5 Essential Metrics to Measure Customer Experience
Customer experience (CX) is being seen as a strategic aspect for any organization that holds immense potential to generate long-term revenues. It can be defined as the interactions between a customer and a company in the form of purchase, advocacy, cultivation, service and support. So it is important for the simple reason that a customer who has a positive experience with a business is more likely to purchase its products or services again.
According to a research conducted by Forrester, 73% companies accepted that improving customer experience is their top priority. Another study by Liveworkstudio reveals that 91% of unhappy customers will never buy from a company again. However, as per some rough estimates and observations only 1% of organizations provide excellent experience to their customers.
There are certain touchpoints for the interaction between brands, businesses, products and customers. The proper addressing of these touchpoints enhances CX, which brings new ways to strengthen customer relationships.
Therefore measuring customer experience is the key to boost your company’s competitiveness and to increase chances to succeed. The measurement becomes a necessary tool to collect and analyze information to get a better perspective of customer and their needs.
Here are 5 essential CX metrics that help you achieve long term success for your company:
1. Effectively Weighing The Net Promoter® Score (NPS)
Developed by Frederick Reicheld and Bain & Company, Net Promoter® Score refers to a concept and strategy that provides a crucial insight as to how your customers feel about company. NPS is an efficient metric that remains relevant to all levels and functions of a company. It is based on the premise that every company’s customers can be placed in three categories – promoters, passive and detractors.
So, when you ask your customers whether they would like to recommend your business to a friend or a colleague, they rate you on a scale of 0 to 10. Promoters typically give 9 or 10 points, passive customers will give you a rating of 7 or 8, while detractors will give you a 6 or lower points. The overall NPS score is thus calculated by subtracting the percentage of detractors from promoters. Hence, making the right improvements based on the feedback will help you increase your customer loyalty and eventual growth.
2. Working Towards Increasing Customer Satisfaction (CSAT)
Customer satisfaction is an important metric that tells you how your products or services meet or surpass your customers’ expectations. According to a recent survey, 71% marketers accepted that they found CSAT metric extremely useful in managing and monitoring their businesses. In addition to a business’ bottomline, customer satisfaction impacts team morale and retention rate.
Thus, happy customers in general recommend you to their friends and keep coming back. It is one of the leading indicators that tell consumer purchase intentions and their loyalty. By measuring CSAT you can put new processes in place in order to reduce customer churn. A 2010 study about customer satisfaction shows that 81% of satisfied customers are more likely to do business with you again.
3. Drawing Actionable Insights By Analyzing The Competition
It is important for you to benchmark against competitors whether it is products or their prices are concerned. So try to avoid hyper-focusing on your own performance and figure how you stack up against others. It would be highly beneficial for you to benchmark not just to your nearest competitors, bust also companies that are best in class in customer experience cutting across all sectors.
Competitive Pricing, therefore, is a crucial aspect of your business. According to another Forrester study, 81% of shoppers compare the prices in search of a better offer. Price index is a crucial indicator that helps you understand which products can be sold more expensively without losses, and which other products’ prices should be lowered. There are many tools such as Upstream Commerce for effective competitive price analysis. The essence of competitive pricing is in qualitative data and its analysis in order to make right decisions and increase customer experience.
4. First Response Time (FRT)
How much you care about your customers can best be reflected by FRT, which by definition is the time a customer service representative takes to respond customers. It is important because it deeply co-relates with customer satisfaction. The lower you FRT, the more satisfied your customers will become. According to a Nielsen-McKinsey report, 33% customers would recommend a brand that provides a quick but ineffective response.
Furthermore, customers trust those brands that factor in accountability in their functioning. In view of this, many companies create service level agreements (SLAs) with their customers to make an assurance that they will respond to cases within a stipulated time.
5. Analyzing Customer Effort Score (CES)
Customer effort score is a little bit more holistic approach of determining the effort required by your customers to accomplish a task. It mainly focuses on the process customers go through when seeking help. This makes it a powerful metric that has a significant impact on your customers’ experience vis-à-vis your brand.
An article published in Harvard Business Review titled “Stop Trying to Delight Your Customers” summed the value of CES effectively. It said, “There are two aspects in every company’s customer service strategy. First, delighting customers doesn’t build loyalty; reducing their efforts – does. Second, acting diligently on this insight can help improve overall customer experience”. Therefore, you should strive to make it easy to complete for customers to complete a particular task in order to maintain high levels of loyalty and satisfaction.
Being a forward looking business, your strategy should be to create a remarkable customer experience from end-to-end. Since every business is different, there could be many metrics and strategies that improve customer experience. Our effort was to find out which are the most effective ones that need to be looked into from a new perspective.