Maintaining a top-notch customer experience for the potential audience and existing consumers is a backbreaker task. You have to cater best experiences constantly so that you do not lose your customers to your competition.
“The bottom line is to arrive at those critical metrics that you believe define the customer experience and have data that enables real-time monitoring of those metrics/KPIs. And this monitoring must be done at the on-ground team level but equally importantly at the senior-most management level,” says V S Sudhakar, Co-founder at BigBasket in Clootrack's 102 CX Expert report.
Keeping track of customer experience metrics is one of the most effective ways to monitor your CX program and keep customers happy. But, before that, you should have a basic knowledge of CX metrics.
So, let's dive into the details!
What is a Customer Experience Metric?
Customer experience metrics are a set of measurements used to evaluate the quality of the customer experience that your company provides. These metrics help your organization understand how customers interact with your brand, products, and services.
The goal of customer experience metrics is to provide valuable insights into the customer experience and to help you make data-driven decisions to enhance your customer experience and drive customer satisfaction, loyalty, and growth. These metrics provide a comprehensive view of the customer experience, assisting you in comprehending how well you meet customer needs and expectations.
Definition of Customer Experience Metrics
Freshworks:- “Customer experience metrics are standards against which you can measure and assess several factors that add to your customer experience.”
Hotjar:- “Customer experience metrics measure how easy, enjoyable, and useful customers find their experience with your business across the entire customer journey.”
What is the Purpose of Customer Experience Metrics?
CX metrics reveal enough about your customer-related performances. With the metric numbers, you can easily pull off your customer experience strategy successfully, increasing the count of satisfied customers.
Here are the top 5 reasons why you need to leverage the outcomes of CX metrics without fail:-
1) To Identify Areas for Improvement
CX metrics help you to understand customer perception of products, services, and the overall customer experience you offer. With metrics, you can effortlessly identify areas where improvements can be made, such as processes causing delays or problems in the customer journey.
Also, by continually monitoring the metrics, you can track your progress in iterations, ensuring that your customers receive the best possible experience. For instance, if customer satisfaction is low in a particular area, you can focus your team efforts on improving that area first to address the issue quickly and continue that to enhance the end-to-end customer experience for better outcomes.
2) To Provide a Single View of the Customer
By viewing metric numbers obtained from different customer touchpoints, you get a holistic understanding of the customer’s interactions with your brand. You can identify patterns, trends, and areas where you can improve the customer experience. For example, if a customer has a positive experience when they call the support center but a negative experience when they use the company’s website. In such cases, CX metrics can help you pinpoint the problem, and further you can work to fix the issue.
A single view of the customer also helps you personalize customer interactions. By having a complete picture of these interactions, you can unite brand, marketing, and customer experience and tailor support responses and product offerings to meet the specific needs and preferences of the customers.
3) To Drive Business Growth
By measuring and analyzing the customer experience with metrics, you can identify opportunities to upscale your business with new products, services, and processes, which can ultimately bring exponential business growth. To demonstrate, if customer feedback indicates a high degree of satisfaction with a particular aspect of a product, a company can use that information to roll out variations of that product, leading to increased customer retention and sales.
Other than that, if you know which experiences are most likely to lead to repeat purchases and positive word-of-mouth recommendations, you can prioritize those experiences and double down on providing them to customers. This, in turn, can drive long-term business growth and success.
4) To Compete Effectively
By providing valuable data and insights into the customer experience, these metrics enable you to identify strengths and weaknesses in your customer service and product offerings by aiding your competitive analysis process. For example, by using metrics such as Net Promoter Score (NPS) or Customer Satisfaction (CSAT), companies can benchmark their customer experience against their competitors, helping them understand where they stand and where they need to improve.
By tailoring unique customer experiences, you can create a memorable moment that sets you apart from the competition. Additionally, metrics such as customer feedback and sentiment analysis can provide valuable insights into customer opinions and preferences, which you can utilize to inform product and service offerings and marketing strategies.
