Measuring CX: Why You're Doing It All Wrong

NPS. CLI. CSAT. CES. CLV. And on and on and on. Most of us have tried it all — and often with such ardor that we tend to categorize CX professionals by which camp they’re in. I’ve spent at least a bit of time in all of these camps, I have to admit. The unfortunate truth is that each of these metrics can serve a purpose but are off the mark if we are truly trying to use metrics to run the business and affect change.

So, what is the mark we need to hit?

First, let’s explore the most important dimensions of measuring CX.

The Magnificent 7: Why Measure CX

1. Continuous improvement: Having data that reliably points to what is wrong with our current business processes and what to focus on in order to fix those issues.
2. Trending over time: Assessing whether we are or are not improving from one period to the next.
3. Improvement of CX performance for individual customers: Objective evidence that we are getting better at servicing specific customers based on their perceptions and objectives.
4. Benchmarking: Comparing our CX strategy with industry or process leaders so we know where we stand and, when we are a leader, so we can promote our position against competitors.
5. Customer performance: Assessing whether our customers are meeting their objectives and how we have (or haven’t) facilitated that.
6. Return on CX investment: Are we seeing the financial payback we had promised from developing specific capabilities and deploying programs?
7. Alignment of our CX strategy to company success: Whether we are contributing to revenue, profitability, market share, social or other strategic objectives set by the organization.

Each of today’s most frequently used metrics might help with one or even a few of these objectives, but none fully meet the need. Net Promoter Score, for example, is a perfectly viable way to benchmark across organizations or assess broad improvements over time, but I defy anyone to use it to improve specific journeys, processes or business objectives. And there is no way NPS can help us demonstrate the direct linkage between CX and company profitability. Or how about assessing the return on investment in CX programs?

Related Article: Are You Using the Right Customer Experience Analytics?

Extraordinary Measures: New Way to Think About Measurement

Instead of the classic measures of CX, why not look at ways to more directly assess the progress of our customer strategy? Instead of abstractions that assess broadly, why not take a more tactical, cause-and-effect oriented approach? To do this, we first need to explore the key contributors, or capabilities, that drive an effective CX strategy. In my experience, these are:

• Customer Feedback, Data & Analytics: Collecting, analyzing, interpreting, and reporting on customer input, as well as managing customer data across the enterprise. Consider programs such as voice of the customer, customer data management, analytics, storytelling, customer segmentation, and customer advisory boards.
• Customer Engagement: Interacting and collaborating with customers through programs that focus on account management, awareness-to-buy engagement, post-purchase engagement, executive sponsorship, issue resolution, user experience and proactive “white glove” customer care.
• Customer Success: Capabilities focused on effective product or services usage, customer communities and platforms for sharing best practices, product adoption, and value realization.
• Customer Marketing: Developing customer content and related marketing campaigns, account-based marketing, customer references and reward/referral programs.
• Customer-Centered Transformation: Orchestrating business transformation and change management programs through the lens of customer experience and outcomes.

CX strategies are brought to life through many combinations of each of these capabilities and programs, with specific emphasis varying over time: as a function of program maturity, the state of the business, competitive position and overriding company objectives.

When I was chief customer officer at Oracle, we initially focused on feedback, data and engagement efforts. Later, when those capabilities were more mature, we turned greater attention to customer success and marketing. Finally, we looked at how to weaponize CX for transformation, change, and CX-oriented competitive advantage.

The overall objective of CX is to develop and exploit these capabilities to help you and your customers attain desired outcomes. What could possibly be a better way to measure success than by gauging the effectiveness of each capability? If we look at customer engagement, for example, improvements in account management programs create better overall customer engagement and customer experience. The same goes for brand advocacy and its impact on customer success and experience.

Given a well-defined set of capabilities, it’s a relatively small leap from capabilities to programs and then to measurement or impact.

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Related Article: How Do You Measure Customer Success? Very Carefully

Hidden Figures: Some CX Metrics Hiding in Plain Sight

Here are some examples of metrics that can help us gauge the effectiveness of our core CX capabilities. Note that mileage may vary. These metrics work for me but may need some tweaking to pass your litmus tests of easy access, easy comprehension and communication, and a comfortable balance between quantitative and qualitative:

It can be highly impactful to take both an outside-in and an inside-out approach to every measurement. When your customers have one view and your employees see something else, that is always good to know and deal with. In some (or even many) cases, you may already have your customer input on an essential capability or program (see my earlier article on customer feedback) so just ask your employees. It is also worthwhile to align each measure to top-level company objectives and metrics. There is no better way to prove the importance of CX than to continually and loudly relate how we measure it to how the business is performing in financial, strategic and operational terms.

In addition to more granular measurement of each of the capabilities and programs, it is important to pick just a few critical measures that you can easily and effectively communicate company-wide. If I had to pick no more than five things to assess in a universal CX scorecard for my company, those five would be:

1. Customer Feedback, Data, & Analytics: How actionable are our customer insights? Can you efficiently and effectively use the data you collect?
2. Customer Engagement: How mutually productive are our customer partnerships?
3. Customer Success: Have we helped our customers attain their desired objectives?
4. Customer Marketing: Do we maximize the value of customers advocating for our brand?
5. Customer-Centered Transformation: Do we demonstrate thought leadership in how we organize our company around customer experience?

Related Article: Enough Already With Customer Feedback. Make Your Move

The Last Action Hero: How to Get Going

Assemble a cross-functional team (and get outside help as necessary) to define and put the right set of metrics in place by:

1. Confirming your core capabilities. I recommend those described in this article, but yours might be a bit different.
2. Confirming and prioritizing each of the crucial programs within those capabilities.
3. Confirming or identifying the metrics that will assess the effectiveness of each program.
4. Evaluating the viability, efficiency and effectiveness of the metrics across a few dimensions including easy access to data, a comfortable balance between quantitative and qualitative and how relatable the data is across your company.
5. Finally, mapping each capability, program and metric to your company’s top-level strategic, financial and operational metrics.

None if this is easy, but it’s definitely possible. And the rewards that come from galvanizing the organization around the CX strategy in extremely practical terms are significant. The right measurement approach takes otherwise ethereal CX ideals and breaks them down to exactly what it takes to authoritatively implement them.

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