BUILDING BLOCK 2: MEASUREMENT

The art of designing measurement is being able to define the attributes of a specific event or element that can be used to compare with other events or elements.

A typical organization tracks hundreds of KPIs, generally within specific departments or teams. By and large they are not connected to the corporate-level KPI, which creates conflict in company-wide prioritization and direction. Organizations with customer-centric decision-making have a system that works to align their KPIs across the company, including a focus on loyalty metrics (e.g., Customer Lifetime Value and Double Blend NPS benchmark.) 

LOYALTY METRICS 

Customer loyalty is the result of consistently meeting and exceeding customer expectations. Customers that trust the companies they do business with will be more likely to purchase from them again in the future.

Customer Lifetime Value: demonstrates the total revenue a customer will bring to your business throughout their entire time as a paying customer.

Another loyalty metric is share of the wallet (SOW) and repurchase, which demonstrate how much a customer spends on your brand over competing brands.

NET PROMOTER METRICS

These represent the likelihood to recommend your brand, product, or services. While there are many means of measuring this, the key ones are:

• NPS Benchmark [Double Blend]: It measures your organization's brand loyalty value among your competitors in the market. Customer loyalty is the result of consistently meeting and exceeding your customer expectations. This metric is the north star of metrics—when it’s successfully shining, employees rally around it.
• Relationship: It measures the holistic experience of the customer relationship.
• Episodic / Journey: It measures crucial touchpoint experiences or episode milestones that customers go through during their journey with your organization.
• Transactional / Touchpoint: It measures the experience following a specific event or interaction with your organization.

Relationship, episodic/ journey, and transactional / touchpoint NPS metrics address specific areas in the organization. They are diagnostic tools used to drive actions and ongoing improvements, and increase the main NPS benchmark metric.

The primary reason for the NPS score itself is to segment customers into three categories.

• Promoters are those who respond positively, rating their experience as a 9 or above out of 10. They are usually loyal customers who advocate for the brand, intend to spend more and tell their friends and family about their positive experience.

• Passives are those who responded with scores of 7 or 8, and usually express indifference to the brand.  They are likely to leave to competitors who offer better prices or higher quality products and services. Your brand should invest in turning those passives into promoters.

• Detractors respond with a score of 6 or below. These customers had bad experiences or disliked the products and services. You should address their concerns and work on improving their experiences, otherwise, your businesses could risk negative publicity.

Based on data analysis, the value of promoters or detractors can be quantified.  Promoters are 3X to 5X more likely to generate growth vs. detractors.

ECONOMIC METRICS

They measure the financial flow of revenue and the cost of doing business. Typical economic metrics include revenue, cost, profit, etc.  

OPERATION METRICS

They measure the preference of a function, team, or task.  

BEHAVIOR METRICS

These include purchase habits, customer sentiment, customer satisfaction, trust index, empathy, and social influence index. Many of them are derived from qualitative data that is captured during customer interactions or getting customer feedback from structured or unstructured data. 

KEY TAKEAWAYS:

1. Understanding that each metric has a purpose. Some metrics are focused on tactical and operation and some are focused on strategic and long term view of the business.  
2. Correlating two or more metrics can provide you with a multi-dimension view and in-depth insights behind the scenes operations.
3. Quantitative metrics are not enough to paint the picture of your customer experience, and you want to add qualitative metrics to get how customers feel about your experience delivery