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Measuring The Customer Experience

According to a study by Walker, by the year 2020, price and products will no longer be the key brand differentiator — customer experience (CX) is set to take over.

With this in mind, more and more companies are shifting their focus towards improving the customer experience. In fact, a recent report by Forrester stated that “nearly 72% of businesses say improving the customer experience is now their top priority.”

But to many, the concept of customer experience is just an idea without much substance. Many businesses struggle with the ability to accurately measure improvements in customer experience, failing to identify specific metrics to measure ROI.

So, let’s more clearly define the customer experience, then work to identify factors used to accurately measure it.

What Is Customer Experience?

Customer experience is about the interaction between a customer and business and the feelings associated with that experience: good or bad. Think of customer experience as a process occurring throughout the duration of the relationship between the two parties.

The goal of course, is to always provide a positive customer experience, resulting in high customer satisfaction. This means meeting or exceeding customer expectations during every customer interaction. Providing a positive customer experience benefits a company’s bottom line: it results in the high possibility of retaining more loyal, repeat customers.

According to a study by Oracle, 74% of senior executives believe that customer experience has a lot to do with a customer’s willingness to be a loyal advocate to the brand.

The Importance of Measuring the Customer Experience 

Customer Experience Measurement measures the customer experience throughout the entire customer journey. The customer journey is defined as being made up of all the customer actions during all the touchpoints between the customer and the business.

Due to the increasing importance of the customer experience to a company’s bottom line, the ability to accurately measure the customer experience is becoming a top priority for businesses.

The process is not just about collecting data and results, but also about fully understanding and monitoring customers and their behaviors while interacting with brands. Having a qualitative and quantitative look at relevant information provides a more well-rounded perspective as to what customers want and need, and what satisfies or dissatisfies them.

4 Ways to Measure Customer Experience

There are many different approaches to measuring the customer experience, but they all have the same goal — to understand the customer journey and a customer’s relationship with the business.

1. Customer Satisfaction Surveys (CSAT)

Simple questionnaires are given to customers, either in stores or online surveys. The average score given by customers to a brand will be a key factor in determining customer satisfaction. Questions can be general or drilled down into specifics about products/services, customer service, and so on.

2. Net Promoter Score (NPS)

The Net Promoter Score can predict how likely (or unlikely) customers are to recommend your brand to others. It can also predict whether or not customers will remain loyal to a brand.

The Net Promoter System provides a score guide to determine which level customer responses fall into. NPS is typically measured by collecting data using customer surveys, specifically asking “How likely are you to recommend this brand to your family and friends?”. The score is then calculated by subtracting the percentage of detractors from the percentage of promoters. Studies have shown a correlation between high NPS and revenue growth.

3. Customer Churn Rate

Churn rate refers to the percentage of customers who walk away from a business. This can be a passive action where a customer simply ceases to come back for another purchase or the more active action of cancelling a recurring service.

Churn rate is often directly correlated to customer satisfaction as it relates to poor customer service. Churn rate can be calculated by dividing the total number of lost customers by the total number of active customers during a given period of time.

4. Customer Effort Score (CES)

The Customer Effort Score helps businesses determine the amount of effort required for customers to accomplish a task. The score is determined through a post-interaction survey asking customers how requests or complaints are handled. Put simply, the survey asks, “Did it require too much effort?”

CEB’s research stated that 96% of customers who put forth high effort to resolve issues are more disloyal compared to only 9% of those with low effort interactions. As a rule, businesses should aim to create low effort interactions on behalf of their customers and issue resolution.

Customer Experience Metrics That You Should Track

Besides the score frameworks already mentioned, there are also a few additional metrics you can measure to understand your company’s customer experience.

Response Time

Customers want fast response times when they are seeking assistance. That said, response times vary by medium:

  1. Phone: According to Dave Chaffey’s study, 53% of respondents find 3 minutes to be the most reasonable response time while waiting for a customer support agent.
  2. Email: Research from the University of Southern California’s Viterbi School of Engineering found that the most common email response time is two minutes (which could include an auto response acknowledging the customer’s email). The same study found that 50% of survey respondents expected an email in just under an hour. Buffer, for example, strives to answer every email they receive within 60 minutes.
Resolution Time

No customers wants to wait very long for their questions to be acknowledged. Making customers wait for a response increases frustration while negatively impacting the customer satisfaction rate.

According to the Customer Experience Impact Report by Harris Interactive, the top two reasons for customer loss are:

  1. The customer feeling poorly treated
  2. Failure to solve an issue in a timely manner
Social Media

More than just a place to share your latest company news (and promotions): social media can also serve as a useful metric for measuring the customer experience. Customers use social media as a channel for solving customer service issues and voicing their opinions on a business. You can track feedback on social media through sentiment analysis.

Measuring the Customer Experience

Datasets without context can be overwhelming; however, when you know exactly what you want to measure and what metrics to focus on, it’s possible to make sense of and act on this data to improve the customer experience.

Businesses that are still relying on their “gut feelings” when it comes to putting numbers to the customer experience are missing key opportunities to improve their CX. Determine your most important metrics, figure out how to measure them, and use them as a benchmark for improvement over time.

Do you use any other metrics or frameworks for measuring the customer experience? Let us know by tweeting at @SaleMove.

<p>Maddy Osman creates engaging content with SEO best practices for marketing thought leaders and agencies that have their hands full with clients and projects. Read her latest articles on Twitter: @MaddyOsman.</p>