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Is the Importance of Customer Experience Overinflated?
by Bob Hayes
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Companies rely on customer experience management (CEM) programs to provide insight about how to manage customer relationships effectively to grow their business. CEM programs require measurement of primarily two types of variables, satisfaction with customer experience and customer loyalty. These metrics are used specifically to assess the importance of customer experience in improving customer loyalty. Determining the “importance” of different customer experience attributes needs to be precise as it plays a major role in helping companies: 1) prioritize improvement efforts, 2) estimate return on investment (ROI) of improvement efforts and 3) allocate company resources.
How We Determine Importance of Customer Experience Attributes
When we label a customer experience attribute as “important,” we typically are referring to the magnitude of the correlation between customer ratings on that attribute (e.g., product quality, account management, customer service) and a measure of customer loyalty (e.g., recommend, renew service contract). Correlations can vary from 0.0 to 1.0. Those attributes that have a high correlation with customer loyalty (approaching 1.0) are considered more “important” than other attributes that have a low correlation with customer loyalty (approaching 0.0).
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