Top 10 KPIs to measure customer experience
Customer experience KPIs let you track how fast you are losing your customers, how to retain them, their lifetime value, and their experience with your brand/business.
Here are the top 10 customer experience KPIs that you should consider measuring for your company:
1: Customer churn rate
The customer churn rate measures the percentage of customers who discontinue using a product or service over a specific time frame. The first step in figuring out how to keep a current customer and boost income streams is lowering churn rates.
A high churn rate signifies that a significant number of customers are ending their relationship with a brand, highlighting potential issues with customer satisfaction, value, or experience. On the other hand, a lower churn rate indicates that customers are happy with your level of service, which leads to a better customer experience and greater customer loyalty.
By closely monitoring this KPI, a business can gain insight into the effectiveness of its customer retention strategies, proactively address concerns, enhance customer experience, and thereby reduce customer attrition.
2: Net promoter score
The Net Promoter Score is a widely recognized CX KPI that evaluates customer loyalty and advocacy. It tells you about the quality of your overall customer experience based on the likelihood of your existing customers recommending your product, service, or brand/business to others.
Calculated by subtracting the percentage of Detractors from the percentage of Promoters, NPS provides a clear numerical representation of customer sentiment.
NPS = Total % of promoters – total % of detractors
A positive NPS score indicates strong customer loyalty and positive word-of-mouth referrals, while a negative score suggests areas for improvement in the overall customer experience.
3: Customer satisfaction
Customer satisfaction score (CSAT) gauges customers' contentment with a brand's products, services, or interactions. Typically measured through surveys or feedback mechanisms, customer satisfaction offers insights into the effectiveness of customer experience initiatives. A high customer satisfaction score indicates that the brand's efforts align with customer expectations and needs, contributing to positive sentiments and lasting relationships. It says that your company has a customer-focused culture and that you consistently meet or exceed your customers' expectations.
CSAT Score: Total number of satisfied responses (ratings of 4 or 5) / Total number of responses x 100
4: Average resolution time
This KPI measures how long it typically takes a customer care representative to address a problem for a client. This customer support statistic reflects your staff's effectiveness and directly correlates to client satisfaction.
A shorter resolution time is indicative of efficient customer service and enhanced experience. This KPI helps businesses identify bottlenecks in their support processes, ensure timely assistance, and enhance customer satisfaction by addressing concerns promptly.
5: Customer acquisition rate
The Customer Acquisition Rate measures the rate at which new customers are acquired over a specific period. Tracking this metric enables businesses to understand the effectiveness of their marketing and sales strategies in attracting and converting potential customers. This rate can be expressed as the number of new customers gained in a given time frame, such as per month or quarter.
A higher acquisition rate indicates successful customer engagement and the appeal of the brand's offerings.
6: Conversion rate
The conversion rate is a crucial CX KPI that evaluates the effectiveness of a brand's website or landing pages in converting visitors into customers. Expressed as a percentage, the conversion rate highlights the success of calls-to-action, user experience, and overall engagement on digital platforms. Businesses can use this KPI to optimize user journeys and maximize conversions.
7: Cart abandonment rate
In ecommerce and
retail, the cart abonnement rate holds significant importance. It measures the percentage of users who add items to their online shopping carts but do not complete the purchase. A high abandonment rate indicates potential friction points in the checkout process or gaps in the user experience. Monitoring and addressing this KPI can increase sales and improve user journeys.
Many of the causes of cart abandonment can be resolved by simply improving the user experience. For instance, if potential customers are leaving their carts empty because of unanswered queries, you might set up a chatbot or integrate messaging on your checkout page so they can easily contact support without leaving the experience. A well-designed user experience, possible return consumers, and greater revenue are all signs of lower cart abandonment rates.
8: Customer lifetime value
Also known as Customer LTV or Lifetime Customer Value, customer lifetime value (CLV) quantifies the total value a customer brings to a company over the entire relationship duration. CLV considers not just the initial purchase but also the ongoing value generated from repeat purchases, cross-selling, upselling, and referrals.
Customer lifetime value = Customer value* x Average customer lifespan
*Customer value= Average purchase value x average number of purchases
CLV helps businesses understand the long-term financial impact of acquiring and retaining customers. A higher CLV indicates that customers are generating more value over time, which could justify higher customer acquisition costs or investments in customer retention strategies. It also aids in making informed decisions about resource allocation, marketing strategies, and customer relationship management.
9: Direct traffic
Direct traffic measures the volume of visitors who reach a website directly by typing the URL into their browser or using bookmarks. High direct traffic is an indicator of brand awareness and customer loyalty, showing that customers are intentionally seeking out the brand's online presence.
Direct traffic creates potential for future growth and goes hand in hand with brand awareness.
10: Pages per visit
Pages per visit quantifies the average number of pages a user views during a single session on a website. A higher pages-per-visit metric indicates deeper engagement and interest in the brand's content, reflecting the effectiveness of the website's layout, navigation, and user experience.
Should you measure all these KPIs?
While each of the mentioned customer experience KPIs provides valuable insights into different aspects of your business's interactions with customers, it's not necessary or practical to measure all of them simultaneously. The choice of KPIs to measure should be tailored to your specific business goals, industry, and the nature of your customer interactions.
Most companies only measure 2.5 customer experience KPIs. It really starts with understanding your business metrics and choosing the best KPIS for customer experience that makes sense to your business.
