Tying metrics to system strategy is a loophole in your organisational architecture. The perils of blindly using it can result not only in unaligned digital experiences, but also damage your brand loyalty.
Simply put, metrics are the building blocks to design your strategy. But, across almost every organisation today, numbers are ruthlessly devising strategies. This has resulted in business leaders and C-suite executives losing sight of their company’s vision. Instead, they focus rigorously on the metrics that are only meant to represent it.
What are pseudo metrics?
Let’s take an example to know what pseudo metrics really are.
Think about YouTube video views. Ever wondered if a YouTuber has only ~200 subscribers and got ~1 million views in fairly short period, say, within a day of video launch. Yes, this is practically possible and happens a lot using virtual viewers, and not organic targeted audience. This is pseudo metrics.
In other words, when you don’t have clear correlation of investment, results (metrics), and actual business outcome (impact on customers), know that you are looking at pseudo metrics. That video might have got only ~100 real organic views, so that’s a failure really. Be aware of pseudo metrics as it does play in all level of businesses.
Another corporate example is cost savings increased by X% – the hidden reality may be a layoff due to low sales. That cost savings was in fact a failure from an operational standpoint.
Metrics are inherently inadequate when they are based on flawed proxies for what you care about. This can be a bigger problem later on where you may get the desired results, but throw your target audience into bewilderment.
This, however, doesn’t suggest that metrics, data, and numbers are now obsolete. Data analytics provide a clearly defined direction upon which action is to be taken, and strategy must be built. It is crucial to establish the relationship between customer behaviour and action, without which CX strategy is too amorphous to have any impact.
It is time to move beyond standardised practices of measurement tools. Let’s dig deeper into consolidated data that focuses on the underlying parameters. This will shape DX instead of stand-alone metrics.
The Wells Fargo incentive scandal
Wells Fargo employees reportedly “opened as many as 1.5 million checking and savings accounts, and more than 500,000 credit cards, without customers’ authorisation,” The employees received bonuses for opening new credit cards and checking accounts, and enrolling customers into products like online banking.
The banks’ sales culture and cross-selling strategy revealed intense pressure on bank managers and individual bankers to produce sales. However, the root cause is believed to be the company’s incentive system. Another culprit is the combination of challenging sales quotas and relentless pressure to meet them.
Employees’ priority to generate numbers is among top reasons to derail from the customer-centric culture. Metrics should be focused around CX and engagement – including how to measure emotional and empathetic scores with customers.
How CX should be measured
If metrics don’t justify the real branding impact and outcome to customers, that needs to be analysed. There should always be a correlation with reality.
1. Use CPIs (focusing on outcomes)
Net Promoter Score captures the overall trend of customer loyalty. But what your NPS isn’t telling you is the reason behind the trend. It is therefore only a vanity metric; unless coupled with CPIs (Customer Performance Indicators) that allow you to focus on the outcomes that matter.
The key is to layer your NPS data with CPIs – like Customer Effort Score (CES), Conversion Rate (CR), and Customer Satisfaction (CSAT). This will generate a more comprehensive picture of your customer’s journey and understand whether your customer support is driving loyalty, or if it’s a reason for churn. No lone metrics can be used to quantify the outcomes of your CX strategies.
This approach highlights the fact that no single metric can completely capture CX across multiple touchpoints. It also helps in segmentation to customers and understanding which investments are yielding the most return rather than taking stabs in the dark. However, multiple metrics can contribute to increasing the complexity of evaluation. But they’re essential while applying the patterns of ubiquitous strategy.
At times, value is lying behind the missing data. Ask yourself the question, “what can be missing in this data”? Additionally, you should always look for patterns to outcome.
2. Aligning KPIs to CX strategy
An unfortunate reality of the corporate world is pay-for-performance – tying incentives to metric-based targets at the cost of strategy. Companies must loosen the link between monetary compensation and metrics for CX strategy to work.
Hence, if you’re wondering why your strategy is not delivering a better CX, start with employees and their KPIs. You must re-evaluate what employee metrics get the most attention, and how employees get incentivised and rewarded for the same.
Rewards must be aligned with your CX goals. Effort must be put into creating an environment that encourages employee behaviour to track CX progress. This will drive growth for your business. The focus must be to help employees define measurable OKRs that certainly align with your strategy.
Motivate employees at the same time to help drive business success, not just data alone. In order to create company goals as personal at each level of organisation, develop people-first culture.
3. Map your customer’s journey
The substitution of metrics for strategy is the main hindrance to providing a frictionless digital experience to customers. If your strategy is abstract, and the metrics of the strategy are conspicuous, your people will subconsciously rely on metrics for decision-making.
Customer touch points should be designed by outcome – not just call to actions. Mapping your customer’s journey throughout the sales process is a good way to understand the intention of your customer. Feedback from surveys often fails to capture behavioural signals from customers.
The number of customer service conversations, total customers helped, resolution time, and customer satisfaction are critical indicators of their experience and intent. These must be monitored in tandem with survey responses to get nuanced insights into customers’ intent.
The bottom line
You need to ensure you’re doing the basics right. Once your foundation is solid, you can build an efficient ecosystem to collect the right data to use, visualise it clearly, and make efficient decisions.
Effective digital experiences foster invariably when measurement gets smarter, faster, and more workable. This poses a challenge for business leaders to be more strategic and sophisticated in their use of metrics. The focus should be on defining metrics and KPIs that show you patterns, correlation to the reality, and inspire strategic success. Legacy leadership has a cultural bias that overrules the customer intent and focuses on data-driven metrics.
Leadership, not measurement, is the problem. Leadership purpose and perspective shift are required. Metrics are pseudo only until you agree that it makes sense with the reality of customer impact.