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In modern business, focusing on customer experience (CX) is no longer a nice-to-have, but rather a necessity for businesses of all sizes. However, defining a successful customer experience can be difficult because many touch points form the customer journey. By using online surveys, companies can gain quantitative information about the customer experience to actively monitor trends that develop over time. Based on customer feedback, organizations can identify areas for improvement, adjust their strategies accordingly, set better goals for their key performance indicators (KPIs), and strive to deliver the seamless experiences that today’s consumers expect.
Customer experience KPIs
Research shows that CX is now competing with traditional factors such as price and quality in influencing customer loyalty and advocacy. According to Forbes, 77% of consumers consider CX just as important as the main product or service itself. PWC reported that even beloved brands risk losing 32% of their customers after one negative interaction. In addition, poor CX burdens the company with costs. To address this, this article outlines five critical CX KPIs that can be systematically monitored, evaluated, and optimized to help address customer service problems and strengthen a company’s connections with its customer base.
1. % Customer satisfaction score (CSAT)
This KPI measures how customers rate particular interactions with a company, such as getting a response from customer care or processing a return. Users can score their satisfaction with the experience on a scale from “very dissatisfied” to “very satisfied” by responding to an automated questionnaire sent to them. Monitoring the ratings depends on a company’s objectives, but the general rule is that anything above 85% is excellent, and anything below 60% requires rapid attention.
Calculation: CSAT = (Number of Positive Responses / Total Number of Responses) x 100
2. # Net promoter score (NPS)
The NPS, considered the most famous CX KPI, reflects the willingness of consumers to recommend a product to friends and acquaintances. To calculate NPS, a company can conduct a survey of customers from one query: “What is the probability that you will recommend the product to your friends?” The answer is given on a 10-point scale, where 0 is “I will not recommend it in any case” and 10 is “I will definitely recommend.” The respondents can be divided into three groups depending on the scores obtained: promoters, passives, and detractors. The majority of companies consider a score above 80 as excellent, a score between 50 and 80 as very good, and a score below 50 as good.
An extension of the NPS index, the creation of the WoMI was motivated by criticism towards the traditional NPS. Researchers believed that the NPS made the incorrect assumption that if a customer does not recommend a product or service, then they are automatically considered detractors. This led researchers to make adjustments to the KPI in order to better reflect reality. It tracks the recommendation, but from the opposite perspective: “What is the probability that you will discourage people from doing business with the company?” This can be rated on a scale of 0 to 10. Those who choose 9-10 on the scale of “dissuading” are categorized as “true detractors.” The threshold varies from one industry to another. It is better to have a lower score, as the target for most companies is less than 10%. To gain a comprehensive understanding of your company’s position among customers, we suggest employing both approaches to obtain a complete picture.
WoMI = (Number of Promoters – Number of Detractors) / Number of Respondents * 100.
4. Consumer Effort Score (CES)
The CES index, which was developed in 2010, is related to the idea that the more effort the product or service requires from customers, the less likely they are to stay with the company. As cited in an article, research by the Corporate Executive Board (CEB) shows that 94% of customers who have an effortless experience are likely to make repeat purchases. The KPI could be measured by the customer’s response to a statement like: “Thanks to the service/product of company X. I was able to easily cope with my problem.” with a rating scale of 1 to 7. Most companies typically receive CES scores ranging from 5 to 5.5. A score exceeding 6 is generally considered above average.
CES = (Sum of response scores) ÷ (Number of responses)
5. Customer churn rate
Simply put, the churn rate is the number of users who stop any interaction with the company. Depending on the industry, this could mean that customers deleted their account, did not re-buy, or simply decided to switch to a competitor. In its simplest form, customer churn can be calculated by comparing the number of customers lost to the total number of customers. By dividing one metric by another, one can get the customer churn rate as a percentage of the total base. The most common acceptable churn rate is 5-7% annually.
KPIs must be monitored and measured in order to improve CX. To do so effectively, a system that accurately collects data from all channels should be considered. This allows requests to be categorized and common issues to be identified. In-depth interviews with both loyal and dissatisfied customers should be conducted to understand the root cause of any problems, as some of which could be related to support services. Consistency in tracking and improving CX KPIs is the key to ensuring decisions and actions in customer service adapt to changing customer sentiment and meeting their needs.
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Globally, up to 2.78 million workers die annually from occupational accidents and work-related diseases, while another 347 million suffer from non-fatal occupational accidents, according to the United Nations Global Compact.
Dealing with work-related accidents severely impacts corporate management performance by generating direct and indirect costs and repercussions. Some of these are medical costs, losses due to production downtime, loss of productivity, and low employee morale. A company can also be sanctioned by authorities or suffer from reputation damage, which in turn may result in sales reduction.
