The new success metrics for CX

CX metrics are so much more than NPS and CSAT

In our work with customer service organizations, we hear a lot about the difficulty of quantifying the customer experience.

Too often, CX leaders are stuck using incomplete or fuzzy datasets to determine what to work on next. They’re doing all the right things, collating survey responses and customer feedback. They’re integrating their customer service tools with their CRM. The problem is, too much of the data gathered only focuses on specific touchpoints, not the entire customer journey.

For instance, say you sell car insurance policies. If you send out a CSAT or NPS survey right after purchase, you’re going to get different answers to your survey questions than after a month or a year of service. You’ll also get a different answers from someone who’s had to make use of the policy, versus someone who’s never filed a claim.

Some customer experience metrics will always be a bit ‘soft’. After all, we’re dealing with people, and people are unpredictable. We have to factor in emotions and biases and hidden desires. The mystery of human behavior is part of what makes customer-facing roles so exciting and challenging.

And yet, measurement is necessary. Customer experience leaders need scalable ways to control the quality of the customer experience for every single person who walks through their doors.

They also need to:

• Prove to C-level executives and board members that customer-centric initiatives yield positive business outcomes (including the bottom line)

• Align the team internally around shared goals

• Manage the inflow of customer data from various sources

In this guide, we’ll show you how to build a set of CX metrics specific to your business. This includes standard metrics you can use for industry benchmarking, and customer experience KPIs centered around the customer journey. By the end, you’ll know how to start gathering the insights you need to deliver the best experience possible for your customers.

Why customer experience metrics are valuable

Measuring customer experience is a strategic necessity for enterprise leaders. It touches almost every business health indicator, including:

1. Customer loyalty and retention

Positive customer experiences are directly linked to customer loyalty. When customers have a positive experience, they are more likely to remain loyal to the brand, make repeat purchases, and recommend the company to others.

2. Revenue growth

Satisfied customers are more likely to spend more and contribute to revenue growth. By understanding and improving the customer experience, enterprises can enhance customer satisfaction and, consequently, increase revenue through repeat business and positive word-of-mouth.

3. Competitive advantage

Providing an exceptional customer experience that outshines your competitors’ can be a key differentiator. Companies that consistently deliver positive experiences have a competitive advantage over those that don't, leading to increased market share.

4. Brand reputation

Customer perception plays a crucial role in shaping a brand's reputation. Positive customer experiences contribute to a positive brand image, while negative experiences can harm a brand's reputation. Monitoring and managing customer experience helps protect and enhance the brand.

5. Customer acquisition

Happy customers are more likely to become brand advocates and recommend the company to others. Positive word-of-mouth marketing can lead to new customer acquisition, reducing the cost of acquiring new customers compared to traditional marketing efforts.

6. Operational efficiency

Measuring customer experience involves evaluating various touchpoints in the customer journey. Identifying pain points and areas of improvement can help streamline processes, enhance efficiency, and reduce costs.

7. Data-driven decision-making

Customer experience data provides valuable insights into customer preferences, behaviors, and expectations. Enterprise leaders can read and analyze CX metrics to make informed decisions about product development, marketing strategies, and overall business operations.

8. Employee satisfaction

Employee satisfaction is often linked to customer satisfaction. Happy and engaged employees are more likely to deliver better customer service. By focusing on customer success, enterprise leaders can indirectly improve employee morale and performance.

9. Adaptability to market changes

Customer preferences can change rapidly. Monitoring customer experience allows enterprise leaders to read the market, anticipate new trends, stay agile and adapt their strategies to meet evolving customer expectations.

10. Regulatory compliance

In some industries, there are regulations and standards related to customer protection and satisfaction. Measuring customer experience helps ensure compliance with these regulations, avoiding legal issues and penalties.

Customer-centric organizations realize the impact of the customer experience on all aspects of the business. Great CX saves businesses money and time, promotes growth, and deepens loyalty, ultimately leading to longevity.

Common customer experience metrics

Customer experience measurement is nothing new. There are already several key indicators used across industries for benchmarking the quality of the customer experience. These include:

1. Net Promoter Score (NPS)

One of the most widely used metrics, NPS measures the likelihood of customers recommending your product or service on a scale from 0 to 10. Those who are more likely to recommend your product (and thus bring in new customers via referrals) are identified as promoters. Those less likely to spread the word about your product are known as detractors. NPS provides a clear indication of overall customer satisfaction and loyalty. And with journeys, you know what to address to improve your NPS.

2. Customer Satisfaction (CSAT)

CSAT surveys gauge customers' satisfaction levels with a particular touchpoint or customer interaction. Surveys can be sent out at any time. Customer satisfaction scores are determined based on various methods of quantifying survey responses.

3. Customer Effort Score (CES)

CES assesses how easy or difficult it is for customers to achieve their goals with your product or service. Lower CES effort usually correlates with higher satisfaction.

4. Conversion Rate

Tracking the percentage of website visitors who complete a desired goal, such as making a purchase, or filling out a subscription form, helps measure the effectiveness of your customer experience.

