Traditionally, companies gather customer feedback and measure sentiment in a variety of ways, from surveys to satisfaction scores to support calls and focus groups. While these are important to gathering feedback, they are missing one key element: Understanding the 'why' of customer behavior.
In the new digital-first era, we need to evolve from just gathering the 'what' of customer sentiment as an indicator of purchase or retention-- what they think and feel-- but also understand the 'why'. Why does a customer purchase, why do they churn, why are they loyal?
Seems easy, right?
In a traditional world where the product was physical-first, it was a much more straightforward exercise to track sentiment through scores and other measurement channels. Now in the digital-first world where the product is largely digital, there is a new opportunity to understand digital customer behavior and use this intelligence to transform experiences from the place that value is created and exchanged-- from the digital product itself.
Don't just take my word for it. A recent survey of nearly 300 executives globally found that only 16 percent of respondents consider Net Promoter Score (NPS) a reliable indicator of long-term success. NPS was the holy grail of customer sentiment, and now only a small fraction of executives rely on it as a core customer satisfaction metric.
Traditional sentiment measurement tools are only useful for measuring outcomes: Was the customer happy with the experience or not? First, they aren't real-time measurement tools so they can't tell you anything about the journey that took the customer to that point, while they are taking it. After the fact measurement puts companies in a reactive mode and may give them limited ability to actually identify and fix an experience in the moment of impact.
To use an analogy, using customer sentiment to measure the health of your business is like evaluating the quality of a vacation by checking whether you got back home or not. What you miss are all the sights and memories, the high points and the flat tires, along the way that truly create the experience.
With the explosion of digital-first businesses there needs to be a fundamental shift in understanding digital customer behavior and using this intelligence to transform experiences in the moment. It's time to get in that car and ride along with your customers.
One of the greatest opportunities that comes with transforming to a digital-first company is leveraging the power of data and digital product analytics to deeply understand and adapt experiences in the moment to both transform customer value and maximize business outcomes.
To find the customer 'why,' look inside the product
Product analytics enables any team responsible for creating and delivering experiences-- product teams, marketers and engineers to name a few-- to have a unified view into every customer action taken through a digital product experience and use these insights to adapt experiences. And the best part? It takes data previously locked behind BI tools and an army of data scientists and puts it in the hands of the teams that can do something with it.
I'm not talking about clicks, visits or sentiment-- I am talking about understanding why a customer is engaged and loyal over time, and how these actions correlate to better experiences and outcomes. And getting this data in real-time to adapt experiences in the moment.
If you can harness the 'why' and link that to retention and lifetime value, that's when the magic of great experiences happens. In fact, 86 percent of executives in the survey I mentioned above believe customer engagement and retention have never been more important in a digital-first landscape.
Take Peloton for example. The fitness company, whose revenue grew in 2020 to $1.8 billion, found tremendous success by paying close attention to its customers' behaviors, both within the product and outside it. David Packles, Director of Product at Peloton Initiative, shared how the company's multichannel customer experience efforts discovered that online member groups were organizing their own training clubs. They saw an opportunity to build on that organic movement with new, community-minded product offerings. They ran a series of experiments and carefully monitored impact, eventually finding a winner: the addition of a hashtag feature. Today, more than 50 percent of Peloton members use hashtags -- a rate of adoption most digital businesses would kill for.
We're moving through a once-in-a-generation shift. Digital is now firmly planted at the center of every interaction between a business and its customers. There are now two types of companies: digital disruptors and those being digitally disrupted. The digital disrupters understand that traditional approaches to understanding customer sentiment are no longer enough in this new era. Welcome to the modern era of digital product analytics.