How Do You Measure Customer Experience?

Customer Experience

Last  Wednesday, I hosted the 102nd edition of  Twitter’s first debate hour: #Bizforum. The topic: Is “Customer Experience” the same as Marketing? I’ve also lately been debating the impact of a vocal CEO on customer experience (think Abercrombie & Fitch). In each conversation, I’ve heard a common refrain…

- Who really owns customer experience? And more importantly, should it be its own department?
- Independently of who owns customer experience, how will its success be measured, and what are its outputs?

So, who does own customer experience?

Well, the debates ranged from expanding the marketing mandate to include ownership of the customer experience marketing, to creating a newly minted CX department. But the notion that seems to win out most frequently is that customer experience is a whole organization mandate.

In this light, the components of customer experience: the milestones and metrics would need to be divvied up and assigned to each individual (existing) department. For example: If a customer experience output were product satisfaction, then the engineering and product development teams would be assigned this particular mandate and performance would be measured against the product satisfaction metric. Which begs the questions…

What do you measure? What are the outputs? And, how does it all benefit the business?

In recent times, the economy has been tough. Businesses, big and small, have struggled to stay afloat and manage a profitable balance sheet through the rough waters. These struggles have put a spotlight on:

- Content
- Context
- Social
- CX

It used to be that in the first sign of economic instability, the marketing department (and all its appendages) was cut first. Sadly, it’s still the case in many businesses. But it also forces the C-suite who, previously had been lauding the exploits of marketing, to demonstrate the real value that the practice brings to the business.

Marketing, PR and Communications experts are now on display and pushed ever more to demonstrate impact to the businesses bottom line from these new channels and tools. Each of these new approaches to connect with consumers have far too often been touted as being free; but we now know of course, that nothing is free. And businesses – more ardently today – are leery of expenses that do not deliver ROI… or rather that don’t appear to deliver ROI.

To generate true connections with consumers, businesses must invest in time, restructuring, big data, analysis and so on. The market has changed and is demanding a change in the way businesses operate, communicate with them and sell to them. The value of this connection with consumers lies in the notion that retaining a consumer is far less costly then acquiring a new one. Additional value comes from the understanding that the advocacy and influence of a satisfied, retained consumer can convert new consumers much more effectively than can traditional marketing approaches.

From a customer experience viewpoint, we need to define, qualify and measure those connections. This is the place where we have to outline, define, script and design all the touch points where brands and consumers meet. We have to parse those touch points and assign responsibility for them across the organization; we need to be clear on what the touch point looks like, and what we want the experience to be. And, most importantly, we need to understand how to draw a line between a specific connection and the brass ring for business: ROI…

A few CX thought starters:

Product experience

–Does the product respond to a need and/or a desire? Does it work? Does it go beyond a simple “need satisfaction” and connect with the consumer emotionally? Will the consumer not only refer, but also evangelize? What is the value of this consumer – not just for today’s purchase but also over time?

Social experience

–Is the brand recognized in the market place; not just among existing consumers, but also more broadly? What is the brand perception? Does the perception yield value (share prices, referrals, word-of-mouth)? Who is talking about the brand; what are they saying; and how does the brand get impacted by association to those who are speaking about it?

Transaction experience

- Where can the brand be purchased? Distributors? Direct? What is the transaction experience? Does it reflect the brand values? How does the transaction experience get related into the social space? Is there an opportunity to enhance the brand experience and brand use? What is the value of the transaction, beyond the specific purchase?

There are so many more elements to customer experience that it may warrant a broader discussion, and also demand a whole organization shift. What do you think?

Sensei Debates: How do you measure Customer Experience? Can it be measured?  Is it possible to outline, define, script and design the customer experience? Can the outputs of Customer Experience be universally defined?  Join the discussion in the comments below. 

Image Credit: TibetandTaylor via Creative Commons

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8 comments
RebeccaCortright
RebeccaCortright

Great article  Judi, there are a lot of ways of measuring customer experience, some company are missing a lot of information that provides a complete picture of what customer experience is. True connections with consumers is a must to maintain customer satisfaction, track and assign real value to improvements, yes it's a lot of work but it would truly make your company grow.

kkoelliker
kkoelliker

Thanks for the great post Judi. I agree with @Jack Pierce that the contact center is a key aspect of the customer experience. Oftentimes, once you purchase a product, your only interaction with the company going forward is when something goes wrong. The experience your customers get not only when they call, but email, chat, or tweet will be critical to their perception of the experience of your whole brand. But also as he said, it's not the only thing that matters. 

You also pose an important question about measurement. I remember a study a while back where 80% of companies thought they offered a superior customer experience, but only 8% of customers agreed. When measuring customer experience, you have to ask the customers directly. Indirect measurement on its own will never give you a full picture. 

SMSJOE
SMSJOE like.author.displayName 1 Like

Judi, I believe the organization "owns the customer experience" the first task is to define the desired customer experience. The more each functional area can play a role the more the organization will then embrace and internalize and then work to create the ultimate expression of the experience. I recognize this is easier said than done. I agree with Sam the ultimate metric is lifetime value. It's important for the functional areas to collaborate and share how their respective roles contribute to the greater goal the organization's defined customer experience. According to Patrick Lencioni it's a competitive advantage. 

samfiorella
samfiorella moderator

Great question and breakdown Judi. Asking people to define the output of customer experience (eg. Product satisfaction) sends readers/practitioners down the wrong path. Customer experience can be tracked across many business metrics but ultimately, I measure it against the customer life time value. What is the effect of all those metrics on the CLV and advocacy - that's CX measurement in my mind. 

chieflemonhead
chieflemonhead

@samfiorella Thanks, Sam... absolutely, the CX impact on CLV is a must to consider.

Your suggestion is an interesting one... looking at the impact of a single CX component on the CLV. It reminds me of the calculation we look at when suggesting that the right kind of advertising or experiential marketing initiative can lift sales to the tune of 3%, 5% or 10% (or some other number). The way that is usually looked at is reviewing sales throughout a cycle and seeing how those sales changed (up or down) at the same time an initiative was executed.

The issue with applying that type of thinking to CX is that it is a perishable. Because CX is usually a result of an interaction that involves at least one person, then the person becomes a part of the CX. It is near impossible to calculate something with a repeatable result if there is human influence in the equation. And that is what we are seeking to solve...


Mike Bird1
Mike Bird1 like.author.displayName 1 Like

Great article on the State of the CX Nation... One comment, however: while it us certainly true that customer experience us not free, it is absolutely cheaper than the alternative...

Jack Pierce
Jack Pierce like.author.displayName 1 Like

I'm working to re-engineer the call center-related business results of a very large membership-based retailer. It's clear that many things matter at a call center when it comes to how customers experience the company. Try looking at #onholdwith on Twitter, just to see how many people are Tweeting while on hold (most are not kind). But it's also clear that the call center is just one touch point in mapping the customer experience. Think through how you experience your favorite store, restaurant, or whatever: website, social media, mobile, phone, and staff who serve you in perhaps one of many ways. Then there's the advertising and word of mouth. Can't forget WOM.

So, for me, it's a shared responsibility and it does require training and a customer-first mentality. Thanks for putting up this post, Judi!

chieflemonhead
chieflemonhead

@Jack Pierce Thanks, for the comment, Jack (and my apologies for the delay in response)!

Customer-first is a must in today's business... it is a whole-organization philosophy. All employees must understand who the customer is, what they stand for and what they need. Then, it is up to each individual and team to deliver on that. If we all row in the same direction, the experience becomes more seamless and worthwhile.