5. Referral Rate

As mentioned above regarding NPS, satisfied customers are more likely to refer others. Referral rate is calculated by dividing the number of referred customers by the total number of customers. Monitoring your referral rate gives insights into the organic growth potential of your customer base.

6. Time to Value (TTV)

TTV measures how quickly customers realize the value of your product or service. A shorter time to value contributes to positive experiences, and can reflect well on sectors of your team, particularly your sales, fulfillment, and support reps.

7. Customer Churn Rate

Churn measures the percentage of customers who stop using your product or service over a given period. It's a crucial indicator of customer dissatisfaction.

8. Customer Lifetime Value (CLV)

Understanding the long-term value a customer brings to your business helps in strategic decision-making around the customer experience. CLV is notoriously complex, but can be calculated via analysis of revenue, customer acquisition costs (CAC), and customer churn rate.

9. Net Revenue Retention (NRR)

Net revenue retention is a newer metric that can be used to gauge your customer retention rate over a set period of time. It’s used most commonly by software-as-a-service (SaaS) companies. It’s a simple calculation based on the revenue earned per year from customers who were around the year before. Divide by total revenue, and you’ll find your NRR percentage.

10. First Contact Resolution (FCR)

Resolution time is a metric many customer support teams will be familiar with. FCR particularly measures the ability of support agents to solve customer issues on the first response — whether that’s a phone call, message, or email exchange.

11. Average Resolution Time (ART)

Unfortunately, many customer issues cannot be solved at first contact. But reps can reduce the time it takes for support tickets to get resolved, on average. A low ART can indicate customer satisfaction for current users, not just those recently entering or exiting.

Each of these standard metrics covers a key moment within the customer lifecycle, and they’re not difficult to gather. For instance, a NPS survey is just one question for respondents to answer, and many customer service tools automatically measure things like FCR and response time.

However, what all these metrics are missing is a way to analyze the whole picture.

Why you should build your CX metrics around the customer journey

The customer journey is the foundation of customer experience. You may already know that mapping out the customer journey is a quick way to get teams aligned around customer needs and behaviors. But Journey Management is also a method to understand your customers comprehensively.

Customer journeys can be micro or macro. They can involve new sales leads or existing customers. And they can vary greatly in terms of quality of the customer experience. Some common examples of journeys include:

• Onboarding journey: how a new customer gets to know your product after signup. Onboarding is a common churn point; many companies struggle to educate new customers, don’t provide enough live and self-serve support options, or fail to follow up on promises made before the sale.
  
  

  
  

• Payment flow journey: how a customer pays for your product. Payment is a technically complex process that can deeply affect customer sentiment if not managed with care. Say a customer’s credit card expires and service abruptly stops, or perhaps they are caught by surprise with an auto-charge — these are all factors which could contribute to an unhappy customer and a journey cut short.

• Customer support journey: what happens when a customer reaches out to your support team with a question or issue. This is another make-or-break journey because a positive support experience can boost loyalty; whereas a negative one where a customer is frustrated by slow responses, unsatisfactory answers, or lack of empathy, can lead to —yet again— churn.

These are just a few examples of customer journeys for a business. Put together, they comprise the overall customer journey, or what is alternatively called customer lifecycle or experience.

Measuring the success of the whole is just as important as measuring the performance of the component parts. Otherwise, you’ll suffer from the effect of missing the forest for the trees.

Analysis of customer journey success is a more truthful and comprehensive approach to metrics. It reflects the omnichannel experience your customers have. Journey Management clearly lays out the most urgent customer needs and pains, and the most valuable insights, opportunities, and solutions for your business moving forward.

How to implement metrics around the customer journey

Analyzing journeys means taking stock of how effectively a customer completes a combination of steps and actions. Several interaction-based metrics feed into an overall journey score, which leads to insights and opportunities for improving CX.

Continue to use pre-existing tools such as NPS and CSAT surveys, but use those in combination with considerations such as revenue and costs associated with each step, time spent, and conversions. Then, look at the metrics for each step on your journey map. This way you can judge if the full journey is truly maximizing its potential.

In the insurance example, let’s say a customer needs to file a claim. You’ll probably measure how customer feels about the experience of filling out and submitting the claim, as well as how their interaction with their account rep went, how long the claim took to resolve, and how much the process cost them and you. One journey score captures all of that data in one number.

Soon, AI-based journey analysis will help you gather information on full or partial journeys just by typing a few words. It will tell you the strengths and weaknesses of overall customer experience as it currently is, and will also predict customer behaviors before they even happen.

To truly measure customer experience, look beyond the numbers

Journey-based metrics help you understand the full movie of the customer experience, not just a couple still frames. It helps executives and other stakeholders get a bird’s eye view of the customer experience without having to dig into surveys and spreadsheets.

However, the scalability of journey-based analysis and even Journey AI will never replace regular conversations with customers and manual gathering of feedback.

Sometimes even the most powerful statistics can’t beat one good customer story.