If you’re launching into business process transformation, how you measure and report on your progress and success can be make or break.
If you’re launching into business process transformation, how you measure and report on your progress and success can be make or break. Data-led business transformation Key Performance Indicators (KPIs) allow you to not only report on the results of your transformation, they also allow you to proactively inform the strategic decisions that keep it on track.
This is crucial at a time when just 30% of transformations meet or exceed their target value and result in sustainable change, according to research by Boston Consulting Group. While every business has unique challenges, and therefore some unique KPIs best suited for its situation, there are some which will likely underpin any successful business process transformation process:
Customer-first metrics:
Customer Health Score
Customer Effort Score
Customer Satisfaction
Net Promoter Score® (NPS)
Referral Rate
Employee-facing metrics:
Employee Churn Rate
Employee Satisfaction
1. Customer-first metrics
Approaching business process transformation with a customer-first mindset is vitally important. Why? Because it’s a key part of getting an ROI from your innovation or transformation spend. That makes it crucial to understand and measure the tangible impact your transformation is having on your customers.
Below are some of the key ways you can do that:
Customer Health Score
A customer health score is designed to measure the current state of the relationship between you and a given customer. The best way to do that? Multiple streams of input. This includes everything from feedback from your customer teams, customer contract value, etc. Your customer health score is likely to incorporate some of the other customer-first metrics listed in this article and aggregate them to an overall score.
For a customer health score to be most valuable, it should also be linked to action. This means you need to set parameters—if your score drops too low, it should trigger a response.
Customer Satisfaction Score (CSAT)
This measures how satisfied your customers are—often on a scale of 1-3, 1-5, or 1-7 (there’s no hard and fast industry standard). It’s calculated by taking the total number of satisfied customers (e.g. those who gave you a score of 4 or above on 1-5 scale), dividing by the total number of participants, and multiplying by 100 to get the percentage.
There are pros and cons to using a CSAT score. One the one side, it’s easy to deploy and has a high completion rate. However, the word ‘satisfaction’ has come under scrutiny as it’s open to interpretation. CSAT can also give skewed results because the customers who opt to complete the survey are often at the polar extremes of the satisfaction scale.
So, how can you create value from your CSAT score? Use it in the right areas.
For example:
1. To gauge satisfaction at a particular point of your transformation to understand how disruptive it has been.
2. To assess the positive or negative response to the launch of a new feature or service—typically 14-28 days after the go-live time.
3. To assess how engaged your customers are with your brand by how many actually complete the survey.
Customer Effort Score (CES)
This measures how easy or hard it is for your customers to reach a desired outcome using your product or service. Customer experience has become a vital indicator of success. 89% of businesses compete primarily on the basis of customer experience (CX) and 73% of consumers say that CX is a factor when making purchase decisions, according to research by SmartKarrot.
Unsurprisingly, low-effort experiences are indicative of successful business process transformation initiatives. CES is also captured via a customer survey and is calculated as follows: take the sum total of all customer effort scores and divide by the total number of survey respondents.
Churn Rate
Churn rate measures how many customers stop using your product or service in a given period. All businesses, no matter how successful, have a churn rate. When undertaking a business process transformation, churn rate can give you a very good indication of how well it is meeting your customers’ needs. For example, if your transformation involves replacing part of your customer helpline provision with a chatbot and your customer churn rate goes up, it’s likely that service isn’t quite hitting the mark.
The data for churn rate comes from your internal systems such as a Customer Relationship Management program (CRM). To calculate churn rate, take the total number of customers lost in a given period, divided by the total number of customers at the beginning of that period. Then multiply the result by 100 to get the percentage.
2. Employee-facing metrics
While a customer-first mindset is the bedrock of successful business process transformation, it’s also extremely important that your employees believe in and benefit from your transformation process. To make sure you’re delivering on that front, here are the key employee-facing metrics you should know about:
Employee retention rate
This measures how many employees left your company over a given period. It’s important to note that new starters are not included in the retention rate—it focuses solely on people who remained employed by your business.
