Key Metrics To Measure for CX

To measure customer experience, you shouldn’t measure any one thing like revenue or the number of customers. Instead, you should target several key metrics; let’s break these down one by one.

Customer Satisfaction Score (CSAT)

Customer satisfaction score or CSAT is an excellent, straightforward way with which to measure CX. In a nutshell, the customer satisfaction score is roughly how satisfied a customer is with your brand or with a given interaction.

You can measure CSAT in the immediate aftermath of a customer support call, for example, by asking a customer who was just helped what they thought of the service or whether their problem was taken care of.

CSAT is also highly popular because it’s easy to calculate. Just send out a scorecard or survey to customers, then ask them to rank a given experience or product on a scale of 1 to 10. Once you have enough of these surveys answered, you can roughly average out your customer satisfaction score and use that to determine the average satisfaction of your CX.

Customer Effort Score (CES)

Customer experience score or CES is a measure of how much effort a customer has to expend in order to navigate your website or make a purchase (or, in some cases, use one of your products). To gather CES data, you first need to send a survey to customers ranking how easy it was for them to interact with your brand.

You can calculate the customer effort score by taking the sum of customer effort ratings and dividing it by the number of survey responses received. CES is vital in determining and analyzing your customer experience – the easier it is for customers to use and interact with your brand, the likelier it is that they will be satisfied with any given interaction.

Net Promoter Score (NPS)

Then there’s the net promoter score or NPS. To understand NPS, you need to understand detractors, passives, and promoters.

Detractors are those who, when asked whether they would refer your brand to a friend on a scale of 0 to 10, would rate your brand from 0 to 6. Passives are customers who would rank your brand a 7 to 8. Meanwhile, promoters are those who would rank your brand 9 to 10.

To calculate your NPS, you subtract the percentage of detractors from the promoters. Passives aren't very useful for measuring CX or determining how popular your brand is. Only focus on detractors and promoters. If you have many more promoters than detractors, congratulations; odds are your customer experience is satisfying and engaging throughout.

If your NPS is low, it could mean that most of your customers aren’t willing to become brand ambassadors or recommend you to their friends and family members. Since good word-of-mouth is paramount for building up a brand reputation, try to increase NPS ASAP.

Churn Rate

Churn rate is just the percentage of the customers or subscribers to your brand who either cancel or don't renew subscriptions in a given timeframe. Some customer churn is inevitable, but if your churn rate is very high, it means that you can bring customers to your brand in the short term but can't keep them in the long term.

Calculating churn rate involves determining a timeframe, like a month or business quarter. Then tally up the total number of customers you acquired in that timeframe.

Calculate how many customers churned or unsubscribed from your business, then divide that number by the total number of customers you acquired. Multiply the resulting decimal by 100 in order to calculate your churn rate as a percentage.

Customer Lifetime Value (CLV)

CLV, or customer lifetime value, tells you the total amount of money you can expect from a customer from all of their lifetime purchases at your business. The higher the CLV, the higher you can expect your CX to be as well. After all, customers don't come back to brands that are unengaging or uncomfortable to buy from.

If your CLV Is low, it might be a sign that you need to double down on CX improvements and efforts. That's the only way to make it enjoyable to shop at your brand, thereby helping you maintain a loyal customer base, not just constantly attracting new customers.

Calculate CLV by multiplying a customer’s dollar value or spend money by the average customer lifespan (measured in purchases made). For instance, if the average customer at your brand makes three purchases, and a given customer spends $10 for their first purchase, their CLV is $30.

Customer Retention Rate

Customer retention rate is also vital. As a CX metric, it tells you how frequently your business retains customers it acquires over a given timeframe, like a month or year. The better your retention rate, the less money you have to spend bringing new customers into the fold.

You can calculate your retention rate by:

• • Determining a set timeframe, like a week, month, year, etc.

• • Calculate the customers you have at the end of the timeframe

• • Subtracting all the new customers you gained during the timeframe

• • Then divide that number by the number of customers you had at the beginning of the timeframe

• • Multiply the resulting number 100 to get your retention rate as a percentage

First Contact Resolution (FCR)

First contact resolution tells you how many customers have an issue or complaint that is resolved with a single interaction, usually in customer support. A good FCR score is likely a sign that your CX is excellent, at least in that arena.

