Once upon a time, customer loyalty depended on the product or service you'd provide. If they were high quality and unique, bibbidi-bobbidi-boo, you’ve most likely gained yourself a new fan. Nowadays, it’s different — the market is saturated with various brands offering similar services, and an essential distinguishing factor is customer experience. A positive experience doesn’t just result in customer happiness but also leads to increased revenue. Let’s explore what customer experience means, and how to measure your key customer experience metrics.
Let’s imagine that you’re booking a room at a hotel. Upon entering, you smell the stench of cigarettes in the air, so you return to the front desk and explain that you forgot to request a non-smoking room. The clerk is extremely friendly and says that it’s not a problem, that they’re out of standard non-smoking rooms but can upgrade you to a suite, free of charge. Inside the suite, you see a handwritten note thanking you for staying at the hotel. On the day you check out, you receive a complimentary cookie and a discount voucher for your next stay.
That’s an excellent customer experience from beginning to end.
In a nutshell, customer experience is the impression you leave with your customers. It affects how they perceive your brand through all stages of the customer journey.
Customers always want the same thing: to be taken care of and to connect with you in the easiest way possible. They’re more demanding than ever and want their problems to be quickly solved, but that’s not surprising — technology has given us the tools required for that kind of speed. Your job is to adapt to that speed and get the customers what they want.
The good thing is, companies recognize the importance of customer experience — 80% of them believe they deliver “super experiences.” But cue the record scratch, because only 8% of customers agree. It’s a huge discrepancy that makes you wonder: Where did these companies go wrong?
They’re either incorrectly measuring their customer experience, or they’re not measuring them at all. After all, how exactly do you measure an experience? Before we go over some common metrics that companies use to measure customer experience, note that there are a lot of different metrics to choose from. It depends on your business goals — certain metrics can better inform your business strategy.
NPS is the metric that’s used to gauge customer loyalty — it determines who would, or wouldn’t, recommend your brand to others. Usually, it’s measured using a customer survey that asks the customer, “How likely are you to recommend this organization to a friend or colleague?” The rating scale is from 0-10. Depending on what number the customer chooses, they're classified as either Detractors, Passives, or Promoters.
0 – 6: Detractors
7 – 8: Passives
9-10: Promoters
To calculate your NPS, subtract the Detractors from the Promoters. While the NPS has its limitations, it’s still a useful metric that’s easily measured.
Overall satisfaction is a metric that should be measured consistently. It’s the average satisfaction score that serves as a baseline measure of your customer experience performance and how customers feel about your brand. It helps you predict customers’ next steps so that you can be proactive with your customer retention strategies.
Measure customer satisfaction with an automated survey that asks them to rate their satisfaction level on a scale of “Not satisfied” to “Extremely satisfied.” Or, it could be measured on a numerical scale — there isn’t a universal agreement on what works best.
Vipin Thomas, Global Lead of Customer Success at Freshdesk, says that his company tries to get a CSAT score within 15 minutes of an interaction: “It's super helpful to improvise on the resolution, mode of delivery, channel, etc. It's one of the important metrics to evaluate the performance of the support desk."
The CES is similar to the CSAT, except it looks at the ease of experience versus a customer’s satisfaction. The CES operates under the impression that the easier a task is, the better. Touching back on the earlier point about customers demanding speed, a simple and fast experience is the quickest way towards customer loyalty.
Create a CES survey that asks customers to rate their ease level on a scale of “Very difficult” to “Very easy.” Again, this could also be measured on a numerical scale, depending on how you phrase the question.
Churn rate is the rate at which customers stop making repeat purchases (for transaction-based businesses) or cancel their subscription-based services. This metric doesn't just directly affect your company's profitability, it also gives you an idea of why customers are happy or unhappy.
Calculate the customer churn rate by dividing the number of lost customers with the number of active customers for any given period.
Don’t forget about your customer reviews — they’re valuable nuggets of customer feedback that tell you precisely how a customer’s experience with your brand is. Analyzing customer reviews and feedback enables you to resolve issues that customers face for a positive experience.
You can ask for customers to leave reviews in the following ways:
As previously mentioned, there are a plethora of customer experience metrics to use, depending on your business goals and strategies, such as purchase horizon and next steps. Conduct some research to determine which metrics are better suited for your business strategies and goals.
Last updated on September 20th, 2023.