You want to increase your customers’ happiness? Great! But how to measure this phenomenon which seems quite difficult to grasp? How to prove the added value in your company’s revenues to make the financial benefits visible? A guide to square the circle.
Customer Experience (CX), in our world of B2B, is a separate discipline. Companies are adapting techniques and measuring methods from the B2C sector to a certain degree. Those responsible for CX all around the world are facing the challenge of justifying the value of CX improvements. And there are many reasons for it. Compared to B2C, the number of customers in B2B is usually smaller but has a greater customer lifetime value (CLV). The latter is characterised by long-lasting relationships, typically higher transaction volumes and services around the product or service as such.
On the other hand, brands do not necessarily move into the consumers’ focus if there are still some intermediate steps in the value chain left before the consumer product is being produced.
CX programmes: a number one priority
Nonetheless, CX programmes are of course nothing new to us in the B2B world. Recent studies show that 86 per cent of buyers are willing to pay more in exchange for a great CX. And other than product development and pricing strategy, the focus on CX will be the number one priority for B2B companies in the next five years.
Today, CX programmes are carried out in nearly every industry and across the value chains. CX experts are hired across the globe to drive customer satisfaction and loyalty. And companies do not only rely on excellent product quality anymore but also offer flexibility and accurate processes to make their customers happy. The fact of receiving positive feedback and making positive trends as to NPS® scores or other metrics shows that companies concentrate on the right aspects.
Clarifying the value
So far, so good. But at a certain point during CX programmes, the decision-makers in your company will ask you about the value of CX. For example, in the context of upcoming budget planning or unexpected challenges, like the current Covid-19 pandemic. In critical cases like this one, the value of CX programmes is even more relevant. Every CX practitioner knows the high-level metrics of increased sales, reduced cost of service and improved employee satisfaction. But these metrics are too general to invalidate specific counterarguments. Here are two examples:
We all know these „yes, but“ discussions. Questioning the value of CX doesn’t harm though – in fact, they help you selecting your metrics more strategically because decision-makers need more specific information to be convinced of a more customer-centric culture.
In addition, the metrics, once defined and measured correctly, do not only ensure a stronger focus on CX, but also help you to constantly learn and adapt.
How to measure soft factors like customer loyalty
First of all, you as the one in charge of CX need to distinguish tangible from intangible benefits. Intangible benefits are typically linked to your company’s strategy and are therefore hard to measure.
So, your basic principle is to understand what kind of indicators are quantifiable and measurable. This means, decision-makers wanting to understand the value of CX in your company need to hear specific numbers of tangible benefits.
This doesn’t mean showing an increase of the NPS® or any other score. Instead, try to find metrics which can be understood and interpreted by everybody in the organisation: your CEO, your head of Sales, your customer service representative. These metrics typically are a set of the following examples:
- number of customer complaints regarding a certain touchpoint
- number of interactions with a customer to solve a specific problem
- number of company-internal interfaces for a customer-facing process
- number of turnover increases with a specific customer or customer group
Next thing to do: Try to find more of these high-level metrics for your specific business. Once your first list of KPIs is ready, you need to identify influencing parameters for these KPIs being independent of the CX within your company. These can be market movements of the customer specific industry, like changing demands or long-term changes in the supply environment. Or projects running in your company’s marketing and sales area, which might also target similar KPIs than the ones listed above. You don’t need to consider these influencing factors on a granular level at this stage, but only in general.
In order to decide on the relevant metrics to measure the concrete monetary value of CX for your company, you may also think of additional hints to consider before you decide on the final list of KPIs.
So, plainly, here’s what to do:
- Do not define more than 3 till 5 KPIs.
-> Your task consists of making your customers more successful. Don’t let it be delayed by collecting and permanently arguing about value metrics.
2. Check which metrics you or your team can measure on your or their own!
-> You should come up with these numbers easily and get them updated on the fly. It must not take days to calculate the value, since otherwise, it will already be outdated at the point of communicating your results.
3. You might base your evaluation on external sources as well, but check their update intervals.
-> All sources need to be of current state, because your intent is to show recent trends. So remove any metrics which are not updated at least weekly.
It’s all about comparing results
These three main aspects make your list of relevant metrics leaner and more reliable. Now measure the KPIs for a selected group of your customers in order to create a first review before setting it up completely and taking all your customers into account. Make sure to keep the sample size large enough, though: In the end, the value of your company’s CX is the sum of the accumulated success of each of your customers.
Once the results of your metrics for the sample selection are available, it is important to compare them with a reference value: your company’s average with the same metrics.
As an example: If there are 100 customers in your CX programmes pilot group, make sure to compare the results with a group of 100 customers within your company who have not been treated with any elements of the CX programmes, but, beyond that, show the same characteristics. Like that, you ensure a proper basis of comparison. If your pilot group shows better results than the control group, you created a solid basis not only to measure customer satisfaction in a comprehensible way, but also a hardly contestable basis to argue the carrying-out of your CX programmes.
Share these results with your stakeholders within the company, include their feedback and extend your measurement to all optimised touchpoints and customer relationships.
What are you waiting for?
According to recent studies, companies with highly satisfied and, thus, loyal customers increase their sales about 2.5 times faster than their competitors. So happy customers should be a genuine interest of every company. Start today to make your customers‘ journeys consistent and thrive to be one of the best ones achieving this goal for the next few years. Remember: Always keep measuring CX metrics continuously in order to secure reliable approval of all decision makers in your company in the long term.