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The new metrics of customer experience

customer experience metrics

Although companies are increasingly recognising the importance of exceptional customer experience, the numbers show that few are achieving it. Forrester’s Australia 2019 Customer Experience Index (CX Index™) reveals that despite an overall improvement in CX quality between 2018 and 2019, the experiences delivered by two-thirds of brands are still just ‘OK’.

This presents an opportunity for companies that successfully manage to improve, progressing into Forrester’s good and excellent categories to differentiate their brands and gain a competitive advantage. Also, organisations providing superior customer experience benefit from increased revenue, greater customer retention, improved customer satisfaction, and a lower cost to serve.

However, even with clear incentives to step up their game, companies often struggle to quantify the impact of their CX efforts, which in turn hampers their ability to identify areas for improvement. This is particularly true in the vital, but often overlooked aspect of CX; customer communications.

As a new study from Gartner urges leaders to eliminate feeble customer experience metrics from their CX programs, we take a look at how you can select the metrics that matter to your business and suggest some measures to consider.

Choosing the right metrics

It’s important to know there’s no one-size-fits-all approach to measuring customer experience. Every organisation is different and how you use your metrics is ultimately more important than the metrics themselves.

To create a solid measurement system, use the following principles to guide you:

Take a holistic approach

It might be tempting to try to identify a single, perfect top-line metric but it’s neither possible nor indeed desirable. Instead, think about developing a holistic model that encompasses metrics that capture customer experience at touchpoints along the customer journey and flow into a top-line metric or suite of metrics.

Select meaningful metrics

What’s right for one organisation might not work for another. Think about your company’s most important goals and identify the customer behaviours that support success in those areas. For example, if your goal is to increase revenue then you’ll want to drive customer recommendations and increase retention rates. Tracking appropriate metrics for each touchpoint lets you see the areas where change could improve the overall customer experience.

Start building your data set

It can take 12-18 months’ worth of data to see relationships between business performance and customer behaviour so start collecting data as soon as possible. A good customer communications management (CCM) system will facilitate easy data capture and can be integrated with other business systems to achieve a single view of the customer.

Popular CX Metrics

Forrester suggests that great experiences need to have effectiveness, ease, and positive emotions. To measure CX at the customer journey level, consider leading indicators that highlight frustration, friction, or a problem in the system, such as:

Wait time. In a world where modern consumers expect instant service, the higher the wait time, the lower customer satisfaction is likely to be. It’s calculated as the waiting time for a call centre divided by the number of calls taken in a certain period.

Call abandonment rate. Another indicator of frustration, this metric is calculated as the number of calls where the customer hangs up before speaking to an agent as a percentage of total calls.

Website bounce rate. A high bounce rate may indicate that customers are unable to find what they were looking for or achieve what they came to do. It’s calculated as the number of single-page visits as a percentage of total visits.

These could be used to underpin more cumulative, top-line metrics like:

Customer effort score. CES relates to the amount of effort a customer uses to achieve a given task and is measured with a survey question. The idea is that the easier the task is to complete, the better the customer experience. According to research by Gartner, 96% of customers with a high-effort service interaction become more disloyal, as against just 9% who experience a low-effort interaction.

Customer satisfaction. An emotion-based metric, customer satisfaction score (CSAT) shows the average level of satisfaction in customers. It’s measured with a survey question, usually after a specific interaction.

Net Promoter Score. NPS shows the likelihood of customers to recommend your company to family and friends. Although a commonly used metric due to its ease of measurement—asking customers a simple survey question—isn’t a direct indicator of customer experience quality as, strictly speaking, it measures loyalty. 

Churn rate. Effectively the opposite of retention rate, churn rate is calculated as the number of customers lost in a certain period, divided by the number of customers the company had at the start of the period. The theory behind it is that customers who are happy with their experience won’t leave.

CX measurement should remain a top priority

Given the rising importance of customer experience, it’s unsurprising that businesses are increasing their CX budgets in 2020. But with higher investment comes an expectation of results, and as the old saying goes, “what gets measured, gets done”.

Leaders should approach customer experience measurement with a holistic model, considering leading indicators from individual touchpoints in addition to top-line metrics. A comprehensive CCM system will allow you to capture the required data to ensure that customer communications are supporting a positive customer experience throughout the customer journey.

As a welcome side-effect, solid, clear content in your communications can also drive customers to your website for more information. This gives you both an additional opportunity to upsell or cross-sell and intercept people before they use your call centre, lowering your cost-to-serve.

Armed with a combination of the right metrics, leaders will be better prepared to understand what’s important to customers and how to meet their needs, enabling them to deliver impact and create value for the organisation.


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