Blended Index: How to Create a CX Single Metric

The use of blended indices is quickly becoming a best practice as companies attempt to connect the dots across many sources of data being collected for their organizations. No single measurement tells the whole story—and that’s particularly true of multi-location businesses. Why? Because locations are looking at operational excellence metrics, satisfaction and loyalty metrics, as well as financial metrics to understand how they perform. And how they perform needs to be within the context of the brand itself and peer groups. In order to make sense of the rich data sources, we recommend constructing a blended index.

WHAT is a blended index?

A blended index creates a composite score from multiple data sources, spanning operational and customer metrics. The algorithm must normalize the data so that scales are not an issue (e.g. mystery shopping on a 100 point scale, customer satisfaction on a 5 point scale, or contacts on a number of complaints/1000 transactions). The algorithm should also flex to weight specific metrics. This single score provides the brand—and your locations—with a holistic view of performance across all metrics.

WHY should I have a Blended Index?

A blended index that spans across operational and customer metrics helps you understand performance as a whole. The magic happens when you bump that information up against a financial metric like same store sales growth, revenue per available room, or volume of gas sold. You’ll then want to understand the performance of every location on that grid to determine where you will want to require better operations, more marketing to drive traffic, management changes, and adoption of best practices.

HOW do I get value from a Blended Index?

The final step in maximizing your value from a blended index requires socializing the information with the rest of the organization. Executives and managers from both operations and marketing need to understand the numbers. More importantly, they need to drive action across the organization. Finding the critical drivers—specific actions that can be taken to change scores on the blended metric—must happen. Without that commitment, you’ll be looking at data that stays the same and never changes—and that will not help you grow your brand. 

Sam McKeveny is Head of Program Development, North America at Market Force Information. Sam consults with client executives to design program architectures that systematically improve operational execution, customer delight and sales growth.

Innovation in Social Media: The Power of a Listening Ear

Social media strategies now require a large percentage of our marketing budgets. In fact, Forrester research forecasts that US social media spending will increase dramatically in the next five years, from $13 billion in 2016 to $30 billion in 2021 with a growth rate of 16.9%. In Europe, growth is projected at 18.4%, from $7.4 billion in 2016 to $17.3 billion in 2016 (US dollars). And advertising is only one component of social media dollars spent by big brands. We divide that spend into three separate categories:

Responding to CX commentary. Customers post their customer experience comments to both corporate and site level Facebook and Twitter pages. Brands have built strategies for managing those comments, focusing on taking negative commentary offline and recovering unhappy customers. Positive commentary can be used to uplift and motivate employees. Direct recognition for great work can immediately impact morale!

Managing third party reviews. Reviews posted to Yelp, Trip Advisor and other third party sites have become increasingly important. For example, understanding sentiment, categories of commentary, and trends—and comparing that information to key competitors—form the very basics of what your brand needs to be watching. Also, in the restaurant industry more than 67 percent of customers take online reviews into consideration when making a purchasing decision (as published by Modern Restaurant Management). In Market Force’s research, we clearly see the influence of sites like Pinterest for fashion and even comparative pricing apps like GasBuddy for gas.  

Creating engagement and innovation through advertising. We love it when brands use social media to innovate. Flynn Decker, CMO for Wingstop, gave a great interview to Loyalty 360 (https://loyalty360.org/content-gallery/daily-news/wingstop-carries-its-innovative-spirit-through-dig) about how Wingstop is using social media and CX data to engage with customers. Wingstop has aligned its CX strategy to match the heavy use of online ordering, recognition of the importance of mobility, and the first-of-its-kind social auction series on Periscope “THUMP by Wingstop.” Users bid on prizes by tapping the Periscope heart button. 

As you think about your own budget for social media, divide it into those things that will a) create and drive revenue, like engaging your customer base through advertising, b) those that will help you mitigate risk, like taking negative conversations offline, and c) those that will help you drive down costs, like using commentary and third party reviews to help your teams perform better. Every dollar you spend can be leveraged to drive your business. 

