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Measuring customer experience: 5 CX KPIs to keep an eye on

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Image source: grapestock from Getty Images | Canva

In modern business, focusing on customer experience (CX) is no longer a nice-to-have, but rather a necessity for businesses of all sizes. However, defining a successful customer experience can be difficult because many touch points form the customer journey. By using online surveys, companies can gain quantitative information about the customer experience to actively monitor trends that develop over time. Based on customer feedback, organizations can identify areas for improvement, adjust their strategies accordingly, set better goals for their key performance indicators (KPIs), and strive to deliver the seamless experiences that today’s consumers expect.

Customer experience KPIs

Research shows that CX is now competing with traditional factors such as price and quality in influencing customer loyalty and advocacy. According to  Forbes, 77% of consumers consider CX just as important as the main product or service itself.  PWC reported that even beloved brands risk losing 32% of their customers after one negative interaction. In addition, poor CX burdens the company with costs. To address this, this article outlines five critical CX KPIs that can be systematically monitored, evaluated, and optimized to help address customer service problems and strengthen a company’s connections with its customer base.

1. % Customer satisfaction score (CSAT)

This KPI measures how customers rate particular interactions with a company, such as getting a response from customer care or processing a return. Users can score their satisfaction with the experience on a scale from “very dissatisfied” to “very satisfied” by responding to an automated questionnaire sent to them. Monitoring the ratings depends on a company’s objectives, but the general rule is that anything above 85% is excellent, and anything below 60% requires rapid attention.

Calculation: CSAT = (Number of Positive Responses / Total Number of Responses) x 100

2. # Net promoter score (NPS)

The NPS, considered the most famous CX KPI, reflects the willingness of consumers to recommend a product to friends and acquaintances. To calculate NPS, a company can conduct a survey of customers from one query: “What is the probability that you will recommend the product to your friends?” The answer is given on a 10-point scale, where 0 is “I will not recommend it in any case” and 10 is “I will definitely recommend.” The respondents can be divided into three groups depending on the scores obtained: promoters, passives, and detractors. The majority of companies consider a score above 80 as excellent, a score between 50 and 80 as very good, and a score below 50 as good.

Calculation: NPS = % Promoters – % Detractors.

3. % Word of Mouth Index (WoMI)

An extension of the NPS index, the creation of the WoMI was motivated by criticism towards the traditional NPS. Researchers believed that the NPS made the incorrect assumption that if a customer does not recommend a product or service, then they are automatically considered detractors. This led researchers to make adjustments to the KPI in order to better reflect reality.  It tracks the recommendation, but from the opposite perspective: “What is the probability that you will discourage people from doing business with the company?” This can be rated on a scale of 0 to 10. Those who choose 9-10 on the scale of “dissuading” are categorized as “true detractors.” The threshold varies from one industry to another. It is better to have a lower score, as the target for most companies is less than 10%. To gain a comprehensive understanding of your company’s position among customers, we suggest employing both approaches to obtain a complete picture.

WoMI = (Number of Promoters – Number of Detractors) / Number of Respondents * 100.

4. Consumer Effort Score (CES)

The CES index, which was developed in 2010, is related to the idea that the more effort the product or service requires from customers, the less likely they are to stay with the company. As cited in an article, research by the Corporate Executive Board (CEB) shows that 94% of customers who have an effortless experience are likely to make repeat purchases. The KPI could be measured by the customer’s response to a statement like: “Thanks to the service/product of company X. I was able to easily cope with my problem.” with a rating scale of 1 to 7. Most companies typically receive CES scores ranging from 5 to 5.5. A score exceeding 6 is generally considered above average. 

CES = (Sum of response scores) ÷ (Number of responses)

5. Customer churn rate

Simply put, the churn rate is the number of users who stop any interaction with the company. Depending on the industry, this could mean that customers deleted their account, did not re-buy, or simply decided to switch to a competitor. In its simplest form, customer churn can be calculated by comparing the number of customers lost to the total number of customers. By dividing one metric by another, one can get the customer churn rate as a percentage of the total base. The most common acceptable churn rate is 5-7% annually.

Enabling effective CX measurement

KPIs must be monitored and measured in order to improve CX. To do so effectively, a system that accurately collects data from all channels should be considered. This allows requests to be categorized and common issues to be identified. In-depth interviews with both loyal and dissatisfied customers should be conducted to understand the root cause of any problems, as some of which could be related to support services. Consistency in tracking and improving CX KPIs is the key to ensuring decisions and actions in customer service adapt to changing customer sentiment and meeting their needs. 

Take your CX to the next level! Visit smartKPIs.com for a comprehensive, 360-degree view of CX KPIs.

