Customer Experience – Are You Measuring?

September 29, 2014

CX Measurement

It is a no-brainer and almost common sense that achieving great customer experience (CX) should be an important element of your business strategy. Also, it does not take much to convince people that investing in CX would give you a lot more insights that help you make better decisions. An Oracle Survey found that 93% of Senior-level executives believe that ‘Improving CX’ is one of their top three priorities, while 97% rating it as critical to success. Despite this, only 37% have formally introduced a CX practice. Why?

The question of Return on Investment (ROI) in CX management is a crucial one. And when you are calculating ROI, measuring and benchmarking the right metrics is even more critical. I will get to the measurable aspects a little later, but if, as a CEO or key decision maker, you are not convinced about the ROI, read the numbers below:

1] Gartner estimated last year that by 2014 “failure to respond via social channels can lead to up to a 15% increase in churn rate for existing customers.” Are you still blocking your employee’s social interaction?

2] As per the 2011 RightNow (Now  –  Oracle RightNow CX Cloud Service) CEI report, 49% of executives believe that customers will switch brands due to poor CX. In reality, 89% of customers agree they would or have already switched brands.

3] Dell’s internal metrics show that they were able to turn around 97% of its dissatisfied customers through proactive intervention. More importantly, more than 40% of these became Dell’s raving fans.

It is no coincidence that organizations that listen to their customer and focus on them have done well even in the stock market in the last 6 years. The chart below by Watermark consulting highlights this very fact. It is a comparison of companies that are considered CX leaders and laggards against the S&P 500 (stock market index based on the market capitalization of 500 large companies listed on NYSE)

Customer Experience Leaders Outperform the Market


One may still have questions on how to measure CX. There is no straight answer to this. All methodologies may sound right and not so right at the same time. You may not be able to measure a direct outcome from a particular initiative taken towards CX, but collectively, you can measure the change.

Customer experiences are complicated! They are subjective and driven by emotions. If you try to collect and organize this information, the meaning may be lost. Moreover, traditional indirect measurement methods may not be correct and scarily misleading. Also, sometimes, capturing responses and averaging feedback scores may not be enough.

For instance, sometime back, I was speaking to a friend who was looking to buy a new phone. Her Apple iPhone 4S started giving problems after almost 2 years of use, and she was literally frustrated with how the phone was disrupting her daily life. I met her again after a week, and as expected, she had got herself a new phone, but to my surprise, she purchased a newer model of iPhone. When asked why, she responded, “Two years, the phone hasn’t really given any problems, and I trust Apple.” Another friend going through similar issues immediately decided to switch to an Android platform.

Excellent keynote

Thus, the experience may vary from customer to customer. Also, responses may vary from industry to industry. A few negative feedbacks against some average feedback may not hamper the sales of a no-frills airline; furthermore, for an organization, a definition of an important customer set will differ. The responses may also differ for sales and after-sales. Hence, setting parameters for measurement is very contextual.

But let’s try this – The two most basic outcomes you want to see out of an investment are:

1] Increase in Revenue

2] Decrease in costs.

This could be further broken into two more metrics.

Mapping your CX initiatives from the outcomes

Mapping your CX initiatives against each of these desired outcomes is fairly easy. Then each could be measured by a relevant metric. An example of one such grid is shown below.

Intended OutcomeCX Examples through the customer journeyDescriptive Metrics
Acquire New BusinessVisually Appealing Website with self-service featuresDirect or Indirect Traffic, Page visit, Frequency
Acquire New BusinessA targeted campaign did use Oracle Marketing CloudMarketing Campaign Effectiveness, Conversion Rate, Cost of acquisition
Retain Existing BusinessA promotional campaign did use Oracle Marketing and Oracle Social Relationship management.Upsell or Cross-Sell Rate, Customer Churn Rate,  Revenue per customer, Renewals
Retain Existing BusinessPromote Facebook and LinkedIn pages through your Social engagement and monitor investmentNet Promoter Score, Brand mentions, likelihood to recommend
Retain Existing BusinessFeedback or surveys are sent to customers after every service interaction using Oracle RightNow CX.Customer Satisfaction, Average scoring
Reduce Employee disengagementInternal training on New applicationsAverage Resolution Time, Turn Around Time Initial Training Time, Service Costs
Reduce the cost of operating the channelMultichannel support is provided through chat on the customer’s website or through a self-service portal.First Contact Resolution, Self Service Rate, Channel Costs, Customer Effort score


Although this process is involved, there are ways to streamline it. One such methodology by Forrester is explained below. The below approach would cover most of your permutations and combinations while measuring your CX.

CX Measurement

Measuring CX is important. Benchmarking the results against industry and self-standards is indispensable. An organization is required to reassess its progress at regular intervals. Only doing so would help you lead your segment and industry.

About CRMIT Solutions:

CRMIT Solutions is a leader in transforming businesses with cloud-based Customer Experience (CX) solutions on sales, service, marketing & social cloud.

We are committed to providing customers with the best service in the industry. Everything we do – every order, every delivery, every service, every offering – centers on the satisfaction of our customers and making them more efficient at what they do.

Testimony to Customer Excellence

Inputs from

Pratik Bajaj
Principal Business Consultant –Industry CRM & CX Solutions.
CRMIT Solutions

Tags: #oow14, cloud oracle, CRM/CX, OOW, Oracle cloud application, oracle crm, Oracle Open World, Oracle RightNow CX, Oracle service cloud, oracle specialized, Oracle® Platinum Partner

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