Benchmarking CX in retail

Benchmarking CX Performance in Retail, Franchise & Restaurant Groups

NPS benchmark In response to the frequently asked question about the best piece of advice I have ever received, I typically respond with this hard-hitting comment:
“Don’t benchmark yourself off the bottom… benchmark yourself off the top!” (Thanks JOS!)
This advice genuinely changed the way I view everything that I do. But taken too literally it can make for a very unhappy life, or in retail and restaurant groups, very unhappy store managers. That is why it is a slightly modified version of this approach that I would like to pass onto anyone looking to start benchmarking customer experience performance in a retail chain, franchise or restaurant group.

Why is Benchmarking CX Performance Important?

Benchmarking store performance in terms of customer experience is critically important in multi-location businesses. For the purposes of this article we are going to focus on Net Promoter Score (NPS) benchmarking, but the same principles apply no matter what CX metric you are using. On one hand benchmarking unit performance helps you protect market share and on the other it helps you grow market share and create loyal customers.  

How NPS benchmarking protects market share

One poorly performing location can do untold damage to your customer perception, impacting the entire brand experience.  It may be a one-off catastrophic event that is amplified by social media (e.g. the infamous taco licking scandal below). Or it might be more akin to death by a thousand cuts if the restaurant is gradually eroding customer satisfaction experience by experience. Either way, instead of that location building the reputation of the brand and spreading its sphere of influence, the store is stunting the chain’s growth on either a local or national level.
Identify training needs early to avoid customer experience disasters
A photo of an unnamed employee licking taco shells at a Taco Bell restaurant that was posted to Facebook in 2013. Source: Facebook
  NPS benchmarking will help you identify those stores that are performing badly early, which means you can take action. Without it you are waiting for financial results or worse, social media, to tell you there is a customer journey problem in a particular location.

How CX benchmarking helps grow market share

Identifying the top performing locations from a CX point of view and matching them with a list of the best financial performers is a very useful exercise. It is normal to see a strong correlation between the two. Modelling processes and best CX practices on the stores that rank highly on both lists will help you improve the entire chain’s performance in terms of both customer advocacy and financial performance. Just like a sales manager will ask her most successful salespeople to share their tactics, operations managers should be sharing how top performing stores are wowing customers with a memorable shopping experience. There is no quicker way to build market share than to have people telling their friends and family that they should pay a visit. While it’s always important, benchmarking CX performance is absolutely critical in the early stages of expansion when the brand is still nascent.  

Choosing an NPS Benchmark for your Chain

By default we set the location benchmark in ServiceDock to the average NPS of the top 25% of units. That can be changed but our rationale for choosing 25% is as follows:
  1. Benchmarking against the average performance breeds mediocrity. Using the average means underperformers are not put under any significant pressure, while there is little incentive for average performers to improve customer interactions. At the same time, top performers may get lax because they are so far ahead of the curve. You can see where that is going to end up!
  2. Benchmarking against the top location or even the top 5% can do more damage than good in the long run. Winning is good for the morale of any team, so you want as many winning managers as possible. At the same time, you want to design a system that pulls standards upwards. Creating a situation where there’s only one winner or no expectation of being able to become a winner, can reduce the enthusiasm for achieving great customer experience. That can lead to apathy, which is the true enemy of customer experience management. On top of that, external forces that influence CX results, such as the demographics of the customer base, are out of the control of the manager/franchisee. This means two equally excellent managers can have slightly different results. Frustration may kick in if such a quality operator is not perceived to be better than the benchmark.
  3. Using the average of the top quartile of locations creates a mini-league among your leading operators, while giving the average operator an achievable target. By choosing this benchmark you have created two separate competitions. The first is to be the best of the best within the top quartile. The second is to break into that elite group and leave the ordinary 75% behind you. Backed up with bonus structures and rewards, a system like this will be engaging and motivational for far more players than a winner takes all approach. That should naturally lead to an upswing in NPS or whatever other metrics you’re using to track CX.
In a future blog post we will cover what the features of a strong location benchmarking system look like.  

Maximising your CX

NPS benchmarking or benchmarking on any other metric is not rocket science. But to maximise the benefit of your benchmarking programme you must set up correctly at the outset and then actively manage customer feedback on an ongoing basis. To do it well you will need some sort of software to capture customer feedback, compile the results and then communicate them with your managers and/or franchisees. There are lots of options out there, but unlike ServiceDock, few are built from the ground up for multi-location businesses and none use messaging apps to capture customer feedback. If we can be of any assistance to you, please get in touch.
Related Posts
3 Tactics CEOs Use to Improve Customer Experience Culture

Practical advice as to how CEOs & other leaders can drive CX Read more

3 Ways Store Layout Decisions Impact on Customer Experience

Do you consider CX when making store layout decisions? Are you focusing Read more

4 Customer Expectation Management Strategies to Improve CX

Want to improve CX? Follow these 4 strategies to increase the chance Read more

5 Key Success Factors in a Multi-Unit CX Program

Improving customer experience in retail chains is challenging. 5 key factors can Read more

Download our Brochure to See How You can Maximise the Potential of Your Stores

Webinar : Book your spot

August 6th @ 2 PM (GMT+1)

By continuing to use this site you consent to the use of cookies in accordance with our cookie policy.

Want to learn how to increase footfall?


Please add your email below to receive the latest tips & insights on how to attract & retain customers.

Benchmarking CX Performance in Retail, Franchise & Restaurant Groups

by Oisin Ryan time to read: 4 min