When customer experience (CX) is uncoordinated with marketing efforts, customer trust erodes.
If loyalty and customer-relationship leaders are to drive retention and growth, they must act to align CX and marketing by bridging silos and focusing on meaningful engagement—in other words, engagement that exists at the intersection of not only business outcomes but also customer needs.
One of the big problems of delivering CX-centric marketing is that many of the metrics used by marketing teams to gauge the engage-ability of their strategies are burdened by bias, and they may be unintentionally manipulated to paint a rosier engagement picture than what is really going on.
Not having an accurate portrayal of CX can lead to businesses' thinking they're on stable ground with their customers when more and more of those customers are becoming disengaged and pulled down gravitationally toward churn.
That's because, simply put, the metrics are lying, and therefore they can't paint the full picture.
To clear inadvertent cognitive bias in marketing and customer engagement, businesses need to re-evaluate the metrics they know and have grown to love, to see whether they're still driving value—or painting a facade.
This piece will examine three metrics commonly used in CX, including why marketing teams should consider whether those metrics are useful in analyzing outcome-driven engagement.
1. Open Rates
Open rates are most commonly used to measure the effectiveness of an email or marketing campaign. The metric does track inbound traffic well enough, and it can account for the volume of clicks to a site, but its usefulness doesn't extend much beyond that.
The issue with treating transactional touchpoints such as open rates as a meaningful measurement of engagement is that they do not map back to any well-defined business goals. Simply opening an email or viewing a notification in an app does not offer enough data to accurately say who customers are or why they opened; it just indicates that they did open. Overreliance on the open rate metric can lead to marketing teams' believing that their current outreach and marketing strategies are working, when those customers may very well lose all interest right after seeing the message.
Instead, businesses should keep track of customer touchpoints made after the email is opened:
- How many other links were clicked after the fact?
- Is there a correlation between the different links that were visited and the email?
- Can we accurately map where this customer is on the lifecycle?
Those are the questions that derive true business value and paint a clearer picture of who is being marketed to.
2. Clickthrough Rates
Measuring the effectiveness of marketing campaigns is crucial for marketing teams; but, similar to open rates, clickthrough rates are transactional in nature and therefore not a true indicator of a customer's intent.
Worse, relying on clickthroughs as a key metric can inadvertently create a complete echo chamber for marketers. For example, if a marketing campaign is disseminated to 1,000 customers, and 100 open and click through and 100 opt out, the resulting clickthrough rate is 10%. If the next campaign is run to the existing 900 customers, and 100 click through, it looks like the clickthrough rate increased to 11%, when really the campaign engaged fewer people.
That incidental echo chamber of feedback can lead to marketing teams' feeling more confident about their campaigns than they should be—which is exactly how cognitive bias starts within marketing teams. Since 11% is better than 10%, one could be forgiven for viewing the new clickthrough rate as a positive, especially because marketing automation reporting often minimizes the elephant that is the 100 customers who are now actively disengaged from the brand.
Consider that the most powerful engagement metric is disengagement rate. One way to measure disengagement is via opt-out rates. Opt-outs are essential to measure because they are a true indicator of how many people are actually engaging with a business's outreach. Opt-out rates are up double-digits year over year, recently published research has uncovered.
If a company has 1,000 customers but only 75% are opted in to receive communications, then that business must urgently contend and remediate its 25% disengagement rate. Because when disengagement occurs, like churn, your marketing team has to not only dedicate time and resources to bringing in new leads and prospective customers but also refocus its attention to reacquire customers that have been lost.
3. Net Promoter Scores
Net promoter scores (NPS) have been a longstanding cornerstone in CX, especially when measuring how well the customer community receives a product, service, or campaign.
Of course, it's nice to provide a mechanism for customers to give detailed, personal feedback after an engagement. However, such feedback is typically limited to that one instance, and therefore it is not a good indicator of a customer's overall perception of a brand. In fact, last year Gartner predicted more than 75% of organizations will abandon NPS as a measure of success.
Another issue with NPS lies in the sample size. If customers actively disengage with surveys, the sample size of those who populate NPS questionnaires stops being statistically significant, so the score does not really mean all that much.
What complicates things further is that it is next to impossible to detect differences between respondents. If the question is "How likely on a scale of 1-10 are you to recommend our business?" NPS treats anyone who responds with 0-6 as "detractors." That creates a situation where a brand may very well have a customer in the 5 or 6 range, who is on the fence about their business and could be convinced, being treated the same as a customer who rates the company a solid 0.
Without being able to effectively measure the nuance between scores, NPS does not offer real insights that are useful in today's CX environment.
So, what does?
Research suggests that customer engagement value (CEV) has a greater overall impact on customer satisfaction, loyalty, and lifetime value. CEV is a metric that helps companies accurately attribute value to their customer engagement efforts. It takes into account the total number of customers engaging, the high-value experiences (HVEs) being delivered to those customers, and the value attributed to those HVEs from a revenue and outcomes standpoint.
In short, it takes a full-frame view of the touchpoints and experiences from customer engagement efforts and tells the whole story of the customer lifecycle.
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Customer engagement needs to be quantified using outcomes rather than transactional touchpoints. What needs to be measured is causation; to do that, businesses need to deploy an engagement strategy that reports back on actual outcomes rather than signals that may be spuriously correlated to outcomes.
When they know the metrics to avoid, businesses can switch their mindset to focus on CX—and specifically on dormant customers or those at risk of disengaging—and use the information they have at hand to re-engage those who are close to opting out.
More Resources on Customer Experience and Engagement Metrics
Five Key Metrics You Need to Create a Customer-Centric Company
