5 Essential Customer Experience Metrics to Track

What do you remember the most about a brand? For most, it all comes down to the experience. The customer experience helps build trust in your brand and drives revenue. Businesses can measure the customer experience through metrics to understand what’s going well and what needs work. In this blog, we take an in-depth look at five customer experience metrics

5 Essential Customer Experience Metrics to Track

There are multiple ways to measure the customer experience. It can be challenging to know which metric to use and when. Do you want to look into customer satisfaction? Perhaps you want to measure the performance of your customer service or product quality? Or maybe you need to look into the rate at which your customers are leaving.

Let’s look at five essential customer experience metrics you can track to monitor and improve your customers’ experience.

1. Net Promoter Score^℠ (NPS^®)

The “gold standard” of customer experience metrics is the Net Promoter Score (NPS). The NPS is a simple way to measure your customer satisfaction rate. It breaks down your customers into those who are willing to promote your brand and those who could cause harm to your brand.

How to Measure the Net Promoter Score

The NPS survey uses a single question: “How likely are you to recommend our [business, product, or service] to a friend or colleague?” Respondents will answer on a scale of 1-10, with 1 being least likely to recommend and 10 being most likely to recommend.

Once the results are in, your customers are segmented into three categories:

1. Promoters (score 9-10) are your loyal supporters who fuel your business growth through repeat purchases and referring others.
2. Passives (score 7-8) are satisfied customers but they’re indifferent about your business and could jump to a competitor.
3. Detractors (score 0-6) are unsatisfied customers who can harm your brand and slow growth with negative reviews and word-of-mouth.

To determine your NPS, subtract the percentage of detractors from your percentage of promoters. The score will range from a low of -100 (all detractors) to a high of 100 (all promoters). Send out the survey at frequent intervals to easily compare your customer satisfaction rate over time.

 

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Net Promoter Score Formula

Total % of promoters  – total % of detractors = Net Promoter Score

Let’s say 20% of your respondents are Detractors, 20% are Passives, and 60% are Promoters.

60-20=40

How to Use the NPS to Improve the Customer Experience

The NPS survey helps you identify your customers who are loyal to your brand. Your promoters are customers who are willing to share their experience with others and are likely to be repeat customers. Maximize your promoters by asking them for an online review or testimonial.

Conversely, your detractors are customers who are likely to leave your business and share negative thoughts about your brand. Try to follow up with your detractors to inquire how you could improve the experience. This will help you determine what areas of the customer journey may need improvement.

2. Customer Satisfaction (CSAT)

To measure customer service performance and product quality, you’ll want to leverage the customer satisfaction score (CSAT) metric. The CSAT is one of the simplest ways to measure customer satisfaction with a brand, product, or service.

How to Measure Customer Satisfaction

In a CSAT survey, a single question is presented: “How would you rate your overall satisfaction with the [goods/service] you received?” Respondents use a scale of 1 (very unsatisfied) to 5 (very satisfied). This scale can also range from 1-3 or 1-10.

To calculate a CSAT score from the survey, you’ll use the responses from the two highest values (e.g., 4 and 5 on a scale of 1-5) and the total number of responses. Divide the total number from your two highest values with the number of survey responses. Times it by 100 to receive the percentage of satisfied customers.

Customer Satisfaction Formula

(Total number of 4 and 5 responses/Number of total responses) x 100 = Customer Satisfaction Score

Let’s say you had 23 positive responses and a total of 40 survey responses.

(23/40)x100= 57.5%

How to Use the CSAT to Improve the Customer Experience

The CSAT is best for short-term indicators of your customers’ satisfaction. It’s also great for single interactions or touchpoints in the customer’s journey. This customer experience metric can also track satisfaction with individual products. 

A limiting factor to this metric is that it cannot measure the customer’s continuing relationship and loyalty with the brand. This customer experience metric is best paired with the NPS to determine ongoing customer satisfaction and loyalty.

