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How to measure customer experience with the right metrics
A competitive, well-marketed product in a booming industry — does it guarantee success?
Maybe not. It only means that you have entered the rat race.
Top customer experience statistics say that 89% of businesses will compete mainly on customer experience, making it the key differentiator in the long run.
So, in an era where customers frequently share their experiences with a brand on social media channels and review sites, it has become critical for businesses to deliver positive customer experience across touchpoints and stay connected throughout their journey, striving for an emotional connection.
However, the effort has not come to fruition for many, primarily because of two factors.
1. Only 37% of organizations have started a formal CXM initiative.
2. Difficulty in measuring customer experience.
So, when 68% of customers say they’ve switched service providers because of poor customer service, it has become even more vital for businesses to measure, track and manage customer experience regularly despite all odds.
In this blog, you will learn how to measure customer experience using the right metrics. But first, let’s start with the basics.
What is customer experience?
Customer experience encapsulates your customer's overall perception of your brand. It encompasses every interaction your customer has with your brand, ranging from product or service quality, pricing and customer service to brand aesthetics, website usability, customer engagement and response times.
In a nutshell, customer experience goes beyond just a single transaction or interaction and encompasses the entire conversation you've had with your customers throughout their customer journey.
Why measure customer experience for your business
Measuring customer experience guides you towards sustained growth, unwavering customer loyalty and a competitive edge in today's dynamic landscape. Here’s why you should always measure customer experience.
- Identifying pain points and opportunities: Customer journey mapping highlights specific areas where you may be falling short or excelling. Pinpointing pain points allows for targeted improvements while recognizing strengths, enabling you to leverage and build upon those successes.
- Competitive advantage: In an era where product differentiation is extremely difficult, delivering superior customer experience can be a powerful differentiator. Measuring CX helps you build a competitive edge as you know the market's pulse. You can accordingly plan your product launches, marketing campaigns and sales strategies.
- Customer loyalty and retention: Satisfied customers are more likely to remain loyal and continue doing business with you, acting as brand advocates. Measuring customer experience helps you improve customer loyalty and allows you to implement strategies to retain your valuable customer base.
- Positive brand image and reputation: A positive customer experience fosters a favorable online reputation. Satisfied customers are more likely to become brand advocates, spreading positive word-of-mouth and contributing to a strong reputation in the market.
- Increased revenue and profitability: Studies consistently show that businesses with high customer satisfaction have higher revenue growth and profitability. Happy customers are more likely to make repeat purchases and spend more over time. Besides, acquiring a new customer's often more expensive than retaining an existing one. Satisfied customers are more likely to refer others, reducing the need for extensive marketing efforts and acquisition costs.
- Adaptation to changing customer preferences: Customer preferences evolve. Measuring customer experience helps you stay attuned to these shifts, allowing them to adapt your products, services and strategies accordingly.
- Data-driven decision-making: Data-driven decision-making, facilitated by data democratization, is paramount in understanding customer experience metrics. This approach ensures that resources are allocated efficiently and efforts are focused on areas that will significantly impact customer satisfaction and business success.
By democratizing access to valuable customer data, every team member gains insights to inform their actions, fostering a culture of customer-centricity across the organization.
Reference Read: 3 Ways Data Democratization Improves the Customer Experience
Key customer experience metrics to track
Before delving into the essential customer experience metrics, it's imperative to recognize that ensuring exceptional customer experiences transcends individual efforts or departmental roles.
It is a collective endeavor with a heightened emphasis on customer-facing teams. This emphasis is substantiated by the fact that while customer retention metrics predominantly fall under the purview of the customer success team, key customer service metrics such as response times and first-contact resolutions are entrusted to the customer service or support team.
Learn More: Customer Success vs. Customer Experience
Additionally, the onus of achieving a commendable customer satisfaction score lies on the shoulders of every member of your organization.
Therefore, fostering a collaborative mindset across teams is pivotal. This entails instilling a shared understanding of the overarching objective: cultivating a positive customer experience. This feat can only be accomplished through the seamless integration of customer insights and the dissolution of information silos. Having said that here is how the key customer experience metrics are categorized:
Customer satisfaction metrics
Three metrics are primarily considered under this category:
Customer satisfaction score (CSAT)
Customer satisfaction (CSAT) is a pivotal metric in assessing the level of contentment a customer experiences during their interactions with your company. To make sure that users have satisfying interactions with the agents, you can send customer satisfaction (CSAT) surveys to users. The survey can have inquiries like:
- What is the emotional disposition of a customer during their engagement with the company?
- How effectively is the company managing and resolving customer grievances?
- To what degree does a customer find a particular product, service or support satisfactory?
💡Do you know: You can predict CSAT by analyzing conversations for intent, sentiment, emotion, intensity and response time. Advanced AI-powered omnichannel survey software enhances CSAT reporting accuracy and triggers supervisor alerts for predicted negative scores.
Net promoter score (NPS)
NPS is a metric that quantifies customer loyalty by asking customers how likely they are to recommend a company or product, rated on a scale of 0-10.
An indicator of customer loyalty and advocacy, it is the most common metric used to measure customer experience. You can measure it by asking the following question to customers:
Go Beyond: How to Improve the Net Promoter Score of Your Brand
Customer effort score (CES)
Customer Effort Score or CES evaluates the ease with which customers can accomplish a task or resolve an issue.
Typically, there are three scenarios where you can make an attempt to gauge customer effort score.
