Top 5 metrics to measure success in customer experience
Customer experience (CX) is key to a brand’s survival and growth, and companies devote enormous time and effort to CX strategies. But how do you know if a strategy is delivering results? That’s where CX metrics have become essential tools to gauge how satisfied or unhappy customers are with a brand. Let’s look at some widely used metrics and the type of information they yield, to help you polish your CX.
Net Promoter Score (NPS)
Arguably the most crucial metric you can adopt is the Net Promoter Score (NPS). NPS, in essence, measures how loyal existing customers are to your organisation and whether they will recommend your product or service to their friends and co-workers.
To collect this data, companies send out a simple, one-question survey seeking customers’ feedback on their buying experience. To complete the survey, customers must pick a number value between 0 and 10. Based on their response, customers get classified into three groups:
Group 1: Detractors (0-6)
These are dissatisfied customers who could potentially criticise your company, either through social media, word-of-mouth, or other means.
Group 2: Passive (7-8)
Customers who assign a score within this range are more or less satisfied but are also open to switching to competing brands.
Group 3: Promoters (9-10)
This group are your most loyal customers — people who are extremely satisfied and will refer your brand to others.
When you subtract the percentage of detractors from the percentage of promoters, you arrive at your NPS.
Ideally, send an NPS survey to your new customers within a month of their purchase and repeat the survey every quarter to monitor satisfaction levels.
Customer Satisfaction (CSAT)
Customer satisfaction is also measured through surveys consisting of several questions. Customers rate their experience with a company’s product or service on a scale of 1-5 or 10. To arrive at your CSAT, you must compute the average score of these responses.
Start collecting this data by delivering an online questionnaire immediately after a customer buy from your website or calls your company. Your questions should be simple and direct, for example, “How satisfied are you with our product/service?”
Customer Churn Rate
This simple metric captures data on customers who have moved away from your company. Such customers include people who:
- Stopped buying from your company
- Unsubscribed from your promotional emails
- Stopped renewing subscriptions.
To use this metric, first select a time against which you want to measure your churn percentage and then apply this simple formula:
(Customers churned ÷ Total customers acquired) x 100
While there will always be customers who abandon you for any number of reasons, it is essential to know why they left you. This metric can help you. To derive the maximum advantage from it, measure the churn rate at least quarterly or annually. The benefits of this exercise are many:
- You will know how to reduce the churn rate, going ahead.
- Your CX teams can strategize more effectively when they get advance information.
- When you know if your churn rate is increasing or decreasing, you will be able to design appropriate customer marketing plans and plan ways to improve retention rates.
- This metric is especially important for companies who work on a subscription model because it is more cost-effective for them to retain existing customers than acquire new ones.
Queries and complaints
The questions and complaints that your customer support team handles every day are a treasure trove of useful information. Monitored consistently, the most typical and frequent queries and complaints can shine the light on pain points in the customer experience.
To do this, you can initiate multiple ways your customers can contact you. Some suggestions:
- Establish a call centre management system
- Keep a close watch on social media
- Create a response team to address customer emails
If these communication systems consistently throw up the same complaints, that is a metric which reveals a cause for concern. When you know you have a problem, it is easier to look for solutions.
How deeply are your customers engaged with your social media marketing efforts? Do they like and share your posts? Monitor this aspect of your marketing to track sales and customer experience.
A 2018 study showed that 91 per cent of customers in the 18-34 age range place as much faith in online reviews as they do in personal references. By regularly monitoring online customer reviews on social media channels you get a broad idea of what buyers have experienced. You may also be able to communicate with them and resolve their concerns.
Go for the right metrics
Enormous amounts of data can be mined through various platforms, and it is easy to fall into a metrics rabbit hole. Don’t get tempted. Pick just a few metrics and learn how to use them effectively.
Also, measuring customer metrics is only half the battle won – the other half is knowing how to utilise the information they throw up to achieve desired outcomes. For this, it is necessary to understand the human factors that inform customer behaviour. Your CX team leaders should empathise with buyers and think about how the company can use the data from metrics to make product or service improvements. For instance, if data reveals a higher than the minimum level of complaints about a product, they should analyse and fix the customer pain points to change that opinion. Analysing metrics appropriately to enhance customer experience will result in higher revenue from reduced churn rates, increased referrals, and better customer retention.
*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.