Every organization wants to create amazing customer experiences. Forrester reports; in fact, that 72% of businesses say improving customer experience (CX) is a top priority.
Measuring CX helps businesses determine what works and doesn’t work for customers. They can then use that information to inform initiatives to enhance CX.
An exceptional customer experience is good for business; it helps to increase sales and revenue, improve customer engagement and reduce customer churn.
Don’t track the wrong KPIs
But when assessing the effectiveness of customer relationships, too many organizations track the wrong KPIs (key performance indicators); and as a result, base crucial CX and marketing decision on measurements that are not relevant to the business. Ultimately, these companies end up wasting time planning, implementing, analyzing and fine-tuning strategies that fail to drive actionable results.
How to select the best KPIs for your firm
The first step to selecting the right KPIs is understanding your company’s unique differentiators. This is a two-pronged process that involves:
- Evaluating successes by taking inventory of your most successful projects and identifying the factors that contributed to their success.
- Examining mistakes by looking at failed projects and asking questions to understand why they failed so you can determine what to do differently next time.
From this process, create KPIs that enable you to build on and repeat successes while avoiding activities that led to failure.
Top KPIs to measure
What KPIs should you be tracking to learn the truth about your relationships with customers? Here are four:
- Customer acquisition rate: To determine customer acquisition rates, measure how your sales team performs month over month. If patterns show a decline, figure out why so you can reverse it. For example, perhaps your salespeople aren’t receiving enough leads — a sign that maybe it’s time to re-evaluate your marketing strategies.
- New and returning customers: By breaking down the number of active customers into new and returning, you can see the mix of customer acquisition versus retention in your business. Determine if you’re doing a good job retaining previous customers and keeping them coming back and if you’re acquiring new customers. You should be balancing your business between the two.
- Cost of direct sales: With this measure, you can determine how much value your salespeople are bringing to your company. For example, if they’re selling online services, 15 percent is acceptable and 8 percent to 10 percent is ideal. Anything above that means their incomes are too high or quotas too low.
- Transactions per customer/value per transaction: If you break down value into transactions, you can see how often customers interact with your company and the value of those transactions in terms of revenue. This will help you measure increases and decreases in the frequency and value of transactions.
NexTec Group delivers business intelligence software solutions that help organizations succeed. NexTec Group is dedicated to your success, and our team of experts will work with your organization to analyze workforce efficiency and monitor key performance indicators to optimize your profitability. Contact us to get started.