How to Effectively Measure Customer Experience: Frameworks That Inspire
Manufacturing | 12 min READ
    
Customer Experience Measurement – Why it Matters?
Measuring the Customer Experience or CX can be pivotal in determining the success of a business. The key to success lies in the customers' patronage and end experience for anyone offering a product or service. Hence, the success of a venture needs to ensure that the customer experience is positive; it's further important to have an ever-improving CX to stay ahead of the competition. Understanding the Customer Experience is the key first step in ensuring that positive CX is guaranteed.
Neha Aggarwal
Neha Aggarwal

AVP & Head

CX and Automation Practice

Birlasoft

Michael Pearo
Michael Pearo

Director

User Experience Practice

Birlasoft

 
History is rife with the tales of people, armies, empires, and nations acting on erroneous beliefs and ending in ruin as a result. The phenomenon prevails in business as well. It is not uncommon for companies to rely on anecdotes or poor sample sizes and understand a problem incorrectly. This would then lead to spending valuable resources in the pursuit of a phantom, leading to a predictably poor ROI.
The insights gained from a systematic and reliable measurement of the Customer Experience across multiple channels, on the other hand, can inform marketing strategy, sales practices and better align the product and service offerings with customer desires. Leading to greater customer retention, increased customer value increased cross-sell opportunities, more sales, and more revenue.
How to Measure Customer Experience?
Quantifying a qualitative idea can be challenging. Luckily, years of academic and industry research have led us to increasingly robust customer experience metrics, the frameworks that give meaning to these metrics, and the analytical tools that let us make sense of the data and lead to actionable insights.
A touchpoint is an individual incident of the customer having an interaction with a part of a business. Touchpoints have been central in gauging customer satisfaction for a long time, as it is operationally convenient to employ metrics at individual touchpoints and assess customer satisfaction. Touchpoints allow for discrete analyses of interactions with various parts of a company such as sales teams, customer care staff, et cetera. While touchpoints are useful, looking at them in isolation may lead to erroneous assumptions about something important—like the onboarding experience of new customers.
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Customers may have been satisfied with individual e-mails, videos, visits, and other interactions but still have an experience that is negative as a whole. With the individual touchpoints working fine, the cause of such an experience would be difficult to diagnose unless the bigger picture is seen as a whole. Mapping a customer journey with the help of indicators like Key Performance Indicators or KPIs—which are quantifiable values of how effectively a company is meeting a business goal—leads to a comprehensive assessment of the user experience.
The abstraction of the Customer Journey stretches from what happens before the experience of a product or service through its use and extends beyond the usage. It allows us to assimilate the long utilized touchpoint metrics effectively and CX metrics called KPIs (which may be calculated using data from one or several touchpoints) to arrive at a more useful understanding. Creating persona-based customer journey maps further helps businesses understand their customers and interact with you across the various touchpoints. It can help you refocus your business priorities, implement proactive customer service and improve retention rates.
The process of optimizing a customer journey arranges touchpoints along a narrative timeline—encompassing, connecting, and contextualizing these individual experiences. This gives us one of the most holistic assessments of the average customer experience, allowing us to empathize with the customer's journey and arrive at actionable insights. Without this, the underlying causes for trends in analytics would elude us, and even the patterns that emerge will only improve discrete parts of the value chain.
Setting Up the Right Framework
While CX has been measured for decades now and a wide variety of tools are available to allow for the same--the measurement of the customer journeys remains much harder. According to a report by Forrester, the inability to measure journey effectively leaves brands blind when it comes to diagnosing CX problems. The solution is to reframe the way this problem is approached. The frameworks and thought should be reoriented, away from the traditional metrics, and measuring the entire customer journey.
It has always been hard to measure journeys in the discrete and non-integrated way of measuring the journey across touchpoints. The metrics for these discrete steps have also been disparate, prohibiting effective analyses. For example, at a pre-sales touchpoint, a positive response to a marketing video is measured and at another touchpoint--let's say over a phone call with a representative, one measures the experience of the call. Now, in place of a common framework, one would find themselves inundated in numbers or conducting meaningless mathematical exercises.
How To Setup CX Measurement Frameworks
How To Setup CX Measurement Frameworks

