In an age where it’s becoming incredibly difficult to compete based on features, there are very few options left for businesses that want to get ahead of their competition. Luckily, there is one area where even the most successful companies struggle - customer experience (CX).
In fact, 89% of companies today compete on the basis of customer satisfaction. When the tech allows anyone to replicate your business model, you can go one step further and provide a better customer experience.
Easier said than done, though, especially if you’re not measuring your customer experience right now. To help you out, we’ve prepared a list of the most important customer experience KPIs every business needs to track, measure, and improve on.
Why does great customer experience matter?
Instinctively, we know that customers won’t spend their time with businesses that don’t care about them. With each year, we get more data on user expectations and their overall experience to back up this assumption.
For starters, 49% of customers have left a brand in the past year because of inadequate levels of customer experience. As switching to a competitor is easier than ever before, your existing users probably reviewed a few options before choosing you, anyways.
Satisfied customers also pay more. According to the research mentioned above, 61% of customers are willing to pay at least 5% more for the same product or service provided that they get an amazing experience.
Good CX drives loyalty, too. Research by Gartner revealed that excellent customer experience accounts for over two-thirds of customer loyalty, outperforming branding and pricing combined.
Keeping your eye on your customer experience KPIs is a great way to ensure you’re not left behind, both by your customers and in terms of your revenue. Here are the 8 most important customer feedback KPIs you should watch out for and use to measure how satisfied your customers are.
First response time (FRT)
Customers hate waiting. When they reach out and ask for help, you should aim to solve their problem as quickly as possible. Long waiting times cause frustration and nowadays, it only takes seconds to Google somebody else offering the same product or service that you do.
So, what’s a good response time to aim for? It's determined by the medium.
According to one source, customers expect their emails to be answered within the first 24 hours; social media should be handled within an hour, and calls should be answered in less than three minutes before customers get irritated. However, research varies depending on the industry, with some sources stating that 52% of customers expect a reply in less than one hour, regardless of the medium.
How you improve your first response time is related to the platform that your customers use to get in touch with you, and there are plenty of strategies devised for each platform.
For example, you can improve the FRT for phone inquiries through modern call center tools such as IVR, call routing, call pop, computer telephony integrations, and more. To shorten the response time on social media, set up chatbots for your accounts and connect them to your help desk or live chat software, such as Intercom. You can also use live chat to run surveys after customer interactions.
Keep your pulse on this metric and as time goes by, do your best to keep the first response time as low as possible. If you have a product that is used and sold globally, you’re going to have to go the extra mile to provide support around the clock.
First call resolution (FCR)
If a customer already got in touch with you regarding a problem and resolving that problem is taking much longer than they anticipated, they probably won’t be too excited.
In an ideal world, all of your customers’ problems would be resolved on the first call. However, things get in the way, and very often, you can’t really offer a solution on the spot. The higher your first call resolution, the less of a chance there is for customers to get angry as they wait to resolve their problem.
If you’re struggling with this metric, there are a number of things that you can do:
Having a better help center and FAQ section explaining the ins and outs of your product or service
Using call routing to send customers to the right agent straight from the first call
Implementing IVR and automated messages to help customers to solve the majority of the problems on their own
Using smart CRM and help desk tools that keep all of your customer interactions in place so when they call, you have all of their information at hand
Offering a callback feature when all agents are busy so that your customers can get a call back once your representative becomes available and you can avoid negative feedback as a nice extra
In general, a smart combination of tech and top-notch customer care can ensure that you do amazing with first call resolution.
Net Promoter Score (NPS)
Net Promoter Score, one of the most popular customer experience metrics, focuses on a single, crucial question: how likely are you to recommend us to a friend, on a scale from 0 to 10?
NPS is widely recognized as one of the most important metrics for customer experience. It’s easy to calculate and, with survey software such as Survicate, measuring it is a matter of minutes.
Based on the score they give you, your customers can belong to three groups:
Promoters (with a score of 9 or 10)
Any business out there will have their fair share of each group. Ideally, you want as many promoters and as few detractors as possible. Once you know how many of each group you have, you can devise a strategy for how to retain the happy customers and satisfy the unhappy ones..
The great thing about the NPS is that it’s a fairly standardized measure for customer experience so you can easily find NPS values for different industries and even specific companies. For example, Apple has an NPS score of 47, which is actually excellent.
