Customer Analytics

3 steps to drive change via customer metrics

The key to deriving value from customer metrics lies in taking a holistic view, developing a deeper understanding of customer motivation and behaviour and embedding customer-centricity across the organisation.

by Peter Bull (contact), Anit Roy-Choudhury (contact)
6 minute read

 1. Define Intent

Companies need to be clear about what they hope to achieve from their customer metrics, and how these will be used and shared across the business. Asking the following five key questions should stimulate a valuable discussion on the ultimate intent of metrics.

  1. Are we looking for a top-level gauge of progress? Or are we seeking detailed insights to drive specific improvements?
  2. Are we primarily looking to address poor customer satisfaction? Or are we trying to create long-term customer advocacy and loyalty?
  3. Do we want to influence staff behaviour across the organization? Or are we focused on the leadership team?
  4. Will the metrics be linked to individual performances and incentives?
  5. Do we want metrics to be ongoing, in order to continually learn and change?

Agreement and clarity on these questions is the strategic input from leadership that is essential to setting the right parameters across the organisation.

Driving revenue by redefining customer metrics

When assessing its digital web offering, one of our retail clients used classic web metrics such as drop-off rates from pages, and customers not completing orders. However, this information was not helpful in explaining why potential customers were not fully engaging with the website.

The leadership team redefined the intent of using customer metrics to be clearly focused on improving revenue performance by addressing poor levels of customer satisfaction in the web experience. This shift led to the introduction more qualitative measures of customer experience, and asking customers their views and experiences with competitor web sites. Insights gained from these new metrics helped the company build a fuller picture of what drove customer behaviour. These insights helped to formulate a fresh web strategy and design, with customer-friendly features aimed at converting viewers to sales.

2. Design an appropriate set of metrics

Customer metrics should be viewed in the same way as financial metrics - as Board-level performance data that influences the view of corporate performance. Once the intent of using the metrics is clear, the appropriate set should be identified to track customer outcomes as well as the primary drivers and root causes – this set could be a combination including operating and financial metrics. A key performance indicator (KPI) dashboard can then be created to highlight the extent to which the company, and its executives, are meeting customer goals and core business process objectives, and how these are interrelated. As with financial metrics, the presentation of results should be as simple as possible, with clear visuals, supported by an appropriate level of detail and analysis to drive action.

 Improving performance by combining brand metrics with operational measures

In seeking a single, high-level customer metric to track against overall corporate results, a global pharmaceutical company was not able to link the reported scores to specific actions that could improve performance.

Management realised that it needed to ask further, deeper questions on issues such as product quality, service and pricing, and integrate operational metrics that connected what customers were saying with what they were actually doing.

The company settled on a combination of metrics, including CSat, NPSSM and other brand, service and value perception measures. When linked with operational measures such as time taken to make a transaction, speed of delivery, time-to-invoice, and invoice error rate, they could determine why customers were satisfied/dissatisfied, and, ultimately, connect these findings with share of wallet and other financial performance measures.

3. Embed the metrics

Selecting the right metrics is, arguably, the easy part. The real challenge comes in instilling the metrics into the fabric of your organization, to create a culture that is dedicated to taking action against these metrics and delivering an excellent customer experience.

Customer metrics are not just useful supporting data, but are essential indicators of business performance. Teams across your organisation need to appreciate the importance of meeting customer expectations, and be encouraged to prepare and study the metrics as part of their everyday jobs. By embedding metrics into your organisational operating model, you can make a significant difference to performance. Here are some examples:

Core business should monitor their impact on customer metrics, and in turn can be realigned towards the highest value segments, for example, logistics processes giving valued customers better delivery terms.

  • Digital infrastructure and support services should maximise customer impact and can be adapted to prioritise key segments.
  • The skills and capability requirements for staff can be expanded to include a deeper appreciation of the importance of customer experience and associated metrics, as part of a broader cultural shift.
  • Executive incentives could be partly based upon attaining critical customer metrics.

Unbiased questions on experience, satisfaction and other measures, posed at the right point and at the right frequency, should engage both customers and staff. Some questions to consider include:

  • How can accountability be created? What decisions will need to me made as a result of gained insights? Who will make these decisions?
  • How will the metrics drive behaviour, for customer-facing staff, as well as employees (and possibly third parties) indirectly involved in the value delivery chain?
  • How can metrics be used to drive broader cultural change?

To be committed to customer-centricity, executive leadership need to agree a unified and integrated approach to designing, implementing, and embedding the use of customer metrics. Steer clear of common pitfalls by avoiding a ‘one-size-fits-all’ approach of singular metrics, and adopting a more balanced, nuanced set of metrics that recognise and account for the subtleties of customer behaviour – delving into the ‘why’ beyond the ‘what’.

Finally, once the set of metrics is agreed, it is imperative to embed them across your organisation, turning observations into actions that can drive improved customer outcomes. As a final ongoing step, metrics should also stimulate continual learning, by evaluating how decisions impact customers, and encouraging new ways to improve products/services, delivery and customer service.

What are your biggest challenges with customer metrics? When was the last time you took a holistic view?

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