Metrics for Customer Experience Management

Metrics selection may be your most important decision for customer experience success. Metrics drive thinking and doing, because they communicate to executives and employees what matters most to the company, what will be visible to peers and the chain of command, and what will be rewarded. The gravity of upside and downside to customer experience metrics selection cannot be overstated.

If you had to choose two words to sum-up what customer experience managers do, you might say "measure progress". Voice-of-the-customer tools and customer engagement efforts are essentially about "taking the temperature" of customers as the complement to, and hopefully, a predictor of the selling company's financial growth.

Laws of Metrics
This in itself is a clue to the "laws of metrics" (like "laws of physics"): they're not stand-alone figures, but rather, quantifications of a process flow. That probably brings to mind something like touch-point mapping or customer journey mapping, but those aren't the process flows to zero-in on when designing customer experience management metrics.

Instead, think of customer experience as a chain of activities and decisions that originate with your company's suppliers, proceed from department to department throughout your company, and eventually result in products, policies, business models, processes, services, touch-points, and interactions that collectively influence what customers experience in their dealings with your firm.

It’s Like Physical Fitness

The tendency to focus your metrics attention on end-results, such as NPS, CSAT, uplift, repurchase, and so forth, is faulty. Think of what it takes to meet other goals in business or life, and you'll see what I mean. For example, if your friend wants to lose weight, you would probably laugh if he focused his attention on his bathroom scale, shapewear, flattering patterns and lines in his clothing, and charming the people around him.

Your advice would probably be: "as much as all that is certainly more fun to do, you're really going to have to hit the gym on a regular basis, mix cardio and strength training to manage heart rate and metabolism, be religious about portion control and a balance of carbs-fats-proteins, and get enough sleep." Pure and simple, that's the hard truth you’d give your friend, right? You might even suggest a tracking device or website or coach that can monitor activity, exercise, food, and sleep. Bingo: that’s the way it works in customer experience management, too.

Two Predictive Paths
There are two paths of metrics you should be monitoring in order to see clearly what's predictive of the beloved end-results: (1) action plan metrics and (2) program metrics.

Action Plan Metrics

Like the fitness example above, these metrics can be diagrammed as internal process check-points that give you an early heads-up about whether you're on-track. If your in-process metric indicates that you're likely to produce scrap, re-work or disappointment down the line, then you should be able to make adjustments in your work to get it back on-track before those nasty things happen. When you've identified something to measure that allows this, it's a leading indicator. "Leading" because you see it before your stakeholder is aware of its output.

To identify good action plan metrics, start with voice-of-the-customer: (a) what are the most severe hassles customers deal with? (b) what are customers’ most-desired innovations? You may be tempted to zero-in on (b) because it appears to be the ticket to revenue growth. Yet change management studies show that humans are slower to embrace the positives when there are still a lot of negatives in-play for them. Think of it like a sailboat: rough waters or heavy anchors mean that attempting to catch strong wind in your sails could be disastrous with rips in the sail cloth or even cap-sizing of the boat. This gives you a clear idea of why it's absolutely necessary to address (a) in a systemic, root-cause-eradication way.

Read the customers' comments associated with the most severe hassles, and define a problem statement from the customer's viewpoint. Then identify the key themes among the comments. Conduct root cause analysis to identify the reasons why these hassles occur. Identify a metric that gives you a heads-up about your progress in eradicating a root cause. This is a predictive leading indicator.

Program Metrics

The key role of a customer experience management professional is to facilitate ownership of the customer experience across all departments and employees. Everything they do contributes one way or another to what customers experience. As such, it's essential to monitor their ownership progress and your facilitation progress. Examples include: % of employees who know what the top three customer hassles are, % of relevant departments participating in eradicating a root cause of a chronic customer hassle, % of action plans on-track, % of employees participating in cross-functional teams to tackle a big customer issue, % of employees who know how to use lean/six-sigma methods to address problems wisely, and so forth. These are leading indicators of the action metrics, because they reflect internal engagement necessary to "moving the needle" across the flow of activities that lead to what customers experience.

Connecting Leading & Lagging Indicators
To empower your friend in his ongoing pursuit of physical fitness, you'd probably recommend that metrics from his tracking device be placed side-by-side the metrics from his bathroom scale and clothes sizes and compliments from friends and acquaintances. The tracking device represents leading indicators (predictive heads-up trends) and the scale/clothes/compliments represent lagging indicators (end-results).

When leading and lagging indicators are shown together on a dashboard, it's empowering and enlightening. Do this with your program metrics, action plan metrics, and customer engagement/voice metrics. Add context with operational and financial metrics, and you'll enable others to see the whole picture toward your company's financial growth. Metrics for customer experience management may be the most influential facet of your strategy.

Contact the author, Lynn Hunsaker, to find out how to customize these tips to your situation.