What are CPIs and how do you use them? In an article written by Gene Cornfield published in HBR recently, he talks about CPIs: Customer Performance Indicators.
Yesterday I talked about looking at your performance for the month of April, creating a solid, more specific, plan for the month of May, then executing on those plans. How do you create, measure, and tie to KPIs your new CPIs? And why would you want to measure CPIs anyway?
Gene says that CPIs are the most accurate way to measure growth in your company. (Sign me up!) That makes sense since growth in your company is determined by your customer, right? Customers vote with their dollars and you want them voting for you and voting often.
CPIs are points in your business or throughout the customer journey that the customers tell you are critical to them. It determines various measures like satisfaction and retention (these are KPIs, that are linked to CPIs).
I keep thinking about this and thinking about this. I am going to try with an example I think is right, but since this isn’t my business and not my CPIs I’m not certain if this is accurate. But follow me:
For home food delivery, customers want the food tracker linked to their order so that they can have full insight into what is happening to their food and when it will arrive. This is a CPI, the desire to see their order every step of the way. If at any point it takes significantly longer than promised, causing the order to be delivered later than normal, the customer is left dissatisfied. Dissatisfaction is the KPI.
As the customer watches, the delay could be on the side of the restaurant or on the side of the delivery service. The customer can see that, know that, and then decide if they don’t want food from that restaurant again or if they want to try a different delivery service. If you order from a delivery service, remember that the next time you log back into the app it asks you to rate (up to 5 stars) what? Two pieces of the process: 1. the restaurant’s part in the service and 2. the delivery service’s part of the process. Right? As a customer, you wouldn’t be able to answer these two questions without the tracker information. So now the delivery company (say GrubHub or DoorDash) can determine how they influence the KPIs of satisfaction or retention by either not allowing that restaurant onto their service or improving the performance of their drivers. Now they know what to fix to improve customer satisfaction!
If you want to have your own CPIs, determine what matters to your customer. Find a way to measure those CPIs. Then test to see if you can link that CPI to a KPI. If there is a link, you can drive employee behavior and incentives off of that KPI because you know it will drive the CPI.
My challenge for you is to think about the idea of CPIs. If it is something you want to measure, spend this time strategically assessing your business. Keep your team executing on the May game plan while you listen to your customer and try to determine your CPIs. Once you have measures to test, involve your team.