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Begin with Measuring the Entire Customer Journey
By measuring not the individual interactions but small groups of interactions bound along a meaningful line, we establish a framework. A common analogy used to explain this is that of atoms and molecules, elements rarely exist in nature as free atoms; they bind with other atoms to form the stable bases of most matter we interact with--the molecules.
Journey steps are to interactions, what molecules are to atoms. Much like molecules, Journey steps may be composed of a few or many interactions. The solution is to move away from measuring these individual atoms, which would be every touchpoint, and look at the molecular picture instead, where some well-defined activity is being accomplished--often across multiple channels.
A customer-centric approach is vital in the identification of journey steps. The right journey steps are those that the customer can comprehend. The impact of thinking in concrete steps will be palpable to everyone, from customers to partners. Customers and employees alike should be able to tell when an action has been completed.
Building the framework by keeping the customer's goal in mind makes it meaningful and easier--the business goal must be skillfully aligned with the customer's end goal. To ascertain how his congruence of outcomes may be achieved, deep insights into how the customer, employees, and partners move through each part of the journey must be sought.
So two levels of integration are necessary for seeing the journey as a whole. The first is on the atomic level--where we measure journey steps instead of solitary interactions.
And the second is where we establish a common framework for analyzing various steps themselves. If I were to extend the atoms and molecules' analogy--this would be similar to molecules arranging themselves in crystals and lattices of multiple sorts. Understanding hinges on the effective identification and mapping of individual touchpoints (the atoms) and understanding the relationships between them.
Optimizing Touchpoints Across the Customer Journey
The individual touchpoints and how they are joined are the spaces for potential improvement. The touchpoints must be in harmony with the desires and expectations of the customer and should do so without being overly complicated and cumbersome for the customer to navigate. The touchpoints should also be relevant to the business goals at the same time and appeal to what the customer wants out of the journey. Once individual touchpoints are optimized, it must be ensured that the transitions between these touchpoints make sense in the same manner and are painless and relevant to both the customer's and the business' goals.
Managing Heuristics Across the Customer Journey
Understanding consumer behavior is drawn from an understanding of human psychology and behavioral economics once considered human beings as rational actors. Ever since the 1980s, however, this has been proven to be very far from the truth and must be accounted for when designing the Customer Experience and journey.
A heuristic is a mental shortcut that allows a person to make a decision quickly and with little mental effort. Heuristics are an evolutionary response to the immense volume of information that we as humans get in our everyday lives, and it is well understood that most decisions are made with the help of heuristics and not with an unbiased, rational understanding of the phenomenon.
Being such a significant part of human psychology, heuristics affect purchase decisions monumentally and explain phenomena like brand loyalty or the tendency to choose a particular item on a restaurant menu. How a customer feels about a brand or a product far outweighs the rational analysis of that brand's proposition to the customer. While a large smartphone corporation's phones might not have the best camera, the best battery, the best processing capabilities, or even a charger in the box--people would still be willing to happily pay the highest prices as long as they have the best experience.
Managing heuristics to make people instantly think that "this is the best smartphone" is how this is accomplished. People do not rationally compare datasheets of available options and decide when buying a phone or a car and rely on these mental shortcuts. Developing a clear understanding of how customers use heuristics around a brand is an important part of understanding the customer journey and promises to yield better results than simpler insights like "overall satisfaction."
Building the Right Set of Metrics to Measure Journeys
Customer journeys are a little harder to analyze than the KPIs used to measure performance at individual touchpoints. The customer journey can be divided into the stages of awareness, consideration, decision-making, retention, and advocacy. This takes us from the customer gaining knowledge of the brand's existence to the customer being a satisfied advocate of the company's product. Customer journey metrics must be aimed at gauging: the churn rate, how likely the customers are to promote the product, how easy they find it to interact with the company, and the hardships in the customer journey. The metrics should also have room for incorporating qualitative feedback, as it helps vouchsafe against CX blind spots.
Benefits of Measuring Customer Experience
The digital world has radically changed consumer behavior and expectations, which is driving the business transformation. However, our research shows that about 50% of the executives have achieved <10% ROI on their digital investments.
According to Bain, a tech-driven CX strategy can increase customer retention rates by 5% increases profits anywhere from 25% to 95%. Organizations that understand the capability of customer journey optimization strategies are poised to derive great value from them. Over 5000 major companies worldwide now have a dedicated CX leader, and the list only seems to be growing.
How to Effectively Measure Customer Experience: Frameworks That Inspire
CX metrics can be used to convey the rationale of past investments, assess progress, determine future strategies, increase cross-sell opportunities, thus increase ROI and revenue is possible and common for companies to fail in spending the correct amount of effort, not just by under-spending and misspending the money. Still, they do often end up overspending as well.
"It's no secret that failing to meet your customer's expectations can have serious negative consequences. However, exceeding customer expectations can also negatively impact profits." -How much is Customer Experience worth, a report by KPMG
 
