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Editorial

How to Measure Customer Experience Beyond Net Promoter Score

11 minute read
Karolina Kulach avatar
Satisfied customers will drive your business. Your task is to improve your customers’ experience. Here's a look at how to measure it.

According to a study by consultancy Walker Information, customer experience (CX) will overtake price and product as the key brand differentiator by 2020.

In other words, satisfied customers will drive your business. Your task, then, is to improve your customers’ experience. And in order to verify that the customer experience is improving, you will need to measure CX.

There are many ways to measure CX that go beyond the net promoter score (NPS). Let's take a look at a few.

Measure CX and Retain Your Existing Customers

The old adage has it that retaining customers costs less than acquiring new ones.

In a column in Forbes, serial entrepreneur Patrick Hull cited the book “Marketing Metrics” by Paul W. Ferris et al., which stated businesses have a 60 to 70 percent chance of selling to an existing customer but only a 5 to 20 percent chance of selling to a prospect.

So your chances of succeeding come down to great customer experience. There’s always room to improve the customer experience, but to do so you need to measure it in a strategic way. Here are the steps to take:

  • Select the right business/CX metrics for analysis.
  • Choose an end goal (“improve customer retention,” for example).
  • Determine what metric you will use to measure your progress toward that goal (e.g., churn rate), and define a target in quantifiable terms (e.g., a churn rate of less than 8 percent).
  • Keep your business’s key performance indicators (KPI) in mind (revenue or number of repeat customers, for example).
  • Think like your customers.

To choose the right measurement approach, keep your business goals in mind while opting for the least painful option for your customers.

Related Article: Are Your Customer Metrics Making an Impact?

Is There a One-Size-Fits-All Way to Measure CX?

It would be nice if we had one standard way to measure CX, but we don't — customer experience isn't that easy! For a B2B company, NPS may work well, whereas Customer Effort Score may be the answer for a B2C company. It’s reasonable to track multiple metrics over multiple time frames.

The good news is today we have access to tools, possibilities and best practices. The great news is there’s no need to guess.

Is It Really All About NPS?

A classic brand metric, the net promoter score indicates the percentage of customers who say they would recommend your company to others.

It’s one of the easiest and fastest ways to measure customer satisfaction, but it's not recommended for businesses to rely solely on NPS. Because NPS is based on a response to a single question (How did you like our service?), one of its biggest drawbacks is the need for additional research. Moreover, NPS may not reflect actual interactions and experiences.

What people say is not the same as what people do. Therefore, in addition to asking customers whether they would recommend your company to someone else, you need to measure and track actual interactions and dig into the root causes of why customers contact your support team. It’s crucial to understand the actual issues your customers have with your product, not the ones you or they think they have.

You have to get to the heart of the customer’s experience.

Related Article: Everything You're Doing With Net Promoter Score Is Probably Wrong 

Other Ways to Measure CX and Customer Satisfaction

One way of doing this is the customer effort score (CES), which is designed to determine the relative amount of effort required by the customer to do business with a brand. CES measures how easily exchanges between the customer and the company are completed, with a focus on customer support.

Many consider CES to be the most telling metric of how positive customer experience has been. After all, using your products should be as easy as possible. If the customer said it was effortless, there you go!

Faced with a choice of a single CX metric, many say they would choose CES.

Of course, there are others. You could, for example, use the customer satisfaction score (CSAT). To calculate your CSAT, you ask your customers how satisfied they are on a scale of, say, 1 to 5. It’s a good approach for general-purpose measurement and identifying interactions in need of improvement.

Surveys are great tools for collecting data about your customers’ perceptions of your business. Bear in mind, though, that they’re more of a backup to determine if the knowledge you gain from customer data is right.

Where Do You Get Your Customer Data?

One type of valuable customer data is your churn rate, a measure of the percentage of customers who stop using your product within a given time frame. For B2C companies, churn rate may be a quarterly measurement. B2B companies may measure churn rate on an annual basis. Your goal is to make the churn rate drop.

You can also cull valuable customer data from the calls and inquiries you receive. You should keep track of the number of times customers contact you, as well as the content of their calls and inquiries. Then look for patterns, draw conclusions and follow up.

Some say no news is good news and silence is golden, and if that’s the case at your company — meaning you aren’t hearing anything from your customers — congrats! It’s less likely that people will tell you when something goes right, because in the age of the demanding consumers, an impeccable experience is expected.

No news? Your users may have no technical issues and you’re probably doing a good job. That would make your customer agents happy, because it means they don’t have to exhaust themselves by constantly replying to tickets.

On the other hand, if things are too quiet, it could be cause for concern. Some experts say that a high volume of service tickets is a good sign: It means customers want to be successful with your product. And according to some estimates, more than 90 percent of unhappy customers don’t complain — they just leave.

Customer Journey Mapping

If you survey customers after individual transactions, they may appear satisfied at each point. However, the very same people may report that they’re unhappy with the overall experience. The whole journey is greater than the sum of its parts.

