Podcast Summary: Experts of Experience – Episode #51 "Connecting CX to Key Value Metrics"
Released on October 9, 2024, Presented by Salesforce Customer Success
Introduction
In this episode of Experts of Experience, host Lauren Wood engages in a deep dive with Dia Sika, Director at NPSX—a startup within Bain and Company specializing in customer experience (CX). Together, they explore the intricate relationship between customer experience metrics like Net Promoter Score (NPS) and key business value metrics. The conversation seeks to provide actionable insights for organizations striving to elevate their CX strategies beyond traditional metrics.
Understanding NPS and Its Limitations
The discussion begins with an exploration of NPS, its origins, and its prevalent use in measuring customer sentiment. Dia Sika emphasizes the importance of not relying solely on NPS as a standalone metric:
Dia Sika [00:00]: "Organizations do themselves a disservice if they hang their hat on a single metric... if you can't tie NPS to how many customers are you retaining... then the metric in and of itself doesn't mean much in the overall business context."
Sika acknowledges that while NPS was introduced to provide a strong predictor of customer behavior, its overemphasis can lead to misguided efforts, such as gamifying scores without addressing underlying customer feedback.
Connecting CX to Business Metrics
Lauren Wood and Dia Sika discuss the critical need to align CX metrics like NPS with broader business objectives. Sika highlights the correlation between NPS improvements and tangible business outcomes:
Dia Sika [30:06]: "Some companies... a 2% NPS point improvement can lead to a 4% increase in share of wallet... a 3 point improvement in NPS can lead to a 2 point reduction in churn."
This alignment ensures that CX initiatives contribute directly to revenue growth, customer retention, and overall business health, making the case for executive support and cross-departmental collaboration.
Evolution of Customer Experience
Sika outlines the transformation of CX into three distinct waves:
- First Wave: Introduction of Voice of Customer programs and foundational metrics like CSAT and NPS.
- Second Wave: Implementation of closed-loop feedback systems to act on customer insights.
- Third Wave: Integration of real-time feedback channels, predictive analytics, and generative AI to proactively manage and personalize customer experiences.
Dia Sika [09:54]: "We're now in the third wave of customer experience... listening to customer feedback can happen in so many different ways."
The third wave focuses on leveraging advanced technologies to move from reactive to predictive and proactive CX management.
Leveraging Data and AI for CX
The conversation shifts to the role of data and artificial intelligence in enhancing CX. Sika emphasizes the necessity of robust data foundations and the potential of predictive analytics:
Dia Sika [14:03]: "Based off of if you have that operational data that provides end-to-end how you're engaging through an experience and you know how a typical promoter detractor passive would react and what their operational data is, you can easily predict your experience."
She advocates for hypothesis-driven data collection and the strategic use of generative AI to unlock deeper customer insights and personalized interactions.
Overcoming Data Management Challenges
Addressing common obstacles, Sika advises leaders to focus on specific use cases and build their data infrastructure incrementally:
Dia Sika [16:54]: "Think about what are the five things you think today would drive retention... start there and it may be right."
This approach helps organizations manage the complexity of data integration and utilization without being overwhelmed by the vastness of data landscapes.
Tools for CX Data Visualization
When asked about technologies for data visualization, Sika notes the absence of a one-size-fits-all solution and suggests leveraging existing tools:
Dia Sika [21:07]: "...tools like Power BI, Tableau for visualization. I don't think that tool really exists."
She recommends customizing dashboards using current visualization tools to align with specific business needs and CX objectives.
Assessing CX Maturity in Organizations
Sika introduces the CX Global Standards framework, developed in collaboration with Kantar and Qualtrics, to evaluate an organization's CX maturity across various pillars such as culture, capabilities, and execution. The framework uses a star-rating system to benchmark an organization's standing and provide a clear roadmap for improvement.
Dia Sika [23:24]: "There are 60 standards... we developed a three-star, zero to three-star kind of framework... you come out of there with a very clear roadmap."
This structured approach helps organizations identify strengths and areas for growth in their CX strategies.
Creating a Customer-Centric Culture
A significant portion of the discussion revolves around fostering a customer-centric culture within organizations. Sika identifies key elements often overlooked, such as data management and connecting CX initiatives to business value. She underscores the importance of leadership involvement and empowering middle management to drive cultural change.
Dia Sika [27:07]: "The first one... single view of customer needs to be built... the second one is around value... culture is like really has to come through behavior change across the board."
Sika also cautions against tying individual incentives directly to NPS, which can lead to unintended negative consequences.
Linking Employee Experience to CX
Lauren Wood highlights the direct impact of employee experience on customer interactions, emphasizing that empowered and motivated employees are crucial for delivering exceptional CX. Sika concurs, suggesting that recognition and closed-loop feedback systems are vital for maintaining employee engagement and fostering a customer-first mindset.
Dia Sika [39:14]: "One thing is rewards... companies who do that have a greater chance of seeing excited and more empowered employees about customer."
Best-in-Class Customer-Centric Practices
Sika shares examples of organizations excelling in customer-centric culture, such as:
- Executive Engagement: Starting meetings with customer-centric discussions.
- Leadership Involvement: Executives actively participating in customer interactions.
- Employee Empowerment: Middle management driving customer-centric initiatives and recognizing employee contributions.
Dia Sika [34:22]: "Companies that do this really well... they'll start every meeting with the topic of customer."
These practices ensure that customer focus permeates all levels of the organization, leading to consistent and meaningful customer experiences.
Final Advice for CX Leaders
Concluding the episode, Dia Sika offers pivotal advice for CX leaders:
Dia Sika [47:27]: "Don't live in a silo. Move on from surveys, please. ... expand beyond the survey universe."
She encourages leaders to integrate CX insights across the organization, leveraging all available data sources to create a holistic and actionable understanding of customer experiences.
Closing Thoughts
Lauren Wood wraps up the episode by reinforcing the role of CX leaders as facilitators who bridge gaps between departments, advocate for customer needs, and cultivate a unified, customer-centric culture. The episode provides a comprehensive roadmap for organizations aiming to elevate their customer experience strategies through integrated metrics, data-driven insights, and a unified cultural approach.
This episode of Experts of Experience offers invaluable insights for CX professionals seeking to align customer experience initiatives with overarching business goals, leveraging technology and fostering a culture that prioritizes the customer at every touchpoint.