If you improve customer satisfaction and loyalty and do not use KPI, then you are not doing it. According to the Global State of Multichannel Customer Service Report:62 percent of global consumers have stopped doing business with a brand or organization due to a poor customer service experience and 97 percent of global consumers claim customer service is either very or somewhat important in their choice of and loyalty to a brand[1].

Therefore, we must understand customer satisfaction and loyalty. Experts offer more than 20 types of indicators, but we will focus on 5.

1. Net Promoter Score (NPS). NPS measures whether current or former customers will recommend your products or services to others.

2. Customer Satisfaction (CSAT). The most popular KPI for measuring customer satisfaction is CSAT. You can evaluate their satisfaction with your business, product, or services. Your rating is the average of all customer responses. Your scale may consist of regular numbers, stars, emoticons, etc.

3. Customer Retention Rate (CRR). According to RJmetrics, the most regular customers receive more than half of their income from regular customers. CRR shows what percentage of your customers stayed with you for a certain period of time. 

4. SERVQUAL. Method for measuring subjective elements of quality of service. Evaluation from customers compared to expectations. 5 elements of quality of service: Reliability, Assurance,Tangibles,Empathy,Responsiveness[2].

5. Customer Effort Score (CES). CES measures how much work customers have to do through an interaction with the brand. CES helps companies determine customer friction points and find ways to create a more seamless experience.

It is important not only to determine the KPI and correctly establish the causes and effects of the impact on financial performance. In case from Stanford professors the managers of fast food restaurants believed that the low turnover of all personnel affects customer satisfaction and company profitability. But after collecting the data, it turned out that satisfaction is not affected by all the staff, but only by restaurant managers and it is important to keep them[3].


Sources:

[1]https://www.leightoninteractive.com/blog/5-marketing-kpis-to-measure-customer-satisfaction

[2]https://www.userlike.com/en/blog/customer-service-kpi

[3]https://hbr.org/2012/10/the-true-measures-of-success

6 комментариев

  1. Firstly, I would like to give thanks to Aleksandra for this article. The author touches upon an essential topic which significance is rising sharply nowadays. Indeed, lots of companies endeavor to implement a transformation of the CRM strategy and make absolutely no attempts to measure the effectiveness which eventually lead to worse financial results. Aleksandra outlines the main customer satisfaction KPIs, which are most popular within the businesses, and briefly describes what an appropriate KPI exactly measures. I’d like to say that it would have been a great idea also to shortly indicate the main advantages and disadvantages for each of the customer satisfaction KPI. For instance, it is widely known that NPS metric is a straightforward one to understand and calculate but it can sometimes be useless since there is a lack of ability to identify the driving factors behind customers’ feedback. Therefore, it is a rocket science for the companies to develop their new strategy or circumvent the current problems. With this information, I believe that it would be more understandable what is the best alternative to choose based on the company’s requirements, strategy, goals and financial status.

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  2. Aleksandra, thank you a lot for this topic. I think this subject has a lot of discussions but one is absoluteness right — all activities should have KPIs. Aleksandra gave examples of 5 KPIs and I want to say that some of them gives more subjective assessment than objective, for example if we ask a customer to measure the satisfaction it can depend on his mood, if he has a problem on work or upset for other reason, he can give lower stars than when he has a good mood. Also, i want to agree with Maxim that such type of indicator doesn’t show us the driving factors and how it affects on our financial performance. I think it would be great if Aleksandra divided all indicators into those that has impact on financial results and which don’t. Then it will be a good tool for companies and help to better understand what company should do: improve the staff or improve the strategy.

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  3. I would like to thank Alexandra for the article. Indeed, in our modern era it is very important to develop a system of satisfaction and loyalty. As a rule, companies that have implemented and use such a system have a high level of profitability and do not work on a stream, but on the quality of customer service. Undoubtedly, in order to evaluate the quality of a system, certain KPIs are needed to help identify areas for growth and development. For example, a balanced scorecard strategy developed by Robert Kaplan and David Norton is successful. Such a strategy is based on paying attention to account the needs and interests of the parties in a complex where the core values of the company are its pivoting point.
    Although success comes slowly and a strategy that works for now won’t always work forever, periodic measures can help a business identify problems before they exacerbate into crises.

    __________
    Source: https://www.zendesk.com/blog/3-steps-achieving-customer-satisfaction-loyalty/

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  4. Alexandra, thank you for the article.
    I agree completely on the point that KPIs should be established before any changes are made. There are hidden relationships between variables everywhere in the field of satisfaction and loyalty, and we must make sure that our actions and goals are valid.
    However, I am surprised that you didn’t mention the commonly discussed issues with some of the methods you’ve brought up. We’ve discussed this in our class. The problem is, satisfaction doesn’t always lead to loyalty or profits, and loyalty doesn’t always lead to profits either.
    Especially the first method you mention, the NPS. Without supporting surveys in order to figure out what went wrong with customer’s opinion of the brand, NPS, due to numerous issues with its measurement, is just a number and doesn’t mean anything, and using it for analysis may be detrimental to the business. Many managers aren’t aware of this problem and shoot themselves in the foot when doing marketing research or audit.
    I personally much prefer factual statistics that measure customer loyalty more objectively, such as customer retention rate or frequency of purchase. I believe these methods can be trusted more as they’re based on actual behavior and not subjective scores “would you recommend”.
    On the other hand, I’m very interested in the latter two methods you mentioned, SERVQUAL and CES. These aren’t common and are far less popular than NPS or CSAT. Thank you for promoting awareness of these methods. In business, when lacking information, as many methods as possible should be utilized to research the market and the customers. Some firm may find these methods more fitting to their mode of operation than these overused NPS and CSAT.

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  5. Thank you very much Alexandra for the list of the most used KPIs used to measure loyalty and satisfaction. However, I’m mentioning that recent studies show that loyalty does not always follow from satisfaction. However, I want to focus more on the SERVQUAL model, which despite its widespread use in service organizations such as banks, beauty salons, etc. has a number of limitations. For example, at different times, the same customer can assess the same place in different ways, even if the service could be provided the same quality of service, and this assessment of individual parameters can vary significantly. It is also worth noting that this model has low efficiency, in the case when the services have such a significant component as trust, i.e. the buyer often may not be aware of the quality of his service. Therefore, it is should focus on the entire consumer journey in the process of providing a service. Setting the most suitable KPI is important, but as a rule, you should not proceed from satisfaction and loyalty, but rather from the specifics of the business, and often a combination of several of the listed KPIs in relation to financial results.

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  6. Лян Цзинкай

    The post tells about the main indicators of KPI for doing business. The main indicators in this process are the level of customer satisfaction and loyalty. The author structurally and accurately describes some of the existing criteria.

    From simple to complex, indicators are described that allow both consumers and manufacturers to interact effectively. Will customers recommend the brand to others, will they be satisfied with the product at the initial stage. Important indicators for the business are: customer retention rate, customer assessment in accordance with expectations, customer effort assessment.

    KPI in this case is based not only on the current plan, but also on the future prospects and consequences of financial indicators.

    The author gives an example of the work of fast-food restaurants and customer satisfaction only thanks to constantly working managers and leadership.

    The post itself is very informative, structured and conveys the basic meanings of introducing KPI into the level of satisfaction and customer loyalty.

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