If your FCR is relatively low, it means that customers who contact your customer experience agents are probably less than satisfied. You can calculate FCR with this formula:

• • # of issues resolved in one interaction / # number of interactions = FCR

If your FCR is low, consider things like whether a callback is needed to resolve issues often, whether the same customers continue to call your customer support agents, etc. All of these are areas where you can potentially improve your customer experience.

Average Resolution Time (ART)

Average resolution time tells you just how long it takes to solve a customer complaint on average. Naturally, you can use this to increase the customer experience across the board by reducing ART as much as possible. You can do that by:

• • Hiring and training knowledgeable customer experience agents

• • Using CRM software to anticipate customer needs

• • Designing a better store or website to minimize problems or confusion

To calculate ART, use this formula:

• • Average time to resolve an issue / # of tickets or customer support calls = ART

Customer Referral Rate (CRR)

Customer referral rate, or CRR, as its name suggests, indicates how many customers have referred you to a friend, family member, or another shopper. It’s closely related to NPS, but CRR tells you how many customers actually refer you to someone else, now just whether they are likely to.

To calculate CRR, just look at the total number of referred purchases or subscriptions out of all purchases made. For instance, if 1 out of 100 customers came from a referral, your referral rate is 1%.

Trial-to-Paid Conversion Rate

The trial-to-paid conversion rate metric tells you how many trial customers turn into paying customers over a given timeframe. For instance, if you have a trial-to-paid conversion rate of 50%, it means that half of the people who try your product with a free trial become paying customers eventually.

Calculate the trial to paid conversion rate with this formula:

• • # of paying customers / # of trial users = trial-to-paid conversion rate

Monthly Active Users (MAU)

Monthly active users is an important CX metric, as it tells you how many users engage with your product or service within a specific timeframe, like one month. This is vital if you run a subscription or live service experience (in which case, customer experience is even more important).

If the number of your monthly active users is relatively low, it means you need to improve your customer experience immediately. Calculating MAU is dependent on how your services run and what exactly you provide in terms of products.

How To Use CX Metrics Effectively

Although the above metrics can be highly effective when trying to analyze CX, you need to know how to use the metrics effectively in order to maximize their benefits.

Put simply: You should acquire these metrics in the right ways. For example, you can give your customers or prospects surveys. That can be an excellent way to uncover things like customer satisfaction score or customer referral rate.

Alternatively, you can use comprehensive, in-depth CRM or customer relationship management software. A CRM platform will allow you to record the details and personal information of many of your clients and customers, helping you draw conclusions and data-based information from them over time.

In addition, as you collect these metrics and analyze your CX, be sure to use them in conjunction with each other. Don’t, for example, only look at CSAT. You should also look at how CSAT is correlated with something like churn rate or customer retention rate.

For example, if your CSAT is relatively high, but you still have a high customer churn rate, it could indicate one of several things, like:

• • Your customer experience is good in the short term but lacking in the long term (so you may need to implement something on a loyalty program, for instance).

• • Your products are excellent, but in the long run, your brand doesn’t mesh with your target audience’s needs or identities.

• • Something else

By looking at all of the metrics holistically, you can draw more accurate, effective conclusions and bolster the effectiveness of your customer experience design in the long run.

Reach Out to Awesome CX Today

With the above tips and tools, you’ll be able to measure and improve your customers’ experiences in more ways than one. That’s a good thing for the long-term health of your brand; better CX offerings usually result in more profits and more satisfied customers, which will help your brand stay strong for years to come.

Awesome CX can also assist with this. Our knowledgeable team members can provide back-office support through data entry, accounting, logistics, and much more. We can also help you create intuitive and complex business applications so you can better measure your customers’ journeys as they progress through your brand experiences.

Send us a message today!

Sources:

How to Measure Customer Experience (+ 8 Metrics to Help You Do It) | Hubspot Blog

What is Net Promoter Score (NPS)? Guide and Definition | TechTarget

Lifetime Value Calculation - Overview, How to Calculate LTV | Corporate Finance Institute