5) To Make Informed Decisions
CX metrics provide a way to measure and quantify the effectiveness of customer service, product offerings, and customer views about your brand. By analyzing data and insights gathered through customer experience metrics, you can prioritize initiatives that enhance the customer experience framework.
Making informed decisions based on metrics can help you build strong relationships with your customers, leading to an increase in the number of loyal customers and sustainable organizational growth. Additionally, providing a superior customer experience can result in repeat business, which increases sales numbers.
What is the Importance of Customer Experience Metrics?
CX metrics provide valuable insights into the customer journey, from initial contact to post-purchase evaluation, and help you understand what is working well and where improvements are needed.
Here are 7 ways how the use of CX metrics have a significant impact on a company's bottom line:-
1) Improved Customer Satisfaction
By tracking customer satisfaction metrics, you gain insights into what the customers prefer, and further you can use those to make changes to meet customer expectations.
Working on CX metrics help you uplift customer satisfaction which is good for brand reputation, leading to increased credibility and more business opportunities.
Satisfied customers are more likely to recommend a company's products or services to others, leading to organic growth and increased revenue. Metrics assist you in reducing customer churn and increasing revenue stability.
2) Increased Customer Loyalty
- You can measure customer experience and develop customer-centric processes with CX metrics outcomes, leading to increased customer loyalty and positive customer feedback.
- With CX metrics, you are less likely to lose customers to competitors, leading to increased retention rates.
- Revamping strategies based on metrics help you to maintain a better reputation in your industry, which can result in a positive brand image and increased credibility.
3) Better Business Performance
- With CX metrics, you can ensure that your efforts to measure and improve customer experience are focused, effective, and deliver the desired results.
- CX metrics help you focus on customer experience and gain a competitive advantage, which can result in increased market share and improved business performance.
- You can identify areas where you can improve the CX governance to optimize business performance while reducing costs. This can lead to improved efficiency and cost savings over time.
4) Competitive Advantage
- Happy customers are more likely to recommend a company to their friends and family, which can drive new business and provide you an advantage over the competitors by constantly working on CX metrics outputs.
- Measuring CX through metrics and optimizing procedures help you understand what sets you apart from your competitors and how you can differentiate yourself in the marketplace.
- By consistently delivering an appealing customer experience with the help of metric numbers, you can enhance your reputation and build a strong, positive brand image in front of your potential customers that differentiates you from the competition.
5) Improved Decision Making
- The data and insights obtained from customer experience metrics can inform strategic decisions and help companies allocate resources more effectively, leading to improved business performance and growth.
- CX metrics can inform product design and development, helping you to create products and services that better meet your stakeholders' expectations.
- Better Identification of Improvement Opportunities: By regularly tracking and analyzing customer experience metrics, your leaders can figure out enhancement areas where their decisions are critical and take action to enrich customer experiences.
6) Early Detection of Issues
- With early issue detection through metrics, you can bring necessary transformations to your CX management program, preventing unnecessary workload on your CX team.
- CX metrics help you quickly identify areas where customers are experiencing roadblocks, allowing you to make impactful decisions and address customer issues in a small time span.
- Addressing customer issues early with metrics often results in cost savings, as it is often easier and less expensive to resolve a problem before it becomes a major issue.
7) Increased Employee Satisfaction
- By measuring and improving customer experience, you can align employee actions with the overall goals and objectives of the business, leading to a more cohesive and motivated team.
- Estimating CX with metrics can foster better communication and collaboration between departments, as everyone works towards a common goal of employees acting towards delivering a great consumer experience.
- By regularly tracking and analyzing customer experience metrics, you can identify areas where employees may need additional training or support, leading to improved job performance and increased employee satisfaction.
What are Key Customer Experience Metrics?
Here are 11 key CX metrics that you must know and track to deliver exceptional customer experience to your consumers:-
1) Net Promoter Score (NPS)
Net Promoter Score (NPS) is a management tool used to measure customer satisfaction and loyalty towards your company or brand. It's based on the principle that every customer can be classified as a promoter, a passive customer, or a detractor based on their likelihood to recommend the company to others.
