KPIs for CX

In the digital era, finding accurate methods of measuring the success of customer experience initiatives is augmented by the growing expectation consumers have for engaging experiences, personalization, and proactive services both in-store and online. However, as competition in customer acquisition and retention rises, many are seeking to understand how to measure the impact of CX on a company’s bottom line both in the short and long term.

What Is CX?

Why Invest In Customer Experience

The Importance Of Measuring CX Success

In order to do this, you need to know what key metrics matter most. For example, if you want to increase sales, then you might focus on conversion rates while if you want to improve customer satisfaction levels, you may choose to look at Net Promoter Score (NPS).

Measurement of customer experience (CX) can be tricky because there are so many factors involved. In order for a corporation to be able to accurately measure customer experience, there needs to be an understanding of what a customer did when interacting with our brand, comprehending their journey, and understanding how these relate to customer engagements.

Using a customer journey map to visualize your experience is a great place to start. Journey maps are a visual story about how people interact with your brand. They help companies gain a deep understanding of their customers and act as a bridge between businesses and buyers.

What Is Customer Retention?

Retaining customers is vital for any business. A study on customer retention rates conducted by McKinsey & Company found that 70 percent of customers would recommend a company based on its ability to retain them.

Key Categories When Measuring CX

  1. CSATs (Customer Satisfaction Assessments) are the most common type of customer experience measurement. They include both explicit measures like surveys and implicit ones like reviews and mystery shopper reports.
  2. Customer loyalty/customer retention/customer churn rate metrics can be retrospective, such as average tenure, or more predictive of the likelihood of a customer remaining a customer. Examples include purchase frequency (how often someone buys), number of different ways they buy from you (e.g., online vs. phone vs. store), type of customer (new vs. returning) and their level of engagement.
  3. Advocacy/reputation/brand. Metrics like these help companies understand whether their products or services are meeting customer expectations.
  4. Quality/operations. These are the most underrated metrics. If a product or service doesn’t meet expectations, then regardless of whether any action was taken to remedy the situation, the customer experience will be poor.
  5. Employee engagement. This fifth set of metrics is included in perhaps only 10% of CX initiatives. A Gartner survey identified employee engagement as a major concern in delivering CX improvements, with 86% of organizations ranking it as having an equal or greater impact than other CX challenges.

PSFK Community Survey

Q: What are the KPIs you are using to measure the performance and/or quality of your customers’ brand or purchase experience?

Retailer: NPS, CSAT, we will introduce Customer Effort Score soon (post transaction, post delivery, post interaction with customer care). We also track: FTR, Contact per order, add to cart rate, on time delivery

Q: What do each of these KPIs tell you and how do you utilize them?

Retailer: Advocacy, satisfaction, promptness of customer care, how much effort customers exert, the drivers behind intention to purchase online, timely delivery.

Q: Of those KPIs, which is the most important metric to your organization?

Q: Are there any areas of CX that are currently unmeasured or insufficiently measured, where you need more visibility?

Retailer: Data quality, ROX.

Q: Please choose one of these two options that best describes how you utilize CX KPIs.

Retailer: We set CX KPI objectives/targets on an annual basis.

Q: What percentage of your overall performance evaluation is based on CX KPIs?

Hospitality: I think it’s about 30%. Retailer: 10%.

To Conclude

If you want to learn more about measuring CX KPIs, contact the PSFK research team.

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