Understanding the potential and impact of workplace super apps

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Technology reshaped work, communication, collaboration, and task automation, driving enhanced productivity and increased internal efficiency, as indicated in a 2022 overview of digital transformation in business. One of the results of digitization is the creation of workplace super apps. A 2023 Infopulse article states that the term “super app” was defined in 2010 by BlackBerry founder Mike Lazaridis as “a closed ecosystem of many apps.” The concept has since gained more prominence through Chinese super products like WeChat and Alipay. 

The evolution from single-purpose to multipurpose applications introduced a versatile solution—the aforementioned workplace super app—that seamlessly integrates essential tools and features for both office-based and frontline employees. As highlighted by AgilityPortal in a 2023 article, organizations adopt super apps to enhance workplace productivity.  

Practical application of workplace super apps

As highlighted in a 2023 article by Kyanon Digital, a super app can offer creative solutions that can be customized to fit multiple industries’ needs. This is apparent in the case of how Aruba Networks, a leading technology solutions provider, actively pursues innovation and creativity to enhance operations. During its 2022 annual conference, the company showcased its forward-thinking approach by seamlessly uniting both in-person and remote attendees, including employees from Aruba Networks and external participants. This remarkable achievement was made possible through their partnership with CXApp, a renowned provider of event and workplace management solutions. CXApp offered a versatile, all-in-one event management platform—a super app. This customized, multipurpose app had a host of useful features (see Figure 1). 

Figure 1. Top features of CXApp’s event management platform | Source: adapted from CXApp, 2022

The indoor navigation feature ensures that in-person participants would not lose their way within the extensive event space. For virtual attendees, there was a virtual innovation zone designed to replicate the immersive 3D experience of the in-person version. 

Also, an exclusive activity stream was available solely to attendees, providing a platform for content sharing. Participants were encouraged to provide instant feedback via surveys for each session, contributing to the continuous improvement of the event’s offerings. 

Moreover, the gamification feature aimed to boost interactivity by offering participants the opportunity to win prizes. All of these features meant that each attendee enjoyed a personalized agenda, ensuring that their experience was catered to their unique interests. 

Measuring the performance of workplace super apps

How can leaders determine if implementing a super app truly yields positive outcomes? By evaluating its performance using specific metrics. 

As emphasized by Brightscout, key performance indicators (KPIs) are commonly employed to measure how well web and mobile applications perform. Since a super app includes multiple apps within it, KPIs can also be used to clearly quantify how well a workplace super app is performing and contributing to business goals. 

Monitoring KPIs helps evaluate the company’s performance before and after implementing the workplace super app. For instance, tracking employee engagement indicates their involvement in daily tasks, and enhancing it through live chat, gamification, and the automated meeting scheduling features of the super app can speed up response times. Moreover, when the workplace super app operates efficiently, planned downtimes are reduced. This surplus time enhances the likelihood of projects meeting their deadlines and reduces the time taken to address business partners’ needs due to synchronized project progress. Consequently, with increased employee efficiency and performance facilitated by improved engagement through the super app, revenue generation experiences a significant boost.       

Managing workplace super app risks

While workplace super apps provide various advantages within the business realm, they also entail certain risks. Multiple articles (Baskaran, Supraja, et al., 2023; Ota, Fernando Kaway Carvalho, et al., 2023; Vinit, Choudhary, 2023) suggest that one of the most prominent risks involves data security and privacy issues. To address these issues, organizations can implement adequate security measures, such as code obfuscation, encryption, and runtime application self-protection (RASP), with the help of an expert, as suggested by Guardsquare.

Before choosing to implement a workplace super app, business leaders should carefully consider its benefits and potential drawbacks. For organizations already utilizing a workplace super app, employing KPIs is recommended to accurately evaluate its performance. 

Acquire the necessary tools, skills, and knowledge to effectively measure performance using KPIs by enrolling in The KPI Institute’s C-KPIs Professional Certification program.

Measuring corporate sustainability using the ROSI™ framework and % ROI

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Corporate sustainability (CS) represents a business approach that creates long-term shareholder value by embracing opportunities and managing risks derived from economic, environmental, and social developments, Yale University states. Organizations are increasingly realizing that their long-term success and profitability depend on measuring the financial impact of CS initiatives for several reasons: enhanced risk management, increased cost efficiency, greater investor demand, and improved brand reputation—ideas that were highlighted in a 2022 paper from the International Journal of Economics and Management.

The NYU Stern Center for Sustainable Business developed the Return on Sustainable Investment (ROSI™) framework as a methodology used to evaluate the financial performance and returns generated from sustainability initiatives. It aims to measure the economic benefits derived from sustainability investments and assess the value created for the organization. 

