What is customer experience and what are CX metrics?
Customer experience highlights how current users respond to a company’s product/service and engage with it or discuss it across various touchpoints during their purchase and after-sales journey.
Content or satisfied customers are more likely to have a positive experience with the product/service, whereas dissatisfied and perplexed customers often indicate a subpar customer experience journey.
Customer experience metrics measure the quality and count the levels of engagement between the company and customers and can encompass a broad spectrum of CX aspects. Through the analysis of these metrics, companies gain valuable insights into strategies for customer retention and acquisition. They also reveal patterns that lead to customer attrition and provide insights into parameters like customer lifetime value and overall health score.
By consistently monitoring these metrics, businesses can resolve customer issues at an agreeable pace and increase the likelihood of existing customers recommending the business to others.
What are the most important metrics to measure customer experience?
CX metrics help to understand how happy or dissatisfied a customer is with the company’s product/service.
Here’s a list of the most preferred CX metrics, which, when utilized effectively, prove invaluable in shaping strategies aimed at delivering a positive customer experience to a large customer base.
- Net promoter score: Net promoter score (NPS) is a commonly used CX metric by companies across the globe. It sheds light on the affability factor of the product/service and the percentage of existing customers who are likely to recommend the brand to others in their circle. Companies use a short survey, asking respondents to rate on a scale of 0 to 10 how likely they are to recommend [brand/product/service] to others, to gauge customer perception of their brand. NPS is easy to calculate and is used to iterate word-of-mouth marketing tactics. Responsive customers are divided into three categories:
- Average resolution time: The average resolution time is the length of time it takes for the customer support team to answer a query / resolve a complaint. This can be calculated by dividing the time taken to resolve all tickets by the number of tickets worked upon within that same period.
Total resolution time for all tickets / Number of tickets = Average resolution time
A low average resolution time indicates a responsive and efficient customer support team. A high average resolution time refers to slow or poor response times, and unsatisfactory customer experience.
- Customer effort score: Customer effort score (CES) highlights the effort customers put into doing business / coordinating to resolve a task or query with the company’s support agents. It’s calculated by conducting CES surveys where the customer is asked to choose from the many alternatives for the question: Was our team able to successfully solve your problem?
The customer must choose a response from the following
Strongly disagree | Disagree | Partially disagree | Undecided | Partially agree | Agree | Strongly agree
The data also gives an idea as to how it was for customers to accomplish a certain task with the brand. It could be an after-sales support request, or it could be a personalization-based request. For this, the customers are supposed to choose from the following alternatives.
Very difficult | Difficult | Medium | Easy | Very easy
- Customer satisfaction score: Customer Satisfaction Score (CSAT) serves as a valuable metric for assessing customer satisfaction following a single interaction. CSAT measurement typically involves the administration of surveys designed to gauge customers’ levels of contentment with their engagement experiences. These surveys commonly feature either an emoji-based or numerical scale spanning from “poor” to “excellent” or from 0 to 5.
The average CSAT score = Total sum of scores / Number of respondents
- Customer retention rate: Customer retention rate (CRR) offers an approximate percentage of customers who are likely to stay with the brand over an expected course of time. Customer retention rate provides insights into the point at which customers are inclined to discontinue using the concerned brand’s products or services. It can occur within a week, a month, or a quarter. Moreover, it allows you to discern retention’s varying impacts on diverse audiences.The standard way to calculate the customer retention percentage is:
CRR % = (Number of customers (end of the period) – Number of new customers (end of the period)) / Number of customers since the beginning * 100
- Customer churn rate: In simpler terms, customer churn rate (CCR) refers to the percentage of customers who have stopped using the brand’s products or services. ‘Churning out’ of customers is a common occurrence in most kinds of business. However, it is important to keep a tab on the reasons that lead to higher churn rates. This can affect the company’s revenue goals and impact the brand’s market value. A low churn rate indicates high retention rates and vice versa.The standard way to calculate customer churn rate is:
CCR% = (Number of customers at the beginning of a period – Number of customers at the end of a period) / Total number of customers since the beginning of the business * 100
- First response time: First response time (FRT) is a key metric used to assess the quality of the customer experience. It quantifies the time that has passed from when a customer first reaches out to the agent with an inquiry or problem until they receive the first response from the brand’s support executive. This metric is important because it is used to evaluate a company’s customer service operations. Also, FRT reflects the brand’s dedication to promptly addressing the needs and concerns of its customers. Quick responses demonstrate a commitment to customer service and have a substantial impact on customer satisfaction.When customers receive a rapid first response, they are more likely to feel valued and supported, which can lead to higher levels of satisfaction with the company’s service, resulting in higher retention rates while delayed responses can frustrate customers, potentially leading to dissatisfaction and higher churn rates.
FRT = Number of issues/queries resolved in the first attempt / Total number of registered issues/queries
- Customer referral rate: The customer referral rate is important to know how well a brand’s marketing strategies are working. This metric calculates the percentage of customers who actively refer to or endorse a company’s products or services to others during a defined time frame. CRR serves as a barometer of both customer contentment and allegiance. Furthermore, it also gives an overview of how well a company’s products, services, and customer support strategies satisfy customers and inspire them to become enthusiastic advocates of the brand.
Referral rate = Total number of referred business transactions / Total number of business transactions * 100
Information is key
Strategies are based on information. These CX metrics are vital information that can be leveraged for drafting new marketing tactics. Most companies have already started making their future business decisions based on these metrics and it’s becoming apparent that brands must use these metrics to keep up with the market trends and perform at par with their respective rivals.