Many companies measure their Customer Experience (CX), so that they can gauge their customers’ sentiments and discover insights to drive profitability. However, not every business needs to use every known CX Metric. This article will detail the top CX Metrics to use, which organizations or departments benefit from them the most, and the reasoning behind using these metrics.
Top CX Metrics In Use Today
Below are seven different CX Metrics used the most by companies:
Overall Customer Satisfaction (CSAT/OSAT):
CSAT is the overall satisfaction a customer has with a company, rated on a five-point scale, with a few practitioners using 4-point scales to avoid giving a “neutral” option. Most organizations will start with this metric, as it is the most traditional method of measuring customer experience.
CSAT scores can be obtained explicitly through survey questions or implicitly through product review ratings, timeliness of delivery statistics, and/or mystery shopping scores. The CSAT metric is universal enough to be used by both B2C and B2B organizations. However, like with the Net Promoter ScoreSM below, most experts advise against relying on only one CX metric.
Net Promoter Score (NPS):
NPS is how likely a customer is to recommend the company to a friend or colleague. It is based on an 11-Point Scale, with 9 and 10’s considered “Promoters”, 7’s and 8’s considered “Neutrals”, and 6’s and under considered “Detractors”. The percentage of promoters is subtracted against the percentage of detractors to give NPS, which ranges from -100 to +100.
“Asking a customer if they would recommend your company to friends or family often causes them to think about their experience in a deeper way.” – Rick Denton, Help Scout
One important thing to note here is that the Net Promoter Score assumes that consumers have a choice between providers. Thus, this metric may not be meaningful to a regulated monopoly (such as a public utility) or a governmental entity (e.g. Municipal Services).
Customer Effort Score (CES):
This measures the ease of doing business with your company (or with a specific company employee), based on a five-point scale. As with many other customer-based metrics, this is often reported on a “Top Box” (e.g. Very Easy) or “Top 2 Box” (e.g. Very Easy or Somewhat Easy) basis. It can also be based on a 10-Point Scale as well.
Like any of the survey-derived metrics here, it is best to include an open-ended response after this question to capture the reasons why the customer gave that specific score.
First Contact Resolution (FCS):
This metric is especially useful for organizations with call/contact centers, retail service locations, or other kinds of human touchpoints. FCS is more of a measure of the perception from the customer that the issue driving the touchpoint (i.e. Phone Call, Store Visit) was fixed in that initial contact.
“Use this to understand areas where you are — or are not — empowering your agents with the processes, tools, and policies to address customer tasks.” – Rick Denton, Help Scout
Low FCS metrics are often a sign of outdated tools and rules with customer-facing staff, so improvements here can also improve employee engagement, which we will detail later.
First Contact Resolution is growing in popularity among B2C organizations, plus B2B firms with highly involved customer service staff.
Customer Loyalty, Retention, and Churn:
These metrics are often obtained from internal sources, such as customer tenure, purchase frequency, average order size, and use of multiple channels. These metrics can be retrospective (i.e., average tenure) or predictive (i.e., likelihood to remain a customer).
They are most often owned by the marketing departments within B2C enterprises but can also be used in B2B organizations with clear evidence of loyalty and/or churn (e.g., Subscriptions or Contract Renewals).
Customer Lifetime Value (CLV):
This is the sum of how much revenue a customer has brought into the business throughout the entire relationship, minus the costs to acquire, retain, and service the same customer. It’s a measure that drives organizations to see the customer experience across the customer’s entire journey, instead of solely focusing on specific transactions.
High CLV measures are indicative of loyal customers with good experiences with the firm, with low CLV scores indicating something lacking in the relationship. This metric works well for B2B organizations, and those B2C firms that can clearly identify a unique customer (e.g., loyalty program, monthly subscriptions, financial services).
Employee Engagement and Experience (EX):
As the saying goes, “happy cows give more milk”. This is also true with your firm’s employees and is often overlooked when gauging Customer Experience.
“Recent research has begun to explore this [relationship], showing that companies that perform well on employee experience metrics also tend to perform well on customer experience metrics, and suggesting that improvements in employee satisfaction can drive improvements in customer satisfaction.” – Harvard Business Review
That Harvard Business Review study showed that for a retail organization with in-store customer-facing employees, if an average store could move from the bottom quartile to the top quartile in each Employee Experience (EX) metric measured, it could increase their profits and revenue by around 50%. A Gartner study also discovered Employee Experience and Engagement had an equal to greater impact on CX improvements for 86% of responding firms.
These EX metrics will require coordination between Human Resource managers and related technology teams, along with the Customer Experience staff and customer-facing managers to action the needed changes suggested through EX metrics.
In conclusion, no one metric will be the best (or worst) to use, as it will depend on the needs of your organization and your customers. Best practice among many companies is to combine select metrics from this list above, with the qualitative data from open-ended comment fields to give a more holistic look at the Customer Experience.
Many survey platforms today, such as Qualtrics or Medallia, can analyze open-ended text responses to synthesize insights from open-ended comments to capture the “why” behind many of these CX metrics above.
Ultimately, it could be said that the only wrong move a company can take with Customer Experience metrics is to not measure it at all.
Frank Ready is a Senior Consultant with RevGen Partners. He specializes in Customer Experience and Insights, Market Research, and listening to the Voice of the Customer through both Qualitative and Quantitative Research.
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