Key Performance Indicators (KPIs) in Customer Centric Organizations

Written by Björn Neumann (follow me on @CCMTechnology) for Buljan & Partners Consulting

While changing your company from a product or service driven to a customer centric organization you might have come to the question of “How to measure, monitor and improve the new structure?” Especially as decision maker you must ask yourself, if the currently established metrics are still valid and are an adequate toolkit for the new strategy.

You might have found that your KPIs in Marketing, Sales and Service related to

  • campaign costs
  • quantity or quality of prospects currently worked on
  • customer kept or lost during a specific time frame

tell you more about your company, your products or your services than about your prospects and customers.

To move towards a customer centric organization also new metrics must be found and established and existing must be dismissed. I mainly recommend three steps to do so:

  1. Reassess: Discharge KPIs without any customer reference.
  2. Renew: Change the perspective of your current customer related KPIs.
  3. Reinvent: Define new customer centric KPIs.

Reassess
The first step should be the easiest. Reassess your current KPIs and eliminate those, which have no direct customer linkage or a win-win character. Ask yourself e.g. – what do you need an internal KPI comparing department X with department Y for? What does a sales training KPI tell you about your customer loyalty? Is the number of registered users telling you anything about your customers? Is your pipeline performance just good for you but also for your customer? Take in mind the customer and not the lead and prospect perspective. In this step the only difficulty may be asking effective questions from the right standpoint.

Renew
The second step is also simple, and it rather changes the view on the KPI than the KPI itself. Take this Value Marketing maxim as an example: “The value is not the value you offer, but the value the customer perceives”. Currently you may be measuring (company) image over (customer) perception. The KPIs numerator (image) is about you, while the denominator (perception) is about your customer. The same KPI inverted, i.e. perception over image helps to change the mindset towards customer centricity:

CC KPI

Reinvent
In the third approach, defining new customer centric KPIs may be a bigger challenge, because internal and external processes have often changed before the metrics follow. Unfortunately analytics often comes last. Let us have an exemplary look at one of the areas stated above: campaign costs. Where do customer, customer experience and customer perception come in?
So how about: How much did we spend on a customer with campaigning (communicating)? But then again, this viewpoint is rather about you and your company not about the customer. Then how about:  How much did the customer spend in our campaigns (e.g. clicking, reading, participating) and how much value did the customer get out of it?

CC KPI 2Basically it follows again the Value Marketing maxim from above. Customer centric KPIs are about customer perceived value. Just imagine the significance of a greater or equal one KPI for this example.

Both KPI examples in steps two and three show how you can convert your analytics from product or service centricity to customer centricity. The stepwise approach helps you to transform your KPIs along with the organizational change. As the first two steps are easy to implement it may be the short term approach to take before directing resources to the third. Nevertheless all three are necessary for a full change towards customer centricity. Seems challenging, doesn’t it? And it is, also in terms of data quality and quantity as well as data preparation, retrieval, analysis and interpretation. But it is definitely worthwhile to build and improve your customer centric organization.

Remember: Customer centric KPIs represent customer relationships with customer -company win-win situations. Customer centric KPIs are about customer perceived value. (Only) measure and monitor what’s in for the customer and improve it, automatically it will improve what’s in for you! Do this by reassessing, renewing and reinventing your customer centric KPIs.

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