Customer Experience Metrics That Matter

Creating a positive customer experience (CX) is not just an option—it's now an imperative. But what exactly is customer experience? In essence, CX encompasses every interaction your customers have with your brand. From the moment they first hear about you, to their initial experience, to their ongoing engagement with your products or services, it all counts. CX is the sum total of their perceptions and feelings about your brand, and this can make or break customer loyalty.

Why does this matter? Let's put it this way: businesses that excel in delivering a top-class customer experience tend to outperform their competitors in almost every meaningful metric, from customer retention to revenue growth. And when your customers feel valued and satisfied, they'll be more inclined to stick around, spend more, and even become advocates.

Conversely, a poor customer experience can drive them straight into the arms of your competitors. So, if you're not measuring and optimising your customer experience, you're missing out on a vital lever for business success.

The benefits of measuring customer experience

Measuring customer experience is like having a compass for your business—it gives you direction, enabling you to steer your efforts towards what truly matters to your customers. But what are the tangible benefits of measuring CX?

Improved customer loyalty is one of the greatest outcomes. By understanding what customers like or dislike about interacting with your brand, you can take steps to enhance the positive aspects and address pain points. Being proactive about CX in this way can foster loyalty, as customers feel that their needs and feedback are being taken seriously.

Moreover, increased revenue is often a natural outcome of a well-measured and optimised customer experience. Satisfied customers are not only more likely to continue buying from you, but they're also more inclined to try new products or services, and even recommend your brand to others. In fact, companies that embrace customer experience can see a revenue boost of up to 4-8% compared to those that don't.

Beyond these benefits, measuring CX can lead to better product development, as the insights gained from customer feedback and behaviour allow you to refine your offerings to better meet customers' needs. This in turn should naturally lead to the development of new products, features, or services that increase your appeal to your audience, ultimately driving business growth.

Challenges in measuring customer experience

Of course, measuring customer experience isn't without its challenges. One of the main hurdles is the subjectivity and bias inherent in customer feedback. People's experiences and perceptions can be deeply personal and influenced by factors outside of your control, such as their mood or external circumstances. This can make it difficult to obtain a clear, objective view of your CX.

Another challenge lies in data integration; because customer experience data often comes from a variety of sources—via surveys, social media, customer support interactions, and more. Integrating all of these data points into a cohesive whole can be a complex and time-consuming task, but delivers rewards by gaining a total understanding of your customers' experiences.

There's also the question of real-time versus periodic measurement. While real-time data provides immediate insights that can be acted upon swiftly, periodic measurement offers a more stable view of customer experience trends over time. Both approaches have their merits, and the challenge is in balancing the two to ensure you're capturing the most accurate and useful data.

Key metrics to measure customer experience

When it comes to measuring your customer experience, there's a range of metrics available, each offering unique insights into different aspects of your customer interactions. Let's delve into some of the most valuable CX metrics that you can use to gauge your performance.

1. Customer Satisfaction (CSAT)

The Customer Satisfaction Score (CSAT) is a straightforward metric that measures how happy your customers are with your product, service, or specific interaction. It's typically measured by asking customers to rate their satisfaction on a scale, with higher scores indicating greater satisfaction.

How CSAT can be used to improve CX

The beauty of CSAT lies in its simplicity and directness. Because it focuses on specific aspects of the customer journey, it provides clear, actionable insights. For example, if you find that satisfaction levels are consistently low following customer support interactions, this signals a need to improve your support processes. Conversely, high CSAT scores can highlight areas where your business is excelling, allowing you to build on these strengths.

How to calculate CSAT

Calculating CSAT is a breeze. Simply ask your customers, “How satisfied were you with our [product/service/support interaction]?” and invite them to rate their satisfaction on a 5-point scale from very dissatisfied to very satisfied. To calculate the CSAT percentage, divide the number of positive responses by the total number of responses and multiply by 100. Scores close to 100% indicate high levels of satisfaction.

Tip: For a quicker and more convenient way of working out your score you might like to use our CSAT score calculator.

2. Customer Effort Score (CES)

The Customer Effort Score (CES) measures how much effort your customers need to expend to achieve a specific outcome with your business, such as resolving a support issue or finding the information they need. This metric is particularly valuable for identifying friction points in your customer journey.

How CES can be used to improve CX

Research from Gartner suggests that 96% of customers who experience high-effort interactions are more likely to become disloyal, compared to just 9% who have low-effort experiences. By reducing the effort required from your customers, you can enhance their satisfaction and increase loyalty. CES helps you pinpoint areas where your customers might be struggling, allowing you to streamline processes and make their experience more seamless.

How to calculate CES

To measure CES, ask your customers to rate the ease of their experience on a scale of 1 to 5 or 1 to 7, depending on your preferred method. The lower the average score, the better. This can be calculated by dividing the sum of all customer effort scores by the number of responses.

