Customer experience (CX) is the impression you leave with your customers, which results in how they think of you as a brand and ultimately creates brand loyalty. Measuring this process with customer experience metrics is important if you want to boost customer retention.
Metrics can help you improve your practices to cater to the customer experience. Solving problems for customers quickly can make it 2.4 times more likely a client will stick with your business. Lowering the customer effort score (CES) by providing simple, easy-to-use products and services means 76% of customers are more likely to recommend your brand to others.
Positive customer experiences can lead to repeat business, and it's easier and less costly for a business to retain clients than to seek out new customers. With that in mind, let's review the top metrics you can use to measure the customer experience.
- What is customer experience?
- Measuring Customer Experience
- Customer Experience Metrics
- How to Accurately Measure Customer Experience
What is customer experience?
Customer experience (CX) is the journey or amalgamation of interactions a customer or potential customer has with a business. This starts with the moment a client becomes aware of a business and follows the purchasing process. Plus, CX includes the weeks, months, or even years later that a customer uses a product or service.
Businesses may work hard to get a customer in the door to make a purchase, but it's important to look at the whole picture. That might mean providing support to customers, even years down the line.
Why is this extra effort and money worth it to the business? It costs more money to add a new customer than to retain an existing one, and 32% of people globally say they'd ditch a brand they love after just one bad experience.
If you're ready to create remarkable experiences for your customers, check out the below episode of the "Duct Tape Marketing Podcast" hosted by the HubSpot Podcast Network to find out how to do just that.
Measuring Customer Experience
Surveys, journey maps, and a variety of other metrics are necessary for measuring CX. This process is complex and can span several years for some customers.
Customer service is just one part of the equation. You want clients to have positive reactions to your advertising and marketing efforts. They should have an easy time using your products or services. And they should get quick responses from your team.
Surveys are one of many ways to measure CX, and we'll dive into specific surveys that help measure customer experience in a few. You may send out surveys after a customer makes a purchase or interacts with your support line. You might survey clients for feedback on a new product or service. Engaging with customers through surveys can help you get an idea of your business strengths and areas where you can improve.
Creating customer journey maps is another way to measure CX. This process tracks a customer's interactions with a business and can help you pinpoint why a customer doesn't follow through on a sale or chooses one product over a different one you offer.
For example, you might notice a customer finds you through a social media ad, goes to your website and fills their shopping cart, then doesn't end up making a purchase. A journey map helps you visualize the customer experience and find points of friction based on customer actions and emotions.
Customer Experience Metrics
- Customer Satisfaction Score (CSAT)
- Net Promoter Score (NPS)
- Customer Effort Score (CES)
- Customer Lifetime Value (CLV)
- Customer Churn Rate
- Customer Retention Rate
- Customer Journey Analytics
- Customer Support Ticket Trends
You can (and should) use a variety of CX metrics together for the most complete picture of the customer's journey with your brand.
As highlighted above, let's discuss eight key metrics in more detail.
1. Customer Satisfaction Score (CSAT)
The Customer Satisfaction Score (CSAT) is one of the most straightforward ways of measuring your customer experience.
While typically used as a customer service metric, CSAT can also give you an idea of the customer experience, considering support interactions are one major component of CX. This is a simple survey that gauges how satisfied a client is following an interaction with your business.
For example, after a customer talks to a live representative via online chat, they can rank the support agent's response based on how satisfied or helpful the solutions are. Or, after a client purchases a product or service, you can ask how satisfied they are with that product or service.
To calculate CSAT, all you need to do is send a survey immediately following a purchase or interaction. This survey will ask how satisfied a customer is with their experience on a corresponding scale. The CSAT is the average score of that survey.
Featured Resource: Customer Survey Templates
2. Net Promoter Score (NPS)
Net Promoter Score (NPS) is one of the main methods to measure customer experience. Your NPS will let you know the percentage of customers that love, are neutral, or aren't a fan of your brand.
To calculate NPS, you'll send a survey to your customers with an NPS question asking them how likely they are to recommend you to a friend, on a scale of 0-10. Scores 0-6 are are detractors, scores 7-8 are passives, and scores 9-10 are promoters.
Your NPS is the percentage of detractor responses subtracted from promoter responses.