Employee retention rate is a great measure of how well your business process transformation has succeeded in making your customers’ and employees’ lives easier. As business process transformation involves behavior change, it’s likely that some existing employees who are wedded to the old ways of working will find the change too much to handle and leave. However, if you find that whole departments are resigning after or during your transformation, it’s time to reconsider your approach.
This is also linked to a customer-first mindset. The longer employees stay, the better they are at their job, the more experience they retain, the better service they can provide to customers, and the more satisfied those customers are.
Retention rate data is captured by internal data systems (e.g. a CRM). To calculate your retention rate, take the total number of employees lost in a given period, divided by the total number of employees at the beginning of that period. Then multiply the result by 100 to get the percentage.
Much like NPS, which focuses on customer sentiments, eNPS measures how likely your employees are to recommend your business to prospective job candidates, typically on a -100 to +100 scale. This is a great indicator of employee engagement as it not only measures how content your employees are, but whether or not they will actively promote your company to friends, family, or peers.
eNPS is particularly important when undergoing business process transformation as it gives you a proactive assessment of how your transformation is impacting your employees’ overall satisfaction levels. This can be key to ensuring you meet the needs of your best employees before it’s too late. As explored in this great article by Ian Daley, that’s because the best employees often don’t complain, they just leave.
eNPS is calculated using the same principles as NPS. Take the percentage of promoters (those who gave a high score), minus the percentage of detractors (low scores). The percentage of “neutrals” or “passives” is not used in the formula.
3. How to use data-led business process transformation KPIs
Getting the right KPIs is a crucial part of successful business process transformation. But it’s important to remember that KPIs themselves will not make your transformation successful. They need to be used as part of a rigorous business process transformation strategy. This includes defining why you’re measuring the areas you have chosen, and what you will do with the data once you’ve captured it.
4. Data-led business process transformation KPIs and outsourcing
Keeping a close eye on your KPIs is especially important if you’re working with an outsourcing partner. When you outline the terms of your engagement with an outsourcer, be sure to get transparency on what good performance looks like and how it will be measured, then carefully outline processes for what happens if targets are missed.
Does your outsourcer have a plan in place for this? If there’s a problem, do you know that you’ll be able to call someone who you know and who knows your business? This is where working with an outsourcing partner that offers you a dedicated Solutions Manager can make all the difference.
Successful business process transformation case studies
GoDaddy: Transforming tech support with data analytics
GoDaddy is a payments terminal and software provider. The company wanted to enhance the merchant and reseller experience while reducing time spent on technical support calls for its point-of-sale solution.
A major challenge was that GoDaddy’s engineers were spending too much time on the phone for escalated technical support. This minimized the time they could devote to product improvement. Using data analytics, GoDaddy worked with an outsourcing partner to demystify the root causes for calls and then divide them into two tiers. It was then able to develop curricula and tools specific to tier 1 and tier 2 calls, and then intelligently route those calls to tier 1 and 2 agents as appropriate. The result? 39% drop in hand-off rate, and a huge 93% jump in customer satisfaction.
American Express: Reaping the benefits of a customer-first approach
Payment card service specialists American Express rewrote its approach to transformation. By prioritizing customer experience, it reimagined its customer service provision from being a cost center to a vital channel through which it could learn more about its customers.
As a result of business process transformation, its customer retention rates jump by 400%.
Walmart: Using transformation to improve
Walmart is a multinational retail corporation that needs no introduction. Walmart used transformation as a way to understand its customers much more deeply but took a very different approach than American Express. By introducing a mobile app and online store, Walmart first and foremost gave its customers more flexible buying options. But it was also able to use these channels to analyze customer behavior and inform the development of new features such as same-day pickup, mobile ordering, and “buy now, pay later.”
Reassured: Redefining the calling agent experience to increase business resilience
Reassured is a leading life insurance broker based in the UK. When the COVID-19 pandemic hit, Reassured was faced with the challenge of pivoting all of its workforce to remote working in just 14 days. At the time, just 22% of its staff had dedicated home working spaces.
To combat this, Reassured transformed its process and implemented a home-based telephone system operated via softphones, which it rolled out to its sales teams. The result? Minimal disruption to its customer base, a viable solution for employees, and the ability to continue delivering life insurance at a time when it was a primary concern for customers.
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