When measuring CX, keep in mind the global view and see customer interactions in context. For example, if there are complaints, where do those complaints arise in your customer’s journey?

A customer journey map graphically portrays the story of the customer’s experience. It offers a holistic approach from initial contact, through engagement and into a long-term relationship, focusing on the functional relationship between parts and the whole.

With customer journey mapping, you can identify key interactions and pain points that the customer has with your company.

Related Article: Customer Journey Maps Work Great ... Up to a Point

Customer Lifetime Value

Another valuable metric is customer lifetime value (CLV), which is a measure of the total worth of a customer to a company over the entire time of that customer’s relationship with the company. It can be tangibly linked to revenue and can help you prepare forecasts.

CLV can be challenging to measure, but let’s boil it down to this simple formula:

Customer revenue minus the cost of acquiring and serving the customer.

CLV can help you segment your customers by value and target them in the most efficient way.

With CLV, you can better plan your future marketing campaigns and improve customer interactions. You can learn from your high-value customers about what makes them do business with you and include that information in your unique selling points.

Learning Opportunities

CLV will also help you gain a better understanding of how to allocate money in your budget to customer acquisition and retention efforts to achieve sustainable growth.

How Long Should Your Customers Wait?

Another metric that offers valuable insights into the customer experience is customer wait time. 

According to Forrester Research, 45 percent of adult U.S. consumers will abandon online transactions if they can’t get their questions answered quickly. And McKinsey reports that 75 percent of online customers expect help within five minutes of making contact online.

Being bounced around and transferred to several people who are unable to provide answers is one of the biggest frustrations for a customer.

Quick response and handling times often equal high customer satisfaction levels.

A metric that can help you better understand the issue is problem resolution time. You can calculate problem resolution time with a simple survey after a customer support interaction, asking, for example, how long it took to solve the problem or how many people a customer had to speak to before the issue was resolved.

If your problem resolution times are high, you’ll probably have to dig deeper to find a solution. For example, you may want to investigate whether the training and organization of your staff is sufficient.

Here are a few other metrics you can use:

  • Average handling time (ART): This is a measure of the average amount of time it takes to solve a customer’s query.
  • First response time (FRT): This is a measure of how quickly you’re able to provide customer support to customer queries. Here is a breakdown of some estimates of first response times that customers expect:

    1. For 53 percent of customers, it’s OK to wait three minutes for a support agent while on the phone.
    2. Email replies are expected within 24 to 48 hours.
    3. Live chat should provide an almost instantaneous response.

  • First contact resolution (FCR): This measures how well you can solve customer queries the very first time they contact you.

You can also get a sense of your company’s customer response times by going undercover and posing as a customer yourself (provided you can keep it secret). You can even ask a friend to join you in this little plot. This way, you will get firsthand information about your marketing efforts, your products and the overall experience of working with your company.

Measure Your Customers’ Emotions

It’d be great to know precisely how your customers feel about you. Measuring that in precise terms is challenging, but you can try emotional evaluation scores and Plutchik’s Wheel of Emotions, which depicts emotions in different colors.

You can also try to detect customers’ emotions by monitoring social media and keeping track of the number of mentions, comments and hashtags that involve your product or company. Bear in mind, though, that social media monitoring is unlikely to be representative of all viewpoints.

Such challenges may be addressed by the future developments in artificial intelligence (AI). Advanced analytics tools can drive real customer experience transformation, especially real-time analytics. CX analytics is maturing and becoming increasingly predictive, which will enhance personalization and, hopefully, emotion detection.

Referrals, Reviews and Word-of-Mouth

Word-of-mouth advertising is powerful. And as old as the hills. If people are happy with your brand and CX, they should gladly recommend your product to increase their own professional or personal worth and value in the eyes of others.

Referrals and five-star online reviews are every business owner’s dream. After all, you don’t have to market yourself, people keep coming to you!

NPS is just a measure of how many people say they would spread a good word about you. If you want real numbers, track actual referrals and reviews. This combines social listening and engaging in trackable customer advocacy programs. Pay attention to the quantity and quality of referrals you get from your existing, satisfied customers.

When it’s easy for you to generate new business from referrals, you can guess the value of the customer experience you provide. But go beyond guessing and measure as much as you can.

Of course, remember to reward these highly valuable customers who tell the world how wonderful you are!

Life Beyond NPS

The bottom line is that improved customer experience equals improved customer satisfaction, which leads to an increase in referrals and an increase in cross-selling and upselling opportunities.

Customers cast their votes with their wallets, and they often have plenty of companies and products to choose from if they decide they are unsatisfied with yours. You want them to vote for you, so improve customer experience.

A well-implemented CX measurement program will give you lots of valuable insights about your customers’ loyalty, areas for improvement and the interactions that matter most.

The best recipe for successful customer experience? Make your customers satisfied, bring them closer to your brand, and let them spread the good word about you!

About the author

Karolina Kulach

Karolina Kulach is a non-fiction writer and content marketing manager at Webinterpret. She specializes in global ecommerce, ecommerce translation and localization and UX writing and microcopy.