Three Ways To Use The Customer Perspective As A Measure Of Success
In business, you can't improve what you don't measure, and organizations today typically measure progress and success through key performance indicators (KPIs).
A successful business is synonymous with overall brand satisfaction, loyalty and reputation. Therefore, it is not surprising that most companies make customer service their top business priority. But often, in their quest to track and measure progress, business leaders prioritize processes that directly address customer behavior.
Traditional KPIs include profitability, productivity, and process efficiency, all of which are internal metrics. Analyzing these parameters can definitely give an indication of the overall performance. But if you sit above all else, you risk missing the bigger picture of how the business benefits customers.
Consumers increasingly derive value from brand interactions and experiences. 83% of consumers pay as much attention to how brands treat them as they do to products, and 89% say they've switched to a competitor after a bad experience.
So, as experience becomes an increasingly important performance measure, the most successful companies are creating emotional connections at every touch point. With today's consumers strongly driven, business leaders must have the right tools, processes and overall customer-centric culture to stay in the game.
Customer value as a KPI
While efficiency, productivity and profitability are still important, customer value is quickly becoming the real star of the analytics program.
Unfortunately, measuring customer value is more complicated than tracking traditional KPIs. Factors such as social value, brand equity and the emotional experience a service or product provides come into play, all of which are very difficult to measure using standard methods.
Here's how to move your KPI dashboard to the client side to set yourself up for success.
Determine which KPIs will give you the richest customer-centric data.
Customer engagement metrics are important at this stage, they help you better allocate your resources and set monitoring and evaluation standards, and most importantly, understand how your customers view you.
Good customer engagement indicators include:
- Customer satisfaction evaluation
Measuring customer satisfaction shows how satisfied a customer was with their last interaction with your business and gives you the opportunity to improve based on their feedback. Net Promoter Score is a similar metric used to measure customer experience.
Your churn rate shows the percentage of customers who stop doing business with you within a certain period of time. When customers leave for a variety of reasons, you need to know that there is a consistent theme to addressing the cause.
This KPI correlates well with unsubscribe. Estimating the lifetime value of a customer gives you the expected revenue your business can generate from a customer and helps you predict future revenue on marketing initiatives.
Center customer value with customer performance metrics.
KPIs are a good starting point, but it can be very easy to get lost in the numbers and lose sight of what's important to customers. Another way to measure success is to supplement these metrics with customer performance indicators (CPIs).
Many companies confuse KPI with CPI. While KPIs can be an effective benchmark, there is always the risk that KPIs ignore what is important to customers. KPIs are inherently related to company goals, but KPIs focus on what matters most to customers, such as value and satisfaction, which leads to loyalty and retention.
Constant dialogue with your customers is the best way to get the most out of your KPIs. 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.
Collect the right measurements, the right tools and the right mindset.
This cycle of constant monitoring and adjustment requires a more sophisticated approach than independent measuring devices that collect data from a single touch point. Unlocking customer-centric data requires an analytics platform that can connect, mine and synthesize data across the application stack.
Customer relationship management (CRM) technology with flexible and intuitive analytics capabilities can deliver results beyond what managers see on an enterprise-wide dashboard. A 360-degree view of your business empowers you to make big decisions based on small details.
Measuring your success against traditional KPIs creates an environment where teams are encouraged to use high-pressure sales tactics to achieve their goals, which undermines good customer relationships. Augmenting these metrics with CPI creates a different kind of accountability, encouraging teams to put customer satisfaction first, which leads to better retention and more revenue.
Customer experience
Always remember that a customer experience is just that: an experience.
Consumers care less about your brand than you do. They focus on their experience. To truly measure your brand's impact on their lives, you need to go beyond individual touch points and measure their overall experience.
While it's not all about the numbers, the only way to know if you're on target is to use data. Your analytics tools and processes must be flexible enough to help you measure and deliver the right experiences that foster long-term relationships with your customers.
Learn how Zoho CRM's intuitive analytics can help you deliver lasting customer value.
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