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The relationship between a business and its customer isn't just a big thing -- it's everything.
Healthy companies base their decisions, operations and insights on data. Strong data leads to better decisions. And if building a relationship with customers is your organization's highest priority, then it should measure the quality of the relationship with strong data, too.
There's a name for that data: customer relationship metrics.
What should you measure?
Customer relationship metrics are measures of the strength of the customer relationship, which is about the quality of their experiences and overall satisfaction with a brand. In turn, this produces loyalty. Forrester Research plots these metrics across two dimensions: customer experience quality and customer loyalty.
Effectiveness, ease and emotion are key survey points for determining customer opinion, according to a Forrester report. Effectiveness is the measure of how much value the customer obtained from the experience. Ease means getting value from the experience was easy. And emotion is a measure of how the customer felt about the experience.
To measure loyalty, Forrester suggested asking about advocacy, enrichment and retention. Questions to ask include the following:
- How likely is the customer to recommend the brand?
- How likely is the customer to buy additional products or services?
- How likely is the customer to stick with the brand?
These other measures can also help guide your business in assessing the quality of the customer relationship:
- Net promoter score (NPS). Many businesses use and trust this score, because it correlates positively with revenue growth and is perhaps the simplest metric to gather. It's based on customer responses to a single question: How likely is it that you would recommend our brand's products or services to a friend or colleague? The response is usually on a scale of zero to 10 and places the customer in one of three categories: Promoter (9 to 10), Passives (7 to 8) or Detractors (0 to 6).
- Customer effort score (CES). This is sometimes called the Net Easy Score. This is another single-item measure that captures a rating of how hard the customer had to work to get a satisfactory result. A feature of this metric is you can apply it to a number of customer interactions, such as resolving an issue, answering a question and returning or replacing a product.
- Customer satisfaction score (CSAT). You can discover this with one straightforward question: How satisfied were you with your experience? You can easily deploy and apply this in many contexts -- by bot, in a pop-up, at the end of another survey or the completion of any interactive process -- and you can attach it to many customer interactions. It is useful for pinpointing dissatisfaction as close to the source as possible.
NPS vs. CES vs. CSAT
Each of these customer relationship metrics has its own strengths and weaknesses.
The NPS empowers the customer. It's not just a satisfaction measure; it's an acknowledgment of the customer's power in the relationship. It also lends itself to convenient, unobtrusive follow-up. After asking about the customer's likelihood to recommend, it's easy to offer an optional question, such as, "Could you tell us why?" Unlike the CES and CSAT, which are more event- or touchpoint-focused, the NPS can apply to an overall experience. But without supplementary questions, the NPS offers no insight into what is driving the customer, and it doesn't predict loyalty behaviors.
CES has strong predictive power. It can forecast customer behavior and the likelihood of the customer giving brand referrals. Forrester, however, recommended measuring more than CES, because while it does offer highly actionable feedback, it doesn't measure customer emotions. It is also limited, because you can't tie it to segmentation of the customer base.
CSAT is most useful when you deploy it at strategic points in the customer lifecycle. When you collect CSAT responses from the same customer over time, measuring the ebb and flow of their satisfaction through the customer lifecycle, it becomes a powerful tool for fine-tuning performance and improving the customer journey. The downside is the sentiment that what this score captures is in the moment and not necessarily reflective of a customer's overall feelings about the brand.
Steps you should consider
While it's very important to choose the right customer relationship metrics, it's equally crucial to do the right things with the data once it's flowing. Here are a few steps that you should include:
- Place survey questions as precisely and strategically as possible. The idea is to build a perpetual performance monitor that captures the customer's input while their response is the freshest -- immediately following an event that can be fine-tuned. Across the customer-enterprise lifecycle, the metrics should collectively form a kind of security system, monitoring the entire enterprise landscape to catch mistakes and identify missed opportunities, and empower the organization in ongoing self-improvement. It's important to note that the survey format can be anything: online, phone survey, snail mail survey, comment cards and so on.
- Analyze customer relationship metrics in a broad context. Don't limit yourself to just using numbers to measure customer happiness. Make use of the data in planning product development. Make the data a C-suite priority and fold it into organizational key performance indicators.
- Empower employees by tying their levels of autonomy to the metrics. You can simplify many processes that involve employee intervention of a customer's behalf -- revising a shipping schedule or discounting an order, for example -- if you design a system in which an employee can take action without additional authorization using responses premeditated with customer relationship metrics in mind. This is especially useful in customer support.
Dig Deeper on Customer loyalty and retention
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