 

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As Chief Strategy Officer, Cheryl aligns Market Force's strategic direction with our clients' strategic objectives. She oversees the North American client base, Analytics and Insights, Winnipeg Operations and Marketing. She has a Ph.D. in social psychology and broad business experience in both private and public companies.​

 

Time to Re-evaluate Strategy

When was the last time you took a walk in your customer’s shoes and experienced your brand from their perspective? Having a clear understanding of their priorities and how those priorities connect to your bottom line is extremely important.

The reality is, our knowledge of the customer experience, customer expectations, and our ability to deliver against their needs, is in constant flux. If we get complacent we may find that our focus, metrics, and the systems we use to manage performance, lose their ability to create real positive change. If it has been more than 2 years since your last deep-dive into the customer journey and the associated measurement and support systems, it is time for fresh perspective.

Are you asking the right questions? Do you have the right processes in place to listen and respond if customers have issues? Are you timely in addressing customer concerns? Are you listening across all of the relevant online, social, and conventional channels? Are you aggregating and disseminating information in effective ways? Do you have a clear picture of reality in terms of your ability to execute against your standards and training? Is it clear to all what the true priorities are?

These are just some of the important questions to consider. That said, even if you recognize the importance of the customer experience, it can be easy to get lost in the daily grind and lose sight of important details. If any of the following conditions exist, now is the time for a second opinion regarding the efficacy of your customer experience practices. To make the review process easier, we’d like to share a list of telltale signs that it is time to revisit your customer strategy.

  1. Low engagement in customer experience programs with customers and/or employees and managers;
  2. Low executive engagement or visibility into customer experience program metrics;
  3. Flat or declining customer experience scores;
  4. A high degree of variability in performance across your brand;
  5. A lack of certainty in the connection between scores and a desired business outcome;
  6. Dated program design, branding and PR strategies;
  7. Reliance on a limited number of channels to engage customers;
  8. High or improving scores, with inverse financial outcomes.

If effectively designed, your customer experience program can be a highly scientific tool to manage your business, placing the wants and needs of your customers at the forefront of decision-making. By deploying best practices in combination you will elevate your chance of success, and ensure you maximize the financial return on your investment of time and energy in creating great customer experiences. 

Contact our experts today to schedule a free 30 minute consultation that will help you determine whether it’s time to revisit your customer experience strategy.

 

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Scott Griffith is Vice President, Executive Business Strategist at Market Force Information. Scott consults with client executives to design strategies that foster growth for companies in early stage ventures through IPO and beyond.

 

Brexit: What’s the Impact to Your CX Strategy?

The referendum results taking the United Kingdom out of the European Union has created an atmosphere of uncertainty. Financial markets initially responded unfavorably and analyst assessments of the economic impacts in the short term cover virtually any potential outcome Euromonitor forecast declines in GDP and increases in both unemployment and inflation. (See http://blog.euromonitor.com/2016/06/the-brexit-vote-is-in-what-next-for-the-uk-leave.html). In stark contrast are predictions that restrictions on immigration may create a labor shortage. Predictions for impact on the EU as a whole and investor confidence vary widely. Forrester predicts wide-scale impacts on technology investments. This ambiguity and uncertainly will continue until the two year exit strategy is defined and negotiations completed.

What is certain is that now is the time to pay extraordinary attention to your customers. At Market Force, we weathered the 2008 economic downturn with our clients. Those who maintained a laser focus on product, service and value, came through with flying colors. Some lost their focus and went bankrupt. Others suffered damage and recovered, including corporations in the banking and auto industries.

We’ve also seen the measurable consequences when companies pull back on their CX investments. In three different situations, detailed below, pulling back on investments or stopping measurement significantly impacted the ability to meet corporate objectives and satisfy customers:

  • For a large retail bank: Customer engagement scores for advisors responsible for accurately presenting products and upsell, dropped by almost 50 points, from 72% in compliance to 25% in compliance. When measurement restarted, performance returned to previous levels.
  • For one of the world’s largest QSR companies: NPS declined by 5.6 points and a critical upsell behavior—recommending a beverage—dropped by almost 80 points from 91% to 9%, creating friction with their beverage partner. When measurement restarted, upsell increased but took time to gain traction.
  • For a major wireless retailer: Performance on five critical selling skills declined between 3 points and 10 points with consequences for ability to attract new customers and sell accessories. 

