In the battle for customer hearts and minds, reliable metrics are critical. The Value Enhancement Score (VES) is a rising star, touted as a more nuanced predictor of customer loyalty than traditional stalwarts like Net Promoter Score (NPS) and Customer Satisfaction (CSAT).
VES, developed by Gartner, measures how customer interactions impact confidence in a product or service. Gartner claims that it can capture the emotional shift towards commitment, predicting loyalty better than metrics focused on mere satisfaction or likelihood to recommend. Niraj Ranjan, CEO of Hiver says, “The essence of VES lies in its ability to shift the focus from mere satisfaction or ease of interaction to a more profound understanding of value enhancement from the customer’s perspective. It encourages a dialogue around the tangible improvements a customer experiences, be it in terms of product utility, confidence in the product, or the likelihood of further engagement.”
VES focuses on two key areas of a customer’s perception of a product or service. Specifically, it evaluates how the service interaction affects;
- the customer’s ability to use the product or service and
- the customer’s confidence in purchasing it.
According to Gartner, increasing a customer’s positive feelings toward those two factors increases the value they derive from the purchased product or service, which makes them much more likely to:
- renew their relationship with the company
- advocate on behalf of the company
- increase spending on the company’s products or services
VES is calculated through a two-question survey where the customer has to rate their agreement with the following statements, on a scale of 1 (Strongly Disagree) to 7 (strongly agree):
- After the interaction, I am able to achieve more with the product or service.
- After the interaction, my confidence in my decision to purchase the product or service is higher.
The higher the combined score, the more value that the customer places on the product or service.
It’s not a silver bullet
VES is a promising metric, potentially providing deeper insights into the value customers derive from interactions. However, it’s not a silver bullet. It works best in conjunction with established metrics like NPS and CSAT, offering a comprehensive view of customer sentiment and loyalty drivers. Ivana Sekanic, Customer Experience Solutions Strategy, Qualtrics, advises, “Value Enhancement Score (VES) has the potential to be effective, as do traditional metrics like NPS and CSAT. But none of them are the single magic solution. The most impactful CX programs are shifting toward CX scorecards consisting of select metrics tailored to their industry or their brand promise”.
Ranjan elaborates on this, “VES doesn’t stand alone. It’s part of a broader conversation. The insights from CSAT, NPS, and CES continue to be relevant, offering a pulse on customer sentiments which is crucial. They provide the context in which the insights from VES can be understood and acted upon. So perhaps, in this melding of metrics, you’ll be able to find a path to more meaningful customer engagement”.
Building trusted relationships through consistent value delivery, transparency, and responsiveness is the foundation upon which loyalty thrives. There’s no single, perfect metric for measuring customer trust in a brand, as trust is a complex and multifaceted concept. While VES illuminates value perception it does not measure trust. Likewise, high NPS and CSAT scores are all indicators of customer loyalty, stemming from positive brand trust, but they do not directly evaluate, on their own, what builds trust.
Tying CX metrics to business outcomes
Tying customer experience (CX) metrics to business outcomes is crucial for demonstrating the ROI of CX initiatives and securing buy-in across the organisation. Sekanic comments, “In modern CX programs, the most critical element is being able to tie them to business outcomes the C-suite and the rest of the business can understand. When organisations successfully position their CX efforts in this way, it allows the business to make confident decisions about where to invest and what to prioritise to drive growth, increase market share, and improve customer loyalty”.
“VES, CSAT, and NPS are not enough on their own to achieve this – which is why organisations are adopting a scorecard approach aligned to the specific focus of their business. And we tend to see these organisations becoming or maintaining their positions as leaders in their industry”.
Sekanic adds, “Brands also need to consider the changing ways customers engage with them and provide feedback. The recent 2024 Qualtrics Consumer Trends report shows the volume of customers giving feedback directly to brands is declining. However, these customers are sharing their experiences in less direct ways across a variety of channels and times, such as in call centre conversations, in online reviews, online, and in-person”.
“To truly measure the effectiveness of CX programs and deliver meaningful improvements for their customers, organisations need to tap into feedback in the places where customers are giving it and understand the emotion, intent, and effort behind it”.
One piece of a complex puzzle
“When it comes to predicting customer loyalty, the most impactful measure brands can take is to look at it through the lens of brand promise by answering and responding to the question: is our brand delivering to customers in the ways we promise? For example, if a brand fails to regularly live up to a promise of fast reliable service, that would be a strong indicator that its customer loyalty will not be high”, states Sekanic.
VES has the potential to be a powerful tool for your organisation and how you measure the success of your CX strategy, but it’s just one piece of the puzzle. Use it wisely, alongside other metrics to build genuine, lasting loyalty.