There’s a nearly endless amount of metrics you could be tracking for your customer service—but many brands make the mistake of tracking too many rather than too few.
So how do you decide which are essential for your brand and goals?
Begin with at least 1-2 metrics that measure customer experience directly. While many types of customer service metrics exist, customer experience metrics are those which directly measure the customer’s experience with a brand, service, product or interaction.
Tracking customer experience metrics specifically gives your team a clear understanding of how customers interact with and experience your brand and service. While there’s many metrics to choose from, these 5 are the most important.
Which Customer Experience Metrics and KPIs Should You Be Tracking?
While 87% of companies rate their customer experience as “excellent,” only 11% of customers agree. Where’s the disconnect?
The disconnect lies in ineffective, or non-existent, tracking of customer experience metrics. After all, if you don’t have adequate insight into how your customers actually feel, it’s easy to believe everything is designed well for the customer. However, to create truly compelling customer experiences, you need to hear from the customer and design for customer satisfaction. These six metrics and KPIs will help you do so.
Customer Satisfaction scores, or CSAT, are one of the most direct and effective ways to measure customer satisfaction. CSAT is measured as a percentage, from 0% satisfied customers (terrible) to 100% satisfaction (impossible, but extraordinary).
CSAT gives you a high-level overview of your audience satisfaction, allowing you to track trends and changes over time and understand how changes to your product or service may be impacting customer satisfaction. For example, if you recently hired more agents to reduce time in queue and your customer satisfaction score improves, you’ll know that shorter wait times matter for customers.
CSAT can also give you insight into how customers experience different touchpoints with your brand (i.e. customers may be more satisfied after visiting an in-store location but less satisfied after phone calls, in which case you’ll know you need to improve your phone service.)
How To Track CSAT
CSAT is collected through a one-question survey where the customer rates how satisfied they are on a scale of 1-5. Generally, this survey directly follows a service interaction, a purchase, or another experience or interaction with the brand. Typically the survey is presented as follows:
“How satisfied are you with [your recent interaction] with [brand]?”
- Very unsatisfied
- Very satisfied
Once the data is collected, you can use the following formula to calculate the percentage of satisfied customers:
(Number of customers who answered “4” or “5”) / (Number of survey responses) x 100 = % of satisfied customers
Net Promoter Score (NPS) is another essential customer experience metric. NPS quantifies brand loyalty and affinity on a larger scale than CSAT, so while CSAT gives you a snapshot of customer satisfaction at a particular moment, NPS shows you the average loyalty of your customers on the whole.
NPS measures how likely customers are to recommend your product or brand to a friend or colleague. Respondents are then grouped into one of three categories:
- Detractors (would actively recommend against, or would not recommend)
- Passives (might or might not recommend)
- Promoters (would actively recommend your brand)
Measuring CSAT alongside NPS gives you a more complete picture of customer experiences. For example: a new customer may call your support team for help with an order. Let’s say they receive satisfactory help, so when they receive the CSAT survey they respond with a 4—satisfied. However, after receiving their order, they don’t think it’s good quality and are frustrated with the product. By the time they receive their NPS survey, they say they would not recommend your brand.
They were satisfied with your service, but not with the brand on the whole. Using NPS and CSAT in tandem can illuminate these nuances and point to areas for improvement.
How To Track NPS
NPS is measured via a one-question survey, typically presented with the following question:
“On a scale of 1-10, how likely would you be to recommend [brand] to a friend or a colleague?”
Within the ten-point scale, anyone who answers between 1-6 is a detractor, any 7s or 8s are passive, and any 9s or 10s are promoters.
Your NPS score is then calculated with the following formula:
[percentage of promoters] – [percentage of detractors] = NPS score
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Customer churn rate
Customer churn rate is a measure of what percentage of customers churn within a given time period (typically monthly or annually). Churn rate is an especially important metric for businesses with recurring revenue models, such as subscription-based or SaaS companies.
If your customer churn rate is significant, it points to deeper problems with either your product or your service that should be addressed to improve the customer experience.
How to track customer churn rate
Customer churn rate is calculated with the following formula:
[Lost customers in a given period] / [Total customers at the beginning of the period] x 100 = Churn Rate
So if you had 100 customers at the beginning of the month and lost ten customers during that month, you would divide 10 by 100, then multiply by 100 to find the percentage, which is 10%. That means your churn rate is 10%.
