How to Choose Customer Experience Metrics & Measure CX

Here’s how to choose customer experience metrics and measure the performance of CX to optimize interactions across every touchpoint in the customer journey.

Suppose you’ve been running a company for a few years. From the start, customers were streaming in. However, while the quality of your products or services has remained consistent, sales growth has been sluggish. New customers aren’t as easy to attract, and existing customers are spending less frequently.

Businesses in every industry face this common situation. Over time, markets and consumer behaviors change. It can catch a brand off guard, but this is why you need to invest in measuring customer experience (CX) metrics — to understand your target audience of customers better.

There’s just one big challenge: With numerous customer experience metrics to track, determining the appropriate ones for your company is challenging. Nonetheless, it’s doable.

Here’s everything you need to know about customer experience metrics.

What are Customer Experience Metrics?

Customer experience metrics refer to measurements aimed at determining the perception consumers have about the interactions with a brand. Such metrics are quantifiable, being sourced from all types of customer feedback — including structured data and unstructured data — and analyzed by a customer experience management (CEM) platform.

As an organization, tracking customer experience metrics will help you monitor customer satisfaction. It’ll then be easy to identify areas that need improvement to enhance happiness and customer loyalty as you’ll have real-time data.

6 Most Popular Customer Experience Metrics

Customer experience metrics are plentiful. But not all have an equal, meaningful value for your brand; therefore, it’s important to determine the appropriate metrics to track depending on an organization’s goals.

As you think about customer experience metrics, consider the most popular ones that top brands use.

#1. Customer satisfaction

Customer satisfaction (CSAT) is arguably the most popular metric in CX. As the name suggests, it measures customers’ overall happiness toward a brand. It assesses their happiness on a scale of 1-5 or 1-10, with higher numbers signifying more satisfaction.

To calculate your CSAT score, divide the number of happy customers — those who gave their experience a 4 or 5, 8, 9, or 10 on a scale — by the total number of respondents and multiply by 100.

CSAT scores reveal satisfaction and pain points during the customer journey. As such, you may track the efficacy of a customer experience strategy and monitor trends by examining CSAT scores over time.

#2. Customer effort score

Customer effort score (CES) measures how simple it is for customers to execute an action or task when interacting with a brand. CES usually entails asking consumers to assess their goal-achieving effort on a scale of 1-5 or 1-7, with higher numbers indicating more effort was required.

To generate an average customer effort score, sum together customers’ replies and divide by the number of respondents.

CES is great for improving self-service channels such as a website or mobile application. Making these touchpoints across the journey more user-friendly and decreasing consumer effort reduces frustration and increases happiness.

#3. Net promoter score

Good businesses attract many customers. Great businesses make customers their number-one marketers. So, if you want to know if you’re approaching a level of greatness, start tracking net promoter score (NPS®). It metric measures a customer’s likelihood to recommend a product or service.

Customers are asked to assess their likelihood of recommending your brand’s offerings on a scale of 0-10. The customers who estimate they’re likely to suggest as 9 or 10 are referred to as ‘promoters,’ whereas ‘detractors’ assess it as 6 or lower. NPS is calculated by subtracting detractors from promoters.

Along with whether they can promote your brand, NPS also reveals happiness (and displeasure). Therefore, you can track customer loyalty by examining NPS rankings.

#4. Customer retention rate

Do existing customers buy from your brand again and again? While attracting new customers is critical to building sales growth and revenue, focusing on customer retention ensures customers who’ve already purchased products or services come back to spend more money.

Customer retention rate (CRR) evaluates the percentage of customers who keep doing business with your organization over time.

To calculate customer retention rate, divide the number of active customers by the total number at the start of the period and multiply by 100.

A high customer retention rate implies customer satisfaction is also high and a likelihood to do business with you again. Yet, a poor customer retention rate may suggest customers are unhappy and may migrate to a competitor.

Tracking customer retention rate helps measure customer loyalty patterns and, as a result of changes to strategy, enhance retention.

