The Future Value of Customer Experience

Wednesday, March 5, 2014

There are a few important factors that moderate the impact of customer satisfaction on loyalty*. 


As competition intensifies and product distinctions decrease, the effect of Customer Satisfaction is diminished...price trumps loyalty


Millennials are more reactive to price, features, 'coolness' and reviews.. As such, Millenials are less loyal than Boomers

Customer Experience

Forrester Research conducted a Customer Experience survey to determine the value of loyalty. The online survey asked recipients, to answer 3 questions about their recent interactions with targeted businesses:

How Enjoyable were they to do business with?

How Easy were they to do business with?

How effective were they at Meeting Your Needs?

Forrester then calculated a Customer Experience Index (CXi) based on the results from the survey. They reported a high correlation between their CXi results and Loyalty (additional revenue, lower churn) and the tendency to recommend.

*: Based on The  Forrester Research North American Technographics® Customer Experience Online Survey, Q4 2012 (US)

The effects varied by Industry Group. Wireless, Banks (Credit Cards & Banks) and Travel (Airlines, Hotels & Car Rental) showed the strongest correlation between Customer Experience and Loyalty. In other words, loyalty was not easily earned in these industries but the projected financial benefits for increased loyalty were substantial. 

Measuring Loyalty - Surveys vs Direct Observation

Surveys used to predict or change future behaviors can be helpful. However, surveys like NPS, CXi, CSAT, etc., are sensitive to sample bias. 

Low response rates and respondent selectivity limit relevance to the full population of users, customers, or prospects.

Unhappy and dissatisfied respondents tend to skew sample integrity.  Not necessarily a bad thing. However, changes based on dissatisfaction of a small sample may have unintended consequences. 

Survey fatigue is a growing issue effecting sample validity. 

Survey Fatigue effects response rates. Potential respondents don't want to invest the time in completing surveys anymore. 

Open ended questions about the causes of dissatisfaction or areas for improvement, take a disproportionate amount of a respondent's time. They contribute to sample fatigue and bias. They are also hard for analysts to classify and tabulate. This makes it difficult to get at the root causes of dissatisfaction using surveys.

Unobtrusive, direct-observations, by independent observers, introduce the least amount sample and experimenter bias. They include live monitoring, analyst assessment of digital recordings, and observation by AI systems that utilize technologies such as DTMF Detection (track selections through IVR interactions), Voice Recognition, and Speech to Text. 

The best systems track calls from inception to conclusion over the complete call path.

Call Intelligence 

We are a transactional intelligence and design consultancy with 23+ years of experience working on projects to document and improve performance of caller-agent interactions. 

Our analyses allow us to map, correlate and prioritize thousands of possible relationships between marketing programs, call handling systems, calls, callers, concerns, agents, competition, etc. and outcomes.

We help our clients in the public and private sectors, (see a partial list below), understand and get control of their call interactions. We use proprietary tools to analyze and optimize the transactional structures, techniques, and tactics used in caller - agent interactions, and make recommendation on ways to improve outcomes.

* Loyalty - The propensity to maintain or increase the value of a relationship.