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2022 Marks the Year of The Customer: 4 Key Success Metrics Businesses Need to Consider
In the uncertainty brought by the last several years one thing is abundantly clear, customer expectations from brands have ramped up to new heights. While catered CX programs and personalized experiences used to help companies break from the mold they’re now a must to maintain relevance and loyalty. Notably, recent research from Mckinsey shows 71% of customers expect personalization, and 76% get frustrated when it’s not there.
What is Customer Centricity?
The truth is, appealing to, retaining and growing customer loyalty goes beyond personalized experiences and CX programs. It requires striving toward achieving customer centricity, or a holistic approach and business culture that prioritizes the customer above all. It involves cultivating a genuine understanding of the customer to anticipate their wants, address their needs and create meaningful experiences throughout the sales process. Not to mention, it necessitates the creation of a business culture that educates and empowers employees to make the best decisions for both the customer and company, in unison - Which, notably, can be much easier said than done.
Take Amazon for example. With a motto of ‘start with the customer then work backward,’ the very core of Amazon’s success can be drilled down to the brand’s complete obsession with customer centricity. From providing options, price comparisons, easy returns and streamlined shipping and tracking services, it’s no wonder the goliath accounts for 41 percent of the U.S. ecommerce market.
Using Metrics to Cater to Customers
For a business to achieve true customer centricity, leadership will first need to develop a deep understanding of the why behind customer behaviors, the actions to take and what patterns keep customers engaged.
To gain that understanding, business will need to pivot to evaluate success through a new lens. Here are a few essential customer-focused metrics executives should consider including in their KPI wheelhouse for 2022.
Net Promoter Score (NPS): On a scale from 0 to 10, how likely would you be to recommend our company to a friend? This metric from Bain & Company is one that has been recently revamped and already adopted by many large brands around the world. NPS measures how consistently a company turns customers into advocates, by tracking and analyzing three segments: promoters, customers who are so pleased with their experience that they recommend your brand to others; passives, customers who feel they got what they paid for but nothing more and who are not loyal assets with lasting value; and detractors, customers who are disappointed with their experience and harm the company’s growth and reputation. Promoters give a score of 9 or 10, passives a 7 or 8, and detractors a 6 or less. To calculate your firm’s overall Net Promoter Score, you subtract the percentage of your customers who are detractors from the percentage who are promoters. The intention of the score is to assess customer sentiment with respect to a company’s performance and services.
Value Exchange Model (VEX): Gongos’ Value Exchange (Vex) Model is a newly-released customer metric that measures brands against 15 universal Customer Performance Indicators (CPIs) that are focused on customers’ social, emotional and functional goals. The VEX model works in combination with common business KPIs to shift the perspective of brand success through the lens of solely business outcomes to complement them with what success looks like through the lens of customers. Through this model, data is collected from a set number of customers who are evaluated against how much they are spending with a brand, how frequently they are spending with that brand, and how likely they are to continue to spend with that brand in the future. These inputs in conjunction with the scores associated with responses surrounding which CPIs are being delivered on satisfactorily, or poorly, from that brand are then used to determine what Future Customer Value (FCV) is for those customers.
Customer Satisfaction Score (CSAT): This is a commonly-used customer experience metric that directly assesses customer satisfaction levels. CSAT is a defined metric that’s expressed as a percentage- 100% would be fantastic – 0% would be terrible. CSAT surveys are deployed when companies want to see how happy clients are with an action the business took, or certain aspects of your products/services. Many brands send a CSAT survey after a customer has made a purchase or a client has completed onboarding to see how efficient the processes are and if and if any improvements are needed to make it a more satisfactory experience. CSAT surveys normally feature a question asking clients how satisfied they are with a certain service, product, or interaction with a brand.
Customer Effort Score (CES): This handy measuring tool was coined by three people: Matthew Dixon, Karen Freeman and Nicholas Toman from The Corporate Executive Board and is used to gauge customer satisfaction levels by focusing on the efforts customers make to interact with a business’ services and products. The goal of the survey is to help identify customer pain points within certain brand interactions to better streamline processes. CES surveys generally ask recipients a single question with respect to how difficult it was to complete a certain interaction – this could be anything from placing an order online, to submitting a review of the product, to returning a product.
Adjusting processes to ensure KPIs compliment customer outcomes may seem like a daunting task, but it is one that will pay in dividends. The number one priority for marketers and brands alike should be to serve customers in the best way possible, and the first step toward achieving that is gaining a true understanding the why behind customer actions and putting the right metrics in place to monitor progress.
By incorporating one, or all, of the above metrics into the marketing mix, leaders can illuminate the strategies that are working well, and perhaps most importantly, the ones that aren’t to make wiser and more profitable investments of time and energy for the business.
This article does not necessarily reflect the opinions of the editors or the management of EconoTimes
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