CX SCORE: HOW TO MEASURE CUSTOMER SATISFACTION?
Without a doubt, the importance of Customer Experience (CX) for any business growth shouldn’t be underestimated. It stands for how customers perceive and feel about your business. Besides, CX and satisfaction clients get from interacting with your brand tightly correlate. In fact, companies that improved customer experience saw an increase in customer satisfaction (92%), an uplift in revenue (84% ), and cost savings (79%).
In recent years, a number of customer experience measurement tools and strategies have been developed to analyze customer habits and preferences. Yet, the most valuable insights you can get comes directly from your customers themselves, and you should treat them as your customer satisfaction KPIs of sorts.
According to Forrester’s CX Index, 72% of companies admit that improving customer experience is a must. However, only 1% of organizations manage to provide a superior experience. Measuring and carefully benchmarking customer experience metrics is already a big step for businesses to enhance their customer experience.
But how to measure customer experience? And which metrics are worth considering for your business? In this blog post, we’ll explain how to start measuring customer experience and how to align those CX KPIs with your business operations to gain the upper hand over your competitors.
WHAT ARE CX QUALITY METRICS?
Simply put, cx metrics help your organization measure how happy your customers are so that you can actively work towards increasing competitive advantage, expanding revenue, and boosting customer loyalty and retention.
Even if customers are unhappy with your product, they choose to say nothing. Those are customers you are likely to lose if you don’t take the necessary measures. That’s why tracking customer satisfaction metrics is crucial. CX measurement tools can help you collect valuable feedback, analyze it, and, based on the received insights, make improvements to your digital product strategy.
HOW TO MEASURE CUSTOMER EXPERIENCE & SATISFACTION? KEY METRICS
A loyal customer is a satisfied customer. We know this very well as the core focus of our company is CX-aware solutions development. We use customer experience and customer satisfaction insights to inform our decisions for product designs.
NPS, CSAT, and CES are the most commonly used customer satisfaction metrics. We’ll introduce you to each metric and show how they can help improve your business performance.
CX METRIC #1: NET PROMOTER SCORE (NPS)
The Net Promoter Score measures the willingness of customers to recommend a company’s products to others. It is used to identify the loyalty of customers to a company.
How to measure customer experience with NPS? We usually measure NPS with a single question survey:
“On a scale from 0 to 10, how are you likely to recommend company/brand/product X to a friend/colleague/relative?“
Reading NPS CX metrics is easy. Here, 0 stands for not at all likely, and 10 is for extremely likely. Depending on the response, customers fall into one of three categories to establish an NPS score:
Consider implementing this CX metric into your customer experience strategy, as it can be used with industry NPS benchmarks to see how your product is doing compared to your competitors.
The formula to calculate the NPS metric is simple. You have to subtract the percentage of customers who answer the question with a 6 or lower from the percentage of customers who answer with a 9 or 10.
Customer satisfaction formula:
NPS = % PROMOTERS – % DETRACTORS
If you apply the NPS feedback correctly, you can adjust your business to meet customers’ needs without over-delivering in one area or under-delivering in another.
We also recommend asking follow-up questions as a part of the survey:
- What’s the reason for your score?
- What can we do to improve our product and bring more value to you?
Customer experience scores are not vanity metrics that make no actual sense for your business. Customer satisfaction is the key to acquiring new customers and keeping the old ones. Yet still, remember that NPS is just a part of a bigger picture. Don’t view it as a standalone metric that determines how good the whole client journey is. Combine NPS with other metrics for customer experience. Customer Satisfaction Score (CSAT) and Customer Effort Score (CES) will be a good company.
Focus on value rather than numbers. It means that you should aim at improving the quality score rather than just increasing the figure. Take what you have learned from your insights and apply the results to grow promoters and convert passives and detractors into promoters.
Summing up, the goal of customer experience evaluation with the help of the Net Promoter Score is analyze and support the relationship you’ve created with your audience. To make it effective, you should always listen to the voice of your customers and act on it. Instead of improving the numbers, focus on understanding what drives the CX score and improving it to create and sustain long-term customer satisfaction.
