Closing the Outer Loop with the Six Sigma Methodology

Customer feedback is critical for helping your customer service agents tackle problems—whether closing the inner loop directly with customers, or closing the outer loop with problems that keep surfacing over and over again.

Organisations are typically quite comfortable tackling inner loop programs. If you have agents that review and action customer feedback, and enough resources to contact unhappy customers, you’re off to a good start. 

However, closing the outer loop means addressing structural issues, and this is where it gets a bit harder.

In the data science department, I’m often asked how an outer loop process should work. My name is Ton Luijten, Customer Success Director + Data Science Lead in APAC—I’m also a Lean Six Sigma Black Belt. Here are my thoughts about how the Six Sigma methodology can be used as a template to help CX leaders close the outer loop and address systemic issues.

What Is Six Sigma? 

Six Sigma is a methodology that uses data analytics and statistics to analyse business processes and services in order to understand how they’re performing and how they can be optimised. The objective is to increase business outcomes (for example, improving customer experiences) by reducing defects and improving services and processes

Since collecting and analysing data is at the core of both Six Sigma and CX programs, it struck me that they seem like a natural fit.

The 5 Steps of the Six Sigma Methodology

Six Sigma follows the DMAIC process made up of the following steps:

  1. Define
  2. Measure
  3. Analyse
  4. Improve
  5. Control

We’ll go through these one by one:

Define

The first step is to prioritise the pain points that you want to tackle as a business. With Six Sigma we typically ask 3 questions:

  • Is there a gap between the current process and the customer expectations around that process?
  • Is the cause of the issue understood?
  • Is the solution known?

You should be able to answer the first question with your voice of customer data, meaning you should be able to work out what issues are causing the most dissatisfaction across your customer base. You can use a simple approach by looking at NPS or satisfaction by drivers or text analytics’ tags, or you can go with a more advanced approach and run driver analyses to understand what the key focus areas should be. This can be done on both unstructured and structured data.

For the second and third point, you might be able to answer “yes” for some simple issues. If that’s the case, then you can just implement that solution. However, we recommend proceeding with caution, as it’s easy to make assumptions.

Once you have found some issues that are not meeting customer expectations to which you don’t know the root cause or solution, there’s a good chance you can turn this into a Six Sigma project.

Measure

Normally this is where you go and measure the problem to establish a baseline. However, with a CX program, you typically already have plenty of data on your issue, so you can simply use your existing data to create that baseline.

Analysis

This is where it gets interesting—the analysis phase involves identifying the root cause, which is critical if you want to find an effective solution. We typically start with brainstorming different ideas and then once we settle on some hypotheses we can test, we can then check if we have the data available to us to check this hypothesis or if we need to collect more data in order to test it.

It’s important to understand the true root cause. It’s quite easy to find correlated themes that do not directly cause the issue. Driver analysis on both structured and unstructured data can help with this process.

Improve

Once we have identified the root cause, it’s time to come up with solutions to address it. This is where customer experience professionals can use their creative side to dream up all kinds of ideas—then the ideas can be evaluated to identify the most promising ones.

Once we’ve settled on the most promising ideas, it’s time to start A/B testing the concepts, which involves trialing the solution(s) with test groups and then comparing the performance against a control group.

In the end, there’s typically a cost benefit analysis to understand which action would have the most impact. This needs to be contrasted against the relevant investment.

Control

Once the best course of action has been identified, it can be implemented. Now it’s time to track the improvement. At InMoment, we have a tool called Watchlist to help you with this. Watchlist does the work for you by tracking customer outcomes after new initiatives have been launched.

Wrapping Up

Often companies struggle with putting a framework in place to tackle the outer loop in an effective manner. Six Sigma is one method that can be utilised to put a structure in place that can be used to root cause structural issues, identify potential solutions and identify the most effective one. Finally, it can track the effectiveness of the final solutions after implementation.

Want to learn more about how you can take action to close the loop or make other improvements to your customer experience? Check out this guide!

About Author

Ton Luijten Customer Success Director, Data Science Lead APAC

Ton has more than 15 years of experience across client and agency side working with brands like Allianz, TAL, New Zealand Post, and New Zealand Police. He specialises in quantitative research and data science.

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