If it’s difficult for your organization to determine lost customers, you can also calculate that metric as follows:
[ (number of customers at the end of the period) – (new customers during the period) ] = retained customers
[number of customers at the beginning of the period] – [retained customers] = lost customers
While a “good” churn rate depends on the industry, ideally your churn rate is lower than your new customer rate—that is, you’re bringing in more new customers on average than you’re losing. In addition, you’ll want to be reducing your churn rate over time.
Customer Effort Score (CES)
Customer Effort Score (CES) is a measure of how much effort the customer has to expend in order to contact your company and get their concerns resolved.
Obviously, customers who have an easier time contacting you and getting their concerns resolved are more likely to purchase again in the future. Harvard Business Review found that CES has a high correlation with churn: of customers who gave a low effort score, 94% said they would purchase from the brand again, and 88% said they would increase spending in the future. As a result, “delighting customers doesn’t build loyalty; reducing their effort—the work they must do to get their problem solved—does.”
As a result, tracking CES is essential for companies who are looking to both understand customer experiences and target specific areas for improvement. By reducing CES, your organization can improve CX while also improving other KPIs and operational metrics.
How to track CES
CES is measured, like other CX metrics, by a single-question survey, usually given at the close of a service interaction. Customers are asked to rate how much effort they had to exert to get their concern resolved on a scale of 1 (very low effort) to 5 (very high effort). Many companies also include an option for “My concern did not get resolved” for additional follow-up.
Ideally, CES is tracked alongside operational metrics such as first contact resolution rate, average hold time, and so on to determine overall effort.
You can also analyze the distribution of scores from CES to understand how different segments of your customers experience your service. For example, you might find that millennials have an effortless experience, while Gen X’ers find your customer service tools difficult to navigate. By finding ways to reduce CES for Gen X (in this example), you can reduce churn among that segment.
Customer Referral Rate
Finally, customer referral rate (CRR) is a great way to measure customer experiences, alongside NPS. While NPS measures the percentage of customers who say they would refer customers to your brand, CRR is a good way to measure the effectiveness of those referrals—i.e. how many actually converted into paying customers.
According to a study from Wharton, referred customers are much more valuable to businesses:
- Referred customers’ churn rate is 18% lower than the average customer churn rate.
- CLV of referred customers was 16% higher, on average, than non-referred customers of similar demographics.
- Referred customers were found to be up to 25% more profitable than non-referred customers.
So, not only is CRR a good indication that customers are having positive experiences, but it’s also a good way to improve CLV, retention and revenue over time.
How to track customer referral rate
Customer Retention Rate can be tracked using the following formula:
(number of referred purchases) / (total number of purchases) = referral rate
You can track referred purchases by asking directly (“Where did you hear about us from?”) or through a dedicated referral program. A referral program makes tracking customer referral rate easier, as you can track referral link clicks or referral codes used.
Using Customer Experience Metrics To Make Meaningful Change
Of course, tracking metrics and KPIs won’t give your organization instant growth—you have to implement changes based on the data you collect. But how can you use customer experience metrics to make meaningful change? Consider some of the following strategies.
Use CSAT data to improve underperforming service areas. CSAT data can give you valuable feedback on areas of your customer service or experience that are underperforming—that is, producing less satisfaction in customers. Once you analyze the data, you can target these areas for improvement. Whether you implement new policies or procedures to improve service, strengthen agent training, expand your support staff or take another approach, CSAT can point out areas for improvement.
Understand and fix pain points based on NPS feedback. Many organizations also include a field on their NPS surveys where customers can provide details about why they would or wouldn’t recommend. Such data is invaluable for improving the customer experience, as it can highlight specific areas or themes that customers are regularly dissatisfied with. You can then use this feedback to implement specific changes to fix these problem areas, strengthen the customer experience and reduce detractors.
Streamline service processes based on CES. Where are your Customer Effort Scores trending upward? When do customers have to exert the most effort to get their problems resolved? Use the data and trends you find from tracking CES to remove obstacles for customers and streamline the customer service process.
Follow up with churned customers or detractors. Turning a bad experience into a good one is a powerful way to improve the experience of individual customers. Not only can you make their own experience a positive one, but you can also enhance the word-of-mouth marketing they may do for your company in the future.
For companies who want to take their customer experiences to the next level, connect with an expert from Global Response for support and strategy specific to your brand. Our team has 40+ years of customer service experience—and our team can help you design customer service processes, track and analyze key metrics, and deliver a standout customer experience time and time again.