TLDR –

If you are unable to link business returns with your current customer experience (CX) measures, it could be due to 2 things – the lack of relevant measures or the lack of a connected measurement system.

Classic measures are not holistic, as they cannot capture customers’ digital processes. Consider newer measures that are more relevant to the digital aspects of current customer journeys:

• Efficiency score

Process efficiency measures

1. The time/number of steps taken to complete processes
2. Automation rate

Customer insight generation efficiency measure

1. (Insight generation per customer / Total number of desired customer insights per customer) x 100%

• Engagement score

1. Percentage of customers utilising digital channels for activities against the total number of customers
2. Time spent on digital platforms per session
3. Frequency of positive interactions (e.g. positive comments, likes, shares, etc.)

• Ecosystem score

1. Revenue of non-core product offerings
2. Percentage of third-party channels/product consumption against main offerings

Build a system that connects all measures — so you get to witness the direct relationship between CX and your business outcomes:

1. Identify crucial customer milestones (i.e. moments that matter) in your customer journey
2. Set up cross-functional teams to own and transform these milestones
3. Define ideal state benchmarks in efficiency, engagement and ecosystem in each journey
4. Measure current score relative to the ideal state benchmarks
5. Define the business impact of each measure of success and link the remuneration of key executives to progress, influence and impact of the scores

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What are measures of success?

Measures evaluate if your business process or system is achieving the desired results. In the realm of customer experience, measures help you understand how your customers see your brand. You want customers to be at least satisfied with your business and hopefully, delighted to become your best asset – your brand’s promoter.

On top of that, good measures should allow you to pinpoint areas that require improvement. They constantly provide you with feedback so you can make the necessary changes.

Current business challenges

For many businesses, the above scenario is frustratingly far from reality. At this point, most businesses are aware that the current measures are inadequate in capturing the whole story. However, finding a solution that provides a clear view of the business situation is a challenge.

Businesses often find themselves stuck with a bunch of numbers that report that customers are not satisfied enough, but it does not alert as to why they are unsatisfied and the areas that require improvement. Equally problematic, the numbers could reflect satisfaction in one customer’s moment but fail to capture frustration in other parts of the customer journey.

The challenge lies in the possibility that the measures are not truly capturing what is relevant to customers (i.e. measurement tool issue). Or, the measures in place could be correct, but the array of scales deployed is so disjointed that it is unable to properly report the overall business situation (i.e. measurement system issue).

Based on that understanding, a successful customer measure requires two factors:

1. Relevant tools – Newer measures that are more relevant to current digital customer experiences
2. Connected systems – A measurement system that captures important customer moments accurately while being able to connect individual moments and their measures to provide relevant data with context

Traditional measures – and why the numbers don’t add up

These familiar, well-loved scales commonly measure customer experience. While they have their merits, they often do not mean much without the right context. Keep in mind that these scales are classic. These measures were not created with newer, digital customer journeys in mind and may not be able to capture the accurate customer scenario without tweaks.

1. NPS – Net promoter score

Captures how likely customers are to recommend your product or service

Upside: Tells you how likely customers will promote your brand, which indirectly shows how happy customers are with your product/service.

Downside: Only captures customer sentiment regarding a certain service or product. Unable to holistically capture the entire journey.

2. CSAT – Customer satisfaction score

Reflects customers’ positive or negative feelings toward your brand

Upside: The CSAT can be deployed in a general manner or in a targeted way, depending on the questions’ phrasing. For example: In a general fashion – How satisfied are you with our brand? In a targeted manner – How satisfied are you with the refund process?

Downside: It does not pinpoint what customers are satisfied or dissatisfied about.

3. Average resolution time

Measures the time taken to resolve a customer issue

Upside: Provides a numerical result of how long it takes to solve a customer’s issue.

Downside: Carries a connotation that the faster it takes to solve a customer’s issue, the better. While customers generally appreciate fast resolution, many service providers forget to consider the quality of service given in exchange for smaller numbers. In other words, this measure does not capture how happy customers feel about their experience.

4. First contact resolution rate

It tells you the number of customer issues resolved within the first interaction.

Upside: Provides the number of customer issues solved in the first interaction.

Downside: Similar to average resolution time, the speed of customer issue resolution does not necessarily equate to the quality of the service given, especially for more complicated or technical issues. This scale focuses on the time taken for issue resolution, which may jeopardise addressing customer issues thoroughly.

