In the past, evaluating a company’s efficacy focused mainly on comparing investments with income. But there is far more to the story than just ROI, especially now that so many factors of business success can be tracked and measured. Still, customer experience is a fairly recent addition to the efficacy measuring stick. It has just been in the last few years that companies have really dived deep into the importance of customer experience as a way to garner increased revenue. Here’s a look at what your clients’ level of engagement can tell you about your business’s efficacy.
Understanding business efficiency can be a bit difficult because there are many factors at play in the equation. The basic principles are these:
- Are you reaching goals? Whether these are sales goals, customer service benchmarks or brand recognition aspirations, they are the hallmark of measuring business success.
- Are costs in line with ROI? No company wants to be spending money without seeing increased revenue as a result.
- Is the business able to grow or pivot? There will be hurdles to jump whenever it comes to change, but making adjustments without major fallout is vital for business development.
- Is communication effective? Wasting workers’ and customers’ time with poor communication never is has a positive effect on a company’s efficacy or profit margin.
- Most importantly, are your customers happy? There are many factors that affect customer engagement and satisfaction, but unhappy clients will always be a hindrance to business success. Companies that aren’t achieving their goals, are getting poor ROI and that are bad communicators are very unlikely to have satisfied customers.
Shortfalls of Traditional Metrics
Business executives usually know their way around a spreadsheet, and all the numbers on one surely are important. But metrics such as year-over-year NIBT or unique visitors to the company website don’t go into enough detail about whether the company is serving its customers well. Disorganized, distracted or poorly communicating companies are unlikely to garner high ratings for customer experience no matter how many customer support interactions they log each day.
Customer Experience Metrics
Forward-thinking companies have come to realize that efficacy is inevitably tied to customer service. Here are three main factors they use to evaluate their progress toward improved service:
- Customer satisfaction: The main question survey administrators are asking is “Would you recommend this company to others?” If the answer is yes, that means the customer had a good experience, is unlikely to post negative reviews online and would happily give a recommendation to a friend about the company.
- Customer engagement: Engagement is all about interaction. Are customers and followers interacting with brand representatives on social media platforms? Are they using live chat for customer support? Are they leaving positive reviews on online forums? Do the company’s website analytics indicate that people are finding the site and clicking through to lots of pages? The more yes answers to these questions, the better efficacy the company can achieve.
- Customer Loyalty: It is easier to retain a current client than to find a new one. That means it is much more efficient to satisfy return customers and encourage repeat purchases. You should be doing everything you can to establish relationships with loyal clients.
If your company is doing well in these three categories, chances are the business is operating efficiently. As a result, you should be seeing a rise in profits. And the plus side is that good customer service doesn’t have to be a major line item on the budget. If you are not finding increased revenue, it likely is time to reevaluate your operations strategies to find more efficient uses of your time and money.