You know your business has a great product or service. Your team works hard, and you’re proud of what you’ve built. But have you ever wondered what your customers really think? Really, truly think about their entire journey with you?
A fantastic product is only one part of the equation. Your customers have countless options, and what often makes the difference between a one-time transaction and a lifelong relationship is the customer experience (CX) you provide.
In fact, research by the PwC revealed that 73% of customers say that experience is important when they make purchasing decisions.
The problem is, ‘experience’ can feel like a fluffy, subjective concept. How do you quantify something that seems abstract? How can you put a number on a feeling?
The good news is that there are a number of powerful, quantifiable metrics you can use to understand exactly how your customers feel. By tracking the right data, you can move from making gut-based decisions to making informed, strategic ones that actually improve your business.
This comprehensive guide will show you how to measure customer experience. You’ll learn not just what these metrics are, but also how to use them to create a better, more customer-centric business.
Table of Contents
- What is Customer Experience?
- Why is Customer Experience Important?
- How to Measure Customer Experience: 7 KPIs to Know
- How to Use and Leverage CX Insights
- Deliver Better Customer Service with Great CX
- FAQs
What is Customer Experience?
Customer experience (CX) is the sum of every interaction a customer has with your business, both before and after they make a purchase. It’s not just the service they receive; it’s the entire journey.
This includes everything from the moment they first see your ad or read a blog post, to their experience browsing your website, the ease of the checkout process, the quality of your product, and the support they get afterwards.
Think of it like this: A single phone call with a support agent is just one moment. But the feeling that person has after getting off the phone (whether they feel heard, frustrated, or delighted) is part of the bigger experience.
A great customer experience is one that is seamless, enjoyable, and consistent at every single touchpoint. You’re creating a feeling that makes a customer want to come back again and again.
Why is Customer Experience Important?
In the past, businesses could compete solely on price or product quality.
Gartner forecasts that over 80% of companies will compete primarily based on CX. The reason is simple: a great customer experience directly impacts your bottom line.
Here are a few compelling reasons why you should make experiences a priority:
Effective CX Drives Revenue
When a customer has a great experience with your brand, they’re more likely to buy again. They’re also more likely to recommend you to their friends, which is a powerful form of free advertising.
Businesses that invest in CX also see a direct increase in customer retention, which is often far more cost-effective than acquiring new customers.
CX Builds Loyalty
When a customer feels like you care about them and their needs, they become loyal. This loyalty is not just about repeat purchases.
You’d be enabling them to become advocates for your brand. They will stand by you and recommend you even when a competitor offers a slightly lower price.
CX Reduces Churn
A poor experience, whether it’s a difficult website or unhelpful support, is a major driver of customer churn. By actively listening to your customers and improving their experience, you can drastically reduce the number of people who leave for a competitor.
How to Measure Customer Experience: 7 KPIs to Know
Now for the part you have been waiting for: how do you put a number on all of this? The following metrics are the most effective ways to measure customer experience:
1. Net Promoter Score (NPS)
You find your NPS by asking a single question:
“On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?“
Based on their answer, you categorise customers into three groups:
- Promoters (9-10): These are your raving fans. They’re loyal and will actively promote your brand.
- Passives (7-8): They’re satisfied but unenthusiastic. They could easily be swayed by a competitor.
- Detractors (0-6): They’re unhappy and are likely to spread negative word-of-mouth.
You calculate your NPS by subtracting the percentage of Detractors from the percentage of Promoters.
The result is a number between -100 and +100. A score greater than zero is typically seen as positive, while a score over 50 is considered outstanding.
2. Customer Satisfaction Score (CSAT)
CSAT is a metric that measures customer satisfaction with a specific interaction. Unlike NPS, which measures overall loyalty, CSAT is a snapshot of a single moment in time. You can measure it with a question like:
“How would you rate your satisfaction with the support you just received?”
The answers are typically given on a scale from ‘very dissatisfied’ to ‘very satisfied’. You calculate your CSAT by dividing the number of satisfied customers by the total number of respondents and then multiplying by 100.
A high CSAT score means your customers are happy with a particular experience, which is great for understanding what’s working well.
