According to Forrester Research, 86% of leaders place Customer Experience (CE) as their top strategic priority.* The measurement of customer experience has exploded, and numerous metrics abound, most of them focused on measuring subjective customer perceptions like customer satisfaction and net promoter score (NPS). However, for roughly 2/3 of US brands, CE ranges from just OK to downright bad, and 51% of leaders indicated that lack of strategy was a big barrier to improving their CE.**
Critical questions for determining customer experience strategy
Collecting subjective CE data and analyzing it is the domain of CE Analytics today. We believe that although collecting and analyzing CE data is a pre-requisite, it is by no means sufficient for CE success.
For example, knowing that your NPS today is 45 and you are in the top decile of NPS scores in the industry is great. It is even better to know that if you could improve your customers' perceptions of "hassle free installation" by 1 point, then your NPS score would increase by 20%.
In order to make CE insights actionable, you need to answer questions like:
- How much impact will operational improvements likely have on customers' perceptions of "hassle free installation"?
- Will these business benefits be enough to justify the costs?
- To what extent will an increased NPS improve customer retention and acquisition?
- What is the impact on business performance overall?
Answering the above questions will not only better help determine the right CE strategy; it will also result in more tangible, actionable outcomes.
Linking customer experience data to business and operational performance
In order to successfully define a CE strategy and put an implementation plan in place, data collection and CE Analytics need to be redefined to enable an estimation of linkages as shown in Exhibit 1 below.
Since customer experience is a top strategic priority that requires attention and commitment, many organizations are putting in place Chief Customer Officers whose job is to develop a CE strategy and devise an implementation plan. These leaders are enabled to cut across silos and would be well served by building analytics capabilities according to the framework outlined above.
If you would like more information about how to build your CE Analytics capabilities to enable an improved and differentiated customer experience, feel free to contact me at 781-494-9989 x201 or nsirohi@iknowtion.com.
* Forrester Research,The Customer Experience Ecosystem, June 2011
** Forrester Research, Customer Experience Strategy Best Practices, Oct 2011
About the author: Niren Sirohi is vice president of predictive analytics at Peppers & Rogers Group. Contact him at nsirohi@peppersandrogersgroup.com.
