Jeannie Walters: 0:02

One, two, three, four. How do you plan for what is ahead of us as a customer experience leader? Some of that might be about what's already happened. Let's talk about it. We have a great question today on the Experience Action Podcast.

Listener Question: 0:20

Hey, Jeannie. It's Shawn from the Experience Investigators Mailroom. I found the perfect question for the podcast. It reads Jeannie, what can my business do to effectively use leading indicators to predict customer satisfaction and improve experiences proactively, while also relying on lagging indicators to evaluate past performance and shape long-term strategy? What's the right mix of data?

Jeannie Walters: 0:45

Thanks, Shawn, and thank you question asker. You know, if you are too shy to leave a voicemail, don't forget you can also find me at askjeannievip and go ahead and send in your question and we will read it on your behalf. But today, let's talk about this. This is a big one. We are in, it's fair to say, an unpredictable market right now. The landscape of being in business right now is really uncertain in many cases. What we have to do as customer experience leaders is look to the past, figure out what can we learn from the data and look ahead. What are those leading indicators? So those leading indicators are signals to us. They give us an early read on what might change, how to actually have an impact on how satisfied or delighted customers feel, as well as the behaviors that we want to drive. We want to make sure that they are loyal because they feel good, they're emotionally connected. We want to make sure that that loyalty translates into more purchases, into higher word of mouth sentiment, into fewer returns and service issues. So when we're talking about leading indicators, that's what we're talking about. How do we look ahead? What are those signals? And then, of course, lagging indicators are things that we use in business to really learn from the past. We evaluate what happened, let's confirm what happened, let's look at the data points that are central to our version of success and then let's evaluate whether our strategies worked and what do we need to do to maybe shift or modify our plans for the long term. So a lot of the things that are commonly looked at in customer experience work things like customer satisfaction rate or CSAT, net promoter score (NPS), even customer effort score (CES) those things are really lagging indicators. They tell us about how people have felt already. This is the feedback that we receive from customers after they have had some sort of interaction with us or while they are actually in the long-term relationship with a brand. That could be a relational metric. However, when we look at things like churn and retention rates, when we look at the revenue impact from a marketing campaign or a sales campaign, all of that is actually lagging. We are learning about what happened and we are evaluating what happened.

Jeannie Walters: 3:26

When we talk about leading indicators, we want to look ahead. We want to figure out what are the signals that can give us some insight so that we can make sure we are staying ahead of those customer expectations. We are living in the age of customer expectations. These are changing. They are changing both from external motivations like the economy and globalization and all of those things, and, frankly, internal motivation as well. Are my values as a customer still aligned with this brand? Am I receiving exactly what I expected at the moment that I need it? Do they value and appreciate me as a customer? Those are internal motivations for an individual.

Jeannie Walters: 4:09

So think about what you can look at for your leading indicators and your specific customers. One of the things I like to think about is you know, are we constantly evaluating customer effort, not just with something like customer effort score, but are we looking at things like are we keeping up in ways that customers expect us to around how many steps does this take? Leading indicators really tell us about what is it we should be paying attention to, what are those red flags, what are those warning symbols, as well as the things that tell us, hey, this might be working. Let's put a little more focus and attention on it. We want to look at things like engagement metrics. We want to see what is happening with our customers. Are they actually engaging more or less with the site or the app or the product that we ask them to? Are they engaging more with service? Are they reaching out more for service?

Jeannie Walters: 5:08

Now, when I say more, this might not be a huge spike in your data. These leading indicators could be something subtle. They could be something like one or two more calls or something like more time on a service call. This is where pattern recognition and AI can be very helpful, because we might not recognize that as a red flag, but if we recognize a pattern like you know what these customers who are calling in all ordered the same product around the same time it gives us an opportunity to look at what's going on and how to prevent more service issues from happening. You might have something where, on a certain date, we made some promises about delivery that unfortunately, we couldn't keep for some reason. That is something that we want to know. If more people are calling in about that. We want to get in front of the people who haven't called in yet and try to improve the customer experience for them. Front of the people who haven't called in yet and try to improve the customer experience for them.

Jeannie Walters: 6:12

Another leading indicator, which is internal within our organization, is around the employee experience. How are employees feeling? What are they telling you? Are they reporting that they are feeling a little less appreciated, that they are hearing more complaints? That sort of anecdotal information will show up before it shows up on your feedback data. So look for those smoke signals that customers and employees are actually showing you through their behavior.

