Customer Experience Metrics To Track CX Impact and Drive Continuous Improvements

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Pallavi Pavithran

August 10, 2022

"Revenue, growth, and similar Key Performance Indicators (KPIs) measure how customers are performing for the company. But organizations that wish to be customer-centric (and maximize growth) must also measure how the company is performing for its customers." - Gene Cornfield.

Not only the customer experience but any business activity is incomplete without measuring its results. Without measuring, how will you know how your million-dollar campaigns perform?

Hence, it’s ideal for measuring results in the beginning and after getting results to check if you could achieve the desired outcome. For that, Customer Experience Metrics are essential.

Now, what are customer experience metrics?

Customer experience metrics help to measure your customers' experience when using your product or service. The main goal of choosing a customer experience metric is to ensure your customers are happy and satisfied, establish a connection between your brand and customers and improve your brand advocacy.

The popular customer experience metrics are Net Promoter Score (NPS), Customer Satisfaction Score(CSAT), Customer Effort Score (CES), Customer Churn Rate, Customer Retention Rate, and Customer Lifetime Value (CLV).

Let's explore how to recognize the right metrics for your company and how to use them effectively.

Understand Which CX Metric Your Organization Requires

There is no one specific metric that fits in all organizations. Leaders must pick the right customer experience measurement solution for the organization depending on the domain, niche, and operations.

Many growing organizations use multiple metrics to measure customer experience activities. Large companies employ more than 50 metrics to measure CX activities alone. Choosing CX metrics should depend upon your organizational goals.

For example, imagine you are a robotic vacuum cleaner brand. You see an increase in return requests from some groups of customers. With the help of insights, you find that the return requests are mostly from customers aged 55+. Then you set a goal - 'increase customer satisfaction' and 'increase customer retention' to recover from this issue.

For that, you choose a metric CSAT (Customer Satisfaction Score) since you think it must be the right metric in this context. After measuring, you feel that your CSAT score is not reaching the benchmark, and you discuss it with the team and decide to improve the speed and quality of the vacuum cleaners since you think it will improve customer satisfaction. After fixing the issues and implementing the change, you again measured the goal with the CSAT survey and saw that you could not move the needle. The problem here is you have chosen the wrong metric.

Since more return requests come from customers who are 55+, it could be that they find it hard to use the robotic vacuum cleaner, which is relatively new for them, and they are less used to the new age technology appliances. In this case, your product quality might be good already, but some customers may find it hard to use with a lack of knowledge of using the products.

If you have chosen the Customer Effort Score (CES) metric instead of CSAT or in addition to CSAT, you could have fixed the issue by simplifying the features and buttons of your product that will make customers' lives easier.

Hence, use a combination of metrics or choose the right metrics based on your goals and customer insights.

4 Objectives That a Customer Experience Metric Should Accomplish

Always remember, it is about choosing the right metric to measure your CX performance, and it's not about trying to track and measure everything that is relevant as well as irrelevant. To check if the chosen metric is the right one, see if it accomplishes the following objectives -

1. Align With Your Organization's KPIs

Any single metric you use should be aligned with your core business KPIs. Otherwise, you will miss measuring the right things at the right time in the right way. Also, it will result in distorted results and taking irrelevant initiatives.

For example, assume that your KPI is to 'check how many times a customer needs to call a support executive to resolve an issue'. In this case, you can use complaint resolution rate, service satisfaction score, and employee engagement metrics to figure out how your customer support team performs and find measures to improve them in the future.

2. Scalable

Imagine, you have chosen a metric for measuring a customer experience activity or customer satisfaction. In that case, you should be able to use the same metric to measure the same activity after you made a change based on the previous measurement.

For example, if you have chosen Net Promoter Score to track how customers would recommend your brand to others, and if they gave you an NPS score of less than 5 out of 10, you need to make a change on your product or service that can increase the score greater than 7. After 3 months of making the changes, you should be able to measure customer advocacy with the same NPS survey.

3. Information for Decision Making

An ideal metric should contribute insight or information for making business decisions. Unless there is no contribution, it will remain as a metric with no purpose. For example, suppose you choose a metric ‘cart abandonment rate’ to check the rate of customers who abandon products on their cart and do not proceed for checkout in your online store. In that case, it should contribute to decision-making around the checkout process, availability of payment methods on the checkout page, and pricing of products to reduce customer churn.

4. Agile And Adaptable

When you choose a metric, it should not be for one-time implementation. It must be compatible with changing business needs and the environment. When you increase your products, release new versions and introduce new product categories, etc., the metrics should be able to work with those changes.

For example, if you choose a metric that will run only on your current software version, there is no use for it in the future. Hence, choose adaptable and agile metrics that work in any business situation.

Top 5 Customer Experience Metrics

Even though there will be multiple customer experience metrics a company will adopt, basically all metrics will come under any of the following categories.

1. Customer Happiness

Metrics under this category focus on measuring customer satisfaction, product satisfaction, speed of delivery, the total number of calls to resolve an issue, etc., by sending direct survey questions. Customer Satisfaction Score (CSAT), Would You Miss Us? (WYMAN), Customer Effort Score (CES), first call resolution rate, etc., will come under this category.

