Metrics matter: The role of measurement in CX
Measurement in the workplace often goes unquestioned.
"What gets measured gets managed," you'll hear, nodding along as you're presented one dashboard or another. Every industry, every company and every department has their share of acronyms corresponding to key performance indicators (KPIs) that must be learned, tracked and analyzed. It all adds up: A Constant Contact article states that businesses can spend 80% of their time collecting, monitoring, analyzing and reporting data.
In fairness, measurement is celebrated for good reason. It is through measurement that businesses can begin to distinguish between what's working and what isn't — and determine what to do next. Efforts to improve both efficiency and effectiveness depend on insights gleaned from measurement.
There's a problem, though. In the name of measurement, all too often, brands end up focusing on hollow metrics that correlate to little and add value to no one.
In the customer experience (CX) context, this can lead to a host of unintended and unwelcome consequences. Despite the best intentions, brands can end up tracking metrics that are disconnected from real customer experiences and the goals of the business. Improving a number on a spreadsheet needs to correlate to what matters — anything else is misleading, inefficient and costly.
As a further complication, measuring the wrong things can have enduring effects. The reason for this is that these metrics often become the focus of ineffective forward-reaching goals. Before you know it, you're not only measuring the wrong things, your very success seems to depend on them, causing you to obsess over the numbers, invest in the wrong solutions and distance yourself farther and farther from the experiences of your customers and the objectives of your business.
What gets measured may very well get managed, but it also seems what gets mismeasured gets mismanaged. Let's take a closer look at how you can avoid common CX measurement pitfalls and establish an effective program.
Challenges related to customer experience metrics
There's one thing to make clear from the start: Metrics don't have inherent value, they gain or lose validity based on how they are put to use. When they are detached from business goals, for example, they lose value and become vanity metrics — serving only to mislead or to justify further measurement.
So while average handle time (AHT), for example, might be a commonly analyzed metric in customer experience, it is possible for brands to misuse it.
One challenge in measurement is called score obsession, which occurs when brands focus on the numbers rather than their customers. A brand exhibiting score obsession might do everything in their power to reduce their AHT, without considering the quality of the service delivered or understanding the relationship between AHT and repeat business.
Score obsession can consume a brand's attention. When you're obsessed with the numbers, any disappointing result or trend, however fleeting, can cause alarm and prompt you to spend your budget that might be better placed elsewhere.
According to the Forrester report, How To Set CX Metrics Goals, another challenge occurs when customer experience metrics goals are set with the assumption that they will always improve. "There's no reason to assume that scores will continually increase unless there's specific information on how or why CX will improve," the report explains.
The authors add, "Some CX leaders believe they must set CX metric targets that continuously increase because their executives treat them like traditional business metrics — like sales and revenue — where constant growth is expected." In these circumstances, and with these types of goals, it is not hard to imagine a brand becoming obsessed with their scores at the expense of their actual customer experience.
It is not the case that all metrics should be considered misleading and consequently ignored, but rather that effective measurement requires a considered approach and a deep understanding of your business and the role of CX within it.
Connecting CX metrics to business value
Metrics might not have inherent value, but that doesn't mean they are doomed to be misused. They gain value through proper application.
Example: The relationship between CX metrics and revenue
Let's reconsider AHT, and apply the metric to a hypothetical brand with a subscription business model. The brand has an interest in increasing the number of subscriptions, which has a direct and important impact on their bottom line.
The brand had been growing for a while, but eventually, the number of subscriptions peaked before starting to take on a new, downward trajectory. Eager to address the cause, the brand dives into their CX metrics: They notice that at the time that the subscription count was at its highest, their customer satisfaction score (CSAT) started a downward trend while their AHT did the opposite.
This might suggest that as the business earned more and more customers, they found themselves fielding an increasing number of customer support requests. As the requests piled up, the amount of time it took for a resolution increased and customers became dissatisfied with the experience. So much so, in fact, that they canceled their subscriptions altogether.
You can see how the application of AHT takes on value due to its relationship to the number of subscriptions, for this business. With greater analysis, this company may decide to create strategic metrics goals that take AHT into account, and scale their customer support team or invest in technology to increase efficiency.
Informing CX investment with metrics
Businesses that connect their customer experience metrics to business performance are able to substantiate the case for sound, strategic investment in their CX operation.
That's a big deal. In a recent Forbes article, CX expert Shep Hyken discusses the top customer experience objectives, challenges and strategies and states that "the No. 1 challenge is demonstrating ROI." Hyken goes on to say that he has "Always preached that CX shouldn't cost… it should pay," and that CX investment "must go from 'nice to have' to a 'must have' based on the benefits to customers, employees and the bottom line."
Beyond measurement of the past and present, brands must establish goals that reach into the future. The aforementioned Forrester report emphasizes the importance of goal-setting, advocating that companies should establish "the correlation between the target CX metric and the financial performance at the customer, business-unit, or company level. Then, compare the CX metric forecast with the expected financial performance to ensure the CX goal is feasible." By doing so, a brand stands the best chance of measuring what matters, and in a realistic manner.
Effective CX goals can't be arbitrary or exist in a silo. They must factor in past performance, wider industry or economic trends, relevant benchmarks and business objectives. The complexity at play underlines the value inherent in an experienced CX partner that can piece together the data, reduce the risk of technological investment and be held accountable to delivering results.
Achieve your business and CX goals through partnership
Targets that connect business and CX performance are consequential. That means they matter — to your C-suite, your CX team, your customers. That importance comes with heightened responsibility.
To make sure their goals are effectively set and met, there's real value in seeking expert help. TELUS International partners with global and disruptive brands to analyze their CX data, establish meaningful goals and turn customer experience into a revenue generator. Contact us today.