It’s a story that’s all too familiar. A company invests millions to create a product perfectly tailored to customer needs—all the right features, all the right use cases, innovation all day long. They congratulate themselves on being customer-centric and watch for their market share to soar. But behind the scenes, trouble is brewing. Inadequate or hard-to-use self-service tools leave customers frustrated. Growing support queues compound their annoyance. Reddit threads are filled with complaints and warnings. Customers start spending less, and ignore marketing content. Defections rise, they leave constructive or negative reviews and ultimately leave or churn. Market share drops. How, exactly, was this a customer-centric company?
Everyone agrees that businesses should be customer-centric. But what does that phrase actually mean? Buzzwords are easy; what’s harder is to translate them into concrete definitions and KPIs. This is not just about adopting a customer-first mindset; it’s about making it measurable and actionable.
Gaining clarity on realized customer value has become especially important following the turbulence of recent years. As businesses have pivoted rapidly from growth and transformation to efficiency and profitability, it’s been too easy to lose sight of the most important priority of all: being a company people want to do business with. Now, as we begin a new year, it’s time to go back to fundamentals.
Let’s begin with a definition. In my view, being customer centric comes down to three questions:
- Are we easy to do business with?
- Do customers realize value quickly from their investment with us?
- Is the experience of working with us truly delightful?
If you can say yes to all three, you’re well positioned for success. But how can you know for sure? There’s no shortage of metrics to evaluate customer success and experience—everything from customer loyalty index to complaint rate. You could easily devote a full team to measuring and analyzing the full spectrum, if only you had the resources. For now, you can get started with the more manageable handful of stats with the greatest relevance to customer centricity, then build from there.
Are we easy to do business with?
If you’re easy to do business with, customers are more likely to continue the relationship and grow with you over time. Conversely, if customers stay with you and keep deepening their investment, that’s a good sign that you’re easy to business with. That makes customer lifetime value (CLV) a great metrics for tracking customer focus.
One of the most crucial customer relationship management and marketing metrics, CLV represents the total revenue your company can expect from a single customer account throughout their time with the business. A high CLV shows that customers are being well taken care of by your customer-facing personnel. They’re not encountering the kinds of friction and frustrations that lead to defections, and their day-to-day interactions are satisfying enough to spend more and more money with you. That’s a good thing for both customers and your bottom line.
Do customers realize value quickly from their investment with us?
Customers shouldn’t have to be patient with you. If you’re truly customer-centric you should give them what they need to see value right away. One way to measure that is with your ticket deflection rate (TDR), which reflects the percentage of potential support tickets “deflected” by self-service resources. After all, there’s nothing people hate more than having to wait in a phone queue or sit by their in-box hoping for a reply. When customers are empowered to solve their own problems, they can move on with their day.
High-quality self-service resources are as helpful for the business as they are for customers. A high TDR means that customer support reps are free to more complex, high-value issues, increasing their productivity and enhancing job satisfaction. It can also lead to cost savings by reducing the demand for direct support. For companies striving to be customer-focused, it shows that you’re working hard to anticipate what people need and make sure they have it.
Customer retention rate (CRR) is an important metric for every kind of business, and especially those operating subscription-based models or in highly competitive markets. Similar to CLV, CRR shows how willing customers are to keep doing business with you. While CLV tracks total spend over the length of each customer’s relationship, CRR measures the rate at which you’re retaining your customer base over a specific period—a direct reflection of how well you’re keeping them satisfied. That, in turn, shows how effectively you’re focusing on and meeting their needs.
For your business, a high CRR shows that you’ve built a loyal customer base capable of generating stable revenue as well as positive word-of-mouth to generate organic growth. On the other hand, if you’re consistently losing a significant share of your customers over time, your customer focus needs sharpening for their sake as well as your own.
Customer health score (CHS) is a more complex and potentially subjective metric than the others we’ve discussed so far, but it can be highly useful for evaluating how well you’re meeting customer needs—and how likely they are to stick around. The factors that go into CHS can vary based on your product and business model, but they can include things like product usage, support interactions, payment history, engagement with marketing content, and survey responses. It can take some groundwork to develop the right CHS formula for your company, but once you do, tracking it over time can help ensure that you’re keeping customers at the center of your business.
Is the experience of working with us delightful?
To get a sense of your ability to deliver delight, it’s helpful to take both the inside and outside perspectives. In other words: employee engagement score (EES) and net promoter score (NPS).
From the inside view, EES measures whether your team is motivated, productive, feeling good about your company values, and willing to go the extra mile for customers as a result. A high EES shows that they’re enthusiastic and committed, and typically correlates well with high customer satisfaction. We’ve all worked with people whose positive attitude helped lift those around them; we’ve also dealt with people who hated their jobs and made everyone else’s day worse. Strong morale inside your company will spill over into your customer base.
Businesses see a high NPS as more precious than gold, and rightly so. If customers are willing to advocate for your company and recommend your products and services to others, they become a virtual extension of your marketing team. One of the most all-encompassing customer success and experience metrics, NPS can reflect everything from the quality of your product or service, to the return on investment you enable, to the customer and user experiences you deliver. Simply put: if your NPS is high, your customers are delighted—and you’ve done right by them.
Being Customer centric isn’t a buzzword t or a box to be checked. It’s an ongoing commitment to specific actions with measurable results designed to give customers what they want, the way they want it. By keying on the six metrics discussed above, you can assess how customer-centric you are today and set a benchmark for continuous improvement moving forward.
In the next customer-centric blog series, we’ll explore the role of AI in boosting customer-centricity. We’ll discuss how it speeds up customer operations, enhances productivity, and what it takes to utilize human-centric conversational AI to deliver significant value.