The uncertainty caused by Brexit creates both risk and opportunity for any corporation. Market Force considers this a time of opportunity and will continue investing in technology, focusing on text analytics, social media listening, and mobility

And we will continue to invest in the teams that serve you, focusing on our ability to help you execute on your brand standards, delight your customers, and position you for financial success. Market Force is here at the ready to help you navigate these uncertain times.

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Ray is the consummate road warrior. His 25 years of experience as a senior-level executive has taken him to over 40 countries in multiple roles. As CEO for Market Force, Ray champions the role of technology and innovation in creating programs that improve our clients' brands. 

Forrester CX Conference: CX Investment Remains Core for Leading Brands

On June 21 and 22, Market Force participated in the Forrester Customer Experience (CX) conference in New York City. A report by Markets and Markets estimates that this space is due to grow to $8 billion by 2020, and certainly the level of commitment and investment by presenters validates that trajectory. I found the conference very valuable and walked away with a few key points that I’ll share with you. All of these points are framed by a keen focus by the world’s largest companies in creating cultures focused on exceptional customer experiences. 

  1. The customer is becoming increasingly powerful. George Colony, CEO of Forrester, put corporations on notice by claiming that we are now in an “existential crisis” with the increasing power of customers to voice their opinions and demand increasing levels of service. He believes that customers will increasingly judge corporation based on the state of their business technology and that software investments will be critical to success.
  2. Effortless customer experience requires vision. Vicky Jones at AT&T simply thrilled the audience with the bold and sweeping vision AT&T has for integrating large acquisitions like DirecTV with current mobility platforms to create an “effortless customer experience”. That focus is backed by AT&T’s CEO, Randall Stephenson. His commitment? Over $1 billion in budget to make that happen. Vicky reiterated that this is a “long game” with sustained investment and grit to make it happen.
  3. Design with simplicity as the core principle. Echoing the message from Vicky Jones, Mark McCormick, Head of User Experience at Wells Fargo, spoke to the power of simplicity in the design of products and experiences. “Simplicity is hard. Simplicity is noble”. He made an argument that products and experience that are complex or difficult to use “rob us of time time and confidence”.
  4. Map the customer journey to align the corporation. A presentation by Joana van den Brink-Quintanilha, Forrester analyst, compelled me to think again about the importance of customer journey mapping. This powerful tool makes it clear where every function and every employee plays a role in creating an effortless, simple customer experience. A good journey map will help create channel parity, simplify offers and pricing, and streamline platforms across multiple channels.
  5. Ask creative questions of your CX data to show ROI. Mike Dzura, EVP of GNC, presented a case study based on his experience as SVP of Operations at GameStop. He showed how analysis of CX data could predict top performing managers, clarifying where GameStop should make its talent investments and the strategy for growing game sales.

In summary, the conference emphasized the increasing importance of the Customer Experience, with companies like Ford, Wells Fargo, AT&T, Marriott, SiriusXM, American Express and Etsy emphasizing their own investments in time, money, and people...lessons for all of us. To understand more about Market Force’s solutions for prioritizing investments, see our strategic advisory workshops.

As Chief Strategy Officer, Cheryl aligns Market Force's strategic direction with our clients' strategic objectives. She oversees the North American client base, Analytics and Insights, Winnipeg Operations and Marketing. She has a Ph.D. in social psychology and broad business experience in both private and public companies.​

Mystery Shopping: Four Mistakes To Avoid

Mystery shopping is an extremely important tool to have in your customer experience management toolbox. Why? Because it measures each location’s adherence to brand standards. Brands invest six or seven figures in their merchandising strategies and planograms, sales associate training, line management protocols, and healthy and safety regulations. Those investments are wasted if teams don’t adhere to them.

