How to Quantify Customer Experience
When you talk about your business’s customer experience, it’s easy to get caught up in the bigger picture of what you want to achieve. Meaning, it’s easy to just imagine the ideal experience you want your customers to have, but not actually focus on what will help you achieve this.
While that’s understandable, it’s also entirely a good idea. You need data to help inform your decisions and tell you if your process is working. So in this article, I want to show you the five metrics that help quantify customer experiences. This will give you a clear path forward to help you reach your customer experience goals.
First up is one that you may have already heard of called the ‘Net Promoter Score’ or NPS.
1. Net Promoter Score
Your Net Promoter Score (NPS) works on the idea that every business can separate their customers into three distinct categories.
The first group of people are called “promoters.” These are customers who are loyal to your brand. They actively recommend you to their friends and family.
The second group of people are termed “passives.” This group likes what you do, but don’t have the same fervor or vigor as the first group. Generally speaking, if they get a better deal, they’ll shift to your competitors.
The final group are the “detractors.” These are customers who are unhappy with you and feel that you have in some way forced them into a bad relationship. They are most likely to abandon your product and service in the first instance.
By separating customers into these three groups, your NPS tries to help you understand what works and what doesn’t. To calculate your NPS, you only have to ask your customers one question: “How likely is it you would recommend us to a friend?” Customers gauge their answer on an 11-point scale, with 0 being the worst and 10 the best:
There are a few reasons. First, your NPS can help paint a clear picture of how your customers feel after they make a purchase. So not only does this gauge your customer’s satisfaction, but it also provides you with a better idea of where you need to improve.
Your NPS can also mold how you operate, which products you promote, and how you approach new customers.
For example, if most of your promoters are buying a specific product in your store, that’s a clear signal that your product is well positioned and functional. So following the pattern left by satisfied customers allows you to build a better product offering in the future.
However, the Net Promoter Score system is far from perfect. It’s not the most specific metric in your lineup and requires some digging if you want to build a plan with it. But those are relatively small sacrifices for what is otherwise a simple benchmarking metric that helps quantify your customer experience. If you want to learn more about how to improve your NPS, I highly recommend checking out our NPS guide.
2. Customer Satisfaction
The next metric on our list that helps quantify customer experience is the Customer Satisfaction Score, CSAT. Much like your NPS, CSAT also seeks to quantify your customer experience by putting their responses on a gradable scale. Only this time, you’re able to ask more than one question.Another big difference is that your CSAT uses the more simplified Likert scale, which allows customers to choose from five options:
– Very satisfied
– Very unsatisfied
If you’ve ever filled out a survey from a retail store receipt, then you’ve experienced a CSAT survey. So from the very start, your CSAT scores are going to be more holistic and inclusive.
According to one study, only 8% of customers agree that companies deliver superior customer service. That means every brand has the potential to improve, and the CSAT metric and testing methods can help direct your improvement efforts.
Thankfully, it’s relatively simple to set up and run these surveys if you’re using helpdesk technology. You’ll be able to generate CSAT scores that are 100% customized to your brand, and can serve as a benchmark over time.
3. Customer Effort Score
The next metric that can help you unfold your customer experience is the Customer Effort Score or CES. This score is a measurement of how easy or hard it is to complete any task on your website. That task could be anything from making a purchase to finding a relevant help article.
It all depends on what your customer needs, but is generally expressed by assessing your customer’s reaction to the statement, “The company made it easy for me to handle my issue.”
The response to this question is important, as it’s generally accepted that your CES is a better indication than other metrics, and can determine if customers will decide to be loyal to your brand in the future.
So calculating CES tells you how effective you are at drawing people back to your product. This is backed by quite a few studies as well. CES is also typically scored on a number scale, and looks like this:
According to Gartner, the group credited with originating the CES method, you can calculate your CES with simple math.
Start by finding the total number of customers who at least “somewhat agree” with the statement posted above. These are the people who ranked you at five or above. Then, divide that number by the total number of respondents. The higher your final CES, the better your chances of bringing customers back. That usually means your customer experience is pretty on point!
4. Churn Rate
Churn rate is the next metric for businesses to consider when they want to quantify their customer experience. SaaS companies typically use this rate, but it can be used on a general level if repeat purchases are essential to your business model.
Your churn rate is the total number of customers who have decided to cut ties with you during a set time period. Businesses usually refer to this as a customer having “churned.”
To calculate churn, start by finding the total number of customers you lost in a set time period. That period could be a week, month, quarter, or even a full year. Then, divide that number by the number of customers you started with, plus the total customers you won in that time. Multiply your result by 100, and you’ll have your churn rate percentage.
Here’s what the formula looks like in full:
You spend quite a bit of your marketing budget trying to win over customers and convincing them to buy. The longer they remain as loyal customers, the more revenue they generate, and the stronger your business becomes.
Lower churn means longer customer lifetimes, which means more value from each customer.
Over time, this will seriously impact both your customer base and your bottom line. So calculating and minimizing churn is a vital method to quantify your customer experience.
5. First Response and Average Handling Time
The final two metrics are usually intertwined with each other. First up is your First Response Time (FRT).
FRT is a measurement of how long customers have to wait before someone in your organization reaches out to help them. It could be minutes, hours, or days depending on how you’ve set up your customer support team.
But it’s not always simple to provide a fast FRT. Your response time will usually vary according to your support source and your industry, so keep that in mind. Generally speaking, you want this metric to be as low as possible. Service issues like a slow FRT can make it much more likely for a customer to move to your competition.
The second metric, which is quite similar, is your Average Handling Time, or AHT. Handle time is a measurement of how long it takes for an issue to go from its initial submission to a resolution. This includes any downtime where a customer is on hold or waiting for an email response. AHT is also called your Average Resolution Time, and you can easily measure this in most helpdesks.
But by tracking both of these metrics, you can assess how quickly your support team helps your customers fix their problems. Shortening wait times and improving the efficiency of your support can lead to a better overall customer experience, which is good for everyone involved.
It may be easy to get caught up in the big picture, but now you know the essential metrics that can help you quantify your customer experience.
By finding your Net Promoter Score, you’ll assess how likely it is that your customers will recommend you to a friend. The more recommendations, the better for the growth of your business.
Customer Satisfaction is very similar but can help give you a more in-depth look at customer pain points and struggles. And with your Customer Effort Score, you can assess how simple it is to complete a task in your business. The easier it is to buy and fix issues, the more likely it is that you’ll have repeat buyers.
You can also calculate churn rate in some situations to see how many customers you’re losing in the grand scheme of things. Low churn means more revenue, so act accordingly.
Finally, by calculating (and lowering) your First Response Time and Average Handling Time, you can provide better support to your customers. By focusing on these metrics, you’ll be positioned to improve your customer experience immediately and for the future. The sooner you start measuring, the faster you get better.