5. Customer churn rate

Reflects the number of customers who are no longer purchasing your product or are leaving your services over time. Gaining new customers costs more than retaining current ones. Higher churn rates indicate a bigger financial investment needed to capture new customers.

Upside: Provides a numerical capture of customers leaving your brand.

Downside: It does not capture the reason behind the churn.

Newer measures that are in line with the times

Before deciding on the measures that can accurately capture customer sentiment, it is important to understand what customers currently care about. On top of products or services that help customers save time (i.e. products that work well), customers are also looking for businesses that can spend their time well (i.e. products that cultivate joy). In other words, when spending time with your brand – customers should be positively engaged to a certain extent.

With that in mind, capture customer experience on three scales:

1. Efficiency score – Evaluates how easy certain products/processes are, therefore helping customers save time and effort
2. Engagement score – Evaluates how engaged one is towards products/processes, therefore understanding how well your brand is spending customers’ time
3. Ecosystem score – Evaluates the value generated by offering interconnected services that address different customer needs across life journeys

Efficiency score

The efficiency score carries two factors:

Processes efficiency

Consider measuring efficiencies across key processes and digital channels, such as customer onboarding, payment, customer enquiries and feedback processes. You can measure it in the form of the time taken to complete these processes. For processes that allow self-service options, pay special attention to automation rates. High automation rates indicate how willing customers are to use these processes. Low automation rates could mean that certain steps are too complex, or the user interphase may need tweaking.

• The time/number of steps taken to complete digital processes
• Automation rates

Customer insight generation efficiency

Every customer interaction carries a treasure of information – especially online. First-party information is now more valuable than ever. However, gathering raw data without an analysis direction does not mean much.

So, identify the amount and type of information you would like to learn from each customer first. Measure customer insight generation efficiency by comparing the number of insights you can get from each customer against the initial identified amount.

• Customer insight generation efficiency = (Insight generation per customer / Total number of desired customer insights per customer) x 100%

Engagement score

This measure looks at customers’ engagement with your services/products. Consider measuring the percentages of customers utilising your digital channels to carry out payments, book appointments, order products, etc.

Also, measure customers’ time spent on your digital platforms per session. The longer the time spent could mean that customers enjoy the content you are putting up. Take into account the frequency of positive interactions you have for each content, like customer comments, number of likes, etc. In short:

• Percentage of customers utilising digital channels for activities against the total number of customers
• Time spent on digital platforms per session
• The frequency of positive interactions per content (e.g. positive comments, likes, shares, etc.)

Ecosystem score

Ecosystems are driving the bulk of new growth in businesses. One of the main reasons for this growth is that customers are placed right at the heart of its offerings. Having a mature ecosystem goes beyond just providing different types of offerings to your customers – it predicts customers’ needs at each milestone and offers them the right service/product before customers voice their wishes. The more mature your ecosystem is, the more present you are in your customers’ lives.

To keep track of your ecosystem growth, measure the revenue of non-core product offerings on your platform. It indicates if customers are spending elsewhere than your main products. You do not need to build an ecosystem all by yourself; you can also opt to invite other businesses in as partners. Thus, monitor its growth by tracking the percentage of third-party channels/product consumption against your main offerings. In short:

• Revenue of non-core product offerings
• Percentage of third-party channels/product consumption against main offerings

So you have the right measures – how do you fit the data in your big picture?

Having the right measurement system helps to make sense of your data, and each measure will be able to fit into your overall business goals. In other words, the numbers gathered from these measures are indicators that you are able to connect back to actual business returns.

The system below allows you to look at the overall customer experience. It also allows you to zoom into specific customer touchpoints to gain a better understanding if needed – all without losing context:

1. Identify the customer journey that matters. Study each journey in and out, and know it like the back of your hand. Only then can you identify important customer milestones – the moments that really make or break the entire customer experience. These areas are where you will be placing your measurements.
2. Set up cross-functional teams. It’s a steep mountain to climb by having only a single group working on CX without collaborating with other departments. Cross-functional teams will ensure each department is aligned with the CX vision, owns important customer milestones and transforms them.
3. Define what success throughout the customer journey looks like at each milestone. Identify these ideal state benchmarks in terms of customer efficiency, engagement and ecosystems.
4. Select the appropriate measures as suggested above and measure them at customer milestones that are identified as important. Make sure to always compare the scores to the ideal state benchmarks.
5. Define the business impact of each measure – making it a part of your business goals. Tie these measures to the remuneration plans of key executives based on the progress, influence and impact of these measures’ scores.