You can’t improve if you don’t measure.
In most areas of a business, measuring KPIs is crucial to understanding what’s working and what isn’t. Initiatives come and go based on how well they perform against expectations.
However, customer experience initiatives seem to sometimes escape measurement. It’s not without reason. Sales figures are relatively cut-and-dried while things like customer feedback and satisfaction are highly qualitative. Nonetheless, if your company wants to create a better customer experience, you must designate and track customer experience metrics. If you don’t, how can you expect to improve?
That said, you will also need to understand what exactly it is that you should be measuring. Lucky for you, we’re going to introduce you to six essential customer experience metrics that you need to track if you want to take your customer experience strategy to the next level.
Why it’s important to measure customer experience
If we want to measure customer experience, we first need to understand what it is. The customer experience (CX) is the interaction between a company and its customers. This encompasses many different areas. The obvious one is customer service, particularly the points of direct contact between your customers and your sales, support, or marketing teams.
While this is one of the most notable and easy to identify areas of customer experience, it’s only a small part. Things like the customer journey, customer retention, customer satisfaction, and feedback also fall under the umbrella of CX.
So why does customer experience matter? Given poor customer experiences leads to unhappy customers, higher churn rates, and falling revenues, making sure that you’re constantly improving and optimizing your customer experience is extremely important. To improve, you first need to track.
Depending on the size of your company, you may have a dedicated customer experience team. In that case, that’s who should be monitoring these metrics. If you’re on the other side of the spectrum and don’t yet have anyone specialized in CX, the customer service team can easily step in to track the key CX metrics.
You can also use automated tools, like customer service chatbots, to help you out. Not only do they collect valuable feedback from customers, but they also enhance the customer experience and reduce your customer service team’s workload.
6 popular customer experience metrics you should track
Clearly, customer experience is important, and measuring it is equally crucial. But, what exactly should you be measuring? As we noted earlier, customer experience metrics can be somewhat qualitative. While we shouldn’t discount the qualitative insights (on the contrary, they’re extremely valuable), there are several key customer experience metrics that you can use in tandem to quantify customers’ experiences with your brand.
How to collect these metrics is up to you but the important thing is that you do collect them. There are many options out there. Chatbots are one tool that can help improve your customer experience and gather feedback at the same time. That said, there’s no single solution that will track everything, you’ll need to use a variety of tools to gather the data.
Regardless of how they’re collected, here are six customer experience metrics that you should be tracking:
Customer churn rate
The first metric you need to be tracking is the customer churn rate.
What is a churn rate? The churn rate is the rate at which customers stop working with or purchasing something from your business over a certain period of time. You calculate your churn rate by subtracting the number of customers at the end of a time period (for example, a quarter) from the number of customers at the start of that same period. Next, you divide the result by the number of customers at the start of the time period.
Tracking your churn rate is extremely important as it indicates how satisfied your customers are with your company and/or its product(s). A high churn rate is a sign that something is very wrong with your product, onboarding process, service, or a combination of the three.
Given that it can cost between five to 25 times more to acquire a new customer than to retain an existing one, an elevated churn rate means that each dollar of sales revenue you gain is going to cost you more (potentially at unprofitable levels). For companies trying to scale, this can be a death sentence.
With that in mind, tracking and reducing your churn rate is a business-critical task. By monitoring your churn rate, you can begin to understand whether or not there’s a problem. Most large SaaS companies experience between 5-7% annual churn rate while smaller enterprises or those targeting SMBs should have a churn rate closer to 5% a month.
If you find that your churn rate is above those levels, you need to take action. Understanding you have a churn problem is the first step to solving it. With this metric in hand, you can work with your sales and customer success teams to identify the root causes, making changes to the product, pricing, or onboarding process and measuring their impact.
Net promoter score (NPS)
The next important metric is the net promoter score (NPS). Your NPS is the measurement of customer loyalty, specifically how likely customers are to recommend your company or its product to another person.
