There’s Just One CX Metric That Matters To Your C-Suite — But You’re Not Reporting It
I’d be doing you a massive disservice if I didn’t tell you that the one CX metric you must report to your CEO and the rest of your C-suite is not Net Promoter Score (NPS).* It’s also not level of effort, CSAT, or even Forrester’s beloved Customer Experience Index (CX Index™).
I feel compelled to point this out because every week my colleagues and I have multiple calls with clients who have questions about CX metrics. Most of these questions fall into three buckets:
- Is NPS the right beacon metric for my company?
- What is the best beacon metric for measuring customer experience?
- We’re tracking five different beacon metrics, but our execs don’t seem to care about any of them — what should we do?
These are perfectly reasonable questions, and we’re happy to answer them. However, there is a vastly more important measurement question that clients should be asking us but seldom do: How can I prove that CX means dollars and cents to the company?
To understand why this is the question for CX measurement programs, stop and reflect on what C-level executives really care about: revenue growth, cost reduction, and profitability. If you work at a publicly traded company, they also care about stock price. Those are the metrics that are top of mind for your execs, every day, all the time. At best, NPS, CSAT, and other typical CX metrics are nice-to-have afterthoughts.
Why? Because when revenue, profits, and stock price go up, and costs go down, your CEO and other members of your C-suite can make surreal amounts of money. And when those metrics don’t improve, they eventually get ousted from the business. Those are their stark alternatives: Get rich, or get fired. It’s not a subtle or nuanced choice they’re making, and they expect you to get that.
So, in what should be a surprise to no one, the metrics your C-suite wants you to report have dollar signs in front of them. Specifically, they want to hear how your CX projects and programs made money for the company or saved money for the company. And they want specifics, and they do not want to have to connect the dots for themselves between NPS (or CSAT) and $. Let me offer you an illustrative example.
Wrong way to communicate the success of a CX project to an executive: “We redesigned our account login process, and now our customers who log in are 22% happier.”
Right way to communicate the success of a CX project to an executive: “We redesigned our account login process, and now we’re saving $4 million per year due to customers who use self-service instead of calling a customer service rep.”
By the way, that second approach is a real-world example, as those of you who read Outside In might remember (it’s in Chapter 2). It worked.
Now, let’s end by going back to that “doing you a disservice” thing I started with. I wasn’t kidding. Just as revenue and profits are existential issues for your CEO, showing that customer experience makes revenues and profits go up (and makes costs go down) is an existential issue for anyone who works in CX. If you’re reading this, there’s a good chance that means you.
As we described in our 2020 customer experience predictions report, companies that can prove the economic value of CX are hiring and promoting CX professionals at the senior level. Companies that are unsure of the economic value of customer experience are reducing or closing their programs, putting CX professionals on the street.
So please us help you: Make $ the central metric of your CX measurement program. How to do that is already in our published research. In an upcoming blog post, I’ll break it down into its fundamentals for those who aren’t Forrester clients and don’t have access. In the meantime, please remember: Your only essential CX metric has a $ in front of it.
* Net Promoter and NPS are registered service marks, and Net Promoter Score is a service mark, of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.
Build a solid financial business case for CX at your firm with Capturing The ROI of CX, a complimentary step-by-step guide and ROI calculator. For more resources on improving the relevance of CX metrics, visit the customer experience measurement hub.