#5. Average handle time

Average handle time (AHT) is the average time an agent takes to resolve a request. As you work to optimize customer service and reduce wait time, you need to track AHT.

To calculate AHT, divide the entire time your customer service team spends on inquiries or requests by the total number of inquiries or requests.

Tracking average handle time identifies areas where the contact center is spending too much time on particular inquiries or requests, allowing you to streamline operations. It might involve improving an online knowledge base and self-service channels, activating an artificial intelligence (AI)-powered chatbot, or calculating call center staffing to get a feel for agents’ day-to-day workflows.

Optimizing AHT boosts customer satisfaction since fast, efficient service through preferred communication channels makes consumers feel appreciated.

#6. Customer lifetime value

Customer lifetime value (CLV, LTV, or CLTV) measures a customer’s lifetime worth to a brand. It’s a measure helping companies discover their best customers and maximize customer acquisition and retention.

To calculate CLV, multiply the average transaction value by the number of transactions per customer and the average customer lifespan.

Measuring customer lifetime value helps retain your best clients as you can determine how and when to offer incentives to enhance their loyalty. Examples of the incentives you can offer include loyalty programs, targeted offers, and VIP-type customer service.

Loyal customers are more inclined to buy again and suggest your firm, so increasing CLV boosts revenue as well.

How to Determine Measurable Customer Experience Goals

Before you begin tracking metrics, it’s crucial that you first define your customer experience goals. As you do so, consider company strategy, customer demographics, and market conditions.

Start by asking what you want to achieve with a customer experience program. This could range from boosting loyalty, satisfaction, and retention to upselling and cross-selling for increased revenue. It’s only by understanding your motivations that you can determine the appropriate metrics to track.

For your goals to succeed, ensure they’re specific, measurable, achievable, relevant, and time-bound (SMART). It’ll allow you to measure progress and make data-driven customer experience strategy decisions.

Also, your customer experience goals should connect with your organization’s goals and be evaluated and modified as business objectives shift.

How to Choose the Best CX Metrics for Your Business

#1. Single question or index

When collecting customer feedback, you’ll need to ask for it. Decide how many questions you ask customers. Though there is a lot of merit in asking one simple question, many brands want to know the answer to more questions and seek to index the answers — a single metric that aggregates multiple data points.

Knowing which is right for your program comes down to the balance between the comprehensiveness of questions and the amount of effort necessary for customers.

#2. The questions

What do you want to measure and what do you want to do with what you measure? Answering these questions is the key to knowing what to ask in a customer survey.

For example, measuring satisfaction at specific touchpoints might help an organization make acute improvements. But asking a customer about their predicted future behaviors might paint a better picture of overall customer experience.

The wording of your questions should be focused on the action your organization wants to take on the data.

#3. The measurement

Scale is highly important when it comes to soliciting customer feedback. It can have a profound effect on how customers formulate their answers and how easily employees can digest and take action with the resulting data.

0 to 10 is different from 0 to 5, which is different from 0 to 4 and 0 to 100 — same as how “Very Satisfied” as a positive endpoint is different than “Exceeds Expectations.” The size of your scale will also determine your ability to more granularly differentiate between high and low-performing areas of the business.

#4. Simplicity

Which of the following is easier to understand: “Our customers are 6.43 satisfied with our reservation operators” or “95% of our customers are dissatisfied with our new customer onboarding”?

Clearly the latter. And though this example is somewhat exaggerated, you might be surprised how often companies develop a key metric that is far from operational or actionable.

Always keep in mind: The easier it is to distill a customer experience metric into actionable insights across the organization, the greater its positive impact on customer experience.

Transform Experiences Utilizing CX Metrics

Industry-leading, world-class customer experience requires a close eye on choosing and applying the correct metrics. When done successfully, the CX metrics aid in transforming experiences and prove an organization is achieving business outcomes.

Looking to discuss the customer experience metrics to unlock your business’ insights? We’ll help you — request a demo, and an expert will walk you through what it takes to listen, interpret, and act on customer feedback to make data-driven decisions.