The formula for calculating NPS is as follows:
NPS Score = Percentage of Promoters – Percentage of Detractors
2) Customer Satisfaction (CSAT) Score
The customer Satisfaction (CSAT) Score is a measure of how satisfied customers are with your company's products or services. It is a widely used metric in customer service and support, as well as in market research conducted through a customer satisfaction survey.
The formula for calculating CSAT is as follows:
CSAT = (Number of Satisfied Customers / Total Number of Customer Responses) * 100
3) Customer Effort Score (CES)
Customer Effort Score (CES) is a metric used to measure the effort a customer has to put in to resolve a problem or complete a task with your company. It's a key indicator of customer experience, as it captures the level of ease or difficulty customers encounter when interacting with your company.
The formula for calculating CES is as follows:
CES = Sum of Customer Effort Rankings / Total Number of Customer Responses
4) Customer Retention Rate (CRR)
Customer Retention Rate (CRR) is a metric used to measure the percentage of customers who continue to do business with your company over a specified period of time. It is an important indicator of customer loyalty and the effectiveness of your company's customer retention efforts.
The formula for calculating CRR is as follows:
CRR = ((Number of Customers at the End of the Period - Number of New Customers in the Period) / Number of Customers at the Beginning of the Period) * 100
5) First Contact Resolution (FCR)
First Contact Resolution (FCR) is a metric used to measure the ability of a customer service or support team to resolve your customer's issue or address their inquiry on the first contact. It's an important indicator of the efficiency of your company's customer service process.
The formula for calculating FCR is as follows:
FCR = (Number of Issues Resolved on the First Contact / Total Number of Issues) * 100
6) Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) is a metric used to measure the total value a customer will bring to your business over their lifetime as a customer. It takes into account the revenue a customer is expected to generate for your brand, as well as the cost of serving them, to provide an estimate of the net profit a customer is expected to generate for the business.
The formula for calculating CLV can vary, but a commonly used formula is as follows:
CLV = (Average Revenue per Customer per Period) * (Number of Periods in a Customer's Lifetime) - (Average Cost to Serve per Customer per Period)
7) Customer Churn Rate (CCR)
Customer Churn Rate (CCR) is a metric used to measure the rate at which customers stop doing business with your company. At a particular time, high customer churn pinpoints the issues customers are facing.
The formula for calculating CCR is as follows:
CCR = (Number of Customers who Churn in a particular period / Total Number of Customers at Start of that Period) * 100
8) Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is a metric used to measure the cost your business incurs in acquiring a new customer. It is a critical indicator of the efficiency and effectiveness of your company's customer acquisition efforts and helps to determine the profitability of these efforts.
The formula for calculating CAC is as follows:
CAC = Total Cost of Sales and Marketing / Number of New Customers Acquired
9) Average Handle Time (AHT)
Average Handle Time (AHT) is a metric used to measure the average amount of time a customer service or support representative spends handling a customer's call, chat, or email. It indicates the efficiency of your customer service or support team and helps you to determine the productivity of customer service representatives.
The formula for calculating AHT is as follows:
AHT = Total Handling Time / Total Number of Interactions
10) Average Resolution Time (ART)
Average Resolution Time (ART) is a metric used to measure the average amount of time it takes for a customer service or support representative to resolve a customer's issue or answer their inquiry. It shows the quality of your company's customer service.
The formula for calculating ART is as follows:
ART = Total Resolution Time / Total Number of Interactions
11) Monthly Active Users (MAU)
Monthly Active Users (MAU) is a metric used to measure the number of unique users who have engaged with your product or service over a given time period, typically a month. It showcases the growth and engagement of a product or service and helps you to determine the size of the user base.
The formula for calculating MAU is straightforward:
MAU = Total Number of Unique Users in a Month
Sources to Collect Data for Customer Experience Metrics
Here are 7 sources to collect data from to get the output of key metrics of CX:-
Surveys that are widely used as sources for collecting data for CX metrics can be administered in various formats, including online, in-person, or by phone. It can be customized to gather specific information from a large number of customers, providing a representative sample of the customer base.
