Perhaps you've had this experience or something similar:

You take your car in for service to a place you've used frequently over the years. You drive in and complete the intake process. You provide some information about the car's performance and any problems. The service manager provides an estimate and tells you when to return. You're delighted when the service manager calls to tell you can pick up your call earlier than expected and the bill will be less than estimated. But then, a few days later, your engine light goes on. You call the service manager. He can't explain why it went on but suggests you bring it back. You're frustrated because you've just been without your car and paid for service. After an exploratory look, the service manager tells you that this will be a significant additional cost. But, you say, they had the car for several days for a complete checkup, shouldn't this issue have been discovered then? The service manager says, well, sometimes things happen. You leave your car to be fixed and you pay again when you pick it up.

Later, a colleague asks for a recommendation for where to take her car. Can the service manager rely on you to make a referral?

As in the above scenario, every touchpoint your customer has with your company matters; some, however, matter more than others.

Customer experience and engagement have evolved from table stakes to points of differentiation, as indicated by the flurry of customer experience/relationship scores now being published. Each interaction creates an opportunity for a moment of truth. More and more evidence strongly suggests that there is a link between customer experience/engagement and the financial success of a company.

Your company can improve customer experience and engagement by understanding the value of each touchpoint.

A high-quality customer experience is made up of high-quality interactions

A customer experience is not limited to a specific transaction, website visit, or conversation with a service representative. It's a process that begins the moment the customer becomes aware of your company, and it encompasses all the interactions, transactions, and contacts along the way.

Ron Shevlin, author of Everything They've Told You About Marketing Is Wrong and an analyst at Aite Group LLC, suggests the following definition for customer engagement: "Repeated interactions that strengthen the emotional, psychological or physical investment a customer has in a brand." All those repeated interactions are touchpoints.

For our discussion, we define a touchpoint as any customer interaction or encounter that can influence the customer's perception of your product, service, or brand. A touchpoint can be intentional (an email you send out) or unintentional (an online review of your product or company). Customers experience touchpoints long before they make a purchase and long after they have had their first transaction.

The goal of every company interested in using customer experience as a competitive advantage is to create a positive and consistent experience at all of the touchpoints.

Customer experience becomes a complex process to measure when you consider the vast number of touchpoints customers encounter today. However, not all "touches" are equal: Some interactions matter more than others. Therefore, you must understand how each touchpoint contributes to the overall customer experience.

By measuring each touchpoint independently, you can determine its contribution to the overall effectiveness as well as more effectively measure the total customer experience.

Although overarching metrics such as customer lifetime value and category ownership are quickly becoming standard today, attempting to measure the customer experience with a single metric can be an overly simplistic and risky approach.

Effectively managing the customer experience requires effective measurement and management of a portfolio of metrics, including touchpoint effectiveness, to gain insights into what is—or is not—working.

Measure touchpoint effectiveness with these six steps

For the six-step process outlined below to be successful, you need to see your business through the eyes of your customer. To complete these six steps, you will need a database of your touchpoints. An easy way to start is to create an Excel file that contains these six columns:

  1. Touchpoint
  2. Operational purpose
  3. Role in customer experience
  4. Lifecycle stage
  5. Touchpoint owner
  6. Importance/impact

Step 1: Inventory Your Touchpoints

To measure the effectiveness of your touchpoints, you first need to inventory all the touchpoints your customers encounter throughout their entire life cycle. Make a list of all those touchpoints.

Note: If you haven't named the stages of the customer life cycle, you should do so. For example, you might have stages similar to this:

  1. Investigation/contact
  2. Interaction/connection
  3. Education/conversation
  4. Evaluation/consideration
  5. Selection/customer
  6. Advocate/community

Your touchpoints need to include every encounter in the attraction process (such as your website, published content, press coverage, social media, and advertisements), through the sales process (such as whitepapers, customer testimonials, samples, product literature, and sales presentations to your prospects), through the delivery and service processes (such as invoices and trouble tickets), and finally through your retention process (such as your account management, referral program, and customer advisory boards).

