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The Quantified Value of Customer Experience

One of the most significant developments in the business world in recent years has been the increased ability of organizations to quantify and analyze an ever-increasing number of variables affecting their business. The ability to gather, collate, and manipulate new types of data has opened up new realms of possibilities and given management teams an unprecedented level of insight into the key factors in their operations.

But the big data revolution has not been equally distributed. While some information has been easy to quantify, other types have stubbornly resisted quantification, making it difficult for managers to perform rigorous, objective analyses on the data. The value of customer experience, for example, is one area that airlines have found it difficult to analyze rigorously. While we all know that customer experience has an impact on an airline's bottom line, how, exactly, can an organization put an economic value on a satisfied customer?

Fortunately, new tools and processes have been developed to allow management teams to more accurately define the importance of customer satisfaction to their bottom line. As a result, airlines around the world are poised to experience a revolution in the way they quantify and analyze customer experience.

Impact on the Bottom Line

One of the problems with quantifying customer experience has been the various ways it can impact a company’s bottom line. In addition to influencing the likelihood that a customer will continue to spend money with an airline, customer satisfaction also has ancillary effects such as word of mouth. Satisfied customers are also less costly for an airline to serve.

But it’s an important metric to track, since customer experience has a major impact on future spending and future revenues. According to a study by Peter Kriss, a customer experience research scientist with Medallia, an enterprise feedback management services company, customers reporting the highest level of satisfaction can generate 2.4 times as much revenue for a company as customers reporting the lowest level of satisfaction.

All About the Data

In order to effectively quantify the customer experience, airlines must first build a history of customer feedback, if they haven’t already, so that they can know which results represent important deviations from the baseline. In addition, large data sets are required in order to generate accurate insights. “The smaller the result you’re trying to measure, the bigger the data set you need,” Kriss says.

To capture this data, however, many airlines will need to change the way they go about gathering feedback and conveying the results to its employees. Traditionally, airlines have conducted large surveys of a broad swath of its customer base, which would then be analyzed by senior management before the results were distributed to frontline staff members. But that data can be weeks or months old before it gets into the hands of employees, and oftentimes it might cover areas of the customer experience an employee has no direct control over, making it difficult to act on the information.

To make customer feedback more actionable, many airlines are now soliciting feedback from individual customers as close to the point of transaction as possible, and communicating those results directly to the employees who dealt with them. As a result, employees receive feedback in close to real time, from customers they had direct experience with.

In some cases, airlines may be worried that asking customers to provide free-form comments on a survey would make the results difficult to quantify. But advanced text analytics are increasingly able to analyze natural speech feedback, making it possible to generate a statistical analysis of thousands of comments.

Finally, it is important in any effort to quantify customer feedback that you work closely with the operations team. Once the data is quantified, it must be communicated to operations in order to make sure that their insights can be effectively translated into actions.

Airlines that are willing to adopt the same rigorous analysis of customer experience data that they use on other business metrics will find that analyzing this type of feedback can be much more powerful than most people realize. This is particularly true for large companies like airlines, which require constant feedback analysis in order to continue to iterate, innovate, and evolve.


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