- After the customer avails customer support
- After the customer buys the product or service
- After using the product or service
Types of CES surveys
Types of scales | Example | Interpretation |
1-10 scale | The customer is asked a question such as “How easy was it to solve your problem?” accompanied by a 1-10 rating scale. | A rating above 7 would mean the customer found the solution to their problem with ease. |
Likert scale | The customer is asked - On a scale of 1 to 5, how much effort did you have to put forth to resolve your recent issue with our product/service? Very low effort Low effort Neutral High effort Very high effort
| The lower the degree of effort, the better the customer effort score. |
Emoticon/emoji scale | A CES survey that employs an emoji scale method may ask the customer, “How easy was the checkout process?” and present them with three emojis – happy face, neutral face, and sad face. | Very intuitive from a customer’s point of view, the happy face emoji represents minimum effort while the sad face represents maximum effort. |
💡 Sprinklr Tip: Encourage customers to provide comments or feedback explaining their rating. This qualitative information can offer valuable context and uncover specific pain points, enabling targeted improvements to enhance the overall customer experience.
Retention and loyalty metrics
Customer churn rate
Also known as customer attrition rate, this metric measures the percentage of customers who have stopped using your products or services. The calculation does not include new customers acquired by your business during the said period.
Must Read: 7 Proven Ways to Reduce Customer Churn
Customer retention rate
The customer retention rate is the opposite of the customer churn rate. It is the percentage of customers retained after a given period. While calculating the customer retention rate, use this formula:
Bonus Read: Average Customer Retention Rate by Industry
Customer lifetime value (CLV)
Customer lifetime value (CLV) indicates the profit a business gains from an average customer over its lifecycle. It considers the customers’ initial purchases, repeat purchases and average engagement duration.
Response and resolution metrics
First response time
First response time measures the average time it takes for a company to provide an initial reply to a customer inquiry or issue. A shorter first response time indicates that a company is more responsive to customer inquiries. It implies that customers are receiving timely acknowledgment and initial assistance.
Average resolution time
Resolution time measures the average duration your agent takes to completely resolve a customer inquiry or issue, from the first point of contact to its satisfactory conclusion. A shorter resolution time indicates that a company efficiently addresses and resolves customer issues or inquiries. It signifies that customers are getting their problems solved quickly.
💡Good to know: AI-powered unified routing in advanced omnichannel routing software improves resolution time by 30%. It identifies required skills and routes to the most qualified agent using strategies like round-robin quota, last engaged, or least utilized. This balances workload, boosting productivity and reducing resolution time.
c. First contact resolution (FCR)
First contact resolution is the percentage of customer queries an agent resolves and closes the query in the first contact without transferring, pausing or escalating it. A high FCR percentage indicates efficient and satisfactory customer service as it minimizes customer effort and frustration.
💡Do you know: Sprinklr’s unified agent console harnesses AI to provide agents with productivity boosters like AI-generated responses and guided workflows to solve routine issues? All of this leads to reduced response times and an increase in first-contact resolution rates.
Best practices for customer experience measurement
While measuring CX metrics, it is essential to follow the best practices for accurate and reliable insights into customer journeys. These best practices establish standards for data collection, allowing you to benchmark your performance against industry norms and make informed decisions.
1. Define clear objectives
Clearly outline what you aim to achieve with your customer experience measurement efforts. Defining objectives provides focus, whether it's improving specific touchpoints or overall satisfaction.
2. Combine quantitative and qualitative data
Balance numerical metrics (CSAT, NPS, etc.) with qualitative data from customer surveys and reviews. This provides a holistic view of the customer experience.
Example: Imagine you run an e-commerce platform. You collect quantitative data through metrics like CSAT or NPS, which give you numerical ratings indicating satisfaction and likelihood to recommend. Additionally, you gather qualitative data through open-ended survey questions or comments where customers can provide detailed feedback about their experiences.
💡Good to know: Gathering customer feedback across channels is easy today with omnichannel survey software. You can collect customer feedback, both qualitative and quantitative, create reports using a drag-and-drop report builder and centrally monitor customer satisfaction across channels and languages.
3. Map customer journeys
Customer journey mapping involves visualizing the customer's various touchpoints and interactions with your business, from initial awareness to post-purchase support. It helps in understanding the entire customer experience lifecycle.
4. Leverage customer persona insights
Customer personas are fictional, generalized representations of your ideal customers. They are based on research and data about your existing customers, helping you understand their motivations, pain points, and preferences.
By understanding these personas, you can gain conversational intelligence and tailor your app's features, content and marketing messages to cater to the specific needs and preferences of each persona.
Measure CX impeccably with Sprinklr Service
In today's world, mastering the art of customer experience is no longer an option — it's a necessity. The challenges lie not only in understanding customer sentiment but also in transforming these insights into actionable strategies.
That's where Sprinklr Analytics & Reporting comes to your rescue.
No matter your goal — reducing churn, higher CLV or advocacy, get real-time insights into customer behavior, engagement, journey and more. Plus,
- Predict CSAT using the world’s most advanced AI engine to analyze conversations based on intent, sentiment, emotion, intensity and time of reply
- Reduce response times by 30% using AI and automation
- Improve CSAT by up to 20% by powering seamless conversations across 35+ digital channels
- Reduce cost of service by up to 30%
Register for a customized product demo or take a 30-day Free Trial today!
Frequently Asked Questions
Some of the KPIs used for measuring customer experience include Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), Customer Effort Score (CES), customer churn rate, customer retention rate, average customer query resolution time, website traffic and customer lifetime value.
The three key customer experience metrics are Net Promoter Score (NPS), Customer Satisfaction Score (CSAT) and Customer Effort Score (CES). Each of these metrics measures CX using a different question. The percentage score, based on customer responses, is defined as the metric value.
The best way to measure customer experience is through a combination of quantitative and qualitative methods. Utilize customer feedback surveys like CSAT, NPS, and CES for quantitative insights. Additionally, gather qualitative feedback through interviews, focus groups and by monitoring customer reviews and comments.