ROSI™ assists decision-making processes, resource allocation, and the prioritization of sustainability investments based on their potential financial returns. The framework also facilitates communication with stakeholders (i.e. investors, customers, and employees) by quantifying the financial value created through sustainable practices. The sustainability drivers of financial performance and competitive advantage based on ROSI™ methodology can be consulted below (see Figure 1).

Figure 1 – The ROSI™ Framework | Source: NYU Stern Center for Sustainable Business

Entities need to follow a clear set of steps to implement the ROSI™ methodology, per The NYU Stern Center for Sustainable Business:

  1. Identify material sustainability practices.
  2. Determine the potential benefits that might drive financial and societal value from sustainability-focused practices.
  3. Quantify benefits derived from the sustainability practices.
  4. Derive a monetary value for the benefits.

The main advantage that ROSI™ brings is helping companies make a compelling business case for sustainability, driving both financial value and positive societal impact while advancing sustainability goals, as NYU Stern concludes in a report published in 2021.

HSBC Bank USA and the NYU Stern Center have launched the Food and Agriculture Sustainability Strategies Framework, based on ROSI™ to help food and agriculture companies make a business case for sustainable initiatives that deliver financial value and societal impact. The framework identifies twelve sustainable strategies and describes practical suggestions for calculating returns. It serves as a strategic tool for unlocking the advantages of sustainability and driving real change in the industry.

According to Forbes—and adapted to adhere to The KPI Institute’s KPI naming standards—% Return on investment (% ROI) is a KPI that measures the efficiency or profitability of an investment or compares the efficiency of several different investments. This metric is also used to measure and evaluate the financial impact of organizational sustainability initiatives, making it easier to understand the value proposition of certain environmental, social, and governance (ESG) criteria used in socially responsible investing. A positive % ROI score indicates a profitable outcome, as the gains generated from the investment exceed the costs incurred (see Figure 2).  

Figure 2 – ROI KPI calculation | Source: Adapted from smartKPIs.com

An article from Brightest presented findings based on data gathered between 2020 – 2023 from five top companies that measure the ROI of sustainability. It stated that companies like HP Inc. ($3.5B), Unilever ($1.2B), McKesson ($227M), Nike ($50M), Anheuser-Busch ($7.5M), and Medtronic ($2.2M) earned extensive profit from internal cost savings actions based on sustainability criteria like energy efficiency or waste reducing. By demonstrating the financial value of sustainable practices, % ROI enhances the business case for social investment and encourages stronger ESG administration, balancing monetary performance with social and environmental impact.

ROSI™ and % ROI are valuable tools for measuring the financial impact of sustainability initiatives. ROSI™ goes beyond traditional metrics, helping companies understand the value of sustainability strategies. Meanwhile, % ROI quantifies the fiscal returns generated, enabling data-driven decision-making. Together, they support making informed choices, practicing accountability, and leaving behind a positive environmental and societal impact while delivering long-term financial value.

Ensuring data reliability along the KPI lifecycle

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Image Source: Gerd Altmann | Pixabay

The lifecycle of a Key Performance Indicator (KPI) is a dynamic process involving definition, recalibration, and—sometimes—abandonment. From establishment to practical application and ongoing evolution, KPIs undergo several steps to effectively measure performance, and prioritizing data reliability at every stage is crucial to achieving their intended purpose.

  1. The foundation of reliable data

The first stage of the cycle, KPI selection, may seem simple, but it is a complex process intertwined with various interdependencies and calibrations with the organization’s objectives.

Establishing data reliability should start from this initial step, and involving employees as primary sources for KPI selection is an effective approach. Their valuable knowledge about the data generated from their activities enhances the reliability of the selected KPIs. Additionally, considering data availability and reliability as criteria for the selection further enhances overall data trustworthiness.

KPI documentation plays a pivotal role in ensuring reliability. Adopting a standardized documentation form establishes a solid foundation for rigorous and dependable data collection and reporting. This approach provides clear guidelines for defining KPIs, including unambiguous calculation formulas, ensuring that the collected data accurately reflects the intended purpose of each KPI.

  1. Establishing dependable data collection

During the activation of KPIs, data reliability depends on the meticulous consideration of data sources, robust data-gathering methods, and the establishment of a strong governance structure. It is imperative to utilize trusted and verified data sources that are up-to-date, accurate, and aligned with the KPIs being measured. Accountability for KPI data should be established by clearly designating KPI owners and data custodians. Furthermore, adopting a standardized data collection process that incorporates technology-driven solutions significantly enhances accuracy.

  1. Communicating meaningful insights

The analysis and reporting of KPIs are significant in ensuring the correct organization and communication of data to key stakeholders. Errors in data analysis have the potential to result in misleading insights, which can have negative effects on decision-making. Therefore, correctly identifying relevant KPI content and conveying meaningful insights derived from KPI data to various stakeholder groups within the organization is essential.

