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Have you ever thought: "I am drowning in data, but I’m dying for some information!"

Maybe the answer is that you do not have GOOD internal predictive metrics. Make sure you don’t pick just any customer metrics, pick GOOD ones!

The Five Keys to Having GOOD Customer Metrics on Your Dashboard

Are you struggling to understand what is truly important to your customers? Do you have GOOD internal metrics; that is, metrics that can predict success with the customers? Most companies have many metrics and a lot of data, but few GOOD ones and often not much information. How do you decide what a good metric is? The best internal metrics have several key characteristics:

1. They are predictive of success with customers (note: they look forward in time, not backward like surveys)
2. They are measurable (you can specify how to generate a number)
3. They are controllable (you can take actions that change the value of the metric)
4. The desired value(s) can be specified (you know what a good score is)
5. The interaction with other metrics is known (if action is taken to change this metric, the effect on other metrics, plus or minus, is known)

These are key ingredients of successful metrics, but tough to achieve. How do you know if a measure or metric is predictive of success with customers? How do you measure opinions in a predictive way? What if it seems like you have no control over the metric?

A specific illustration follows:

A movie theater owner hired me to conduct research to learn how customers decided what theater to attend. Customers are confronted with a choice of theaters showing the same movie, at the same start time and the same price of admission. Often, they select the theater based upon who has the freshest popcorn, among other attributes (the Voice of the Customer).

The theater owner was coached to measure how long the popcorn remains in the bin before it is sold (the predictive internal measure). If the popcorn was being popped as the customer came into the theater, then he knew it was fresh without asking them. We then surveyed his customers and his competitor’s customers to discover the customer preference (external measure - a survey). In this case, we are confirming what we should already know from the internal measure and adding a target value. We determined that the popcorn was deemed to be fresh for about 20 minutes after it was popped. Finally, we decided to pop popcorn in smaller batches, more often (process improvement). By popping the popcorn continuously and throwing it out if it had been in the bin more than 20 minutes, success was achieved.

The result is more popcorn sold, less popcorn thrown away, greater attendance and greater profits! In this case, choosing and managing the key metric properly not only increased sales and profits, but reduced costs.

The same techniques work well in business-to-business relationships. How many of your internal metrics can be linked directly to customer needs? How many of them result in behaviors by your staff that are counterproductive? For example, measuring “call volume” at your call center can result in your customer service agents making customers feel rushed and dissatisfied while your agents hurry to the next call. The result is dissatisfied customers back in queue waiting to have their issues dealt with properly.

Check the health of your internal metrics and make sure they lead to the results you desire. It takes a disciplined approach to make sure the “Pain” of your customers is deployed properly in your organization’s customer relationships and reflected in your key metrics.

-Chris Stiehl
President, StiehlWorks
(619) 516-2864

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