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customer-experience

Measuring Customer experience

(Continues from) – How to measure Customer Experience

Measuring customer experience can be overwhelming, but it’s crucial for achieving better performance results. The previous guide shared the importance of measuring CX and the most important key performance indicators (KPIs) to understand and track. Now, we’ll dig deeper into those KPIs, and we’ll learn how you should calculate them correctly.

Customer Satisfaction and Loyalty

In this guide, you’ll learn how to measure and calculate the most important performance indicators for customer satisfaction and loyalty. And in terms of Customer Experience, satisfaction and loyalty are the most important factors to consider. Both are closely related to customer repurchases and business growth. We’ll look closely into the three customer experience metrics involving customer input and feedback. Net Promoter Score, Customer Satisfaction, and Customer Effort Score are the most popular customer experience metrics. NPS tracks customer loyalty over time, CES shows how easy it is for customers to get help, and CSAT determines how satisfied customers are after crucial touchpoints in the customer journey.

Net promoter score (NPS)

NPS is the most widely used CX metric, with nearly two-thirds of businesses using it. But why is it so widely used? First, NPS is short and simple for both companies to implement and track and for customers to answer. The NPS survey often has only two questions frequently used to rate a brand, service, or product. NPS is a single, powerful metric for goal setting.

Why use NPS?

  • It’s quick, simple, and easy for both companies and customers
  • It calculates how loyal your customers are likely to be
  • It shows the big picture;
  • It’s an industry-standard metric: it is widely and well understood, and there are available benchmarks;
  • An increase or decrease in NPS helps forecast future revenue gains or losses.
  • It’s also used to evaluate word-of-mouth marketing campaigns.

Calculating NPS

How to measure and calculate NPS?

Calculating NPS is quite simple, really.

  • Send an email or a store survey with only two questions
  • Have a scale from 1 to 10 for the customers to rate
  • It’s quick, simple, and easy for both companies and customers;
  • You’ll sort the respondents into three groups: Detractors, Neutrals/Passives, and Promoters are the three types of respondents.
  • Those who answered 1–6 are detractors, 7–8 are passives/neutrals, and those who answered 9–10 are promoters.

Subtract the total number of detractors from the total number of promoters.
The formula is: NPS = % Promoters – % Detractors
If the results show that 70% of your customers are promoters and 10% are detractors, your NPS score will be 60%.

Calculating NPS

Customer Satisfaction (CSAT)

CSAT, along with NPS, is one of the most commonly used CX metrics. It comes in various shapes and sizes, but the most common is using a 1 to 5 scale. An excellent example of CSAT is Google or Facebook ratings. CSAT is a perfect tool for determining whether a customer is satisfied with a one-time interaction. . CSAT is also easily adaptable to any specific needs of an organization.

Why use CSAT?

  • CSAT is simple and efficient to implement;
  • Accordingly, customers’ responses are typically straightforward and quick;
  • It’s targeted, and responses help determine which aspects of the product/service customers are most satisfied with or dissatisfied with;
  • It can be tailored to any specific area or need;
  • It is frequently requested of a customer following a transaction or support ticket to assess the efficiency of the customer service department;
  • CSAT is an excellent way to learn what the customers think of a brand at the moment.

How to measure and calculate CSAT?

  • Send a short survey immediately after customers’ interaction with your brand or their interaction with a specific area of your service or product;
  • Usually, the survey contains only one question: “How satisfied were you with your experience/our product/service today?”;
  • Provide a scaling system (on a scale of 1-5 or 1-10) from very satisfied to very dissatisfied.
Measuring Customer experience

Measuring Customer experience

Calculating the CSAT can be done differently, depending on what works best for the business.

  • Use Happy-Neutral-Unhappy Ratings
  • Use 5-star ratings
  • Use one of the Two different formulas:

With these formulas, you can:

  • Take an average of all the results. In this case, the CSAT formula is to add all scores and divide the total by the number of respondents. Then, multiply the result by 10 to get the CSAT score %.
  • To calculate an average customer satisfaction score, take the number of “Very Satisfied/Satisfied” responses, divide by the total number of respondents, and multiply by 100.

Here are examples for both:

  • Your CSAT survey had 20 respondents. If the total of their scores is 100, you have a 50% CSAT score.
  • If you had 20 respondents and ten said “Very Satisfied/Satisfied,” the CSAT score would be 50%. (0,5 times 100).
Clickable image with pdf file

Customer effort score (CES)

The third most popular customer experience metric that involves the customer’s input is the Customer Effort Score. CES is a transactional metric that evaluates the ease of use of a single solution. The more accessible (and more effortless) you make the customer experience, the more likely your customers will buy from you again.

According to research, 94% of customers who had an easy experience are more likely to buy again. Also, 81% of the customers who felt like buying was too much effort are more likely to share their negative experiences, compared to 1% of those who had an easy time.

CES asks, “How easy was it to solve your problem today?” Usually responding with a 5- or 7-point scale system.

Measuring Customer experience

Measuring Customer experience

Why use CES?

  • CES is simple and efficient to implement;
  • It assists you in analyzing the product/service’s complexity
  • It evaluates the ability to improve usability. Furthermore, reducing effort may increase customer loyalty. As a result, CES may be the best metric for predicting loyalty.

How to measure and calculate CES?

  • Send the survey immediately after the customer interaction. Ask your customers to rate the interaction from low to high in the survey. To calculate the score, see the average and distribution of scores.
  • The formula is: CES = Sum of all customer efforts score / Total number of responses.
How to measure and calculate CES?

Key Takeaways

Measuring customer experience metrics is essential for a customer-facing business. The most important metrics to measure customer satisfaction and loyalty are the Net Promoter Score (NPS), Customer Satisfaction (CSAT), and Customer Effort Score (CES). These customer experience metrics can tell you how simple or complex it is for customers to use your products, directly impacting whether customers will refer you to their friends and colleagues and continue to do business with you. In the following guide, we’ll help you how to calculate the most important metrics related to customer value.