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The Truth about NPS and Getting Customer Experience Right

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About the Episode

What does the employee experience have to do with the customer experience? Everything. On this episode, Annette Franz reveals how focusing on the employee experience is one of the most effective ways to improve the customer experience. The founder and CEO of CX Journey Inc. has spent the last 30 years helping organizations build customer-centric cultures based around people. She explains how to ensure employees have the resources they need to best serve customers, as well as why CX measurements like NPS are not the most reliable way to guage success.

Episode Highlights

Meet Our Guest

Annette Franz is founder and CEO of CX Journey Inc., a customer experience consulting firm specializing in CX roadmapping and strategy. For 30 years, she’s been helping companies better understand their employees and customers. Her expertise lies in identifying what drives retention, satisfaction, and engagement. She’s also the author of multiple books on creating world-class customer experiences.

Episode Transcript

Lindsay McGuire: We don't have the tools and resources we need to serve our customers and the way they deserve to be served. Imagine, really imagine hearing that from someone on your team, would that not be the biggest gut punch moment, but it's true. If you're not providing the right tools and resources for your team, they're being set up for failure. That sentiment is one that many employees have expressed to a net fraud. Annette is the founder and CEO of CX journey where she coaches executives on how to build teams that create amazing customer experiences. Annette is also an author who has written many books on what it really takes to build an amazing customer experience from the inside out. I can't wait for you to hear what she has to share with us. On this episode. You'll walk away knowing exactly how to set your employees up for success so that they can set your customers up for success. Net, thank you so much for joining us on genius spotlight today.

Annette Franz: Thank you so much for having me. I'm so glad to be here. I know it's gonna be a great conversation. These are all the things I love to talk about.

Lindsay McGuire: I love it. Well, customer experience is something I think touches pretty much everyone, regardless of whether you actually work with customers or not to get us rolling. How do you think customer expectations have changed in the last few years?

Annette Franz: Oh gosh. And they continue to evolve, right? So that's part of the work that we've gotta do. But I think probably the biggest things are, these are probably not a surprise, right? I mean, it has to be convenient. Has to be simple, has to be easy, effortless, personalized. That's a big one has to be personalized. Contactless was one we added in the last two years. Those are some of the things. And I always say the best way to know what customer expectations are, how they've changed is to talk to customers, ask them, just ask

Lindsay McGuire: Them when you bring up personalization, can you go a step further? And what do you mean by personalization? I think a lot of people think a email name tag is enough personalization to make it matter, but take it a step further.

Annette Franz: Yeah, it goes deeper than that. We talk about having the right data to be able to personalize the experience. The right data is actually contextually relevant. I'm in the store, I'm on my app or wherever I am, and you're gonna make recommendations because I've bought before or I've searched here. Or I went there, you know, where I am in the journey and you can help me make it a great experience by personalizing it, making everything contextually relevant to where I am in the journey. So if I'm researching a product that I wanna buy, you know, that I've been to your website, that I've called and asked questions. You know, that I've downloaded documents. You know, I've called customer service. You can take all of that and just make the experience that much more personalized because you're not asking me about things where you're not presenting me with things that I've already honored, that I've already looked at.

Lindsay McGuire: I like the idea of the context. And I think it's also important to think about the fact that you don't necessarily have to ask your customers for this data. If they're interacting and engaging with you, there shouldn't be ways for you to glean some of this data. Like for instance, one that is close to me is I eat a 90% vegetarian diet. So anytime I use any kind of meal service, it's always a hundred percent vegetarian and I'm always mind blown by how many of them will advertise meat to me. I've shopped with you for six months a year, and I've never once bought meat from you. Why do you think I'm gonna start now? So how else can companies think about the data that they have already without having to inconvenience a customer?

