Understanding customer satisfaction: The role of CPIs

By Anders Björklund

Understanding customer satisfaction: The role of CPIs

Most companies talk about how important it is to be customer-centric and how. While many businesses proclaim their dedication to a customer-centred approach, a common challenge arises - their metrics predominantly focus on the company itself, failing to capture the customer's viewpoint. This is where Customer Performance Indicators (CPIs) enter the scene - a key metric frequently overlooked by companies but highly valued by both prospective and current customers.

The journey towards customer-centricity with CPIs

To truly embody customer-centricity, businesses must gauge their performance through their customers' eyes, and CPIs provide the tool to do this. These metrics are currently at the forefront of business measurement and should be prioritised. Whilst firms often have online dashboards projecting data demonstrating company performance, every customer interaction presents a unique purpose, problem, challenge, need, intent, or question, each with specific expectations of resolution.

These outcomes need to be assessed through the lens of pertinent CPIs. Many businesses are adopting, setting, and optimising CPIs, becoming more customer-centric. The company's performance relative to the CPIs is often the most influential tool for accomplishing their Key Performance Indicators (KPIs).

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Exploring CPIs: A case study

Consider an instance from any B2B interaction. When an existing customer is seeking something and submits an online form or provides information over the phone or via a video call, companies that offer a price within seconds are likely to secure the customer's business. In this scenario, the customer's desired outcome of completing the form is swiftly receiving a quote.

Many companies stick to their established process, routing the inquiry to the suitable individual based on their geographical rules; meanwhile, the customer gathers quotes and interacts with competitors. When the appropriate individual contacts the customer, they may have already committed to another company that met their expectation for a rapid quote. Businesses that gauge response time as a CPI often discover a direct correlation between this indicator and customer satisfaction.

Why adopting CPIs is essential

The more your company centres on outcomes important to your customers (CPIs), the better your business will fare in areas vital to your KPIs.

Distinguishing CPIs from KPIs

Two factors qualify a metric as a CPI. Firstly, it must be an outcome significant to the customers. Secondly, it should be measurable in increments that customers genuinely value.

Speed, convenience, informed assistance, choice diversity, and friendly service are benefits that most customers value, with additional factors depending on the context. Many presume that the Net Promoter Score (NPS) is a CPI. However, the NPS gauges a customer's willingness to recommend a company and its products or services, something of concern to companies, not customers. In essence, the NPS is another internal business KPI. Unlike CPIs, the NPS does not offer direct traceability to any customer-expected outcome or highlight areas where the company might be lacking.

CPIs can be utilised by any group directly or indirectly involving customers and are particularly effective in sales, product management, customer service, marketing, finance, and operations.

Examples of CPIs

  • Marketing: Tracking payment flexibility as a CPI, offering online selection and managing various payment plan options. The impact of the number and types of opportunities provided on customer acquisition and retention KPIs is monitored.
  • Sales: Monitoring the turnaround time of quotes, which impacts successful sales, as illustrated in the previous example.
  • Customer service: Gauging first-time resolution, measuring whether a customer's issue is resolved during the initial inquiry. This CPI affects customer retention and lifetime value KPIs.

These aren't metrics that companies traditionally track, but they're crucial to their customers. By focusing on what's important to the customers, businesses can better discern which actions to prioritise to enhance customer outcomes, directly influencing their business performance.

When employees are assessed on – and compensated for – their performance on KPIs, they naturally strive for the maximum outcome. However, this can sometimes involve manipulating customers, a practice that customers do not favour. Conversely, when employees are assessed on CPIs, they're motivated to assist customers in achieving their desired outcomes. CPIs align employee and customer interests towards shared success.

Adoption of CPIs typically leads to more frequent and faster business transactions. Furthermore, customer sentiment, behaviour, and loyalty usually improve. The key is to foster an organisational focus on the customer's perspective and their anticipated outcomes.

Identifying your CPIs

The most effective approaches to identifying your company's customer CPIs include contextual inquiry or ethnographic research.

Connecting CPIs to KPIs 

After defining your CPIs, it's crucial to measure them and determine the potential impact each CPI might have on your KPIs. To affirm or refute the CPI-KPI relationships, conducting managed experiments is essential. Once relationships between specific CPIs and KPIs are established, teams and individuals should be held accountable for the CPIs. Consequently, employees will manage the outcomes significant to customers, leading to company growth.

Interestingly, in an era where numerous companies assert their customer-centric, customer-first, or customer-obsessed philosophies, the majority solely concentrate on their company-centric metrics.

Should you and your company choose to transition towards adopting CPIs, and thereby a customer-centric culture and the practices CPIs foster, you will progressively outperform your competitors and enhance your customer satisfaction.

Download the ebook below to learn about the key reasons you should prioritise customer satisfaction today, and look at our in-depth customer satisfaction guide.

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Anders Björklund
Founder, CEO & Strategist since 2001. Anders provides thoughts and reflections about how to think about onlinification and digitalisation in B2B.
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