Knowing how to measure your customer experience is a significant step toward polishing it to perfection.
It matters because the quality of your CX can mean the difference between thriving and dying out in a competitive market.
In fact, companies reaching $1 billion in revenue have dedicated CX executives and committees tracking as many as 50 to 200 metrics. Why? Because it impacts the bottom line.
Three out of four consumers will spend more with businesses providing good customer service.
This means now is a good time to start measuring your CX.
TL;DR – How to Measure Customer Experience
Research shows that 87% of companies believe they provide a great customer experience, but only 11% of consumers agree.
That’s a huge disconnect that can be prevented by monitoring your CX and refining it to meet client expectations.
Explore the ways you can do so for your business:
- Track customer service KPIs
- Analyze the customer journey
- Conduct surveys
- Audit your messaging
Are you looking to restructure your messaging strategy? Let’s talk.
I’m a messaging strategist and marketing expert, and can help you design brand messaging that strengthens your market appeal. Connect with me today.
What Does it Mean to Measure Customer Experience?
Customer experience refers to the collective experience that each customer has with your business and may be impacted by factors like:
- Quality of customer touchpoints
- Flow of the customer journey
- Efficiency of customer service
- Accuracy and pull of brand messaging
- Products and services
Measuring customer experience means monitoring how customers feel about their relationship with your business.
This involves examining the factors I mentioned above, as well as tracking key CX metrics and using tools that provide insight into customer perception.
Importance of Measuring Customer Experience
Quantifying and analyzing your CX is a powerful step toward fully understanding your business from your customers’ point of view.
This is important because great customer experience confirms your value messaging. It also reinforces an attractive brand identity.
It also fosters trust and loyalty – the basis of a profitable business.
Customer Experience Metrics to Track
Monitor these metrics to get accurate insights into customer perception and experience:
Customer Churn Rate
Customer churn rate refers to the number of customers that leave your business within a specific period.
If your business is mature, you should aim for a churn rate of 5 to 7% or lower, but for startups or SMBs, this can be 10% to 15%.
A lower churn rate indicates that very few customers are exiting your business. High churn rates, on the other hand, are alarm signals that tell you something isn’t working.
Customer Retention
One of the most critical indicators that people enjoy their experience with your business is when customer retention rates are high.
While aiming for 100% customer retention is good, it isn’t realistic. Average retention rates also vary depending on your industry, company size, and business tenure.
For example, it’s pegged at around 35% for SaaS companies and 63% for retail.
Customer Satisfaction Score
If you want to quickly gauge customer sentiment, try looking at your customer satisfaction score (CSAT).
It’s one of the easiest metrics to measure and also one of the clearest signs of whether your CX is successful or failing to meet customer expectations.
It also provides real-time feedback since you’ll typically ask customers to rate their experience right after an interaction.
Though numbers vary per industry, you should aim for a CSAT score of 75 to 85%.
Net Promoter Score
Want to know how many people are loyal to your business?
Run a Net Promoter Score survey, which assesses how likely people are to recommend you to others on a scale of 0 to 10.
Customers who give you a score of 9 to 10 are your promoters, those who answer 7 to 8 are passives, and those who respond with 0 to 6 are detractors.
To calculate your NPS, subtract the number of detractors from the number of promoters.
Although NPS is not a perfect metric for measuring your overall CX, it allows for a quick read into customer perception and behavior.
Conversion Rate
A high number of leads converting into paying customers is a good sign of a customer journey that seamlessly transitions customers from one stage of the funnel to the next. It also indicates a strong return on investment (ROI).
So, to see how your CX translates into your bottom line, you’ll want to check your conversion rates.
Ideal conversion rates vary depending on the specific business aspect you’re looking at, as well as the industry you belong to.
For example, the average website conversion rate of 2 to 5% is considered good across all industries. For SaaS companies, a free trial-to-paid user conversion of 18.6 to 29% is a healthy number.
However, if you feel you can do better than your current conversion rates, you should examine how to improve your funnels.
Use ConversionRX, my comprehensive assessment tool that can help you improve your marketing strategy.
How to Measure Customer Experience
Use these methods to measure and manage your company’s CX:
1. Track Customer Service KPIs
The most effective way to measure your CX is to track and analyze key performance indicators or metrics that directly impact the quality of your customer experience.
