What Metrics Do the Best of the Best Use?

Just saw this post from Ron Shevlin's blog last week... Ron does a report called the Hallmarks of High-Performing Integrated Marketers in Retail Financial Services which looks at which business practices and marketing strategies distinguish the high-performers from the rest of the pack.

From Ron's post:

"High-performers are more likely to measure the lift in customer satisfaction and average customer spend than other financial services firms. And less likely to measure likelihood to refer the brand and brand awareness . . .

The findings from the survey shows that high-performing firms put their emphasis on measuring the metrics that matter — those that measure and drive bottom-line performance. The under-performers can continue to look at NPS and brand awareness at their own risk."

In fact, according to the data in the post, customer satisfaction was the most commonly used metric for the highest performing firms, other than sales and average customer spend.

Of course, it can't go without saying that c-sat has to be measured with a time-tested methodology.

It's funny, the two most common statements I hear about measuring customer sat are in direct opposition to one another: "customer satisfaction is a proven predictor of financial success and ROI" and "customer satisfaction has no proven connection to financial success."

Both are true! Customer sat measures with a proven, time-tested, accurate, precise, reliable methodology have been proven in numerous academic articles to be leading indicators of financial success, loyalty, recommends, ROI, and even stock prices.

Customer sat measures which are based on a handful of questions, a haphazard methodology, or a marketing fad have no relationship to success, because they aren't accurate or predictive in nature.

So it's a challenge, from where I sit, to make the distinction for people. Saying "customer satisfaction predicts financial success" is like saying "food is healthy." Well, broccoli is healthy. Twinkies are not (but they do taste good). Both are considered food. And sometimes it's not as easy to tell the difference between predictive customer sat methodologies and cheap imitations.

So just ask. Ask for proof. Ask for academic citations. Ask for case studies. The proof is in the pudding, and if you put your vendor to the test, they should relish the chance to knock your socks off.

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Ron Shevlin is a senior analyst at Aite Group, LLC. He specializes in retail banking issues including sales and marketing technologies, customer and marketing analytics, loyalty management, P2P lending, personal financial management, social computing, online banking, customer experience and consumer behavior.