Hi Team,

Today’s article is a 🧠 dump for a few of the things I’ve been thinking about recently. It’s short and (hopefully) sweet. Enjoy!

The Biggest Problem In CX Today ⁉️

Too many vanity metrics. Not enough action ...

Let's get real for a second.

CX metrics (NPS, CSAT, CES) are nothing more than a snapshot of performance across a certain time period.

Unfortunately, these metrics are not going to change themselves!

In order to change these metrics, organisations must adopt design thinking, also known as "Service Design".

This methodology leverages the double diamond concept to continuously identify customer issues, measure the impact, test new solutions & learn from the results:

Your customer metrics (CSAT, NPS, CES etc) should be used as tools to measure continuous progress on different prototypes and hypothesis' that your team has.

A CX team should have a number of different experiments happening at the same time, with a clear hypothesis, measure & desired outcome.

As Thomas Edison once said - "I have not failed. I've found 10,000 ways that won't work".

In my humble opinion, many organisations spend too much time trying to ANALYSE DATA (left diamond). Instead, they should be spending much more time LEARNING, MEASURING & ITERATING (right diamond)!

CX Performance Metrics YOU Should Be Thinking About In 2024 👇👇

The obsession to demonstrate “ROI on CX” is still prevalent in 2024 however it’s becoming increasingly evident that a CSAT or NPS metric is not going to earn you a seat at the C-Suite table.

To obtain top-down interest of your experience program, begin to reimagine the performance metrics that you’re sharing across the organisation.

Below, I have introduced the concept of “CX Performance Metrics”. The accountability of these metrics should sit within the same team who oversees NPS. The benefit will be that your team now has a metric which directly impacts the financial performance of the organisation, giving your team an elevated role within the business.

Let me explain the slight nuance of these metrics:

• CX metrics = customer measures which cannot be directly linked to financial performance e.g. NPS / CSAT / CES

• CX Performance Metrics = customer measures which can be directly linked to the financial performance e.g. revenue, cost savings, LTV etc

METRIC #1 -  🔄 RETENTION / CHURN RATE - You should have a very clear view on the proportion of customers who have been retained and/or who have churned within a certain period of time. This metric has a tangible impact to business revenue and is arguably the 'North Star' metric for CX teams.

METRIC #2 - 💸 CUSTOMER RETENTION COST (CRC) - If marketing teams can calculate the 'cost to acquire a customer' (CAC), CX teams should be able to figure out the cost to retain a customer (CRC). This cost could include investments via marketing, support, loyalty programs, etc. Lower costs often indicate efficient retention strategies.

METRIC #3 - 🔍 CUSTOMER CHURN REASONS - It's not enough to just measure the rate of customer churn. Understanding WHY customers churn is also crucial. Categorising and analysing reasons for churn (price, service issues, competition, etc.) helps in targeted improvement efforts.

METRIC #4 - ⏱️ NUMBER OF REPEAT CALLERS WHO HAVE CHURNED - This is an extremely under-utilised metric. It is well known that 2-3 poor interactions with a brand will lead to customers moving elsewhere, yet very few organisations actually try to quantify this issue. The easiest way to do this would be to track the churn rate of customers who are repeatedly calling the contact centre. You can diagnose the reason WHY after that point.

METRIC #5 - 📉 LIFETIME VALUE (LTV) BY NPS SEGMENT - This is a great metric to start combining financial results with customer measures. Word of warning - this metric won't be as straightforward as slicing your LTV results by your most recent survey response however it is definitely possible. We have financial linkage experts at Medallia who can help if needed!

IMAGE OF THE WEEK

A 1% gain every day will lead to something becoming 37x better across a year. Conversely, a 1% decline every day for a year will lead to a 97% drop in performance across the year.

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