In business, you can’t improve what you’re not measuring—and today’s organizations typically measure progress and success with key performance indicators (KPIs).
A successful business is synonymous with higher customer satisfaction, retention, and overall brand reputation. So it’s no surprise that most companies rank customer experience as their top business priority. But all too often, in their mission to track and quantify progress, business leaders end up prioritizing processes that directly oppose customer-centric behaviors.
Traditional KPIs include measures of profitability, productivity, and process efficiency—all of which are internal metrics. Analyzing these metrics can undoubtedly give indications of overall performance. But when prioritized above all else, they risk missing the bigger picture of how a business can provide the most value to customers.
Consumers are increasingly deriving value from their interactions and experiences with a brand. Eighty-three percent of consumers pay as much attention to how brands treat them as they do to the products, and 89% report switching to a competitor following a poor experience.
So as experience becomes a more important measure of performance, the most successful companies are creating emotional connections at every touchpoint. With today’s consumers firmly in the driver’s seat, business leaders need to have the right tools, processes, and overall customer-centric culture to stay in the game.
Customer Value as a KPI
Although efficiency, productivity, and profitability will continue to be important, customer value is rapidly becoming the real star of the analytics show.
Unfortunately, measuring customer value is more complex than tracking traditional KPIs. Factors such as social value, brand cachet, and the emotional experience a service or product provides come into play—all of which are harder to quantify with standard methods.
Here’s how to shift your KPI scorecard toward customer value to set yourself up for success.
Establish which KPIs will give you rich, customer-centric data.
Customer engagement metrics are useful at this stage, helping you allocate your resources better and establish standards to monitor and assess—and, crucially, understand—how your customer views you.
A good range of customer engagement metrics include:
- Customer satisfaction score
Measuring your customer satisfaction score tells you how happy a customer was with their last interaction with your company and gives you a chance to improve based on their feedback. Net promoter score is a similar metric you can use to measure the customer experience.
Your churn rate reflects the percentage of customers who stop doing business with you during a specific period. Although customers leave for a variety of reasons, you need to know whether there is a consistent theme so you can address the cause.
This KPI ties nicely into churn. Your customer lifetime value score will give you the expected revenue your company can generate from a customer, helping you estimate the future return from marketing initiatives.
Let customer value take center stage with customer performance indicators.
KPIs are a great place to start, but it can be too easy to get lost in the numbers and distracted from what matters to customers. Another approach to measuring success is to supplement these metrics with customer performance indicators (CPIs).
Many companies confuse KPIs with CPIs. Although KPIs can be an effective measure of sentiment, there’s still a risk that KPIs overlook what’s relevant to customers. KPIs are intrinsically linked to a company’s goals, but CPIs focus on what customers care about the most, such as value and satisfaction, which lead to loyalty and retention.
Ongoing dialogue with your customers is the best way to get the most out of your CPIs. Ask them what value they derive from your business, what keeps them coming back, and what influences their purchases. Ask, listen, design, implement—and then ask again.
Bring together the right metrics, the right tools, and the right mindset.
This continuous loop of monitoring and adjusting requires a more sophisticated approach than isolated measurement tools collecting data from single touchpoints. Unlocking value from customer-centric data requires an analytics platform that can integrate, extract, and synthesize data from across the software stack.
Customer-relationship management (CRM) technology with agile, intuitive analytics features can yield results far beyond what managers see in their organization-wide tableau setup. A 360-degree view of your business empowers you to make bigger decisions based on granular detail.
Judging your measurement of success from traditional KPIs risks creating a situation in which teams are motivated to perform aggressive sales tactics to achieve their targets, which can be destructive to good customer relationships. Complementing these metrics with CPIs cultivates a different type of accountability, encouraging teams to achieve customer satisfaction above all else—which can lead to better retention and more revenue.
The Experience of Customer Experience
Always remember that customer experience is just that: an experience.
Consumers are less interested in your brand than you are. They’re focused on their own experience. To truly measure your brand’s impact on their lives, you need to look past individual touchpoints and evaluate their holistic experience.
Although this is about more than just the numbers, the only way to know whether you’re hitting the mark is with data. Your analytical tools and processes need to be flexible enough to help you measure and deliver authentic experiences that will cultivate lasting customer relationships.
Discover how Zoho CRM’s intuitive analytics can help you deliver lasting customer value.
