Key Customer Metrics
You need more than a high-level view to sway your chief financial officer (CFO) to your way of thinking about customer experience. You also need some hard facts about customer experience in your own organization.
First and foremost, you want to convey how your customers rate you on three key metrics. (Note that you glean these ratings by conducting regular customer surveys. Ideally, these should occur at least quarterly, although more frequent feedback enables you to address customer issues more quickly.)
Likelihood to recommend: This measures how likely a customer is to recommend your company to friends or colleagues. Customers who respond with a high rating are among your most loyal. Not only do they basically provide you with free advertising when they recommend your company to others, but they’re also less likely to share negative feedback about you on your website or on social media.
Likelihood to switch to a competitor: This reveals how likely a customer is to take his business elsewhere. These days, customers can switch from you to your competitor with the click of a mouse. That makes your efforts to retain customers even more important! It only takes one bad experience to drive a customer away . . . and if a competitor responds by providing that customer with an excellent customer experience, rest assured he will be even less likely to return to you.
Likelihood to repurchase: This reveals how likely a customer is to purchase from you again. If a customer has a good experience with your company, that customer will be much more willing to buy from you again!
By themselves, these three key metrics offer a good indication of how your customers feel about their experience with your company. But they get even more interesting when you start finding linkages between these and other measures, such as overall customer experience. After all, what drives a customer’s willingness to refer your company to others? Yep, you guessed it: a great customer experience.
There is a strong positive correlation between a customer’s overall experience and how highly she scores an organization on these three key metrics. Put another way, if you improve customer experience, you also improve likelihood to recommend and likelihood to repurchase, and you diminish the likelihood to switch to a competitor.
This is a big deal. Why? Because this is the kind of information that can grab the attention of your CFO and CEO. After all, they know in dollars and cents what it means for a customer to refer your company to a friend, to not switch to your competitor, and to purchase from you again — without the expense of additional marketing dollars.