Annette Franz: In my first book, I wrote about the three ways that we understand customers and the first way is listening. And I say, listening is about the feedback that they provide, but it's also about the breadcrumbs of data that they leave behind as they interact and transact with the brand. And when we bring those together, we really have a much better picture of who they are, what their expectations are, where we're meeting those expectations, where we're not how we're helping them solve problems and not so using that, using those breadcrumbs, but using it in conjunction with what they tell us is so powerful in terms of designing a better experience for them.

Related: Is Customer Experience Rooted in Employee Experience?

Lindsay McGuire: What do you think some organizations get wrong when it comes to customer experience?

Annette Franz: Well, <laugh> where should we begin? But it's interesting because I had a conversation with some folks this morning, and I think one of the things that kind of came out of that conversation was thinking that customer experience is just for certain businesses or certain types of businesses or certain industries or whatever the bottom line is is if you have customers, you have a customer experience, whether it's intentionally or deliberately designed to be that way, or it happens on its own. A big problem is that companies don't take the time to understand their customers. It's such powerful information. When our customers talk to us and share with us what they're doing and what they're feeling and what they're thinking. So I think that's one, I think another one is not thinking about the customer experience holistically, that it's really the foundation of it is your culture.

Annette Franz: A lot of companies think that we can do this in parts and pieces and different departments do different things. And it really has to be a cohesive effort. Otherwise it's not a cohesive experience for our customers. The other big thing is not focusing on the employee experience and making that connection between the employees and how they drive the customer experience. So if we don't have employees to design, build, sell, deliver service, whatever our products are, our services, we've got nothing. And so we need to make sure that our employees are taken care of. And I think we have seen many examples of this over the last year with the great resignation where companies don't have enough people. So the experience is awful, or they have people and they're frustrated because the working conditions and the culture and the pay and all of these things are just frustrating. Them like crazy. The customer ends up suffering from that as well.

Lindsay McGuire: What are some things an organization can do to improve that employee experience that will eventually trickle down to that customer experience?

Annette Franz: When I define employee experience. And when I think about what comprises employee experience, I would talk about the soft stuff and the hard stuff, the soft stuff is we have a career path and career plans. We have leadership that cares and is open and transparent and really cares about their people. There's coaching. There's a feedback loop. There's transparent communication. I know I'm valued. And I know how I contribute to the business. I'm empowered. The employer takes care of my wellbeing and my wellness, all of those kinds of things I'd put in that soft stuff bucket. And then the hard stuff is I've got the tools and the training and the resources to do my job, the policies aren't outdated and the processes aren't broken. I have what I need to do my job and to serve my customers way that they deserve to be served.

Annette Franz: And I don't just say that lightly. When I first start working with clients, I interview executives, customers, and employees, and those are words from employees. They tell me we don't have the tools, the resources, da, da, da, da, to serve my customers the way that they deserve to be served. And the first time I heard that from an employee, I was like, wow, that's pretty powerful employees. Get it, they get it. And that's what we need to do is just make sure that they've got what they need to do. Their jobs seem to do them. Well.

Lindsay McGuire: Another thing I have seen trip businesses up is getting stuck between doing what is best for the customer versus what is best for the business intention. One example recently I had is my manager actually gifted me a delivery of cookies from a popular cookie place. I got a text message about that, but the only way I can get my cookies is if I download their app and I have a little secret, my phone is maxed out my memory. So I can't download another app. I know it's a personal problem. But to me, that seems like they are not offering me options to be able to have the experience I want as a customer, because if I could go to just their online website to order, which I know you can, from that link, I would have my cookies in two seconds, cuz they're amazing. But where do organizations need to draw the line between doing something that might serve a business goal or be good for the business versus being better for the customer experience?

Annette Franz: It's all about the customer, right? Without customers, we have no business. So we are in business because of, and for our customers. And so we really have to make that connection between the customer and the customer experience and business outcomes. If we don't make that linkage, it doesn't make sense for anybody. It feels like a no brainer to me, but a lot of people still need to see that linkage <laugh>. And to your example, that's a really interesting example of how digital has gone wrong and how we need to make sure that the customer is at the heart of digital.

