Demystifying Customer Experience Quality

We've entered the age of the customer—a 20-year business cycle in which the most successful companies will reinvent themselves to systematically understand and serve increasingly powerful customers. To compete successfully in the new consumer-driven era, companies must become customer-obsessed—your firm must have an obsession with understanding, delighting, connecting with, and serving your customers.

The good news is that a customer-obsessed strategy pays off. As we detailed in the June issue, Watermark Consulting conducted a seven-year stock performance analysis for companies that deliver exceptional customer experiences versus those that deliver poor ones. The results show a 78 percent return for a portfolio of customer experience (CX) leaders, versus a -3 percent return for a portfolio of CX laggards.

The bad news: There are no short cuts to fixing a poor customer experience. It requires discipline, investment, and a repeatable system of measurement. But most companies don't know where to start or how to get better. Forrester found that 11 percent of companies have no CX management program in place, and just 19 percent of firms demonstrate CX maturity.

Companies first need to define metrics that help them measure and manage their customer experience. This will require an honest look at the metrics that hold meaning for their industry and their company. Many start with high-level metrics such as customer satisfaction and/or willingness to recommend, like the Net Promoter Score. But you can't stop there. High-level metrics don't offer the detail needed to understand which interactions in a CX are working and which aren't, and how to improve them. Only with a detailed set of CX quality metrics can customer experience professionals diagnose CX issues and build and execute a surgically precise plan for improvement.

But how do you understand what "quality" means for your particular set of customers? Existing data from surveys and qualitative research such as in-depth interviews and focus groups can help, but to truly understand your customers' perspective, you should map the customer journey. This will give you valuable insights into how different types of customers perceive end-to-end experiences that cross channels and silos. For example, in its customer research, software vendor Citrix identified multiple customer personas, then mapped the customer journey for each persona and identified key touch points. This allowed the firm to define customer metrics for each segment at each touch point.

If you have little or no historical data or aren't able to conduct qualitative research, you can leverage established CX quality frameworks. One such framework, based on more than 15 years of research into what defines a good customer experience and how to measure it, is what Forrester calls "The Three E's of CX Quality": effectiveness, ease, and emotion. In any interaction with a company, customers must derive value from the interaction (effectiveness); get that value without difficulty (ease); and feel good during the process (emotion).

Only by assessing the quality of the experience in detail—i.e., linking it to specific drivers of that experience—can companies diagnose which aspects of their CX interactions are working, which aren't, and why. For example, do customers stumble over poor communication of pricing and/or fees (effectiveness)? Do they rate poorly your ability to process a transaction quickly and correctly (ease)? Do they find that your employees treat your customers curtly (emotion)? These and other drivers affect the quality of the customer experience and significantly contribute to (or impede) your ability to create and sustain customer loyalty.

You'll need this level of detail and insight to succeed in delivering experiences that will win, serve, and retain your customers. Whether it's via internal data or an external framework, you must begin to understand what defines CX quality for your industry and business, and how you are doing compared to your competitors. This focus on quality measurement will help you define, prioritize, and fund the most relevant and effective CX projects.

Roxana Strohmenger is director of Data Insights Innovation at Forrester Research.