Performance Measurement and Management of Customer Experience Function

Abstract

Organizations are increasingly emphasizing the importance of comprehensive customer experience as their primary competitive advantage, and increased competition has shifted the market power from organizations to customers. Over time, question that has arisen increasingly is how Customer Experience function can be measured and managed more systematically within organizations to enhance customer experience. Despite the recognized importance, the current understanding of customer experience has stayed on a relatively high-level, and the number of empirical findings is limited. A search of relevant work did not yield research where Customer Experience function would have been evaluated from the performance measurement and management systems viewpoint, although several recommendations of using the viewpoint exist.

This research analyzes how Customer Experience function is measured and managed in organizations, and what is the role of customer accounting in their customer experience management. The first objective of this research is to establish a comprehensive understanding of how organizations perceive the performance measurement of Customer Experience function and which management methods are essential in it. As the second objective, it addresses the daily processes in customer experience management and the role of customer accounting in supporting their measurement. The research was conducted as a qualitative action-oriented multiple case study, involving interviews with three directors of Customer Experience functions. The represented organizations were chosen based on the organization size, competition intensity and market orientation.

Due to the discretionary nature of sample selection and small size, the results of this research can be further used to create generalized results. The research findings indicate that performance measurement and management systems play an important role in the Customer Experience function, but standardized measurements and management methods do not exist yet. A unique factor of the performance measurement and management system within the Customer Experience function is the importance of qualitative data. According to the research results, the quantification of the qualitative data collected by the function enhances impact of customer experience within the organization but includes a risk of overlooking and hiding business-relevant insights. The role of customer accounting in customer experience management focuses on decision-making and enhancing customer engagement, with the expectation that customer accounting will provide future-oriented and behavior-based insights for the function. To advance the measurement and management of Customer Experience function, it is important to increase understanding of how customer experience can be integrated into financial measurements.