MEASURING CUSTOMER EXPERIENCE: A STEP-BY-STEP GUIDE AND TOP 5 METRICS TO USE
Customer experience, or simply CX, is the impression a customer has of a business after one or more interactions. As business becomes increasingly customer-centric, it has become important that brands consistently deliver positive experiences across all touchpoints. 87% of customers will become repeat buyers after one positive experience. On the other hand, 82% of customers completely stop doing business with brands after two to three negative experiences. These and many more statistics show the importance of CX in today’s business world. Hence it is not only important for brands to attempt to create positive experiences, but it is also vital to regularly measure customer experiences. To learn more about customer experience in the digital age, click here.
WHY IS IT IMPORTANT TO MEASURE CUSTOMER EXPERIENCE?
Customer experience can determine the success or failure of a company. This is a fact that many businesses now recognize, leading to the increased attention and investment in the CX we see today. According to Smart Insights, 87% of business leaders recognize the need for excellent customer experiences, and it is easy to see why. Many businesses offer similar products and services and operate using similar channels. So, what factors differentiate one brand from the next? The quality of customer experiences is certainly one of them.
Research by Forbes revealed that businesses that focus on creating great customer experiences have 4-8% higher revenue than their counterparts. Positive experiences lead to higher brand loyalty, customer retention and acquisition, and customer lifetime value. Hence, it is important to measure CX. However, it will be impossible to make improvements without first understanding the current state. As a result, measuring customer experience is a step every business must take at regular intervals.
By measuring the experiences customers have while interacting with your business, valuable and actionable insights that answer many questions can be generated. For example, a business may be interested in why they have a high churn rate or an excessive website bounce rate. These two peoples are likely to be linked to negative customer experiences, and an attempt to measure the CX will show the reasons. Furthermore, measuring this CX will also create pointers for improving the problems. For example, customer surveys will reflect the direct opinions of customers on how they feel services can be better.
HOW TO MEASURE CUSTOMER EXPERIENCE
Without a doubt, measuring customer experience is important to the growth of any company. However, the process is often a difficult one for several reasons. For example, the customer base for most businesses is quite large. Also, businesses will often set up numerous touchpoints to meet the demands of multichannel marketing. In addition, different business leaders disagree on which of the many CX metrics is the best or which data collection method is preferable. However, with proper planning and implementation, businesses can measure CX and get great value and insights in the process.
Here is a great step-by-step guide to measuring customer experience in a data-driven and result-oriented manner:
DEFINE GOALS AND OBJECTIVES FOR MEASURING CX
At the start of the process, it is important to gather all major stakeholders in a meeting and define the customer-oriented goals and objectives for measuring customer experience. This is important for three reasons. Firstly, it helps in deciding which of the CX metrics will be at the top of your measurement system. Choosing a metric specific to your goals is better than just selecting a metric because it is believed to be the best. Secondly, it makes it easier to know how many channels need to be considered in the measurement of CX; only one, two, or all channels. Lastly, with goals and objectives laid out, businesses can derive true meaning from chosen metrics. This is important because some metrics can mean anything without proper context. For example, the high number of pages viewed per session could mean your website visitors enjoy their user experience. However, it could also mean your UI is confusing, causing them to click around repeatedly. Therefore, this first step is important to avoid difficulties in measurement and interpretation later on.
DRAW CUSTOMER JOURNEY MAPS
Customer journey maps are visual representations of the steps customers take to achieve their goals for interacting with a business. After making all the key decisions above, the next step is to outline customer journeys most relevant to your goals and metrics. A good customer journey map will highlight all the points that cause friction in the customer journey and negatively affect their experience. Consequently, these areas will be the focus of data collection.
COLLECT DATA FROM CUSTOMERS
Now, it is time to conduct marketing research to collect the data that will be used to measure experience. The research may be quantitative or qualitative. Qualitative research is often believed to be the better option because customers are allowed to express themselves. It can be collected through interviews or direct observation. However, quantitative research through customer surveys provides good information and is easier to measure. Once again, the goals and metrics decided upon will guide the decision of methods for data collection.
ANALYZE AND REPORT
The obvious next step is to analyze the collected data. Get the appropriate software and use the analytics tools present to generate insights. The analyzed data will then be presented in charts and graphs that summarize the findings. These reports will clearly show how your business performs against chosen metrics. Also, the insights generated can be used to create theories and ideas on how to improve customer experience in the future.
When implementing new ideas for better CX, it is important to repeat these steps as often as necessary to achieve and maintain great results. Measuring customer experience is a continuous process, not a one-time thing.
TOP 5 CUSTOMER EXPERIENCE METRICS TODAY
Although there are many CX metrics, some represent customer experience better than others. Here are five of the best metrics to use today:
CUSTOMER SATISFACTION SCORE (CSAT)
This is one of the most popular CX metrics used in business. It is used to measure the level of satisfaction a customer experiences with the business in general or after a specific interaction. For example, customers who have just made a purchase can be asked how satisfied they were with the checkout process. The level of satisfaction is typically graded using a numerical or Likert scale. The average score for all customers can then be calculated from the total.
NET PROMOTER SCORE (NPS)
Net Promoter Score is another popular metric, and it shows the level of brand loyalty customers have. It is measured by asking customers how likely they are to recommend the business to friends and family on a numerical scale. 72% of people that enjoyed positive CX will share their experiences with six or more people. Hence, NPS is a good metric for measuring customer experience.
CUSTOMER EFFORT SCORE (CES)
Many customers consider ease of use to be important to their overall experience. Customer Effort Score helps businesses measure how easy the brand’s channels, products, and services are to interact with. For example, the survey might ask, “How easy is it to navigate our website?” and have scores from 1 to 5. The average of the total score will be a fair reflection of the ease of use as well as the customer experience.
CUSTOMER LIFETIME VALUE (CLTV)
The use of customer lifetime value is increasingly becoming more popular in the field of CX. CTLV measures the total revenue a customer has brought during their relationship with the business and how much more the business can expect from the customer over time. It is calculated by multiplying the customer value by the average customer lifespan.
CUSTOMER CHURN RATE
Customer churn rate is a metric that shows the percentage of customers that have ended their relationship with a business over a period of time. A high churn rate is a marker of bad experiences and should make the business question why customers are leaving.
In conclusion, customer experience metrics are important for measuring and understanding customers. Businesses must use suitable metrics as the starting point for improving customer experience.