You cannot have a discussion with a customer about business measurements or metrics without covering customer KPIs (Key Performance Indicators) in some way.
Tracking KPIs is highly critical for customer-facing professionals, as they are a reliable and quantifiable way to analyze performance. KPIs also help organizations set clear business objectives, which makes Customer Success tangible, both for customers and internal executive stakeholders. Plotting out the measurements needed to attain those objectives helps everyone visualize the journey with the product or service (and its ensuing impact).
Here are three key things to be mindful of when planning the KPI process:
1. Co-Defining Outcomes and Corresponding KPIs
Getting outcomes and KPIs to be clearly articulated by a customer is a big challenge. It’s a big challenge because either the customer does not comprehend what’s involved, or is unclear on how to gather the data for these metrics. The desired outcome will vary depending on the perspective of different people within the organization.
Describing an outcome includes addressing the practical realities that the customer will face in the course of achieving their business goals. CSMs need to get involved and help the customer define the successful outcomes for their organization through a discovery process, and to make sure that their product can successfully help the user achieve their end goals.
For example: A hard-to-measure outcome for a test automation, such as “I want my test processes to become simpler,” can be made into a Clear Measurement Outcome, such as “I want manual intervention in my test processes to be reduced to < 20%.”
2. Vanity Metrics vs. Actionable Insights
Vanity metrics will make CS and customer teams happy for a while, as they see growth month over month; but users will eventually start questioning the value of your product or service because of the lack of real business impact.
Many customers understand their own requirements, but do not necessarily know what fulfilling those requirements is worth to them. The only metrics that should be be tracked are those that help you make business-critical decisions. In comparison, vanity metrics don’t offer clear guidance for what to do.
As an example, NPS on its own would be a vanity metric; but when used in conjunction with usage and help tickets, actionable insight can be gleaned. From vanity metrics, one will find a lot of actionable information. Actionable metrics are the statistics that can be used by CSMs to improve business outcomes and demonstrate value to customers.
Depending on circumstances, such as availability of data and a customer’s requirements, a CSM could build a value model for an individual customer, drawing on data gathered from several customers in that segment.
3. Demonstrating Milestone Completion
Early in customer engagement, develop a customer success journey map with milestones throughout the whole lifecycle. Milestones are valuable to CSMs to visually show customers their progress with the product or service. In fact, one way to think about structuring a customer journey map is to look at it in terms of series of milestones that lead towards reaching the customers’ desired outcome.
Each customer’s requirements are different, so a CSM managing multiple accounts must focus on a different set of customer KPIs for each account. It’s more important to know why you should measure a particular KPI, rather than what you should measure. The answers to your why directly lead you to your business outcomes. Again, what to measure can vary from customer to customer.
To learn more, join us for the next PulseLocal even. We’ll be welcoming Shreesha Ramdas, CEO and Co-Founder of Strikedeck. Secure your spot now!