Jeannie Walters: 6:39

Of course we want the right mix of data here. We want to look at quantitative, we want to look at qualitative. Want the right mix of data here. We want to look at quantitative, we want to look at qualitative, we want to look at those lagging indicators, because that gives us information to improve upon. But we also want to look at those leading indicators and we want to really make decisions based on our goals. If we know that we have a service issue that we cannot fix, we might not want to spend a whole lot of time looking into the data around that. We know what's happening there. What we do want to know is okay, if we were proactive and we called a few customers in advance of that service issue and gave them more information, would that actually make them report better feedback? So we have to really put this together almost like a puzzle.

Jeannie Walters: 7:24

Now there's another thing here that we have to remember. We are part of a global world. We all interact with different brands, different suppliers, we have vendors, we have shipment issues, we have tariffs. We have all sorts of things happening. So, while we want to look at our own internal data and what customers and employees are telling us and what the feedback metrics show and what simply our operational metrics tell us as well, we also want to look at things like market trends and industry benchmarks and really just seeing kind of where the world is going. So this could be looking at competitor performance what is happening with some of our larger competitors. Sometimes they feel things or show things before the little guys. Sometimes we want to look at tracking NPS rates against a benchmark. So we want to make sure that we are expanding the scope of where we're looking so that we can really make sure we're not ignoring the rest of the world, because our customers and our viewpoint is limited, no matter what. So we have to make a point of really looking beyond our specific company, our specific industry and even our specific customers and go beyond that and think about what is actually happening here.

Jeannie Walters: 8:46

The big one that I look at are customer behavioral trends. What are people doing? How are they behaving? What's important to them? Now, some of this is hard to see in the moment, and so this also includes a little bit of your risk tolerance. How much do you want to try things just to see what is happening with customer behavior Now? We know now that behavior has changed. We know that during the pandemic, for instance, we all became a lot more interested in hobbies and personal time. That has not gone away, so we know that that happened and that will influence things for the foreseeable future, but we don't always know that in the moment.

Jeannie Walters: 9:30

So what you want to look for are things like rising complaints or themes that maybe are beyond your industry. Are people complaining about time? Are they complaining about how expensive things are? Are they explaining or are they complaining about service? If you're seeing that at the macro level, at the global level, you want to think about how does this apply to our customers? How does this apply to how we will prepare them for what we are doing in the future? How is that a leading indicator for me?

Jeannie Walters: 10:06

We also want to look at things like reviews that customers are sharing publicly. Maybe you want to look at Reddit forums to see what people are saying about their experiences within your industry and beyond your industry as well. And then we also want to look at things like are people spending money differently? Are companies spending money differently? We want to really expand what we're looking at when we're thinking about forecasting and getting ahead of customer expectations. This is where we really can stand out as customer experience leaders. We want to make sure we're not just reporting on what's happened. We're using that information combined with really looking ahead and trying to identify what are the insights that really matter to us, our organization and this is important our definition of success.

Jeannie Walters: 11:01

Because if your customers are super invested in your brand and you think that's going to carry you for a long time, I would suggest that you take a step back and think about why are they loyal today and why will they be loyal tomorrow? And the only way to answer that question is by looking at what will change in their worlds not what will change between our brand and them, but what will change about their real lives. This is where we get into things like the customer life cycle as well. People have different needs at different times. We want to make sure that we are aware of that and respectful of that and can personalize the experience for that as well.

Jeannie Walters: 11:50

And, of course, we are living in a world that is evolving very quickly with technology, artificial intelligence, all those things. How will that impact both the way your company operates and the way your customers behave? One of the things that I've been looking at is you know, there's a shift right now around how customers are reaching out and how they are using AI, and I'm not sure many organizations are really thinking about this. We need to think about how will customers rely on AI? What will happen when they are calling the customer service rep with more information in front of them than maybe that rep has? We have to start preparing for that.

Jeannie Walters: 12:35

So all of this comes down to you know what we have to really look at, both leading and lagging indicators, and we have to expand the scope of where we're looking. That's how we stay ahead of customer expectations. That's how we, as customer experience leaders, can really be partners in the strategic vision and execution of our brands and really have that seat at the table to lead the organization, and that's how we win. That's how customer experience becomes a winning business strategy. You have to make sure that you are treating it as if it is one of the leading ways that you can pull both your organization and your customers ahead.

Jeannie Walters: 13:21

So great, meaty question here I love hearing from you. Don't forget you can leave me whatever question you want at askjeannievip. Thanks for joining me on the Experience Action Podcast and I cannot wait to hear what you ask me next. See you next time. To learn more about our strategic approach to experience, check out free resources at experienceinvestigatorscom, where you can sign up for our newsletter, our Year of CX program and more, and please follow me of CX program and more, and please follow me, Jeannie Walters, on LinkedIn.