Investigating Customer Experience Metrics That Matter
It’s crucial to be able to measure your customer experience. This is because if you don’t know how easy, satisfying and enjoyable your customers find interacting with your brand, you won’t know if you’re delivering a strong customer experience or need to improve it.
While there are many things you can do to get a better feel for the experiences you’re providing for your customers, you’ll only get the most valuable insight if you can measure this with customer experience (CX) metrics at the point of experience.
What are customer experience metrics?
Essentially, CX metrics are the KPIs businesses use to measure how easy, satisfying and enjoyable your customers find their experience of interacting with you throughout their customer journey. They can be split into two main groups.
Here metrics such as the Customer Satisfaction Score (CSAT) and Customer Effort Score (CES), allow you to track customer sentiment numerically, so you can see at a glance how satisfying or easy customers find interacting with you, and where you need to improve if they’re not.
Qualitative customer data
In contrast, you can also collect qualitative data such as the feedback from open-ended questions on surveys or behavioural analytic insights from session recordings, where your customers can give you a more detailed insight about their experiences with your business.
However, whatever measurement mix you choose to employ, it’s essential to keep track of any changes, so you can quickly react and make any necessary improvements.
Key metrics to measure customer experience
When it comes to measuring your customer experience, here’s some of the best CX metrics currently available for you to use.
Customer Satisfaction (CSAT)
The CSAT metric can help you to measure how happy, or unhappy a customer is with your overall service. This satisfaction will typically apply to the performance of your product, the service you’re providing or a support interaction a customer has had with your business.
How CSAT can be used to improve your customer experience
The good thing about the CSAT metric, is because it’s so targeted, you can use it to figure out which parts of your product, service or support your customers are satisfied or unsatisfied with. You can then make any necessary adjustments to any of these areas.
How to calculate CSAT
Your CSAT can be worked out by asking your customers to answer the following question.
‘How satisfied were you with our (product, service, support interaction)?
Each customer is then invited to rate their satisfaction on a 5-point scale ranging from very dissatisfied to very satisfied.
You can then calculate CSAT by dividing all the positive responses you’ve received by your total number of responses and then multiplying this figure by 100, to leave you with a CSAT percentage.
Scores closest to 100% demonstrate the highest levels of satisfaction, while those at the other end of the scale the lowest satisfaction levels.
For a quicker and more convenient way of working out your score you might like to try our csat score calculator instead.
Customer Effort Score (CES)
The CES metric is focused on measuring how much effort your customers need to put in to complete a task with you. This could involve anything from getting a support issue handled and resolved to finding the product or service they were looking for. It’s a transactional metric that measures how easy it is for customers when they need to interact with your brand.
How CES can be used to improve your customer experience
According to research from Gartner, 96% of customers with a high-effort service interaction are more likely to become disloyal compared to just 9% who have a low-effort experience. Consequently, the more effortless you can make your customer experience, the more likely your customers will stay loyal and keep buying from you.
Using the CES metric will help you to identify where your customer experience is smooth and where there are any friction points. You’ll then be able to use this data to make your services easier for customers to use and boost your customer experience KPIs moving forward.
How to calculate CES
Your CES can be measured using two methods that use slightly different rating scales.
Under the first method the customer is asked to answer the question below.
“On a scale of 1 to 5, how much effort did you have to expend to handle your issue? (on the basis that 1 represents very low effort and 5 very high effort)
You can then calculate CES by dividing the sum of all individual customer effort scores by the number of customers providing responses. You should be left with a score between 1 and 5 – the lower the score, the better.
Using the second method, which employs a rating scale of 1 to 7, customers are asked to answer the following question.
“On a scale of 1 to 7, how easy was it to get your issue resolved? (on the basis that 1 represents extremely easy and 7 extremely difficult)
You can then work out your CES by dividing the sum of all individual customer effort scores by the number of customers who responded. The lower the score, the more desirable it is.
However, if you’re looking for a simpler and quicker way of doing this you might like to try our CES calculator.
Net Promoter Score (NPS) ®
Your NPS can help you to gauge the loyalty of your customers, by their willingness to recommend you to others.
How NPS can be used to improve your customer experience
Although it can’t be used to measure something as direct as product success, due to its much broader objective, the NPS metric can offer an effective way of getting to know your customers better.
With NPS, you can get a better idea of your customers’ satisfaction and loyalty levels and how these change over time.
How to calculate NPS
To measure your NPS, you need to ask your customers the following question.
‘On a scale of 0 – 10, how likely would you be to recommend our company to a friend or a colleague? (on the basis that 0 represents not likely and 10 very likely)
Each score is then grouped into the following classifications.
- 9-10 – Promoters (which represents clients who love your company and actively promote it)
- 7-8 – Passives (customers who like your company but don’t love it yet)
- 0-6 – Detractors (clients who are unhappy with your business and are at real risk of churning)
To calculate your NPS score, you simply need to subtract your number of detractors from your number of promoters. This should leave you with a positive or negative number, which you will need to divide by your total number of survey responses and then multiply by 100. This will leave you with a number between 100 and –100. The higher your score the more desirable it will be.
If you’re looking for a simpler and quicker way of calculating this, you might like to try our NPS calculator.
Customer Referral Rate
While NPS helps track the number of customers who say they will refer you to a friend or colleague, the great thing about the customer referral rate is that it can tell you how many are actually doing this.
It focuses on the volume of referred purchases from your total purchases.
How the customer referral rate can be used to improve your customer experience
When customers refer you to their friends or colleagues, it means they believe in your product or service and feel it’s of a high enough quality for them to invest their time in recommending. But in order for that to happen, your customers must have had their own positive experiences with you. This can cover any aspect of their interactions and journey with your business, from their initial sign up to their ongoing use of your products or services.
