“Leaders must start taking it personally that customers are departing from their business,” states Jeanne Bliss in her new book, “Chief Customer Officer 2.0: How To Build Your Customer-Driven Growth Engine” (Wiley). “They need to care about the ‘math’ between customers in and customers out — because that delta drives growth.
By developing a companywide performance metric of customer experience that can be tied directly to growth or loss of a company’s customer base, executives provide themselves a platform from which they can talk candidly — and intelligently — about the effort to drive customer growth. They can take ownership of it, says Bliss.
She provides these basic customer asset metrics:
1. New Customers – Volume and Value: It’s likely your marketing and/or sales organizations are tracking new customer acquisition in some manner (quite possibly independent of one another). It’s more difficult to track the quality or value of incoming customers. One incoming customer generally is not equal to one exiting customer. Because the quality of departing customers is usually of much higher value than newly acquired customers, you may be falsely encouraged by a retention rate that is holding at, say, 73 percent. It is critical not only to measure the number of new customers acquired in a period, but also their projected value.
2. Lost Customers – Volume, Value and Reasons Why: In addition to knowing which customers have left, you need to know the reasons why they left. You have to create a purposeful way to enable customers to inform you they’re cutting you loose. And you need to care enough about the potency of this information to find a way to collect their feedback. Reaching out to customers, when done in a genuine manner to honestly find out what happened, can even earn the right to earn a customer’s return.
3. Do the Math – Net Growth or Loss of Your Customer Asset: The ability to roll up customer data in a meaningful way from metrics 1 and 2 clarifies the connection between customer experience and growth. You get the most traction and understanding when customers gained minus customers lost is represented visually. A compelling and simple representation can show the opportunity for incremental growth that might have been achieved if more customers had stayed.
4. Customer Behaviors Indicating Growth or Loss of Relationship: Collecting actual stories of customer behaviors help tell the story of how engaged your customers are with you and identify behaviors that show both increased and decreased involvement and perceptions of value. This adds dimension to the customer asset metrics story. Examples of behaviors include:
• Revenue and profitability by customer group or segment
• Customers who do not renew in a subscription-based model
• Customers who lapsed or were lost after an incident
• Referrals received by customer segment
• Volume and trend of customers using products or services purchased
“When the intent of the business is to improve the customers’ lives, the work is to know and focus on improving the experiences that are proven to disrupt, dishonor or deliver unreliable experiences that interrupt customers’ lives,” Bliss says. “When you improve those experiences, you add value, and customers will stay — and tell other people about you.”
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