"Measuring Customer Experience -Metrics that Matter"

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?? Measuring Customer Experience: Metrics that Matter ??

In today's highly competitive business landscape, delivering an exceptional customer experience is key for companies to stand out. Organizations that prioritize customer-centricity (I will deconstruct this in future conversations) and invest in understanding their customers' needs are poised to thrive in the long run. However, to truly gauge the effectiveness of your customer experience efforts, you need to rely on the right metrics.?

As a seasoned product manager, CX leader, or operations executive, you have likely utilized a range of metrics. However, it's crucial to question whether you're using the right metric and how it truly matters. Keep in mind that the metric itself isn't the most important thing - it's how you use the insights gained from measuring the customer experience with that metric.

In this edition of the Ins & Outs of Customer Experience post, I'll discuss some of the popular (unpopular) qualitative, quantitative, and quasi-quant experience-related metrics that matter when measuring customer experience. Also,?why and how to factor 3 must-haves for a winning product | service experience while selecting a metric.

When someone asks for a recommendation on which metric to use, I usually start by asking my go-to anchor questions. These questions typically begin with, "Are you going to..." followed by my two cents.

• Measure the?usability?of a feature or product. (SUS, Task Success)
• Monitor the?experience?of a feature or product. (In product CES)
• Measure?overall experience (NPS)
• Measure?overall satisfaction (CSAT)
• Measure impact on customer retention (Churn)
• Assess the financial impact of investing in customer experience (Earned Income Growth, CLV)

Let's dive into some of those popular (unpopular) metrics - feel free to chime in with comments on whether they resonate with you.

1. Net Promoter Score (NPS): NPS is a widely recognized metric quantifying customer loyalty. NPS measures the likelihood of customers recommending your product or service on a scale of 0 to 10. NPS provides valuable insights into your brand's perception and?helps identify promoters, passives, and detractors. By tracking NPS over time, you can assess the impact of your customer experience initiatives and make informed product and service decisions. Recommended not to use NPS for everything such as every feature or page (explore other measures such as SUS, CES and objective of what and why you need a measure).

NPS as a measure is not a solution for all experience measurement needs.

1. Customer Satisfaction Score (CSAT): CSAT measures customer satisfaction levels after specific interactions or experiences. It usually involves asking customers to rate their satisfaction on a scale ranging from 1 to 5 or 1 to 10. CSAT surveys provide immediate feedback and allow you to identify areas for improvement, and enables you to build behavior-based coaching models for your customer service reps linking operational data with behavior.
2. Customer Effort Score (CES): CES evaluates?the ease of doing business with your company. It measures the?level of effort?customers exert to resolve issues or complete tasks. Understanding customers' efforts can streamline processes, minimize friction, and create a seamless experience. Lower CES scores indicate smoother interactions and higher customer loyalty.?
3. Task Success: Metric or criterion used to evaluate the effectiveness or accomplishment of a specific task or goal. It is a way to assess whether a task has been completed successfully or not. Popular performance measure in a usability study methods. Built with predefined constructs of what the task is including pass and fail. Task success measures human performance in the use of products and features.
4. Churn Rate: The churn rate refers to the percentage of customers who discontinue using your product or service within a given period. A high churn rate indicates customer dissatisfaction or lack of loyalty. By monitoring churn rate and identifying the reasons behind customer attrition, you can proactively address issues and implement strategies to retain customers. Reducing churn preserves revenue and enhances the customer experience by fostering long-term relationships.
5. Customer Lifetime Value (CLV): CLV measures the total value a customer brings to your business over their entire relationship with your company. It considers purchase frequency, average order value, and customer retention factors. CLV is a critical metric for understanding the profitability of your customer base and identifying high-value customers. By focusing on increasing CLV, you can allocate resources effectively and tailor experiences to your most valuable customers.
6. Earned Growth Rate?- The earned growth rate refers to the rate at which a company's earnings or profits increase over a specific period. It measures the company's ability to generate more income. It is often used to assess its financial performance and potential for future growth—the metric factors NRR (net revenue retention) and ENC (earned new customers).

Few tables stakes metrics that are must-have in operations as hold the key to operational success.

1. First Response Time (FRT): FRT tracks the time it takes for your team to respond to customer inquiries or support tickets. A quick and efficient response is crucial for customer satisfaction and loyalty. By monitoring FRT and setting benchmarks, you can ensure timely and proactive support, minimizing customer frustration and enhancing their overall experience.
2. Customer Retention Rate (CRR): CRR measures the percentage of customers retained over a specific period. It reflects the effectiveness of your customer experience initiatives in fostering long-term loyalty. By focusing initiatives on retaining existing customers, you can reduce acquisition costs and build a strong base of brand advocates and promoters.

Remember, metrics alone do not tell the whole story. It's essential to contextualize these metrics and combine them with qualitative data, such as customer feedback and sentiment analysis, to understand your customer experience landscape comprehensively.

In conclusion, measuring customer experience is crucial for organizations aiming to deliver exceptional value and build lasting relationships. By leveraging the right metrics, we can gain insights into customer sentiment, identify areas for improvement, and align our efforts to meet and exceed customer expectations.

Let's embrace data-driven approaches and prioritize the metrics that truly matter in our pursuit of outstanding customer experience. ????

If you're reading this, chances are you're already familiar with collection methods in your organization. So, I am going to post on collection methods in future editions. Get ready to enhance your knowledge!

#customerexperience #metricsthatmatter #customercentricity #datadriveninsights #cx #b2b #xm #cxmanagement #cxstrategy #operationalexcellence

You will become an expert only when you do it, so don't let the fear hold you from getting started.

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Disclaimer: All views expressed in this newsletter are solely my opinion. I am not a spokesperson for my employer, nor do they represent my employer's opinion.