Customer Experience and Performance: Definitions, Principles, and Measurement

A. What is Customer Experience?

Customer experience can be defined as the set of interactions, emotions, and perceptions a customer has when purchasing a product or service — before, during, and after the purchase (source). This includes contact with customer service, advertisements, and in-store appointments. These elements collectively shape a customer’s overall perception of a brand — either positive or negative.

To optimize customer experience, it must be approached from several dimensions: cognitive and emotional. The cognitive dimension appeals to rational decision-making (price, quality, customer service), while the emotional dimension creates attachment through values such as nostalgia, exclusivity, and environmental responsibility. A third component, the conative dimension, influences customer behavior, particularly purchase intention (source).

In today’s digital age, customer experience is increasingly data-driven. From tech giants (GAFAM) to SMEs and retail giants, businesses compete to better understand their customers — a complex challenge due to the emotional and subjective nature of experience.

B. Key Pillars of Customer Experience

A good customer experience relies on a seamless buying journey. Depending on the industry, this journey can be in-store, digital, or both. Several key stages include:

  • Anticipation: Assessing and estimating customer needs

  • Purchase experience: Did the process feel smooth or frustrating?

  • Delivery experience: Was the package timely and intact?

  • Product usage: Did the product or service meet expectations?

  • After-sales service: Can customers easily file claims and get responsive support?


Each step plays a crucial role in shaping the overall customer experience.

C. How to Measure Customer Experience?

Customer experience is inherently subjective and difficult to measure globally. According to Forrester, 39% of companies don’t measure it, and 72% don’t analyze its financial impact.

However, several marketing metrics exist:

  • CSAT (Customer Satisfaction Score): A simple satisfaction survey — often a yes/no question or star rating — helpful for identifying dissatisfaction.

  • NPS (Net Promoter Score): Created by Fred Reichheld (Bain & Company, 2003), this metric gauges customer loyalty:

    “How likely are you to recommend our brand/product?”

    Scores range from -100 to +100; above +50 is considered excellent (source).

While these tools are useful, they don’t always explain what customers truly expect.

To address this, companies can use:

  • CES (Customer Effort Score): Measures ease of experience on a 1–5 scale, collected immediately after interaction via open-ended questions.

  • Personas: Fictional profiles based on real cases help visualize different types of users and identify potential friction points (source).

How Customer Experience Drives Business Performance

A. Boosting Sales and Customer Satisfaction

According to PWC’s 2020 report, investment in omnichannel customer experience grew from 20% to over 80%, due to its direct impact on revenue (+27%) and customer satisfaction.

A poor experience — for instance, a non-user-friendly mobile site — discourages 57% of customers from returning. Conversely, 72% of customers share positive experiences with 6 others, while 13% of unhappy customers tell 15 or more people (source).

Thus, a strong customer experience directly boosts performance.

B. Enhancing Loyalty: Visibility and Cost Reduction

Loyal customers are cheaper to retain than acquiring new ones — up to 6 times less costly. Yet, only 15% of consumers are satisfied with loyalty programs in retail (source).

A personalized and effective customer experience strengthens loyalty, turning customers into brand ambassadors — an invaluable source of free marketing. Studies show that improving customer retention by just 5% can increase revenue by 25% to 55% (source).

C. Employee Motivation as a Performance Lever

61.9% of companies report that focusing on customer experience has improved employee engagement. Employees, who are also consumers, understand what customers expect and can devise innovative solutions.

This creates:

  • More efficient management practices

  • Better resource allocation

  • Increased employee productivity

As Richard Branson famously said: “If you take care of your employees, they’ll take care of your customers.” (source)

CEO involvement also correlates strongly with better results — firms with committed leadership saw revenues rise by over 59%.

Improving Customer Experience in the Retail Sector

The retail industry has undergone significant transformations, including fierce price competition and technological disruption. Businesses must now offer a unique, personalized customer experience to stay competitive.

A. Omnichannel Strategy for a Seamless Experience

Retailers have embraced omnichannel strategies — integrating all customer touchpoints, unlike multichannel or cross-channel approaches (source).

This strategy enables:

  • A 360° view of customer needs

  • Smoother experiences with fewer friction points

  • Improved responsiveness and transparency

By leveraging direct, indirect, and inferred feedback, companies can craft a consistent, optimized experience (source).

B. Customer Knowledge, Recognition, and Personalization

Retailers now collect customer data via loyalty cards or online profiles. This allows them to:

  • Recognize repeat customers

  • Offer personalized promotions

  • Suggest products based on purchase history (e.g., complementary items, new books by the same author, recipe ingredients)

Recognition — both online and in-store — enhances feelings of exclusivity and loyalty. These actions build strong customer communities (source).

C. Toward a Phygital Experience?

The concept of phygital blends physical and digital retail. Following the rise of e-commerce, major players like Amazon Go and Casino have launched connected stores (source).

Examples include:

  • Facial recognition at checkout

  • 24/7 automated stores

  • Virtual assistants (e.g., “OK Max”)

  • QR-coded product info and interactive showrooms

Phygital retail creates richer, more convenient experiences, aligning with evolving customer expectations.

Conclusion

Customer experience lies at the heart of retail transformation and is a key driver of business performance. It impacts sales, loyalty, employee motivation, and ultimately long-term sustainability. While companies are on the right path, there is still room to create truly unique and optimized customer journeys — with phygital experiences leading the way.

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