December 7, 2022
Lauren Platero

How to Measure Customer Experience | 6 Customer Experience Metrics

If you’re a business owner or upper-level executive, you know the significance of understanding customer experience metrics. Even if you operate a business within a niche market or an SEO-rich eCommerce site, you’re bound to have competition. So, what will you do to ensure that your customers enjoy your brand? Well, that question should introduce you to the ideas of smart financial and marketing techniques.

But here's the thing–guest retention and satisfaction strategies can cost your business a small fortune. Subsequently, you need to be familiar with formulas that will determine the performance of your efforts. If you don't, you could end up feeling a sense of uncertainty alongside financial losses. Now, let’s avoid such issues by learning all you need to know about calculating customer experience metrics.

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How to Measure Customer Experience Metrics

There are several types of customer experience metrics that a business can monitor. However, some are certainly more popular than others. That’s not to say that the others are any less valuable, though. It’s just that some are more universal or require simpler customer data statistics.

See below for six customer service metrics that you can begin calculating right now:

1. Net Promoter Score

This metric is far simpler than it might sound. In fact, you're probably already aware of it. It measures the likelihood of a customer recommending your brand to a peer or loved one. One thing to keep in mind is that it can be hard to get reasons from those who leave a negative score.

To measure NPS, use the following formula after using a ranking scale that ranges from 0 to 10:

Net Promoter Score = (Number of Promoter Scores / Total Number of Respondents) – (Number of Detractor Scores / Total Number of Respondents). Then, all there's left to do is subtract the percentage of detractors from the percentage of promoters to get the final NPS score.

Keep in mind that promoter scores are those that rank your brand 9-10 and detractors are those who score it 0-6. Your goal is to have an NPS of 0 or higher. If you do, this means that your business has more promoters than detractors.

2. Customer Satisfaction Score

When you think of the customer experience, you might automatically envision customer satisfaction. After all, you want every customer experience to be satisfactory! This customer service metric uses a scale ranging from 1 to 5.

To calculate the customer satisfaction score, follow this formula:

Customer Satisfaction Score = Satisfied Customers / Total Respondents

Begin by sending your customers a survey about your business. With 5 being the highest score, simply ask them to rank their level of satisfaction with the brand. Then, divide the number of results that scored your business 4-5 by the total number of respondents.

3. Customer Referral Rate

Customer referrals are sort of the equivalent to word-of-mouth marketing efforts. If one of your customer experience metrics is a high referral rate, it means that many people are recommending your business. As a result, it's safe to say that people are happy with your products and are spreading the word.

Before you can use the formula, you need to know a couple of things. Find out the number of referral purchases and the total number of purchases in general. Then, it's time to use the following formula:

Customer Referral Rate = Number of Referred Purchases / Total Number of Purchases

Remember that referrals can come from past customers, your email marketing strategy, SMS alerts, and so on. So, when calculating this figure, ensure that you add up all referrals from each outlet.

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4. Customer Retention Rate

It should be a top goal of any company to achieve high customer retention. This is one of the customer experience metrics that indicate that you implement product differentiation and can surpass competitors. Plus, it gives you peace of mind knowing that you'll likely retain high profits.

To calculate the CRR, take the number of customers  from the end of a particular period (E). Then, subtract the number of new customers that you served during that period (N). Lastly, divide this figure by the beginning of the period (S). The final number will be the percentage of customers that you retained from one period to the next. The formula should look like this:

CRR = ((E-N)/S) × 100

So how do you maintain customer retention over an extended period of time? Strongly consider implementing a customer reward program. Not only will a loyalty program incentivize people to return, but it will help attract new customers as well.

5. Customer Churn Rate

Contrary to customer retention, you need to also determine how many customers you lose over a period of time. This refers to the churn rate.

To calculate this customer experience metric, locate the number of customers you lost during a period. Then, find the total number of customers you had at the start of this period. You want to divide these two figures and multiply the result by 100. On paper, this formula should look like this:

(Lost Customers / Total Customers at the Start of Time Period) × 100

Once you understand your business' churn rate, you'll be able to implement new strategic efforts accordingly. Then, you'll be able to establish a brand and product line that caters to your ideal customer profile.

6. Cart Abandonment Rate

The last thing you want is for customers to abandon their cart. This is even true for companies in the restaurant industry who offer their menu types via delivery apps. It's a sign that customers are either no longer interested or have opted for a competitor. It could also indicate that the product was just too expensive.

To measure the abandoned cart rate, find out the total number of shopping carts that had a new item. This will be considered "new" shopping carts. Then, find out the number of shopping carts that were abandoned. Here's the formula for your notebook or digital spreadsheet:

Cart Abandonment Rate (%) = Completed Purchases / Shopping Carts Created x 100

Once you find the abandoned cart rate, the research doesn't end there. It'll be your duty to determine why they're leaving their items behind. Upon discovering such information, you'll need to make any appropriate changes to avoid high abandoned cart rates in the future.

Frequently Asked Questions About Customer Experience Metrics

As you can see, there are multiple customer experience metrics that a business leader can track. Meanwhile, this post is just the tip of the iceberg! Nonetheless, the formulas discussed throughout this post comprise a great starting point–especially for brands within the hospitality industry. If you would like some additional information on the topic, check out the following FAQ se​​ction!

Should Businesses Pay Close Attention to Customer Experience Metrics?

Yes, businesses should constantly pay close attention to various customer experience metrics. Numbers don’t lie, and it’s these figures that will help you determine the success rate of your business. If you don’t keep up with customer experience metrics, you may not know the cause of any future downfalls or losses.

What Is a Common Metric When It Comes to the Customer Experience?

Depending on what you’re trying to measure, there are many different customer experience metrics that one can calculate. For example, if you want to determine how many people recommend your business, it might be worth looking into a Net Promoter Score (NPS). Meanwhile, if you want to learn how many customers no longer frequent your business, it’s advantageous to calculate the churn rate.

What Are Some KPIs Related to Customer Experience Metrics?

Some of the most common KPIs related to customer experience metrics that business leaders keep track of include:

  • Customer satisfaction score
  • Net promoter score
  • Average resolution rate
  • Customer effort score
  • Customer lifetime value
  • Customer churn rate

How Can Business Leaders Measure the Customer Experience?

Business leaders can measure the customer experience they deliver by calculating the formulas for varying metrics. Whether they want to determine the customer health score or churn rate, there’s a mathematical equation for everything!

What Are Four of the Most Common Metrics In Customer Service?

Four of the most common customer service metrics that businesses measure include:

  1. Customer Satisfaction (CSAT)
  2. Customer Effort Score (CES)
  3. Net Promoter Score (NPS)
  4. Customer Retention Rate (CRR)
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Now You Can Measure Various Customer Experience Metrics!

Now it’s time to dust off your calculator and get to work! With these customer experience metrics, you should be able to uncover various tidbits of insight regarding your business. After all, proof of success or downfalls are essential to building a long-term plan that works!