Customer Experience

How to measure Customer Experience?

Do you measure your customer experience consistently? Which key figures are important to you and why? Here's an insight into the CX key figures.

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A comprehensive picture of customer experience is needed

There is more competition than ever, and customer expectations have never been higher. If you want to be successful, a convincing customer experience strategy is essential. Every customer interaction is crucial. The customer's experience with the company has a huge influence on his intentions to buy again and to recommend the product, service or a company to others. The customer does not forgive a company offering mediocre or fluctuating quality of customer experiences.

It is therefore of key importance for the business development to know exactly what a customer's journey is like to understand where there is potential for optimization. Obtaining insights from customer experiences is therefore a key task. To know at any time how satisfied customers were with an interaction, it is advisable to conduct continuous real-time surveys over all relevant customer touchpoints. This enables early identification of trends and potential in the customer experience for proactive, immediate optimization.

This sounds plausible, but is currently only a reality for a few companies. According to a report published by Forrester (Forrester's CX Index™ 2019), 72% of participating companies reported that customer experience (CX) was one of their top priorities. But barely 1% of companies were able to provide a comprehensive picture of their customer experience, and even less in real time.

Irrespective of whether companies, products or services are similar, every customer is different. For this reason, different customer experiences arise along the customer journey, which nevertheless have the same aspects and dimensions of experience. The satisfaction with the product, the simplicity in handling the service or the readiness to recommend the company to others are examples of this.

What key figures are available to measure customer experience?

The customer satisfaction rate (Customer Satisfaction Score: CSAT)

It is essential to know how satisfied you are with all aspects of your product or service that are relevant to the customer. For this reason, the Customer Satisfaction Score (CSAT) is very important. If, for instance, the customer service team is well trained, solution- and customer-oriented, this will be reflected in positive evaluations after an interaction of the customer with your customer service. The customer evaluations have a high expressiveness if the survey is conducted immediately after a received customer service, that is event oriented and transactional, because the memory of the experience is still fresh and alive.

How is the CSAT calculated?

The CSAT score is calculated from the average rating of the answer to a question whose rating scale ranges from "Not at all satisfied" to "Very satisfied". The customer's experience of the service received is assigned to the values 1 - 5. 4 stands for a "satisfied customer", 5 stands for a "very satisfied customer".

The equation below gives you a better understanding of the percentage of total satisfied customers. If your total score is 4 or 5, it indicates a correspondingly higher customer retention rate.

CSAT Formula

The Customer Effort Score: (CES)

Many suppliers are competing for consumers with innovative products and exceptional services. Most recent studies have shown that the market player that succeeds in retaining customers is the one that guarantees the greatest possible convenience and simplicity in handling the product. What does that mean? Customers don't want to make an effort to use a product - they don't want to struggle to accomplish a task for which the product was designed. The Customer Effort Score measures how much effort a customer had to put towards the completion of a particular task and identifies areas where a company needs to improve.

How is the CES identified?

After a shopping experience, service or support purchase, promptly send a survey to receive a rating. For example: "Did you easily find the product you were looking for?” The response scale ranges from "not easily at all" to "very easily". Or: "Did it take you a lot of effort to assemble the furniture?” The rating scale from "a lot of effort" to "no effort at all" indicates how much effort the customer had to make before using the piece of furniture.

To calculate the CES, divide the sum of all customer effort values by the number of customers who participated in the survey. The higher the score, the better

CES Formula

The Willingness for Recommendation Score: (WRS)

The recommendation rate is an alternative to the Net Promoter Score and indicates the willingness of your customers to recommend your company, products or services to friends or colleagues. All online platforms (Tripadvisor, Netflix, Amazon, Uber, etc.) use WRS with the well-known 5-star rating of products and services.

How can a company measure WRS?

With a survey, this metric can be easily determined. The question "On a scale of 1 to 5: How likely are you to recommend our product to a friend or colleague?" aims at identifying satisfied and loyal customers. Customers whose expectations you have met completely and at all times will report a high scale value. Customers whose expectations you have not met or only partially met will rate you lower accordingly.

WRS Formula

The Customer Churn Rate

Business prospers when the company counts repurchasers among its customers or when they continue to pay for subscription-based services. The customer churn rate refers to customers who do not return or cancel a recurring service.

How is the customer churn rate measured?

A company can calculate the customer churn rate by dividing the sum of lost customers by the sum of active customers:

Churn Rate Formula

Communicating a positive customer experience at customer touchpoints, which, for example, is measured with CSAT (Customer Satisfaction) and CES (Customer Effort), is a field of action with which a company can differentiate itself from its competitors. In this way, it is able to build up sustainable customer loyalty, which is documented by the WRS (Willingness for Recommendation). The CCR (Customer Churn Rate) shows how well a company succeeds in retaining customers - it is often used in the telecommunications industry in particular.

Customer experience is becoming increasingly important against the background of a falling loyalty rate and an increasing willingness to change. To provide your customers with an excellent customer experience across the entire customer journey, you need relevant real-time data from transactional surveys. With the gathered customer insights, you will be able to improve the customer experience continuously. For this purpose, you can rely on a Customer Insights Solution that optimally supports you on your way to Customer Experience Excellence.