In our fast changing, increasingly digital world, building a strong customer relationship is the lynchpin to building a great business. The stakes are even higher now as global disruptions occur with alarming regularity—be it political unrest, economic meltdowns or a pandemic.
A new, global study called Experience 2030: The Future of Customer Experience provides insight into the mind of the future consumer and on the actions brands can take now to grow, evolve and thrive — well into the future.
Brands predict that by 2030, 67% of digital customer engagements between a brand and consumer will be completed by smart machines rather than humans. And by 2030, 69% of decisions made during a customer engagement today in 2019 by human agents will be completed by smart machines.
According to the report, brands are investing heavily in emerging tech to face new realities. For example, 54% of brands are investing in augmented and virtual reality (AR/VR) to help consumers visualize the look or use of a product or service remotely. And 53% of brands are pursuing AR/VR tools to improve product use and self-help.
The traditional measure of customer experience success—customer satisfaction scores—fall short. If your business can’t measure the full impact of its marketing, you can’t invest wisely.
Three categories of customer experience measurement
To tie customer experience investments to business outcomes, consider this multi-layered approach to guide your customer experience measurement:
Customer engagement measures. This category examines the effectiveness of your customer experience efforts -- in other words, the health of your customer relationships.
Engagement metrics help marketers measure the specific actions-- transactional or non-transactional--that people take when interacting across customer touch points as well as their resulting impressions toward the brand. Are they attracted or disillusioned? Quantitative metrics include online interactions (visits, downloads, registrations, etc.) or at the interactions at physical location or store, number and frequency of visits, recency, customer migration metrics (from lower to higher tiers of customer value), and customer profile completion rates. Softer, qualitative metrics include satisfaction survey responses and sentiment in social mentions or contact center experiences.
Operations performance measures. This category assesses the efficiency of customer experience activities.
By tracking operational metrics, marketers can get a sense of the size, scale, and activity level of customer experience initiatives, and how those change over time. Agile marketing planning can connect budgeted and actual spending with activities, tasks, resources and objectives related to your customer experience efforts. Operational metrics can include enrollment rates in loyalty programs or campaigns, offer response rates, issue resolution times, asset re-use, and the like.
Corporate business measures. This category assesses customer experience contribution to overall corporate value.
Corporate metrics incorporate available financial and market data to link customer engagement and operational performance and to the firm's top and bottom lines. Examples here include revenue, growth, margins, market and wallet share, and other productivity measure. Tying everything together, these metrics are often the ones that matter most to the executive team.
Considering the overarching objectives for their businesses, marketers must choose appropriate measures that map to those goals directly or indirectly. For example, if the corporate imperative is to increase customer retention, then marketers should examine the correlation between online engagement and length of relationship or status level to renewal revenue.
Four tips to remember
Here are reminders as you embark on the customer experience measurement journey.
1. Express marketing measurements in business language
Speak the language of the business by understanding how your business leaders evaluate marketing performance. Financial measures such as revenue, profit and shareholder value frame the C-suite’s understanding of overall corporate health.
It’s the marketer’s job to connect marketing measurements to business results. In other words, you must frame marketing metrics as financial metrics. For example, campaign response rates links to incremental revenue; retention rates links to increased profitability; cost-per-lead links to reduced acquisition expenses; customer satisfaction scores link to reduced services cost, etc.
Do this, and you’ll raise the marketing department’s credibility within the C-suite.
2. Connect the dots between branding, demand generation, and customer experience.
Many companies have separate departments and marketing budgets. One focused on branding, one on lead generation, another on customer loyalty and so on. Ensuring that the business (not just marketing) takes ownership of the entire customer experience--from a customer's perspective-- is vital to gauging success. One executive I spoke with said it this way, "It’s quite a challenge. Everyone has always measured themselves by progress against sales goals, and customer experience can seem like another initiative. We had to make it clear that it’s not another initiative. It’s part of what we do. We achieve our sales goals via solid customer experience."
3. Don’t focus only on past performance.
Marketers typically report on marketing activity and associated costs, rather than reporting on metrics executives use to set direction. Instead of only reporting what has happened (e.g. marketing qualified leads, conversion rates, win rates), progressive marketing measurement programs should also answer the question: what will happen? Or even better: what must the business do to make that desired business outcome happen?
Including predictive elements such as campaign lift modeling, propensity to purchase (or churn), projected lifetime value measure, etc. are equally vital.
4. Attend to effectiveness first, then on efficiency metrics.
Effectiveness is answering the question: “Are we doing the right things?” While efficiency is answering: “Are we doing that thing well?” First measure if your omni-channel efforts are effective in driving the desired interactions, involvement, intimacy and influence for your brand. Then look at efficiency metrics by evaluating costs of customer acquisition methods, buying and placement of media content, digital asset use, etc.
Executives are always looking at ROI, so marketers who want to capture the C-suite’s attention need to draw a clear line between marketing activities and results. The best marketing and customer experience measures not only tell you if you’re delighting and helping customers, but if you’re also making money doing it.
To learn more, download the free ebook: Customer Experience -- Now and Into the Future.