Are Traditional Customer Surveys on Their Way Out?

Here’s why your company shouldn’t gauge the customer experience on guest experience surveys alone.

Traditional customer feedback surveys have long been one of the top ways that brands measure their company’s customer experience (CX). Now data-driven technologies are bumping customer surveys to the back of the line for customer experience measuring tools.

“After years of serving as the benchmark for defining and refining a company’s customer-experience performance, survey-based systems are heading toward their twilight,” according to an article from management consulting firm McKinsey & Company.

“The future of superior customer-experience performance is moving to data-driven, predictive systems, and competitive advantages are in store for companies that can better understand what their customers want and need.”

Traditional surveys fall short

More brand managers and owners now recognize that customer surveys — while still an important customer experience research tool — no longer meet their company’s customer experience needs, says McKinsey & Company.

McKinsey’s online survey of 260 U.S. customer experience leaders found that 93 percent of respondents said their company uses a survey-based metric such as a customer satisfaction or customer effort score to measure customer experience performance.

Yet only 15 percent said they were “fully satisfied” with how their company measures customer experience. And only six percent said they were confident that their measurement system enables “both strategic and tactical decision making.”

“Leaders pointed to low response rates, data lags, ambiguity about performance drivers, and the lack of a clear link to financial value as critical shortcomings,” says McKinsey & Company.

“Those with an eye toward the future are boosting their data and analytics capabilities and harnessing predictive insights to connect more closely with their customers, anticipate behaviors, and identify CX issues and opportunities in real time,” says the article.

“These companies can better understand their interactions with customers and even preempt problems in customer journeys.”

The future of guest experience measurement programs

Customer experience programs of the future will be “holistic, predictive, precise, and clearly tied to business outcomes,” says McKinsey & Company.

Companies that build the capabilities, talent, and organizational structure needed for that transition will enjoy substantial benefits, according to the McKinsey article. And companies that fail to keep in step with data-driven measures of customer experience will fall behind.

“Since survey-based systems became ubiquitous, the world of insight generation has transformed through impressive advances in the ability to generate, aggregate, and analyze data,” says McKinsey & Company. “Those that stick with the traditional systems will be forced to play catch-up in the years to come.”

According to McKinsey & Company, the array of data sets used to gauge customer experience includes:

• Digital and analog internal customer interactions data
• Transactions and profiles
• Third-party data sets on customer attitudes, behaviors and purchase preferences
• Social media activity
• Internet of Things (IoT) data on customer health, point of view and location

“Other business disciplines, including marketing and revenue management, have already transformed through the aggregation and analysis of these vast data sets,” says McKinsey & Company.

“The contrast is stark: Why use a survey to ask customers about their experiences when data about customer interactions can be used to predict both satisfaction and the likelihood that a customer will remain loyal, bolt or even increase business?”

Organizations looking toward the future are increasing their data and analytics capabilities and harnessing “predictive insights” to know their customers, anticipate customer behaviors, spot real-time customer experience issues and opportunities and preempt customer issues, according to McKinsey & Company, which cites the following predictive insight measures:

• Create a customer-level data lake of customer, financial and operational data and store them in a cloud-based platform.
• Develop analytics using several types of machine-learning algorithms to track and understand what influences customer satisfaction and business performance.
• Share insights, information and suggestions with employees with a broad range of employees, including frontline agents via an application-programming-interface (API) layer.

“The role of the CX leader is evolving, which means that executives will need to reposition themselves within their organizations,” says McKinsey & Company.

“When asked about the biggest challenge with the current system, one chief experience officer responded ‘People associate CX with marketing, not technology.’

“That is changing as more and more companies take up predictive analytics, and it’s up to CX leaders to help encourage the change in perception.”