Most companies have KPIs – Scorecards, Dashboards, etc. Most KPIs are financial or sales performance. While they are useful, they have rarely been improved to take advantage of current technology.
Forests of data exist within every organization. Most companies have access to more data than they know how to use effectively. Given the data-heavy technology investments that are increasingly necessary to compete (CRM, ERP, EDI, etc.), there has been little evolution of KPIs to make use of this data. This is a missed opportunity.
When evaluating data collection and reporting, spend time up front understanding what your customers value most. Ask what most influences your customer’s selection of a provider. Establish customized metrics you can communicate to prospects and customers that validate your performance on those buying values. You should be able to identify 5-10 key things your customers want from you; track those as Customer Relevant Indicators (CRIs).
Once you have identified your CRIs, here are four steps to assuring a meaningful data collection and reporting system are established and used.
Step One – determine the data most important to your customers
Customers seldom buy from you based on your sales close rate or your sales quota to leads ratios. These metrics don’t really impact them. Yet, these are examples of the most common KPIs.
Before you unleash your software’s capability, find out what data is most relevant to buyers in their choice of a provider. This could be product quality, speed of delivery, order accuracy, responsiveness to complaints, or hundreds of other factors. Smart advantage has logged over 1,400 items that customers may care about yet only a handful are typically measured. Not all are relevant.
Through the research we design, we find out for our clients what matters the most to their buyers. The results make it very easy to know precisely what to track and improve. You can avoid wasting efforts in areas of little concern. For example, research shows longevity of a company, and long-term vendor relationships, are rarely important criteria in choosing a vendor.
Step Two – define your metrics
If customers are motivated by your on-time delivery, then review your delivery system: 1) the overall on time delivery your customers experience, and 2) each internal step that impacts on-time delivery. We often find many steps are taken for granted and are not reviewed regularly.
Actually define the metric internally and get agreement. Continuing with on-time delivery as the example, does “on time” mean the time it leaves your dock, or the time it arrives at your customer’s location? For one of our clients, ‘on time’ meant within a week of the promised date. While this may be fine if you are delivering a large and complex piece of equipment, how would your customers feel about getting replacement parts a week late?
Step Three – SOPs
If you are measuring something you have not previously measured, then you will need to determine who and where data will be managed, and this is best codified with the development of a Standard Operating Procedure (SOP) that everyone in the organization understands and follows.
Step Four – Incorporate CRIs into your KPIs
If company leaders review financial/sales KPIs monthly, they are getting insight into a portion of the overall organization’s performance. Your CRIs provide performance results of the customer experience rarely reflected in KPIs
When our clients have integrated CRIs based on solid research into their KPIs, they often set performance goals around those CRIs (e.g., 98% next day delivery). They also experience more sales at higher margins. Relevant performance is the goal.
It’s very likely you have access to data about your customers that you didn’t have a few years ago. Take advantage of that data to enhance your KPIs and track things your customers care about – CRIs.