In the famous words of Stan Phelps, ‘Customer experience isn’t an expense. Managing customer experience in the right way builds your brand image.’ Customer experience focuses on the equation between an organization or business and its customers. It includes every encounter, no matter how brief the interaction, and even if it doesn’t end up in a purchase.
Any call made by the customer, mundane or otherwise, every exchange contributes to the inclination of the customer towards the commitment to a business. What is more important is how those customers view their experiences in aggregate.
According to a study conducted by Forbes, it revealed that 76% of companies with good CX perform financially better than their competitors with 77% of customers saying that below average to poor CX is a definite detriment to customer satisfaction.
How Customer-Centric Companies approach CX?
First, they understand and analyze their customer journeys, track and evaluate their experiences through CX metrics like Customer Satisfaction Score (CSAT), Customer Effort Score (CES), or Net Promoter Score (NPS). Second, derivations are made from these findings on these metrics. And lastly, these companies connect the metrics with the overall performance of the organization.
Some of the essential and well-rounded metrics to keep a track of:
Net Promoter Score (NPS): How likely is the customer going to refer your brand to others?
- Customer Satisfaction Score (CSAT): How satisfied is the customer with the latest encounter he/she had with the business.
- Customer Effort Score (CES): How difficult or easy was it for the customer to use the products or services?
- Problem Resolution Time (PRT): How long did customer support take to resolve the ticket?
Sourced from: https://usabilla.com
1. Cost of Service alongside gain in Customer Experience
Across the customer journey, companies focus to offer a better experience across interactions — be it in digital or physical infrastructure. Organizations and businesses that have realized this goal have begun smartly investing in self-support and customer assistance tools. As a general rule of thumb, costs must always be lower than gains as the latter explicitly indicates the generation of revenue over a course of time. CX metrics like NPS or CSAT can be related to cost of service as an expense but at the same time the impact of customer retention and churn to be also derived and delineated.
2. Client Desertion Rate and CLV
Organizations must become aware of the number of customers that leave them for their competitors on a monthly, quarterly, or yearly basis. This too can be tracked with customer loyalty metrics. When customers drop one brand for another, it’s a loss of relationship than the loss of the next sale, purchase or transaction. This, if not properly monitored and tracked, can drastically reduce the CLV or Customer Lifetime Value further leading to negative customer reviews and poor word of mouth marketing, followed by more desertions. CSAT or NPS are good metrics to track customer defections with. If those metrics are falling, desertion rates must be taken into account.
3. Customer Acquisition via References and NPS
One of the most unambiguous ways to measure customer loyalty is by tracking retention rates. It literally measures the length of time or the duration of however long customers have stayed on with the business or brand. But attrition rate on the other hand combines retention along with new customer accession. This typically means tracking the number of customers leaving the business within a certain period of time frame while also keeping track of the new inflow of customers. This has an indirect relationship with Customer Experience metrics, for example, as the NPS rate of a business increases, the rate of churn or attrition typically reduces. This is an essential tracker as it ensures that new customers are acquired properly while also impacting the customer acquisition costs while also affecting the NPS score. This tracking enables the business to keep existing customers and also acquire new ones leading to a stable, customer-favouring, and evolving business model.
4. Revenue generation and retention rate
CX metrics’ results are useful for organizations both theoretically and practically. Theoretically, these metrics provide the company with the right amount of data and intel required to act on or invest in improvements, evaluations, and internal updates. Practically, it can be used to track revenue which is one of the vital ways of using these CX metrics. It goes without saying that a regular business tracks its gross revenue and profit in meticulous intervals but when the same business also investigates the relationship between CX metrics and business performance; that’s when the organization or business is really upping its game.
By tracking the rates of CES, NPS, or CSAT, the business can get an idea of how its customers are responding to its services and products. By keeping track of how CX improvements are implemented and therefore are positively impacting NPS results, a connection can be established with the top-line revenue numbers of the business.