Editorial
Customer experience is critical to the success of any organization. As the 2018 KPMG Customer Experience Excellence report states, organizations that fail to meet customer experience (CX) expectations “rarely get a second chance.”
Yet KPMG and other consulting firms report that customer expectations for CX are rising faster than companies’ efforts to meet those expectations, so it is important for companies to be able to gauge the success of their CX efforts. To do that, they need metrics, and some metrics are better indicators of CX success than others.
Here’s a look at what marketers say are the top five CX metrics.
1. Net Promoter Score
One of the most popular metrics, the Net Promoter Score (NPS) measures the willingness of customers to recommend a company’s products or services to others.
“Net Promoter Score is well known across industries, in companies of all sizes and throughout executive boardrooms,” says Madeline Good, manager of marketing operations and creative services at customer feedback software provider PeopleMetrics. “NPS can provide excellent insight into the overall relationship you have with your customers, but it falls short in measuring how well the most recent experience went. If you ignore customer issues from recent experiences, eventually your NPS will take a nosedive.”
If a company is simply measuring its overall relationship with a customer, as is the case with NPS, and is not paying attention to recent experiences, that company will not learn that the customer’s account is “at zero” until that customer has had too many negative experiences, Good says.
“NPS is most valuable when leveraged alongside other metrics,” Good argues. “Combine NPS with an individual measure of the customer experience in a transactional voice of the customer survey by asking how satisfied the customer was with their last experience, asking about customer effort or simply asking about a customer’s overall experience during their most recent visit.”
Related Article: The Road to Customer Experience Is Not Through Net Promoter Score
2. Customer Effort
How easy is it for a customer to do business with your brand? Can the customer move easily through your website and make a purchase? Is the customer able to easily find product specs, background details and other information about your products or services?
A customer effort score can help give you the answers to those questions.
“Customer effort is different from industry to industry,” says Christopher Connolly, vice president of product marketing at contact center solution provider Genesys. For example, choosing complex financial products and services requires more customer effort than buying clothes. But if the customer effort for either is above industry norms, or if the customer effort increases from one month to the next, it’s an indicator that CX is declining.
Connolly recommends that companies develop metrics for how long a customer should stay on any portion of a website or how long any web task (e.g., enrollment, ordering, payment), should take. If a customer is taking too long on any particular task, the site should push an offer to chat or to make a call to improve the experience.
Related Article: Great Customer Experience Means Reducing Customer Effort
3. Customer Sentiment
If companies want to find out how people truly feel about the CX they offer — and what customers think about their pricing and product quality, among other things — they need to measure customer sentiment and customer emotion, says Fabrice Martin, chief product officer at customer experience management software provider Clarabridge.
Companies can gather the data they need to gauge customer sentiment by analyzing interactions with their contact centers, monitoring social media posts and conducting customer surveys. The volume of responses to surveys has been declining, so Martin says that companies that want to determine customer sentiment will have to put more effort into analyzing text and audio interactions with contact centers and culling unstructured information from social media posts and reviews on sites like Yelp.
But he notes that there are a couple caveats to keep in mind when looking at online reviews and social media posts: People tend to post negative sentiments more often than positive sentiments, and some companies use paid reviewers. Therefore, outlier sentiments need to be balanced against more common sentiments, he says. The best approach is to collect as many customer interactions as possible. The more interactions you collect, the easier it will be to recognize if very positive or negative sentiments are outliers or if they are true indicators of a company’s CX performance.
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4. Customer Engagement
Another important metric to consider when assessing CX is customer engagement.
The more frequently a customer engages with a brand, and the longer the average interaction lasts — whether those interactions are via visits to a website, trips to brick-and-mortar locations or through social media — the better the CX, says Sandi Lin, CEO and co-founder of Skilljar, a company that offers a training platform that companies use to help customers learn how to use their products.
“We look at things like how recently did we engage with the customers, the number of active users, etc,” Lin explains. “We look at the breadth and depth of the relationship.”
For training programs and for subscription-based products and services, like Microsoft Office 365, a provider needs to evaluate how many of the available subscriptions the customer is using and how much of the available service (e.g., Word, Excel, PowerPoint), the customer is using. If either is low, the CX is weak and the provider is in danger of losing the customer to a competitor, Lin says.
Related Article: Customer Experience Metrics, Through a New Lens
5. Lagging Indicators
While leading metrics like Net Promoter Score, customer engagement, etc., are certainly important, lagging metrics such as customer lifetime value also provide important measures of customer experience success, says Connolly.
As is the case with customer effort, Connolly explains that a customer’s lifetime value will vary from industry to industry. In financial services, for example, a full-service provider’s estimate of lifetime value might include projected earnings from when the customer (or the customer’s elders) make the first deposit into the account, through car loans, mortgages and estate planning, with many sales (life insurance, home equity, etc.) in the mix. However, a specialty retailer would have other expectations for lifetime customer value, as would a general merchandise retailer.
While many factors will influence the nature of a person’s long-term relationship with a company, Connolly says that poor customer experience is one of the major reasons customers curtail or end their relationships with businesses — whether they are financial services providers, retailers or other types of companies.
Other lagging indicators that may indicate that a company needs to improve the experience it offers its customers include overall revenue and overall business performance.
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