2. Customer Retention and Customer Loyalty Metrics

Metrics under this category focus on how many customers visited the online or physical stores, how many customers purchased and remained as customers, how many churn, and their purchase duration. Measuring customer retention and customer loyalty will help to understand how many loyal customers you have and the customer churn rate in the past and present. Metrics that measure purchase frequency, average order size, frequency of interactions, repeated orders, etc. will come under this.

3. Brand Endorsement

These metrics measure how likely customers will recommend or advocate your product or brand. Net Promoter Score (NPS) is the most popular metric that explicitly measures this. Other metrics include brand perception tracking, price sensitivity, trust rating, frequency in participating events, etc. are examples of metrics used to measure brand advocacy or endorsements.

4. Product and Service Quality

There is no point in offering different experiences to delight customers unless you don't offer good quality products and services. If you ensure you provide good quality products and services, half of your customer experience initiative is already done! Metrics to measure pricing accuracy, product defect rates, on-time and accurate delivery, etc., will come under this category.

5. Employee Satisfaction

Like customer satisfaction, employee satisfaction is also vital for delivering a positive customer experience since employees are the ones who need to work on customer experience initiatives and interact with customers directly. Metrics of employee absenteeism, employee satisfaction, job understanding, etc., will come under this category.

Ways to Ensure your Customer Experience Metrics Deliver Values to Your Business

Many businesses invest a lot in customer experience metrics which focus only on measuring and do not show any impact on business outcomes. Any metric you choose to measure your customer satisfaction, experience, or effort with your brand should be capable of giving insights about what customers miss or are happy about in the experience you offer.

Do you think a company can make informed decisions with some random numbers and without understanding the root causes of specific metric scores? No, right?

Let us check three ways you can ensure the metrics you choose to measure your customer experience deliver excellent results and good value in decision making.

1. Creating an Integrated Top-Line CX Metric

In a company, if multiple customer experience metrics measure the same aspect at different points, it’s hard to find the relationship between two metric data to get a holistic customer experience picture.

For example, in an apparel brand, the customer service leaders may place a customer satisfaction metric in the post-purchase moment, and a marketing leader may put another on all touchpoints in the customer journey, including social media, ad campaigns, each website visit, etc. The first one was placed by the customer service team at a granular level and will appear only after a purchase is made. The second covers many customer satisfaction data since it covers many audiences. But, in this case, both customer service and marketing leaders will struggle to make connections and make holistic customer experience decisions since these surveys are shattered in multiple places.

So, it will be better if a company brainstorm and invest in building or buying a top-line metric that connects with multiple customer experience metrics placed on different levels of the customer journey. And the survey data collected at a granular level should flow back to the primary top-line metric that gives a holistic idea for the board to get a complete picture of customer experience.

As per this example, leaders can see the total number of satisfied customers and the level of their satisfaction in multiple touch points and phases in the customer journey and figure out what needs improvement and what affects customer satisfaction.

2. Choose a Metric that Can Contribute to ROI

There are many more customer experience metrics in the industry with different aspects. But choosing the one that can contribute to your business outcome is more important than adopting a set of inefficient metrics that wastes your time.

One of the most important aspects of a metric should be its ability to gather, analyze, and help companies in preparing actionable from customer feedback. And leaders should be able to apply other business insights to these metric values to create a complete picture of customer experience.

Another quality of a metric should be flexibility. It must be flexible enough to make changes from the company side. For example, if your company purchases a metric system that doesn’t allow you to customize the survey question, it will affect gathering the correct answer from your customers.

Also, the same metric you have chosen should be scalable enough to work in different business environments. If your company has multiple branches and works in various countries and regions, you should be able to use the same metric to gather data from multiple sources in the same pattern.

When considering the budget side, there is a tendency for leaders to go with low-budget metrics, but it will be a waste of money if you spend less on a metric that doesn’t contribute to any business outcome. Hence invest in the efficient metric, even if it’s more than your budget since quality matters more.

3. Assign Leaders to Manage the Metrics in the Cross-Functional Level

Using the right metrics is not solely required for customer success and customer experience initiatives. It requires a potential workforce who can use the metrics at different points and manage the data flow to picture the holistic customer experience.

Also, it will be good if all employees are aware of what metrics the company uses, how each one can provide the result, and what point of data every metric contributes. Leaders can even conduct whiteboard sessions on this frequently, discuss the metric scores, and brainstorm with employees from different departments to find the connection between the measured values and take the right actions for the future.

Your company can also develop a dashboard where all metrics and their values can be represented in a single platform. Employees can look at the dashboard to understand where the company is and what can be done to improve.

Only the right metric can deliver the good values that can help business growth. Moreover, human resources should be able to manage these metrics effectively to yield better results.

To sum up,

'Measure what matters' and choose ‘which metric matters’. There is no point in measuring everything and exploring all available metrics in the industry. Understand your company’s customer experience goals and select the metrics that align with them. Moreover, all that matters in a customer experience metric is 'customer satisfaction' more than anything else.

Customer Experience Metrics To Track CX Impact and Drive Continuous Improvements

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