What are Your Company’s Customer Performance Indicators (CPI)?
Posted August 31, 2020 in Articles
In an article titled, The Most Important Metrics You’re Not Tracking (Yet), the Harvard Business Review recently discussed the concept of customer performance indicators (CPI). As the article explains:
“A growing number of organizations are becoming more customer-centric by adopting, measuring, and optimizing CPIs . . . . [Since] because customers are the one and only thing that fuel growth, how well a company performs against CPIs often serves as the most powerful lever for, and the most accurate predictor of, growth.”
The article continues:
“The more your company’s attention is focused on outcomes important to your customers (CPIs), the better your company will likely perform on outcomes important to the business (KPIs).”
This is an interesting concept, and it is certainly one worth considering in today’s business environment. As consumers and business customers alike demand more personalized experiences, measuring your company’s performance from its customers’ perspectives could very well help to spur relevant innovations while also improving customer loyalty and retention.
How Can Your Company Identify and Measure Its CPIs?
So, how can your company adopt an effective system for identifying and measuring CPIs in order to maximize its growth potential in today’s market? Among other things, the Harvard Business Review’s article recommends:
Distinguishing CPIs from KPIs
- CPIs and KPIs are not the same. Unlike KPIs, which focus on the company’s performance from an internal perspective, CPIs should (i) measure “an outcome customers say is important to them,” and (ii) “be measurable in increments that customers actually value.”
Focusing on Customer Experience
– In terms of what customers actually value, the article suggests focusing on factors such as, “[t]ime, convenience, number of options, dollars saved, or recognition of their achievements.” However, each company’s focus will be different, and CPIs should be tailored to each company’s unique customer demands.
Clearly Defining CPIs
– Similar to KPIs, in order to be measurable, CPIs must be clearly defined. Among other mistakes, the article cautions against, ‘relying on expert judgement from internal teams who assume (usually inaccurately) that “we know our customers and what they need.’” Instead, companies should engage outside consultants to objectively assess what is demonstrably most important to their customers.
Connecting CPIs to KPIs
– While CPIs and KPIs should be different, they should also be connected. Once your company has established measurable CPIs, the next step toward making customer-centric and growth-oriented changes is to, “look for the potential relational impact each [CPI] might have on one or more of your [company’s] KPIs.”
Holding Internal Teams Accountable for CPI Impact
– Implementation of CPIs is not something that should be done purely at the management level. Instead, operational teams should be made aware of the company’s efforts, and they should then be held accountable for helping to drive the company’s customer-centric growth.
Get the Help You Need to Improve Your Customers’ Experience and Maximize Your Company’s Growth Potential
Would you like to know more about the benefits of implementing CPIs and using them to maximize your company’s growth potential? If so, we encourage you to get in touch. To speak with a senior consultant at Mithras Investments, call 305-517-7911 or request an appointment online today.