With this score, you can instantly tell how many customers are happy enough with their customer experience that they've become ambassadors for your brand.
Featured Resource: Net Promoter Score Calculator
3. Customer Effort Score (CES)
Customers want simple interactions. Your website should be easy to navigate. Your products should be easy to assemble and use. Your customer service team should be easy to connect with for the client.
You can use aCustomer Effort Score (CES) survey to allow customers to rank an interaction with a company or its products and services as easy, neutral, or difficult.
To calculate CES, you take the sum of your customer effort ratings and divide it by the total number of survey responses you received.
If customers are ranking a product difficult to use, you want to innovate ways to make it more user-friendly. Like if it's hard to find the menu on your website, you'll need to redesign the site or install a simpler template to improve the CX.
4. Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) tells you how much one customer has brought to a business in the entire relationship. In other words, how much they're "worth" to a business. The calculation also takes into account how much a business is spending to keep that customer.
It's a good customer experience metric because you can see over time whether a customer is satisfied and making more purchases or if they spend less with your business.
To calculate CLV, you multiply the customer value times the average customer lifespan.
Typically, the better the CX, the higher the CLV. But if you start to see the customer spend less over time, you can determine why and create solutions to raise the CLV.
5. Customer Churn Rate
Churn rate is the percentage of your customers or subscribers who cancel or don't renew their subscriptions during a given time period.
While churn is inevitable, it's still important that you learn why churn is happening in your company so you can reduce it as much as possible.
Calculating Churn Rate
To calculate your churn rate, designate a time period and tally up the total number of customers you've acquired and the number of customers who churned during that time period.
Then, divide the number of customers who churned by the total number of customers acquired, and multiply that decimal by 100% to calculate your churn rate.
This metric should help you nail down why customers are leaving. Is it because of a lack of engagement? A poor user experience? Or perhaps it's a lack of support? Either way, measuring and analyzing your churn rate will help you figure out how to reduce it.
6. Customer Retention Rate
Customer retention rate is essentially the opposite of the churn rate. This CX metric measures how many customers a business retains over a set period of time and helps determine customer loyalty.
Retention rate is slightly more challenging to calculate, though, because you will need to take into account the customers you retained, the customers you lost, and the customers you gained in a set period of time.
Calculating Retention Rate
To calculate retention rate:
- Set the time period, which could be a week, a month, a year, etc.
- Start with the number of customers you have at the end of that set time period.
- Subtract new customers gained during the set time period.
- Divide the resulting number by the number of clients you had at the beginning of the time period.
- Multiply the result by 100 to get a percentage.
Ideally, you want a high retention rate while also bringing in new clients, that later become loyal customers. If you have a low retention rate but high sales, you'll want to determine why customers are making one or few purchases and then leaving your business.
7. Customer Journey Analytics
Another technique to measure the customer experience is to use your analytics to look at the customer journey.
Your customer journey map can answer questions about customer motivations, needs, and pain points. It'll also help you understand all the touch points a customer experiences on their journey. And this is how you'll gather your customer journey analytics.
Analyzing the Customer Journey
To analyze the customer journey, you'll probably want to start by pulling data from your social media, ads, website, company events, product reviews, onboarding, customer loyalty programs, emails, and surveys. Then, you can create a page or tab on your customer journey map dedicated to reporting the metrics of your touch points, so you can evaluate your customer experience.
Featured Resource: Customer Journey Map Templates
8. Customer Support Ticket Trends
You can also take a look at your customer support tickets to pinpoint trends impacting the customer experience.
Are there recurring issues that cause pain for your customers? If so, try to improve them as they come up. You might decide you need to create clearer instructions, explainer videos, or product tweaks because of the trends you identified.
Analyzing Customer Support Ticket Trends
Key customer support ticket metrics and trends to analyze are first response time, average handle time, and first call resolution. These analytics can help you improve the customer experience from a customer support perspective.
How to Accurately Measure Customer Experience
CX metrics are the key to effectively measuring the customer experience. You can use a combination of surveys, retention and churn rates, and customer trend data to determine how satisfied your customers are at every step of the journey — and whether or not they're willing to come back or refer your brand to others.
Start measuring CX so you can make the business improvements necessary to retain more clients and generate more revenue.