Lindsay McGuire: You mentioned building that culture, that puts customers first. And what are some of the attributes or the foundational systems that you need to have in place to make sure that you are building a foundation based in

Annette Franz: Customers. That takes us to my second book built to win <laugh>. And in that book I have 10 foundational principles. So culture is the foundation. Leadership has to be committed and aligned, committed to providing the resources that we need to get the work done and committed to the success of this transformation. Then aligned across the board. Like everybody has to be on the same page and wanting the same outcomes because otherwise it's going to be painful for employees internally. And it's been painful for customers cuz there's no consistent experience across the organization. Employee experience drives customer experience. I always say people before products, people before profits and people before metrics so important that customer understanding is the cornerstone of customer centricity. Governance is really important because again, we need the entire organization working together toward that common goal toward designing and delivering a great experience for customers. And that only comes when we've got cross functional teams working together to make that happen. We need outside in thinking, not inside out. So bringing that customer voice into everything that we do. And then the last foundational element is around the platinum role. So treat customers the way that they wanna be treated, not the way that you wanna be treated. This is what it takes to really get that foundation and to deliberately design a customer centric organization.

Lindsay McGuire: One place that a lot of organizations struggle with is actually being able to connect with their customers. What are some easy ways that people can get started with that?

Annette Franz: Everybody defaults right away to doing surveys, right? But you are in touch with your customers every day, whether you know it or not, whether it's your website, it's your contact center, it's your sales people. It's your frontline. It's the folks in the accounting office that are answering questions about the invoices. Those are all opportunities to talk to customers and get feedback from them. The next thing is to find a centralized location, to be able to capture those conversations. So there's more than just surveys. There's a lot of other opportunities and a lot of different ways that we can engage with them on the website. We have chat bots there, but let's put some humans on the website. I'm genuinely interested in how's it going today? And what can we help you with? And those kinds of things, and a lot can be learned by just talking to our customers.

Lindsay McGuire: We talked about how rapidly the customer experience has changed and evolved over the last few years. So how can organizations begin to iterate on their customer experience without making a disjointed experience as they're adapting to the changes,

Annette Franz: It really is about listening to customers and bringing them into everything that you do. And that's how we iterate. If we do it without them, we learn that we just design an experience that doesn't meet their needs or doesn't solve problems for them. And that is absolutely an iterative process.

Lindsay McGuire: How do you balance between trying to piece one customer from what you might see as more of the majority feedback from customers?

Annette Franz: Sometimes those outliers, sometimes those voices that aren't the norm, they might be that Canary in the coal mine, they might already be that much more advanced than some of your other customers. I would not discount them. I would absolutely listen to them. And I know we can't just design based on what one customer's doing, but you've gotta take that into consideration and I would actually dig into it. I would have deeper conversations and I would take what you learned from that one and obviously set expectations with them. Here's where we are today. And we're listening and we'll figure out how we incorporate what you're saying into where we go going forward, but take that out to other customers as well and say, is this what you're hearing? Are you seeing this? How would this impact you?

Lindsay McGuire: You've already talked about this overlap between the customer experience and the employee experience. Can you dig a little bit more into how inefficiencies internally affect external customer experiences

Annette Franz: When we're journey mapping, which is really the customer's steps, things that they're doing, thinking and feeling as they're completing some interaction. But we also take a look at what we call service blueprint, which is what's happening behind the scenes, the people, the tools, the systems, and the processes that support and facilitate that experience. You take a look down beneath the surface there to see what is creating that pain for your customers. And I think that's where we'll really see the root cause. And that's where we start to see the inefficiencies. Whether it's in the processes are broken or outdated, the policies are broken or outdated. The tools that we're using just don't help us, or we don't know how to use them correctly. When we bring tools and technology into an organization, we forget to ask and work with the employees who actually need to use those tools. <Laugh> to figure out if those are tools that they actually need, or will those solve problems for your employees or whatever. So if we take that type of a view into the customer journey, and then we look behind the scenes through that service blueprint and doing that service design, we can identify those inefficiencies. And it's a real clear picture of that connection between when things go wrong on the inside, it affects the experience for the customer on the outside.