  1. Continuous improvement

Finally, data reliability can be enhanced through the process of refreshing KPI documentation. This ongoing effort involves recalibrating KPIs after their initial establishment and customizing them for optimal use.

Attention is given to both the content of the KPIs and the standardization of their format. Standardizing KPI content establishes uniform guidelines and criteria for measurement and reporting, ensuring data reliability and consistency. This step refines the measurement and reporting processes, facilitating accurate and dependable data for decision-making purposes.

Monitoring KPI data reliability: The role of the Data Custodian

The Data Custodian is critical in upholding the reliability of data. They actively participate in the design of performance data collection, receipt and storage, processing, analysis, reporting, dissemination, and even archival or deletion of data. They implement measures to validate and verify the accuracy, consistency, and completeness of the data. This involves conducting regular data audits, resolving discrepancies or anomalies, and implementing data cleansing processes to ensure data integrity.

To evaluate the reliability of KPI data, the Data Custodian can monitor % KPIs with reliable data. This metric measures the number of reported KPIs that contain reliable and trustworthy content out of the total number of KPIs reported, according to smartKPIs.com.

In conclusion, to succeed in a data-driven world, organizations must prioritize data reliability along the KPI lifecycle. By implementing the strategies and practices discussed above, organizations can unlock the true potential of their performance measurement systems and empower stakeholders with reliable insights for better decision-making.

The IT industry’s layoff crisis: how to protect employer brand

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Image source: ymoran | Unsplash

The global economy felt the effects of the COVID-19 outbreak, and the IT sector was no exception. Because of the economic slump, various IT companies have announced layoffs. Since the beginning of 2023, the IT industry layoffs wave topped the media with a 649% spike in cases reported last year. When workforce reductions take place, the strength of an organization’s employer brand may suffer significantly. 

Taking the layoffs at Twitter as an example, only 2% of the remaining employees suggest the company as a good place to work, and 1% believe that the company treated the affected employees with dignity. Understanding the consequences of layoffs on a company’s reputation will enable management to analyze perception trends and develop long-term solutions. One approach is to use key performance indicators (KPIs) such as # Employee Net Promoter Score (eNPS) or # Employment brand strength.

Employment brand strength 

# Employment brand strength is an important KPI for any organization that wants to recruit and retain top talent and foster an engaging workplace while maintaining business viability. Employment brand strength is a metric that measures how prospective and current employees view a company.

Tracking # Employment brand strength can help companies monitor their progress over time and identify areas of improvement in different aspects such as brand awareness, work-life balance, career development opportunities, and social responsibility. This will result in a more positive work environment, the attraction of more top talent, and the achievement of their business objectives.

eNPS

Employee net promoter score is a KPI that companies use to measure employee loyalty and satisfaction. Similarly to the NPS for consumers, eNPS applies the same principle to workers, measuring how likely they are to recommend their company as a place to work. Because it is straightforward and easy to track. It can also assist businesses in assessing their employee experience and evaluating their objectives. eNPS can also be used to compare the performance of a company to that of its competitors. 

Figure 1. eNPS | Source: Questpro

eNPS is a valuable KPI that can assist firms in measuring and improving employee happiness and loyalty, leading to increased productivity, fewer attrition, and improved business results.

How to measure it 

  1. Employee surveys can be utilized to assess employee satisfaction, engagement, and retention. eNPS is the most dependable and widely used employee survey method. It simply asks, “On a scale from 0 to 10, how likely are you to recommend your workplace?” Negative aggregate eNPS scores (Promoters – Detractors) are a major warning sign.
  2.  Candidate surveys can be used to identify areas in which the employer brand appeals to potential candidates.
  3. Social media monitoring can be used to observe online conversations. 

Communication is the key

According to Forbes, the company should exhibit compassion for the process. Employees will have numerous questions, and managers must address their concerns, so it is important to implement an open-door policy. Providing job search assistance may also help companies reduce the likelihood of negative comments. Companies should also monitor and anticipate such remarks on social media platforms like Glassdoor and prepare diplomatic responses.

However, it is preferable to forestall it from the beginning. 

After Nokia’s 2008 earnings rose 67%, the CEO let off 2,000 or more employees to save expenses, which harmed the employer brand and triggered demonstrations.Three years later, in 2011, Nokia had to go through another layoff wave, but at this point they reformed and included the impacted staff to guarantee a seamless transition and avoid negative feedback.

By handling layoffs with transparency, fairness, and compassion, focusing on employee retention and engagement, and tracking the reputation of the employer brand properly, companies can mitigate the damage and maintain a positive work environment amid the tech industry crisis. 

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