This paper explores the areas of customer experience and provides a scorecard to gauge how well you are doing vs. your industry and your competitors.

1. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 1CATALYST RESEARCH REPORT
The Importance of Customer
Experience and How Organizations
Can Benchmark Themselves
BY: DAN BECA | DIRECTOR OF MARKETING TECHNOLOGY

2. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 2
TABLE OF CONTENTS
Executive Summary....................................................................................................................................3
Introduction...............................................................................................................................................3
Methodology..............................................................................................................................................3
Matrix Approach..........................................................................................................................................3
Matrix 1.........................................................................................................................................................4
Measurement...............................................................................................................................................4
Key Issues..................................................................................................................................................5
The Importance of Customer Experience...................................................................................................5
Commoditized Products and Services......................................................................................................5
Customer Lifetime Value............................................................................................................................5
Components of Customer Experience........................................................................................................5
Customer Journey.......................................................................................................................................5
Data...............................................................................................................................................................6
Organization.................................................................................................................................................6
Automation...................................................................................................................................................6
Measurement of Customer Experience......................................................................................................7
Qualitative.....................................................................................................................................................7
Quantitative..................................................................................................................................................7
Failures of Customer Experience...............................................................................................................7
Customer-Facing Failures...........................................................................................................................7
Organizational Failures................................................................................................................................8
Measurement.............................................................................................................................................8
Conclusion..................................................................................................................................................9
About the Author.......................................................................................................................................10
About Catalyst..........................................................................................................................................10
Appendix..................................................................................................................................................11
References..................................................................................................................................................11
Matrix..........................................................................................................................................................12
How to Contact Us....................................................................................................................................12

3. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 3
EXECUTIVE SUMMARY
This paper explores why customer experience is vital to companies in
today’s economy. It will take a deep dive into the key areas that define a
great customer experience and provide a measurement framework to help
organizations keep track of how they measure up against competitors and
the industry.
INTRODUCTION
In today’s business environment, the combination of technology, education
and globalization has allowed companies to produce very high-quality
products. But as technology advances and is made available to more people,
the ability to differentiate products has become less and less feasible. The
same can be said about the services provided by companies. Both products
and services have continued to become commoditized, and because they
are not differentiators on their own, the customer experience needs to be
what sets each company apart.
“Customer experience has been defined as the quality of events that
accounts for anticipation, emotional involvement, a uniqueness that makes
the aforementioned stand out from the ordinary, and reaches some form of
completion” (Ab Hamid, 2013).
This paper will explore the different areas of customer experience and
attempt to provide a scorecard that companies can use to gauge how
they are doing against the industry or their competitors.
METHODOLOGY
MATRIX APPROACH
This paper was written using a research matrix to quickly understand the
importance of customer experience, as well as the key issues that a company
needs to focus on in order to improve its customer experience. Scholarly
articles were chosen for the research. As each article was analyzed, key
issues were added to the matrix. All new articles were analyzed to see
whether they contained topics already identified. When an article introduced
new issues, previous articles were reviewed to see whether those issues
were mentioned. This led to a significant number of topics.
When looking across all the various articles about customer experience,
they tended to fall into four larger categories:
1. Overall importance: Why we need customer experience
Companies need a way to
measure how their customer
experience stacks up against
competitors and their industry.

4. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 4
2. Components: Areas a company needs to look at to understand whether
it’s creating a successful customer experience
3. Measurement: How an organization can obtain data to understand
what its customers want and whether the organization is delivering it
4. Failure: Where customer experience can go bad
Those four larger categories were broken down into ten key areas that will
be further explored throughout this paper.
MATRIX 1
Figure 1: Matrix 1 (larger version is available in the Appendix)
MEASUREMENT
In addition to the matrix that was developed from researching customer
experience articles, a section was developed about measurement. The
measurement section provides a model for how organizations can score
themselves and benchmark how they are doing against specific competitors
as well as its industry as a whole. This will be accomplished by using a
scorecard to rank several areas (key customer experience issues) and
then charting those scores using a radar graph. This gives the business
a quick visual of how it stacks up against the competition.

5. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 5
KEY ISSUES
There were several key issues revealed through the research. Four main
areas rose to the top:
1. Importance of customer experience
2. Components of customer experience
3. Measurement of customer experience
4. Failures of customer experience
THE IMPORTANCE OF CUSTOMER EXPERIENCE
COMMODITIZED PRODUCTS AND SERVICES
In an ever-changing global economy, over time we’ve shifted from
product to services as the biggest differentiating factor in the decision to
purchase. However, both are now being commoditized, and companies
are left to find other ways to differentiate. Companies must now work on
creating a best-in-class customer experience to continue to attract new
customers and retain their existing ones. Using segmentation to group
like customers, along with personalized customer information, companies
can start to tailor the customers’ experiences to groups as well as individual
customers.
CUSTOMER LIFETIME VALUE
Hand in hand with acquiring new customers and retaining existing
customers is the concept of customer lifetime value. Companies cannot
cater to every single one of their customers, but they must focus on
their best customers when crafting experiences for them. It’s the classic
80-20 rule: 80 percent of your revenue will come from 20 percent of your
customers. Identifying those customers through modeling a customer
lifetime value can help you determine where your organization should
focus as you begin to cultivate your customer experience. Creating a
customer experience that enhances your organization’s perceived value
ultimately leads to more engaged customers who will likely be advocates
of the business and help spread the word to their friends and family.
COMPONENTS OF CUSTOMER EXPERIENCE
CUSTOMER JOURNEY
Understanding the customer journey is a key step in crafting a great
customer experience. Journey mapping is the process of mapping out
all the customers’ touch points during the different stages of purchase
and understanding what they are thinking, feeling and doing at each of
those stages. This process is also sometimes referred to as customer
As products and services continue
to be commoditized, customer
experience is increasingly used by
companies to differentiate their
offerings.

6. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 6
experience mapping. Journey mapping can be used to bring people
from different areas of the organization together to get a holistic view of
customers as they interact with your brand (Fichter, n.d.). This process
also helps create consistency across all the various channels that the
customer is using.
DATA
Knowing what your customers are thinking, feeling and doing at each stage
of their customer journey is one part of the battle. Another big component
is data. What data have you gathered about your customers? Is it in a
centralized place that’s easily accessible across all channels and by all
members of your organization? Many organizations today make use of a
customer relationship marketing (CRM) database. This is a centralized
place for all customer data to be housed and accessed. Companies can
get a view of all their customers’ behavior, transactions, communication
and engagement by looking at the data in a CRM database. This data is
critical for segmenting your customers and personalizing their customer
experience.
ORGANIZATION
As customer experience has grown in popularity as a differentiator,
organizations have had to evolve and change their businesses over time.
None are perfect at becoming a customer-centric company focused on
the customer experience. Bruce Temkin, in an article from 2014 titled
“Customer Experience Management Is on the Road to Maturity,” claims
that there are six stages of customer experience maturity: ignore, explore,
mobilize, operationalize, align, and embed (Temkin, 2014). He further
states that over 75 percent of companies (at the time of writing) are in the
bottom three stages. Companies can change that and mature over time,
but there are obstacles — some more difficult to overcome than others.
Investment costs present a big challenge for companies to have the
necessary systems in place to deliver on the data needs of a successful
customer experience. There may also be challenges in aligning staff more
appropriately to focus on the customer first, instead of their products or
services.
AUTOMATION
As organizations move toward the upper end of the scale for customer
experience maturity and approach the operationalize, align and embed
stages, they can use automation to help deliver a great customer
experience. After an organization learns where and when it interacts
with customers based on its customer journey mapping and it has the
data in place to segment and personalize customer experiences, it has
the building blocks in place to support automation. Automation can take
place by setting up business rules to account for every customer interaction.
Via Bruce Temkin’s “Customer
Experience Management Is on the
Road to Maturity.”

7. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 7
Ultimately, this will not only enhance the customer experience, but also
reduce support costs to maintain that experience.
MEASUREMENT OF CUSTOMER EXPERIENCE
On the way to becoming a world-class customer experience organization,
there are a few different ways to gather data about your customers, and
that data can be used to measure how well you’re doing. There are two
types of data you can collect: qualitative and quantitative. Both can help
you understand what you are doing well and where your customer
experience is lacking.
QUALITATIVE
There are many ways to get qualitative data from your customers. This
data is the anecdotal information that can’t be measured by simply
looking into the transactional data from customer purchases. It is
obtained by talking to customers (and prospects). It can be obtained via
focus groups — either in person or online, or gathered through interviews
with customers, or even what customers are saying about your brand and
products on social media. Often this data will give you a sense of customer
satisfaction and better understanding of what your customers are thinking,
feeling and doing during each interaction with your brand.
QUANTITATIVE
Quantitative data is the complement to qualitative data. It’s the historical
truth about your customers’ purchase history, who your best customers
are based on the revenue they are generating and how engaged they are
with your marketing communications (email data, web analytics, response
to offline communications, etc.). This data can be used to model your best
customers and help you ascertain whether you’re growing the customer
value through improvements to your customer experience program.
FAILURES OF CUSTOMER EXPERIENCE
CUSTOMER-FACING FAILURES
There are some common failures that can have a negative effect on the
customer experience. One failure: not being integrated across channels.
If a customer is interacting with your brand in many different channels
(which is the norm today), there’s risk that you aren’t being consistent
across those channels. An example: you send an email to customers
alerting them to a sale, but the sale is only available in-store, not online.
Both qualitative and quantitative
data can help you understand
where your customer experience
is lacking.

8. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 8
ORGANIZATIONAL FAILURES
Another common failure: how customer research data is used within
the organization. Often this data is acquired by one department but not
shared with other departments that could utilize it (Lamont, n.d.). This is a
key sign that an organization is still at one of the early stages of customer
experience maturity.
MEASUREMENT
A scorecard can be a great way to help an organization measure how well
it is doing at delivering a great customer experience. By evaluating its
performance on the key issues outlined in this paper, an organization can
get a quick read on where it needs to improve. Using the table below, we
can rank companies on a scale of 1-10 and then plot a visual representation
with a radar graph, which can be used to chart progress over time or
benchmark against competitors or industry standards.
Key Issues Description
Customer Journey
Does the company have a solid grasp of the customer journey? Is it mapped out and
visible to all areas of the company?
Data
Does the company have sufficient data available to it about its customers? Is it in one
central, accessible location, or is it stored in disparate systems that are not readily
available?
Automation
Is the company employing automation to help drive the customer experience? Are
marketing communications automated, or is most of the interaction with customers
manually deployed?
Organization
Is the organization customer-focused or is it product- and service-focused? Does the
structure of the organization support the customer experience or detract from it?
Qualitative
Has the company ever done focus groups with customers? Does it know what its
customers are thinking, feeling and doing at each stage of the buying cycle?
Quantitative
Does the company have historical data on customer behavior? Has it developed a
customer lifetime value model?
Customer
Journey
Data Automation Organization Qualitative Quantitative
Company A 9 3 4 2 5 5
Competitor 5 5 5 5 5 5
Industry 7 8 5 4 4 2
EXAMPLE:

9. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 9
0
1
2
3
4
5
6
7
8
9
Customer Journey
Data
Automation
Organization
Qualitative
Quantitative
Company A Customer Experience Performance
Company A Competitor Industry
CONCLUSION
Although the ability for companies to differentiate themselves through
products or services alone has faded, it is possible to succeed with
customers by creating a great customer experience. Organizations must
strive to cultivate a great customer experience or risk being put out of
business by a company that offers a better customer experience. By
paying close attention to these six key areas, organizations can make sure
that they are on the path to customer experience success:
• Customer Journey
• Data Centricity
• Automation
• Organizational Maturity
• Qualitative Data
• Quantitative Data

10. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 10
800.836.7720 | www.catalystinc.com | info@catalystinc.com Facebook Twitter LinkedIn © 2016 Catalyst
ABOUT THE AUTHOR
DAN BECA
dbeca@catalystinc.com
Dan creates holistic, customer-centric, omnichannel marketing
solutions that are focused on growing revenue and reducing
costs. As the director of marketing technology for Catalyst,
Dan develops digital and web strategies that include database
design, email, search, and mobile marketing. He holds a BS in
information technology from Rochester Institute of Technology
and is currently studying for his MBA.
ABOUT CATALYST
Catalyst (www.catalystinc.com) helps marketers develop more profitable
customer relationships through better acquisition, retention, upsell, cross-
sell, and experience design.
We take the guesswork out of marketing decisions by combining our
intellectual curiosity and inquisitiveness with hard-core analytics and
measurement. We call it Science + Soul.
Headquartered in Rochester, NY, our clients include AAA, ACI Worldwide,
American Family Insurance, Embrace Home Loans, Heraeus Kulzer, Kodak
Alaris, Kroger, Preferred Mutual, Rise Broadband, TTI Floor Care North
America, University of Rochester, Valvoline, and Xeikon, among others.

11. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 11
APPENDIX
REFERENCES
Ab Hamid, Noor Raihan, and Romiza Md Akhir. “Beyond Technology-Based Customer Relationship
Management.” Research in Business Economics Journal (2013).
Chahal, H. and Dutta, K. “Measurement and impact of customer experience in banking sector.”
Vol. 42(1). Decision, 2015. pp. 57-70.
Chidley, J. and Pritchard, N. “Drivers for creating value and enhancing customer experience
through people.” Vol. 48(6). Industrial and Commercial Training, 2014. p. 293.
“Customer Experience Management Market 2014-2019 Research and Forecast Report.” PR
Newswire, 9 September 2014.
Feinberg, E. “Measuring Mobile Customer Experience Satisfaction: ABC Case Study Offers View
into How it Can Be Done.” Vol. 31(6). Customer, 2013. pp. 16-17.
Fichter, D. and Wisniewski, J. “Customer Journey Mapping.” Vol. 39(4). Online Searcher, n.d. pp. 74-76.
Flodin, M. and Norton, D. “Customer Experience Blueprint Drives B2B.” Vol. 15(11). Customer
Relationship Management, 2011. p. 38.
Johnston, R. and Kong, X. “The customer experience: a road-map for improvement.” Vol. 21(1).
Managing Service Quality, 2011. pp. 5-24.
Kosiba, R., PHD. “Customer Experience, Trends, and Staff Planning.” Vol. 31(9). p. 37. Customer, 2013.
Lamont, J. “Creating a cohesive customer experience.” KM World (n.d.): pp. 8-9.
Lemke, F., Clark, M. and Wilson, H. “Customer experience quality: an exploration in business and
consumer contexts using repertory grid technique.” Vol. 39(6). Academy of Marketing
Science Journal, 2011. pp. 846-869.
“Middle East E-Commerce Organizations Need Multi-Channel Customer Experience Model to
Build Customer Loyalty and Grow Business.” UAE Government News, 2013.
Paquin, A. “Mapping the Customer Journey.” Vol. 31(6). Customer, 2013. pp. 22-23.
Popa, V. and Barna, M. “Customer and shopper experience management.” Vol. 4(2). Valahian
Journal of Economic Studies, 2013. pp. 81-88.
Temkin, B. “Customer Experience Management Is on the Road to Maturity.” Vol. 18(8). 2014. p. 10.

12. The Importance of Customer Experience and How Organizations Can Benchmark Themselves Page 12
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