Three levels of customer experience.png

The three levels of customer experience, from a new Forrester report.It’s a given these days that companies need to deliver successful customer experiences (CX) in order to survive -- but how can you measure this kind of success? A new report from Forrester Research attempts to point the way.

The report, "Seven Steps to Successful Customer Experience Measurement Programs," said that most firms are not employing the kind of disciplined measurement program they need. Only 53 percent of survey respondents said they regularly measure CX, a mere 21 percent regularly relate their CX metrics to business outcomes, and only about a third review their metrics regularly.

Seven Steps

To fix this, Forrester distilled the practices of other companies into seven steps that, if followed, lead to a “disciplined, well-founded approach to systematic measurement practices.” They are:

1. Choose customer segments
2. Select which experiences to measure
3. Pick CX metrics for each experience
4. Design a data collection strategy
5. Set targets for each CX metric
6. Identify and act on CX issues
7. Share insights gained from CX measurement

Customer segments need to be identified, the report said, because interactions with a company and customer journeys differ by segments -- and some kinds of customers are more profitable, or have greater growth potential or marketplace influence, than others.

Then the company needs to determine which experiences to measure. Forrester points out that customer experiences occur at three levels – the overall relationship, customer journeys and what it describes as “discrete interactions.” Within the customer journey, there might be specific interactions that utilize a particular set of channels.

Metrics, Business Drivers

As an example, the report noted that Ricoh Canada originally thought the customer interaction related to toner replacement was confined to the order being placed, but, in fact, the experience needed to also cover earlier in the interaction -- when the toner was low and customers started looking for a phone number to call -- and later, to include the successful installation of the new toner.

Learning Opportunities

There are also some company-customer interactions that are more important to the overall client relationship, such as providing a mortgage or reviewing a portfolio for Charles Schwab customers, and Forrester points out that these need to get special attention.

Once specific experiences have been chosen, the next step is to pick perception, descriptive and outcome metrics. The report recommends first defining outcome metrics that correlate with key business drivers, such as revenue-at-risk because of customer defection. CX metrics related to customer defection, for instance, could include very low customer response rates or a self-reported likelihood to renew.

Rinse and Repeat

The data collection strategy step includes relationship, journey and interaction surveys, which would best be designed using a standard template and implemented with techniques to encourage response rates. Targets for each metric determine what “good” looks like, pre-determined action plans are set up to respond to CX issues and results are shared throughout the company.

The seven steps lead to a successful measurement, but things change over time. To keep everything in shape, the report recommends continual tuning and review.

One of the biggest issues surrounding CX has been the fuzzy criteria by which a company is supposed to know what is working, if anything, or how specifically it can make things better. This Forrester report is very specific in its prescriptions and case examples of how to design a program that works for your company, and its advice makes sense throughout.