Value Enhancement Score: The New Customer Service Metric You Need to Track Now

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Move over CSAT and NPS. There’s a new CX metric that’s outshining these two metrics that have long served as the industry’s North Star. 

We’ve all heard of customer satisfaction (CSAT) and Net Promoter Score (NPS) as critical CX metrics to track. But customer service leaders are shifting to a new metric that is more accurate when it comes to predicting customer loyalty: Value Enhancement Score (VES). 

VES, a method introduced by Gartner, focuses on the value that customers place on a product or service. Specifically, it measures the customer’s ability to use the product or service, as well as the customer’s confidence in the decision to purchase that particular item.

Most importantly, VES is the leading predictor of customer loyalty across all of its dimensions—customer retention, increased wallet share, and positive word-of-mouth—compared to traditional metrics like NPS and CSAT. 

While NPS and CSAT focus on predicting attitudinal loyalty outcomes (i.e. what customers say they will do), they fail to focus on predicting behavioral loyalty outcomes (i.e. what customers actually did). 

And it is precisely this behavioral gap that led to Gartner’s creation of value enhancement and the all-new VES metric that outperforms traditional metrics (by leaps and bounds, no less). 

Unfortunately, NPS and CSAT are hyper-focused on evaluating how happy customers are with the quality of their service experience, even though it turns out good customer service on its own isn’t enough to ensure customer loyalty. Nevertheless, when it comes to gaining customer loyalty, businesses continue to put all of their eggs and energy into their customer service basket, hoping that they’ll earn a customer for life by offering a frictionless, low-effort customer service experience.  

The harsh reality? Research on customer service’s contribution to customer loyalty shows that, at best, a great customer service experience can mitigate disloyalty. 

A customer whose issue is resolved in a low-effort manner has a 61% probability of choosing to stay with an organization.

Gartner

In other words, while a low-effort resolution led to a 61% probability that customers will remain loyal, nearly 40% of customers will still leave even if they receive that high-quality service experience. 

So what can brands do to avoid leaving that 40% on the table?

Businesses still need to provide a high-quality, low-effort service experience, which is proven to prevent customers from leaving. But in order to increase customer loyalty (and capture a larger share of that untapped 40%), brands need to take it one step further and help customers perceive more value in the products and services provided—not just solve customers’ immediate problems. 

And that’s where value enhancement enters the picture. Value enhancement is your key to capturing the 40% that most brands leave on the table. 

Want to snatch it up before it’s too late? Continue reading as we break down everything you ever wanted to know about value enhancement and VES. 

What is a Value Enhancement Score (VES)?

Ultimately, VES is the value customers place on a product or service. Customer service leaders can use this metric to evaluate and improve drivers of loyalty and customer experience.

VES focuses on two key areas of a customer’s perception of a product or service. Specifically, it evaluates how the service interaction impacts the customer’s:

  1. Ability to use the product or service 
  2. Confidence in the decision to purchase the product or service

How do you calculate VES?

VES is calculated through a two-question, post-transaction survey in which the customer has to rate their agreement with the following statements on a scale of 1 through 7:

  1. After the customer service interaction, I am able to achieve more with the product. Answers range from strongly disagree (1) to strongly agree (7).
  2. After the customer service interaction, my confidence in my decision to purchase the product is higher. Answers range from a lot lower (1) to a lot higher (7).

The higher the combined score, the more value that the customer places on your product or service… And most importantly, the more customer loyalty you’ve earned! 

How did Gartner create VES? 

Gartner created VES by conducting a survey of over 6,000 global customers with a recent service interaction across a wide array of industries and business models. As part of the survey, Gartner gathered data from over 2,000 customers who were given the option to end or continue their relationship with the organization within 60 days of the service interaction.

Garther’s analysis demonstrates that organizations can in fact take certain actions to improve loyalty outcomes, but it’s actually less about the quality of the service interaction itself and more about the impact that service interaction has on customers’ perceptions of themselves and the product.

Below are some blockbuster stats from Gartner’s study. Gartner found that if customers receive value enhancement during a service interaction, they have:

  • 82% probability of staying with that organization when presented the opportunity to switch 
  • 86% probability of increasing their wallet share when presented with the opportunity 
  • 97% probability of spreading positive word of mouth

If these stats don’t shock you and make a solid case for the employment of value enhancement, we don’t know what will convince you! 

What’s a good VES score?

In Gartner’s analysis, the average VES was 3.96, indicating most service interactions neither eroded nor increased the value customers derived from the product. But retention probability sees a huge uptick when the VES moves from a 4 to a 5: retention probability rises from 67% to 77%. If brands can get customers to a 6, retention likelihood increases another 4% to 81%. (Beyond that, returns level off.)

