U.S.
Strikes Data Customer Experience Metrics
Deal with Europe
A new Privacy Shield accord
safeguards against U.S. spying
J ust slightly more than three months
after the European Union’s Court of
Justice threw out the long-standing
Safe Harbor Agreement for the sharing
of consumer data between the United
States and Europe, a new deal was put
in place. The European Union in early
February agreed to a deal that reinstates
the free flow of consumers’ digital data
on both sides of the Atlantic.
Under the deal, the U.S. will provide
written guarantees that U.S. intelligence
agencies will not have free access to data
coming out of Europe.
The U.S. also granted the Depart-
ment of Commerce oversight for how
U.S. firms implement the agreement
and agreed to appoint an official in the
State Department to address grievances
by Europeans who believe that U.S.
entities are misusing their data. Europe-
ans can also challenge U.S. rulings with
their own local data commissioners; U.S.
firms will have to comply with orders
from those data commissioners.
At press time, the deal still had to be
ratified by the 28 countries that make up
the E.U. Several European privacy advo-
cacy groups were preparing to fight it.
Some of those same advocates filed
legal action that led to the October deci-
sion by the European court to overturn
the Safe Harbor Agreement that had been
in place since 2000. The court ruled at the
time that U.S. data protections were infe-
rior to those in Europe and lacked proper
government and judicial oversight.
If formally approved, the new deal,
called the EU-US Privacy Shield, will go
into effect in early April.
In a statement, U.S. Commerce secre-
tary Penny Pritzker called the deal “a major
achievement for privacy and for businesses
on both sides of the Atlantic.” She added,
“It provides certainty that will help grow
the digital economy.” —Leonard Klie
18 CUSTOMER RELATIONSHIP MANAGEMENT | APRIL 2016
Are on the Rise
Continuity, consistency, impact, and integration are
the key competencies driving CX change
B
usinesses are maturing in their
use of customer experience
(CX) metrics, employing them
more than they did in the past, and get-
ting better at using them, according to
research from the Temkin Group.
As proof of that, the percentage of
organizations that earned a “strong” or
“very strong” rating grew from 11 per-
cent to 14 percent this year, the Temkin
Group noted in its “State of Customer
Experience Metrics 2015” report.
Companies have also improved across
all of the four major competency areas:
continuity, consistency, “impactfulness,”
and integration, the research firm found.
Bruce Temkin, managing partner of
the Temkin Group, explained that for
CX metrics to be valuable, they must
be continuously “integrated into the
rhythm of the business.” If a company
wants to measure an aspect of customer
experience effectively, it must do so on
a regular basis so that it is fresh in mind
during the next period of measure-
ment. In other words, the gaps between
measurements shouldn’t be too big,
Temkin suggests.
Achieving consistency “has a lot to do
with cultural change” and a company’s
adoption of a common language for
discussing CX metrics, Temkin says. If
a large organization shares a set of CX
metrics across its separate parts, that
organization could have more produc-
tive conversations that enable it to drive
change. For instance, companies that
educate their sales, service, and mar-
keting about Net Promoter Scores, and
use the term to signal the same concept
across departments, will benefit from
the common language. “If everyone has
their own measurement and metrics,”
and uses different terminology to refer
to the same concepts, “we have no com-
mon vocabulary and [won’t] be driving
change,” Temkin says.
Organizations are effective if they
use the insights they’ve gleaned from
CX metrics to support their decisions,
Temkin points out. Companies that
are doing this well will not roll out new
products or invest in new business units
without consulting their CX metrics.
Lastly, integration signals “the degree
to which the organization is looking at
the metrics while dealing with other
important measurements of the busi-
ness,” including sales, performance,
and cost, Temkin says. Unfortunately,
this has been the most challenging of the
four competencies for companies.
For companies that get it right, the
benefits can be substantial. According
to Temkin’s research, companies with
stronger CX metrics outperform their
peers: 49 percent of companies with
stronger CX metrics have well-above-av-
erage customer experience scores com-
pared to just 17 percent of those with
weaker CX metrics programs. Addition-
ally, those with stronger CX metrics are
50 percent more likely to have signifi-
cantly better business performance than
their competitors.
Yet while Temkin concedes that cus-
tomer experience can be a key differentiator,
www.destinationCRM.com
he notes that the strength of a product
and price will carry some a longer way
than others. Of the 86 percent of compa-
nies that don’t have strong programs in
place, Temkin estimates that about half
will be impacted if they don’t take action,
while the other half are “good enough for
whatever their business needs are.”
Still, 55 percent of companies aspire to
become CX leaders, and many of those
are still a long way from perfection,
Temkin says. In his view, mastery is
achieved when a company has estab-
lished a well-defined way of measuring
customer experience, consistently uses it
to run its business, and makes improve-
ments based on these metrics.
Companies “should decide what their
core set of CX metrics are going to be,”
Temkin says. They “need to decide what
their North Star for a healthy customer
relationship is.”
Likewise, organizations must take into
account the differences between their cus-
tomer segments. A large company might
have enterprise customers, small-busi-
ness customers, and customers who are
served through a distribution channel,
Temkin points out. “If we don’t apply
our metrics independently to those, then
we just get a mishmash of the metric that
wouldn’t provide the insights we need to
drive our business.” —Oren Smilansky