Lindsay McGuire: And from your experience in this realm of work, what are some of the top inefficiencies you see time and time? Again,

Annette Franz: A lot of times it is policies that are outdated. Those are probably some of the biggest things is the policies and the processes are such a hindrance on what the employee can do. And if we really revisit those and kill the bad ones and update them or just remove them, then employees are happier cuz they don't have to deal with all that nonsense. But it's easier to deliver the experience for the customer because it just has removed some of those inefficiencies.

Lindsay McGuire: We bring up something we found in our 2022 state of digital maturity report where we surveyed 2000 knowledge workers in the us and asked them about what processes are bottlenecks, where are their inefficiencies? How are they digitizing? These are the people at the most optimized, most digitally mature organizations. What we saw was that they had a much greater focus on the customer experience and they also had done the most work of eliminating those inefficient processes. Like the paper, like the faxing, like the wet signatures, but it is still really mind blowing. How many people are still stuck in those things.

Annette Franz: Yeah, it's crazy. My favorite example of a broken process is when you call customer service and they say, oh my computer's slow. Sorry, my computer's slow. Hang on a second. My computer's slow and I've done double jacking, right? I've been in the call centers and sat there and watched and listened and all that. They have 15 screens open <laugh> they have 15 screens open and they're trying to find the answer first. They're trying to find your account. And then they're trying to find the answer to your question and they've got all these other things going on. And the problem is is that if we can automate some of those things, if we can really take some of that off of their plate and they don't have to look at 15 different screens, what a difference that would make

Lindsay McGuire: For those frontline CX workers, how can they help make a case for some of these tools and products and processes and overhauls that you were talking about that are really needed, but somehow they're just never made a priority.

Annette Franz: They need to keep track of them and look at here's what the process is. And here's how it impacted the customer. I had to do X, Y, and Z, and the customer had to wait 15 more minutes, make that connection and then also make the connection to what it means for business outcomes. The customer hung up and they were angry. Maybe they'll unsubscribe, just start tracking those things and making that connection to the customer

Lindsay McGuire: Over the years. How have you seen challenges in organizations when it comes to customer experience? What are some of those overarching pain points that you thought would be resolved, but you're still in it. And you're like, why is this still an issue?

Annette Franz: One of the big ones is focusing on metrics rather than focusing on the customer, right? So we're gonna move the needle. We're gonna move NPS. We're gonna move CS a and not realizing that you can't just move the needle, <laugh> it doesn't work that way. Right? You have to do the work when you do the work. The outcome is, is that the needle moves. So you have to take the time to actually improve the experience. Then the needle will move. I've been in this world for 30 years and I spent probably close to 20 years with voice of the customer vendors, running their consulting services organizations. And I'm still baffled at why we see that today. Why they haven't moved away from that.

Lindsay McGuire: So what is your take on NPS?

Annette Franz: Oh, <laugh>

Lindsay McGuire: We're gonna go there. Oh no,

Annette Franz: We're gonna go there. Well, my take is that it's not my favorite metric. What ends up happening is that people focus on the metric and it was billed as that right out of the gate. And not everybody has adapted to. Okay. That's just a metric. That's not the only number that you need to know. There's a lot of other things that you need to know. They don't ask other questions or to get other details, to really understand why someone would wanna recommend. And I also don't think recommendation is necessarily the be all end all, when it comes to loyalty, I would like to hear, how many times have you referred? How likely are you to refer us when it comes to loyalty? I'm more interested in how many times have they purchased and look at customer lifetime value?

Lindsay McGuire: When I think too, there's this idea of positioning, right? Like, would you recommend us? There's no context there there's no setup there. But if you were asked me, if a friend were to ask you for insert the industry or product or service, would you recommend us? That's a whole nother mindset, right? There, there are a lot of issues with NPS. And it goes back to your idea of looking at your customer holistically and looking at your data holistically. So what would you say are other important metrics to look at beyond the NPS score?

