Customer Experience – What to measure to get it right

 Customer Experience – What to measure to get it right

Link between customer experience and business performance is directly dependent on breaking down overall experience into smaller insights based on your company's specific goals and different stages of the customer journey. Customers are willing to spend more money to buy from a firm that provides good customer service. Thus, to attract, engage, and keep consumers, organizations are increasingly investing in a customer experience platform.

Companies need a mechanism to quantify the success of their efforts when they devote substantial portions of their money to improving customer experience projects. Thus, you may devise a goal-oriented strategy to decide which KPIs are most suited to measuring your success.

Customer acquisition, engagement, and retention may be identified as three strategic facets of the customer experience.

1. Net Promoter Score (NPS)

The Net Promoter Score (NPS) is frequently used to appraise a brand, service, or product in general and is critical for determining your standing with your consumers. With a lower NPS, you'll need to work more to change your consumers' minds about your firm. A rise or reduction in NPS assists you in forecasting future revenue gains or losses as It is widely accepted, and benchmarks are available.

To calculate your NPS, simply subtract the percentage of detractors from the percentage of promoters. While NPS tells you where you stand, it doesn’t tell you why you got that score. To get better information, we usually increase the number of questions that explore the customer’s thoughts.

2. Customer Satisfaction (CSAT)

CSAT is highly interactive and an easy-to-use customer satisfaction metric. It’s an excellent technique to find out what your consumers are thinking about you at the moment. Customer retention is boosted in organizations with high customer satisfaction. This metric helps gather up-to-date feedback since it can be calculated fast, usually within hours or less following a customer’s use of a product or service. This allows us to quickly reduce any friction that might be affecting their business across all channels, ensuring optimal customer experience

3. Customer churn rate

The customer churn rate indicates how many of your customers have abandoned your products or services. It can also be considered as lost business value over a period. Low Churn rate indicates that your customers are happy with the level of service you provide. Thus lowering Churn rate is critical step towards Customer retention as retaining existing consumers is substantially less expensive than acquiring new customers. More importantly, when we combine the churn rate metrics with other operational data, we can identify churn patterns, which can help us identify where your CX issues really are and get insights on how to address them.

4. Customer Effort Score (CES)

The Customer Experience Score (CES) is a transactional indicator that evaluates how simple a single solution is to use and it entails client participation. It is critical to provide an easy-to-use experience in order to increase client satisfaction leading to retention. Thus using this statistic for identifying the sources of distraction, it is possible to reduce churn in a cost-effective manner. This metric helps improve the customer experience by showing places where improvements can be made to make things easier for customers.

5. Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) is a forecast of the net profit earned over the course of a customer's whole future relationship. It may be assessed as a business value that a customer contributes to a firm throughout the course of their relationship

6. Average Resolution Time

The average resolution time is a customer service KPI that measures how long it takes an organization to handle a client issue. This customer service statistic is closely related to client satisfaction and represents the effectiveness of the team. Fast resolutions are the most important aspect of a positive customer service experience.

One can better determine which levers to pull in order to influence client's experience when one can relate to the customer experience measure results to what transpired in the transaction. It's critical to comprehend how the customer experience influences consumer behavior which in turn affects your business.

However, it is not required to monitor all metrics unless you know what you want to do with them. The trick is to measure the one that is important to your business. Most businesses track 2-5 key performance indicators (KPIs) linked to customer experience and most of them benefit from focusing on just one customer experience indicator and one associated behavioral parameter. It is not required to measure all of them. One must choose the metric which is most important to one’s business.