Thus, occupational safety and health (OSH) is a priority for businesses. OSH is the practice of protecting the safety and health of employees by identifying workplace hazards and implementing initiatives meant to prevent their occurrence. OSH standards and regulations exist at the international and the national levels, and companies are responsible for adopting them.
To support OSH, the International Labour Organization and the United Nations Global Compact identified business practices to improve workplace safety and health, and one of which encourages companies to “enhance the reporting, recording, and notification of occupational injuries and diseases to improve data collection.” Through the improved recording of workplace mortality and morbidity, companies and authorities can evaluate the performance of internal OSH systems, prioritize OSH initiatives, and enhance corrective actions and prevention efforts.
The performance of such initiatives can be tracked with the help of health and safety key performance indicators (KPIs), such as # Lost Time Injury (LTI), # Lost Time Injury Frequency Rate (LTIFR), % Health and safety (H&S) incident type breakdown, % Health, security, and safety training completed, % Compliance OSH regulations, and % Lost day rate.
The healthcare manufacturing industry is a high-risk industry when it comes to occupational safety and health due to the nature of the products and the operating environment. The OSH problems faced by workers in this industry include exposure to chemical and biological substances, exposure to physical hazards, ergonomic affections, and hazardous processes using heavy machinery.
Medtronic and Johnson & Johnson are renowned corporations in the industry and have established a strong presence in the market. Both companies stated their strong commitment to ensuring the well-being of their employees and have implemented comprehensive OSH systems.
Medtronic, a global leader in medical technology, services, and solutions, strongly focuses on health and safety, implementing enterprise-wide standards to reduce hazards and risks and prevent workplace accidents. Their Environmental, Health, and Safety Performance System monitors the recordable incident rate, employee training, and auditing while providing employees with tools to reduce risks and employ safe behaviors.
As revealed by the KPIs’ results for the last four years, Medtronic’s EHS system achieved notable progress in enhancing workplace safety. Three of the indicators have shown a decreasing trend compared to previous years. Only the % Employee injury incident rate has slightly raised due to an increase in slips, trips, and falls, as stated in the company’s ESG Report.
To address the issue, the company launched a comprehensive awareness campaign across all its sites and took measures to improve outdoor walking surfaces and lighting where deficiencies were detected.
As part of the ongoing initiatives that supported continuous improvement, Medtronic implemented a companywide hazard reporting tool, which allows employees to report potential risks and near-miss incidents. This enables the company to take timely mitigating measures and reduce the likelihood of incidents. Johnson & Johnson, a popular healthcare company that produces a wide range of medical devices, pharmaceuticals, and consumer packaged goods, has implemented thorough safety programs, risk assessments, and training for its employees.
Johnson & Johnson’s OSH system incorporates a global data management system with digital tools, predictive analytics, and visualization tools to track the OSH KPIs, gain deeper insights into their performance, and identify potential risks early.
Using leading indicators facilitates a proactive avoidance of workplace injuries. Examples of leading KPIs the company uses include # Corrective and Preventive Actions (CAPA) resulting from program evaluations, internal audits, and # Near misses.
The company’s recent focus was to prioritize resources and risk mitigation efforts to prevent those incidents that could lead to life-threatening or life-altering outcomes. By following the hierarchy of controls, with an emphasis on eliminating, substituting, or engineering controls rather than relying on administrative controls, the company was able to reduce indicators of fatalities and serious injuries.
Despite this, the other two KPIs showed a slight increase in 2021, contrary to the downward trend seen in previous years.
KPIs Drive Occupational Safety and Health Performance
There is no one correct formula for employee safety. Starting from the authorities’ standards and recommendations, companies should develop OSH systems tailored to their needs. Business practices focused on employees’ participation in risk identification, periodic audits, OSH training, safe behavior stimulation, and awareness activities could help create a preventive and safety culture.
As shown by the examples of Medtronic and Johnson & Johnson, top-tier companies operating in a high-risk sector, regardless of the chosen initiatives, effective systems enhance the recording and reporting of OSH KPIs.
Monitoring the leading indicators to proactively identify potential risks and implement mitigation measures and lagging indicators to understand the current deficiencies and apply corrective actions can determine the success of an OSH system in creating a safer, healthier, and more efficient workplace.
Working in a team can create synergy, since a good team will likely produce better results than individuals working separately. However, measuring team performance is even more challenging than measuring the performance of each employee separately, since you have to take into consideration each and every member’s performance, in relation to the others’, as well as the overall team’s.