Since you can measure the Net Promoter Score across so many different interactions, it’s a good idea to use it to keep your finger on the pulse of your customers’ responses. It can be a good litmus test to reveal any potential problems before they arise.
Customer Satisfaction Score (CSAT)
“On a scale from 0 to 10, how satisfied are you with our product or service?” is a typical CSAT question. Thanks to survey tools such as Survicate, you can run CSAT surveys on different platforms, including emails, websites, mobile apps, and Intercom chat.
Just like the Net Promoter Score, CSAT is a metric used across different industries so finding out how you stack up against your competitors is a matter of a quick Google search.
Perhaps the biggest benefit of using the CSAT is a quick overview on your overall customer satisfaction. Of course, you can find this out from user interviews, but CSAT has the advantage of being easy to quantify and measure. In other words, it’s a fast way to get quantitative feedback.
To avoid major pitfalls when using the CSAT, make sure to measure it regularly instead of just once a year. It’s a good indicator of whether you’re on the right track and if you need to make any changes to retain your existing customers and attract new ones.
On its own, the CSAT is not the end-all metric for customer experience. But when combined with metrics such as NPS, CES and customer churn, it can give you a super clear idea of the exact state of your customer experience and overall business health.
Customer Effort Score (CES)
Most of the customer experience KPIs mentioned here are holistic - they reflect the customer experience as a whole. If you want to look at individual customer touchpoints, the metric you need is the Customer Effort Score.
The CES is a measurement of how difficult it is to perform a certain action with your service or product. The question you would ask could be: “On a scale from 0 to 10, how difficult is it to complete your payment at our online store?”
When measuring Customer Effort Score, your goal is to determine whether a certain touchpoint is causing friction in your customer journey. This can be a new feature you launched, a part of your onboarding process, or any other touchpoint.
The beauty of CES compared to other customer experience KPIs is that it can reveal bottlenecks in your customer journey using an easily quantifiable method. If you think that something is causing issues for your customers, a CES survey is a neat way to find out if your assumptions are true.
Customer Lifetime Value (CLV)
The customer lifetime value (CLV) is the total amount of money a customer spends with you over the course of being your customer, i.e., before they churn. Naturally, you want your customer lifetime value to be as high as possible because it means that not only do you provide a great customer experience, but you also have a great product or service.
Unlike other customer experience KPIs, there is no ideal lifetime value across industries. The only thing that matters is that, at the end of the day, your lifetime value is higher than your customer acquisition cost (CAC). In other words, the cost of acquiring a new customer should be lower than the total amount spent by them on the product or service you offer.
However, you should not monitor your lifetime value alone. To ensure sustainable business success, keep an eye on your CAC:LTV ratio. This brings us to another important metric.
Customer churn is the percentage of customers that stopped using your product or service over a certain time period. For example, if you had 1,000 customers at the beginning of the month and 950 at the end of it, that means you lost 5% of customers - not accounting for any new ones you gained.
The problem with customer churn is that a churn rate of 5% might look harmless, especially if you look at it on a quarterly or annual level. However, churn has a habit of creeping up on you and if you can’t acquire new customers at the rate that you’re losing your existing ones, you’re going to run into problems soon.
A good customer churn rate will depend on many factors. However, if your annual churn is anywhere between 5-7%, you’re doing well. That number translates to about .50% churn on a monthly level or about 1 lost customer per 200 customers total.
A good churn rate means that you provide a great customer experience and, perhaps more importantly, that you’re financially not at risk as a business.
Measuring and tracking customer experience is an admirable goal to aspire for in 2023 and beyond. As customers are getting savvier about the ways they spend money, they’ll want to stay with the businesses that go above and beyond to make them feel exceptional by collecting timely customer feedback.
And if you’re still not sure whether you’re providing the right kind of customer experience, we’ve got your back. With Survicate, you can measure a large variety of customer experience KPIs, including NPS, CSAT and CES. Sign up for your free trial today to get started!
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Mile is a content marketing strategist and writer and has been in the world of SaaS since 2016. You can find him writing on topics such as productivity and marketing
NET PROMOTER, NPS, AND THE NPS-RELATED EMOTICONS ARE REGISTERED U.S. TRADEMARKS, AND NET PROMOTER SCORE AND NET PROMOTER SYSTEM ARE SERVICE MARKS, OF BAIN & COMPANY, INC., SATMETRIX SYSTEMS, INC. AND FRED REICHHELD.