Customer experience (CX) key performance indicators (KPIs) are important for any customer-facing brand because they let the business how satisfied and loyal its customers are. The best CX KPIs are typically focused on customer perception with metrics such as Overall Satisfaction (OSAT) and Likelihood to Return. Some surveys also include a question about Problem Experience and how effectively a business resolved a customer’s issue. These specific survey questions have a history of being better predictors of future customer behavior.

Obviously for a brand, customer satisfaction and loyalty are going to affect the bottom line, since customer retention is important for businesses. However, management will often want insight into exactly what the ROI will be of investing in some aspect of a customer experience program, given the competition for investment dollars from all parts of the business.

That’s where business KPIs come in. Business KPIs are most often financial measures, such as revenue, income, sales, customer counts, customer population growth, share of wallet, customer attrition, subscription rates and so forth. Most often, business KPIs are relatively specific to the industry, with KPIs expressed in terms of change relative to a prior time period – for instance, year-over-year or same-store sales growth.

While OSAT is usually highly linked to financial performance at a brand’s individual locations, the linkage for Likelihood to Recommend (or Net Promoter Score) is not as strong. This is largely due to the fact that consumers typically combine together their in-store experience (overall satisfaction with a specific experience) with overall perception of the brand in question (general perception of the brand). This conflation tends to dilute the predictive value of the NPS customer satisfaction metric relative to future financial performance.

At Market Force, we find that a best practice is to link OSAT results with financial performance to understand what drives customer satisfaction, while also predicting financial outcomes for investments made in the customer experience.

However, using a single measurement across all locations may actually “penalize” high-performing locations while obscuring the problems at under-performing locations. For this reason, Market Force allows a drill-down on KPIs to the location level so that each location can prioritize and work on exactly those actions that will boost their ROI.

 

Phil Doriot is Vice President, Analytics & Insights with Market Force Information. With a career structured around the development and application of sound measurement practices, he has worked with some of the largest companies across a broad cross-section of industries tuning business processes to deliver better financial performance, and increase customer experiences.​

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