficial for every company as it helps measure customer loyalty. This factor helps grow the business by recommending your brand to other customers. With the help of NSP, you can measure if you acquire satisfied or unsatisfied customers.

Improves Business Profit

The business profit comes from the customers, and if your customers are happy with your brand, they will come back. Aiming for a high NPS score will help you in increasing your profit and achieve a high ROI on your customer experience.

NPS surveys or full NPS analytics?

The question of “What should you invest in: survey or analytics?” reminds me a lot “Chicken vs. Egg”-dilemma. Without a properly crafted customer survey, you would not get enough data. And without great analytics, you would not understand your data. Both these steps of building the Voice of Customer-program are essential for its success.

However, when debating survey vs. analytics, professionals often forget why they started the customer experience management program in the first place. Usually, the reason is between understanding the needs of their customers and driving advocacy and profit with a better customer experience. For that, leaders should stop spending all their time collecting and analyzing by trusting it to the right tools and spend time on driving product and customer experience changes by looking at the results of customer feedback.

1.   Lumoa

Lumoa is one of the leading AI-based customer insight platforms that help companies gather and generate insights from customer feedback. It is all-in-one SaaS platform for collecting and analyzing customer feedback, including NPS feedback. You can easily identify the topics that drives your NPS score up and down.  And maybe more importantly, you can see exactly how much each topic impacts on the NPS score, which makes it easy to prioritize the issues that needs to be dealt with first.

Key Features

• Understand what drives the NPS up and down, and with how much.
• Analyze feedback in more than 60+ languages.
• Analyze any type of feedback such as NPS, CSAT, CES, or open text.
• Analyze feedback from any source; surveys, chat, reviews, Social media, phone calls, etc.
• Unlimited users
• Offers free trials

Read more: Lumoa.me

2.    Survicate

Survicate is a popular customer feedback tool that offers four preeminent services: Mobile App Surveys, Website Feedback Surveys, Surveys & Forms. Suricate’s focus is more towards collecting feedback rather than analyzing feedback, but they do offer some basic analysis of feedback. One of its significant qualities is that it is easy to use and has 125 ready-to-use survey templates. You can run the surveys through emails, apps, websites, and links. It offers integration with tools such as google sheets, google analytics, HubSpot, and many more.

Key Features

• Easy to create good-looking surveys
• Several survey trigger option
• It has a questioning library, where the customers’ questions are stored
• Unlimited free users and surveys
• Integration possibilities

Read more: Survicate

3.   Promoter.io

Promotoer.io is one of the top NPS software used for analyzing customer satisfaction and gaining insight into the customers’ response. It collects the information by analyzing, engaging, measuring, and growing customer engagement. One of the only barriers is that its price may start steeping. It is equipped with many extremely easy tools and consists of over a million questions, making it even more desirable. Through this software, you can create NPS surveys in no time and then schedule them for automatic dispersal.

Key Features

• Collect NPS feedback via email, SMS, and embedded link
• Support surveys in 27 languages
• Real-time text analytics
• Superb user interface (UI)

Read more: promoter.io

4.   Trustmary

Trustmary is a review and feedback system that not only helps you measure NPS but also gets you authentic customer reviews. When you send your customers an NPS survey with open feedback, you can ask the Promoters to leave their feedback as public reviews. You can then easily add the testimonials to your website with a review widget or share them on social media. Integrate Trustmary with your CRM or other daily tools to create an automatic feedback collection process. Get customer experience reports that help you follow your success in real-time.

Key Features

• NPS survey templates
• Always updated reports
• Turn feedback into reviews
• Various integration and automation options

Read more: Trustmary

5.   Zonka Feedback

Zonka Feedback is an omnichannel feedback management tool that lets you capture feedback across channels like websites, products, in-app, emails, SMS, kiosk, and offline. The survey software is geared towards empowering businesses to do more with insights received from the users. It helps run effective NPS surveys across different touchpoints in the customer journey and offers in-depth, actionable insights to drive loyalty. Not only does it come with several ready-to-use NPS survey templates to send NPS surveys instantly, but it also helps measure customer loyalty and convert detractors into passives and passives into promoters.

Key Features

• Advanced NPS survey tool with in-depth insights to prevent churn
• Comprehensive survey software at competitive pricing
• Sync NPS surveys with HubSpot, Salesforce, Pipedrive, and other CRMs, collaboration tools, or helpdesk
• Close the feedback loop by taking actions based on responses received

Read more: Zonka Feedback

6.   Satismeter

Satismeter’s software is completely devoted to the NPS. Its features are relatively easy to understand compared to the other NPS software, making it different. The pricing is based on the responses, and all the features are available in all the plans. It truly helps you analyze and understand what your customers want without creating a lot of puzzlement.

Key Features

• Works with Android, iOS, email, apps, and web
• You can invite an unlimited number of team members for no extra cost

Read more: Satismeter

7.   Retently

Even though Retently is a bit expensive, it boasts multiple superior features. It allows you to present the survey to the customers on the most appropriate or convenient channel. You can segment your audience and, for each segment, run different surveys. It lets you customize your survey’s visual appearance to make it more fetching.

Key Features

• Specialized NPS software
• Collect NPS feedback on your website, via email, or in-app
• Automate survey scheduling via workflows and webshooks
• Integration possibilities, such as Slack, Mailchimp, Hubspot, and many more
• Option to run multiple surveys at once for various customer segments

Read more: Retently

8. Nicereply

Nicereply is a survey tool for marketers and customer support to understand the engagement of digital assets: blog content, website, emails, and product marketing. Nicereply made it easy to follow up the survey results and contact promoters, detractors or passives separately in order to drive brand advocacy and reduce churn.

Key Features

• Survey software for marketers and customer support
• Collect NPS, CES or CSAT on your web pages or via email
• Understand the performance of digital assets: from blog content to UX of website
• Close the feedback loop by addressing the feedback directly

   

Read more: Nicereply

9.   SurveySensum

SurveySensum is very convenient when it comes to user experience. It allows you to launch surveys according to the timing which is most apt for you and ask questions that you wish to get answers for very precisely. It provides alerts for notifications and tracks the customer’s sentiments through its sentiment analysis feature.

Key Features

• AI-enabled customer experience management platform
• Easy to use interface

Read more: Surveysensum

10. Delighted

This NPS software allows you to create customer and employee surveys in minutes. With Delighted you can collect multiple types of feedback such as, NPS, CSAT, CES, 5-start surveys etc. Users can easily administer their surveys via email, SMS, web, and link. Delighted accommodates multiple integrations and allows customers to give their insights properly through free response follow-ups to the particular NPS questions.

Key Features

• Multi-language support in 30+ languages
• Automated surveying
• Real-time dashboard
• Feedback scoring and reports

Read more: Delighted

The Future of NPS Software

Gartner states that by 2021, 15% of all customer service interactions will be completely handled by AI, an increase of 400% from 2017. Indeed, CX software is on the rise, with AI and predictive analytics in most demand and 31% of organizations have already invested in technology like AI to outpace the competition.

We hope this article has cleared all your doubts regarding which NPS software to choose. These are the top 10 NSP tools, which will help you get hold of your products & services to deliver effective results. Whether you select the NPS software from our list or not, make sure to use it for your business. NPS is an efficient method to judge your customer’s satisfaction quotient and thus retain them for a longer duration.

The post 10 Most Relevant NPS Software Platforms appeared first on Lumoa.

About the episode:

Most of us understand that customer experience is something highly relevant for a business. Improved customer experience is equal to improved retention, decreased churn, and improved competitiveness, which leads to revenue growth.

Although it’s evident that customer experience is a good thing to focus on, why is it still such a struggle to link improved customer experience with revenue growth and other operative metrics?

In this episode, we try to sort out why many organizations struggle to see actual proof of the linkage and what you should do to see the link more clearly.

Highlights:

How to establish a link between customer experience metrics and other operative metrics:

• Clear ownership of customer experience
• Clear metric(s) to follow that you can link to a critical financial metric
• Set clear targets of what you want to achieve
• Have a way to understand what drives your metrics

Most important feedback for an organization to do that wants to become more customer-centric:

Remember that customer experience is not rocket science. It’s about understanding your customers better and showing interest and empathy to find ways to make their lives easier.

Our guest:

Joahnna Sinkkonen, CEO and co-founder of Lumoa. Johanna has a history of working in big corporates like Nokia and Microsoft, working with business strategy and development, which lead her into the customer experience field. She knows what the CX-related challenges organizations are facing since she has been there herself.

Episode Transcript

Sofia: Hello and Welcome, everyone. I’m Sofia Ohlson and I am the host of Inside CX by Luma. Thank you for watching. Today we’re going to talk about linking cx with business outcomes. Joining me for the first episode is my colleague, co-founder, and CEO of Lumoa Johanna Sinkkonen. Johanna has a long history of working in CX, she has worked in well-known companies such as Nokia and Microsoft before founding Lumoa. Welcome, Johanna to the show. 

Johanna: Thank you, Sofia.