Calculating NPS is relatively simple. You just ask customers to rate the likelihood that they would refer your product to a colleague, peer, or friend. Generally, you ask them to provide a rating on a scale of one to 10. You can do this through a variety of tools; emails, pop-ups, chatbots, and surveys. All can do a great job collecting this data.
When interpreting your NPS score, you need to understand what the different scores mean. Here is a basic visual breakdown:
- 0-6: 👎 (Detractor)
- 7-8: 🤷♀️ (Passive)
- 9-10: 👍 (Promoter)
Essentially, you’re going to want to see scores in the 9 to 10 range. Scores of six or below indicate customers aren’t super happy.
To find your overall NPS, you subtract the percentage of 👎 responses (0 to 6) from the percentage of 👍 responses (9 or 10). On average, an NPS below zero is considered okay while an NPS above zero is considered good.
Why is NPS important? Well, referrals are a powerful thing. Referrals are relatively cheap to acquire since satisfied customers are happy to share their positive experience – and more likely to convert – which makes sense given that they were asking for suggestions about solutions to a problem.
The last thing you want a prospect to hear is that your customers think that your product or service sucks. While you’ll never have 100% customer satisfaction, the happier your customers are, the easier it will be to acquire new ones.
Customer satisfaction score (CSAT)
Number three on the list of key CX metrics is the customer satisfaction score (CSAT). Unsurprisingly, a CSAT measures how satisfied your customers are. CSATs can be used in many ways but, most often, they’re used to gather insights on customers’ overall satisfaction with a certain product or service.
Usually, CSATs take the form of a question (for example, “How happy are you with X product?”) that customers respond to using a rating scale (a scale of 1 to 10, for instance). The rating scale uses a range from extremely unsatisfied (1) to extremely satisfied (10). To calculate your CSAT, take the number of satisfied customers (in this case, customers who gave you a rating of 8, 9, or 10) and divide that by the total number of responses.
Unlike NPS (which is about sharing satisfaction or dissatisfaction with others), CSAT is strictly concerned with how happy your customers are with you. Your CSAT will allow you to get the general temperature of where your relationship with your customers is at. If you see the score dropping, you’ll know there’s a problem. That said, one of the downsides of the CSAT is that while you can track drops in satisfaction, you won’t necessarily know why (that’s where surveys can help, but we’ll get to that in a minute).
Customer effort score (CES)
We’ve covered loyalty and satisfaction, now it’s time for the Customer Effort Score (CES). The CES is focused on ease of use. The idea that underpins this metric is that customers are more loyal to products or services that are easy to use.
CES surveys usually ask questions about how easy or difficult it is to interact with your company. The best place to gather CES responses is right after an interaction with your organization, whether that be post-purchase, post-onboarding, or post-agent interaction.
It makes sense – you want the experience to be top of mind. By asking customers how easy (or challenging) the process was, you’ll get a better idea of whether they’ll churn or return and what processes should be improved.
It’s important to note that CES is best when used in conjunction with other metrics. It’s possible that an otherwise happy customer had a single bad interaction and gave a low CES. However, when looking at that customer’s high NPS and CSAT scores, you’ll see that there isn’t a particularly high risk of churn.
Customer journey analytics
Customer journey analytics and the process of collecting them is a bit more complex than the previous metrics. There are two parts to this metric: the customer journey and the analytics. Let’s start by jumping into the customer journey itself.
The customer journey is a summation of a customer’s whole experience with your company. Starting with their first interaction and then including every interaction from that point forward, customer journeys map out all of your customers’ interactions as they move from prospects to customers (and sometimes to former customers).
The customer journey can be divided into five main stages: awareness, consideration, decision, retention, and advocacy. Each of these stages represents a customer’s intention of purchasing your product or service. In the awareness stage, prospective customers are aware they have a problem or a need and are researching to find information about how to solve or address it.
