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32 Customer Experience Measurements Every Business Leader Should Know

By on Aug 13, 2014 Editor's Pick No Comments

Every organization, no matter what you do or who you do it for, has a customer experience that can either earn you or cost you money. Once your organization embraces the fact that your customer experience drives revenue and profit (and is not a tradeoff), many things need to happen within your organization to align yourself behind your customer’s experience - among them, measuring your customer experience.

 Every experience is made up of the same 6 steps:

  1. Realize a need
  2. Learn about their options to solve the need
  3. Try out options
  4. Buy
  5. Solve their problem
  6. Evolve to another need over time

Your ability to translate these steps into a set of consistent, specific actions that solve your customers’ most essential needs is directly linked to your financial performance. Because of this, you’ll want to have different measurements throughout the steps of your customer’s experience so you can learn, analyze and adjust your organization’s actions.

 I. Realize a Need

The first step your customer takes in their journey is realizing they have a need. For your organization, the metrics you want to pay attention to are about understanding your market, its size, how it grows, and it’s profitability.

Here are 5 metrics to pay attention to at this first step (if you are not already):

  1. Size of your current target market - a signal that the target customer and problem you have chosen to solve are clear and able to drive sustainable demand
  2. Growth rate of your target market - drive of your growth potential
  3. Size of current target customer pipeline, in customers and dollars, to measure your effectiveness in generating demand from the target market
  4. Overall revenue and profit per customer - an indicator you've chosen to right target customer, and are solving a problem effectively
  5. Overall product profitability - more indication that your customer and organization actions are in alignment and delivering reward

II. Learn About Options to Solve the Need

Once your potential customer realizes they have a need they are going to seek out their options for solving that need. For you, it’s important to be measuring elements related to the amount of prospects looking at your solution, and what it will cost you to go after them.

Here are the 4 metrics to pay attention to at this step:

  1. Number of prospects who consider your product, brand and company
  2. Return on the sales/selling expenses you invest to earn consideration from your target customers
  3. Return on investment of marketing expenses to generate leads or prospects, and to establish your product, service and company
  4. Alignment between your brand's reputation and your desired position in the marketplace (i.e. for the problem you want to solve)

III. Try Out Options

Now that your potential customer has identified you as a candidate to solve their problem, they are going to want to get a sense of what your solution looks and feels like. At this step you want to be looking at metrics related to how well you’ve demonstrated why you’re their best option.

Here are the 6 metrics to pay attention to at this step:

  1. Sales close ratio
  2. Return on your total investment to acquire customers (staff, contractors and program expenses in sales, marketing and advertising)
  3. Speed to close
  4. Actual vs. target price position (stronger leverage to charge for your solution based on value; weaker market or buyer price pressure)
  5. Overall customer profitability
  6. Customer satisfaction scores - or even better, at the end of the buying process, measure the ratio of satisfied vs. captive customer

IV. Buy

Success, your prospect has turned into a customer! At this step you want to be measuring those things related to the sale itself: the size, profitability, and potential for more sales.

Here are the 5 metrics to pay attention to at this step:

  1. Close ratio - the funnel of customer who choose you to solve their need
  2. Average order size - the size and breadth of your customers' average purchase
  3. Share of wallet - the portion of your target customers' money spent to solve a problem that they spend with you
  4. Retention rates for returning customers, your Buy step action play a role in this measure
  5. Cross-sell and up-sell metrics

 V. Solve a Problem

Now your customers are putting your solution to work for them, and expecting their problems to be solved. In this stage your measurements will tell you how satisfied your customers’ are with your solution

 Here are the 6 metrics to pay attention to at this step:

  1. Customer satisfaction or loyalty scores
  2. Share of wallet - the portion of your customers' problem-solving money spent with you over time
  3. Retention rates - your success at this step plays a primary role in this measure
  4. Overall operating margin - a good ratio indicates strong alignment between your operating actions and the value customers ascribe to your solution
  5. Cost to serve (total service and support cost) - and ratio of cost to serve / total revenue
  6. Customer engagement - measured in usage or penetration or compliance or enrollment, indicates how important your solution is to your customer

 VI. Evolve to Another Need

Finally, your customers’ next steps are going to be influenced by whether you solved their problem and how well you did so. The metrics at this step are related to your solving ability and to your potential to anticipate and solve new problems.

 Here are the 6 metrics to pay attention to at this step:

  1. Customer retention and repeat purchase rates
  2. Customer satisfaction and loyalty scores
  3. Number / percentage of reference-willing clients
  4. Size of the demand pipeline of new needs (emerging needs that we don't solve today, but could)
  5. Size of the demand pipeline of same next needs (future demand we can predict that needs the same problems solved that we solve today)
  6. Brand reputation

Conclusion

Your organization’s customer experience is directly connected with your financial performance, and can be changed and enhanced at will. This means your financial destiny is more firmly in your control. Use the measurements listed above to more clearly understand your customer experience, and how it’s impacting your organization.

What key measurements do you regularly track that are related to your customer experience? Share them in the comments below.

And for more useful and actionable information on diagnosing and improving your customer experience, grab a copy of our free ebook “How To Convince Anyone That Customer Experience Matters” by clicking the button below.

Republished with author's permission from original post.

Categories: ! Blog! Editor's PicksCustomer Experience
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