Why Do You Need KPIs Anyway?


There isn't much hope of getting where you want to go if you don't know where you are.


When you put key measurements in place it adds a level of authority to your program and a sense of maturity to your Customer Experience (CX) strategy.


Key Performance Indicators (KPIs) are a path to improving your customer experience and your business growth, but you have to be careful to pick the ones that are most important to your service strategy, marketplace, and customers.


I'm going to dial in the six that have fueled the most success with organizations I've partnered with over the years. Remember that you may identify other measures for other departments, but when it comes to driving customer experience, start here.


Once you identify your metrics, you then have to keep them relevant and important to your team members across your organization.


There is one key way to do this that many organizations neglect.


KPIs must be included in compensation planning. Too often I see organizations establish well thought out KPIs only to let them languish in obscurity because they don't impact leaders where it counts: Their wallets.


I know that the prevailing theory is that hearts and minds trump dollars and cents every time. There is definitely some truth to this.


While you absolutely want to communicate why these matter and the larger vision and purpose, don't be afraid to attach performance in these key metrics to compensation planning such as annual increases, bonuses, and promotions.


Customer Satisfaction


You may hear this referred to as C-SAT and it asks your customers, consumers, and guests how satisfied they were with the service they received. You may ask them to rate you on a scale of 0 - 10 or even with stars or smiley faces. This is an emotionally driven score that allows your customer to rate your service and the more ratings you receive, the more accurate your picture will be.


This is one of the most popular measures because it is easy to share and easy to watch trends over time. You must understand how it relates to your revenue and ultimately to the lifetime value of a customer. The other piece to remember is to give context to your customers as they rate you.


If you are grading on a 5 star scale, let them know what it means to give you a rating.


5 Stars: Very Good

4 Stars: Good

3 Stars: Just okay

2 Stars: Poor

1 Star: Very Poor


This is a very basic scale, but it gives your rater some context around what he or she is saying with the rating. This helps them be more accurate with what they are trying to communicate and that will help you take action on their feedback.



Net Promoter Score


If C-SAT represents an emotional response, Net Promoter Score (NPS) allows you to determine if customers are willing to take action on your behalf. Will they recommend you to a friend, colleague, or family member? This is a big step, and important one, since recommendations from others carry such weight with customers.


Review 42 recently reported that 86% of customers trust word-of-mouth reviews and recommendations above all else. That is a staggering number when you think about caring for your customers and protecting your brand.


Typically, you will find NPS represented with a question like "On a scale of 0 - 10 How likely are you to recommend xyz product or service to a friend or colleague?"


So when you segment the responses, you'll group them into 3 categories:


Promoters: 9 - 10

Passives: 7 - 8

Detractors: 0 - 6


Now you just need to do a little math - I know, math, right.


Subtract your percentage of promoters from your percentage of detractors and there you have your NPS.


So if 60% of your respondents were Promoters, 10% were Passives, and 30% were Detractors it would look like this:


60% - 30% = 30%


Your NPS is 30%



Employee Engagement + Retention


This one is my favorite curve ball to throw into these KPIs - mostly because this set of data is usually seen as an HR metric. But challenge yourself on the rationale. If employee experience is a key driver of customer experience, shouldn't we measure it when it comes to evaluating our customer service success?


Many of the indicators you will look at will be Lagging Indicators - meaning that while accurate, they occur after the fact so they are not predictive.


Employee Experience could be your strongest leading indicator, because it can give you insight into what may be coming in the future.


So keep a close eye on your employee engagement surveys and also your team turnover metrics. As a CX professional or business leader, that will likely mean you have to collaborate with your HR Business Partners to get the information. That is also a great lead in to drive those scores higher through leadership engagement, training, and recognition events.


First Call Resolution


This is just about as important as it gets in the call center world - but anyone who has customer contact can learn from it. I have had many friends who are taking their first forays into the unemployment process over the past few months, and I can tell you that their level of frustration increased with every call they had to make to their various state unemployment offices.


