We’re now operating in a fiercely competitive customer experience economy, with measurement becoming a hot topic within the industry over the last few years.
To stay ahead of the curve and meet customers’ ever-growing expectations, many brands are beginning to re-think how they measure the success of their campaigns by looking inwards at their own internal measurement frameworks.
However, there may be a cause for concern. According to a new report from McKinsey ‘Prediction: The Future of CX’, only 6% of leaders revealed they are actually confident that their current measurement system ‘enables both strategic and tactical decision-making’.
In principle, it’s very simple. Without clear measurement of the correct metrics, you’re unable to see how far (or not) you’ve come. This can then risk falling short of the brand’s vision, as well as ultimately threatening the overall success of the business. However, when done correctly, measurement can be a powerful driver of change across an entire organisation.
As part of our 2022 Customer Experience Imperatives, we explored how brands can create a more effective measurement framework, from focusing on what you can measure, to what you should measure. And, how this in turn, can make the world of difference for those brands competing for the top spot.
The importance of a measurement framework
An effective measurement framework is not about reporting or dashboards. Instead, it provides a solid foundation for understanding what activities are meaningful to the business, and how teams should prioritise them. This then allows brands to easily identify the core focus areas for the business and ensures everyone within the organisation is working towards clearly defined goals that are tied to a common purpose.
Unifying a brand’s vision is not only important for both customers and employees, but it also breaks down business silos, rather than reinforcing them. If for example, one team is working towards a set of goals that differs from another team’s, employees may feel a lack of direction from higher management. This can also cause disjointed brand interactions for consumers and could be just the thing to drive a once loyal customer into the arms of a competitor.
A clear measurement framework, however, enables brands to deliver more seamless, cohesive, and relevant experiences to their customers, and ensure employees stay on track by translating the CEO’s vision into concrete actions.
A four-pronged approach
Ensuring that the core business objectives tie into a brand’s business purpose, is an important first step. Once the above is in place, brands will need to develop a framework that will effectively track whether activities and inputs are driving positive movement towards these objectives. There are four phases to that process: align, access, analyse and evolve.
Measurement, like many other elements of business, changes and matures as time goes on. Even if an organisation’s strategic objectives set the course and direction the business wants to take, often its KPIs and measurements do not align with those objectives.
The first step for brands is to create a unified strategy that aligns strategic objectives to measurable outcomes, and to the actions and decisions needed to drive results. Brands should then benchmark how the business is performing and understand what capabilities it has to deliver those measurements.
Successful measurement requires mature capabilities, application, and adoption. Therefore, brands should benchmark how and what they are measuring, as well as the capabilities needed to successfully define, develop, and utilise measurements.
However, benchmarking is an ongoing process. It’s important for brands to revisit benchmarking to ensure they are seeing continuous improvements as this allows businesses to track progress against valuable comparison points in the market (for example, the competition, customer spend, or an adjacent industry’s products/services). Finally, brands should assess capabilities to measure, build the measurements aligned to the business’ outcomes, as well as define the primary measurement KPIs that support the actions needed to run the business.
Once a brand’s measurement maturity is understood, it’s important to define KPIs and map them against the measurements that are already currently in place. At this stage, it’s valuable to note all potential data limitations that could hinder achieving your objectives, including details around people, processes, and technology.
Here, it is important to identify where and how a brand needs to expand measurement to track its performance. As you define KPIs, they should be strategically linked, actionable, and goal orientated, otherwise it cannot be considered a metric for measurement. This can put the business at risk of investing time and resources into measuring data that does not hold value.
For long-term measurement success, this requires charting a course for change that evolves over time. Therefore, brands must continuously evaluate their business objectives to ensure everything still aligns and gauge the effectiveness of KPIs, to link actions to outcomes. Once outputs are determined, brands can then begin to prioritise recommendations to improve long-term measurement, with near-term wins.
Finally, it’s time to define the measurement roadmap with key workstreams, dependencies, milestones, and timelines. As well as defining the steps needed to address data, reporting, and underlying technology initiatives to bring the KPI framework to life.
No two businesses are ever the same, so there’s no such thing as a one-size fits all measurement framework. Instead, the key is to identify short, medium, and long-term plans to develop a bespoke structure that fits around a brand’s individual and unique needs.
We’re now living in a highly competitive and fast-changing world and keeping up and keeping ahead can be a constant challenge. By building an effective framework, measurement can be used as a very powerful catalyst for change and can improve the effectiveness of customer experiences in new and innovative ways today, and as a business evolves in the future.