by Steve Offsey

The debate on the importance of customer experience is over. In fact, a Forrester study already showed that “CX leaders grow revenue faster than CX laggards.” Nevertheless, most companies are still struggling to improve customer experience and measure it in a meaningful way. Even CX leaders are finding it difficult to make the quantitative link between customer behavior and business outcomes, so they can move beyond relying on gut feel and qualitative data to prioritize decisions.

In this post, I’ll describe how customer journey analytics makes CX actionable by directly tying customer experiences to revenue, profitability and other hard metrics on which executives are measured.

Why Quantifying CX is a Challenge

According to a Harvard Business Review Analytic Services Study, nearly half of all companies surveyed identified tying customer experience to business outcomes as very or extremely challenging. Even leading-edge companies face difficulties in this endeavor.

how customer journey analytics can help improve customer experience

From leaders to laggards, all companies find it challenging to tie customer experience to business outcomes. [Source: Lessons from the Leading Edge of Customer Experience Management]

Providing an exceptional customer experience is hard and tying it to tangible business outcomes is even more difficult. In order to quantify customer experience, you first need to create a single view of the customer as she interacts with your brand across channels and over time.

To achieve this unified view and deliver personalized customer experiences, analytics must evolve from retrospective reporting to real-time, behavior driven engagement. However, data overload and integration issues thwart a lot of these efforts.

Many companies are now collecting feedback from customer experience surveys, Net Promoter Scores® (NPS) and call center reports. When an individual metric like NPS improves, it is feted as a success and perhaps accepted without too many questions. But correlation does not equal causality, meaning that you are not controlling for other factors that could have caused an improvement in a specific metric, nor can you simply assume an exact relationship with hard metrics, like revenue or churn.

Measure effectiveness of customer service self-help

Customer Journey Analytics is the Bridge Between Customer Behaviors and Business Outcomes

Companies have traditionally looked to improve customer experience by focusing on particular touch points. This often leads to misleading results as customers could rate an individual interaction highly yet be unhappy over the course of an entire journey.

Customer journeys are at the core of customer experience, as customers interact with companies across touchpoints, channels, and over time. Only by looking at a customer journey in its entirety across channels and over time can real pain points—and therefore opportunities for positive change—become visible.

How customer journey analytics can help improve customer experience

Looking at end-to-end customer journeys, and not individual touchpoints, is important

A recent McKinsey study found that “performance on journeys is substantially more strongly correlated with customer satisfaction than performance on touchpoints—and performance on journeys is significantly more strongly correlated with business outcomes such as revenue, churn, and repeat purchase.” Customer journey analytics is therefore essential to understand, prioritize, improve and measure customer experience and show its impact on revenue.

4 Ways Customer Journey Analytics Provides the Quantitative Information You Need to Improve Customer Experience

Quantify what matters most to your customers

Customer journey analytics can pinpoint the drivers of customer satisfaction in a way that traditional analytics can not. It can provide quantitative key performance indicators (KPIs) along the paths that your most satisfied customers take, as they interact with your brand across channels and over time.

USAA Uses Customer Journeys to Delight Customers

United Services Automobile Association (USAA) is a financial services organization that focuses on providing insurance to current or previous members of the U.S. military. It is consistently rated highly by its customers and recently topped KPMG Nunwood’s 2017 US Customer Experience Excellence Centre report. By taking a look at end-to-end customer journeys and being customer-obsessed, USAA has led the industry in applying technology and innovation with an aim to improve customer experience.

An analysis of their customers’ journeys revealed that military members and their families cannot visit a branch or speak over the phone easily, as they are deployed overseas and across the country. A key driver of their satisfaction therefore was availability and ease of online services. This insight led USAA to add several new technology features in the customer journey—chief among which is a Siri-like virtual assistant in their mobile app called Eva.

For the same reason, USAA offers features like ‘MyAccount’ that helps members track and get updated on insurance claims they’ve made. Through this feature, they can get updates such as ‘waiting for plating’ or ‘pending contact from opposing insurance company’, providing much needed ‘virtual assurance’ during the long claims process.

How customer journey analytics helps improve customer experience

USAA innovated their processes based on an understanding of customer journeys. Image courtesy:

USAA also realized through customer journey analysis that its members are channel-agnostic. This led them to add their very popular mobile assistant, Eva, to their website, so desktop users can avail of it too. The USAA team also looked at which customer journeys were driving the largest number of calls and realized that members were making multiple calls before obtaining a car loan. This led them to transform the entire loan process into an online digital loan origination solution.

By understanding and quantifying what matters most to your customers, you can design customer journeys that consistently provide a superior customer experience and measure their impact on key quantitative customer experience metrics.

Identify and Measure the Impact of Customer Experience Obstacles

Businesses regularly lose money due to customer experiences that don’t live up to expectations, such as a failed onboarding experience. Even a few minutes of downtime for a website or an app in certain industries may mean a loss of millions of dollars. Yet companies are not successful in quantifying the impact of these experiences. Customer journey analytics can be used to understand the quantitative impact of a poor experience at every step of the customer journey.

Using predictive analytics and machine learning algorithms, journey analytics can help identify which customers are most likely to churn, thus providing you with valuable data to turn the situation around. Moreover, by employing customer journey analytics your efforts to woo back your former customer are significantly more likely to succeed, as you reach out to them with the right message through their preferred channel within the right timeframe. Even if you fail at winning back that customer, the information you gather will help you take proactive steps before customer churn becomes a problem.