Sofia: So, as I just said, you have a long history in cx. And now you’re one of the founders of Lumoa. But how did your cx journey start? How did you end up working with cx in the first place?

Johanna: I actually did most of my corporate career in business-related roles, strategic planning, strategy, development, business development, business planning, etc. But then I was also a part of the program/team that started, at Nokia, this sort of continuous feedback gathering, Net Promoter Score measurement there. And that was obviously, many, many years ago.

But in that situation, and environment, it was sort of a revolution. Because before those times, we had been dependent on tracking, like, customer experience and consumer experience with sort of these traditional surveys, product, and brand trackers, that took a lot of money, and many, many months to get any results. So to get to the situation where we could actually in real-time, follow what the customers think about us and our products, etc. That was an incredibly big change. So I was very happy to be part of that. 

And that kind of started my huge, sort of enthusiasm minute when it comes to customer experience, and customer experience management.

Sofia: Right. So it’s sort of gradually just, became part of your work, sort of naturally, that yes, since it was the way to go sort of.

So you have worked at Nokia and Microsoft working with customer experience. But what happened? Why did you then move on to found your own business together with your co-founders?

Johanna: Yeah, I think it was a combination of a few things. First of all, we felt that we had built something very meaningful, learned many good ways to analyze customer feedback that we could actually also teach to other companies. And from that we wanted to then build a product, and “productize” our learnings and thinking, but personally, it was also a need, and sort of a preference to have a change. 

So I obviously worked on for a long time in those companies, 12 years altogether. So to be in a big company, a big corporation for such a long time. It’s, it’s a lot in a way, and I wanted to have more direct impact on the business and the world, myself, so I wanted to start building something on my own. And that’s why I wanted to be a part of starting this company.

Sofia: Okay, so coming back to the topic of today’s episode, which is linking customer experience with business and business outcomes. 

Just starting off, really simple question, I guess most of us already knows this, but is customer experience relevant for a business, and if it’s relevant, why is it relevant?

Johanna: Good question.

Let me start by saying that yes, it is relevant. So of course, there are some exceptions. So if you are a monopoly, with no fear of anybody else entering the market, or if you are selling a total commodity in a commodity market, then maybe, customer experience is not so relevant for you. Because you basically don’t need to differentiate from anybody.

But there are not so many industries and companies who can say that they are in that kind of situation. So for anybody else, customer experience is extremely important, because you have to differentiate from others to be able to survive in this world. So, globalization we can nowadays buy services, products, etc, from anywhere in the world.

So basically, the only way you can, in the end, keep your customers happy, is to provide them with a good experience somehow, it can be that your product is better, it can be that your product is not so much better, but your services is extremely good.

Something, there needs to be something, some reason for that your customers stick with you and not to your competitor.

Sofia: Yeah, exactly. So it’s used, mostly seen as a way of standing out from the crowd. And as, standing out from the crowd and like, differentiate from the competitors.

So, linking customer experience to business or business outcomes, is as I have understoodit, pretty hard to do for businesses, to get like some concrete facts or results that actually show you this cx improvement actually have made our business better or grow, or we have received more revenue, whatever.

So what is it with customer experience? Why is it so hard to link customer experience initiatives to any kind of business-related outcomes or goals or results?

Johanna: Yeah, I would claim that it’s difficult only if you are searching for some sort of universal truth. 

So if you want sort of universal truth, saying that when any company increases their cx metric, for instance, net promoter score, or customer satisfaction, by this much, their revenue will increase this much, you will not find it. Because there are no such universal truths. 

The reality is that the importance of customer experience always depends on your industry. So if you’re selling a commodity product, like nearly commodity product, it’s much less than if you’re selling a highly differentiated experience. 

For instance, if you’re a telco selling us, like cellular access, or if your utility company selling electricity, the level of customer experience that is kind of a hygiene level is obviously that the electricity keeps flowing, and that your price is not insane, that it’s on par or lower than the competition, similar for like mobile network access or whatnot.

So if you achieve that hygiene level, then you can try to differentiate from your competitors with, sort of, better digital services like easier invoicing very good and easy to read customer service, sort of agents. 

But you can normally count on that some of your consumers or customers are lazy enough that they even, if your queues to your customer service, or to get long, or something like that, they won’t switch because they don’t bother to switch. 

But then of course, if you are in an industry which is say for instance, in hospitality, you run a restaurant or hotel, basically the only thing you have is a great customer experience. So, if people hate your food, hate your service, they will never come back and you cannot basically survive with that without really focusing on investing in customer experience. 

So there is no ”one” single truth to this NPS versus revenue, or NPS versus growth, or customer satisfaction versus growth.

But you always need to consider it from your own industry, and all company point of view, because in different countries, you might have different competitive situation.

So even in industries, where you normally, if you run a restaurant in a small village where there are no other restaurants, then maybe you’ll survive with your bad food, etc. So the competitive situation is, is highly important.

But saying all this, then when we get to your individual, kind of, is it difficult for you, in your individual company to understand the relevance of customer experience to business metrics, like financial metrics?

It shouldn’t be too difficult, you should understand, basically, that, that whenever my customer satisfaction goes down, it means that I start to lose customers, and starting to lose customers has a very clear financial impact.

Sofia: Yeah, so like, that means that, if you’re measuring your customer experience, you should, see the start of the correlations between the customer experience, and whatever metrics like customer churn,or retention, and how they correlate to each other. And then obviously see that impact, if I understood it right? 

Johanna: Yeah. Yeah. 

Sofia: Interesting.

So, ideally, now, we’re maybe walking away from this topic a bit, but ideally, how, according to you, how should a customer experience management look like, in a company, if you want the customer experience to be actually a core function in the company that is driving business growth? 

And so that it’s not just a nice thing to have? Just because it makes your brand look good? Or just because that your competitors are doing it? and so on? How should you implement customer experience into your business? Have any thoughts about that?

Johanna: Yeah, yeah, I think there are a few general good practices that apply almost universally like it’s very difficult to make it work without this. 

First one being that there needs to be clear ownership for a customer experience in the leadership team level. So it cannot be done. Only somewhere, sort of down there in the organization. If there are no management buy in, and and strong owners ownership and interest in top management, you should have a metric for that a metric that people understand, not too many (metrics), so that people get confused.

But one customer experience metric, that you also link them to the most critical financial metric, it actually drives, we have now mentioned several times the linkage between the customer experience metric, and retention, retaining your customers, that’s the most typical, sort of route through which the good or bad customer experience actually hits yourbottom line, hits your revenue growth, hits your profitability. So you should have that metric and understand how it actually drives your financial metric.

And then you should have targets for an actual customer experience metric, because obviously it motivates people hugely. If they know where they should get to,

Then the leadership team should understand what drives that metric. So kind of just having a number and following it can be actually extremely frustrating for the organization. Because it’s when people get your customers get unhappy, you just see a number go down. You don’t know why it’s going down. It’s just huge frustration. It doesn’t really help. So the leadership and the rest of the organization should understand:

• What drives it? 
• What is driving it down? 
• Why is it going down? 
• What are the biggest changes happening? 
• Why does it look like this does this month?
• Why does it look different from last month?

And when you have that, then you are in a much stronger position to also start looking at ”Okay, do we want to invest more in this”, ”do we want to fix this problem”. And then obviously, with any decision of investment, the companies always have very similar criteria.

So, customer experience is no different from any other field in a company. So, of course, you need to only invest in initiatives that have a meaningful a good business case. And they need to be compared to your other potential things that you want to do.

But, kind of starting from the top line of ownership, measurement, targets, and good overall understanding is always what is needed first.

Sofia: Right. Right. So to summarise,you said:

• a clear ownership of the customer experience
• need to follow/measure metrics continuously
• Know what drives the metric

So let’s say, it’s beginning of a new year,or the beginning of a new quarter, whatever, and you have a new set of business goals/ OKRs that has been set, and you work with customer experience. 

And you know what the overall business goals are. And you are now wondering, ”okay, how do I align ”my work” that I’m doing with customer experience with the overall business goals?”

Have you any, tips on how a person should think about that problem? Or how to approach it?

Johanna: Very practically, I would recommend, sort of, with the core team, that for instance, now works in customer experience, team or however your organization look like to build a hypothesis on “What is the behavioral or linkage between the customer experience metric, and then the financial metric”.

So your hypothesis could be that ”most likely, the biggest impact from my customers getting happier would be that they, it’s easier to retain them, they don’t switch to competitors”.And therefore we can grow our business more. so revenue grows, or that’s like the basic case.

But your hypothesis can obviously also be that, ”most likely we increase the satisfaction of our customers, they recommend us more, we can start to see that we get this viral effect going on. And we get new customers a bit easier”. 

So build these hypotheses, and then test them see what actually holds true. See if you have a group of detractors that gave you that bad feedback a year ago. How large part of them you have you lost? Have they churned? See if you had promoters a year ago? How large partof them have you lost? Have they churned?

In any normal business, you’ll see that there is a difference. You have most likely lost a lot more of those detractors that you had lost promoters, happy customers. And that’s where you start to see that there’s a difference. If you if your customer experience metric increases your retention increases as well. 

