One of the most popular series I’ve run here on the Customer Experience for Profit blog is what readers call “the steps series.” There I defined the six steps common to any customer experience, from both the customer’s point of view and from an organization’s point of view.
Folks who mention the series share great stories of the six steps of their organization’s customer experience. How their customers realize a need, learn about options, try them out, buy, use a product or service to solve their need, and even evolve to have new needs over time. And then – almost always – the conversation moves to the topic of measurement. I hear a common question: “How do we know if our customer experience is making or costing us money?”
So today we begin a new series regarding the operating metrics that correspond with each step of the customer experience. Over the next six weeks we’ll discuss how you can measure your organization’s performance payoff for your efforts in customer experience.
Spoiler alert: You probably already have many of these measures in place. How great is that?
Let’s start with the metrics you can check to see how your business is doing at the very first step of any customer experience. This step is all about the triggering need. This is the need, or desire, or problem that your customers would pay money to have solved. You get to choose which needs you will solve for which customers. Your goal at this step is to find a need you can solve better than anyone else — and one that is important to a lot of customers to have solved. Their goal is to realize they have a need and decide to do something about it.
I’ve noted which metrics are leading performance indicators — those that are predictive of future performance, and which are lagging –those that reactively measure performance outcomes.
At the Triggering Need step you can check this performance indicators to see how you’re doing:
- Leading: Size of your current target market. This is a signal that the problem you have chosen to solve is clear and important to enough prospects to drive sustainable demand.
- Leading: Growth rate of your target market. This rate demonstrates the growth potential that your choices of which target customers and what needs to solve bring to your business.
- Leading: Size of current customer pipeline. Measure this in customers and in dollars, to see your effectiveness in generating demand from the target market.
- Lagging: Overall revenue and profit per customer. This is an indicator you’ve chosen the right target customer, and are solving a problem effectively
- Lagging: Overall product / service service profitability. More indication that your customers value what you solve for them.
How is your product, service, group or whole business doing at this step? Are you triggering needs from a large and sustainable target market? If you feel good about your performance against the metrics here, you’ve chosen target customers and needs to solve wisely. You’re connecting with prospects to help them realize a need. You’re triggering needs in people who would pay good money to have them solved.
Do you use these metrics to measure your performance at this first step of the customer experience?