CX METRIC #2: CUSTOMER SATISFACTION SCORE (CSAT)
CSAT is a commonly-used key performance indicator for customer experience. We usually apply this metric to track how satisfied customers are with the product.
CSAT surveys are one of the ways to measure customer experience in regard to a certain aspect of your product. For example, you’ve added a new feature and want to see how efficient and useful it is to the end users and if any improvements are necessary.
Here’s an example of common CSAT questions:
“How are you satisfied with our product?” or “How would you rate your overall satisfaction?” with the company, its product, or a certain interaction.
A five-point customer experience scale is used, with the following options: 1) very unsatisfied, 2) unsatisfied, 3) neutral, 4) satisfied, and 5) very satisfied. Companies can calculate CSAT by using an average of 1-5 or focusing on the 4-5 responses.
Customer satisfaction formula:
(#) POSITIVE RESPONSES / (#) TOTAL RESPONSES X 100 = (%) CSAT
To calculate the Customer Satisfaction Score, divide the number of “satisfied” or “very satisfied” respondents by the total number of respondents and multiply it by 100. This results in your CSAT percentage.
CX METRIC #3: CUSTOMER EFFORT SCORE (CES)
With the CES experience metrics, we ask customers to score the amount of effort involved with a specific interaction. Using CES surveys, you can ask the question,
“on a scale of ‘extremely easy’ to ‘extremely difficult, how easy was it to interact with [product].”
The idea is that customers are more loyal to a product that is easier to use. Customer churn is one of the main business drivers, and customer effort is a great indicator of loyalty. CES impacts your business outcomes and is ideal for tracking customer experience over time.
To calculate the Customer Effort Score, determine the percentage of positive (easy and easy) and negative (complicated) responses to your CES survey. You can then subtract the number of negative responses from the positive responses.
Customer satisfaction formula:
CES = % EASY – % DIFFICULT
If you get a high average, your company is making the experience convenient for customers. A low average indicates that there’s still work to be done in order to make the customer experience easier and more engaging. However, the drawback of CES is that it is more focused on evaluating a particular process of customer interaction, so it doesn’t give a broader understanding of the entire customer experience. For this reason, we apply CES together with Net Promoter Score and Customer Satisfaction Score to get a better understanding of customer satisfaction.
OTHER CUSTOMER EXPERIENCE METRICS
Customer experience is multi-faceted. That’s why there’s no single CX KPI that would give you a straightforward answer as to whether the customer experience you provide is good or bad.
To make sure you are guided by relevant data, you have to keep track of a variety of customer experience indicators. Although they do not point at customer experience flaws directly, they may well add context to the data you’ve already collected with the NPS, CSAT, and CES metrics. So, here are a few more KPIs to measure customer experience:
- Customer lifetime value (CLV)
- Customer health score (CHS)
- Customer retention rate
- Customer referral rate
- Customer churn rate
- Conversion rate
- Active users: daily (DAU), weekly (WAU), monthly (MAU)
WHICH METRICS FOR MEASURING CUSTOMER EXPERIENCE TO FOCUS ON?
That’s the most interesting part because there’s no right answer to this question. To avoid tracking vanity metrics, you need to know exactly why you collect that data.
Is it in line with your current business strategy?
Have you resorted to customer experience tracking in order to find the weak spots in your product?
Or maybe, you already know where your product underperforms and you are trying to understand how customers want the problem to be solved?
The golden rule here is you should always be guided by certain goals. This is the only way to achieve the expected results.
We believe that a well-designed CX strategy combines multiple CX metrics based on user feedback. When you collect different types of feedback data, you get a holistic view of what is going through your customer’s mind. To do so, it’s important to supplement the quantitative surveys with open-ended questions where users can leave qualitative feedback.
As we’ve mentioned before, working with customer experience metrics is an essential part of the CX-aware solutions development process. We start incorporating user feedback and CX metrics into the project roadmap from the very beginning of the project. Want to learn what it looks like in practice? Contact our team for more details.