Therefore, in order to successfully enhance value, organizations don’t need to secure the absolute highest score possible. Rather, according to Gartner, “getting into the more than 5 range is good enough to deliver a significant lift to retention.” 

Why does VES outperform traditional metrics?

Compared to CSAT and NPS, VES is the best predictor across all dimensions of customer loyalty: customer retention, increased wallet share, and positive word of mouth.

While NPS and CSAT are proxies for loyalty, they focus on customer perceptions — what customers are feeling based on the interaction. NPS and CSAT focus on attitudinal loyalty outcomes (i.e. what customers say they will do) rather than behavioral loyalty outcomes (i.e. what customers actually did). 

Meanwhile, VES focuses on behavioral loyalty outcomes by measuring the customer’s ability to use the product or service and the confidence in the decision to purchase. This focus on understanding value in the eyes of consumers allows VES to go beyond predicting a customer’s likelihood of repurchase and referral, and accurately predict a customer’s likelihood of retention, share of wallet, and advocacy. 

How do you use VES?

Now that you know this all-star metric exists, you’re probably asking yourself how you can take action and use it in your organization. 

Customer service leaders can leverage this metric to predict future customer behaviors and customize interactions accordingly. Tracking individual customers’ VES can be used to predict the probability of loyalty in the future. Furthermore, VES can be used to identify which interactions are best suited for increasing loyalty. 

The bottom line? Shifting from CSAT and NPS to the VES empowers executive leaders to demonstrate their ability to drive revenue and provide loyalty-building opportunities. 

How can you increase value enhancement (and earn a higher VES)?

The good news is that there’s a significant opportunity to increase your share when it comes to value enhancement. Case in point: Only 15% of customers report receiving value enhancement today, according to Gartner’s analysis. 

Given how uncommon value enhancement is, businesses should systematize value enhancement and create a deliberate strategy surrounding it. So how can your organization drive value enhancement?

Here are five proven ways to generate value enhancement during customer service interactions, according to Gartner: 

  1. Educate customers on usage: Teach consumers how to best use your products or services
  2. Counsel customers on new uses: Introduce the consumer to unused or newly launched features
  3. Validate customer purchase decisions: Reassure consumers that they made the correct purchase decision
  4. Anticipate customer needs: Predict which features will be valuable for consumers in the future
  5. Empower customers to achieve specific goals: Outline product features a consumer should use based on his, her, or their goals

Focusing on driving value enhancement can result in big increases to your brand’s bottom line. 

In fact, Simplr recently found a strong correlation between a customer’s excitement and confidence (A.K.A. value enhancement) and their likelihood of repurchasing. When consumers felt excited and confident during their customer service experience, they were 65% more likely to repurchase. (See more stats from our State of Conversational Commerce report.)

When designing for value enhancement, it’s important for CX leaders to keep in mind that certain contact types are a better fit for value enhancement over others. Inquiry contacts, where customers are asking for information, present a good opportunity to introduce value enhancement vs. product issue contacts, where customers expect a direct and immediate solution to their problem. 

When possible, find ways to automate value enhancement. Look for patterns throughout your customer base in order to identify particular customer groups that are in need of (or more open to) value enhancement, such as new customers who might be unfamiliar with your product or service. 

Also, be sure to analyze individual customer data to flag individual customers who could benefit from value enhancement. Businesses can use commonalities among former customers to predict which current customers are at risk of attrition and tag them in their CRM. That way, when these at-risk customers contact customer service, your agents can handle them with extra care and an eye towards value enhancement. 

Ready to drive value enhancement for your business?

Rather than focusing on making marginal improvements to customer service experience quality, it’s important for brands to pivot and ask themselves the following question: How can our customer service experience help customers derive more value from our product or service? 

When it comes to helping customers understand the value you offer, Simplr is on your side. We automate value enhancement by serving up prompts to our distributed, always-on network of human specialists who work within our AI-powered platform.

That’s right—we’ve done the hard work of baking value enhancement directly into our platform so that your brand doesn’t even have to think about it!

Simplr Specialists can see customers’ previous order histories and quickly validate purchase decisions in a natural way that establishes connection. (E.g. A Simplr Specialist might say, “I see you bought X product in blue. Great choice, I love that color!”) 

Furthermore, unlike a programmed chatbot, our human agents can forge meaningful relationships with customers through a conversational commerce approach in order to better understand their goals… And then proactively serve customers content that can help them achieve those specific goals! 

For example, through the course of a conversation, a Simplr Specialist might realize that a customer isn’t using a product correctly. Our Specialist can send the customer a help article that includes step-by-step instructions, plus proactively send a link to another help article that shares instructions for a similar product feature the customer will likely have trouble using.

Contact Simplr today to learn more about how we can drive value during your everyday customer service interactions!