Tip: if you’re looking for a simpler and quicker way of doing this you might like to try our CES calculator.

3. Net Promoter Score (NPS)®

Net Promoter Score (NPS) is a widely-used metric that gauges customer loyalty by asking how likely they are to recommend your business to others. It's a powerful tool for understanding overall customer sentiment and identifying brand advocates and detractors.

How NPS can be used to improve CX

While NPS doesn't directly measure specific aspects of your product or service, it provides a broad view of customer loyalty and satisfaction. Tracking NPS over time can help you identify trends in customer sentiment, allowing you to take action before minor issues escalate into major problems.

How to calculate NPS

To measure your NPS, you need to ask your customers the following question.

‘On a scale of 0 – 10, how likely would you be to recommend our company to a friend or a colleague? (on the basis that 0 represents not likely and 10 very likely)

Each score is then grouped into the following classifications.

• 9-10 – Promoters (which represents clients who love your company and actively promote it)
• 7-8 – Passives (customers who like your company but don’t love it yet)
• 0-6 – Detractors (clients who are unhappy with your business and are at real risk of churning)

To calculate your NPS score, you simply need to subtract your number of detractors from your number of promoters. This should leave you with a positive or negative number, which you will need to divide by your total number of survey responses and then multiply by 100. This will leave you with a number between 100 and –100. The higher your score the more desirable it will be.

Tip: If you’re looking for a simpler and quicker way of calculating this, you might like to visit our NPS calculator.

4. Customer Referral Rate

While NPS indicates how many customers say they will refer you, the Customer Referral Rate measures how many actually do. This metric focuses on the volume of purchases that come from referrals, offering a tangible measure of your customers' willingness to recommend your brand.

How customer referral rate can be used to improve CX

In customer experience management, a high referral rate is a strong indicator that your customers are not only satisfied with your offerings but also trust your brand enough to recommend it to others. This trust is built through positive experiences across all touchpoints in the customer journey. By monitoring this metric, you can gauge the effectiveness of your customer experience and identify areas where you can encourage more referrals.

How to calculate Customer Referral Rate

To calculate this metric, simply divide the number of referred purchases by the total number of purchases, then multiply by 100 to get a percentage. For instance, if 5 out of 100 customers were referred by existing customers, your referral rate would be 5%.

5. Customer Retention Rate

The Customer Retention Rate measures the percentage of customers who continue to do business with you over a specific period of time. It's a crucial metric for measuring customer loyalty and the long-term health of your customer relationships.

How customer retention rate can be used to improve CX

Retention rate provides insight into how well you're meeting your customers' needs over time. If you notice a drop in retention, it could indicate dissatisfaction with your product or service, signalling a need for improvements. By focusing on retention, you can reduce churn and foster long-term customer relationships, which are typically more profitable than acquiring new customers.

How to calculate customer retention rate

You can calculate retention rate by subtracting the number of customers who churn over a period from the number who stayed, or by comparing customer counts across different periods. For example, if 80 out of 100 customers remained with you from one period to the next, your retention rate would be 80%.

6. Customer Churn Rate

The Customer Churn Rate is the inverse of retention, showing the percentage of customers who leave or stop paying for your services over a given period. High churn rates can signal serious issues with your customer experience.

How customer churn rate can be used to improve CX

Keeping an eye on your churn rate helps you identify and address the reasons why customers are leaving. By analysing when and why customers churn, you can make targeted improvements to your products, services, or customer interactions, reducing churn and improving customer loyalty.

How to calculate customer churn rate

To calculate churn rate, subtract the number of customers at the end of a period from the number at the beginning, then divide by the number at the start. For example, if you started with 100 customers and ended with 90, your churn rate would be 10%.

7. First Contact Resolution (FCR)

First Contact Resolution (FCR) measures the percentage of customer issues resolved during the first interaction. This metric is particularly relevant for customer service and support teams and is closely linked to customer satisfaction.

How FCR can be used to improve CX

Resolving customer issues on the first contact not only boosts satisfaction but also reduces the operational costs associated with handling repeated queries. A high FCR rate indicates that your support processes are efficient and that customers are having positive experiences when they reach out for help.

How to calculate FCR

FCR is calculated by dividing the number of issues resolved on the first contact by the total number of issues handled. For example, if you resolved 80 out of 100 support tickets on the first try, your FCR rate would be 80%.

8. Average Resolution Time (ART)

Average Resolution Time (ART) tracks how long it takes to resolve customer issues, providing insights into the efficiency of your support team.

How ART can be used to improve CX

Customers expect quick resolutions to their issues, and a shorter ART can significantly enhance their experience. Monitoring ART can help you identify bottlenecks in your support process and make necessary adjustments to improve response times. Additionally, by understanding why certain issues take longer to resolve, you can address underlying problems that may be impacting customer satisfaction.