Next comes the consideration stage. In this stage, potential customers have done their initial research and are aware of some of the solutions out there. Now that they’ve found a smaller number of possible solutions, they’re going to do in-depth research, comparing product features and prices, reading reviews, and more. This is followed by the decision stage; this stage is relatively self-explanatory.
The customer has the information they need to choose and purchase a product. Assuming that they choose you and become a customer, they will enter the retention stage. During this stage, you will need to work to keep the customer happy by asking for feedback and addressing their complaints.
Last, but not least, is the advocacy stage. This stage is the hardest to achieve. Here, a customer becomes an advocate for your brand and actively refers others to you.
Now that we’ve outlined the customer journey, we’ll dive into the analytics side of things. Just looking at the different steps of the customer journey, it’s clear that numerous analytics platforms will be needed to get a holistic picture.
Many interactions during the customer journey happen on different platforms and are influenced by real-world and online research. Customer journey analytics pull together these different variables to create a measurable set of metrics that be used to identify pain points during the process.
Mapping your customer journey is key to helping bring more customers further down the sales funnel. These analytics allow you to find and resolve pain points at different parts of the journey. As the customers’ experiences become more and more seamless, you may start to see improvement in your sales funnel, customer retention, and referrals rates.
Customer feedback via surveys
While hardly a revelation, customer feedback surveys are still a powerful tool to improve the customer experience. Yes, they can be a bit qualitative and that’s exactly why they’re so valuable. Many of the other metrics we’ve discussed above can give you indications of customer feelings (which is important) but none of them allow customers to share the “why” behind their rating.
Traditional surveys provide the perfect mix of qualitative and quantitative. Let people choose a numerical rating and then explain why. While it’s true that it takes longer to review, the feedback found in the responses can give you actionable insights that you’d be hard-pressed to pull from quantitative data.
Survey comments can help you identify CX issues that you didn’t even realize exist while also providing you with ideas on how to improve your product, sales processes, and customer support strategies.
There are countless ways to gather customer feedback through surveys. In many cases, you can collect the metrics mentioned earlier in tandem with qualitative surveys. For example, you can ask a customer to explain why they chose a certain NPS score or what was challenging about a process after a CES submission. By combining qualitative and quantitative feedback, you can get a more complete understanding of what’s working and what isn’t.
To get better, you need to measure
Tracking customer experience metrics is important. Without it, you’ll never improve. The first step is to make sure you’re tracking the right customer experience metrics.
In case you scrolled straight to the conclusion, these six metrics are an excellent place to start:
- The customer churn rate gives you an idea if there are serious problems with your customer experience
- NPS lets you monitor how enthusiastic customers are about you and your product or service
- CSAT helps you track overall customer satisfaction with your service or product
- CES gives you insights on how easy (or not) it is to interact with your company
- Customer journey analytics allow you to identify customer experience pain points that prevent prospects from becoming customers
- Customer feedback surveys tie it all together by allowing customers to express qualitative feedback
Now that you know what to measure, the next step is to understand how to do it. Implementing the tools need to gather the data is a team effort. You’ll need to involve stakeholders from sales, marketing, customer success, and IT to create the optimal system for your business.
The good news is that there are plenty of tools and platforms to choose from. You don’t need a huge budget to start collecting and tracking customer experience data. Chatbots can work as virtual assistants and feedback gathers, website analytics platforms let you map the customer journey, and email-based survey tools allow you to send short quantitative or qualitative questionnaires to customers.
In the end, there are few things more important than customer experience. A great customer experience can lead to less churn, reduced acquisition costs, and more satisfied customers. To get started, you need to understand what’s going right and what’s not. By tracking these customer experience metrics, you can take the first step to becoming a more customer-centric organization.
While improving the customer experience isn’t without its costs (both in terms of time and money), the potential benefits of such an investment are enormous. With great experiences becoming an increasingly important buying criterion for customers around the world, the real question is can you afford not to?