In business, you can’t improve what you don’t measure—and today’s organizations often measure progress and success using key performance indicators (KPIs).
A successful business equates to higher customer satisfaction, retention, and overall brand reputation. So it’s no surprise that most companies rank customer experience as theirs top business priority. But often, in their mission to track and quantify progress, business leaders end up prioritizing processes that are in direct opposition to customer-centric values.
Traditional KPIs include measures of profitability, productivity, and process effectiveness—all of which are internal measures. Analyzing these metrics will undoubtedly provide clues to overall performance. But if it is prioritized above all else, it risks losing sight of the bigger picture of how a business can deliver the best value to customers.
Consumers increasingly derive value from their interactions and experiences with a brand. Eighty-three percent of consumers pay a lot of attention how brands treat them as they do with products, and 89% reported transfer to a competitor following a bad experience.
So as experience becomes an increasingly important measure of performance, the most successful companies are creating emotional connections at every touchpoint. With consumers now firmly in the driver’s seat, business leaders must 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 fast becoming the real star of the analytics show.
Unfortunately, measuring customer value is more complicated 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 move 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, importantly, understand—how you’re perceived. to your customer.
A good range of customer engagement metrics include:
- Customer satisfaction score
Measuring your customer satisfaction score tells you how happy a customer was during their last interaction with your company and gives you an opportunity to improve based on their feedback. Net promoter score is a similar metric you can use to measure customer experience.
Your churn rate shows the percentage of customers who stop doing business with you during a certain period of time. Although customers leave for different reasons, you need to know if there is a consistent theme so you can address the reason.
This KPI correlates well with churn. Your customer lifetime value score will give you the expected revenue your company can generate from a single customer, which will help you estimate future returns from marketing initiatives.
Make customer value take center stage in customer performance indicators.
KPIs are a good place to start, but it can be very easy to get lost in the numbers and get distracted from what’s important to customers. Another way to measure success is to add these metrics to customer performance indicators (CPIs).
Many companies confuse KPIs with CPIs. Although KPIs can be an effective measure of sentiment, there is a danger that KPIs miss what customers are concerned with. KPIs are intrinsically linked to a company’s goals, but CPIs are focused on what customers care about mostsuch as value and satisfaction, which lead to loyalty and retention.
Continuous dialogue with your customers is the best way to get the most out of your CPIs. Ask them what value they get from your business, what keeps them coming back, and what influences their purchases. Ask, listen, design, implement—and then ask again.
Combine the right metrics, the right tools, and the right mindset.
This continuous loop of monitoring and adjustment requires a more sophisticated approach than isolated measurement tools to collect data from single touchpoints. Unlocking value from customer-centric data requires an analytics platform that can integrate, extract, and synthesize data from the entire software stack.
Customer relationship management (CRM) technology with agile, intuitive analytic features can deliver results far beyond what managers see in their tableau setup across the organization. A 360-degree view of your business empowers you to make bigger decisions based on granular detail.
Judging your success measurement from traditional KPIs risks creating a situation where teams are encouraged to make aggressive sales tactics to reach their targets, which can damage good customer relations. Completing these metrics with CPIs cultivates a different kind of accountability, encouraging teams to achieve customer satisfaction above all else—which can lead to better maintain more income.
The Customer Experience Experience
Always remember that the customer experience is just that: an experience.
Consumers are less interested in your brand than you are. They are focused on their own experience. To truly measure your brand’s impact in their lives, you need to look past individual touchpoints and evaluate their overall experience.
Although it’s more than numbers, the only way to know if you’ve hit the mark is with data. Your analytical tools and processes must be flexible enough to help you measure and deliver authentic experiences that cultivate lasting customer relationships.
DISCOVERING how Zoho CRM’s intuitive analytics can help you deliver sustainable customer value.