Is Your Business Using All 4 of These Core Customer Experience Metrics?
Just how important is it to “wow” customers these days? Behold these eye-opening statistics:
- 87% of customers share positive experiences.
- 86% of customers gladly pay more for a better brand experience.
- 84% of businesses that invest in improving customer experience report an increase in revenues.
- It costs 7 times more to acquire a new customer than it does to retain an existing one.
Of course, while most businesses strive to improve customer experience in one way or another, many of them miss the mark — and it’s typically because, as the old saying goes, you cannot manage what you cannot measure.
To close this gap, here are four customer experience metrics that all businesses — B2C, B2B, and B2B2C — should be using to constantly raise the bar and delight customers:
Net Promoter Score (NPS)
Developed by Fred Reichheld of Bain & Company, NPS is a powerful customer loyalty metric that enables businesses to verify whether their customer engagement investments, strategies and policies are trending in the right direction. At the heart of NPS is a simple, yet penetrating question posed to customers: on a scale of 0 to 10, how likely are you to recommend [name of brand] to a friend or colleague? Customers who respond with a 0 to 6 are grouped as detractors who can damage a brand and impede business growth. Customers who respond with a 7 or 8 are grouped as passives who are reasonably satisfied, but still vulnerable to being swayed by the competition. Customers who respond with a 9 or 10 are grouped as promoters who are loyal fans and brand ambassadors that drive business growth.
Visitor intent is used to evaluate the extent to which digital touch points are — or are not — working to usher customers forward on the buyer’s journey. Visitor intent goes beyond conventional website metrics such as time on site by delving into why customers make decisions, rather than exclusively observing what they do (or how quickly they do it). While there are a growing roster of tools and apps to help businesses glean visitor intent, the best way is to ask customers directly through surveys, chat, and other market research methods.
Customer Satisfaction (CSAT)
CSAT is typically used to capture customer experience levels for one-time interactions. For example, after finishing a chat session with a customer service representative or technical support specialist, customers are asked to rank their experience on a scale of 1 to 5 (or something similar, like 1 to 5 stars). Because providing this information only takes a few seconds, customers are much more likely to respond than if they were contacted days or weeks later through email. Businesses can then aggregate the feedback to spot trends, establish best practices, identify training opportunities, and so on.
Customer Churn Rate
Customer churn rate is used by companies that utilize a subscription business model (e.g. SaaS) to capture the volume and momentum of customers who exit the relationship. Generally, low churn rates indicate (but do not necessarily confirm) strong levels of customer satisfaction, while high churn rates suggest the opposite. It is important for businesses not to overreact to this metric, because there can be more to the story. For example, a low churn rate might be primarily driven by a low price or weak competition rather than strong customer experience. Conversely, a high churn rate might not necessarily be rooted in inferior customer experience, but could be a function of pricing, product, availability, marketing, or some other influential variable.
The Bottom Line
Customer experience is emerging — and in many marketplaces has already established itself — as the most important brand differentiator. Businesses that capture and exploit relevant customer experience metrics will find themselves poised to lead the way in the Customer Experience Era. Businesses that neglect relevant customer experience metrics will invariably find themselves falling behind their competitors — and in the long run, disappearing entirely from the landscape.