Sofia: Right right. So is there a way to somehow estimate the impact of customer experience in a business. Can you like beforehand, somehow estimate that “Well, what, if we improve these things X, that is related to customer experience, then we know that we’re going to get this much in revenue” and so on, or whatever it could be.

Johanna: Yeah, so. Understanding the linkage between your CX metric, and the behavioral change that he drives, that has a direct impact on revenue should give you this insight.

But I’m not sure what you mean, when you say, in advance, do you mean in advance of making a decision or on some specific, like customer experience improvement initiative, or in advance before you have even ever measured your customer experience? 

Sofia: I guess, when I say advance, I mean at the point when you’re already measuring/following some cx metric, and so on. So you’re not totally new to this field, the work sort of. But I guess this has something to do, or like what you just said that, when you have already started to see, like, a correlation between customer experience and for example, customer retention, you get start getting in some real numbers on that you can actually estimate or start using that statistics and use them to estimate future.

Johanna: Yeah, yeah, that certainly helps in that business case building.

When you know, that general linkage between those metrics in your case. obviously, if there is no history, and you haven’t ever measured customer experience, you’re just starting that, then it’s much more difficult. Then maybe you need to just start small, like start measuring, start investigating what happens to those customers that continue to be unhappy.

Or, if you managed to, with some relatively affordable means to increase your customer satisfaction level, you can also start to see if it starts to correlate with positive changes in the churn rate.

But normally, yeah, it gets more easy. It gets easier if you have any data from the history to back this up. 

Sofia: Yeah. Right. Okay, so thank you so much for your answers. Before we finish, we have one last question. And this is a question we’re gonna ask all of our guests. 

So at Lumoa, we’re a company that really likes feedback. So obviously, we need to get some feedback from you as well.

So as a last question, what is the most important feedback you would give to any organization that would like to become more customer-centric?

Yeah, don’t need to be a super-advanced answer. First thing that comes up into your mind.

Johanna: Yeah, first thing that comes to my mind is that keep in mind that it’s not rocket science. So we are talking actually about what real people out there your customers are feeling, thinking? And what do they say about you, to use yourself, but also to their friends and family and all of that. 

So kind of what really helps in sort of understanding them. And what really helps in then improving your customer experience is just to have a normal empathy towards them. 

So being curious and wanting to understand what they actually thinking and saying, like listening to them because of that, because you actually want to understand whether they like your product, and why they don’t like it if they don’t like it, and what would they like to see changed that curiosity and then empathy, if they had a bad experience, and they complain about that?

As a human to human how can you actually help them? Could you do something to make their lives a bit easier, their day a bit better. And I think that takes you a long way.

So it’s not only about or even primarily about a kind of analyzing a complex relationship between metrics or whatnot, we have now focused quite a lot on that. 

But actually just keeping your ears open, listening to your customers, and then trying to sort of use your intelligence to think, Okay, how can I, how can I now fix this situation? How can I help this person? How can I going forward, make it a continuous process so that not only I help them, but I also improve the chances of my business succeeding because of that.

Sofia: Right. So it’s truly important to remember, that we’re working with just normal human beings. And we’re not any we’re not any robots. And we just want to make life easier for a human being or somebody else. 

The post Ep 1: Inside CX by Lumoa – Linking Customer Experience with Business Outcomes appeared first on Lumoa.

It seems in any given group of friends there are a number of casual experts. Maybe one is really into movies or music. Or, perhaps, there’s a “foodie” in the group. Since we don’t have direct access to lots of experts, those people in our lives tend to be who we consult if we’re curious about that topic.  

However, what would happen if you found out your movie expert friend had only ever seen Twilight movies?

Their credibility with you would probably fade. It’s nothing against vampires or teen romance. It’s simply that movies are a complex art form and in order to have a sophisticated understanding, you probably need to see lots of movies. Five (yes, there were five Twilight movies) is simply not a large enough sample size. 

What is a sample size?

Companies can ensure that their customer feedback is a reliable source of information for making decisions by accurately estimating the characteristics of their larger population. Sample size calculation accomplishes this, taking into account factors like variability and confidence level to make sure surveys are representative and results are significant. Doing so empowers businesses to better understand opinions and needs – allowing them to provide even more satisfying experiences!

The sample size is a term commonly used in market research that refers to the number of respondents to a survey. It’s referred to as a “sample” because it’s a small group that’s meant to represent a larger population or target audience. 

For example, you may be interested to know how Americans feel about a certain topic. Since it’s not possible to survey the entire population, you gather a small group, or sample, of the population that’s representative of the whole and survey them to get an understanding of general sentiment.  

How to determine sample size

There are a number of different things you may consider when you’re trying to determine how large a sample size you need in order to get reliable data. If your sample size is too small, the data may not be relevant and possibly misleading. 

On the other end of the spectrum, if you try for too large a sample size your study could get very expensive and needlessly complicated. With that in mind, it’s paramount to your success that you’re able to properly determine the correct sample size for a given project. In order to do that, there are four areas to consider. 

Determine sample size variables

1. Population size – This number refers to the total number of people in your target audience. For example, you might be interested in SUV owners. For population size, it’s best to be as detailed as possible. For example, you might only look at people who currently own SUVs. Or, perhaps you want input from anyone who has ever owned an SUV. In either case, clearly defining those parameters is the only way to accurately understand your population size.
2. The margin of error (confidence interval) – This number refers to how closely your sample size accurately represents your target audience. Having a smaller margin of error means a higher level of accuracy. Conversely, a larger margin of error means being less accurate. There will always be some margin of error, but you can control how big, or small, your sample size is. 
3. Confidence level – Related to the margin of error, confidence level refers to how accurate you feel your results are. Your confidence level, which is expressed as a percentage, states how sure you are that the mean falls somewhere within the margin of error. Generally speaking, most use a confidence level of 90%, 95%, or 99%.  
4. Standard deviation – This number refers to how many individual responses will vary between each other, and the mean. If there’s a low standard deviation, it means scores will all be clustered near the mean, so not much variation. A larger standard deviation means when plotted on a graph, responses will be more spread out. Standard deviation is expressed as a decimal, with 0.5 being a good standard deviation to set to ensure a proper sample size. 

Calculate sample size

After you know the answers to the four above variables, you should be able to calculate your needed sample size.  

However, if you don’t know your population size you can still figure out your sample size. You’ll need two more pieces of information: a z score, and the sample size formula. 

1. Determine Z score – Your z score is simply the numerical representation of your desired confidence level. As mentioned above, 90%, 95%, and 99% are the most common percentages.

   Below are the Z scores for those percentages:

   90% = 1.645
   95% = 1.96
   99% =  2.576

   If you’re interested in using a different confidence level than the above three, you can use this Z score table. 

2. Use sample size formula – Once you have your Z score, you have all the data needed to fill out the sample size formula which is: 

Example of calculating sample size

So, let’s say you’re interested in a confidence level of 90%, decide to use the recommended standard deviation of 0.5 and are comfortable with a margin of error of +/- 5%.

This is what your initial equation would be: 

Which equals 270 and is your needed sample size to satisfy the conditions mentioned above. If you want to use a smaller sample size, you can lower your confidence level, or increase the margin of error you’re willing to accept.

That said, both of those adjustments could negatively impact the accuracy of your results. So, depending on what your study is for, it may not be the most advisable strategy. 

Understand your dimensions

If you’ve calculated your sample size to be 350, but then want to further analyze the data by looking into specific parts of the data – you have to remember that the sample size is not enough to give you accurate results.

It’s only accurate when considering all the responses together. 

For example, let’s say you calculate your sample size should be 400 to give you accurate results. When looking at all 400 responses together, you have an accurate representation of the target audience.

However, let’s say you break the results down by country. You collected 200 answers from the US and 200 from the UK. These sample sizes are not enough to give you an accurate view of the results in each country. You can make statements about the entire response pool, but you could not calculate a specific result from one of these countries. 

With that being the case, you should determine upfront what dimensions you’re interested in for your study. 

1. What are the dimensions you want to see your data from?

Realistically, there is any number of ways you could segment your data and endless dimensions you may be interested in. That said, there are a few that are more common you should consider prior to running any study.

For example, you might be interested in a dimension around demographic information such as location, age, or gender. If you run an e-commerce site you may also be interested in segmenting data based on different customer attributes like if they’re a first-time buyer, the size of their purchase, or their CSAT score. 

2. How often do you want to have reliable results?

The cadence –regular interval of time between surveys– of your surveys is also an important factor to consider. If you want to look at your data to see if there are any changes from one month to another, you need to have a regular cadence for running surveys. 

For example, let’s say you’ve calculated that your sample size should be 400. This means that you have to receive 400 responses monthly to be able to compare results month by month. If there’s a fluctuation between months, you won’t be able to reliably compare the results.

General rules for sample size

As we’ve mentioned throughout this post, there are lots of variables to consider when generating your specific sample size. That said, there are still a few general rules to know when creating a sample size to get the best results possible. 

