IBM was onto something in the ’90s when they saw the shift needed in the world. Everything would need a lot more integration between client/server technologies — and professionals to deliver the services required to make that integration work. Lou Gerstner saw what the customer of his customer needed: integrated systems and supported their buying needs via e-commerce. The IBM Global Services division was born and became an industry-leading services giant for IBM, ushering in a new era of capabilities and mindset. I know because I was there.
SAP would later use the same concept of “your customer’s customer” when pitching e-commerce solutions in the 2000s, and now with digital transformation. And you know what? It’s a solid concept to teach business and IT staff to prepare for your digital transformation journey. An essential ingredient to this journey is what is called Customer Performance Indicators, or CPIs.
Imagine you are a Systems Analyst in the IT team. Your “customer” is the Business Analyst who is gathering business requirements for the new project. To level up your business and IT game, consider who the Business Analyst’s customer is. Is it their Director or VP? No. In the most fundamental sense, the business has deputized the business analyst to deliver results for those who pay for your products or services.
So, just as you work towards internal metrics on which you’re measured, often called Key Performance Indicators or KPIs, your end customer also has performance indicators, CPIs, that they measure your organization with. The exciting thing about CPIs and digital transformation is this – their key metrics often don’t resemble your KPIs at all!
How can that be? Let’s take an example. Apple wants to sell more iPhones. Apple rewards its employees on hitting their internal metrics, those KPIs, for selling more iPhones, keeping optimum inventory levels (which could be high or low depending on the item), reducing costs, and so on.
What do the metrics looking like on the customer side? Well, beyond the one iPhone they were interested in buying, they don’t care how many iPhones Apple sells. They don’t care what “optimum” inventory levels are, just that Apple or a retailer somehow had the one they wanted in stock. They don’t care about how many issues were solved for millions of users worldwide across every possible component or service for Apple’s products.
They don’t care whether the support person has one start-of-the-art AI-powered problem-solving application or has to quietly navigate 11 disjointed, unintegrated applications across multiple screens to manually and mentally patch data together into useful information and eventually arrive at the desired outcome (as I learned about one telecom carrier, no joke).
They only care about getting their problem solved with a minimal wait before talking to a knowledgeable support person who will solve it on the first call or chat 99% of the time.
Instead, digital transformation begins with people. It starts with the customer and their experience when interacting with your organization and ripples to the employees, partners, and contractors who make, sell, transport, and support your product or service. From this vantage point, the customer has their metrics on how good a company you are. They want their desired iPhone in stock. They want their question or problem solved on the first call to technical support, not bounced around three times and hung up on because that helps internal call center staff maintain their KPI for fast call closure rates. They don’t care if you have different systems for tracking packages, just that it looks like one easy-to-use system that gives them instant, accurate information on their schedule, day or night.
Consider this astounding finding by SAP Technology & Innovation Overview and Outlook:
“…The companies that are most successful in overcoming these challenges and surpassing their peers are the ones that understand how to consistently deliver exceptional experiences. In fact, organizations that lead in customer experience outperformed laggards on the S&P 500 Index by nearly 80%.”
Where KPIs are internally focused, CPIs are customer/user experience focused. These metrics determine if they will convert to a customer after browsing your app or website and finding the information they want — within a few clicks, each of which took no more than 3 seconds apiece. Their purchase experience will determine whether they come back for follow-up sales. Their overall experience determines if they will happily promote your product to their friends, family, and co-workers and leave good reviews on social media platforms. To the CEO, these experiential outcomes translate views into sales, sales into repeat sales, and customer satisfaction into customer promotion. And there’s nothing more powerful than customers promoting you on your behalf.
Sales, repeat sales, excellent service, 5-star reviews, and a strong net promoter score are just a few of the ways your organization will know its digital transformation journey is working. And it starts with leadership deciding that digital transformation is a priority and engaging their team and their partners about what it means to their customers and their organization. Announce you are going to do it. Get started with CPIs and re-evaluating if your KPIs drive the behavior and outcomes you want from the viewpoint of the CPIs. If they don’t, dare to change or eliminate them and create ones. Change your compensation plans. Make your new CPIs and KPIs known to all, and have a way to track them transparently, whether it’s with reports or analytics and feeding them live into a dashboard on your intranet or in an app.
Think about an instance when you provided feedback to an organization and never saw a response or change in behavior. Now, think about a time when you saw an organization ask for your feedback, responded quickly, earnestly, and enthusiastically, and took action to resolve the matter to your satisfaction. It’s one thing to see a standard form available for you to leave a comment in, and somehow you know it’s just going to go into a black hole. It’s quite another experience to see and feel one or more people-driven and empowered to recognize a problem, your problem (or request), and see them take action like their heart was in it, that it’s the new way of life(work)…or at least that their job depended on it.
In conclusion, in the past organizations have focused on KPIs. And it got them mixed results. But the organizations that embrace digital transformation and add the power of CPIs to their vision, vocabulary, and daily life to transform their customer experience, alongside their refreshed KPIs, will see surprising results. Not only will you build a strong foundation for growth, but you will see new levels of success and sustained customer engagement for whatever comes next in your journey.