A local bakery with buttery croissants and amazing coffee saw a decline in sales and an increase in negative reviews. The owners decided to turn to CX measurement.
Simply by asking some questions, they discovered that the customers found the bakery’s service slow and the staff indifferent. Even though they offer an amazing menu, they lack in customer service.
This resonates universally across businesses, irrespective of size or industry. It shows that just having a good product or service isn’t always enough for success. It is also really important to understand and make the customers happy.
How satisfied customers are and the experience they have can really affect how well a business does. That is where measuring customer experience comes in.
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What is Customer Experience, and why Measuring it is Important?
Customer experience (CX) is the impression that customers have of a company throughout their entire journey, from first contact to post-purchase.
It is influenced by every interaction that a customer has with your company, including the products and services, employees, website, and social media presence.
But what really creates a great experience? Speed, convenience, consistency, friendliness, and, most importantly, the human touch.
The significance of measuring CX cannot be overstated in the contemporary business landscape. It helps gather feedback that can be used to make the overall customer experience better.
So, here are the most popular metrics to measure your CX success.
Top 7 CX Measurement Metrics to Measure CX Success
1. Customer Satisfaction Score (CSAT)
CSAT measures how satisfied your customers are with the product, service, or interaction your business offers. Basically, what better way to measure customer experience than directly asking your customers?
Calculate CSAT by using customer feedback received through surveys or questionnaires. Customers are asked to rate their satisfaction, with 1 being “very dissatisfied” and 5 being “very satisfied.”
How to Measure CSAT?
After collecting the feedback, you can calculate your CSAT score by dividing the number of customers who gave you a rating of 4/5 by the total number of respondents.
For example, if you had 150 responses and 120 customers indicated they were “Satisfied” or “Very Satisfied,” the calculation would be:
2. Net Promoter Score (NPS)
Net Promoter Score (NPS) is a customer loyalty metric that measures how likely customers are to recommend your company’s products or services to others.
The question looks something like this:
NPS is calculated by asking customers the above-mentioned question and then categorizing them as promoters (9-10), passives (7-8), or detractors (0-6). Then, subtracting the percentage of detractors from the percentage of promoters
3. Customer Effort Score (CES)
Customer Effort Score (CES) is ideal for identifying and fixing areas of customer friction. It measures how easy or difficult it is for customers to get what they need from your company.
It is typically measured using a survey that asks customers to rate their level of effort on a scale.
How to measure CES?
To calculate CES, take the sum of your customer effort ratings and divide it by the total number of survey responses you receive.
4. Customer Lifetime Value (CLV)
Customer lifetime value (CLV or CLTV) is a metric that represents the total net profit a company can expect to generate from a customer throughout their entire relationship.
In other words, how much they’re “worth” to the company.
How is CLV measured?
It is calculated by multiplying the average customer purchase value by the average customer lifespan.
Typically, the better the CX, the higher the CLV. But if you start to see the customer spend less over time, you can determine why and create solutions to raise the CLV.
5. Customer Churn Rate
Customer churn rate is the percentage of customers who stop doing business with a company over a given period of time.
It is used to measure customer loyalty and satisfaction. A high churn rate indicates that customers are probably not happy with the company’s products or services.
How to measure Churn Rate?
To calculate your churn rate, tally up the total number of customers you’ve acquired and the number of customers who churned during a particular time period.
Then, divide the number of customers who churned by the total number of customers acquired and multiply that decimal by 100% to calculate your churn rate.
6. Customer Retention Rate (CCR)
Customer retention rate (CRR) is the percentage of customers that a company retains over a given period of time.
CRR measures how successful your company is at retaining customers. A high CRR indicates that customers are satisfied with the company’s products or services and that they are likely to continue doing business in the future.
To Measure the Customer Retention Rate, use the following formula.
7. First Contact Resolution (FCR)
First Contact Resolution (FCR) measures the percentage of customer support tickets that are resolved on the first contact. It indicates how well customer support agents are able to resolve customer issues quickly and efficiently.
To measure FCR, you simply divide the number of tickets that are resolved on the first contact by the total number of tickets received.
A leading telecom operator saw a 21% improvement in FCR accuracy within 6 months of deploying Knowmax.Uncover the full story
How Knowmax can Help you Improve your CX Metrics
Knowmax, an AI-powered knowledge management platform, enhances CX metrics by offering various support tools such as Cognitive Decision Trees, self-service content creation, and visual how-to guides for your agents.
This comprehensive approach not only reduces search times but also empowers the support teams with up-to-date and easily accessible information structured in decision trees, resulting in minimized hold times and improved CSAT.
Don’t just take it from us!
“Be it voice, chat, or email, we’ve seen a consistent improvement in overall service delivery. We’ve observed a drop in our AHT, and it has resulted in outstanding CSAT. For our long-term CX goals, Knowmax is one of our most preferred partners”.
Nikhil Godbole – Group Customer Service Head
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