Measuring end-2-end from customer to business value
The goal of any measurement is better decisions. How can our measurement invite and support better questions and decisions across the organization?
The attached deck and highlights is from a presentation I was invited to share at the 13th Annual Customer Experience Management Summit in October this year (2022).
In this article I am sharing the slide show via Google Slides and a few slides with comments below.
#1. In order to measure something we first need to agree on what we are measuring
Without clarity and alignment on e.g. what customer experience, customer value or business value is (or why we have strategy) any measure will do the job.
We will then fail to hold ourselves accountable or be able to improve what we are doing. If every team measures the same thing differently we won’t be able to operate as a learning network and our ability to keep up with the market suffers. Without shared language and shared understanding the company will fail to collaborate on critical topics.
Definitions on what to measure is equally important to the measurements themselves.
#2 Metrics serve decisions not the other way around
Are teams suffering from dashboard fatigue? Are we pumping them full of numbers and graphs without any clear distinction between what are signals and what is noise? The more important job is discovering what decisions different stakeholders could make that would lead to improvement. The dashboard is a commodity serving those decisions. A dashboard that doesn’t know which decisions it serves could just as well be a random numbers generator.
#3 Humans don’t need metrics, but models
For some metrics there is no need for a human at all. A human needs expensive dashboards and visualizations while a computer only needs numbers. Maybe the human should focus on training a computer on what makes a good decision rather than having a computer train a human on how to read data?
#5 Do we measure, value and incentivize outputs or outcomes?
According to Clayton Christensen the most powerful people in an organization are those who decide how people are measured.
Your measurements will not only affect what the organziation perceives as value, but also how people work and what people think the work is.
e.g. if we are measuring outputs then the work is to be a factory floor producing outputs most efficiently. If you are measuring outcomes the work is to experiement with, learn from and improve what your customers are doing at a continuous pace.
#5 What do we measure?
The presentation demonstrates the chain from engagement to customer and business value. How each part of the chain has a clear role and is checked by the other elements. By setting a chain and not a single KPI one could find what is or isn’t working and what to improve more easily. The company is also much less likely to game it’s measurements.
#6 Don’t over market your metrics!
Don’t pretend your metrics are doing something they aren’t. This will only lead to a. the company believing and acting on something that isn’t correct, and b. it will hamper the organizations investment in something that is better. Over marketing your metrics is very short term thinking.
Soruce: Derek Rowntree
#7 Proxies are make-believe at best!
Most of our measures are inescapably proxies, but be careful with them. As many are spurious, based on our pre-conceived ideas, we lack the data to confirm them and we evaluate them based on our own opinions.
Poor proxies can lead the company further away from their customers and create a gap between the marketing strategy and the execution.
Source: Cathy O’Neil
#8 Are you measuring the customer or yourself?
Many measures pretending to be about the customer are not really about the customer at all — they are about us (the organization).
E.g. an NPS asks: “based on this experience would you likely recommend …” a CSAT asks: “how satisified were you with the current expeirence …”.
None of them ask the customer about what they want, why they are here in the first place or what they are hoping to achieve as an outcome from the experience.
NPS and CSAT are engagement vanity metrics the business can use to pat itself on the back. This doesn’t mean they are not valuable. If the company is not able to produce a quality engagement in the first place then it won’t be able to produce anything else either. But .. don’t over market your metrics!
The Cobra Effect
Any measure that can be gamed will be gamed. One antidote is to make metrics more contextual. Be clearer and more precise on what they are measuring and add it to a chain of metrics having different roles and checking each other.
The presentation suggests four clear contexts each with different roles and measures: engagement, customer value, customer response (strategy) and business value.
Sources: Emily Gorcenski and Jennifer Garvey Berger
