The decision to buy or not to buy is influenced by many factors. Some of these are functional, like price or availability or delivery speed, with impacts that are measurable and known. Tangible, functional value-adds like time and effort saved, or number of integration options, are easily captured by traditional metrics.
Others, like brand cachet or social value, are much harder to quantify according to standard metrics.These intangibles can be nebulous and difficult to precisely calculate: the emotional experience a product creates; the ways an experience can change a person's life; how an organization's presence might be impacting the lives of others. But these are often the value-adds that cultivate loyalty and drive revenue.
These immeasurable but influential drivers can be collectively described as customer value: not the value of the customer, but the value that the product, service, or brand association provides to the customer. Simply put, it is what a customer perceives they are paying compared to what they feel they get in exchange.
So how do organizations looking to drive more customer value execute on that goal? One way is to shift their focus, replacing their KPIs with CPIs (Customer Performance Indicators) instead.
Putting customer value before the value of a customer
Customer value is an entirely subjective matter, involving both dollars and sense. Price is often a primary consideration, and when it is the only thing customers value about an offering, introducing items at higher price points can drive people away. Similarly, when quality is the key differentiator, rolling out a line of lower-cost, lower quality offerings can turn off customers and increase churn.
Considering the value an organization brings to its customers requires a holistic perspective that includes time costs, innovativeness of products, effort level required to access them, social status or affiliation, customer experience, brand perception, and impact on the environment, customers' community, or other communities.
Symbolic value can play an immense role in how customers value a product. When a viral movement spread the #DeleteUber hashtag, many riders turned to Lyft and other services perceived to support better labor practices. As a result of that perception, Uber's competitors saw a significant revenue boost in the aftermath.
Patagonia and Chick-fil-A both use this effect, capitalizing on corporate ethics as key differentiators for their brands. The former leans into employee wellness and environmental stewardship through its decisions around holiday work schedules and philanthropy; the latter aligns itself with Christian religious teachings through the choice to be closed on Sunday or promote fish sandwiches in observation of Lent.
Seeing the KPI forest for the CPI trees
Most companies aim to be customer-centric, but how many are actually successful? For brands striving for better outcomes, a true customer focus might mean looking at CPIs, not KPIs.
Key performance indicators (KPIs) are measures of efficacy and efficiency; they are concretely linked to larger organizational goals and strategy. By contrast, CPIs measure those things that directly impact the customer or their feelings about the brand. Each CPI tracks an outcome that customers value, which contributes to measuring the overall value the organization provides to its customers. Most verticals contain a host of competitors offering solutions to the same kinds of customer pain points; with the right CPIs, organizations can understand why, and whether, their offerings stand out.
Shifting focus from KPIs to CPIs creates different types of accountability without reinventing the organizational wheel. Instead of focusing on bird's-eye-view outcomes like churn or LTV, CPIs look at smaller, discrete elements that affect those big picture items. For example, when a grocery delivery service tracks the percentage of fragile items that are broken in transit, it can see what's impacting support volume, inventory needs, and the costs of redelivery, all of which will drive improvement across the organization and in the bottom line.
Fore-fronting the metrics that offer the most insight into the customer experience can profoundly shift employee behavior. Customer success teams can tighten their focus by following First Contact Resolution rates, while Quote Turnaround Time can give sales teams more fine-tuned insights into what drives buying decisions. And while brands may want to drive customers toward particular payment methods, attaching a CPI to Payment Flexibility can show whether keeping the options open is driving retention or conversions.
Emphasizing CPIs also creates a different type of employee accountability. Rather than incentivizing an organizational outcome that might result in aggressive sales tactics, manipulating data, or concealing failures, CPIs provide employees with motivation to achieve customer satisfaction above all else. Naturally, this leads to better retention numbers, higher LTV, reduced support costs, and more revenue.
In focus: CPIs in customer support
Most organizations believe they are already measuring some CPIs, citing figures like CSAT or NPS. While these do track customer sentiment, they don't actually measure what's relevant to customers; customers do not care nearly as much about their "likelihood to recommend to others" as businesses do.
Rather than using KPIs masquerading as CPIs, what are some meaningful metrics that customer support teams can track to drive better CX? One approach is to track what makes the customer's experience worse. The inverse of CSAT, known as NRR (Negative Response Ratings) or BADSAT, tracks the negative reviews a team or CSR receives in order to gain insights into how to improve the customer experience.
Combining multiple CPIs gives even more fine-grained measures of customer value. First Response Time (FRT) tracks how long it takes for a customer to get a response to their help request. By pairing FRT or average hold time stats with the results of sentiment surveys from after a customer interaction has ended, organizations can see how these micro-level engagements influence customer perceptions at the macro scale.
When FRT is combined with data about ticket reopens, it reveals the efficacy of the first-tier support process. If the success rate is low, this is an opportunity to increase customer value by deepening the resources of the customer success team: expanding the internal KB; giving agents scripts and suggested responses; offering targeted training on specific issues.
Putting CPIs into practice
Organizations that want to understand which of their CPIs matter most have a source of expertise built in: the customers. Ultimately, asking the customer is the most effective way to understand what value they derive from doing business with a brand, what keeps them coming back, and what impacts their purchase decisions. Regular surveys, outreach calls, and feedback mechanisms across different touchpoints keep the conversation going. Each touchpoint is an opportunity both to collect more information and to look at the customer experience and imagine ways to make it more impactful.
Getting value out of this collected data is where having an analytics platform that can integrate, extract and synthesize data from across the software stack becomes essential. If the data about customers' actual experiences with an organization remains siloed from the data being used to make decisions about how to improve CX, those efforts will always fall short. The right tools, the right metrics, and the right mindset come together to offer the bigger picture.
Zoho offers a suite of intelligent enterprise business software, including an award-winning CRM suite, the industry's only comprehensive analytics and BI platform, and a powerful low-code development ecosystem.
