“You must earn the right to continued relationships with customers.” – Jeanne Bliss
For companies to be successful they must know what customers want. The best way to truly understand what customers want is by asking them, getting their feedback. Customer metrics are those indicators and statistics that put together and sum up the feedback provided by customers. The feedback can be in the form of point ratings or longer and more answers provided. Most often for a feedback survey to be effective it must talk about a number of aspects related to the ‘relationship’ of the customer to the company. Customer metrics is a company’s attempt at understanding the customer better – about being able to ‘feel the pulse’ of the customer, an attempt at making an analysis of possible future behaviour and how customers current ‘feel’ about your company. Customer metrics allow companies to get an indication of which customers will remain loyal versus the ones who can be easily enticed by competition. Armed with this information, companies can put together the appropriate strategies to fix any troubled situations and also make the unhappy customers back to being pleased.
With the unhindered rise of new companies, willingness of investors to pump money into companies, the surge in technology and information and companies not being risk averse any more, customer metrics has taken on an altogether different meaning. It has become crucial for companies to gauge the customer’s mood before it is too late – the fact is customers have many more options and unlimited access to information and unless they have good reason to stay with a company, they will not. Customer metrics help companies to gauge these different behaviours to be able to put together innovative strategies and launch new products and services that will keep customers enticed, engaged and interested. An understanding of what customer metrics are about is essential for companies to mould their tactics around the specific needs of customers and make them as personalized as possible.
Most companies put together a list of customer metrics depending on their experiences with their customers while others may choose to enlist the help of a professional agency to help them with a list of such metrics. Whatever the route taken the aim remains standard – knowing what your customers feel, what your company can do to ensure that keep customers happy by giving them what they want. So what are some of the ‘common’ and oft used customer metrics? All of them are important and we enlist some of them albeit not in any particular order.
– Customer metrics provides the company will specifics on the amount of value customers attach to their business and this value comes from service and product quality, pricing and customer service. This metric is in a way direct comparison customers make between you and your competitors and gives a company some critical clues as to what can be done better to outdo competition and retain the customer’s business and keep them loyal. Everyone is aware of the huge costs involved in acquiring a new customer but if a company ‘treats’ the customer right, with time these costs are more than offset by the customer’s profitability and loyalty. When a customer is loyal, not only will they prove to be advantageous to a company but would also be willing to refer the company to their friends and associates and anyone in business knows the power of a customer referral.
– The customer metrics of loyalty lets companies know whether the customer will always choose their products and services irrespective of the prices offered by competition. Loyal customers provide a company the stability and continuity that is so essential in the cut-throat business environment and are also walking talking advertisements for your company. There is no way to gauge customer loyalty other than asking for their feedback, speaking to them and finding ways to assess where your company stands with respect to their opinion of competition.
– For companies to sustain their profitability, they must not only understand and be aware of the overall business being generated, but also have a firm grip on the profitability status of each individual customer. It is crucial to track revenue this way – we discussed earlier that sometimes it costs a company way more to keep a customer and these costs outdo the amount of money being generated by the customer. Customer segmentation becomes easier through an assessment of this customer metric – customer revenue and profitability. The fact is that the smallest number of customers is the ones that contribute the maximum to the bottom-line.
– Checking on the customer metrics of satisfaction lets companies know whether their existing customer base is happy and the reasons for their satisfaction or dissatisfaction. The rating for this metric is best collected via a point system wherein customers can rate your customer service, products, pricing and overall experiences on a rating scale. It would be prudent for companies to not just solicit this data from existing customers but also from former ones and other people who deal with the company – vendors for example. Customer satisfaction also ties in closely with the level of morale and employee satisfaction and it would helpful for companies to first ascertain what their employees feel about them.
– The customer metric of profitability per customer is another way of measuring how much a company is spending per customer vis-à-vis the business being generated. An evaluation of this customer metrics is a sure shot way of knowing which customer or customer segment is profitable and which is not. Customers who are more profitable must be given preferential treatment by way of incentives, added product features, discounts and any other means to increase and retain their loyalty. You don’t want to lose these profitable customers, do you?
– It is common sense that unless people know that a brand, company or product exist they cannot buy. It stands to reason that creating brand awareness is a vital customer metric and one that will attract potential customers and also let current customers know what is new or fresh for your company and its brand. Getting customers to rate their knowledge of the brand will add the much needed perspective for companies and build strategies around building their brand and increasing its visibility.
– Communication channels and their usage is another one of the key customer metrics especially now that there is such a large number of channels available to customers through with they can connect with companies. Apart from understanding which customer prefers which method of communicating, making an analysis of what the customers use those channels for also helps. Companies should focus on making their applications and communication methods as simplified as possible for customers – ease of navigation and use largely define customer preferences.
– Depending on the effectiveness of their strategies and quality of their products and customer service, companies are either able to ‘convert’ prospective customers to actual ones. Using this customer metric, companies can know how much success and support they can garner by the number of people doing business and buying their products.
Customer metrics are, as mentioned, an effective way to know how well or badly your company is faring with regard to its customers. How effective your usage of customer metrics will be is defined by whether your company knows exactly why each is being used – that is to know clearly what your company seeks to measure. The data collected via these customer metrics must not only be concise, it must also be reliable, valid and be able to significantly affect a company’s strategies and policies – aligning them for greater success.
Irrespective of the customer metrics your company chooses, it will always remain crucial to gather customer data if you wish to continually improve customer service and better your product quality consistently. Even though gathering data via customer metrics may seem arduous and cumbersome, it proves invaluable for companies to get better and give their competition sleepless nights and restless days.
