Financial services firms are dealing with a lot of pressure: Rapidly evolving technology, more informed customers and industry disruptions are just a few factors that are affecting traditional customer relationship management (CRM) progression, and the overall customer journey.
To effectively manage and evolve a customer’s journey, it’s necessary to define and understand the real key performance indicators (KPIs) that should be tracked and measured across all stages of a customer’s lifecycle.
To be clear, by measuring KPIs, I don’t mean tracking vanity metrics such as social likes, open rates, et al. These figures may provide you with some comfort that your marketing is creating noise, but they don’t provide any business insights into what your firm should be doing more or less of. Instead, I suggest measuring the sanity KPIs, those which provide predictive insights that inform your company’s overall business performance.
These are the KPIs that will transition your company from competing in today’s world, to winning.
The Customer Lifecycle:
So what are the Mandatory KPIs along the Customer Lifecycle?
- New Customers Acquired: While generating awareness of your business is a popular marketing tactic that benefits brand building, the only real metric that matters is new customers acquired. All other metrics help you understand how well you are doing to achieve that single objective.
- Renewals: Renewed Share of Base (%) — An honest indicator of provided value is whether clients coming back for more.
- Upsells: Upgrades — Are clients upgrading their choices? Can they? Are choices available, are they easy to access, understand, evaluate and transact?
- Cross-sells: Plus One’s — Are clients adding choices from other categories? Can they? Are choices available, are they easy to access, understand, evaluate and transact?
- Adoption: First Choice — Does your customer use your product first, or do they reach for a competitor’ product first
- Usage: Are people using your product or service immediately after signing up? Is the experience confusing, intimidating or enabling?
- Usage Frequency: How often are customers using/accessing the product or service? If there are multiple users under one account, what does the usage pattern look like? Are more users being added? What is the persistence of their activity?
- Sustained Usage: How long after initial usage are clients active and at what frequency? Do they die off and if so how quickly and why? Are there timing opportunities for communications to retain, upsell or cross sell.
- Cancellations / Churn: Are people abandoning the product or service once they experience it.
- Growth: If you aren’t growing your client, you are likely to lose your client, so what is your customer growth rate (i.e. how much more share of wallet are you getting of your customers?)
- Retention: What percentage of your customers churn on an annual basis? Are they the right customers who churn? What percentage of share of wallet is churning on an annual basis?
- Loyalty: Net Promoter Score (NPS) — An existing client’s willingness to put their reputation at stake by recommending your brand/service is as honest a metric as you can get when it comes to Loyalty. If they actually do refer you to a friend, they have become Advocates…the pinnacle of any customer relationship.
- Advocacy: Post Activation Referrals — If all is done well, you’ll create advocates, but are they advocating? If you provide “refer a friend” incentives, what is the update rate? Influencer citations (including media and reviews) — Who shared and or said what? Are you generating favourable reviews and media?
Digital products and services give us a whole world of new ways to measure performance, the key is choosing the ones that have meaning and can lead to actionable insights. It’s easy to track all sorts of numbers, but the only ones that matter are driven by explicit actions from prospects and or customer that indicate a change in their real intent to do business with you.
About the Author:
Lawrence Tepperman is a serial entrepreneur, having successfully grew and exited two startups, 80/20 Solutions and K2 Digital, and is now Proprietor & President of Berkeley Payment Solutions Inc.