Rule 1: Balance cost and confidence level 

In order to increase your confidence level, or reduce your margin of error, you have to increase the sample size. Larger sample sizes almost always mean higher costs. So, be deliberate when picking your confidence level and margin of error. 

Having a 99% confidence level may sound attractive, but depending on your study you might be better-served saving resources for other aspects of your project by accepting a slightly lower confidence level, or slightly higher margin of error. 

Rule 2: Not all surveys need statistically significant results

Depending on your target audience, it may not be possible to get enough responses to cross the threshold into having your results be “statistically significant”. Depending on the type of study you’re running, that may matter. 

However, if it’s just for your own research and not something with a wider bearing, that may not be that big of a deal. It’s important to remember that any feedback you get is useful. If it’s from a smaller group you may want to show some restraint in how you apply the feedback, but it’s still valuable. 

Rule 3: No matter the sample size, ask open-ended questions

You should always seek out text-based feedback. Though it can be harder to quantify, it’s incredibly valuable and something you should ask for in all of your surveys. The right open-ended question can add a lot of insights you may not otherwise get if you only ask close-ended questions. 

Conclusion 

Calculating the correct survey sample size can be tricky, but it’s an important step for ensuring successful surveys. Understanding your audience is an important aspect of running a successful business. Sending out customer surveys, like CSAT, or NPS are a great place to start but if you really want to get a strong pulse check, you need to have a sufficient sample size. 

Moreover, keeping in mind general rules such as balancing cost and confidence level, understanding that not all surveys need statistically significant results, and including open-ended questions will help you get reliable and meaningful results. With a clear understanding of your target audience, you’ll be better poised to serve them and grow your business.

The post How To Calculate Survey Sample Size: A Simple Guide appeared first on Lumoa.

However, if you’re in the business world, churn is referring to something completely different. In this article, we’re going to cover that type of churn: the kind that relates to customers and won’t raise your cholesterol. Along with giving a (business) definition of customer churn, we’ll also give you some handy formulas to calculate customer churn rates. Lastly, we’ll give some tips you can use to try and reduce churn at your company. 

What is Customer Churn?

When someone says a customer churned, what they mean is that they either canceled their business or decided not to renew an agreement they previously had. To put it simply: it’s any business that you lose. All businesses deal with churn. For some, it’s not as important a number. For others, it’s one of the most important metrics they have.  

For example, a gas station probably isn’t as concerned about customer churn as a subscription business is. Both want to keep customers, but the nature of a gas station’s business is different and relies more heavily on volume, rather than repeat business from the same customer. Although it is becoming more and more common for convenience stores to have loyalty programs, which are meant to bring people back and reduce churn. 

In the example of a subscription business, it matters much more because it generally costs them more to acquire a customer (this is sometimes referred to as CAC or Customer Acquisition Cost), so it takes longer for them to break-even or turn a profit on a customer. They need to put more effort into reducing their churn generally, to keep their business healthy. If they’re not able to retain a certain amount of customers,  then they won’t be able to stay in business. 

Another case where churn is something that is very important to keep an eye on is in businesses that have a small number of clients. For example, ad agencies might have two to three large clients that account for the majority of their annual business. Then they have a number of smaller accounts that round out the rest of their earnings. So if one of the big accounts churn it’s a very large problem. 

However, that’s really only one part of the story, right? What if you lose one big account, but then add an account that’s worth the same amount, or even more? How do you measure impact in that case? That brings us to our next topic: calculating your churn rate.

Calculating Your Churn Rate

Typically, when talking about churn you’ll hear someone refer to their “churn rate.” In order to calculate your churn rate you need to first define a specific period of time. It could be a week, a month, or more. 

After you’ve defined your time period you take the number of customers that churned and divide that by the total number of customers you had at the beginning of the time period.

So, if you started with 100 customers, but lost 5, you’d have a churn rate of 5%. Meaning that over that period of time only 5% of your customers churned. The actual equation would look like this: (5/100)x100 = 5

For another example, let’s say you started with 500 customers at the beginning of the month, but lost 35 over the month. The equation would be (35/500)x100. In that case, you’d have a monthly churn rate of 7%. 

Here is the equation without any variables filled in so you can plug in your own numbers: 

How to Calculate Churn Rate

Being able to calculate churn rates is important because it allows you to measure the impact of different projects, or company initiatives. It can also help you determine progress for your business and give you benchmarks to measure against. While the actual number mightn’t explain much, it can be a really good starting point for you to start digging deeper. 

Here is a great example from Proof showing how churn affects your business growth.

As we’ve mentioned, churn impacts some industries more than others. For some it’s not an important metric, but for others it’s a main health indicator. To give an example, online retail has a churn rate of about 22% in the US. However, SaaS companies aim for a churn rate of 5% or lower annually. 

Strategies to Reduce Churn

Now that we’ve covered what churn is and how to calculate it, we’re going to talk about a few ways you can reduce churn at your company. Each industry will be different but most should find something relevant below:

1. Watch the Market – Have you ever noticed how industries have trends? For example, when smartphones first came out it seemed they were all priced at about $200. So when something was priced above that it seemed very expensive. That device would need to provide something super unique to justify the cost. It had to prove that the value was there. 

   Any product or service you sell follows the same rules. Even if someone loves your product, if they perceive that the cost is not worth the value it brings, then they will probably start shopping around for different options. Now, we’re not saying that you need to price-match everyone in your space. What we are saying is that if you’re the most expensive you do need to have a strong case as to why. 

2. Invest in Customer Education – How many people do you know that own guitars? Now, how many people do you know that actually play the guitar? The number is probably quite different. Infact, 90% of those who purchase a guitar don’t play beyond one year. However, Fender found that the 10% that continued playing may spend up to $10,000 in their lifetime on guitars and related accessories.

   Though your product is probably easier to learn than an instrument, there will still be an element of a learning curve involved. If a customer is discouraged early and not able to accomplish the task they wanted to with your product, chances are they won’t continue using it in the future and you’ll lose their business. Investing in education options like help center articles and online tutorials means customers will have a better chance to be successful with your product and be less likely to leave. 

3. Look for Trends – When you analyze your churn data you may start to notice that most people leave within a certain timeframe. Or, perhaps you see that when a customer uses a certain feature or service that they are less likely to churn. These types of actionable insights are invaluable. 

To use them to your full advantage, you need to go a step further and see if you can figure out why those things are happening. As many a math teacher has said, correlation does not equal causation. So, be curious and dig in deeper to learn even more about your customers and what may be motivating them. 

Conclusion

Remember that to measure churn you need to first define a period of time, then you’ll take the number of customers lost over that time and divide it by the total number of customers at the beginning of the time period. 

Though there is no silver bullet to stop customers leaving there are a few things to consider. Make sure you’re keeping up with the market. If your price and value don’t align, then it could cause trouble. Invest in educating customers. When they’re successful with your product, they’re more likely to stick around. Last, be curious about the data you gather. Look for trends and dive deeper to understand them. 

You won’t be able to keep every customer you attract. It’s a fact of business, and one that you’ll need to prepare for. Though it is an inevitability, you can take measures to decrease those instances. Being able to identify customer churn is the first step in that journey. 

To learn more about customer experience related metrics, check out this article: 6 Most popular customer experience metrics and KPIs explained simply

The post What Customer Churn is and How to Calculate it appeared first on Lumoa.

Customer experience management brings discipline to this somewhat vague and soft area: by establishing a systematic process for collecting, analyzing, and acting on customer feedback, you’ll be able to improve customer experience altogether. 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 their interactions with your company. Customer experience cannot 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 the 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.

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

Recommended reading:
Business value and ROI of customer experience: the step-by-step guide
How to justify a CX program to your CEO

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.

Many businesses are participating in the customer experience race: “whose cx is the latest and the greatest”. Not many of them understand that the 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.

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.

Above is how the roles in an organization are typically defined. In a successful organization, everyone participates in 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 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 for someone else to fix the problem, is contagious: when employees see other people doing it, they get encouraged to try out as well.

In 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.

Set targets

Customer experience goals and target setting are essential if you want to empower the whole organization to get on board with customer experience management. It makes it 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.

Setting up common customer experience targets across the 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.

Other Customer experience KPIs

In addition to the main customer experience metrics based on customer feedback, you could follow several KPIs of the customer journey. 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 retention better, the KPIs such as churn rate, purchase frequency, the time between purchases and others. The choice largely depends on the nature of your business.

First response rate

The first response rate measures how fast a customer received a reply from your company since the first contact was 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 with customer experience goals. CLV measures the financial value of one customer and has a strong bond to retention and loyalty.

Collect customer feedback

After you have understood the targets and metrics and defined the roles of customer experience management, it’s time for action. Asking for 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 a 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.

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 feedback. Text analytics help you to analyze the feedback in a fast and efficient manner, showing tailored results valuable to your business.

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

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, analyzing, and acting on feedback, and ends with communicating the changes and bringing the customer to the heart of the business.

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

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.

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. Organize workshops, coaching, and training within the company.

• Empower the whole organization to make improvements. Your starting point should be the customer journey, not an 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.

