Need a Customer Experience boost? Set the right KPIs!
Silvia Myers, Founder of Bright Cherry
02 June 2016
Since NPS took over the world, the ‘likelihood to recommend’ has become the single most important score tracking loyalty and customer experience in literally millions of companies across the world. But regardless of what types of scores businesses decide to use, I’ve observed that many firms put effort into their customer experience metrics (or KPIs) yet arrive at a dead end.
“The NPS is increasing, yet organisations are struggling to improve the actual customer experience.”
How I went shopping for a car
Let me divert a little and share with you my recent experience when shopping for a car. I was looking around at an unnamed dealership receiving your average service. As a woman in a ‘toy store for boys’, the type of attention you get doesn’t always equal the service you expect or require. Though, the surprising point for me wasn’t the customer experience itself but the massive sign by the door. It read something along these lines:
“If you purchased a car, you will get a survey. If for some reason, you feel that your experience wasn’t good enough to score us 9 or 10, please speak to our manager who will explain to you why our service is worth giving us a 9 or a 10.”
Wow, I was in a shock! Not that I just had an experience that definitely didn’t fulfil my expectations but on top of that, I was now also discouraged to share my real opinion and therefore discouraged to help the business improve and service me better in the future.
How do you think this experience made me feel? Definitely NOT worth a score of 9 or a 10 though most probably worth taking my money elsewhere, sharing this experience with everyone I know (hello LinkedIn community) and never returning back again.
What gets measured gets done
Now let’s bring this back to the topic of customer experience metrics. Lots of companies choose to set NPS as their internal KPI, which is a great concept. It means that such companies care about how their customers feel about them and want to keep improving their customer experience trend.
What’s not so great is if this KPI is passed down from management to staff in the very same format. Why do you think the dealership chose to have that terrible sign in its premises? One word says it all: KPIs.
The basic principle of KPIs is that what gets measured, gets done. KPIs in any business are set to drive behaviours, generate action and get things done. When a KPI equals a customer experience score, how can a staff member get this done?
Sure, the score is a great KPI for the management layer who can use it to see whether the trend is heading in the right direction, but a staff member needs to understand how their action today influences an outcome for tomorrow. Which means that in order to generate motivating and actionable customer experience KPIs for staff, the overall score needs to be broken down to activities reflecting actions customers actually care about.
From score to staff
Instead of being encouraged to collect customer feedback, the dealership was being measured on the percentage of Promoter ratings they receive. Not an unusual scenario resulting in frontline teams doing whatever possible to increase that percentage.
Therefore, instead of thinking how to service customers better, teams put their efforts into figuring out how to play the game to ensure they meet their KPIs.
They have no idea what else they could do. I don’t blame them.
As a business leader, you have a tough journey ahead. While you’re trying to figure out how to get your staff embrace the new metrics, the overall customer experience of your business isn’t improving the way you had originally planned. Does any of this sound familiar?
Five steps to set actionable customer centric KPIs
The good news is that there is a way to fix this. There is a way to set actionable and motivating KPIs driving real customer experience improvement. By real, I mean improvement that actually makes customers happier and impacts the bottom line. Not an improvement that generates better scores only.
1. The first step is to remove the scores from frontline KPIs and embrace feedback. The feedback customers give you with their score really is the golden nugget all business are searching for. It offers an insight into what customers really care about and what is it that they want and need from their provider.
2. The second step is to translate the customer insight into topics staff can relate to. Taking the dealership as an example, the customer insight might tell us that our customers expect to be served promptly, test drive any model on any day and be offered transparent pricing for the car of their choice.
3. Thirdly, measure the topics in actionable format containing leading and lagging indicators. Lagging indicator is anything that’s completed (e.g. a percentage of customers who have been served within 5 minutes) while leading indicator is anything that is still in the pipeline, can be worked on today and influences what becomes a lagging indicator tomorrow (e.g. actual customers waiting to be served).
4. The fourth and probably the most important step is to keep reviewing.Get your staff involved in reviewing their KPIs daily to be in control of how well they’ve serviced their customers yesterday, what can they replicate today and what can they avoid to influence the result for tomorrow.
5. The last step is to keep moving the bar. Remember, all KPIs need to be challenging, motivating, actionable and obtainable so you want to make sure that you keep raising the bar as your team keeps smashing the targets.
Turning customer experience scores into actual continuous improvement program isn’t always easy. It does require a bit of effort but once completed, it’s extremely rewarding for both organisations and its customers.
The right set of KPIs enables customer experiences with a cherry on top, something all customers so badly desire. In turn, businesses will be rewarded with loyalty, greater share of wallet and advocacy reaching beyond imaginable.
Silvia is the Founder of Bright Cherry, a customer centric consultancy specialising in helping entrepreneurs and small business owners understand their customers and build successful businesses around that. The fact is that 90% of entrepreneurs fail and one of the reasons is that majority of businesses don’t understand their target market. Get in touch to join the growing network of successful entrepreneurs committed to reach new heights through delivering to their customers’ wants and needs.