Annette Franz: I would say customer satisfaction, customer effort. They tell me whether the customer is happy or not, cuz with likelihood to recommend. What if I just don't recommend? What if that's not a thing I do or can do customer effort, score customer satisfaction. I'm either satisfied or I'm not. So I like those two, those kinds of things where we're truly asking the customer what the experience was and how well we performed against their expectations.

Lindsay McGuire: Have we met your expectations is such a strong statement to ask because then you are ensuring that you are aligning with their wants and needs. And there's an opportunity for them to share a little bit more there. I find human psychology fascinating. And one thing we see over and over again in CX is that the angry customer is the one who's going to talk to you or the one who's going to leave a review or they're gonna be the ones who are like, yes, NPS zero, because there's that emotional reaction. Do you have any strategies to help encourage happy customers to talk up? Just as much

Annette Franz: Years ago, we had done research on that and that wasn't even the case. And I don't know what it is today, but that was probably about 15 years ago. What we ended up finding out was that the unhappy ones were the ones who responded first and then the happy ones, maybe it took a couple days, right? Here's the thing I don't believe in incentives, that's gaming the system. We get people to respond who wouldn't respond. Not that we don't wanna hear from those folks, but I think the biggest and the best incentive to get both the people that are happy and that aren't happy to respond is to do something with the feedback, close that loop and let customers know we heard you. Here's what we did. Here's what the new experience looks like. Please keep providing your feedback, cuz we're going to keep using that to improve the experience. So that for me is the best incentive to get folks to respond, whether it was a great experience or not.

Lindsay McGuire: What have you seen keeping organizations from iterating and innovating around their customer experience? What are some of the common barriers?

Annette Franz: The biggest one has to do with leadership because you don't have that commitment. When I talk about commitment, I think I mentioned that the two things, right? Commitment to the resources and commitment to the success of the work that lies ahead, the resources we need, human time, capital financial. We need all of that. And if we can't get that, that's a barrier. If we can't get what we need to do the work to understand customers and then improve experiences, it becomes a huge challenge.

Annette Franz quote

Lindsay McGuire: If listeners were going to invest that time, that money, that people, resources, tools, all the things. If they could only invest that in one initiative around the customer experience, what would you recommend?

Annette Franz: They have to be listening to customers feedback, but using what you hear, you can get a VOC platform, but if you just bring that data in and do nothing with it, then it's pointless. It's money thrown out the window. That is absolutely where I would say most companies should and do start is listening to customers, but do something with it. Make sure that you socialize it, operationalize it, all of that. It's gotta be used. That's probably the number one way that you're going to start to improve the experience that

Lindsay McGuire: Data mining can be a little scary sometimes I think so. Where can organizations start once they do have this customer and they've implemented some systems, some processes to gather that feedback, how can they make it a little bit more feasible? Where should they start

Annette Franz: Again? It's probably going to sit within the platform that you get. And then it's not just the feedback that you're getting. You've gotta marry that with the bright crumbs of data that customers leave behind. And so you do have to have a platform and, and a lot of the voice of the customer platforms today have the ability to either integrate with your CRM system or data travels both ways so that you can bring that data in, but you've gotta bring all that data together to make sure that you can analyze it in a way that makes sense.

Lindsay McGuire: If you had to say one metric that was most important to the success of customer experience, what would it be

Annette Franz: Continuing to purchase continuing to buy same product, similar products, extension, but continuing to purchase from that brand? Absolutely. I think that tells me that we're doing something right, but we've also gotta have the feedback behind that cuz I may be continuing to buy, but I might be frustrated with something. So it can't just be about the one metric. It has to be about all the other information and data that we have around that. So I can really have a full picture of why the customer is the customer. There's the apostle model, right? The apostle model that HBR had created years ago, am I a hostage? Am I loyal because I have corporate directives, this is all I can buy. Why am I continuing to purchase?

