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Some CX leaders turn to benchmarks–the relative scores received by the company versus its competitors–to gain consideration within their organisations. These leaders hope to earn attention by demonstrating their brand lags in key CX measures such as net promoter score (NPS), customer satisfaction (CSAT), customer effort score (CES), and other operational metrics (such as average hold time, abandon rate, etc.) Telling those inside the company that a hated competitor is beating your brand’s NPS may seem an excellent way to engage your peers’ competitive spirit, but there are problems and dangers with relying on third-party benchmarks to drive attention. These problems include:
- Consistency and quality of data: A company’s NPS or CSAT score scraped off the internet is an unreliable measure. Too much depends on who the company asks (the sample), what questions precede the NPS questions (the survey design), any preceding interactions that trigger the survey (the methodology), and other factors. The only reliable and consistent way to compare one company’s score against another is to ensure uniformity of sample, survey, and methodology, and this is best done within a single study. This is why brands interested in benchmarks rely on services that collect brand perception and customer satisfaction data using consistent, objective processes, such as those managed by JD Powers or the American Customer Satisfaction Index.
- Pertinence: Every category, every brand, and every audience will have unique factors that impact customer satisfaction. We wouldn’t expect the CES scores for a value brand to compare to a luxury brand, or for a brand focused on selling in retail store aisles to correspond to one that controls the entire end-to-end experience with direct-to-consumer e-commerce. By selecting benchmarks that may lack relevance to your brand’s unique situation, you could be setting the bar too high or too low. Many CX leaders with whom I speak wish to benchmark themselves against the best companies in the world, such as USAA or Amazon, but few companies share the same customer base, mission, leadership, history, offerings, and strategies as these companies. Your brand needs to be the best in its unique situation—just as USAA and Amazon have done in theirs.
- Goals: The goal of CX is not to achieve a better score than someone else; it is to improve customer relationships in ways that drive financial success. If all a brand delivers with its CX efforts is to beat competitors’ scores, has it really achieved anything vital to business outcomes? Even if your company earns better ratings than competitors, who’s to say there isn’t more financial benefit to be created by driving to even greater levers of satisfaction, loyalty, and advocacy? Brands that achieve game-changing CX don’t only attain higher scores than others but use their NPS, CSAT and CES data to recognise what drives customer dissatisfaction, uncover problems, reveal unmet needs, and learn what earns the most durable trust, retention, repeat purchases, and WOM. Benchmarking yourself against competitors does not uncover those critical drivers of business success.
- Focus: And, one of the primary problems with benchmarks in CX is that they encourage a focus not on the customer—which is, after all, the whole intent of CX—but on the competition. The strongest CX efforts are those aimed at knowing and delivering on customer wants, needs, and motivations, not ones that focus on the actions or scores of competitors.
In our experience, benchmarks do not drive more attention, commitment, and support within organisations. What does is using your data to demonstrate the relationship between customer perception scores (such as NPS) and customer behaviours that drive business results. Using your data, from your customers, buying your products, can help you prove that your promoters (when compared to detractors) buy more frequently, spend more, churn less, have a lower cost to service, refer more business, and offer better online ratings that drive more sales. If you can demonstrate that your most-satisfied customers provide more top- and bottom-line financial results than do your least-satisfied customers, you’ll crush the barriers that prevent you from attaining the attention and support your CX initiatives require.
Senior executives have a hard time knowing how much (or whether) to invest in improving customer experience when the only goal is to beat some other brand’s score. Sure, it feels good to beat the competition at something, but you cannot take NPS to the bank. The most successful CX leaders are the ones that focus not on competitive benchmarks but on ways to validate why CX matters to business outcomes. Current Gartner clients can learn more in our research report, “Tailor Customer Experience Data and Metrics to Improve Customer Centricity, Drive Action and Validate Business Outcomes.”
*This article is reprinted from the Gartner Blog Network with permission.