When I think about brands that truly understand the meaning of ‘experience business’, Sephora always comes to mind. The beauty chain knows everything I’ve purchased, so I receive fantastic recommendations online, on my mobile phone, and even while shopping in-store. They seem to understand perfectly whether I’m online and even with which device — they all elicit different experiences, and Sephora knows it. They make the interactions easy and, thus, delightful, ensuring I continue to return for more.
As I’ve said before and still believe, “If you’re not working on customer experience, then you’re working on the wrong thing.” Some companies aren’t yet focusing on customer experience, because they haven’t quite figured out how to define and measure the success of experience. Individual anecdotes (like mine) certainly help, but they don’t give companies the full story — not enough, anyway, to convince the C-suite or company investors that the way they’ve been conducting business for years must change.
Experience businesses need to learn to define success outside of traditional marketing metrics — and they need data to do it. Creating metrics to prove the value of experiences would translate better to all involved. If they can’t define success, they won’t gain the support and results they need to continue.
Defining Success for the Experience Business
There are two ways to view company outcomes:
The Business Outcome
— what the organization sees, and
The Consumer Outcome
— what the consumer sees.
Experience is from the customer perspective and yet, the business must also see real financial results. The trick is to understand where the two align, so we all win. If you don’t gain financial results, it’s possible to go out of business creating great experiences for your customers. You need to be able to recognize experiences that will benefit clients and create business results, so you’ll know confidently and strategically where to devote your resources.
Consider how we measure television viewing for advertising purposes. We measure it using gross rating points (GRP) or, basically, how many people might see an ad at any given time. We can tie the everchanging GRP to business results, knowing we can expect a certain business outcome when we run ads during a particular show because 30 million people could potentially see it (according to GRP). So, we have a precedence for measuring how successful these types of marketing activities are, but we haven’t yet made the connection between specific experiences and which business outcomes they produce. That needs to change.
Finding Relevant Data and Measuring Outcomes
There are traditional measurements such as the completion of the customer journey — the customer buys what we are selling. Ultimately, though, it’s all about customer satisfaction — did we make the customer happy? The experience should be a ladder leading up to a relationship that keeps the customer returning for more. In fact, an experience isn’t a one-off; it’s a sum of all the interactions leading into the relationship your company has with each customer.
To measure these experiences, brands must start with data. Following are three ways to find the relevant data you need.
1. Measuring Activity
By conducting regular surveys and polls (like those I often receive from Sephora), you can keep notes that measure each customer’s activity at each touchpoint. Was that touchpoint successful? Did customers complete what they wanted to do? Do they respond to the emails and notifications we send? That’s the nice, simple way to understand experience — letting companies continuously collect and analyze data and understand which things customers are learning.
2. Measuring Emotions
How did you feel about that experience? Did it make you feel happy? Did the quality meet your expectations? In our Think Tank discussion in March, Lightwave CEO, Rana June brought up the discussion of emotional data and whether it can be trusted to measure experiences.
“We are irrational actors, but at the same time, we’re very predictable,” Rana said. “The way that we’ve historically examined emotional data has been in a lab, which is an unnatural environment measuring maybe 10 individuals. If you can take this outside the lab and get authentic data looking at thousands if not millions or even billions of people, that’s when you can start to really gain some useful insights into the emotional dynamic. Even measuring emojis, for example, can provide so much value.”
It isn’t easy, however. If you are measuring customer experience and satisfaction through a survey, and the customer gives the company an 8 or 9 (or even a 7) in the survey, how do you determine the real issue that kept it from getting a 10? It goes back to measuring the emotion or satisfaction. Here’s an example of how emotion is being measured now: Certain restaurant chains place a button near the door that customers can hit to express customer satisfaction — green = happy, yellow = meh, red = unhappy. The minute someone chooses red, restaurant staff receives immediate feedback letting them know that something is wrong. Or, if it happens multiple times, then something is very wrong. So, it is possible to collect this emotional data in a pretty simple way with mini-pulse feedback online and offline.
3. Measuring Relationships
This is the intangible part and is even more difficult to measure. How did the experience (or series of experiences) impact the customer’s overall relationship with the company? Was it “just fine,” or was it “mind-blowing?” Did it change what the customer thinks of your organization? How would the customer say the relationship changed after the experience? There isn’t a simple behavior metric you can use to measure this. However, you can measure it on the backend by tracking whether certain customers are buying more, are referring to the company more, or are calling more frequently.
Maturing Experience Measurement
While surveys and polls are still a major source of the data companies collect, and the mini-pulse buttons I mentioned previously continue to help provide some emotional data, technology makes measuring these experiences even easier. Some companies are now using artificial intelligence (AI) to understand the tone in customers’ voices over the phone — how quickly they are speaking, their intonations, pitches, volumes, and more — to decipher how happy or upset they are. You can actually assign each a numerical score and decide from there how to react to keep that customer happy based on this score.
Most companies still struggle to tell whether customers see something that actually moves them. Affectiva in Boston is aiming to change that, using cameras to understand and categorize people’s emotions. Its software can take video calls at the call centers or even on various devices. Imagine having an Xbox or computer camera on (with permission, of course) and someone being able to tell how you feel — upset, happy, or confused, for instance. Surprisingly, AI is becoming better than humans at understanding and communicating emotions. This absolutely applies to experience businesses, helping businesses understand the state of people who are walking into their stores by noticing their pace and level of nervousness, for example. The company can then take immediate action to make the experience easier for the customer.
Moving Forward With Patience
To succeed as an experience business, you need to measure experiences in the context of customer relationships and how they matter to the business. Otherwise, you’re wandering around in the dark — and might measure and, thus, optimize the wrong thing. There’s no magic bullet. Just as measuring television ads has shown us, it’s going to take multiple levels, many years, and a tremendous amount of perfect patience and careful listening. We all measure things differently, but in the end, it all comes down to keeping your customers close by, developing their trust — and constantly measuring the relationships to ensure your experience business is still on the right track.