The Most Important Customer Experience Metrics

Summary

  • You can't manage what you can't measure. That's why customer experience metrics are needed to bring real-time visibility to the most important drivers of customer experiences (CX) and company outcomes.
  • Improving CX isn't done by coming up with a list of CX metrics that get looked at from time to time. It's done by implementing metrics that induce action, create value, change behaviors and deliver financial impact.
  • To choose the best metrics for your company, identify the insights you want to acquire, the challenges you want to resolve and the performance factors that contribute to the most important customer and company goals. In this post, we share a 5-step process to do this, and to shift CX metrics from just being visible to inducing the action that elevates the CX and the company's financial performance.
Johnny Grow Revenue Growth Consulting

Are you delivering superior CXs? That's a question best answered with metrics.

Performance metrics are needed to shine a spotlight on the drivers that most impact the CX. Customer experience metrics show what's working and what's not. They reveal business process friction points that reduce repeat purchases and cause customers to churn. And they reveal the specific interactions that delight customers and increase customer lifetime value, customer advocacy and referrals.

But using any performance metric to identify actionable opportunities for business growth is easier said than done.

Gartner advises that over 70% of business leaders incur problems implementing CX programs that make metrics actionable and drive measurable business results.

And that's the challenge. Anybody can come up with a list of metrics. But to apply those figures to create actionable business improvement opportunities, change staff behaviors that improve CXs and quantify the result is a much taller order. The best metrics are those that get acted upon, not just reported on.

The metric isn't the goal. It's a recommendation for action. Action is the goal.

That's why we apply a customer experience framework to make it easier.

Below is an extract of the Johnny Grow framework that you can apply so that every CX metric delivers actionable and measurable value that improves customer and company outcomes.

A Holistic Customer Experience Impact Model

If your CX program is something that you need to measure, improve and demonstrate concrete results for, consider the following 5-point plan.

1

Identify the Most Strategic Measures

Start by selecting CX key performance indicators (KPI) that align with the company's top business priorities. For most companies, the top priorities are things like increased revenues, profits and market share.

Unless your CX KPIs directly impact these things, they are just not that meaningful and will struggle to gain executive support and continued funding. Also recognize that this cannot be done in an internal vacuum. The KPIs selected must matter to your customers. Below are some of the most common strategic KPIs.

    1. CX Score
    2. Customer Lifetime Value (CLV)
    3. Customer Health Score
    4. Customer Retention Rate (CRR)
    5. Net Promoter Score (NPS)

2

Define the Decentralized Measures

Improving CXs is an enterprise-wide effort. Even if one area of the business executes well, the overall experience can still disappoint if another area falls short. Each customer facing department must identify and be responsible for their contribution.

Marketing will apply KPIs that measure offer, promotion and content engagement. This will include measures such as Customer Engagement (AES), Brand Advocacy, customer sentiment and content conversion rates.

The contact center will use KPIs that primarily measure case resolution, such as First Contact Resolution (FCR), Average Resolution Time (ART), Customer Effort Score (CES) and most importantly Customer Satisfaction (CSAT).

Each decentralized measure should have a target and an owner who is accountable to achieve or maintain that target.

If you unsure of the departmental KPIs to use, you can either test and measure (a longer process) or conduct a one-day design thinking workshop to surface the most important and highest impact KPIs.

3

Define the (Cross Functional) Customer Journey Measures

This is where the magic happens.

CXs are not based on a single interaction but the culmination of a process or event. That requires measuring the interactions in a process and the completed process result. And the best way to do this is to use customer journey maps.

Customer Journey
Customer Journey

Journey maps measure the cross-functional interactions or touch points required to achieve a successful CX. They are visual, show the process from the customers' perspective, have a defined beginning and end, and can pinpoint the interactions that cause processes to fail. They are essential to correlate customer interactions with business outcomes.

4

Understand How Metrics Impact Each Other

Here's where most companies fall short – and where the biggest financial gains will be found.

No customer experience metric exists in a vacuum. Each has cascading effects that impact others and those impacts must be considered when identifying improvement opportunities and making tradeoffs.

You need to understand the relationships among metrics and how they roll up if you want to engineer outcomes or forecast how a change in any part of the business will impact the end result.

Below is dashboard we use to bring both visibility and predictability to the KPIs that will most improve customer and company outcomes.

Customer Experience Predictive Model

See how customer experience metrics impact each other, the customer experience and the company's financial performance.

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5

Deliver Metrics at the Point of Action

KPIs only work when actionable information is delivered to the right person at the right time.

The three best tools to make this happen are customer experience dashboards, CRM workflows and artificial intelligence (AI).

A good customer experience dashboard will shift from lagging to leading indicators, diagnose root causes and provide links to remediation actions.

Customer Experience Dashboard
Customer Experience Dashboard

CRM workflows can alert the right people when CXs fail and need quick remediation.

AI products such as Salesforce Einstein go a step further to harvest large volumes of customer data and deliver prescriptive insights to any customer interaction point. Based on any metric in the customer journey, AI can deliver real-time contextual next-best-experiences, guided interactions and other highly specific recommendations.

The point here is that CRM technology is needed to deliver the process automation and information reporting to make improving the CX systemic, automated and scalable.

According to McKinsey research, business leaders who use advanced customer experience analytics make both customers and employees happier and achieve revenue gains of 5 to 10 percent, while at the same time reduce costs by 15 to 25 percent within two or three years.