I’ve discussed some of the most important metrics in the earlier section. But apart from customer churn, retention, and conversion, you may also want to monitor:
- Average resolution time (ART): Refers to the average length of time it takes for you to resolve customer issues and complaints. This heavily impacts customer satisfaction since two-thirds of consumers say speed matters to them just as much as price.
- Customer effort score (CES): Tells how easy it is for customers to complete a transaction. The smoother these transactions go, the happier your customers are.
2. Analyze the Customer Journey
It could be worth revisiting existing processes and workflows that make up the customer journey to examine how effectively they drive your intended results.
Let’s say you’ve noticed a sharp increase in churn rate over the past months despite individual touchpoints receiving positive customer feedback.
In this case, you’ll want to take a step back to view the full picture. To do so:
- Create a map that traces the customer journey from the first touchpoint to post-sales and beyond.
- Gather data from all touchpoints, both online and offline, to understand customer sentiment at every level.
- Collate and analyze customer data.
This way, you may find that while individual touchpoints are great, some might not serve the customer journey as a whole.
For example, is there frequent back-and-forth from one stage to another? Is the sales process too complicated?
Tip: You don’t have to wait to review your customer journey. Use real-time analysis tools to address problem areas before they affect customer relationships.
Studies suggest that 58% of businesses see a significant increase in customer retention using real-time customer analytics.
3. Conduct Surveys
Surveys are another straightforward method for gathering customer feedback in real time.
For instance, you can run surveys to determine your customer satisfaction score (CSAT) and net promoter score (NPS). Both of these have long been established as essential indicators of CX performance.
Note that surveys don’t have to be limited to quantitative findings. You can enhance your surveys by including open-ended questions or offering space for additional remarks to collect qualitative customer data.
To better understand insights from both quantitative and qualitative survey results:
- Create a visual illustration of the data
- Convert qualitative insights into quantitative data.
4. Audit Your Messaging
Evaluate your messaging architecture to see how customers respond to key messages at every touchpoint.
Remember: Your CX works hand-in-hand with your messaging. One has to reinforce the other, or else your customers get a disjointed experience.
To examine your messaging strategy:
- Go back to your brand identity: Your messaging has to be consistent with your brand pillars to ensure that it matches your CX.
- Use social listening tools: Listen in on conversations around your brand to understand how customers receive your messaging. Do they react as intended? Or does your messaging turn them off?
- Test your messaging: Message testing will enable you to spot gaps, inconsistencies, and even strategies that just don’t resonate with your audience.
Customer Experience Measurement Tools
Make measuring your CX easier by using these tools:
- Hootsuite: Technically a social media management suite, Hootsuite can also come in handy for social listening and social media analytics.
- Zendesk: Provides robust analytics capabilities together with customer engagement and customer service tools.
- Salesforce: A cloud-based CRM, Salesforce allows you to store all customer data in one hub. This makes it convenient for analyzing and managing customer information.
Frequently Asked Questions (FAQs)
Learn more with these FAQs about measuring your CX:
How Can Social Media Listening Help in Measuring Customer Experience?
Social media listening helps gauge customer sentiment by tracking mentions of your brand and analyzing the contexts in which these brand mentions occur.
As you learn how your customers feel about your brand, you can fine-tune your strategy to match and even exceed their expectations.
What is the Importance of Real-Time Data in Measuring Customer Experience?
A study by HBR mentioned above shows that companies that gather real-time customer data and analytics significantly increase customer retention.
It also helps brands spot gaps in their CX strategy early so they don’t negatively impact their business.
How Can Qualitative Methods be Used to Measure Customer Experience?
Qualitative methods, like in-depth interviews, can help you gain a more robust understanding of customer behavior, expectations, and perception.
To analyze qualitative insights more quickly, you can convert them into quantitative data and create a visual representation of your findings.
Conclusion
Measuring your CX is vital to a successful business.
Make sure you’re tracking key performance indicators, examining your customer journey, conducting surveys, and auditing your messaging strategy to find out how your customers feel about their experience with your brand.
Does your message strategy need an upgrade? Let’s work together on a brand message that connects at every customer touchpoint. Schedule a discovery call with me today.