2) Customer Feedback Forms
Customer feedback forms can be set up on your organization's website, in-store, or as part of an online customer service portal and can be used for gathering real-time customer feedback. They are convenient for customers as they can provide feedback at any time from any location.
3) Website Analytics
Website analytics track and collect data about user behavior on a website, including page views, click-through rates, bounce rates, and time on site, among other metrics. They are often free or low-cost, making them an accessible and cost-effective way to gather CX data.
4) Customer Interaction and Transaction Data
Customer interaction and transaction data include information about the customer's interactions with your organization, such as phone calls, chat sessions, purchase history returns, and other dealings occurring at several touchpoints. It provides a comprehensive understanding of the CX, including areas where customers face extreme difficulties.
5) Social Media Listening
Social media listening involves monitoring social media platforms for mentions of a brand, product, or service and gathering information about customer opinions, feedback, and experiences. It allows you to gather feedback and insights from a wider audience, including customers who may not interact directly with the organization.
6) Sales Data
Sales data includes information about customer purchases, including product and service sales, order history, and payment information. It provides a wealth of customer data, helping you better manage inventory and ensure that products are in stock when customers need them.
7) Product Usage Data
Product usage data includes information about how customers use a product or service, including usage patterns, frequency, and time spent. By analyzing product usage data, you can comprehend your target audience and use this information to obtain CX numbers.
Best Practices for Measuring Customer Experience Through Metrics
Positive customer experiences lead to increased positive reviews, while poor experiences can drive customers away and harm the company's reputation. You can identify a customer's issue and eradicate the friction points by consistently using metrics to measure CX.
Here are 3 best practices that you must incorporate for measuring customer experience through metrics:-
1) Set Clear Goals and Objectives
Without clear goals and objectives, it can be challenging to determine metrics to track and changes to make. To set detailed plans, you should start by identifying the key drivers of customer satisfaction. And this might include factors such as response time, product quality, customer service, and overall value proposition.
Once these drivers are identified, you can set specific and measurable goals for each, such as reducing response time by 25% or improving product quality ratings by 15%. These goals should be regularly reviewed and updated as necessary to ensure they remain relevant and aligned with the needs of your business and customers.
2) Regularly Collect and Analyze Data
You have to establish a system for collecting and tracking customer experience data on an ongoing basis, such as through surveys, feedback forms, or other methods to get the correct CX metric output. Without regular data collection, you may miss important trends or changes in the customer experience that could impact customer sentiment directly.
Once data has been collected, it is critical to analyze it to identify consumer behavior patterns, trends, and areas for improvement regularly. You can track progress over time and get a valuable source of information for decision-making, enabling you to make data-driven improvements to the CX programs.
3) Engage Customers in the Processes
You must seek out and consider customer feedback, opinions, and suggestions in the measurement process continuously and actively. By doing so, you gain valuable insight into the customer experience from the customer's perspective and ensure that your endeavors improve and align with what customers ask and expect from your brand.
Regular surveys, feedback forms, focus groups, customer advisory boards, and many such sources can be established to gain customer feedback and opinions on various aspects, such as product quality, customer service, and overall desire fulfillment. By engaging customers in the process, you can build a stronger influence on customers, and demonstrate your commitment to delivering a best-in-class customer experience.
Final Thoughts on Customer Experience Metrics
In conclusion, customer experience metrics play a vital role in helping you comprehend and improve the customer experience. They provide valuable data and insights into customer behavior, preferences, and opinions, enabling you to make informed decisions about the customer experience. By using metrics such as Net Promoter Score (NPS), Customer Satisfaction (CSAT), and Customer Effort Score (CES), you can measure customer loyalty, happiness, and effort and identify areas for improvement.
Additionally, by tailoring the customer experience to meet the specific needs of individual customers, you can differentiate the offerings from those of your competitors and gain a competitive advantage in your niche industry. Ultimately, by utilizing customer experience metrics, you build strong, lasting relationships with your customers and achieve tremendous business growth.
Related Read:- Customer Experience Metrics To Track CX Impact and Drive Continuous Improvements.