Advocate Marketing Has Big Benefits Currently, many businesses are strug-
gling to effectively manage customer
feedback, usually as a result of disparate
But first businesses need to better manage customer feedback programs or internal disagreements. The

A
dvocate marketing can turn increasingly relying on social media for report identifies three areas of improve-
recommendations into rev- customer support, having advocates ment for businesses.
enue opportunities and help who actively share examples and assist First, many brands’ programs provide
companies unify traditionally separated newcomers is highly valuable. only sporadic interactions. It can be dif-
engagement programs, but many com- The report cites Salesforce.com’s ficult to forecast referral supply, and sales
panies are falling short on using it to its MVP customer program as a successful or business partners often delay asking
full potential, according to a recent study example of this strategy: The program marketing for references. Advocate mar-
by Forrester Research. has more than 180 advocates contrib- keting resolves these issues by cultivating
Advocate marketing, as defined in the uting roughly 80 percent of community relationships with customers instead of
report, is “the use of marketing strategy, content and answering more than 35 simply reacting to urgent requests.
budget, and resources to encourage cus- percent of online forum questions. Second, corporate policies often cause
tomers, employees, or partners—or any Second, advocate marketing rewards different departments to guard customer
combination of them—to do something loyal buyers by enhancing their reputa- relationships, resulting in disjointed cus-
on behalf of your company, with or with- tions. According to the report, prospective tomer experiences and underutilization
out the expectation of mutual benefit.” customers want to know of customers who provide
In the past, advocacy for a brand was that the endorsements on a “If the customer journey is positive feedback. Advo-
seen purely as a gesture of goodwill, and site are real, more so than in cate marketing improves
it was widely believed that rewarding the past, and simply adding
a cycle, advocacy is the the customer experience by
advocates would somehow breach that a customer logo on com- chain drive that keeps actively managing customer
credibility, according to Laura Ramos, pany collateral isn’t enough. the wheels spinning.” profiles and enabling all
vice president and principal analyst cov- Now, prospects want to see departments to have access
ering B2B marketing at Forrester. Today, the people and the process behind success to the customer responses they need.
those views are changing, she observes. stories. Advocate marketing can provide a Finally, junior staff often lacks the expe-
“That has shifted a lot with social media deeper, more nuanced view of these people rience that senior advocates appreciate. It
and with the idea of applying gamifi- and decisions, infusing customer engage- is essential for companies to hire expert
cation to allow companies to thank, ment with a much needed human element. marketing managers who know how to
reward, and recognize customers for Third, and perhaps most import- create lasting connections with customers.
doing things for them,” she says. ant, advocate marketing can transform “If the customer journey is a cycle, then
Companies that employ and encour- customers’ successes into new business advocacy is the chain drive that keeps the
age advocate marketing can expect sev- opportunities. Customers can raise aware- wheels spinning,” Ramos says. “Without
eral benefits related to the customer life ness about business problems and provide advocacy, you’re not going to multiply
cycle, Ramos concluded in the report. evidence that businesses can overcome marketing’s effects. You can have much
First, advocate marketing encour- these problems. In this way, businesses greater reach at lower cost versus tradi-
ages buyers to share best practices and continue conversations with customers tional reach tactics by having customers
help each other thrive. With businesses and establish new connections. advocate for you.” —Sam Del Rowe

www.destinationCRM.com CUSTOMER RELATIONSHIP MANAGEMENT | APRIL 2016 19

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