Mystery shopping is an objective, standardized method for measuring operational excellence and the execution of brand expectations at every location. Implementing a mystery shopping program requires thinking through how to design the questions to ensure both the quality of the data gathered, and the actions you want to encourage in the behaviors of the managers and teams receiving the results. Here are four things you should avoid when structuring your program:

  1. Use subjective questions. The whole purpose of mystery shopping is to provide objectivity—not opinion. When questions are structured so they become opinion-based, they lose credibility. Question design needs standardized, clarifying comments so that your managers and teams know what to repair to drive performance improvement at the location level.
  2. Set up scenarios that identify shoppers. Shoppers need to remain anonymous. Anything that allows teams to quickly identify shoppers should be removed from the scenario. For example, we worked with a QSR company that wanted shoppers to approach the cash register with a $20/bill in hand. How many of us pay in cash—or have the cash ready at the register?
  3. Allow managers and operators to constantly question results. Pushing back on one questionable shop result is understandable. Pushing back on 10 of them is not. When a location receives many poor scores, it’s not the shop that’s wrong—it’s operations. Make sure operators use the data to take action—not complain about the shop.
  4. Look at only aggregated data. Sure, the overall score for your shops, aggregated at the brand level is important. However, it’s more important to look at how all of your locations perform and the distribution of scores. If locations perform very inconsistently on your own standards, brands are at risk. Location-level data provides the insights needed to drive change…at the location.

Market Force prides itself on the extraordinarily high quality of its mystery shopping programs. Companies rely on us to deliver insights about thousands of locations and these tips come from our experience as the largest mystery shop provider in the world. Contact us if you would like our expertise in helping you build a world class mystery shopping program. 

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As Vice President, Operations, Emily oversees Market Force's mystery shopping operations in North America and helps build programs that meet regulatory guidelines and retain customers. She also holds a BA in government from the College of William and Mary. 

Customer Experience Management: Revamp Your System!

Have you been measuring the same things in your customer experience surveys for the past three years? Has your mystery shopping program been in place with little change? Has it been 6 months or more since your team met to clearly assess your measurement program—including spend and ROI? If so, it’s time to step back and do a clear-eyed evaluation.

Too often, measurement systems are left running untouched for months or years. That’s a mistake. The market is dynamic, customer expectations change, and your own products and services change as well. Granted, there is a cost to making changes:

  • You do want a stable measurement system to track and trend results;
  • If compensation is tied to results, changes may need to roll out slowly;
  • There’s work involved—and that includes aligning stakeholders.

However, the benefits of carefully evaluating and fine-tuning your program far outweigh the challenges. You will want to:

  • Find the gaps. What methodologies need to be added to assess brand and store level performance? What focus areas or questionnaires need changed?
  • Align the questions. Remember to construct a questionnaire matrix to ensure that you use the same wording and scales across your measurement instruments.
  • Evaluate communication. Go out to franchisees, the front line, managers—all users of the data—and ask whether they are getting what they need to better manage their business. If they aren’t, you’ll need to rethink that strategy.
  • Raise the bar. Demand more of your teams. We have one client who raises standards every year in order to remain best-in-class. The bar he’s set in demanding exceptional customer experience has become a real challenge to competitors.

Market Force provides CX Strategic Planning workshops to assist with this process. We’d be glad to discuss how we might help you. In the meantime, check out a video published by The Telegraph interviewing Cheryl Flink, Chief Strategy Officer for Market Force. You’ll find some great tips for designing your customer experience management program. 

Gino Virgadamo is a Key Account Manager at Market Force Information, specialising in the pub, restaurant and petrol-convenience industries. Over the past 4 years, he has helped businesses understand key drivers & trends, as well as provide strategic planning to drive ROI and stay ahead of the market. 

Five tips for measuring grocery guest experience

The competitive grocery space has experienced so many changes in just the last 12 months. Big players like Safeway and Albertson’s have merged. The Whole Foods value proposition has been challenged by consumers who want great food at lower prices. Regional players like Publix have captured market share. And then there’s the big squeeze from mass merchandisers like Walmart and convenience stores like QuickTrip.

