Are your metrics really about your customers – or just your own achievements? Here’s why I am refreshing my measurement framework.
Are We Measuring Value – Or Just Ourselves?
When I wrote about my measurement framework last week, I reflected on the need to bring value to our business endeavors in concrete, measurable terms. A recent article about customer success metrics challenged me to revisit my initial thinking.
Most customer success metrics – like Customer Satisfaction (CSAT), Annual Recurring Revenue (ARR), or Churn Rate – are well known but operator-centric. Even CSAT, which sounds focused on the customer, is really just the customer’s satisfaction with us. That’s useful, but it’s only part of the picture.
Metrics Through a Different Lens
Lynn Hunsaker’s recent article Executives’ Guide to Customer Experience Value Metrics points out that most metrics, even in customer-centric organizations, reflect how we’re doing, not how the customer is doing.
At the end of her framework, Hunsaker includes four moments that measure experience – while valuable, they are not true business outcomes:
It’s not enough to track our business performance or even customer impressions. What about measuring the real, tangible impact we have on our clients?
Reflecting on her work, I realized my own framework needed a shift.
Outcomes, Not Just Activities
Let’s take a fertility clinic as an example. It’s typical to measure revenue-generating activities such as hormone levels measured, IVF procedures completed, and so on; it makes sense since those are services the clinic delivers and gets paid for. But for the patient, what matters is the actual outcome – a viable pregnancy.
Volume and productivity metrics risk being the “Musk Metrics” I described in my post last week – they drive revenue but are not necessarily a predictor of future success. In the long run, success comes from delivering outcomes that have genuine value in the customer’s life or business, not just our near-term bottom line.
Measuring Real Impact
The metrics of long-term business health that investors pay attention to – customer retention rates, revenue growth / predictable cash flow, and customer lifetime value – are a reflection of success that you have helped your customer or patient achieve through your product or service. In the end, what’s going to keep your customer with you is if you’re bringing value to their business or their lives in some way. And ideally, that is what you should be measuring.
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I’d love to hear your reflections on this topic – what do you think of the revised framework? What are you measuring, and how does it reflect your customers’ real success? What challenges do you anticipate in measuring your customers’ or patients’ outcomes, and not just your own?
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