Advanced Analytics: The Future Of CX
Despite the recent challenges in overall experience quality seen in Forrester’s Customer Experience Index (CX Index™) benchmarks, customer experience (CX) remains a priority for many organizations. Unfortunately, these organizations have struggled to realize tangible benefits from their CX programs. In new research, we discuss key challenges CX programs face when relying on customer feedback as their primary capability and why they need to leverage more advanced quantitative analytics to drive action, increase financial impact, and prepare for a more analytics-driven future.
The Challenges Of Survey-Only CX
CX measurement programs report that their most common challenges are driving action to improve experience quality and proving the financial importance of CX. One primary cause is their reliance on soliciting customer feedback, usually through surveys. Surveys don’t often provide definitive root causes that compel business functions to make changes, and the relationship between survey scores and financial performance remains theoretical in most organizations.
While a survey-reliant CX strategy is holding CX programs back, we are not advocating that they stop surveying customers. Instead, they should reduce their reliance on surveys and use that feedback data as part of a more comprehensive quantitative approach.
The Quantitative Future Of CX
Integrating advanced quantitative analytics into their strategy helps CX programs drive action and prove value. This involves shifting from treating survey score metrics as their primary output to using feedback data as an input to more advanced techniques. When CX programs combine customer feedback data with other metrics like operational interaction data, financial outcome data, and additional non-survey perception data, these inputs to advanced analytics can produce more actionable and financially connected insights than survey feedback alone.
Executing On The Promise Of Advanced Analytics In CX
After discussions with dozens of CX leaders, top vendors, and service providers in CX analytics, we found a consensus on several steps organizations must take to implement advanced CX analytics successfully. Among the five key components presented in our research, two demand considerable attention:
- Enabling a comprehensive experience dataset. This includes ensuring the availability, quality, and validity of a comprehensive dataset of customer perceptions, interactions, and the financial outcomes of their behavior. Most experts agree that this is the most critical and challenging aspect of implementing an advanced CX analytics strategy.
- Operationalizing insights from advanced analytics. While insights from advanced analytic techniques can prove fascinating in many organizations, acting on the outputs is crucial. This means using advanced analytic insights to take a proactive approach to CX, where organizations use diagnostics, predictions, and prescriptions to manage the experiences of all customers rather than reacting to feedback from a small percentage who respond to surveys.
Avoiding Missteps In The Adoption Of Advanced Analytics In CX
For our recent research, we have defined advanced CX analytics as “advanced analytic techniques — including diagnostic, predictive, and prescriptive machine learning — that identify how customers’ experiences affect their behaviors.” The terms “advanced analytics” and “predictive analytics” are used somewhat loosely in the CX ecosystem. While useful, language analytics, conversational and digital intelligence, and sentiment analysis differ from advanced diagnostic, predictive, and prescriptive methods. CX leaders should ensure they understand these differences when pursuing quantitative CX strategies.
Another variation in CX analytics is leveraging machine learning models to predict common CX survey metrics like Net Promoter Score℠ (NPS) or customer satisfaction (CSAT). While novel, most organizations would be better served predicting the actual outcomes of customer behavior with direct financial impacts rather than making the effort to develop these capabilities only to reinforce challenges associated with relying on customer perceptions to manage experiences.
Final Advice
While advanced analytic techniques are uncommon in CX practices today, CX programs and leaders should challenge themselves and find a path to facilitate, collaborate , or expand the CX mandate to pursue a more quantitative approach that will prepare them for the future of CX.
If you’re ready to advance your CX program’s analytics strategy, Forrester can help. Forrester clients can access our two new reports, Why You Need Advanced Analytics To Transform CX and How To Transform CX With Advanced Analytics, where we provide a practical approach for pursuing advanced CX analytics in your organization. They can also schedule a guidance session on the topic. CX leaders can join us in Nashville this summer for Forrester’s North America CX Summit, where I will be available for live in person guidance.