But the metric is just as straightforward as it sounds - was a customer able to get their answer, solve their problem, or address their needs to their satisfaction during the first contact with no follow up required.


There are a few things to consider when you think about FCR. You have to address the customer's perception of resolution. It doesn't matter if you think their problem is solved, it matters if they do. Also remember that if there is a lag in your response window that should impact your metrics as well. For example, if you have a 24 hour response window and your customer has to call you back 48 hours later because you didn't follow up, then that should be reflected as a non-resolved issue.


The point here is that you want to make it easy for your customers to close every conversation feeling as though their needs have been addressed.



SERVQUAL


This KPI is a mashup of service and quality as compared to customer expectations and is useful to identify perception gaps in service. This is important because it brings quality into the mix, which is a key part of the customer experience. The upside to SERVQUAL is that it does help leaders focus their resources in a more holistic way.


Reliability: The promised service was delivered accurately and consistently


Assurance: Employees were courteous and knowledgeable in their jobs, inspiring trust and confidence


Tangibles: The appearance of the physical space, equipment, employees, and website


Empathy: Team members serve with a caring attitude and bring a sense of personalization to the experience


Responsiveness: The willingness to help solve customer's problems in a prompt and timely manner



Verbatim Comments


Verbatim comments are open ended questions that allow your customers to enter their personal thoughts in the survey. These are often the deeper sources of learning and add flavor to the numeric feedback. These are particularly helpful in identifying friction points and customer effort. You could add a question around customer effort in your surveys, but I have always found verbatim comments to be the divining rod for processes that are too hard for customers.


The trick with verbatims is finding the time to weed through them - if you use a third party provider to administer your survey, they will often have technology that can find themes and create word clouds that make it easier to make sense of the information.


So while there is a lot of noise within verbatim comments, you'll never find a more accurate customer voice.

The one bonus tip I'll add with verbatims is to invest time in them. Once a month just sit and read them. Over the years I've spent time reading thousands of verbatim comments and I learned so much that helped me run my businesses better and with a deeper customer focus. Some of them will make you feel good, others will make you mad, and others will feel like a kick in the teeth. They all have value.


You'll never feel more connected to your customers when they aren't in the room then when you are reading verbatim comments.


Once you establish and begin to collect data against your KPIs, you'll need to be sure that you are using the information in a way that has impact.


Many organizations do a decent job of collecting information and feedback, but don't put it to work growing loyalty and sales.

Be sure that you are sharing the information you collect and using it to make decisions about your business. Take the time to analyze the information and then share it widely throughout your organization. This allows you to help everyone understand where you are, where you want to go, and to assist with journey to success.


When your team understands what is going well and where there are challenges, it provides an opportunity for everyone to contribute solutions that will ultimately help you improve.


Customer feedback is a gift - a gift that can hurt - but one that will ultimately align you with your customers in meaningful ways.


It will also help you keep them right at the center of everything you do.



TAKE ACTION:

  1. Understand what matters to your customers and ask them about those items

  2. Keep surveys short

  3. Connect organizational accountability and performance plans to customer satisfaction KPIs

  4. Share what you learn about your KPIs with your entire team to keep them informed, motivated, and engaged in customer satisfaction



Tony

Tony Johnson, CCXP Customer Experience Speaker | Author |Trainer | Consultant 606.356.7447 FREE RESOURCES AND TRAINING TOOLS WEB - TWITTER - FACEBOOK - YOUTUBE - INSTAGRAM Improve Your Customer Service with my Book: TOGETHER WE SERVE: Four Proven Strategies to Create Winning Experiences for Your Guests and Your Team Click to Purchase on Amazon.com

Tony Johnson is an award winning speaker and author on the topics of sales growth, customer service, and leadership. Tony speaks to thousands annually and has also been featured on ABC News and Fox News. He is available for business planning, motivational keynotes, leadership workshops, and employee service skills training.

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