This is the first post in a series of indefinite length on implementing Customer Effort Score (CES) at Linode.
At Linode, we’ve just started to use OKRs to set goals and track milestones throughout the year. Each Key Result contributes to an Objective, and those Key Results waterfall into Objectives for the layers underneath. For 2019, a top level Objective for Linode is “Deliver on the Voice of the Customer”, for which a Key Result in Q1 is to re-analyze how we measure Customer Satisfaction. With this in mind, we decided to analyze the big three Customer Satisfaction Methodologies - Net Promoter Score (NPS), Wallet Allocation Rule (WAR), and Customer Effort Score (CES) - and determine if we’d like to add any to our current Customer Happiness measurement, which we collect and analyze with Hively.
Net Promoter Score is a measurement of how likely is it that a customer would recommend your company. By far the oldest and well-known Customer Satisfaction measurement, NPS is used by more than two thirds of Fortune 1000 companies. NPS is measured by asking a customer to rate how likely they are to recommend your company to a friend or colleague on a scale from 1-10:
- “Promoters” (score 9-10) are loyal enthusiasts who will actively “promote” your brand to others.
- “Passives” (score 7-8) are satisfied, but not “wow’d”. They won’t actively promote or detract from your brand.
- “Detractors” (score 0-6) are unhappy customers who will actively “detract” from your brand - they will find opportunities to tarnish your reputation by recounting their poor experience.
I’ve used NPS in the past at Apple, and there are two great tenants that still resonate with me today. First, at Apple, every detractor is contacted by someone empowered to resolve their problem (1). At the least, sending an email or calling a customer who had a poor interaction assured them someone was listening and that their opinion is valued. At the best, we were able to repair the relationship by solving something that was missed or could have been done better. I saw this transform experiences so often that at Linode we also contact every customer who leaves us an “Unhappy” Hively rating and who provide a means to contact them.
Secondly, while passive customers did not have an experience where they will actively promote or detract from your brand, the key is that they are people whom you can convert to promoters. Many criticisms of NPS ignore or forget that inside the passive customer experience lives a world of opportunity in creating incredible experiences for customers, and exploring how to transform a passive experience to a promoter experience is a huge and often untapped opportunity. Analyzing and providing feedback on how we could have promoted an experience from “Satisfied” to “Happy” is something we focus on at Linode down to the individual interaction during our monthly 1-on-1’s.
However, NPS has long been plagued with studies and claims that it just doesn’t give you an accurate representation of Customer Satisfaction. There are dozens of articles and scientific papers where you can read with the criticisms, such as that it doesn’t segment customers, and that it doesn’t get to actionable feedback, but one idea from Jared M. Spool’s “Net Promoter Score Considered Harmful (and What UX Professionals Can Do About It)” summed it up for me the best:
“The best research questions are about past behavior, not future behavior. Asking a study participant ‘Will you try to live a healthy lifestyle?’ or ‘Are you going to give up sugar?’ or ‘Will you purchase this product?’ requires they predict their future behavior. We are more interested in what they’ve done than what they’ll do. We’re interested in actual behavior, not a prediction of behavior.”
Since we’re able to implement the most valuable two pieces of NPS into our existing system as it is right now, on their own they won’t be enough to sway us in NPS’ direction. At the end of the day, the research is worrying enough to rule out moving forward with NPS.
Wallet Allocation Rule is a measurement of what percentage of your customers spend in your industry is with your company. Sort of the outlier in the mix, WAR depends on you obtaining the following data from your customers:
- What percentage of your spend for (your company’s industry) is with (your company)?
- What percentage of your spend for (your company’s industry) is with each of (your company’s) competitors?
- How do you rank (your company) in (whatever performance metric)?
- How do you rank each of (your company’s) competitors in (whatever performance metric)?
I found that Wallet Allocation Rule may very well be a viable measurement for some companies, but is not a fit for us. Soliciting this information from our customers is just not our style - we’ve always been fairly “hands-off”. Additionally, a curious piece of WAR is that you’re deciding to implicitly trust this data - putting myself in a customer’s shoes, I’m not sure I’d be willing or excited to share this information with any company. In fact, to date, I’ve never been encountered with WAR, so I can’t speak for what I’d do.
Further, Linode is a cloud hosting company, and a company that needs reliable hosting diversifies. Using only a single hosting provider is bad practice, so aiming towards capturing 100% of a customers’ total spend while still providing the best solution for them is a dangerously tedious line to walk.
Customer Effort Score is a measurement of how easy it is for a customer to solve their problems. The Harvard Business Review, the creators of CES, contends that contrary to conventional wisdom, delighting customers has very little to do with customer loyalty. Rather, “…when it comes to service, companies create loyal customers primarily by helping them solve their problems quickly and easily.” Therefore, measuring Customer Happiness or Customer Satisfaction is a somewhat unimportant metric, as it does not correlate with loyalty or lifetime spend. This idea isn’t hard to grasp - what keeps customers coming back and more likely to continue to grow with you is the assurance that when they do encounter an issue, they’ll have it resolved quickly and easily. Delightment is fleeting - solving problems is enduring.
Further, CES promises a commitment to actionable feedback, an area where NPS is notoriously weak. Targeting and fixing exactly what made it hard to solve a customer’s problem is what drives loyalty and makes customers happier and more satisfied in their experience, and a methodology designed with collecting that information is of particular importance.
I’m further attracted to the idea that measuring and acting on Customer Effort requires company-wide adoption. To bring everyone together with the goal of making customers lives’ easier is an exercise in continuing to focus 100% on the customer - or to quote our OKRs, to Deliver on the Voice of the Customer. From Customer Support to Documentation to Product Development, UX, Operations, and beyond, it is a company’s responsibility to focus on driving loyalty through effortless experiences.
All this said, I do not agree that delighting customers isn’t a transformative experience - I have had great customer experiences which, barring unforeseen circumstances, have captured me as a lifelong customer (a Christmas present gone wrong solved with a one-ring phone call, a delightfully mood-matched and empathetic representative, no-hassle replacement, and free shipping just because from B&H is the most recent in memory). We’ll still be using Hively so we can catch interactions going south in real-time and identify and reward delightful experiences.
Customer Experience balances simple feedback collection, a promise of that feedback being actionable, company-wide commitment to Customer Experience, and measurement of what amounts to actual loyalty. The decision was easy - Linode will be moving toward implementing Customer Effort Score in 2019. I’ve picked up my copy of The Effortless Experience, and this blog will document the process of implementation, adoption, and lessons learned. In the meantime, however, if anyone has tips, tricks, or pitfalls to avoid, please reach out on Twitter and let me know.