Survey Results, Part 4: The Right Metrics For Customer Experience Comp Plans

This is the last post of results from our customer experience survey. This post focuses on:

Customer Experience & Compensation

A respondent wanted customer experience metrics to drive incentive plans and bonuses across his/her entire organization, "including Senior Management."

The challenge, of course, is to determine what metrics are directly correlated to the strategic goals of your company.

That can't be done without clearly understanding customer experience and its impact on company performance.

Here's a case in point where the issue was somewhat counter intuitive.

I worked with a financial data and software publisher that offered a subscription service that enabled individual and institutional investors to search for publicly held companies that met user-defined criteria.

The data subscription was multi-tiered, allowing different levels of access and frequency. A trial subscription was offered at a very low price.

The company wanted growth. In addition to acquiring new customers, there were significant revenue opportunities through improved customer retention and up selling subscribers to more expensive subscription options.

We began by focusing on customer experience and learned that:

• Frequent users (at least 4 times per month) had higher priced subscriptions and had a 96% renewal rate
• Frequent users sought support at least twice a year for implementing a strategy
• Among those subscribers who lapsed, never upgraded, or didn't subscribe beyond the trial, they had almost never asked for help in implementing a strategy

We contacted a subset of this group and asked why they weren't contacting support for help in implementing their strategies. They gave three reasons:

1. They trusted the data and software but were unsure about the support staff's ability to understand their investment strategies
2. They wanted to keep their strategies confidential
3. They were a bit embarrassed that they couldn't become expert users on their own

When asked if all of these issues were addressed to their satisfaction how likely they would be to use the software more frequently, the vast majority indicated they would.

The company tested some solutions to these challenges:

• Privacy guidelines were reinforced and communicated to all subscribers
• Example investment strategies were published in an effort to raise the company's credibility
• An invitation to get help implementing any strategy was sent to all subscribers
• Several members of the financial media were recruited to use the service and write articles about investment strategies

Renewals increased about 25%. 20% more trial subscriptions converted to annual subscriptions. Referral rates increased dramatically as well. The additional PR also contributed to new customer acquisition. The company grew 500% over 3 years and was sold to a large financial research and publishing company.

Many companies rightfully focus on reducing support costs. Perhaps the right metric in this case is to ensure that the level of support has minimum and maximum levels. Employees are compensated by keeping the averages within those bounds. Staying below the top level cuts costs and being above the bottom threshold drives revenue.