Want more Insights from SAS? Subscribe to our Insights newsletter. Or check back often to get more insights on the topics you care about, including analytics, big data, data management, marketing, and risk & fraud.
Customer engagement and moments of truth
By Denis Pombriant, Managing Principal at Beagle Research Group
The best way to understand customers today, and thus enable your business to engage and deliver relevant products and services, is by first identifying the moments of truth you share with them. A moment of truth is a promise that can relate to the brand, an individual product, or doing business with your company. It's a time when the vendor has to “show up” or “come through” for the customer or risk disappointment.
It's nothing more (or less) than what a customer expects during an encounter. Importantly, customers experience moments of truth; thus customer experience is not some randomly created event but a natural outgrowth of a necessary interaction of some kind.
A moment of truth is a time when the vendor has to “show up” or “come through” for the customer or risk disappointment.
Tacit vs. explicit
Moments of truth can relate equally to promises that are either expressed (what you say you do) or implied (what the customer believes you should do), and that’s where things get tricky.
For example, an explicit promise is to provide a low – or even the lowest – price. A tacit promise is that your low-cost product will also be easy to use and reliable – two things you must offer if your prices prevent you from offering superior service and support. Interestingly that’s also where analytics can help.
Analytics plays two crucial roles in moments of truth. The first one is by simply identifying those moments, and the second is monitoring how well you’re meeting customer expectations.
Data, analytics and the HIPPO
Historically, companies have relied on intuition and senior-level judgment to determine how to engage with customers. The term HIPPO (the highest paid person’s opinion) applies here. For a long time the opinions and assumptions of HIPPOs were about all companies had; and, of course, they were not always right.
But capturing lots of customer data for analyses that would offer valuable insights was always hampered by the difficulty inherent in collection. Big data solutions have solved the problem of collection. And vendors like SAS have done a great job of providing the right tools, which many businesses have successfully used to solve a variety of problems. The issue for businesses today lies with the model, framework or paradigm a business employs when using analytic tools.
Modeling moments of truth
In my book Solve for the Customer, I advocate modeling moments of truth between you and your customers rather than trying to define customer experiences based solely on intuition. Moments of truth can include making a return, customer onboarding, or ensuring that a CFO customer gets information relevant to that role. Modeling is the critical difference because a moment of truth is proactive and must be tied to something a customer actually cares about. Customers experience them, and they therefore generate memories of experiences. On the contrary, (and this is subtle) engineering an experience – without first modeling the moment of truth – assumes knowledge that may be wide of the mark per our discussion of HIPPOs.
Each business has its own unique moments of truth. Two car companies, one a luxury brand and the other focused on economy, will necessarily have different moments of truth. The luxury brand will likely put more effort and budget into staffing and training to ensure a superior and personal interaction.
The economy brand will want to create a model where expensive people are not needed, leveraging peer-to-peer communities or automation to achieve results. Also, it might tout reliability and low cost of ownership rather than luxury.
Despite their differences, both companies will certainly place a premium on treating the customer well, but the economy brand might also work extra hard to optimize its processes because the emphasis is on keeping costs down. So each vendor will see different moments of truth and use different approaches throughout the life cycle.
Identifying the moments that matter to you
For each brand, customer data will cluster around different points, and each company’s task is to determine if each cluster represents a moment of truth that the company wishes to address (not all are).
Your moments of truth are as unique as your objectives, people, products and services because they ultimately drive the generation of your customer-facing business processes.
Using a moments-of-truth approach, instead of one aimed building elaborate customer experiences based on hunches, is actually an easier path to follow. Rather than considering a universe of possible needs and responses, you can determine those that are critical to both the customer and your business – and that’s a smaller, manageable number.
Thresholds and measures
Once a vendor has identified through analytics the moments of truth that are essential to its business, it’s important to develop specific metrics for them. For example, the speed of customer onboarding is proportional to customer satisfaction and longevity. Conversely, if onboarding takes a customer longer than a certain amount of time, that customer is at risk.
Businesses will have different thresholds based on product complexity, training requirements, integration, costs and other factors. But regardless of the choices, the principle is the same even though each business might develop slightly different metrics.
In the past, many businesses had done a great job of developing metrics to measure business processes, and some were likely spot on while others weren’t even close. Taking a moments-of-truth approach can enable you to be more accurate because it helps to ensure you’re measuring the right things for your business – things customers care about.
And if your moments of truth begin to change, that’s an early warning that something is amiss. Maybe your processes need to evolve, or maybe your customers are getting restless. Before, you couldn’t know for sure. But now you have enough information and a reliable process to begin looking for answers.
Read this next
- Harvard Business Review report: Lessons from the Leading Edge of Customer Experience Management
- Book: Solve for the Customer