How to Choose Customer Experience Metrics and Measure CX

While measuring customer experience (CX) matters to you, it’s perhaps even more critical to your customers.

Customer expectations change, and many businesses are pushing to transform their CX — 60% of CX leaders have invested in a customer engagement solution in response to rapidly changing customer expectations. However, 90% say they find it challenging to know where to start. Customer experience metrics can guide CX improvement efforts.

What Are Customer Experience Metrics?

Customer experience metrics are predetermined measurements designed to quantify customers’ perceptions of interacting with your brand. Using preset criteria, your organization can measure how happy your customers are, letting you work toward reducing friction. 

You can use different metrics to measure CX depending on your goals and industry. Some are easy to quantify based on operational data, like support resolution times. Others are more challenging because they deal with customers’ emotions — how they feel about interacting with your brand. While emotions are complex, you can find methods to measure them by asking the right questions. 

Why Is Measuring Customer Experience Important?

Measuring the customer experience is one of the most critical activities in a business. You can use whatever you learn to inform your CX goals for the future, improve your services, adjust your marketing message, drive sales and more. A positive customer experience leads to loyalty to your brand, but this change doesn’t come without risks:

Using incomplete or inaccurate data can lead to the wrong conclusions. Asking customers to spend too much time completing surveys can detract from the customer’s experience instead of enhancing it. However, taking the correct approach can change how you do business for the better. 

What Are Some Common Customer Experience Metrics?

Not all metrics will provide the same value to your organization. The first step is to choose the right metrics to help you meet your business goals. Some of the most common CX metrics include:

Customer satisfaction (CSAT)

CSAT is the preferred customer experience metric for many businesses, as it measures customers’ overall satisfaction with a business, purchase or interaction. Customer satisfaction is determined by asking one simple question, such as “how satisfied were you with your experience?” A CSAT score is the sum of all positive responses, divided by the total responses collected, multiplied by 100. For example, if you received 100 survey responses, and 65 of them were positive, your CSAT score would be 65%. The CSAT score gives you insight into customer satisfaction and pain points, and monitoring them over time can measure the effectiveness of your CX strategy. This information will equip you to make the necessary adjustments to achieve your goals.

Customer effort score (CES)

The CES measures how easily customers can complete an action when interacting with your brand. Customers rate their effort on a scale of 1-5 or 1-7, with the higher numbers indicating they had to exert more effort to complete the task.

Suppose you want to understand how your customers feel about self-service channels like your website. In that case, measuring CES (e.g., how easy was it to find the information you needed to resolve your problem?) is an excellent method of identifying and reducing friction to make your resources more user-friendly, improving your overall CX.

Net promoter score (NPS)

The most successful businesses understand that your customers are your best marketers. If you have a high NPS, many customers will recommend your brand. NPS measures how likely a customer is to recommend your product, on a scale of 1-10. “Promoters” score a 9 or 10 and “detractors” score a 6 or less. Subtract your detractors from your promoters to calculate your NPS.

Customers’ willingness to promote your business also tells you whether they’re happy with your service, so you can also use NPS to evaluate customer loyalty.

Customer retention rate (CRR)

As the name suggests, CRR measures the percentage of customers who repeatedly buy your products or use your services. It’s calculated over a specific time period and is also a reliable indicator of satisfaction. CRR helps measure customer loyalty patterns over time so you can change the necessary operations to enhance retention.

Average handle time (AHT)

AHT refers to the average time, measured in minutes and seconds, that call center agents take to handle customer phone calls and other inquiries. AHT = (Total talk time + total hold time + total after-call tasks)/total number of calls. Tracking patterns in AHT identifies areas for improvement. For example, if billing inquiries take longer to handle than other calls, you may want to take steps to reduce bill confusion.

Customer churn rate

Your customer churn rate is the opposite of customer retention, indicating how many customers you lose over a period of time. Acquiring new customers is significantly more expensive than retaining existing ones. If your churn rate is high, you should improve CX so your customers will return to your organization.

Customer lifetime value (CLV)

According to Gartner, CLV is the total revenue or profit generated by a customer over the entire course of their relationship with your business.

Customer lifetime value = Number of purchases/annually X purchase profitability X length of commercial relationship. For example, a customer who purchases four pairs of shoes per year, with a profitability of $100 per pair, for 10 years has a CLV of $4000. Calculating CLV tells you how much to invest in CX to see a positive ROI. In other words, will the investment in CX generate more revenue over a customer’s lifetime? CLV can help you identify ideal customers and retain your most valuable clients so you can boost their loyalty with well-designed incentives like targeted offers and loyalty programs. Happy, loyal customers are likely to recommend you and buy consistently, so determining CLV can support you in working to increase long-term revenue.

First contact resolution (FCR)

As the name suggests, FCR is the percentage of inquiries that are resolved in a single interaction. According to the Contact Center Satisfaction Index, satisfaction declines from 82 (out of 100) for issues resolved in one call to 52 when it takes four or more calls to solve the problem. It’s simple to measure and a fantastic metric for analyzing your customer support. Your FCR rate can indicate the need to improve customer support, leading to higher customer satisfaction overall.

How to Choose the Best CX Metrics for Your Business

You may know what you want to measure, but whether you get accurate measurements depends on your customer’s willingness to provide feedback, your record-keeping and many other factors. Deciding which CX metrics to use can be challenging. Keep the following steps in mind to align your goals with your strategy:

1. Know your customers

If you want accurate customer feedback, you must present the request so they’re happy to respond. You may want as much feedback as possible, but piling questions on customers is likely to alienate them. Knowing what your customers will engage with is essential to striking the perfect balance between getting the answers you want and respecting your customers’ time.

2. Ask the right questions

Phrasing your questions intentionally means you get multiple sets of information from a single inquiry. Think about your customer experience goals and the answers you need to achieve them. Then, align your questions with your goals so you can act on customer responses.

3. Transform qualitative into quantitative

The challenge with measuring customer experience is to take personal information and turn it into something measurable. Your net promoter score is an excellent way to transform your data, as it allows you to measure CX objectively and track changes over time.

4. Keep it simple

It’s easy to get wrapped up in the numbers, but remember that you’re gathering CX data to act on it. Keep your metrics actionable so you can take your customer insights and turn them into a practical approach. Any metric you choose should help you enhance the customer experience throughout your organization.

5. Align CX metrics with key performance indicators

If your CX metrics don’t align with your business’s key performance indicators (KPIs), they won’t be as successful. Align your CX metrics with financial and strategic KPIs (such as repeat sales, account activation rate, or digital containment rate). For example, measuring CX at specific points on the customer journey allows you to link them with particular employees or systems. Keeping the alignment between measurements enables you to pinpoint specific parts of your customer experience that need work and improve them.

Reach Your Customer Experience Goals With CSG

Providing your customers with the best possible CX benefits your business in numerous ways, including fostering brand loyalty, receiving recommendations from existing customers and boosting sales. However, providing an unforgettable customer experience can be challenging. CSG Xponent can help you become the brand that anticipates your customers’ needs by building detailed customer profiles in real time. 

CSG Xponent combines a customer data platform with customer journey analytics and customer journey orchestration. Journey analytics tracks every interaction customers have with your brand, illustrating customer behavior, revealing needs, and identifying friction points. Journey analytics combines channel analytics and customer intent to indicate what’s happening in real time—going beyond one-point-in-time metrics like NPS and CSAT. Customer journey orchestration then delivers the right messages at the right time to help customers achieve their desired outcome.