Recommended reading:
How to prioritize customer experience initiatives

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 to 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 on 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, and start a referral campaign.

• Ask promoters to leave public feedback: to write a review or share their experience on social media.

• Upsell to the promoters and introduce new/additional services and products.

Deal With The Detractors

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

• The customers who have provided you with 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.

Enhance customer-centric culture

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

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

Shared targets

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

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.

Let the Choice of the Customer Be Heard

Ensure that people can access not only the analytics results but also the customer comments – hearing the voice of your customer 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.

Recommended reading on Customer experience

Here are some of our favorite articles about customer experience:

• A checklist for starting to measure customer experience
• A to Z guide to customer experience definitions and terms
• How customer empathy can supercharge your customer experience
• Customer service VS. customer experience: what is the difference? 
• Personalized customer experience: what, how, and why?
• How To Increase Customer Engagement On Your Website

The post How to Improve Customer Experience: A Step by Step Guide appeared first on Lumoa.

Customer experience (CX) plays a crucial role in business success, with 99% of CX leaders acknowledging its positive impact. However, only 3% of companies are truly customer-obsessed. Businesses that prioritize CX are more likely to be relevant, profitable, and successful.

Unhappy customers can have significant consequences, as they are more likely to switch to competitors and share their negative experiences. Consumer demand for better service continues to rise, and trust in brands is influenced by quality, personal experiences, and consistency.

Customer feedback analytics are essential for understanding and improving CX, yet many companies fail to regularly collect and analyze customer feedback. Metrics like Net Promoter Score (NPS) and Customer Effort Score (CES) are commonly used to measure CX.

Organizations with a customer-centric approach outperform their competitors, but there is a need for improved CX skills and cross-team collaboration. Customer service and support channels, such as email and phone calls, are critical for delivering a seamless experience.

In summary, customer experience and feedback analytics are vital for businesses to thrive and retain customers in today’s competitive landscape.

Find the latest stats on customer experience trends

• 99% of Customer Experience and Success leaders believe CEM has a positive impact on their business. (Lumoa, 2018)
• In 2019, customer experience will continue as a major factor in how companies do business. (Forrester, 2018)
• Over 80% of organizations expect to compete mainly based on CX, meaning that the skill of realizing benefits will be in high demand. (Gartner, 2018)
• According to customers, in 2022, only 3% of companies are customer-obsessed — putting customers at the center of their leadership, strategy, and operations — a decrease of 7 percentage points from the prior year. (Forrester, 2022)
• 80% of CEOs believe they deliver superior customer experience. Only 8% of their customers agreed. (Bain, 2005)
• 87% of marketers say they are delivering engaging customer experiences. (Acquia, 2019)
• 78.5% of CMOs agree or strongly agree that amazing customer experiences provide a powerful competitive advantage. (Martech Alliance, 2021)
• Nearly half (48%) of survey respondents said the customer experience they deliver falls below or significantly below their customers’ expectations. Just 31.5% believe they are exceeding expectations. (Martech Alliance, 2021)
• Customer-obsessed businesses expect to be 7x more relevant to customers, 5x more likely a top provider of products, and 4x more profitable. (Forrester, 2016)
• 55% of CX professionals believe their companies will be too slow and face disruption from more innovative, nimble, and customer-focused competitors. (Oracle, 2018)
• Optimizing customer experience is the most exciting opportunity for 19% of businesses, ahead of data-driven marketing that focuses on individuals (16%) and content marketing (14%). (Econsultancy, 2018)
• 91% of senior executives agree/strongly agree that the C-suite recognizes the importance of the digital experience for growth. (Adobe, 2022)
• 75% of marketing & CX practitioners have observed a surge in existing customers using digital channels (Adobe, 2022)
• 74% of CX professionals say creating a seamless customer journey across assisted and self-service channels is “important” or “very important.” (Gartner, 2021)
• 8 in 10 consumers report that businesses are meeting or exceeding their expectations for service, compared to 67 percent in 2014. In fact, 40% say businesses have increased their focus and attention on service, a significant increase in just three years (up from 29% in 2014). (AmericanExpress, 2017)
• Only 43% of CX executives are highly confident in their company’s CX proficiencies and preparedness for the future. (Oracle, 2018)
• 53% of organizations don’t believe they make it easy for customers to handle their issues/requests. (Gartner, 2022)
• 87% of organizations agree that traditional experiences no longer satisfy customers. (Accenture, 2018)
• By industry, supermarket chains provide the best customer experience, while TV and Internet service providers provide the worst. (Temkin, 2018)
• Just 34% of respondents report they have three or more years of experience developing end-to-end journey maps, and 83% report their organization struggles to use customer journey maps to identify and prioritize CX efforts. (Gartner, 2022)
• CX programs that exceed management expectations are 2.3 times more likely to have CX efforts in marketing not primarily focused on the path to purchase but on the journey after acquisition. (Gartner, 2022)
• Customer experience is a ‘significant’ or ‘critical’ priority for 69% of organizations. 77% have a centralized customer experience group, and 68% have a senior executive in charge of customer experience across products and channels. (Qualtrics, 2022)

Happy vs. Unhappy Customers

Learn how promoters differ from detractors

• 86% of consumers will pay more for a better customer experience. (Oracle, 2011)
• Businesses have a 60 to 70% chance of selling to an existing customer while the probability of selling to a new prospect is only 5% to 20%. (Marketing Metrics, 2010)
• Increasing customer retention rates by 5% increases profits anywhere from 25% to 95%. (Bain, 2014)
• 54% shared bad experiences with more than five people and 33% shared good experiences with more than five people. (Zendesk, 2013)
• 89% of consumers began doing business with a competitor following a poor customer experience. (Oracle, 2011)
• Customers who had a very good experience are 3.5x more likely to repurchase and 5x more likely to recommend the company to friends and relatives than if they had a very poor experience. (Temkin, 2018)
• After a bad experience, 22% cut their spending with the company and 19% stopped their relationships with the company completely. (Temkin, 2017)
• After a bad experience, 30% of consumers tell the company, 50% tell their friends, and 15% provide feedback online. (Temkin, 2017)
• 48% of consumers expect specialized treatment for being good customers. (Accenture, 2017)

Consumer demand better service from companies

• More than 60% of customers say they now have higher customer service standards. (Zendesk, 2022)
• 54% of customers who report positive emotions like feeling happy, valued, and appreciated are willing to forgive brands that make mistakes. (Forrester, 2022)
• In 2022, an average of 59% of customers trust the brands they interact with, 2 percentage points higher than the 57% of customers who trusted brands in 2020. (Forrester, 2022)
• Nearly half of consumers say brands don’t meet their expectations. (Acquia, 2019)
• 78% of people believe brands can do more to deliver happiness to their customers and 91% said they preferred brands to be funny; this number increased among Gen Z (94%) and Millennials (94%). (Oracle, 2022)
• The top three reasons a consumer would trust a brand are the quality of the product (66%), personal experience with the brand (53%), and consistency (32%). (Forbes Insights, 2020)
• Two-thirds of customers could not recall when a brand exceeded expectations. (Acquia, 2019)
• It’s a high-stakes game—61 percent of customers would now defect to a competitor after just one bad experience. Make it two negative experiences, and 76 percent of customers are out the door. (Zendesk, 2022)
• The large majority of consumers said they would switch to a competitor after three poor experiences or fewer. UK consumers are slightly more likely to leave a brand (90%) than their US counterparts (81%). (Emplifi, 2021)

Want more data?

We asked 100+ CX leaders about the future of customer experience.

Check the latest State of Customer Experience Report.

Customer Feedback and Surveys

Find all about customer surveying and feedback

• 39% of companies don’t regularly ask customers for feedback about their interactions — the most basic form of CX measurement. (Forrester, 2016)
• The average email survey response rate is 24%. (Fluid Survey, 2014)
• 75% of people complete surveys on their mobile. (IMImobile, 2018)
• 77% of companies say that they don’t model the drivers of CX quality regularly, leaving them in the dark about what matters most to their customers. (Forrester, 2016)
• 60% don’t regularly track operational data that reveals what really happened during interactions to help explain why customers felt the way that they did. (Forrester, 2016)
• 63% of CX professionals use customer feedback to prioritize investment in better products, services, and customer experiences. (Oracle, 2018)
• 79% of consumers who shared complaints about poor customer experience online had their complaints ignored. (Oracle, 2011)
• 79% of consumers who complained are still not happy with the way their complaints are handled. (CCMC, 2017)

Customer Experience Metrics and Data

Learn how to measure Customer Experience

• 21% of companies have developed their own KPIs to track customer experience. (Lumoa, 2018)
• Only 11% of companies have strong CX metrics programs and 62% of companies cite the lack of taking action based on CX metrics programs as the key problem. (Temkin, 2017)
• 78% of companies expect customer interaction history to become an increasingly important source of insights, and only 33% feel the same about multiple-choice survey questions. (Temkin, 2017)
• 65% of companies measure NPS compared with 44% that measure CSAT and 14% that measure CES. (Lumoa, 2018)
• Only 32% of CX professionals feel they have access to the information they need to understand customers’ needs and previous interactions, and can apply it to improve their experience. (Oracle, 2018)
• Industry leaders reported that they improved their customer satisfaction KPI metric target by 47.1% over the last two years, 2.4 times higher than lagging organizations, which improved their customer satisfaction KPI metric target by 19.4%. (IDC, 2022)

Net Promoter Score

Utilize your NPS Better

• Net Promoter Score (NPS) is the most popular customer experience metric and is measured in two-thirds of companies. (Lumoa, 2018)
• In 2022, that is still true as 69% of CX Leaders are using NPS as a core CX metric. (Qualtrics, 2022)
• 32 is the Net Promoter Score of the Net Promoter System. (Lumoa, 2018)
• Compared with the detractors, promoters are 4.2x more likely to buy again, 5.6x more likely to forgive a company after a mistake, and 7.2x more likely to try a new offering. (Temkin, 2017)
• 83% of customers would trust recommendations from the people they know: colleagues, family, friends, etc. and 66% would trust other consumer opinions posted online. (Nielsen, 2015)
• An average NPS increase by 7 points correlates with a 1% growth in revenue. (London School of Economics, 2005)

Customer Effort Score

Is CES worth your attention? Short answer: YES!

