There are a lot of acronyms and jargon in that headline. So let’s start by unpacking what they mean.
CX – Customer Experience.
CX is shorthand for Customer Experience. At Aquitude we believe that CX is something that should be top of mind for everyone in the company. It’s like a river that has many sources and several paths to the sea.
It’s more than just customer service or support and it’s a lot more than User Experience (UX) – which usually only covers the parts of the customer journey where consumers interact with digital touch-points like a website or app.
Even if your role is not explicitly customer facing, your decisions are ultimately reflected in a customer’s experience. For example, the finance department might determine credit terms or create policies that impact on loyalty programs or refunds.
KPI – Key Performance Indicator
Is a term that has been around for a while. Most organisations use measures to benchmark performance and sometimes use them as incentives or targets.
Examples of KPIs might be Sales, or Net Profit or Conversion Rate. KPIs that are specifically useful in a CX context include things like NPS – a measure of how likely a customer is to recommend your company to someone else and CSAT, which is a measure of customer satisfaction.
Usually, a KPI is a measure of something at a point in time and often they are averages. KPIs assigned to different parts of the organisation may conflict – e.g. A buyer might be focused on margin, which might lead to buying larger quantities to get a lower price. Someone working in the warehouse might have a KPI that is focussed on reducing stock on hand, so buying larger quantities would help the buyer but not the warehouse.
KPIs don’t, in and of themselves, change behaviour. Which brings us to the OKR.
OKR – Objectives and Key Results
Like many things in business, this is not a new idea, but it has been made fashionable by Silicon Valley companies with VC backing.
Sources say that the OKR can be traced back to 1954, when Peter Drucker invented MBO or Management by Objectives. From there it spread to Intel and then to Google, where it is still used.
An OKR may include several KPI style measurements in order to track whether the objective, or goal is being achieved. The Objective can also be set company wide to avoid some of the conflicts that were described above.
Using OKRs to Be More Customer-Centric
Our Customer Experience Typology Framework identifies how your organisation, teams and individuals fit into a customer-centric model. If you have too many Lone Wolf or Team Player types and not enough Customer Stars, then it might be due to the wrong incentives and targets in place.
OKRs can be used at a company level and at a team level to align everyone around a single ‘North Star‘ Metric.
Here is a simple example of an OKR for Customer Experience
Objective – Increase Customer Satisfaction.
- KR – Make Net Promoter Score (NPS) greater than 8.0
- KR – Reduce Customer Complaints by 20%
- KR – Conduct 50 phone interviews with top customers
- KR – Conduct 15 phone interviews with recently churned customers
Using this method, communicating the company objectives to the whole organisation and making everybody accountable helps to change behaviour.
Let’s revisit the finance team that we used as an example at the beginning of this article. Customer complaints may not be a KPI that finance is usually measured on. However, if the company goal is to reduce customer complaints and 50% of the complaints are about a policy that is determined by the finance department, then suddenly they are responsible and accountable.
What if you were to have a company wide objective to ‘Become a Customer-centric Organisation’. What would your Key Results be?
Talk to us about how to benchmark your entire organisation and identify opportunities to improve your overall Customer Experience.