JetBlue Customer Experience Soars High

As every traveler knows, the airport check-in process is undeniably one of the worst aspects of flying. In an article in Argyle Journal, Liliana Petrova, JetBlue’s Director Customer Experience Programs, described how mapping customer journeys helped JetBlue confirm that the check-in process was a real customer experience obstacle and long check-in queues were resulting in the decline of pre-security NPS. (Read: How to calculate NPS more effectively using journey analytics)

Using technology, they transformed the passenger experience by using automated bag drop to decrease the time to complete the overall check-in process to less than two minutes, from entering the lobby through check-in at kiosk, to dropping bags and proceeding to security.

Says Petrova, “JetBlue’s three corporate pillars are: differentiated products and culture, competitive costs, and high-value geography. Each of these has its own customer-experience strategy that was developed by journey mapping and talking to customers about what’s important to them.”

JetBlue has consistently been rated highly for its customer experience. In an interview in CIO, Eash Sundaram, JetBlue’s EVP Innovation & CIO says, “We think of ourselves as a customer service company that happens to fly planes. Technology plays such an integral role in addressing our customer needs.”

In keeping with this customer service ethos, JetBlue took several steps aided by technology. The airline automatically checks in certain eligible customers 24 hours before departure, assigns them seats based on their previous preferences and sends them a boarding pass—completely eliminating the need to log into their website or mobile app.

how customer journey analytics can help improve customer experience

JetBlue’s Inflight Service Assistance app provides passenger details to flight attendants. Image courtesy:

Customer journey analytics  helps customer experience teams by identifying the key customer experience obstacles along a customer journey. It also provides important quantitative data to determine the impact of these CX obstacles on business objectives, as well as the effectiveness of any remediations.

Prioritize and Act Upon Customer Experience Issues Based on Their Revenue Impact

As customer experience has risen in prominence, investments in this area have also increased. But it is important to strike a balance between rising customer expectations and the financial value attached to it.

According to KPMG, the relationship between customer experience and financial return is complex and delighting customers can reach a point of diminishing returns quickly, the costs often exceeding the value generated.

Moreover, customer experience investment returns are not consistent across industries. McKinsey finds that in the healthcare industry, marginal improvements in customer experience for dissatisfied customers have a better return than delighting the customers to become advocates. In contrast, retail banking has found that every customer matters and moving customers from 80th percentile to 90th percentile of satisfaction provides significant returns.

A Telecom Company Prioritizes Areas to Improve Customer Experience

A leading telecom company used customer journey analytics to discover the most important areas for improvement in their online self-help mechanism, as part of an overall effort to improve customer experience. They analyzed customer journeys to discover the paths that led customers from the main self-channels to the customer service center. Within minutes, they were able to drill down into the self-help channel that was driving the highest call volumes and also had the highest failure rate in resolving the issue.

Using customer journey analytics, they analyzed customer behavior to identify the most frequent and predictive paths that customers took after participating in each of the self-help mechanisms. This was the key to unlocking the primary customer failure points and areas most in need of improvement within the Help Forum. Moreover, they were able to connect these failure points to customer churn and see how many customers went on to disconnect the service, as well as view the aggregated revenue loss associated with each failure point. With these views they were then able to prioritize their improvement initiatives.

how customer journey analytics can improve customer experience

Customer journey analytics unlocks failure points and reveals the most important areas for improvement.

In today’s world, companies need to differentiate the important from the trivial, so they can focus on problems and opportunities that have the most potential to impact business results. Customer journey analytics enables you to do just that by identifying the costliest failure points along the customer journey and helping businesses decide where to invest their dollars.

Use Customer Experience to Differentiate From the Competition

Customer journey analytics can be used to glean quantitative insights that can improve customer experience and turn it into a point of differentiation. In a recent McKinsey article, the authors state that customer journeys which result in more than six calls per customer are ripe for innovation. Making transformative changes in those pain points not only lowers cost to serve, but can also be used to differentiate yourself from your competition.

Warby Parker Uses Customer Experience to Upend the Eyewear Game

Warby Parker, the eyewear company, has seen massive success and disrupted the market using customer experience as a core strategy. Using hyper-personalization, they have combined the convenience of online shopping with the personal touch of face-to-face customer experience. Customers can upload their prescription online and then go to a showroom to select the frames they like.

Warby Parker’s unique home try-on initiative mails 5 frames free to customers and lets them try them out for 5 days to decide which ones to buy. They can then make the purchase online to receive a fresh pair and return the rejected frames with a prepaid label.

How customer journey analytics helps improve customer experience

Warby Parker’s relentless focus on customer experience has disrupted the market. Image courtesy:

When prospects started asking questions via social media, Warby Parker responded by providing one-to-one video answers and comical emails. They have now produced over 2000 such videos. This kind of personalized experience has led to over 50% of the website traffic coming from word-of-mouth referrals.

Your customers expect personalized experiences driven by their current preferences and recent interactions. Current rule-based personalization tools can’t help you uncover the unscripted customer behaviors that occur in the real world. A differentiated, multi-channel customer experience is best created by first understanding your customers’ real-world journeys and then engaging with your customers at optimal points along their journey using the most effective channel.

Looking Ahead

Customer journey analytics is fast becoming the preferred approach for marketers and customer experience professionals looking to improve customer experience. By linking customer experience to quantitative metrics, customer journey analytics enables you to focus on implementing changes that truly matter. It directly ties customer experiences to business outcomes, so you can deliver on revenue, profitability and other hard metrics on which your company’s executives are measured.