• 96% of customers with a high-effort service interaction are more disloyal, compared to only 9% with low-effort interactions. (Gartner, 2018)
• 94% of customers going through an effortless experience are likely to repurchase vs. only 4% of those who went through a high level of effort. (Gartner, 2018)
• 81% of customers going through a high level of effort are likely to share their bad experience with friends vs. only 1% of those who went through an effortless experience. (Gartner, 2018)
• 17% of CX Leaders are using CES as a core CX metric. (Qualtrics, 2022)

Business Impact of CX

Find out how customer experience can influence your business KPIs

• Organizations that lead in CX outperformed laggards on the S&P 500 index by nearly 80%. (Watermark Consulting, 2018)
• Only 14% of companies measure the ROI of Customer Experience. (Lumoa, 2018)
• 61% of consumers would pay at least 5% more if they knew they would receive outstanding CX. (Emplifi, 2021)
• Experience-driven businesses grew revenue 1.4 times faster and increased customer lifetime value 1.6x more than other companies in the past year. (Forrester, 2018)
• Companies embracing service as a value creator achieve 3.5 times more revenue growth than those managing it as a cost center. (Accenture, 2021)
• Companies receive 10X+ higher revenue growth when they  involve their service organization in the development of new products. (Accenture, 2021)
• 64% of business leaders say that customer service has a positive impact on their company’s growth. (Zendesk, 2022)
• Almost 20% of consumers say they usually (if not always) abandon a purchase because of a single poor customer experience. (Emplifi, 2021)
• Organizations with a cross-team approach with a customer at the heart of all initiatives are nearly twice as likely to exceed their business goal by a significant margin. (Econsultancy, 2018)
• 62% of CX leaders think that their organization needs to make major changes to the customer experience to meet their customer strategy. (PwC, 2017)
• 60% of CX leaders see larger returns from CX initiatives relative to other initiatives in their organization. (PwC, 2017)

Customer Centricity

Are you obsessed with your customers?

• 56% of CEOs and 66% of top managers are involved in Customer Experience activities according to the employees. (Lumoa, 2018)
• 26% of CX teams experience a lack of skills and are not sure how to deal with the new consumer mindset and constantly changing market. (Lumoa, 2018)
• Only 13% of companies believe that HR has an impact on Customer Experience activities in the company. (Lumoa, 2018)
• 90% of experience decision-makers agree that the CMO should be the internal advocate for their customers. (Accenture, 2018)
• Forty-five percent of businesses manage the customer experience through their customer care organization, while 30% have marketing manage customer experience. (Genesys, 2017)
• Only 19% of businesses report that they have a dedicated customer experience team to manage the experience. (Genesys, 2017)
• 55% of companies suffer from organizational silos, incl. slow internal processes, and unwillingness to change. (Lumoa, 2018)
• Getting buy-in from the executive team, knowing about available resources, and justifying the need for those resources are among the main challenges for the customer support teams. (Support Driven, 2018)
• 72% of companies don’t review customer experience metrics or share them with all employees regularly. (Forrester, 2016)
• 39% of companies don’t keep a documented list of customer experience projects that are currently underway. (Forrester, 2016)
• 79% of employees in CX leading companies are engaged, compared with 49% in the companies with CX below average. (Temkin, 2018)

Customer Service and Support

Customer experience can’t go without customer service.

Channels

• 54% of customers used email customer service channels making it the most commonly used digital customer service channel. (Forrester, 2018)
• 9 in 10 consumers want absolute omnichannel service – they expect a seamless experience when moving from one communication method to another, such as phone to text or chat to phone. (NICE inContact, 2018)
• 59% of customers had a conversation with a customer service representative or agent via telephone, making phone calls the most commonly used customer service channel. (Forrester, 2018)
• 87% of customers find it frustrating to repeat themselves in multiple channels, and 73% question doing business with that brand as a result. (Precisely, 2020)
• 93% of consumers will spend more with companies that offer their preferred option to reach customer service (ex: chat) (Zendesk, 2022)
• 89% of consumers will spend more with companies that allow them to find answers online without having to contact anyone. (Zendesk, 2022)
• More than 70% of customers expect agents to have access to all information relevant to their account and query. (Zendesk, 2022)
• 63% of customers are happy to be served by a chatbot if there is an option to escalate the conversation to a human. (Forrester, 2018)
• 90% of customers prefer to talk to a live service agent over a chatbot. (NICE inContact, 2018)
• Contact center performance drives both loyalty and churn. 90% of consumers said they are likely to stay loyal after a positive call center experience; 73.7% said they are likely to switch after a negative call center experience. (CallMiner, 2020)
• Approximately 50% of consumers will use mobile messaging apps for customer service and support. Another 28% are willing to give mobile messaging a chance.  (Genesys, 2018)
• 68% of customers worry their query gets lost or misunderstood by fully automated services. (Forrester, 2018)
• 76% of customers want human contact to remain part of customer service. (Forrester, 2018)

Speed

• Slow response time (37%) was rated as the leading contributor to a negative experience, followed by a lack of 24/7 customer service support (23%). (Emplifi, 2021)
• 52% of consumers said a fast response within one hour is expected. 1 in 10 consumers wants a response in less than 5 minutes. (Emplifi, 2021)
• Earlier, 50% of consumers give a brand only one week to respond to a question before they stop doing business with them. (Oracle, 2010)
• 73% say that valuing their time is the most important thing a company can do to provide them with good online customer service. (Forrester, 2016)
• 77% of customers believe it takes too long to reach a live agent and consumers will wait on hold for an average of 11 minutes before hanging up. (RightNow, 2010)
• 69% attributed their good customer service experience to quick resolution of their problem. (Zendesk, 2013)
• 72% blamed their bad customer service interaction on having to explain their problem to multiple people. (Zendesk, 2013)

Relationships and Emotions

• 81% of consumers say that getting a satisfactory answer is a very important part of servicing satisfaction, and 74% want a knowledgeable professional. But nearly half also say that personalized service (47%) and appreciation for them as a customer (45%) are very important in providing excellent care. (AmericanExpress, 2017)
• Nine out of 10 consumers value when a business knows their account history and current activities with that company, and seven out of 10 value having the same representative or agent help them each time they interact with the company. (Genesys, 2017)
• 51% of consumers felt like they received nothing after a customer service interaction. (CCMC, 2017)
• 56% of customers with a problem experienced rage. (CCMC, 2017)
• Commonly used practices in customer service, that consumers hate: misuse of automated phone technology e.g. no live person option, outsourcing service abroad, upselling, having to repeat information already given and talking too fast. (CCMC, 2017)

Personalization

Learn how customers value the personalization of service

• 56% of customer experience professionals aim to improve and personalize the customer experience. (Lumoa, 2018)
• 83% of consumers are willing to share their data to enable a personalized experience. (Accenture, 2017)
• Personalization at scale can drive between 5 and 15% revenue growth for companies in the retail, travel, entertainment, telecom, and financial services sectors. (McKinsey, 2017)
• 33% of consumers who abandoned a business relationship in 2016 did so because personalization was lacking. (Accenture, 2017)
• 58% of consumers would switch half or more of their spending to a provider that excels at personalizing experiences without compromising trust. (Accenture, 2017)
• 64% of millennials value anticipation and customization of the experience using their transaction data over privacy concerns. 46% value personalization using preferences and contact info over privacy concerns. At the same time, 45% of baby boomers (age 55 and over) value privacy over personalization. (Genesys, 2018)

