How insurance companies can decide on which CX Metrics to use
Selecting and keeping track of the right Customer experience (CX) KPIs is important. Insurance companies can use them to:
- communicate the rationale for previous investments
- validate whether improvements to the customer experience have taken place
- set goals and targets for future improvements
- intervene when remedial action is needed
But there’s a problem.
In most organisations, including insurance, it is difficult to get agreement on which metrics should be used to proactively monitor, measure and improve CX.
This is further complicated when you consider that the range of possible CX metrics is extensive.
For example, the majority of large organisations with revenue of more than $1 billion (or the equivalent) use more than 50 CX metrics—some use as many as 200.
To decide on which metrics matter most in terms of relative impact on the customer, insurance companies can employ a 4-step process.
Step 1: Audit
The first step to evaluating which CX metrics to employ to enhance customer experience is to audit all of the customer experience metrics currently being used across the entire organisation. The purpose of the audit is to determine what is being measured, how each metric is calculated and who is accountable for its improvement.
A thorough audit will take you beyond the departments that first come to mind i.e. marketing, customer service, operations, sales and supply chain. Keep in mind that digital Claims, Billing and Underwriting also track a variety of CX metrics too that you should be analyzing.
When your audit is complete you will have gathered a large number of metrics. It may feel overwhelming. To help make managing the data more manageable, the majority of organisations will group the metrics into four categories:
1. Customer Satisfaction
2. Customer Loyalty/Retention/Churn
Step 2: Build a Hierarchical Dashboard
Different departments within an insurance organisation tend to focus on different CX metrics. However, if an insurance company is going to enhance or improve its overall customer experience it’s important for employees throughout the organisation to have visibility into the experience customers are having with all departments and lines of business. By doing so employees will gain a complete understanding of the customer experience and how it may or may not impact their specific interactions.
To provide this bird’s eye view of the customer experience, insurance companies should combine all the relevant metrics into a customer experience dashboard. A CX dashboard captures the entire customer experience from as many different viewpoints as possible.
Typically, these dashboards have one or two high-level metrics at the top that the operating committee are interested in, such as overall customer satisfaction score, and then waterfalls down to include all of the operational metrics relevant to the customers experience.
Step 3: Prioritise your KPI’s
Once the hierarchical dashboard is filled out, review each metric from the perspective of your customer, and sort them in order from most critical to least critical when it comes to evaluating the customer experience.
Some organisations have an inside-out focus when prioritizing metrics. When they do, they have a greater chance of relying on CX metrics that aren’t actually assessing the customer experience. This can lead to an initiative that’s reason for existence is to satisfy a business goal such as lowering costs, boosting revenue or increasing loyalty vs. a customer experience goal such as aiding the customer in buying or owning a product or service.
However, when an organisation takes an outside-in approach, they put customer first and are be able to clarify with colleagues when a metric is not a CX metric.
Step 4: Avoid Focusing on Executive-Level Customer Experience Metrics
Board level executives tend to focus their attention on metrics that summarise the overall customer experience; metrics such as Customer Satisfaction (CSAT), Net Promoter Score (NPS) or Customers Effort Score (CES). So it makes sense for a CX executive to do the same, right? Wrong.
The time it takes for organisations to climb to the top of their industry, or for organisations that are new entrants to climb up to average, is about four to five years. As a result, a CX executive is more likely to generate short-term wins by focusing their attention on improving several lower-level CX metrics.
By having multiple specific metrics to improve, you spread out the risk that they fail to improve i.e. they form a portfolio of projects that spread the risk of failure. More importantly, the cumulative effect of making small improvements tends to result in the top-level CX metrics improving, too.