Once you have identified the key performance indicators to track for Customer Experience, how do you benchmark yourself to best in class companies? This article shares some benchmarks you can use to prioritize your improvements.

In a recent article, we defined the right Key Performance Indicators for Customer Experience. If you have invested the time to collecting this information, your next step is comparing yourself to other companies.

 

Before we compare your Customer Experience to other companies, let’s refresh our understanding of Benchmarks vs. Benchmarking, as we described in our Customer Success Benchmarking article.

 

 

  • Benchmarks
    • A quantitative statement showing the average performance for a set of companies. While this is interesting, there is limited value in comparing yourself to your “average peers”.

       

  • Benchmarking
    • Looking at the inputs, processes, and outputs that generate great results.

       

Download our Customer Experience Benchmark Tool to determine your Customer Experience benchmarks, to evaluate 9 different metrics to determine your Customer Experience, and to leverage different metric types in 3 areas: Behavioral, Leading, and Lagging.

 

Compare your current actions to the best in class.

 

 

By understanding how they reach that level of success, you can apply those learnings to your organization, and ultimately improve your processes. This is a more impactful exercise and is one way you can leapfrog your competitors.

 

In our previous article, we separated our KPIs into Behavioral, Leading, and Lagging, which we will continue to use here:

 

Behavioral

 

  • Unforced Errors – Most B2B companies have some level of manual processes. If a manual process is 99% accurate, that aligns to industry benchmarks.   What is dangerous, however, is a series of manual processes, as these error rates are a geometric relationship.   Put quite simply, 3 processes at 99% are only 97% accurate (99% x 99% x 99%).   Your goal, therefore, to reduce errors is to minimize the number of manual processes that are dependent on one another.

     

  • Social Media Mentions – All social media mentions must be reviewed. For B2B companies, same business day responses are expected, but faster is better.    There are several technology packages that can help monitor your feeds.   And while it is typically Marketing’s responsibility to monitor and respond, they should have access to a service team that can escalate any responses to minimize impact.

     

  • Marketing Qualified Leads – Marketing should contribute enough leads to cover 30% of the pipeline target. By understanding your average deal size, you can calculate how many deals you need to win to reach your pipeline target.   It is important to monitor what percentage of leads are accepted by sales, and for both parties to review these together.

     

Leading

 

  • Contact Handling – Customer expectations vary widely, even in the B2B space. For example, time sensitive industries (such as logistics) have a much higher expectation than business services software.   Make sure you understand what your customers expectations are, and what competitors are able to deliver.
    • Service Level Attainment –Once you set the target by channel (ie, 30 seconds for answering the phone, 2 hours for email response, 60 seconds for a chat response), you should be able to deliver this level 95% of the time.   You do not want to measure averages, because that is not what your customers feel.
    • First Contact ResolutionInsight Squared publishes a useful benchmark here. 90% is a goal for most B2B interactions.   However, the more complex your service, the lower this will typically be.   However, this is an important area of focus, as it positively impacts Satisfaction scores and service level attainment (via reduced second calls).   Often, reviewing your case data will identify some quick win opportunities. 

       

  • Customer Surveys – It is important not to over-survey your customers. The best practice is to formally survey each customer once per year, but to stagger these monthly so you always have recent data.   We also recommend that you use a 5 point scale for satisfaction items, as it is easier for people to process.    Generally a 4.5 on a 5 point scale is a good score from a benchmarking perspective.   When surveys are not anonymous, it is important for management to follow up with any score that is 3 or lower, to address the root cause of the issue, and if necessary create a service recovery situation.

     

  • Expansion Opportunities – Selling more to your existing customers generally has a much higher win rate than selling new products to new customers. The benchmark for win rate on expansion opportunities is 70%.   Using SBI’s revenue planning tool you can determine how much of the revenue target will come from existing customers.    If your goal is $10M from expansion, divide that by your win rate, and you will know how much in pipeline you need to cover your expansion target.

     

Lagging

 

  • Customer Effort ScoreNice Reply publishes some useful benchmarking on Customer Effort score. When used effectively, you are looking for progress over time, and making yourself easier to buy rom.   Some inputs that you can use to set your internal benchmarks:
    • # contacts – This is important to look across channels, to monitor changes in how your customers want to interact with you.   You also want to monitor channel switching, which is generally an indicator they were unable to achieve their objectives in their preferred channel.
    • Post support survey – Ideally you can track scores by customer so you can factor in scores specific to them.
    • First Call Resolution –Higher FCR is indicative of being “easier to do business with.”
    • Future Issue Avoidance – Defined in Customer Experience 3.0 by John Goodman “Problem Prevention Prevention of both future problems and future contacts is the third objective of any service interaction. The serviceperson or response system should use the facts at hand to identify as many future questions or problems as possible and proactively offer advice or a caution to avoid any future issues.”

       

  • Net Promoter Score – In certain industries (Airlines, US Health Insurance), the industry leaders are in the 20 range. In the consumer Space, Apple has scored in the 70’s, which outpaces their competitors in the 50’s.  We recommend that you monitor your progress over time, and look at competitors in your space.

     

  • Retention and Expansion – While you may be tempted to focus on revenue from existing customers, it is worth separating retention and expansion, so you can design strategies to maximize both levers.
    • Retention – While you want to retain every customer, the most relevant benchmark is net renewal on a dollar basis.    The benchmark here is 95-103%.   Companies over 100% are achieving this via price increases.
    • Expansion – To understand how much revenue you can drive here, you need to understand how much White Space there is your existing customers.   Converting 10% of your White Space in a Year is a good benchmark.

       

If you are interested in benchmarking yourself vs. best in class Customer Success teams, please contact us, and we can schedule a discussion with one of our experts.

 

Download our Customer Experience Benchmark Tool to determine your Customer Experience benchmarks, to evaluate 9 different metrics to determine your Customer Experience, and to leverage different metric types in 3 areas: Behavioral, Leading, and Lagging.

 

 

Additional Resources

 

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ABOUT THE AUTHOR

Fred Penteado

Guides private equity portfolio companies in a variety of industries on how to make their number.

Prior to joining SBI, Fred held a variety of leadership positions with multinational Fortune 50 companies. He has worked in product/program/channel management, sales operations, and served as a Chief of Staff.

 

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