Customer Experience Technologies

Find out what technologies CX leaders use

• By 2021, 15% of all customer service interactions will be completely handled by AI, an increase of 400% from 2017. (Gartner, 2017)
• By 2019, over 85% of new packaged customer service and support software will be delivered on a cloud-based model. (Gartner, 2017)
• 48% of CX professionals said that although their companies embrace digital, they don’t think they’ll keep pace with the speed of technology change. (Oracle, 2018)
• 79% of contact center leaders plan to invest in greater AI capabilities in the next two years. (Deloitte, 2021)
• 80.1% of leaders fully automate their data validation, data access policies, and data set management processes, while only 3.2% of lagging organizations fully automate these processes. (IDC, 2021)
• 53% Of CMOs said a lack of skills/knowledge of the technology and/or data management was one of the biggest barriers to realizing their CX vision. (Martech Alliance, 2021)
• Nearly 70% agreed that customer experience would be drastically improved by introducing a customer data platform (or better managing an existing one). (Martech Alliance, 2021)
• 70.5% of CMOs say data compliance, privacy, and ethics are vital to achieving customer experience success. (Martech Alliance, 2021)
• More than 24% of companies report experiencing a lack of customer insights in marketing/customer experience organizations. (Adobe, 2022)
• Technology spend is expected to have substantial expected growth throughout 2022, with notably less spend expected for both facilities and T&E. (Gartner, 2022)
• Over 50% of CX professionals say their organization is planning to use predictive analytics and artificial intelligence ‘somewhat’ or ‘significantly’ more than they were doing so last year. 44% of respondents’ organizations plan to use journey analytics more, as well. (Qualtrics, 2022)
• 31% of organizations have already invested in technology like AI to outpace the competition. (Accenture, 2018)
• 76% of collaboration leaders are investing or expanding their emerging technology investment. (Accenture, 2018)
• 26% of companies leading financially use CX technologies, compared to 7% of laggards. (Bain, 2018)
• Predictive analytics and Artificial Intelligence are in the most demand among CX professionals. (Bain, 2018)

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Customer acquisition has always been a key focus for any business: to make money, you need to get customers. You can also make money by selling to your existing customers, but in order to do that, you need customer retention.

When large numbers of customers are leaving your business, it’s like pouring water into a leaky bucket – you can keep adding more, but at the rate you’re losing, you’re not going to have much left. Still, 44% of businesses focus more of their time and effort on acquiring customers, rather than retaining them.

By focusing at least equally as much effort on retention, you can find and fix the holes in your business. That way, all the work it takes to acquire customers doesn’t go to waste when they drop out after one purchase, and you can continue doing business with your customers for a long time.

Your survival and success depend on repeat customers, especially if you’re a subscription-based business or one whose customers have the potential to repurchase frequently. So, use robust and reliable subscription payment apps, such as the ones explored in a guide on SaaS subscription billing. It’ll help you seamlessly handle your recurring revenue streams and customer relationships. Incidentally, much research has shown how effective and efficient it is to focus on selling to existing customers, rather than trying to acquire new ones:

• It’s 5 to 25 times more expensive to acquire a new customer than it is to retain an existing one.
• A 5% increase in customer retention can increase company revenue by 25-95%.
• Compared to new visitors, existing customers are five times more likely to purchase and four times more likely to make a referral.

It’s clear that focusing on retention has immense benefits. But as the infamous saying goes, “You can’t manage what you can’t measure.” The first step toward focusing on retention is measuring it. Then, you can take steps to improve it.

How to Measure Customer Retention

Customer retention rate

At its root, retention is a function of how many customers stick with you over a given time period. Depending on your business, the time periods that are important to you may be different, but some standards are to measure by month, quarter, and year.

With that in mind, you might be inclined to measure retention simply by taking the number of customers at the end of the month and dividing it by the number of customers you had at the beginning. For example, if you have 1000 customers at the end of the month, and you started the month with 1050, then you might try to calculate retention as follows: 1000 / 1050 = 95%

However, this approach doesn’t account for new customers added over the course of the month, and therefore it can lead to an artificially inflated retention rate. If you use the same example as above but add in the fact that you added 75 customers, then you’ll see a different result. To control for new customers added, you’d subtract them from the total number of customers remaining at the end of the month, like this: (1000 – 75) / 1050 = 88%.

The difference between 95% and 88% is fairly large, and by removing the number of new customers added during the time period, you get a clearer picture of your true customer retention rate.

Gross Revenue retention

It’s great to know how many customers you’re keeping, but for many businesses, not all customers represent the same amount of value. So losing five customers who make you 100€ a month is a lot different from losing one who makes you 10 000€.

That’s why it’s also helpful to measure revenue retention. Revenue retention is usually measured monthly and annually. To figure out monthly revenue retention, for example, take the amount of recurring revenue you lost in that month, either through downselling or churn, and subtract it from the recurring revenue from the beginning of the month, then divide it by the revenue at the beginning.

For example, you have 100 000€ in recurring revenue at the beginning of the month. During that same month, you lost 5000€ in revenue. (100 000 – 5000) / 100 000 x 100% = 95% gross revenue retention.

Net Revenue Retention

Gross revenue retention is a great metric because it tells you how much revenue you’ve managed to keep in a given time period. However, it doesn’t take into account some of the other benefits of focusing on retention, like reactivated or expansion revenue.

That’s where net revenue retention can be a helpful complement. It’s calculated by taking the starting monthly recurring revenue plus any expansion revenue, then subtracting any lost revenue, divided by the starting revenue.

For example, you started the month with 100 000€ in recurring revenue. Over the course of the month, you added 20 000€ in new recurring revenue and lost 5000€.

((100 000 + 20 000) – 5000) / 100 000 = 115% net revenue retention

Anything over 100% means that you’re growing revenue faster than you’re losing it. So as you focus both on adding new revenue and holding onto existing revenue, you’ll improve this metric.

Churn

Another way to look at retention is through its inverse metric, called churn. Churn is the portion of customers lost during a given time period, and it can be measured by subtracting the number of customers at the end of the period from the number at the beginning, then dividing by the number at the beginning.

For example, you have 1050 customers at the beginning of the month and 1000 at the end: (1050 – 1000) / 1050 = 5% churn

The revenue retention metrics can also similarly be calculated as gross revenue churn and net revenue churn. Looking at a suite of retention and churn metrics will help you get a balanced perspective.

Benchmarking Retention

Depending on the industry, the average customer retention rate varies. In SaaS, 5-7% annual churn is considered to be reasonable. Industry benchmarks are helpful because they allow you to make some comparisons against others in your field.

But every business is slightly different, and a more realistic way to create goals around retention is to work from your current retention rate and set out to make incremental improvements over time.

Improving Retention

Collect feedback and fix problems

One of the most impactful ways to improve retention is by listening to customers and using their feedback. Sending surveys, like an NPS survey, can provide you with a direct line into what customers are experiencing, illuminating the pain points that customers are facing and giving you an opportunity to make improvements.

As you survey your customers, you’ll notice common themes in their responses. You can then start categorizing all the survey responses based on their theme. This will give you a picture of which issues are biggest. When done manually, this can be a significant amount of work, but a tool like Lumoa makes the process much easier and more scalable.

Once you have an idea of what’s frustrating your customers, then you can work on remediating and eliminating these issues. You’ll also uncover individual cases where you can follow up and correct mistakes immediately. These are golden opportunities to make things right and win customers back.

Another good time to survey customers is when they’re canceling. While it’s best to focus most of your efforts learning about and engaging your customers before they’re ready to head out the door, an exit survey can help you keep a pulse on what’s driving customers away.

Surveys should be sent on an ongoing basis to capture feedback on any changes in your business and to keep driving continuous improvement.

Acquire the right customers

Sometimes, retention problems can point back to the way you’re acquiring customers in the first place. If you’re seeing trends in the types of customers who are canceling related to company size or industry, that might mean that there are segments of customers who simply aren’t the right fit.

It’s important that your sales reps optimize their actions to ensure customer retention. Be sure your sales team is aligned on the ideal customer profile (ie. the people who are going to get the most value from what you offer), and that they are focusing most of their efforts there. Also, make it a point to be upfront about what the product can provide. If the sales team is selling a myth, then customers won’t be around very long once they’re faced with the reality of a product that doesn’t truly meet their needs.

Increase adoption through onboarding

Especially if customers are churning early on in their lifecycle, it may be that they don’t understand how to use your product. Effective onboarding helps teach customers what your product can do and how it can help them reach their goals.

The onboarding process also sets the tone for the relationship. After selling to a customer, if you drop them into your product without any guidance or resources, they’ll likely feel lost and unsupported. On the other hand, providing them with educational materials and being there to assist them shows that you care and are dedicated to their success.

When customers are guided on how to use your product, they’ll be more likely to get value out of it. And when they see value, they’ll be far less likely to leave.

Building trust through transparency

Mistakes happen. Whether that’s data loss, a billing mistake, an outage, or something else, it’s better to be upfront and admit it than to try to sweep it under the rug. Customers will find out anyway, so it’s best to get in front of it and own it.

When you proactively manage your mistakes, you’ll show yourself as a vigilant company that cares about righting its wrongs. And when you work quickly to fix a problem, then provide detail about how you’ll prevent something similar from happening again, you’ll build trust because customers will see that you have integrity even at the worst of times.

