Customer experience metrics: a brief guide on how to measure CX

| May 19, 2016
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Forrester’s CX Index found that 73% of companies say improving customer experience is a priority. But only 1% of organizations deliver an excellent experience for their customer.

Executives are becoming more and more aware of the importance of great CX. But figuring out where to start making improvements can be overwhelming. Like our SVP of Customer Experience, Maggie Young said, “It requires a series of small steps and picking your battles. You can’t initiate a huge cultural change. And you can’t just flip a switch one day and have your CEO proclaim that now you’re going to be the kings and queens of customer experience.”

A great place to start is by measuring your key customer experience metrics. But when it comes to a qualitative concept like CX, how exactly do you measure it? That’s the question that we’ll address in this article.I’ll share some common metrics that companies with mature CX practices use to measure their customer experience. Let’s jump in.

I’ll share some common metrics that companies with mature CX practices use to measure their customer experience. Let’s jump in.

1. Net promoter score (NPS)

NPS is the percentage of your customers who would—or wouldn’t—recommend your company to their friends, family, or colleagues.

It’s typically measured with a customer survey that asks the customer, “How likely are you to recommend this business to a friend or colleague?” Customers rate your company on a scale from 0-10. Your NPS score is calculated by subtracting the Detractors from the Promoters.

Source: ReviewTrackers

Source: ReviewTrackers

Pro tip from Jay Baer — Author of Hug Your Haters, Founder of Convince & Convert:

“Customer experience is all about expectation management. Great customer experience occurs when you exceed customer expectations in a palpable way. Poor customer experience occurs when you fail to meet customer expectations.

Thus, the best way to measure customer experience is to mine that expectation gap. Ask every customer (or a random sample) a simple question: ‘On a scale of 1-10 how much better (or worse) was your experience with our company compared to what you expected?’

It’s Net Promoter Score methodology adjusted for the realities of customer experience.”

Recommended resources:

2. Customer satisfaction (CSAT)

CSAT is the average satisfaction score that customers rate a specific experience they had with your organization—such as getting an answer from customer support or returning a product.

It’s measured by sending customers an automated survey asking them to rate their level of satisfaction with the interaction on a scale of “Not satisfied at all” to “Very satisfied.”

Source: imgur

Source: imgur

Pro tip from Helen Casewell — UX Research Manager at VoxGen:

“Want to understand what customers think of a specific product or service, or measure impact of changes to a specific product or service? Then CSAT would be my recommendation.

I believe both CSAT and NPS have merits, but they really do different jobs. While CSAT measures a users’ satisfaction with a product or service, NPS measures customer loyalty. CSAT is typically based on a number of statements that customers rate their agreement or disagreement with e.g. Overall I was satisfied with <product/service>. While NPS is based on a single question based on a customers’ overall interaction with a company i.e. How likely are you to recommend our company/product/service to your friends and colleagues?

The key benefit I’ve found with CSAT is that it’s based on a here and now reaction to a users’ satisfaction with a product or service (we try and get a CSAT score within 30 minutes of a product or service being used), whether that be through a website, IVR, smartphone or some other channel.”

Recommended resources:

3. Customer effort score (CES)

CES helps you determine the effort required by your customers to accomplish a task, like getting a support request handled or finding the product they were looking for. It’s typically measured by sending customers an automated post-interaction survey asking them to rate a specific statement on a defined scale.

The statement will depend on the interaction they just completed. For a customer support interaction, for example, you might ask “How much effort did you personally have to put forth to resolve your issue?” And have them rate the interaction on a scale ranging from “Very low effort” to “Very high effort.”

If you’re measuring how easy or difficult it is for customers to find the product they were looking for, you might ask them to rate the statement “The company made it easy for me to find the product I was looking for” on a scale ranging from “Strongly disagree” to “Strongly agree.”

Source: CEB

Source: CEB

Pro tip from Matthew Dixon, Karen Freeman & Nicholas Toman from Corporate Executive Board:

“When it comes to service, companies create loyal customers primarily by helping them solve their problems quickly and easily. Armed with this understanding, we can fundamentally change the emphasis of customer service interactions. Framing the service challenge in terms of making it easy for the customer can be highly illuminating, even liberating, especially for companies that have been struggling to delight. Telling frontline reps to exceed customers’ expectations is apt to yield confusion, wasted time and effort, and costly giveaways. Telling them to “make it easy” gives them a solid foundation for action.

What exactly does “make it easy” mean? Simply: Remove obstacles… Customers resent having to contact the company repeatedly (or be transferred) to get an issue resolved, having to repeat information, and having to switch from one service channel to another (for instance, needing to call after trying unsuccessfully to solve a problem through the website)… Companies can reduce these types of effort and measure the effects with a new metric, the Customer Effort Score (CES), which assigns ratings from 1 to 5, with 5 representing very high effort.”

Recommended resources:

4. Customer churn rate

Churn rate is the percentage of customers who either don’t make a repeat purchase (for transaction-based businesses) or cancel their recurring service (for subscription-based businesses).

You can calculate this metric by dividing the total number of lost customers by the total number of active customers for any given period of time.

Source: churn-rate.com

Source: churn-rate.com

Pro tip from the RJ Metrics Team:

“While Churn Rate has traditionally been used by businesses relying on recurring revenue models, many of today’s leading ecommerce companies are also adopting the metric.

Calculating churn for ecommerce is trickier, but doable, and well worth the effort. The key difference for non-subscription-based ecommerce companies is that they need to clearly define what constitutes a churn event. For example, if a company knows that most of their customers who will make a repeat purchase do so within 90 days, they may choose to mark any customer who has not made a purchase in that time period as being ‘churned.’

Whether you are a subscription or non-subscription-based ecommerce store, maintaining a handle on your churn rate will help ensure the long-term growth and health of your business.”

Recommended resources:

5. First response & average handling time

First response time is the average amount of time it takes for a customer to get an initial response to their support issue. This is typically measured by taking the average amount of time from when your customers first open their support tickets to the time that they receive their first response.

Source: Freshdesk

Source: Freshdesk

And, like its name implies, average handling time is the average amount of time it takes to resolve a customer support interaction from start to finish. This metric includes time spent interacting with customers on calls, email, chat or anything else—as well as the time between interactions.

Average handling time is typically measured by taking the average amount of time it takes to fully resolve a customer issue—starting from when the customer first initiates the interaction all the way to the point when the issue has been successfully resolved.

Source: CallCentreHelper

Source: CallCentreHelper

Pro tip from Amar Zagorica — Customer Service Manager at HelpJuice:

“This first point is one that everyone is probably most familiar with. It’s simple, customers expect you to respond to their issues in a timely manner. And if we fail to meet expectations we’re likely to bring down our customer satisfaction considerably.

Here is something we’ve learned very early on: Speed is a single variable you need to factor in, but do not pat yourself on the back for answering questions within 1 minute if you’re not doing it efficiently.

Instead, we try to ask ourselves: How many interactions between the customer and company staff are necessary to resolve the issue?

The best answer is… 0, if you can avoid issues, but realistically it’s 1. If it takes five interactions, on average, in order to solve an issue, it could mean that the customer is not being put in touch with the right individual to solve the problem. This is wasting the customer’s time and your company’s time.”

Recommended resources:

Over to you!

Ultimately, every business is different and there’s no single metric that will work for every organization in every industry. Whatever you decide on, just make sure you’re measuring the things that are most important to your customers, and that you can draw actionable insights from and put to use right away.

What do you think? We’d love to hear what metrics your organization uses to measure CX. Share your thoughts with us on Twitter and Facebook! And if you know anyone who’d find this post useful, please share it with them!