Robust analytics ensure that your resources are invested with precision, in the right places, and in the right amounts. Precision is the difference between a surgically guided missile and a carpet bombing—the intelligent strategist always chooses the former.
Benefits of Measuring Customer Experience
Benefits of Measuring Customer Experience

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Examples of How Organizations Benefited from Measuring CX
Leading firms across the world place a premium on CX measurement and enhancement to enhance their value propositions. When thinking of Consumer Experience, it is hard to ignore the thought of the tech giant Apple, with exceptional customer loyalty and NPS, who lies a thorough understanding of the customer's journey with due attention to its nuances. Apple's CX strategy is no secret, as Steve Jobs said, "You've got to start with Customer Experience and work back toward the technology, not the other way around."
Covid-19 drastically impacted supply chains globally, and with shipping in disarray, small businesses were left fending for themselves. FedEx quickly reacted to the situation, creating numerous resources, templates for COVID signage, shipping discounts, and expert advice and best practices. Helping their customers in time of need, the organization showed its unwavering commitment to the segment and gained loyal customers in the process.
Microsoft Teams is another business that has become essential to our lives in the pandemic. From communicating with our families to working and studying from home, video conferencing was all made possible. But users were concerned about showing their messy home offices on video calls, and many were embarrassed by the background noises resulting from screaming kids or barking dogs. Microsoft was quick to take note of these issues and allow users to add custom backgrounds by adding photos or videos or simply blurring their backgrounds. It further leveraged its AI capabilities to create a noise suppression feature that used deep neural networks to understand the difference between speech and unnecessary noise and cancel out the unnecessary noise without affecting the speaker's voice.
In UK, customers have long been wary of traditional banks, which have scored negative or near negative customer satisfaction scores with their excessive fees, outdated in-person branch banking, and lackluster digital services. Enter Monzo, a digital-only bank which allowed users to open accounts quickly and seamlessly, get instant payment notifications, save money atomatically with ‘saving pots’, and split bills with friends. Creating value for its customers by offering convenience, transparency and excellent customer service, the bank was able to score a satisfaction score of 80 out of 100. This helped it gain customers from incumbent banks and become the fastest gainer in terms of new current account users.
In KPMG's Global Customer Experience Excellence report for 2018, an understanding of the customer's journey and gathering various data to achieve this understanding was the key to success for companies from over 15 of the largest economies. This report and most research around the topic of customer experience enhancement also hails digital tools, AI, and ML as the champion technologies that can create the customer experience of the future.
Comprehending the customer journey is about understanding what customers go through from the moment they first contact your brand and then ensuring that the road to purchase is as simple, efficient, and satisfying as possible.
Consumer Experience has become central to how the world's leading businesses design their products. Managing the consumer experience well is of utmost relevance to a company's success, and The International Data Corporation reports that spending on CX technologies will reach an incredible $641 Billion by 2022. This CX revolution is ushered in and sustained by advanced and perpetually improving technology.
It becomes increasingly important for an organization to place customer-centricity and experience at the heart of its business strategy. Mapping their customer's experience allows them to pivot at the right time to improve continuously and, if required, pivot at the right time
 
 
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