If you're like most companies, you'll come up with a fairly long list of encounters.

Step 2: Every touch has a purpose

Transfer all your touchpoints to individual Post-it notes.

For each touchpoint, indicate its operational purpose and its role in the customer experience. On the operational side, a touchpoint may be designed to identify a prospect, resolve a problem, accelerate conversion, or support executing a transaction; on the customer experience side, a role of a touchpoint might be to influence perception, build preference, or create loyalty.

This work is often done best in a facilitated working session that includes people from functions that "touch" the customer, as well as some customers.

Together, organize all the Post-it notes on a wall in the order they are most likely experienced. The goal is to group together all the touchpoints associated with a specific phase in the customer lifecycle.

Then transfer that information to the first four columns in your touchpoint spreadsheet.

Step 3: Identify ownership

Who owns the touchpoint? Use the working session as an opportunity to clarify touchpoint ownership.

For example, appointment scheduling may be owned by Pre-Sales, invoicing by Accounting, troubleshooting by Support, demos by Product, and webinars by Marketing.

Indicate the primary owner (column 5) for each touchpoint in your spreadsheet.

Step 4: Rate the touchpoint's impact

Since not all touches are equal, it's important to understand the individual impact of each interaction.

Even some touches that appear similar do not carry the same weight. For example, a mix-up in a coffee delivery might be irritating but not damaging if rectified quickly. A mix-up in the delivery of medication, however, may be enough to lose the customer.

Score the impact of each touchpoint on the experience using a 1-10 scale, with 1 being "doesn't have a high impact on the experience" and 10 being "has a very high impact on the experience." Avoid guessing. Consider including members of your customer advisory board in the process. If necessary, conduct some customer research.

Add the information that results from this step to column six.

Step 5: Assess the effectiveness of critical touchpoints

Ah, the value of the sort feature in Excel! Sort your touchpoints by the impact column. Initially focus on touchpoints with a score of 8 or higher.

Add two more columns to your spreadsheet (your spreadsheet now has 8 columns) with these labels:

  1. Operational effectiveness
  2. Customer experience effectiveness

Then using the same scale of 1-10, with 1 as "extremely ineffective" and 10 as "extremely effective," evaluate each touchpoint that earned an 8 or more on its ability to positively impact operational effectives and customer experience. (If you're up to it, do this for all the touchpoints.)

Step 6: Analyze what is and isn't working

You're almost finished. Create a 2x2 grid, with one axis labeled "operational effectiveness" and the other labeled "customer experience," and map each touchpoint with an 8 or higher onto the grid.

Each touchpoint will fall into one of four quadrants on the grid—high operational effectiveness/high customer experience, low operational/low customer experience, high operational/low customer experience, low operational/high customer experience.

The mapping will allow you visualize whether and where there are weak links in the overall experience. Indicate the quadrant for each touchpoint back on your map.

So what now?

For each touchpoint you now have three pieces of data:

  1. An impact/importance score
  2. An effectiveness score
  3. A point on the grid

For those touchpoints that were in the low/low quadrant of the grid that have a rating of 8 or higher for importance develop, prepare and implement a corrective action plan.

* * *

Let's think back to our opening scenario. By using the approach outlined in this article, the service manager will have a solid idea about whether his customer will make the referral.

Though every interaction matters, to improve customer experience you need a place to start. This approach helps you identify the touchpoints that will have the greatest impact on improving and delivering great customer experience, as well as on your customer retention rate and your customer referral rate.

Customer experience/engagement is a core competency that every company needs to cultivate. Ready to evaluate your touchpoints?

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How to Measure Touchpoint Effectiveness: Six Steps to Better Customer Experiences

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image of Laura Patterson

Laura Patterson is the president of VisionEdge Marketing. A pioneer in Marketing Performance Management, Laura has published four books and she has been recognized for her thought leadership, winning numerous industry awards.