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Customer-Centricity and Metrics: Moving from KPIs to CPIs

Updated: Jun 14, 2021

Are you tracking the critical metrics that underlie your customer's experience?

Customer-centric practices are not new—companies across industries continue to see the value in holding the customer at the center of everything that they do. Customer-centricity impacts processes, procedures, and service efforts. Companies are all too often very vocal in showing off the moves that they are making to be a more customer-centric organization.

However, customer-centricity does not stop there.

For companies that are truly committed to customers it is imperative to align metrics to customer outcomes to ensure the entire organization is moving in the same direction – to satisfy the end customer. This is where CPIs— Customer Performance Indicators —come in. CPIs are indicators that customers truly care about, such as speed of quoting in the insurance space or “nothing broken” in a delivery. By focusing on exactly what customers care about, companies can have a stronger impact on the actions and offers that customers truly care about the most.

1. Not All Metrics Are the Same

Thinking of typical KPIs- revenue, growth, sales, etc. the focus is solely on company outcomes. KPIs consider what the customer does for the company and not what the company does for the customer. CPIs on the other hand focus squarely on what customers care about the most – and at the end of the day the customer really cares about their experiences. Was the resolution easy? Was the service representative knowledgeable? Was there ample stock available? These are all relevant customer concerns and can form the basis of CPIs to ensure that a company is truly meeting the needs of their end customer.

KPIs will still have a place – they help to showcase the financial outcomes of an organization – but a company’s success does not simply reside in the numbers. The continued focus on customers and nourishing that relationship can strengthen not only the brand but create positive impacts to the bottom line—and in turn to KPIs as well.

CPI considerations based on industry include:

  • B2B and B2C: Convenience or the time required to transact is a different process for a B2C retailer than it is for a complex B2B software platform provider.

  • CPG and retail: Consumer packaged goods (CPG) brands must rely on partners in the supply chain, such as retailers, to help deliver on targeted CPIs.

  • Hospitality: A hotel chain likely has direct measurement tools available to determine valued customer outcomes, such as whether a room was clean or whether the check-in process was seamless. However, while Airbnb and Vrbo are fulfilling the same basic customer need for a place to stay, their ability to operationalize and measure customer outcomes is very different. They may best focus on a smooth and transparent booking experience on the front end, followed by monitoring post-stay reviews and satisfaction.

2. Measuring CPIs and the Impact of Employees

One key difference of KPIs vs. CPIs is that employees can create clear, tangible impacts to the customer by providing a positive, lasting experience. Yes, the argument can be made that employees also impact KPIs and ultimately drive financial performance as well but that is much harder for the employee to truly see daily. It is much easier to see a smiling, happy customer than it is to envision an average cost per transaction.

Organizations that are driving toward CPIs also focus on their employees to ensure that employees keep customers at the heart of everything they do. Often building a culture around CPIs involves a shift of the company culture where employees are trained on being truly customer centric and putting the customer at the center of everything that they do.

When employees are only measured on and compensated for their performance on KPIs, they are naturally incentivized to do whatever is necessary to achieve that outcome for the company. This often includes manipulating customers, which customers do not like. Conversely, when employees are accountable to CPIs, they are motivated to help customers achieve the customer’s desired outcome. CPIs align employee and customer interests toward shared success.

3. Embracing Change: Creating Positive and Lasting Outcomes

A growing number of organizations are becoming more customer-centric by adopting, measuring, and optimizing CPIs — and this extends from consumer buyers to business buyers. And because customers are the one and only thing that fuel growth, how well a company performs against CPIs often serves as the most powerful lever for, and the most accurate predictor of, growth.

To revisit KPIs it is important to note that embracing CPIs can have a positive impact on those key company metrics. As the saying goes, high tide lifts all ships, and so to can creating CPIs that resonate with your business. A customer-centric culture can revolutionize the business and develop positive incomes that are felt across the business.

The Goal: Creating a Culture That's All About the Customer

To create a customer-centric culture it is imperative to truly know and understand their needs, motivations, drive, and potential barriers. Immersive explorations that examine the customer journey can help to create a clear and distinct picture of your customer today, to optimize for the future. CPIs will not be successful if they are created in a vacuum and must consider all the real experiences of the customer in order to help the business grow and thrive.

And truly what other reason is there to exist is not to service the customer?

Check out our shareable PDF report here!

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