Blended Index: How to Create a CX Single Metric

The use of blended indices is quickly becoming a best practice as companies attempt to connect the dots across many sources of data being collected for their organizations. No single measurement tells the whole story—and that’s particularly true of multi-location businesses. Why? Because locations are looking at operational excellence metrics, satisfaction and loyalty metrics, as well as financial metrics to understand how they perform. And how they perform needs to be within the context of the brand itself and peer groups. In order to make sense of the rich data sources, we recommend constructing a blended index.

WHAT is a blended index?

A blended index creates a composite score from multiple data sources, spanning operational and customer metrics. The algorithm must normalize the data so that scales are not an issue (e.g. mystery shopping on a 100 point scale, customer satisfaction on a 5 point scale, or contacts on a number of complaints/1000 transactions). The algorithm should also flex to weight specific metrics. This single score provides the brand—and your locations—with a holistic view of performance across all metrics.

WHY should I have a Blended Index?

A blended index that spans across operational and customer metrics helps you understand performance as a whole. The magic happens when you bump that information up against a financial metric like same store sales growth, revenue per available room, or volume of gas sold. You’ll then want to understand the performance of every location on that grid to determine where you will want to require better operations, more marketing to drive traffic, management changes, and adoption of best practices.

HOW do I get value from a Blended Index?

The final step in maximizing your value from a blended index requires socializing the information with the rest of the organization. Executives and managers from both operations and marketing need to understand the numbers. More importantly, they need to drive action across the organization. Finding the critical drivers—specific actions that can be taken to change scores on the blended metric—must happen. Without that commitment, you’ll be looking at data that stays the same and never changes—and that will not help you grow your brand. 

Sam McKeveny is Head of Program Development, North America at Market Force Information. Sam consults with client executives to design program architectures that systematically improve operational execution, customer delight and sales growth.