In general, employees are members of departments. A department is a subdivision of an organization and an individual, generally, can only be part of one department. That being said, nowadays, teams are more flexible in how they are formed and how they operate: a team can be a temporary group formed to work on a specific task or project. Therefore, employees can be members of only one department, but several teams.
The first step is to link the team results to the organization’s goals, by cascading the objectives and KPIs from the organizational level to the team level. It is not very productive to have a well-performing team whose work does not help the organization reach higher performance goals.
There are many indicators and measurements that can be useful when considering measuring your team’s results. In what follows, we’ve put together a list of the most widely employed benchmarks, so that you may get a general feel for what is considered useful to keep track of.
Employee attendance: Employee attendance is an important aspect of team performance since absenteeism incurs excess costs and will have an unwanted effect on team productivity & employee morale.
Moreover, late employees can be the source of annoyance or frustration, which will reduce team cohesion and further reduce a working unit’s effectiveness. Therefore, attendance related KPIs should be the first ones to track, when we talk about team performance:
% Absenteeism: Indicates the percentage of employees within the team who are repeatedly and/or unexpectedly absent, out of the total team members.
$ Lost time accounting: Measures the potential revenue lost because of idle workers or wasted hours within the team.
# Time lost by starting work late: Measures the volume of time lost due to employees starting their working hours late.
Client satisfaction: Every team has an internal/external customer, which is why satisfaction can be a good measurement unit. Improving customer satisfaction will eventually result in a more efficient production process, better service and ultimately, lead to more satisfied external customers. The most important KPI to measure in this regard is the following:
% Customer satisfaction: Measures the level of satisfaction exhibited by the team’s customers (current employees, distributors, vendors, departments, or external clients), towards the inter-functional services provided, be it communication, productivity and/or responsiveness.
Employee retention within the team: A low retention level or a high turnover level is usually connected with low levels of efficiency and productivity, which in the end can lead to a negative impact on an organization’s overall results.
This aspect can be influenced not just by the team performance, but also by the HR department’s performance, the working environment and work policies, the supervisor, as well as the promotion and professional development opportunities for the future. However, high level of employee turnover within a specific team could indicate team-related problems.
The most important employee retention KPIs to measure are the following:
% Employee turnover: Measures the rate at which employees leave the team in a given time period (e.g., month, quarter, year).
% Employee retention rate: Measures the total number of employees retained at the end of the reporting period, expressed as a percentage from the total number of employees that were in the team at the start.
Employee satisfaction: Studies suggest a direct correlation between employee satisfaction, employee engagement and increased performance. Employee engagement can be increased through various company efforts, such as facilitating the development of skills for its employees, giving them a sense of trust and integrity, and clarifying their opportunities for future career development. The most important indicators to take into consideration, when looking to improve or maintain employee satisfaction, are the following:
% Employee satisfaction: Measures the employees’ satisfaction and motivation level, with aspects regarding their job and working environment: job responsibilities, team and management, workplace, and professional development.
# Employee Engagement Index: Measures the engagement level of employees in their work activities and responsibilities, in terms of enthusiasm, commitment and discretionary effort.
Productivity of individuals: Productivity of individuals is a key element of team performance. The following KPIs help measure a team’s contribution to the organizational goals, and the contribution of its members to the general team results:
$ Profit per employee: Measures the team’s contribution to the overall profit pool. It is a particularly important ratio in customer-focused businesses, such as those in the service sector.
$ Sales per employee: Measures a team member’s productivity and efficiency in generating sales.
% Human Capital Return on Investment (ROI): Measures the return on investing in a team’s human capital, after adjusting for the cost of financial capital.
$ Human capital value added: Measures the value added through productive activities, by a team’s members. Reflects the adjusted operating profitability figure, calculated by subtracting all expenses except for labor expenses, from revenue, and dividing the adjusted profit figure by the total headcount.
In some specific cases, where the productivity of a team is not directly linked to the organizational revenue or profit (ex. support teams), it is more advisable to use OKRs (Objectives and Key Results), instead of KPIs (Key performance indicators), to measure productivity.
OKRs contain a well-defined objective and one or more key results. OKRs help define how to achieve a goal through concrete, measurable actions. So, in case of the support teams, these results should be measured to track team performance, as they will be able to paint a more accurate picture of their efforts.
Conclusion
It is a complex process to measure team performance; therefore, it should be analyzed from numerous angles, according to each team’s specialization and workload. It should be noted that the aforementioned indicators are not the only ones which can portray a group’s results. However, if you are looking for a quick introduction into this topic, these KPIs will serve as a sustainable foundation on which you can build your employee management system.
