How to Measure Customer Experience: A Quick Overview

Recent research discovered that over 80% of organizations currently expect to compete primarily on customer experience (CX). In other words, despite your product’s price, use cases or unique capabilities, the overall opinion a customer forms through interactions with your business is expected to dictate their purchase decision more than any other factor. A seamless buying experience that directly addresses your customers’ needs win the CX game every time. But, the rapid evolution of customer expectations has had a major impact on what this strategy might look like. “Experience” as a word feels like something that would inherently be challenging, if not impossible to quantify. How can we measure something so seemingly ambiguous as a feeling, or an emotional response— especially at scale? Before I started studying customer success I would have thought the same thing. Now that I’ve learned a thing or two I’ve put together a list to measure customer experience that can hopefully serve as a guide in helping you initially define your customer success and support objectives and make future business decisions. In the same way that marketing attribution might seem challenging to define with data or hard numbers, so is customer experience. But it is possible to figure out. Here’s how:‍

1. Calculate Your Net Promoter Score (NPS)

NPS stands for Net Promoter Score, which is a metric used in customer experience programs. NPS measures the loyalty of customers to a company, and they are measured with a single question survey and reported with a number from -100 to +100, with a higher score being most desirable. NPS is often held up as the gold standard metric in customer experience. First developed in 2003 by Bain and Company, it’s now used by millions of businesses to measure and track how they’re perceived by their customers. It measures customer perception based on one simple question: How likely is it that you would recommend [Organization X/Product Y/Service Z] to a friend or colleague? Respondents give a rating between 0 (not at all likely) and 10 (extremely likely) and, depending on their response, customers fall into one of 3 categories to establish an NPS score:

• Promoters respond with a score of 9 or 10 and are typically loyal and enthusiastic customers.
• Passives respond with a score of 7 or 8. They are satisfied with your service but not happy enough to be considered promoters.

Detractors respond with a score of 0 to 6. These are unhappy customers who are unlikely to buy from you again, and may even discourage others from buying from you. ‍

2. Analyze Analytics Along Your Unique Customer Journey

As a disclaimer, before gathering this specific data, it’s important that you already have a holistic understanding of your currently existing customer base and/or target demographic(s). Jumping into analyzing a consumer’s journey with your business, you’ll want to know a few things: First, is just straight up Customer Count: How many customers do you currently have? Do you have more customers for one type of product than another? Do you have a mix of new and recurring customers? This information will help establish an important baseline Next, is Average Revenue/User: How much does each customer spend on average? Are they brand new or long-time users? What is their lifetime value (LTV)? Knowing this information will help you understand how much to invest in each customer and how much they are likely to spend in the future. Then, we have Average Lifetime Value Of A Customer, which is knowing what percentage of your revenue comes from repeat purchases, and what percentage comes from cross or upsells. This helps determine the true value of a customer as well as helping measure your churn rate (the percentage of users who stop buying) as well as predict potential growth later on down the road. In addition to understanding your existing customer base, it’s important to know where these people are coming from and how they end up at your company. If you’re already running ads or using some version of marketing automation, then this should be fairly easy — but if not, it may require a little digging on your part. Did 20% of new signups come from Facebook Ads while another 14% came via Google? Or maybe 45% came through email marketing while 35% signed up when visiting an affiliate website. This data can be extremely helpful when trying to optimize campaigns since it allows you to predict which channels are most effective at driving users based on past performance. Additionally, a customer journey map will help you understand all the touchpoints a customer goes through in order to buy your product or service. Having you and your team personally walk through this journey will help you empathize with their needs and perspectives and thereby fix any pain points. Given that this is, frankly, a highly complex process, it is important to note that mapping your customer journey should not be a one-time thing. Your customers are multi-dimensional and the rate at which technology and markets evolve means you should regularly be checking in and updating the map to reflect what’s currently going on in the world and with your customers.

3. Conduct Surveys

Besides looking at analytics, one of the best ways to understand your customer experience is just to meet your customers where they are and talk to them. You’d be shocked how much ⁠insight— whether in regards to pain points, product ideas, new features, etc.⁠— you can gain for your business simply by asking your users. As you are building your product, it is important to talk to your customers in real time. There are a plethora of ways to do this: online surveys, calls, focus groups, and so on. But the most important thing is understanding what they want out of the product or service you’re designing. This might seem obvious, but you also need to keep in mind that your users don’t care about your metrics. They care about their personal goals and how what you’re offering is going to help them get to where they’re trying to go, as fast and with as little friction as possible. Analytics can be a great way of finding out what people actually want and need from a product or service—but only if it is used alongside more qualitative user research techniques like interviews and surveys (and not as a replacement for them). Basically, analytics + qualitative user research is your bread and butter of building a quality customer experience. ‍

4. Figure Out Your Churn Rate

Long story short, churn rate is the percentage of your customers or (typically paying) users who either cancel or choose not to renew their subscription with you during a given time period. While some churn is always inevitable, it’s still important that you still identify why it’s happening so you can find the root of the issue and reduce it as much as possible. To determine your churn rate, look at a specific time period and count the total number of customers you’ve acquired, as well as the number of customers who churned during that time. You then divide the number of customers who churned by the total number of customers acquired, and multiply that decimal by 100% to calculate your churn rate. This metric should help you nail down why customers are leaving. Is it because of a confusing onboarding experience? Lack of engagement? Too much engagement? An inefficient user experience? Whatever your specific case may be, measuring and then analyzing your churn rate should help you improve your customer experience. A.K.A. you don’t know how to fix the problem until you know what the problem is.‍

5. Look for Trends in Your Customer Support Tickets

This is a big one: another metric that can help you learn more about your customer experience is your customer support ticket trends. This is probably the most clear sign of where your customers are having pain points. Don’t overlook it. Are the same issues coming up over and over again to your support team? If so, you need to find out why that’s happening and immediately see what steps can be taken to resolve it. You might create better self-sufficient materials, offer explainer videos with the help of something like Zight (formerly CloudApp), or tweak features that your customers might not be feeling. Not to mention the benefits this can add to CX from a support perspective. By taking a closer look at your support operations you can analyze how long it takes customers to get a response and how effective the responses are. It can never hurt your CX to see how these two areas can be improved. ‍

6. Measure Customer Satisfaction Scores

The customer satisfaction score is one of the most straightforward ways of measuring your customer experience. CSAT is short for customer satisfaction score. It’s a commonly used metric that acts as a key performance indicator for customer service and product quality in all kinds of businesses. While customer satisfaction as an idea is a general one, CSAT is a more defined metric, expressed as a percentage. 100% would be phenomenal – 0% would be terrible. To calculate, all you need to do is send a survey immediately following a purchase or interaction, depending on your business. This survey will ask “How satisfied were you with your experience?” and provide a corresponding survey scale. The CSAT is the average score of that survey. Customer satisfaction is a great way to get immediate feedback on whether a customer enjoyed their experience. If you have a low customer satisfaction score, you can begin to improve the customer experience. As I mentioned before, the idea of customer experience can be extremely abstract, and therefore, intimidating from a business-decision-making standpoint. Although it might seem challenging to measure things like brand salience or customer loyalty, these metrics can help make the ambiguous more understandable and concrete. You can only learn how to improve your customer experience once you begin measuring it. Get started today.