In this dynamic and competitive landscape, keeping the focus on your customers and delivering to your brand standards can be challenging. So to help you do that, let me offer five tips for measuring customer experience in the grocery industry. These tips come from our most recent grocery research and some of our customers in this space, like Aldi

  • Pay close attention to the checkout experience. Cashier courtesy, bagging, and efficiency of line management really matter to grocery consumers. We’ve found that consumers are forgiving if they feel lines are being managed well, tills are open, and cashiers continue to be courteous even in the face of long lines.
  • Let the specialty departments be the face of your brand. In our panel research and client programs we’ve validated over and over the importance of service in the specialty departments. Product knowledge and suggestions are very important to delivering a great experience and can help you differentiate.
  • Solve problems. When customers have a problem, your staff need to be empowered to solve those problems, either on the floor, at the service counter, at the till, or in the contact center. Make sure you’ve trained staff on common issues and how to solve them, and the helpful and professional attitude that must be maintained.
  • Be squeaky clean. You know this, but let me emphasize the impact your store’s appearance has on your customers. A bright shiny floor and squeaky clean bathroom tells customers that you’re handling their food properly—and when they’re buying fresh produce, meat and seafood, that really matters.
  • Make sure your customers receive consistent messaging online and in-store. Whatever you say online needs to be honored in the store. Coupon redemption, loyalty card points, special product promotions—whatever consumers read online or in the store must match. If they don’t, you’ll confuse or anger your customers and hurt your brand. Consider using customer journey mapping to help you understand the customer’s omnichannel experience. 

I hope you enjoyed these five tips for managing the grocery customer’s experience and your own brand reputation. Good luck!

Jay Little is a Director of Strategic Relations at Market Force Information and has over 10 years’ experience working with some of the biggest brands in the UK. He oversees the team of Key Account Managers who will help your business understand the key drivers & insights that will drive the biggest ROI, either in loyalty or financial return.

Create a Restaurant Measurement System That Produces Real Results

Measurements are the key enablers to drive accountability and effective business and consumer analytics, as well as to help companies grow and strengthen their business performance. When I led a team at McDonald's that was charged with developing and implementing a world-class measurement system that centered on the critical drivers of restaurant performance and customer satisfaction, there were specific key elements/enablers that made it so effective. Let’s take a look at them.

1. Management buy-in before all else

The first and foremost step in creating a measurement system for your restaurant brand is to obtain support from senior management. Like any major initiative a company undertakes, it requires funding, people resources and management support to address any pushback within the organization regarding the need or direction of the project.

After the business case has been made and approved by senior management, you then need to create a cross-functional team that represents all of the critical segments of the business that will either be impacted or able to add value to the process design. This is critical to ensure you receive the best input on the design and structure of the measurement tools and processes. Plus, it lends credibility to the process, and helps turn those involved in the project design into advocates and supporters of the end product.

 

2. Set achievable and actionable metrics

The next step is to sit down with your team and ensure that the metrics or targets for the components you’re planning to evaluate possess the following characteristics:

  • Actionable – Are they in the control of the people who are being measured?
  • Realistic – Are they achievable or too far fetched?
  • Targeted – Make sure the targets are designed around the critical drivers for your business and customers’ expectations
  • Data-friendly – Data must be captured at the unit level to help determine root-causes and assist in developing effective action plans
3. Outsource the feedback gathering

Enlist quality third-party partners to help you capture and evaluate customer feedback on your brand and service, to assess in-store performance relative to your standards, and to gather employee input on their day-to-day experiences (e.g. customer satisfaction surveys, mystery shopping audits and employee commitment surveys). This is typically a more cost-effective way to capture the data versus trying to do it internally, and these are professionals who do this all day every day.

