Customer Behavior Metrics - Part 2
(Identify Changing Customer Attitudes)
Bill Riquier, Business Metrics
This is the 2nd
article in the series on using customer metrics to prevent
customer problems. The first article highlighted the importance of
using customer metrics to prevent customer problems and described
several metrics that companies use that are actually lagging
indicators of perceived customer value. This article discusses the
first business area that supplies leading indicators of change in
perceived value: Customer Behavior.
Hopefully, your company logs all customer complaints. While
complaints are outcomes of specific transactions, they do not
necessarily signal damage to the relationship. Classifying and
then tallying complaints will allow you to develop a Pareto Chart.
This tool presents each classification in descending order of
frequency. By calculating the cumulative percent of total
complaints, starting with the most frequent, you will often see
that 80-90% of complaints fall into the top 3 or 4
classifications. Moreover, a rigorous cause-and-effect analysis of
the top complaint groupings will often reveal common causes. This
method can help you take a confusing mess of hundreds of customer
complaints and comments from the previous period and narrow them
down to 2 or 3 important causes. Typically, managers are well
aware of these problems, but now know that they are threatening to
impact the customer relationship and can use this proof to
mobilize staff, access resources, and garner support from
sales staff can be an excellent source of customer attitude data
if they effectively log their sales activity. Measures of pipeline
activity can be very effective leading indicators of coming
changes in the customer relationship. For instance, an upturn in
the average time proposals to existing customers are spending in
the Negotiations Phase could signal the beginning of a change in
your customers’ feelings about a number of issues, from price to
trust. And a drill down may reveal that the shift is concentrated
in a specific customer type and/or for a certain service offering.
The time to act is now, before this attitude shift turns into a
customer-facing staff, such as Customer Service, Billing, and
Legal, should keep logs of activity that managers could use to
identify changing customer attitudes.
next two installments, I will discuss three more areas of the
business that supply leading indicators of perceived value. These
are: Company Performance, Industry, and Growth and Learning.
Previous articles in this series:
1. Don't Solve Your
Customer Problems: Prevent Them!
Riquier can be contacted at