Organizations are discovering that loyalty is highly correlated with customer experience. While any organization can improve segments of its customer experience, it takes more than a few superficial changes to create significant changes that deliver long lasting results.
In the coming years, customer experience management solutions will no longer serve as a luxury -- they will become a competitive necessity. Customer experience programs that report actionable intelligence can give organizations a competitive advantage by optimizing their customer service to retain and expand their customer base.
Recent research from Ovum indicates that retail banks across the globe will see IT spending grow 3.4%, reaching US$ 118.6 billion in 2013, as CIOs focus on customer satisfaction and revenue growth. According to Forrester’s State of Retailing survey report, online retailers in 2013 will get back to basics by focusing on strategies and tactics to improve the customer experience and increase web conversion and loyalty across all devices, especially mobile.
Any organization seeking to implement a customer experience program will need a quantitative method to track the experiences of its customers. The correct metrics will allow an organization to consistently monitor how it is performing over short- and long-term periods, as well as compare performance across channels and geographies.
Choosing the right set of metrics allows an organization to also accurately measure changes in customer interactions and develop solutions to improve them where necessary.
Choosing the Best Combination of Metrics
With numerous metrics to choose from, organizations can tailor what they would like to measure about their customers’ interactions. But how does an organization determine which metrics are best suited for its needs? These six strategies can help organizations sift through several options and arrive at an optimal combination.
1. Industry
Certain metrics are more suited to some industries more than others. This is determined by the way that customers interact with the organization’s products or services as well as how the responses will be collected. The nature of each industry is the broadest consideration for what type of metric will produce the most relevant results.
2. Survey Methodology
The level of access to customer contact information sanctioned by the industry will dictate what collection method can be used for the survey. For example, a mobile phone number is needed to send an SMS survey and an email address is necessary for an email invitation-based web survey. When little contact information is available, gateway partners are often available to help fill this gap.
3. Brand Promise
Fulfilling brand promises creates a highly positive customer experience. It is important for each organization to identify any brand promises and find metrics that will correlate with the underlying sentiment. To easily identify brand promises, pinpoint selling features that an organization markets and find the basic guarantee within. Once this is determined, the organization can find a metric to support the assertion.
4. Organizational Visibility
Taking into account which levels of staff will be reviewing customer response results will affect which metrics are selected. For example, if the goal is to engage frontline employees to improve service, monitoring each service interaction would be beneficial. However, if the goal is for corporate executives to learn customer perceptions of the brand, the same metric may not be as useful as a more high-level analysis.
5. Channel Evaluation
Determining which channels will use the program will also help metric selection. If an organization is tracking customer experience within a contact center, retail and web channel, it should determine if each division offers the same type of experience and has the same goals. If experiences are varied, different metrics can be implemented in each channel to best suit its needs.
6. Consistency
While using too many metrics can dilute the impact of results, using only one may not provide enough information. In most cases it is best to use a combination of metrics. This combination of metrics can differ completely based on channels, or can be consistent across all service touch points.
Tried and True - Six Common CXM Metrics
Determining the right blend of metrics can be a daunting task, as there are many to consider. Fortunately some of the most common metrics may provide the perfect solution.
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Customer Satisfaction (CSAT)
This classic metric makes it possible to measure and improve how happy customers are,giving organizations a way to increase their likelihood and frequency of purchasing as a result.
Customer Effort Score (CES)
CES measures how much work is required for a customer to solve a problem. This metric seeks to evaluate the entire service experience and reduce the number of interaction points required of customers across channels. In recent years this metric has gained popularity as organizations realize that providing easy interactions with the organization as a whole is a valuable service.
Net Promoter Score (NPS)
Through finding out how loyal customers are to an organization, NPS is able to measure the percentage of customers who would put their own reputation on the line and recommend the organization to others, which is the highest form of loyalty. It seeks to find those loyal customers who will bring more business to the organization and those who are not as satisfied, to find ways to improve their experiences.
General Question Index & Customer Experience Index (CXi)
These index options contain multiple questions that each address an element of the organization or service channel. General question indexes are often used to provide insights into detailed aspects of a customer experience.
American Customer Satisfaction Index (ACSI)
The ACSI is an economic indicator that measures customer satisfaction of consumers across the United States, with similar national versions available for other countries including the UK and Singapore. The ACSI is now the most well-known national customer satisfaction index.
Wallet Allocation Rule
When it comes to determining customer loyalty, what ultimately matters is how much a consumer spends with an organization. Through measuring the amount a customer spends on a particular organization within an industry, and ranking this against other organizations, it is possible to gain an accurate sense of customer loyalty and the wallet share occupied by each.
Summary
When developing a customer experience program, the number of metrics available can initially seem overwhelming. It is essential to choose metrics that make the most sense for your industry, organization and customer experience program. This will allow for insights that are valuable in terms of amount of data, what the data means and the intentions of the program.
Key to selecting the right metrics is choosing what will be actionable. To see improvement in organizational performance and collected metrics, findings should be seriously evaluated and changes should be made based on metric results. This will lead to increased loyalty, satisfaction and revenue, which are at the core of any customer experience management program.
Editor's Note: Interested in reading another perspective on building great customer experiences? Read Ashley Eckel's 3 Reasons Why Web Analytics Aren't the New Marketing Funnel