4. Tap technology – don’t undertake it all yourself

Leverage technology wherever possible to capture, input and report data performance at all levels of the organization. Spend the time upfront to perfect this process because, in the long run, it will guarantee the data is captured efficiently and reported back to the appropriate people in a friendly, summarized format. Technology will also assure the reports and analytics (e.g. unit rankings, top and bottom performers, trending, etc.) are performed in a cost-efficient manner, as they can easily start eating up lots of man-hours. The other benefit is that your performance data will be available any time and any place your staff wants to access it.

 

5. Don’t skip the training

Once the reporting is finalized – or even alongside it – you should be developing a comprehensive training program to educate all of the people in the system on all the tools, processes and reporting and, even more importantly, making it clear how they can tap them to drive increases in performance. The key here is to communicate early and often to all of the impacted people, so they have a thorough understanding of what, why and how the new performance improvement system operates.

6. Review and review again

Lastly, it's critical that you periodically review the measurement system and processes that you decide upon to make sure they’re still current and relative. Don’t go too long without taking stock because you’ll quickly fall behind in a fast-moving industry. Any significant enhancements or changes should be implemented ASAP.

Keep in mind that developing an effective measurement system will take time and dedicated resources. It's a journey and customers may not notice the performance improvements over night, but rest assured that they will eventually take note. When approached correctly, it will be a valuable tool to help drive performance improvements at both the unit and system level.

Any organization with numerous locations spread out geographically, such as multi-location restaurant brands, needs a quality measurement system to help them measure and assess performance consistently and timely. These tools are also the key enablers that will help you react to problems quickly, determine if action plans are working and begin building an accountability culture throughout the organization.

 

Jerry Calabrese was responsible for a global restaurant measurement system that evaluated and helped to significantly improve the performance of 32,000 restaurants in 100+ countries in the period from 2002 to 2008. As VP of Restaurant Measurement at McDonald’s Corporation, his leadership and implementation of tools and processes were a key enabler and significant factor in the financial and operational turnaround of the company during his tenure that helped McDonald’s improve its performance and brand image during that time period.

CX ROI: What's the value of investing?

There are two schools of thought around customer experience. The first school says, “Of course you have to focus on customers. Just do it.” The second says, “I have any number of initiatives where I need to spend money. Prove to me that my investment in CX has an ROI.” The latter is a tall order, but the link has been proven both by independent companies like Forrester and through modeling work by Market Force.

In July of 2015, Forrester released new research regarding the link between CX investments and ROI. The original research found a link between CX leaders versus CX laggards and stock returns, but also noted that there is lots of noise in the stock return data. In the new research, they focused on modeling to revenue in five different industries. The rich research (see www.Forrester.com, “Does Customer Experience Really Drive Business Success?” by Harley Manning) concludes that it does ... but with some caveats. For example, industries with lots of competition and freedom of choice from consumers show a much higher ROI on CX investments than industries where there is little choice and consumers are trapped.

Over the years, Market Force has created dozens of sophisticated models showing the relationship between customer experience and revenue, and indeed, the expected ROI when locations improved their performance on critical drivers of both. Example industries and KPI’s where we have found those relationships include:

  • Hotel: Increased Revenue Per Available Room (REVPar)
  • Petro Convenience: Volume of gas sold
  • Restaurant: Year Over Year Same Store Sales comps
  • Grocery: Annual household spend and same store sales
  • Retail Banking: Number of portfolio products purchased

The work is not for the faint of heart and requires much more than trying to generate a correlation between two columns of numbers. But the results open the eyes of executives and investors alike as they see the return on improving the customer experience. Read one of our case studies profiling a wireless retailer or visit our predictive modeling page to learn more about who you can make the case for your investment in customer experience.

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As Chief Strategy Officer, Cheryl aligns Market Force's strategic direction with our clients' strategic objectives. She oversees the North American client base, Analytics and Insights, Winnipeg Operations and Marketing. She has a Ph.D. in social psychology and broad business experience in both private and public companies.

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To discuss your needs for improving performance for your multi-location brand, give us a call. We’d be happy to discuss best practices for measuring the customer experience and compliance to brand standards, using analytics to understand what matters most and the ROI for change, and technology solutions that integrate large quantities of data on one single platform. We look forward to a great discussion!

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