Lindsay McGuire: And one thing too, I've noticed a lot is companies get so focused on net new and they forget the importance of that expansion play like you're talking about. And there's also the statistic about what it's two or three times more costly to acquire a new customer than retain one. Why do you think people fall in that trap?

Annette Franz: First of all, growth is sexy for the CEO. They love growth. Hey, we got 10,000 new customers this month, but then they failed to talk about the 11,000 that ran out the back door at the same time. There's real immediate ROI there. We spent marketing dollars coupons and discounts and advertising and all this. And we have immediate ROI. But when we focus on retention and we focus on improving the customer experience to do what it takes to keep customers, sometimes we don't see a real return on that for 12 or 18 months that imediacy of the ROI from acquisition is sexy.

Lindsay McGuire: The more digitally mature organization, the more importance they put behind improving and maintaining the customer experience. Why do you think there's that correlation between being able to digitize go through these digital transformations and also having a higher focus on the customer experience?

Annette Franz: Because I think there's a realization that at the heart of a digital experience is the customer and those brands that have done it and have done it. Right. They get it. So that's the connection there.

Lindsay McGuire: We talked about the investment of people and time and resources and products and technology. If you had to choose one of those to start with in your organization, what would it be?

Annette Franz: People don't even have to think about that one.

Lindsay McGuire: And when you say people, can you expand on that? What about those people? Are you investing in, how are you investing in those people?

Annette Franz: Making sure we hire the right people, making sure we take care of our people, make sure they're trained. They have the tools and the resources and everything. They need to do their jobs, not forgetting that in the entire experience ecosystem. We have customers. What we also have vendors, we've got franchisees and we've got licensees. It is about the people ultimately. And it's about putting the people first, even if we talked about processes and putting processes and technology first, I mean, we'd have to talk about the people because the people are the ones who are going to use those processes. So let's take the time to bring the right people on board and then put them first. And then from there design the processes, pick the technology that makes their jobs easier and helps them solve problems and makes their needs and those kinds of things. So we always have to put the people first.

Lindsay McGuire: It's been the common theme this season, regardless of the topic, is that the people come before the process. I think that's a really strong statement. And the more that we shift, not only into this digital world, but also this kind of remote first world, I think it's gonna become more important to put those people at the forefront of whatever department, whatever type of organization you run.

Annette Franz: Absolutely, absolutely.

Lindsay McGuire: Our show is called practically genius. And the reason behind this is we believe that genius ideas are found all throughout organizations and anyone of any level, any department can be practically genius. So what do you think is the fuel behind the people who are bringing these practically genius ideas to the forefront? What makes someone practically genius?

Annette Franz: I would say that would have to do with wanting to make an impact and leaving a legacy. That's my top of my answer. <Laugh>

Lindsay McGuire: If you take that question through the lens of creating a customer first environment, what do you think fuels those leaders who really do say we are a customer first organization?

Annette Franz:I honestly think it's the same thing. It's leaving a legacy. I've seen that. I've read it. I've heard it from others is that I wanna leave this legacy that I built this business that put customers, put people first and that's what I wanna be known for. So I think it's still purpose in making an impact and leaving a legacy.

Lindsay McGuire: Thank you so much for joining us for this great conversation with Annette. If you wanna keep the conversation going, join me and my co-host Ryan for next week's episode of practically speaking, where we'll be diving in with some data driven insights around how the most optimized organizations are prioritizing the customer experience. And as always you can find your next practically genius idea at form dash.

Hosted By
Lindsay McGuire
Senior Content Marketing Manager
Co-Hosted By
Ryan Greives
VP, Brand & Communications

Practically Genius is a show built for innovators championing digitization within their organization.

Hosts Lindsay McGuire and Ryan Greives host conversations with real-world innovators sharing stories of digital transformation while also providing helpful advice and insights to listeners.

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