Richard Snow's Analyst Perspectives

Best Practice Customer-Related Metrics

Posted by Richard Snow on Jan 4, 2013 11:39:30 AM

Customers have always been important to companies, but what are the best metrics to measure the success of customer-related activities, and how well companies meet customer expectations?

At the beginning of 2012 I carried out benchmark research into customer relationship maturity. In it I asked respondents what were their most important customer-related metrics. The results show the three most important metrics were how much revenue each customer had generated (71%), customer satisfaction scores (50%) and how much it costs to provide customer service for each customer (49%). As they were quite new at the time, not surprisingly customer effort  (fifth out of nine), net promoter (seventh) and influencer (eighth) scores came further down the list of priorities. The most surprising insight was that companies on average use only two to three metrics, and the majority use just one or two.

More recently I finished a benchmark into customer feedback management where I asked a similar question but with slightly revised options. The top three metrics were customer satisfaction scores (71%), first-contact resolution rates (31%) and revenue generated by each customer (30%). To keep the results in perspective, net promoter scores (NPS) was fourth out of nine, customer effort scores (CES) was seventh and influencer scores ninth. In a remarkably similar result to my findings in customer relationship maturity, the average number of customer feedback metrics used by companies remains between two and three, and once again the majority use just one or two.

Without reading too much into the two sets of results, because the options were slightly different, I found:

  • Organizations don’t over-measure customer success and are guided by only one or two key metrics.
  • Customer revenues and satisfaction are the most common key metrics.
  • First-contact resolution has jumped in priority as companies seek to keep down costs but at the same time meet customer expectations.
  • The newer metrics – NPS, CES and influencer – are slowly catching on, but their use is not yet widespread, although with customer experience in mind, net promoter scores have grown in importance.

I went one step further in the customer feedback benchmark so that I could determine how well organizations are performing against key metrics. Far more of the respondents (approximately 70%) knew how well their organization was performing in terms of customer satisfaction compared to customer value, NPS and CES, where only between 50 and 60 percent knew how their organization was performing. However, the results are not encouraging, with only a third beating the CSAT target, 20 percent beating customer value, 15 percent NPS and 10 percent CES, and in all cases about a quarter being on target.

One contributing factor to poor performance is that many interactions flow through a company’s contact center, and my research into the agent desktop shows that most agents face considerable hurdles handling customer interactions. The first and foremost is the state of their desktops, which the research found to be cluttered, with several systems to handle different communication channels, multiple business applications, dashboards and, increasingly, collaboration systems. Added together, these make the agents’ lives difficult, which decreases agent satisfaction and makes it only half as likely they will meet targets for these key metrics. In an effort to improve, we recommend organizations take a close look at their agent desktops and determine what they can do to make them easier to use and smarter in supporting agents.

In both these and other benchmarks I have also sought to discover how organizations produce their metrics. The most popular tool remains spreadsheets, which are not good at combining information from multiple systems, are labor-intensive, can’t produce results in near real time and require a lot of skill to develop formulas to automate the calculation of the more complex metrics. They also can’t process unstructured data, so organizations are missing out on insights locked into call recordings and text-based interactions (emails, letters, surveys, text messages, IM scripts, web scripts, social media posts). Unlocking these insights requires using advanced voice and text analytics, which only the most mature companies have deployed.

As companies try to improve customer-related activities and business outcomes, we recommend companies start by reviewing the metrics they use in order to gain a better balance between efficiency and effective (outcome) metrics. Organizations should evaluate new analytics tools available to process structured and unstructured data, and above all they should share the results more widely so that everyone in the organization can see how what they do impacts customers.

Regards,

Richard J. Snow

VP & Research Director

Topics: Customer Analytics, Customer Feedback Management, Speech Analytics, Voice of the Customer, Analytics, Business Analytics, Contact Center Analytics, Customer Performance Management (CPM), Desktop Analytics, Text Analytics

Richard Snow

Written by Richard Snow

Richard leads Ventana Research’s Customer and Contact Center Performance Management research practice, which is dedicated to helping organizations improve the efficiency and effectiveness of managing their customers, throughout their lifetime and across all touch points, including the contact center. He conducts research exploring the people, process, information and technology issues behind customer operations management, contact center management, and customer experience management. He also works with senior business operations and IT managers to ensure that companies get the best performance from today’s highly complex application products. Richard has worked in management and consulting leadership positions in the technology industry including with Price Waterhouse, Sema Group and Valors. In his work, he has been involved with all aspects of delivering highly complex IT solutions to a variety of clients in the telecommunications, financial services and public sectors. Richard has specialized in delivering customer care and billing solutions for telecommunications operators, and several multi-channel contact centers for organizations in both the public and private sectors.