Customer Experience Metrics Are on the Rise

Businesses are maturing in their use of customer experience (CX) metrics, employing them more than they did in the past, and getting better at using them, according to research from the Temkin Group.

As proof of that, the percentage of organizations that earned a "strong" or "very strong" rating grew from 11 percent to 14 percent this year, the Temkin Group noted in its "State of Customer Experience Metrics 2015" report.

Companies have also improved across all of the four major competency areas: continuity, consistency, "impactfulness," and integration, the research firm found.

Bruce Temkin, managing partner of the Temkin Group, explained that for CX metrics to be valuable, they must be continuously "integrated into the rhythm of the business." If a company wants to measure an aspect of customer experience effectively, it must do so on a regular basis so that it is fresh in mind during the next period of measurement. In other words, the gaps between measurements shouldn't be too big, Temkin suggests.

Achieving consistency "has a lot to do with cultural change" and a company's adoption of a common language for discussing CX metrics, Temkin says. If a large organization shares a set of CX metrics across its separate parts, that organization could have more productive conversations that enable it to drive change. For instance, companies that educate their sales, service, and marketing about Net Promoter Scores, and use the term to signal the same concept across departments, will benefit from the common language. "If everyone has their own measurement and metrics," and uses different terminology to refer to the same concepts, "we have no common vocabulary and [won't] be driving change," Temkin says.

Organizations are effective if they use the insights they’ve gleaned from CX metrics to support their decisions, Temkin points out. Companies that are doing this well will not roll out new products or invest in new business units without consulting their CX metrics.

Lastly, integration signals "the degree to which the organization is looking at the metrics while dealing with other important measurements of the business," including sales, performance, and cost, Temkin says. Unfortunately, this has been the most challenging of the four competencies for companies.

For companies that get it right, the benefits can be substantial. According to Temkin's research, companies with stronger CX metrics outperform their peers: 49 percent of companies with stronger CX metrics have well-above-average customer experience scores compared to just 17 percent of those with weaker CX metrics programs. Additionally, those with stronger CX metrics are 50 percent more likely to have significantly better business performance than their competitors.

Yet while Temkin concedes that customer experience can be a key differentiator, he notes that the strength of a product and price will carry some a longer way than others. Of the 86 percent of companies that don't have strong programs in place, Temkin estimates that about half will be impacted if they don't take action, while the other half are "good enough for whatever their business needs are."

Still, 55 percent of companies aspire to become CX leaders, and many of those are still a long way from perfection, Temkin says. In his view, mastery is achieved when a company has established a well-defined way of measuring customer experience, consistently uses it to run its business, and makes improvements based on these metrics.

Companies "should decide what their core set of CX metrics are going to be," Temkin says. They "need to decide what their North Star for a healthy customer relationship is."

Likewise, organizations must take into account the differences between their customer segments. A large company might have enterprise customers, small-business customers, and customers who are served through a distribution channel, Temkin points out. "If we don't apply our metrics independently to those, then we just get a mishmash of the metric that wouldn't provide the insights we need to drive our business."