3. Customer Effort Score (CES)
CES measures how easy it is for a customer to get their problem solved. The theory behind this metric is that customers don’t just want to be satisfied; they want their interactions to be effortless.
The question for CES is typically:
“On a scale of 1 (very difficult) to 7 (very easy), how easy was it to resolve your issue today?”
A high CES score indicates that your customers can get what they need without a lot of friction or effort. It’s a great metric for understanding the efficiency of your support channels and identifying common pain points in your customer journey.
4. Customer Churn Rate
Churn rate is the percentage of customers who stop doing business with you over a specific period. While it doesn’t measure a customer’s feelings directly, it’s the ultimate indicator of your CX.
A high churn rate is a strong sign that something is wrong with your product or the overall customer experience. You calculate it by dividing:
# of customers lost in a period
______________________________________
# of customers at the start of a period
Monitoring this metric closely allows you to see how your CX initiatives are impacting customer loyalty over time.
5. Customer Lifetime Value (CLV)
CLV is a prediction of the total revenue a business can expect from a single customer throughout their entire relationship with you.
When you improve customer experience, you increase retention, which naturally leads to a higher CLV. A rising CLV signals that your customers are not just buying once, but are staying loyal and continuing to spend with you over a longer period of time.
6. First Contact Resolution (FCR)
FCR measures the percentage of customer service issues that are resolved on the first try. You can track this by asking customers to rate their experience immediately after an interaction.
A high FCR is a direct sign that your support team is efficient and effective. It shows that your customers do not have to spend extra time and effort calling back or following up on the same issue.
7. Customer Reviews and Social Listening
This is a qualitative metric, but it’s one of the most important ones. You need to know what people are saying about you in public forums like social media, review sites, and online communities.
You can use tools for social listening to track mentions of your brand and analyse the sentiment behind those comments. This gives you raw, unfiltered feedback on what your customers think.
While it’s not a single number, it provides invaluable insights into common frustrations, praises, and product suggestions, which can help you make strategic improvements to your CX.
How to Use and Leverage CX Insights
Collecting data is only the first step. The real magic happens when you use that data to drive meaningful change. You should leverage your CX insights in the following ways.
- Close the Loop – Do not just ask for feedback; act on it. You should always follow up with customers who have given you a low score. This shows them you are listening and can often turn a negative experience into a positive one.
- Identify Trends – You should look for patterns in your data. Are a lot of customers giving low CSAT scores on your website’s checkout page? Are a high percentage of your detractors complaining about a specific feature?
Identifying these trends allows you to prioritise which parts of your customer experience you need to fix first.
- Share Insights with Your Team – CX is not just a job for the support team. It’s a company-wide responsibility. You should share your CX metrics with every department.
When your sales team, product team, and marketing team all understand the customer journey, they can work together to improve it.
Deliver Better Customer Service with Great CX
Customer service is a crucial part of the overall customer experience, but it’s not the whole picture. When you focus on the entire journey, from marketing to sales to support, you create a seamless and positive experience that benefits everyone.
This is how you build a business that’s profitable and beloved by its customers. A great CX strategy will make your customer service team more efficient and your customers much happier.
FAQs
What is the difference between customer experience and customer service?
Customer service is a single, direct interaction with your business, such as a phone call to support or a live chat. It’s a reactive part of the business.
CX is the sum of every single interaction with your company, including the product, the website, the marketing, and the post-purchase support.
Customer service is just one touchpoint within the broader customer experience.
How often should I measure customer experience?
The frequency of your measurements depends on the metric. For transactional metrics like CSAT and CES, you should measure them immediately after an interaction has occurred.
For a relational metric like NPS, you should send surveys to customers every 3, 6, or 12 months. This allows you to get a good read on their overall loyalty without causing survey fatigue.
What tools can I use to measure CX?
There are many great tools available to help you measure CX. For surveys, you can use platforms like SurveyMonkey, Qualtrics, or HubSpot.
Many CRM platforms like Salesforce also have built-in survey and analytics tools. You should also consider leveraging analytics from your website and social media to get a more complete picture of the customer journey.