6 Key customer satisfaction metrics to consider
Covid thrust the world into a hitherto unknown zone and the world grappled to first stay afloat, then survive and stay alert. Two years running, now the new normal is to thrive despite volatility, uncertainty, complexity, and ambiguity (VUCA) looming. As businesses – small, large and every size in-between – ready themselves to face new challenges by the minute, it becomes imperative that the tools, technology, and outlook for businesses remain sharp and relevant.
Customers are the life-line of businesses and the metrics to measure their satisfaction need more focus than ever before. We have come a long way from the first online customer to the billion transactions that happen every minute. The customer surveys employed still remain simple and straightforward to fill, however, what has become complex is the science used to derive meaningful insights, about customer satisfaction, from the humongous data collected.
This is where the most useful metrics on customer satisfaction play a role. Let us take a look at some of them.
- Net Promoter Score (NPS) If organisations were to pick only one metric to measure overall customer sentiment, it would be the NPS. It readily provides the pulse of customer satisfaction. While NPSs would still rank high among the simplest yet useful data to capture on customer loyalty, advanced Net Promoter Scores arm us with additional data on the reasoning behind NPS and also provides customers a window to pen their comments on products/services. The creator of NPS, Fred Reicheld, introduced the metric ‘earned growth rate’ to calculate the actual growth in revenue due to customer referrals and retention rate.
- Customer Satisfaction The business impact of increasing Customer satisfaction (CSAT) is well documented. In fact, it has long been an important Key Performance Indicator (KPI) of businesses. CSAT surveys need to be agile and reveal both positive customer sentiments and actionable insights to deal with customer dissatisfaction, on an ongoing basis. CSAT data should be able to point out the drivers of customer satisfaction and the triggers of dissatisfaction.
- Customer Performance Indicators (CPI) Research from top business schools lays stress on the efficacy of customer-centric metrics on companies as opposed to company-centric metrics on customers. One example to drive home the point is one from the insurance industry. An online customer looking to buy insurance urgently would buy from a company that shares his urgency and quickly provides the best quote and eases the process of payment. Other companies delaying due to lengthy internal processes may lose out on this customer despite being compliant on company policies. The CPI here was the urgency (read time) of the customer which was shared by the first company and promptly delivered.
- Customer Effort Score (CES) This is a Customer Experience (CX) metric which determines the ease of customer interaction and/or resolution of request. Gartner research says “96% customers with a high-effort service interaction become more disloyal compared to just 9% who have a low-effort service experience”. By monitoring this single metric, companies could make positive changes to overall customer experience, increase NPS and repurchase rates.
- Customer Reviews Reviews from actual customers have gone on to become one of the most powerful, visible and trackable metrics in the digital world. Word travels fast across multi-platforms and can build or break brands. Reviews directly influence brand/product image and sales. Influencers are gaining ground on social media platforms as key players in digital marketing. So tools to scan, monitor and study customer reviews can point to almost real-time market sentiment on product/services.
- Customer Churn Rate This points to the percentage of customers lost by the organisation in a specific time frame (monthly/quarterly/annual).Even though some percent of customer attrition is natural, it needs to be monitored and kept in check. This metric can point to any micro trends leading to the churn. One example is the higher churn rate due to the price rise of a service or product. The churn rate analysis can be used to predict loss in customer base and relay signals to the concerned teams for corrective measures.
Where does Business Process Automation (BPA) fit into the scheme of things here? The right tools* are essential for measuring and processing customer satisfaction metrics. Automated tools, customised for organisations, can help in collating, decoding and deriving insights from the huge data. It could pinpoint areas of improvement and flag areas of concern. Customer retention strategies do not generally elicit the same zing as customer acquisition ideas, though research points out that customer acquisition cost is far more than customer retention cost. Organisations should move from reactive to near real-time to predictive analytics with regards to customer satisfaction.
*For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.