When it comes to measuring the impact of your customer experience (CX) programs, many people would likely look to a Customer Satisfaction or loyalty metric, like Net Promoter Score. While improvements in your score would rightfully suggest that your investment in CX may be paying off, there are additional key performance indicators (KPIs) you should not overlook.
Here are five examples to help establish your CX program as a significant driver of company growth.
1. Track the percentage of customers potentially at-risk
Relying on customer health scores (or other models) to understand which customers are at risk of churning is extremely valuable for predicting future outcomes. Many companies have processes or methodologies in place to identify which accounts may be at risk, and why. A relatively straightforward metric to track is the percentage of your overall revenue (or customers) is considered at-risk, based on your definition. ROI comes into play by taking action to resolve customer pain points, which will ultimately help you retain other accounts that may be at risk for similar reasons. For more, read this article on five precursors to customer churn.
2. Monitor customer churn (i.e. net revenue retention or churn rate)
Customer churn is one of the most important determinants of the impact your customer experience program is having on your business. By tracking customer churn and, importantly, the reasons behind it, you can gauge how well your improvement efforts are increasing customer sentiment and retention. In order to effect positive change, it’s vital to understand the real reasons customers are leaving so you can take the appropriate steps to reduce or eliminate the frustrations other customers may be feeling as well. That’s why a Customer Defection Analysis program is so important. These in-depth phone interviews dig deep to uncover key trends and pain-points among your lost accounts and that should inform your company’s priorities in the months ahead. Read the tips on customer churn prevention strategies for additional examples.
3. Quantify the number of customers upgrading or expanding their engagement with your company
A sure-fire sign that customers are extremely satisfied with your offering(s) is if they upgrade or expand their engagement. If you’re not already tracking the number or percentage of customers that enhance their engagement with your company, you’re missing an important opportunity to highlight the ROI behind your CX program. Evidence that your “Land and Expand” strategy is working is clear evidence that trust has been established and your company has given customers the confidence to allocate more of their budget to your solutions. For more visibility into the ROI of your CX efforts, we also suggest you showcase these wins in your Slack or Microsoft team channels (or other internal systems). The added benefit is the space it creates for employees to feel good about your company’s mission and their part in achieving those goals.
4. Calculate the percentage of customers that are willing to serve as references
Asking customers to serve as a reference can be a tell-tale sign of their level of enthusiasm. Generally speaking, your Promoters should be very willing to rave to prospects about your company’s offering. Over time, we suggest you track the percentage of customers that are willing to serve as references. Start with your most recent Net Promoter Score or Customer Satisfaction Survey and invite your biggest supporters to your reference program. The percentage that is so pleased that they are willing to help your sales team win new business is an indicator your CX efforts are paying off. Here’s an article that discusses how to generate referrals from existing customers.
5. Quantify the dollar value of new business obtained through referrals from other customers
Let’s look at the following scenario: Customer A referred Company B. After a short sales process, Company B signed a contract for your services. Who earns “credit” for the sale? The foundation for this type of win should be traced back to the loyalty engendered thanks to a strong customer experience. That’s because a salesperson’s greatest ally for closing the sale are other customers who will rave about your business. To prove the value and ROI of your CX program, we suggest you start by tracking the added revenue from referred customers. Then, identify which customer segments are more likely to generate high-value referrals and share that information with marketing. Keeping tabs of the revenue earned from happy customers will help your leadership view the CX as a profitable part of the business.
Measuring CX Impact
Measuring the true impact of your customer experience program also involves different departments. Work with marketing to understand what percentage of customers are willing to write testimonials, partner on case studies, or participate in joint presentations. Work with Sales to understand the needs and expectations of prospective customers or learn how your company is perceived in the marketplace.
Armed with this information, you can then work with your team to make meaningful improvements in the overall customer experience.