One study at Harvard Business School showed that when diners in a restaurant could see the cooks throughout the meal, customer satisfaction increased by 17%. More transparency in restaurant operations ultimately led to more trust and satisfaction.

Keep them coming back

Start by measuring your customer retention, then focus on improving it. By implementing some of the practices above, you’ll see more satisfied customers who stick around longer and your customer acquisition and retention costs will go down. When that happens, your business will grow and thrive, pulling far ahead of those simply focusing on acquisition alone.

To learn more about customer experience-related metrics, check out this article: 6 Most popular customer experience metrics and KPIs explained simply

The post How to Measure and Improve Customer Retention appeared first on Lumoa.

You can easily see that NPS is the most common CX metric: almost two-thirds of companies follow it. The churn or retention rate is usually used to understand the connection between customer experience management and its monetary value, further emphasizing the role of AI-powered customer experience analytics and text analysis in interpreting data for actionable insights. This is particularly relevant in the context of using rating scales and structured feedback analysis to enhance the understanding of customer satisfaction and loyalty.

Let’s dive deeper into each of them, recognizing how the integration of advanced technologies and methodologies, such as text analysis and AI, into the analysis of traditional metrics like NPS, CSAT, churn rate, retention rate, CLV, and CES, can provide companies with a competitive edge. This approach not only helps in tracking and improving customer experience metrics but also aligns with the broader business objectives by effectively managing and enhancing the customer journey through strategic insights gained from customer feedback and, conversational and behavior analysis.

Three Customer Experience Metrics

The Customer Experience Metrics are the KPIs the business follows that involve customers’ input. These metrics help you in understanding how loyal or satisfied your customers are. The most popular customer experience metrics include Net Promoter Score, Customer Satisfaction, and Customer Effort Score. Use an NPS survey to track customer loyalty over time, send out CES surveys to understand how easy it is for customers to get the support they need, or distribute CSAT surveys to understand how satisfied customers are after key touchpoints in the customer journey.

Net Promoter Score (NPS)

As you could clearly see from the graph, NPS is the favorite customer experience metric among Nordic companies. The same applies also globally. About two-thirds of all companies are using it to define where they stand in terms of the customer experience. Since 2003, when the metric was first introduced, NPS has been gaining popularity. Now, most Fortune500 companies, incl. Apple, and other global market leaders, incl. Airbnb, benefit from the metric. Why?

NPS is short and simple for the customers to answer and it is very easy to track for companies. NPS consists of only two questions and it gives that one customer experience-related number your leadership needs for target setting and bonuses. NPS is often used to rate a brand, service, or product in general.

How to calculate NPS?

1. Calculate the percentage of promoters among your surveyed customers

2. Calculate the percentage of detractors

3. Subtract the detractor percentage from the promoter percentage

In short, why should you use NPS?

• fast, simple, and easy both for customers and companies

• open text feedback allows us to dive deep and see the big picture

• industry-standard metric: it is widely understood and benchmarks exist(before benchmarking, read what NPS score you should aim at here)

• an increase or decrease in NPS helps you to predict future revenue gain or loss

• NPS is also utilized to measure word-of-mouth marketing strategies

If you want to know more about NPS, check this comprehensive guide to the Net Promoter Score for more details.

Customer Satisfaction (CSAT)

CSAT, together with NPS, is one of the most used CX metrics. It has many forms and scales, but the most common is a scale from 1 to 5. Google or Facebook ratings are a good example of CSAT.

Why use CSAT?

CSAT is a very simple and efficient customer experience metric to implement. Just as the NPS, it’s typically very simple and fast for the customers to answer. It is often asked from a customer after a transaction or customer support ticket to evaluate the efficiency of the customer service department. CSAT is a great way to see what your customers think about you right now.

To read more about customer satisfaction – check out this article: The Importance of Customer Satisfaction

Customer Effort Score (CES)

Customer Effort Score is the third most popular customer experience metric that involves the customer’s input. CES is a pure transactional metric and it typically assesses the simplicity of a single solution.

CES typically answers “how easy was it to solve your problem with today?” and has a 5- or 7-point scale system. Below, there are some examples of CES implementation.

CES is different from NPS or CSAT because, in order to make sense of it, you need to follow both the average score and the distribution of scores. Analyzing distributions could help you in identifying which of your customers experience effortless service and, more importantly, find those that struggle to during the process. By proactively helping and reaching out to those who are struggling, you can effectively decrease churn.

Why use CES? 

CES helps you to analyze the complexity of the service. Why is it important? 94% of customers going through an effortless experience are likely to repurchase vs. only 4% of those who went through a high level of effort. According to the same research, 81% of customers going through a high level of effort are likely to share their bad experiences with friends vs. only 1% of those who went through an effortless experience.  An interesting discovery is summed up in HBR article “Stop Trying to Delight Your Customers“ – companies create loyal customers not by “wowing“ them, but by providing an effortless experience.

Sue Duris, Director of Marketing and Customer Experience at M4 Communications, strongly believes in the connection of CES, loyalty, and the direction the company is going.  “CES is a transactional metric and should be used after service interactions and other key moments of truth like after purchase. Loyalty is about whether a company can deliver – does it meet/exceed expectations? Reducing effort has been found to drive loyalty. What CES does is that it measures an ability to reduce friction/improve ease of use. That’s why I believe CES is the best metric to predict loyalty.”

CES is a good metric for revealing detraction drivers. With NPS and CSAT you most likely get a more balanced view: not only your weaknesses but also your strengths. Using any one of them is useful to understand the customer experience.

Churn rate

The customer churn rate reflects how many of your customers have stopped using your products or services. Generally, customer churn rate counts the total number of lost customers or the percentage of lost customers within a defined time period. Sometimes, the customer churn rate is calculated as a lost business value.

For example, you have signed 1000 long-term contracts of a value of €100 at the beginning of the year, but now only 800 of those customers keep using your services. Depending on different ways to count your churn rate, it could be either 20%, 200 customers, or €20000.

Following the customer churn rate is critical because generally, it is much less expensive  to retain existing customers than it is to acquire new customers.

Reading recommendation:
What customer churn is and how to calculate it
3 Ways to balance between acquisition and retention

Retention rate

Customer retention rate  is the measurement of how a business retains customers over a specific period of time. The metric is highly connected to the churn rate: the higher the retention is, the lower the churn rate would be. For instance, if your churn rate is 10% over a year, that means that 90% of customers stayed with your company. Thus the retention rate is 90%.

If it doesn’t make you work on your retention strategy just yet, think about this: loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering, according to Temkin Group.

Reading recommendation: How to measure and improve customer retention

Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) is a prediction of the net profit attributed to the entire future relationship with a customer. CLV could be calculated both as a business value that the customer brings during the whole time of the relationship with a company or as a value over a defined period of time (a year, 5 years, or anything else that makes sense to the particular company). It is usually looked at as an average. For example, it might be easier to calculate the whole CLV for a wedding planning company (people don’t get married too often) but it makes more sense to calculate a year CLV for a soda producer.

Check this article by Hubspot to find out more about calculating CLV.

Customer Experience-related business KPIs

Understanding the customer voice via customer experience analytics is a crucial step toward building a successful customer experience management approach. At the same time, all CX metrics need background information on the operations. When you can link the customer experience metric results to what happened in the transaction, you can better assess which levers to pull to influence the happiness of your customer.

The operational KPIs could be anything from typical customer engagement metrics or speed of service to the average queue time in the shop – anything that can affect your customer.

It is good to stay on top of your key operational measures. Just keep in mind that you also need to listen to the customer to really understand how they experience the situation. The queue time can have a strong impact on how people perceive your customer service but it is not the only determining factor.

In addition to the customer voice and the related customer experience metrics, it is crucial to understand how the customer experience impacts customer behavior and – because of that – your business. To understand this, companies typically measure some critical behavioral loyalty metrics, most typically the churn, retention, or customer lifetime value.

Should you measure all the metrics?

The answer is no. You should measure the ones relevant to your business. Also, you should not ask your customers to give you feedback before you understand what you would do with it.

Most companies measure on average 2.5 customer experience-related KPIs. For your business development, we recommend you understand your business metrics (churn or retention and CLV) and the appropriate customer experience metrics. In practice, find the metrics that do make sense to your business. Most companies are best off when they choose one customer experience metric and one related behavioral metric. Adding more complexity doesn’t typically add value. On the contrary, having a simple survey design, proper customer feedback analytics and a simple set of targets and metrics to follow up helps the organization to focus on things that matter:  fixing issues and improving the results.

Read here about how to establish customer experience goals and targets for your company.

Nate Jones, Director of Customer Support at SimpleNexus states the common problem among businesses: over-measuring. ”No matter which metrics you choose to use, make sure they are predictive of the outcome you are trying to avoid or promote. Too many businesses gather the metrics because they feel like they are supposed to and don’t understand how to get the value out of them.”

The advice is clear. Don’t measure for the sake of measuring. Measure to grow your business.

The post 6 Most Popular Customer Experience Metrics and KPIs Explained Simply appeared first on Lumoa.