Is it ok to your investors to ignore money on the table by providing a mediocre customer experience?
Kerry Bodine, Vice President and Principal Analyst at Forrester Research, discusses what Forrester’s Customer Experience Index is and what it means for you.
The Forrester Customer Experience Index (CxPi) is calculated as an average of the indexes that came from consumer responses to the following three questions from their online survey:
- Thinking about your recent interactions with these firms, how effective were they at meeting your needs? (This question drives the “meets needs” index.)
- Thinking about your recent interactions with these firms, how easy was it to work with these firms? (This question drives the “ease of working with” index.)
- Thinking about your recent interactions with these firms, how enjoyable were the interactions? (This question drives the “enjoyability” index.)
Consumers selected responses along a five-point scale — ranging from a very negative experience (1) to a very positive one (5). The individual indexes were calculated by taking the percentage of consumers who selected one of the top two boxes (4 or 5) and subtracting the percentage of consumers who selected one of the bottom two boxes (1 or 2). The correlations between CxPi and NPS were calculated using the sum of the consumer responses to the three above questions that make up the CxPi, yielding a range of 0 to 15, and the respective answers to the NPS question asked in the survey
Correlations above 0.8 are actually considered bad because they imply that you simply measured the same thing two different ways. This makes the second metric redundant — unless it is significantly cheaper or easier to collect than the original.
Forrester based this assertion on findings that for 11 industries recently studied, the correlation between CxPi scores and “likelihood to recommend to a friend of colleague” on a five-point scale ranged from a low of 0.61 (which is still quite high) for retailers to a high of 0.70 for TV service providers.