How to calculate ART

To calculate ART, add up the total time taken to resolve all issues and divide by the number of issues handled. For instance, if your team spends a total of 500 minutes resolving 50 issues, the ART would be 10 minutes per issue.

How to implement CX metrics in your business

Implementing CX metrics in your business requires a thoughtful and structured approach. Here's how you can get started:

Setting up a CX measurement framework  

Begin by establishing a clear framework for how you'll measure and track customer experience. Define the specific metrics you'll use, the methods for collecting data, and how frequently you'll review and act on the results. It's also important to set benchmarks and goals for each metric to gauge progress and success.

Involving key stakeholders  

Customer experience is not just the responsibility of one department; it involves everyone in your organisation. Ensure that key stakeholders across departments, such as marketing, sales, and customer support, are involved in the process. This collaborative approach will help you gather a more holistic view of the customer journey and ensure that improvements are aligned across the business.

Continuous improvement cycle  

Customer experience is not static—it evolves over time as customer expectations change and your business grows. Adopt a continuous improvement mindset by regularly reviewing your CX metrics and making necessary adjustments to your strategies. This ongoing process will help you stay ahead of customer needs and maintain a high level of satisfaction and loyalty.

Common mistakes to avoid when measuring customer experience

Even with the best intentions, it's easy to make mistakes when measuring customer experience. Here are a few common pitfalls to watch out for:

Overemphasis on a single metric  

While it might be tempting to focus on a single metric like NPS, doing so can provide an incomplete picture of your customer experience. It's important to use a balanced mix of metrics to capture different aspects of the customer journey and gain a more comprehensive understanding of your performance.

Ignoring negative feedback  

Negative feedback can be tough to hear, but it's invaluable for improving your customer experience. Don't make the mistake of disregarding or downplaying negative responses. Instead, use them as a catalyst for change and an opportunity to turn dissatisfied customers into loyal advocates.

Infrequent measurement  

Customer experience is dynamic, and measuring it once in a while simply won't cut it. To get a true sense of how your customers feel, you need to measure CX regularly and in real-time where possible. This will help you stay on top of changes in customer sentiment and respond quickly to emerging issues.

Additional thoughts on CX metrics

Industry-specific considerations

Different industries have unique customer experience challenges and priorities. For example, B2B companies might place greater emphasis on long-term relationship metrics like Customer Retention Rate, while B2C businesses might focus more on transactional metrics like CSAT and NPS. It's important to tailor your CX measurement strategy to your specific industry and business model.

Real-world examples of successful implementation

Learning from the successes (and failures) of others can provide valuable insights for your own CX strategy. For example, a SaaS company that tracks NPS and uses the feedback to improve its onboarding process might see a significant increase in customer retention and satisfaction. On the other hand, a retail brand that focuses on reducing its Customer Effort Score (CES) might find that simplifying its checkout process leads to higher conversion rates.

Interpreting CX metrics for actionable insights

Collecting CX metrics is only half the battle—you also need to interpret the data to make meaningful improvements. Look for trends and patterns in the data to identify what's driving customer satisfaction or dissatisfaction. For example, if you notice that your CSAT scores drop significantly after a product update, this could indicate issues with the new features or a lack of adequate support during the transition.

Wrapping up

Customer experience metrics are essential tools for understanding and improving how your customers interact with your brand. By choosing the appropriate metrics for your business, overcoming the challenges of CX measurement, and continuously refining your approach, you can create customer experiences that not only meet but exceed customer expectations. And that's a recipe for lasting success.

Key takeaways

Customer experience (CX) is crucial for business success: CX encompasses every interaction a customer has with your brand, impacting their loyalty, satisfaction, and likelihood of recommending your business to others.

Measuring CX provides actionable insights: By using a mix of qualitative and quantitative metrics, businesses can gain valuable insights into what’s working and where improvements are needed to enhance the overall customer experience.

Different CX metrics serve different purposes: Metrics like Customer Satisfaction Score (CSAT), Customer Effort Score (CES), and Net Promoter Score (NPS) offer unique insights into various aspects of the customer journey, helping businesses address specific areas of concern.

Challenges exist in measuring CX effectively: Subjectivity in feedback, integrating data from multiple sources, and balancing real-time and periodic measurement are common challenges that businesses need to navigate.

Tailor CX metrics to your industry and goals: Not all CX metrics are equally relevant for every business. It's important to select metrics that align with your specific industry, business model, and customer expectations.

Continuous improvement is key to CX success: Customer experience is dynamic, requiring regular measurement, analysis, and refinement to stay ahead of customer needs and expectations.

Avoid common mistakes in CX measurement: Overemphasis on a single metric, ignoring negative feedback, and infrequent measurement can lead to a skewed understanding of customer experience and missed opportunities for improvement.

Author's note: this blog was originally published January 2023 and updated August 2024