C-level executives tend to think in terms of broad strategies, like the current focus on customer engagement and Net Promoter Scores (NPS). Sales, marketing, and service personnel, on the other hand, need to manage the day-to-day operations of the organization, which requires attention to detail. How can both levels of the organization be brought together to manage customers more effectively?
Developing new operational metrics allows an organization to understand an abstract concept like “engagement” and implement marketing policies that carry out C-level strategies.
The enterprise measurements of engagement (deleted because most companies use NPS as a pulse survey) are usually developed from quarterly or annual surveys. As valuable as they are, these surveys measure a tiny number of customers and give no immediate feedback on what specifically is driving performance, for better or worse.
By contrast, a company has a lot of detailed information on every customer and this information changes every day. In many settings, this data most directly represents the health of their customer relationship, such as “Does a customer like our brand enough to spend money with us?”
For example: A national, well-established charity that supports veteran-related causes solicits donations from new and established donors. Most donations are comparable in size, a result of marketing that suggests certain amounts. Here is a quick way to segment its donors into three groups that provide a good proxy for engagement:
| Segment A | These donors give less frequently, but when they “miss” an opportunity, they donate higher amounts. We believe these donors to be the most engaged, as they compensate for lapses through bigger donations. |
| Segment B | These donors respond frequently, but donate close to the average amount. For the most part, they seem to be moderately engaged, because they are dependable. |
| Segment C | These are one-time donors, or those who give less frequently before stopping altogether. |
The segmentation is simplified quite a bit. Behind the scenes, there is some fairly advanced math. But it summarizes customers into three clear groups that can be described clearly for senior executives.
We next need to confirm that these operating-level metrics calibrate well against the C-level metrics. Do our segment A and B customers really have the engagement or NPS scores we expect? If not, we need to refine the metrics.
Finally, for each segment, we can add in other operational factors, like the marketing mix or demographics. Is the frequency or content of our marketing driving more people into segment C? If so, we need to adjust marketing to get higher engagement with segment B. Are we attracting new donors that become engaged sooner? Can we use demographics to find more donors through new channels, new media, or more targeted marketing?
Other types of organizations will have different metrics. A bank, for example, will be interested in a customer’s number of accounts and overall trends in balances—both good metrics to represent engagement and importance to the bank’s profitability.
Marketers must resist the temptation to present senior executives with dozens of metrics. The point is not to awe them with analytical wizardry, but to clearly communicate the way in which the high-level strategy has been effectively put into operation. Marketers need to show consistency between macro and micro measurements, and between C-level and operational-level metrics. Not only will this help clarify communications back to the executive team; it will allow the business to focus on its most important drivers while gaining real improvements.
About the author: David King is CEO at Fulcrum.