There are plenty of ways to track KPI and experience metrics. Companies that do this can ensure a future where goals are met, and a better customer experience for most everyone. But some stand out above the rest, and we’re here to break those down. With that being said, let’s dive in and really figure out what we can learn from these helpful metrics.
The 3 Customer Experience metrics you should get involved with our “Customer Satisfaction (CSAT),” “Net Promoter Score (NPS),” and “Customer Effort Score (CES).” All of these KPIs follow one thing, and that’s the satisfaction rate and loyalty of your current customers. All of these factors work best when put in order for the buyer’s journey.
Net Promoter Score
NPS or Net Promoter Score surveys should be first on your customer’s journey. Since an NPS will help track customer loyalty over a specific course of time. By implementing this early on, your customer’s metrics will be tracked. This will also help you determine the customer’s willingness to order with your company again. NPS is a great survey to conduct at the early stages of a buyer’s journey since it is basically the foundation for building a relationship with the customer. You can calculate your NPS score by determining the number of promoters and detractors and subtracting the two percentages. The total percentage you end up with is how many people are “passive” towards your services. Since this is such a simple metric to capture, it is widely used by many industries.
Customer Satisfaction Score
Probably the most heard of metric, CSAT has a very easily followed 1-5 star rating format. Most commonly seen on Google or Facebook, many CSAT ratings are based on the 5-star model. CSAT is a solid tool if you are measuring single interactions. While its measurement is limited, it’s still great for customers since it is fast and easy.
Customer Effort Score
By putting the CES survey last, you can get a better understanding of how to distribute CSAT surveys. CES is a combination of the CSAT and NPS scores and needs both of the scores to calculate the complexity of your services. This metric can also help measure your weaknesses and your strengths. All of the above metrics are useful in helping your customer experience.
This data is representative of how many of your customers are no longer using your services. Churn rate is a way to track customers lost by percentage in a set amount of time. For example, if you were to sign 1000 contracts for a value of $100 early in the year, but now only 800 continue to use your services. According to the churn rate, the metric number would be 20%, 200 customers, or $20k. This is an important metric to keep track of since retaining customers is much more cost-effective than gaining new customers.
On the other side of the same coin as the churn rate, we have a retention rate. This metric is measured by how many customers you keep over a specific time frame. With a higher retention rate, the churn rate should be low according to the retention percentage. An example would be the Retention rate being 90% and Churn rate is 10%. Something to consider: Temkin Group conducted some research that states that loyal customers are 5 times more likely to repeat business and just as likely to forgive mistakes. They are also 7 times more likely to try a new offering.
Customer Lifetime Value
CLV predicts the net profit attributed to a customer’s future relationship. It can also be classified as a business value that customers bring during a company’s relationship over a set period of time. This metric is usually seen as an average. It might be easier to calculate the whole CLV for a company that doesn’t have repeat customers often, but it makes more sense to apply the CLV to a company that will get repeat customers much more often.
Should I Use All These Metrics?
A short answer would be no. Most companies don’t always need to measure every one of these metrics since each company has relevant needs. Another thing to consider is to not incorporate these metrics before you understand what your customer metrics will actually do for you. Your business should understand CLV and churn/retention rates, and then as they apply – your appropriate customer experience metrics (NPS, CSAT, CES). Making things more complex doesn’t necessarily add to the value you provide. You should focus on the basics at first – being, solving issues, and improving your metrics results that you can get without customer surveys. This advice will lead you to a better understanding of the metrics that can help you, just focus on customer experiences in baby steps!
These metrics will give you a sense of where your company stands with customer experience. If your company needs help, we are available to partner with you to build a better experience for anyone who interacts with your brand. Check out our services that will help improve your ‘X’!