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Six Tips for Actionable CX Metrics
The expectation for CX is clear, but without the right metrics it is hard to know which efforts are paying off.
One of the most frequent questions I get from clients is “Other than Net Promoter Score, what other Customer Experience (CX) metrics should I be thinking about?” Statistical aggregates, or simply “metrics,” distill data into an easily understood form to ease decision making. Too often, the story ends after the data is gathered and eye-catching charts are created.
Here are some tips for creating truly actionable CX metrics:
Start by understanding your business model and how it drives customer interactions
Why do your customers choose to do business with you? What value do you create for them? An understanding of your firm’s customer segments, relationships and channels is a prerequisite to the development of useful CX metrics. Often underestimated, is the human context of the interactions between your firm and your firm’s customers. Where do interactions happen? What is typically on your customer’s mind when they interact with your firm? Finally, determine how those interactions correlate to value for the customer and profit for your firm. Which interactions drive sales? Which interactions drive complaints?
Don’t settle for metrics that are easy to gather
Many clients stumble by settling for metrics that can be easily gathered from existing resources. Sometimes this can be enough, but often clients find that technology or process changes are required to gather the really useful data. Because most traditional business architectures were designed for firm efficiency (as opposed to customer efficiency), quality CX metrics are likely to require changes to technology or processes. Don’t be limited to what data exists today, challenge your organization to think differently and invest the money and effort to gather data that captures your customer interactions. Alternatively, I sometimes see clients ask their operations or sales staff to gather data manually either via paper tick sheets or spreadsheets. I have found this to be counterproductive for numerous reasons. First, it usually demotivates the staff tasked with doing the tracking due to the tedious/laborious nature of the work. Second, it can detract from having authentic interactions with your customers as your staff becomes hyper-aware that they are being monitored and thus change their behavior to “rig the numbers.” Lastly, humans don’t make great data collectors. People forget, make data entry errors, lose track of data etc.
Uncover the links between internal behaviors and customer actions
The ultimate goal of compiling and gathering CX data is to change internal behavior in a way that positively impacts your customer’s experience which ultimately improves business results. Spend time studying the characteristics of customer interactions that drive positive customer actions. The nature of this exercise varies depending on the channels your firm uses to interact with your customers. However, the goal is always the same, to find patterns that can be exploited to improve CX and thus profitability. For an example that highlights the financial and brand perception impacts of a key customer interaction, click here for our Website Performance Study.
Align your metrics with the strategic decisions faced by your firm
Is your firm considering investing to gain market share or shed unprofitable customers? Is your firm pursuing a cost leadership or differentiated strategy? Gathering CX metrics that illuminate the complex strategic decisions facing the firm raises the importance of CX within the organization and avoids creating merely interesting factoids and PPT slides.
Consider instrumental variables
Sometimes it is simply too costly or impractical to gather some types of data. In our work in Customer Correspondence Management, due to the sheer volume of communications, we find that we often need to get creative in measuring impact. For example, suppose you operate a business that sends a mailed correspondence piece to your customers every month and you would like to know how many customers open the envelope, the so-called “open rate”. Each month, include the same offer in the correspondence, over time the number of offer acceptances can be used as an instrumental variable to determine the open rate for the mailing. Customer Correspondence Management pdf available here.
Net Promoter Score is a well-established and respected CX measurement, but it is important to note that NPS is based on human responses to a survey mechanism. That is to say, NPS is an aggregate measure of what your customers say, it is not a measurement of what your customers are actually doing. It is equally important to collect metrics related to actual customer behavior. Are your customers calling your call center more often? Cancelling their accounts? Complaining on social media? The point here is to track both what your customers say and what they do. (I would be remiss in not mentioning here the importance of measuring what your employees say and do. Your employees shape and drive customer interactions every day and understanding what they say and do is critical to building positive customer experiences. Bottom line: you should be measuring what your customers say and do as well as what your employees say and do.)
It is proven that CX efforts done right, translate to customer attraction, retention and reduced organizational costs. The expectation for CX is clear in most organizations, but without the right metrics, it is hard to measure which CX efforts are working and which need to be fixed. The strategic definition of the right metrics provides enormous value and enables more efficient and effective CX implementation.
What’s your biggest obstacle to accurate CX measurement? If you would like to speak with me about the right CX metrics for your organization, please contact me here.
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