There are seven measurements that should be on every CCO's dashboard. I cover four in this blog post and the remaining three in next week's blog post.
First, an important word about metrics. Because these metrics represent "proxy" measures for revenue and profitability, securing buy-in from the corporate level that these metrics are indeed tied to revenue and/or profitability, albeit indirectly, is critical to their credibility and the CCO's authority. Without this consensus the dashboard cannot demonstrate value for the CCO. The metrics are presented in order of data readiness and access; the easiest measures are listed first.
Key account relationship health
On a weekly basis, account relationship managers should post the status of key accounts; those in green have no issues, those in yellow have some emerging issues not of a critical nature, and red accounts are those in greatest jeopardy. The CCO must take personal responsibility for resolving the issues for accounts with red indicators.
Metrics: The number of accounts in green or successfully migrated to green, or elapsed time between identification and improved account status are potential metrics for the dashboard.
Overall and key customer engagement
It has been shown that more engaged customers spend more money. The degree of customer engagement can be measured based on rates of participation in customer programs such as executive forums, product development, and participation in corporate strategy initiatives. One large technology company has over 70 customer engagement programs and they have been able to document the positive relationship between customer engagement and spending.
Metrics: There are several metrics to be considered: The number of customer engagement programs and their growth, the level of involvement of customers in customer engagement initiatives, and especially the spending patterns of customers at different levels of engagement.
Academic research has proven that the higher the level of customer loyalty the greater the spend level.
Metrics: A number of commercially available survey instruments can be used to measure customer loyalty. As well, combining a customer's spending over time and customer loyalty makes a good proxy measure.
Progress toward resolution of critical customer issues
Identifying and focusing resources on resolving critical customer issues is an important role for the CCO. One large technology company annually identifies its chief customer concerns that represent a combination of technical, operational, and process issues.
Metrics: The time it takes the CCO to identify the components and drivers of the issue, the timing for a resolution plan, and time to resolution are appropriate measures for the dashboard.
This covers the four of the seven areas recommended for the CCO dashboard. The remaining three measurements and their potential metrics will be discussed in next week's blog post.
*This series has been excerpted from The Bingham Advisory: Eight Imperatives for the Chief Customer Officer, available for free download from the CCO Council website here.