What is a CX Balanced Scorecard?

Starting with the basics, a CX balanced scorecard is a tool used to measure and track progress against specific customer experience objectives. It provides a snapshot of key performance indicators (KPIs) in different areas of the customer journey such as acquisition, engagement, retention, and advocacy. By tracking these KPIs over time, you can identify trends and areas for improvement in your customer experience operations.

Why is a CX Balanced Scorecard useful?

Let's review the four major benefits you can expect from a CX balanced scorecard.

1. It Helps You Understand Your Customers

   The first reason why a CX balanced scorecard is useful is that it helps you understand your customers. This scorecard provides a framework for collecting and analyzing customer feedback. By understanding what your customers want and need, you can make changes to your business that will improve their experience, reduce friction in your ordering process, and thus increase revenue and profit margins.

2. It Helps You Measure Progress

   The second reason why a CX balanced scorecard is useful is that it helps you measure progress toward your CX operations' goals. The scorecard allows you to track the progress of your customer experience initiatives over time. This is important because it allows you to see whether or not your efforts are making a difference, especially in key areas where you know you need to improve. Progress can be measured via objective KPIs like customer satisfaction, customer effort level required in your sales or checkout process, and operational costs.

3. Helps You Make Comparisons

   The third reason why a CX balanced scorecard is useful is that it can help you make comparisons. A balanced scorecard allows you to compare your customer experience to that of other businesses. This is important because it can help you benchmark your performance and identify areas where you need to improve.

4. Helps You Allocate Resources

   The fourth reason why a CX balanced scorecard is useful is that it helps you allocate your limited headcount and technology resources. The balanced scorecard provides a framework for allocating resources to customer experience initiatives. This is important because it ensures that your resources are being used effectively and efficiently.

At Rush Order, we believe the CX balanced scorecard is the ultimate tool for continuous improvement by helping you track progress over time and identify areas for further investment.

Use this guide to create your own CX balanced scorecard. And, better yet, there's no need to start from scratch. Download Rush Order's CX balanced scorecard template to easily get started.

How to Create a CX Balanced Scorecard

Follow these steps to create your own CX balanced scorecard. We recommend using these prompts for group discussion with the key stakeholders on your team. Stakeholders may include CX / CS, sales, marketing, your CEO or COO, and finance or accounting. Be sure to document or whiteboard your answers and ensure your entire team is aligned. Without explicit buy-in from your team, the scorecard won't be nearly as effective as it could be.

And, don't forget to download Rush Order's template to get started quickly.

1. Define your objectives: What do you want to achieve with your customer support operations? Be specific and realistic in setting your goals. Are you optimizing for customer experience or costs? Or both? This decision will help inform the relative weighting of your data inputs.

2. Select KPIs: Choose the right KPIs that align with your objectives and that you can realistically track on an ongoing basis. For example, Rush Order's downloadable CX balanced scorecard template includes Customer Effort Score (CES). If you don't have a way to reliably gather and track CES data, we recommend weighting this particular metric at 0%, rather than deleting it entirely. This reminds everyone that CES is another KPI that can and probably should be tracked in the future.

3. Set targets: For each KPI, establish target values that represent your desired improvement over current performance levels. It's OK to be aggressive, but be realistic. Improvements are often incremental, so consider setting monthly or quarterly goals.

4. Collect data: Begin tracking the KPIs on your scorecard on a regular basis. Data can be collected manually or through automated tools such as customer surveys or call center analytics software. Of course, help desk tools like Zendesk, Freshdesk, Intercom, Kustomer, etc. etc. can help aggregate and report lots of great data points as well.

5. Analyze results: Review the data on your scorecard periodically as a team to identify trends and areas for improvement. Make changes to your operations as needed to improve performance against the KPIs on your scorecard.

6. Adjust your targets: Your business will hopefully grow and change over time. Don't be afraid to change metric weighting as you proceed, so long as you have good reason to do so and your broader team is onboard with these changes.

7. Repeat: Continue tracking KPIs and making improvements on an ongoing basis to ensure your customer support operations are continuously getting better.

CX Balanced Scorecard Biggest Mistakes

There are a handful of common traps with these scorecards we've seen over the years that we often work with our clients to correct.

1. Not Defining the Customer Journey

   The first mistake e-commerce brands make when creating a customer experience balanced scorecard is not defining the customer journey. The customer journey is the path that a customer takes from becoming aware of a company to becoming a loyal customer. Without a clear understanding of the customer journey, it will be difficult to create metrics that accurately reflect the customer experience or measure things like Customer Effort Score (CES).

2. Focusing on the Wrong Metrics

   The second mistake that companies make is focusing on the wrong metrics. There are a variety of metrics that can be used to measure the customer experience, but not all of them are equally important. For example, satisfaction surveys are often used to measure the customer experience, but they only provide a snapshot of how customers feel at a single point in time. A more effective metric would be one that captures how customers feel at multiple points throughout their journey with a company, including pre and post sale.

3. Not Aligning Metrics with Business Goals

   The third mistake that companies make is not properly aligning metrics with business goals. The metrics chosen for a customer experience balanced scorecard should be aligned with the overall business goals of the company. For example, if a company’s goal is to increase revenue, then metrics focused on agents' ability to improve conversion rates and average order values would be more important than First Contact Resolution (FCR) or similar CSAT metrics.

4. Introducing Too Much Complexity

   A good CX balanced scorecard should have somewhere around four to six performance metrics. The record for the most we have ever seen was an e-commerce brand with 12 metrics. That's too much. Keep it simple. A concise list of metrics is more easily understood by all your stakeholders and it's easier to make decisions from. We've found that scorecards with greater than five or six metrics can be difficult to manage and difficult to interpret. They are unwieldy and unlikely to help you make the gains you desire in your customer experience operation.

5. Not Tracking Progress Over Time

   The fifth and final mistake ecommerce brands often make is not tracking scorecard progress over time. It’s important to track how the metrics on a customer experience balanced scorecard change over time so that you can see if your efforts are having an impact. Additionally, tracking progress over time will help you to identify trends and pinpoint areas where improvements need to be made. Lack of alignment or buy-in from your company's key stakeholders is one of the quickest ways for CX balanced scorecard initiatives to fizzle out. If you don't have everyone's honest agreement on this scorecard initiative, you won't be able to sustain it.

CX Scorecard Parting Thoughts

Creating and managing a CX balanced scorecard is an important part of evaluating and improving your customer support team's performance. By tracking the right metrics and implementing improvements, you can make data-driven decisions that will lead to happier customers and improved business results.

Lastly, if you have not already done so, download Rush Order's CX balanced scorecard template and join our newsletter for more upcoming tips, tricks and best practices for CX design, implementation, and ongoing management.

Need further help implementing the tools or metrics associated with the CX balanced scorecard? Contact us now for a free consultation. No obligation. No pressure.