Editorial
The Gist
- Customer power. Modern customers have access to endless information and choices, challenging businesses.
- Outdated metrics. Traditional measures like CSAT and NPS are no longer sufficient alone.
- Delight matters. Moving from satisfaction to delight drives loyalty and repeat business.
The customer is more powerful than ever. Armed with endless access to information, widening product and service choice, and empowered by digital devices and social media that allow them to spread influence instantaneously, customers are giving today’s businesses a run for their money. In this environment, achieving customer delight has become a crucial goal for companies aiming to stand out and build lasting loyalty.
Such customer power is especially apparent in technology. As more software company models have shifted from perpetual licensing in favor of recurring, cloud-based software-as-a-service subscriptions, the business of customer retention is now a fiercely competitive and complex endeavor, as users who are unmoved by one offering can in most cases cancel and move to a competitor seamlessly.
Still, even as this new landscape upends traditional retention strategy, many in the software and technology business continue to depend on leaky, outdated models for measuring customer sentiment, mostly by relying solely on the Customer Satisfaction Score (CSAT).
Measured through customer feedback surveys as a percentage, CSAT’s simplicity has driven its pervasiveness — simply send a customer a brief survey after purchasing a product or service and collect instant feedback.
The same can be said of other reactive measures of customer sentiment, such as the Net Promoter Score (NPS), which measures customers’ willingness to recommend products or services to others, and the Customer Effort Score (CES), which measures the ease of the customer experience.
What made these measures so widely adopted in the past — simple administration, moment-in-time feedback, instant product or service validation — are, ironically, the same elements that make them inadequate today, at least on their own.
For software businesses to truly thrive in the current customer environment, one-dimensional and reactive measures like these simply won’t cut it. What’s needed is something more holistic, scientific and proactive — a measure that represents not only customers’ satisfaction or ease of experience at a moment in time but can assess the more powerful emotion that translates into sticky, repeat business: customer delight.
Related Article: 10 Guaranteed Ways to Improve Customer Satisfaction
Enter the Customer Delight Index (CDI)
Broadening efforts from customer satisfaction to delight may seem like a matter of semantics. But the meaning behind the two words is important.
A customer who is “satisfied” is pleased with a product or service, but in an unmemorable sense. A customer who is “delighted,” on the other hand, is not just pleased but overwhelmed with positive, memorable emotions.
It’s likely we’ve all experienced this key difference. Some products or services are satisfactory; others are truly delightful, to the point where it’s difficult to temper enthusiasm. Delight is something you will tell your friends and family about. Satisfaction is often not.
The customer delight index aims to capture this enthusiasm by turning those traditional, reactive metrics — CSAT, NPS and CES, among others — into component parts of a greater whole. The result is a metric that more accurately captures customer sentiment, providing businesses with a more scientific and accurate basis for future decision-making and business growth.
A customer delight index can take several forms, but in my experience as an executive implementing the methodology, here are the components I use:
Customer Satisfaction Score (CSAT)
Simply put, this score — traditionally the sole indicator many businesses have used to measure sentiment — is collected by asking customers a simple survey question after a product or service interaction, with respondents using a 1-5 scale ranging from very dissatisfied to very satisfied.
Lovability
Creating a business that customers genuinely love is a straightforward concept. But it’s easier said than done. Consider this in your own experience: How many products or services do you absolutely love and do not want to live without? How many do you tolerate? Hate? Or simply endure due to lack of available alternatives?
Many may overlook “Lovability" as a legitimate business metric, but having something customers genuinely love ultimately results in lower churn and higher positive testimonials and advocacy. Asking questions around customers’ “emotional benefits” from using a product helps companies with this input. For example, asking if a product or service gives a customer confidence, joy, peace of mind or pride are some ways to arrive at whether the product is truly loved, or in fact just tolerated.
Related Article: Are Brand Communities Your Shortcut to Customer Love?
Net Promoter Score (NPS)
This metric measures the loyalty of customers to a company. Scores are related to recommendation levels taken from a company’s CES and Lovability surveys, with scores reported with a range from -100 to +100. Higher scores, of course, are more desirable.
Related Article: Net Promoter Score: Top 3 Impactful Trends
Customer Lifetime Value (CLV)
To determine CLV, calculate the average purchase value multiplied by the average number of purchases minus the cost of acquisition.
Customer Effort Score (CES)
This metric measures how much effort a customer had to exert to get an issue resolved, a request fulfilled, a product purchased or returned, or a question answered. At my company, we focus on the initial experience after the purchase decision has been taken; customers rate us accordingly.
Combining to Form a Customer Delight Index
To derive the CDI percentage, each of the above components are given equal weight, or in our case 20%. Multiply each component score by their weighting, then add together. To ensure companies are holding themselves accountable for the entire experience, multiply that number by the retention rate to get a Customer Delight Index Score, expressed as a percentage. Anything 80% or above is a healthy score. Consider the example formulation below:
Setting Delightful Standards
As more businesses aim to transition their customers from satisfaction to delight, the customer delight index can be a powerful North Star to measure and track progress and success.
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CDI takes once overly relied upon, reactive measures of customer sentiment and combines them into a new, more meaningful — and ultimately accurate — reflection of how customers feel about a business.
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