Appendix D

An Overview of Measurement and Model Analysis Methods

A ForeSee Technical White Paper

Russ Merz, PhD, Research Director, ForeSee

We are providing this white paper on the methodology behind ForeSee's customer experience metrics for people (such as Alex, from Chapter 1) who are interested in a more in-depth understanding of how the modeling works.

Introduction

Background: The methodology behind ForeSee's customer experience models and technology has a proven relationship with customer spending,1 shareholder value,2,3 cash flows,4 and business performance.5 The underlying theory and modeling approach supporting the index are backed by more than 80 years of rigorous scientific inquiry in the fields of consumer psychology and psychometrics, coupled with advanced analytic techniques from statistics and econometrics. While applicability of this methodology to the management of commercial product and service companies has been repeatedly demonstrated in the literature,6,7 this paper provides a basic description of the underlying measurement and model analysis methods that are used by ForeSee in the design, development, and delivery of products.

The purpose of this paper is to provide the reader with an overview of how ForeSee uses measurement and analysis methods to meet the performance measurement requirements of the business community and improve the management and delivery of their products and services to customers. This is accomplished by:

  • An examination of how ForeSee ...

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