In a recent webinar conducted by ActiveStrategy, Mark Graham Brown, author of a number of Baldrige and performance measurement books, talked about key customer metrics. He advised people to be wary of the most common measurements such as customer surveys (usually fail to ask the most important questions and employees figure out how to “game” the survey), customer complaints (only about one in ten unhappy customers complain), customer loyalty (based on faulty assumptions since loyalty is driven by many factors other than satisfaction), focus groups (expensive and time consuming), and net promoter score (satisfaction doesn’t equal loyalty and the people in the middle aren’t addressed).

Instead, Brown suggested two great customer metrics:

• Customer Aggravation Index. Use focus groups to identify the things customers hate, rank them according to severity, and keep track of how you perform on them. It’s a meaningful metric that predicts loyalty and it’s being used by such companies as FedEx, DTE Energy, and Midwest Airlines.
• Matrimonial Index. Rate customer relationships on a scale of 1 to 10 based on how “married” they are to you or to your competitors.

According to Brown, you can consider a number of factors for an index including satisfaction levels, aggravation levels, length of relationships, level of relationships, willingness to give a referral, monetary value and scope of business, connections to the company (friends/associates at your company), and the price of “divorce” (what it would cost for the customer to find a new supplier).

With quality customer satisfaction and loyalty data in hand, the next step is to target your marketing dollars at those customers or potential customers who are going to drive your success. As Brown said, maintain a surface level relationship with undesirable customers, strive for “marriage” with desirable ones, and improve relationships with your best customers.

To view the archived webinar Customer Metrics That Work featuring Mark Graham Brown (free sign-up required), click on the webinar title.

To read more about customer satisfaction and engagement, click on these articles:

• Walk in Your Customer’s Body Armor
• When “Very Satisfied” Is Impossible
• Bottom-Line Value of Customer Engagement
• 9 Ways to Get Closer to Customers
• Customer Loyalty Myths

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