3. Customer Effort Score (CES)

The amount of effort a customer must go through to have a problem resolved can have an impact on their experience and their loyalty to the brand. Organizations can track the customer effort score (CES) to determine if there are any areas that need improvement.

How to Calculate the Customer Effort Score

The CES is measured by asking customers how easy it was to interact with or use a product or service. Respondents will answer based on a scale from 1 (very hard) to 7 (very easy).

To calculate the CES, you take the sum of customer effort ratings and divide it by the total number of survey responses. The result will show you the average effort customers use when interacting with your business.

Customer Effort Score Formula

The total sum of responses/Number of responses = CES score

Some CES surveys use a scale of 1-5, 1-7, or even use smiling or sad faces as responses. Ultimately, you want to find the average response to determine your CES.

How to Use the CES to Improve the Customer Experience

Customers often don’t want to put more effort into a product or service than needed. Therefore, you want to aim for an effortless customer experience. Customers who have a low-effort interaction with a brand are more likely to purchase from them again.

 

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4. Customer Retention Rate

The number of customers your business is able to retain during a given period of time is known as the Customer Retention Rate or CRR. This customer experience metric is a good indicator of how well your business is doing.

Retaining your current customers is crucial to moving your business forward. It can cost five times more to acquire a new customer than retain your current one. Additionally, loyal customers who have a good experience with your brand are likely to refer you to their friends and colleagues.

How to Measure the Customer Retention Rate

Calculating the CRR can be done in 3 steps:

1. Determine the total number of customers you had at the end of your selected period.
2. Subtract the number of new customers acquired during that period from the total number of customers.
3. Divide the result from Step 2 by the number of customers you had at the start of your selected period.

Customer Retention Rate Formula

(Number of Customers at the end of the period – new customers acquired during the period)/Number of Customers you had at the start of the period)x100 = Customer Retention Rate

Let’s say you want to track the Customer Retention Rate for one month. You have 203 at the start of the month, lost 13 customers, and gained 17 new customers.

(190-17)/203×100=85.2%

How to Use the Customer Retention Rate to Improve the Customer Experience

The CRR can be tracked regularly to better understand the customer experience during certain points of your product’s life cycle. You’ll be able to determine the value of your product over time and make improvements when necessary.

5. Customer Churn Rate

The rate at which customers stop doing business with you is referred to as the Customer Churn Rate or CCR. It’s essential to track this customer experience metric to measure the health of your business. 

It’s natural to lose some customers as they simply may no longer need your product or service. However, your business should be aim to keep your churn rate below 5-7%. A high churn rate typically means your product or service is not meeting your customers’ needs as expected.

How to Measure the Customer Churn Rate

To measure the Customer Churn Rate, you’ll first need to determine the period you’re tracking. The frequency of how often to measure your churn rate will depend on the size of your business. For example, businesses with large contact bases should measure their churn rate more frequently than those with small contact bases.

Once you’ve selected the period you want to measure, you need to know the number of customers you had at the start and end of that period. You subtract the number of customers at the end of the period from the customers at the start of the period. Then, you divide that number by the number of customers at the start of the period.

Customer Churn Rate Formula

((Number of customers at the start of the period – Number of customers at the end of the period)/Number of customers at the start of the period)x100 = Churn Rate

Let’s say you have 419 customers at the start of a month, and you lose 26 customers by the end of the month.

((419-26)/419)x100=93.7%

How to Use the Customer Churn Rate to Improve the Customer Experience

It’s crucial to consistently track your customer churn rate to determine any drop-off points. Remember, it’s more expensive to gain new customers than to retain those you have. You can improve the customer experience by adjusting to your product or service by knowing who left and when.

 

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Customer Experience Metrics Matter

It’s essential to know when your customers are satisfied and when they’re not. You can understand how they feel about your business by using the mentioned customer experience metrics. We recommend investing the time and money into the proper tools to help you consistently and easily monitor your customer experience.