The smoother these processors are, the more likely they’ll be to refer you.
How to calculate Customer Referral Rate
The customer referral rate is pretty simple to calculate, as it’s based on the total number of referred purchases from all of your purchases. So, if 5 out of 100 customers came from referrals, you’ll have a referral rate of 5%.
Customer Retention Rate
The customer retention rate metric can help you measure how many customers stay with your business over a given period of time or keep paying for your services. It’s also related to your churn, which we will look at after we’ve examined this metric.
Your retention rate can highlight when customers are likely to stop using or paying for your services. This could be a week, a fortnight or months later. You can also examine how retention affects different cohorts of your audience.
How customer retention rate can be used to improve your customer experience
Looking at your retention rate, can give you a better insight into your customer experience, as it allows you to track certain points in your products’ life cycle or specific user groups.
It will also give you an idea of how much users value your product over a given period of time and therefore the chance to make any improvements. It’s certainly worth doing, as it’s far more expensive to onboard new customers than it is to keep existing ones.
How to calculate customer retention rate
There are a couple of methods you can use to calculate your customer retention rate.
The first way is to subtract the number of customers who churn over a period of time from the number of customers who stay loyal to you.
For example, 90% retention – 10% churn = an 80% retention rate
Another way is to examine how many customers stay loyal for one period of time, vs another period.
For example, % of customers in period one / % of customers in period two = your retention rate
Customer Churn Rate
The opposite of retention, your churn rate gives you an indication of how many customers are leaving your business or are no longer paying for your services over a given period of time.
How customer churn rate can be used to improve your customer experience
Given that it’s more expensive to find new customers than to keep existing ones, it’s vital to keep an eye on your churn rate. The lower your churn rate, the more loyal customers you have.
You can use the drop-off points in your retention measurement to identify where, or which groups of users are losing interest in your services. Following this you can make any necessary adjustments to improve your customer experience in these areas.
How to calculate customer churn rate
Essentially, to calculate your churn rate, you need to work out the reverse sum of your retention rate.
So, if you wanted to measure your churn rate for the first financial quarter of the year your calculation may look something like the following.
Subtract your number of customers at the beginning of period one from the number of customers you have at the end of period one.
You then need to divide the figure you’re left with from the number of customers you have at the end of period one to get your churn rate.
A more visual representation of this calculation is as follows.
# of customers at beginning of period one – # of customers at the end of period one / # of customers at the beginning of period one = churn rate
First Contact Resolution (FCR)
With the first contact resolution metric, you’re able to evaluate how many of your customers had their issues resolved during their first initial interaction with you. This typically applies to business areas such as customer support.
How FCR can be used to improve your customer experience
The quality of support that you deliver for your customers helps contribute towards their overall experience. So, it shouldn’t be too surprising to appreciate that customers who have had their issues resolved through a single interaction are likely to have a more positive perception of that experience and be more satisfied as a result.
In fact, studies reveal that for every 1% increase in FCR, there’s also a 1% increase in CSAT and a 1% decrease in support operating costs. So, there’s plenty of scope to improve your customer experience levels when you start solving more customer issues on first contact.
How to calculate FCR
FCR can be best described as the total percentage of calls or support tickets you receive. Yet how many of those calls or tickets are effectively dealt with on first contact?
To calculate your FCR, you need to divide the issues you’ve resolved on first contract from the total number of issues you’ve had to handle and then divide that number by 100.
A more visual representation of this calculation is as follows.
# issues resolved on first contact / # of interactions x 100 = FCR
Average Resolution Time (ART)
While it’s good to know how many customer issues you’re solving on first contact, it’s also really valuable to know how long you’re typically taking to solve these issues, which is where the average resolution time metric comes in.
This metric allows you to examine your support teams’ efficiency, which may be high for some support enquiries and low for others.
How ART can be used to improve your customer experience
Generally, your customers won’t want to wait too long to have their issues resolved. So, the faster you can solve their issues, the more satisfied they’ll be.
While your average resolution time can have a direct impact on your company’s CSAT score, you should also be paying attention to why your customers are calling and how this could be impacting their wider customer experience.
For example, if there’s a recurring issue that’s impacting multiple customers, then it could be an issue with your product, which is something you’ll want to address.
Think about your customer’s expectations too. You may have set these out in the Service Level Agreement you made with them when they began using your service, or these expectations may be influenced by what’s in your company’s values or mission statement. However, these expectations have been set, you need to ensure you’re doing your best to meet them, as they can also impact your customer experience.
How to calculate ART
To calculate your average resolution time, you need to add up the total amount of time it takes to resolve all issues and divide this by the number of calls or support tickets you receive over a given time period.
A more visual representation of this calculation is as follows.
Time it takes to resolve issue / # of calls or tickets = ART
Identify the best CX metrics for your needs
Having read through all the different types of customer experience metrics that are available, we hope you will feel better informed about how and when to use them.
However, when it comes to CX metrics, it’s important to point out that there’s not a one size fits all approach, as every business and industry will differ and so will its goals. Therefore, the customer experience metrics don’t necessarily provide the same value for every business.
So, instead of trying to include every single CX metric on your customer experience programme, you’d be better off focusing on those metrics that are most relevant to you and will provide the most useful information for your business.
To help identify this, think about those aspects a customer finds the most important in their relationship with your organisation. So, if you operate in the service industry, it’s likely that CSAT will be the most important in your CX metric mix, as your success will be most impacted by the satisfaction levels of your customers.
If you can select the most appropriate CX metrics for you and make the improvements you need, you should be able to deliver a customer experience that makes your business more successful.
Generate experiences your customers love
When you’re using the right CX metrics and making the improvements you need, you’ll deliver more enjoyable experiences for your customers. But you’ll only achieve the very best results when you have the right survey tools.