A variety of metrics can be used to measure whether a human body is healthy, but each only tells part of the story, blood pressure being one example. Measuring the risk of losing customers can be equally tricky.
While an accounting system can show that product lines are losing more customers than gaining them, it cannot say why they choose to leave. Customer relationship management (CRM) systems contain a deluge of customer information, but it can be difficult to know which bits are worth investigating further.
To help solve the problem, a company can use customer experience metrics, such as the Net Promoter Score (NPS) and the Customer Effort Score (CeS), integrated into its CRM system, to find the 'why' needles in the information haystack.
NPS measures if more customers recommend a product or service than are critical of it; while CeS measures the amount of effort a customer has to put in to do business with a company.
However, before measuring anything, a business should understand how a metric will improve its bottom line, says George Todd, GM of operations at Merchants, a contact centre solutions provider.
"You have to take the metric, and drill it down to bottom-line impact," continues Todd. "If you see a five-point change in your NPS, what does that actually do to the propensity of your customers to leave you, or take-up of new customers, or your turnover in revenue, or your cost base?"
In other words, the company must get a return from the cost of improving customer experience.
Selecting the most meaningful metric for your market, geographic locations, business and customers is the next challenge. Each company has to decide what to “shine the customer experience metrics light on”, says Todd.
"Then we can see where we are at risk of losing customers, or where the opportunities are to gain more loyal or new customers."
Customer expectations of products and services, as well as their preference for low prices or low effort, have a significant impact on how meaningful a metric will be.
In a constrained market, for example, where customers have few choices, are price-sensitive and don't mind effort to do business, a CeS survey to check how easy a service was to use, or an NPS survey to determine how likely they are to recommend it, may not be very meaningful; customers may be resigned to a 'best of a bad bunch' option they regard as better compared to others.
When customers have lots of choices, and it's easy to move to another provider, the picture changes.
"CeS would likely be a useful metric," says Todd, "but only if one of the primary customer decision-making criteria is the amount of effort involved. If cost is the customer driver, more likely the cost differences between providers will dictate most customer movement."
Finally, it's not the absolute value of a metric that is meaningful; rather, changes in a metric are most significant, says Todd.
"Are your customers getting happier? Are your customers finding it easier to do business with you? Are they more likely to recommend you? Those things tell you [that] you are doing something that should have a bottom-line effect on your company."
Share