When it comes to customer experience metrics, many details must be considered. Knowing the advantages and disadvantages of each metric is essential to implementing a good customer-centric strategy , right?
According to a study by Lee Resources , for every dissatisfied customer who complains, 26 remain silent. So if you're thinking this might be happening to your company, you need to keep reading this article and take appropriate action to ensure that customer experience monitoring doesn't become a barrier to your business.
customer satisfaction management tool can help you collect valuable feedback so you can make the improvements your customers are asking for, delivering a good experience and a more enjoyable customer journey.
But before that, we need to talk about the concept of customer experience. And to keep things simple, it's important to mention that customer satisfaction metrics are also called customer experience metrics, or CX .
What is CX?
CX stands for Customer Experience . It's the overall perception your customer has of your product or service, across all interactions throughout the customer lifecycle.
But its significance isn't limited to the consumer experience alone. This perception influences customer behavior, builds memories that drive loyalty, and impacts the economic value generated by the organization.
If you're still unsure about the importance of customer experience in your business, know that this strategy is already becoming the main competitive differentiator for companies in 2020 , surpassing prices and products.
Furthermore, customer experience is directly linked to the loyalty that customers have with your brand retention indicators in your business.
After all, data shows that consumers who are impacted by a good experience are 5 times more likely to recommend a brand to others and 54% more likely to do business with you again.
Customer Experience Metrics:
When it comes to customer experience metrics, NPS®, CSAT, and CES hold a prominent place as the most widely used indicators worldwide. With that in mind, we've compiled a list with a brief explanation of each. Check it out:
NPS® (Net Promoter Score)
NPS® , or Net Promoter Score, is a metric designed to measure and understand customer loyalty levels . Its goal is to determine a consistent and easily interpretable score that can be compared over time or across industries.
The metric assesses how much the respondent recommends a particular company, product or service to friends, family or colleagues.
The idea is simple: if you enjoy using a product or doing business with a particular company, you want to share that experience with others, right?
And the Net Promoter Score question is simple. On a scale of 0 to 10, you ask customers:
Depending on your answer, customers will be divided into three categories, based on their Net Promoter Score:
- Promoters (score 9-10): Loyal enthusiasts who will continue to buy and recommend your products to others, fueling the growth of your business.
- Neutrals (score 7-8): Satisfied customers who purchase with average frequency and are vulnerable to competitive offers.
- Detractors (score 0-6): Unhappy customers who can damage your brand and impede growth through negative word of mouth.
CES (Customer Effort Score)
The Customer Effort Score is a metric used to measure the level of effort a customer put into resolving a specific issue with your company.
The Customer Effort Score question is on a scale of 1 to 7, which asks:
To calculate customer effort , you need to take the weighted average of the scores to determine a score out of 7. The higher the score, the less effort was put in.
Tip: A good practice is to display data on Corporate TV to monitor customer experience metrics in real time in a management model visible to all employees.
CSAT (Customer Satisfaction Score)
The Customer Satisfaction Score is a metric that directly measures customer satisfaction levels in specific interactions, and is measured through a numerical scale that asks:
There are several ways to calculate CSAT because there are different ways to measure this score.
Therefore, customer satisfaction scores can be measured in five ways, namely:
- Yes and No – 1 and 2 (binary)
- Dissatisfied/Neutral/Satisfied – 1 and 3
- 1 to 5 (Likert scale)
- 1 to 7 (Likert Scale)
- 0 to 10 (Likert scale)
If you choose to calculate CSAT on numerical scales such as 1 to 5, 1 to 7, or 1 to 10, you will need to calculate the weighted average by adding up all occurrences and dividing by the number of respondents.
But if you opt for the 1 and 2, or 1 to 3 model, the calculation ends up being easier, as you will basically have to subtract the percentage of satisfied vs. dissatisfied customers.
What is the best customer experience metric?
I confess this question is quite common, but before discussing the advantages and disadvantages of each metric, it's important to understand that there's no such thing as a better or worse metric—there's only one that fits the needs you're addressing through your satisfaction survey . From there, let's discuss the strengths and weaknesses of each:
NPS – Advantages
To begin with the advantages, NPS offers good customer segmentation . This means you can see exactly which types of customers you need to focus your efforts on (promoters, neutrals, or detractors) to achieve better results.
By analyzing data individually, you can gain insights into the long-term relationships you're building and whether your company is on track to achieve its goals through the methodology.
Additionally, NPS surveys tend to be very accurate , as they utilize a greater bias to obtain accurate and unbiased feedback
Rather than asking about a specific experience, NPS uses a broad question to investigate how likely customers are to recommend a company as a whole.
The effect is that scores and feedback are less likely to be affected by specific events. As a result, your company receives feedback , with fewer discrepancies caused by recent positive or negative customer experiences.
Another important point is that NPS is a long-term customer experience metric . That said, NPS seeks to understand your brand's referral/referral levels, not just the individual customer experience.
The metric's premise is based on the fact that people are unlikely to recommend a brand if they don't trust it – and if they do recommend such a brand, they are more likely to have a positive connection with it.
And the final advantage of NPS worth mentioning is that these surveys tend to have a higher response rate . While an average survey has a response rate between 3% and 5% , NPS surveys excel with response rates in the 20% to 40% range.
These results are often obtained because there is only one question, and because the numerical scale is an easier way for respondents to provide quick feedback, since they do not need to read additional text.
And this much higher-than-average response rate means that even a small NPS survey audience can produce meaningful, statistically significant data that your business can use to improve retention and generate more revenue .
NPS – Disadvantages
Now, in terms of disadvantages, NPS research requires follow-up , so you can't rely on just one question, or rely solely on the first survey.
Additionally, it's quite common for good NPS scores to create a "tunnel vision" effect, where companies feel like they're on the right track and don't need to continue monitoring customer experience.
While a high NPS score is a great achievement, you can't just assume that all the work is already done.
You need to act on this score and start engaging your promoters to advocate for your brand to others, and become even more proactive in addressing the issues faced by detractors, in a cycle of continuous improvement.
Another key point is that in B2B scenarios, NPS surveys can contain errors . It's important to remember that what you call a customer is actually an account.
Therefore, sending an NPS survey for B2B means sending surveys to different employees in a company, who are most often not the decision-makers.
Finally, it's crucial to have information from survey respondents to effectively use NPS. Only when you identify the customer can you close the loop—a fundamental step within the Net Promoter methodology.
CES – Advantages
One of the main reasons to use the Customer Effort Score is that, according to research from the Harvard Business Review , the results obtained through the metric are a strong indicator of behavior, showing a high prediction of future purchases . The same study shows that 94% of consumers who report having interactions with a brand with "low effort" indicate that they would do business with that brand again.
Another study shows that 81% of consumers who report having "high-effort" interactions say they would speak negatively about the brand in question. And what does this mean in practice? The CES metric can also provide insight into your customers' likelihood to recommend your company to others .
The idea would be that if it were very easy for them to do business with you, they would be more likely to promote your service and do business with you again.
Finally, because the research focuses directly on customer effort , it offers actionable data that allows you to quickly identify friction points in different types of interactions with your brand, such as high effort to exchange a product or contact the support team.
CES – Disadvantages
Now, regarding the disadvantages of the CES metric, it does n't allow for customer segmentation . Because it's a metric used transactionally, immediately after a specific event, it means you can't determine which type of customer had trouble interacting with your product.
This way, you only discover the problem, and most of the time, you don't have information to identify this user/customer.
For example, a customer using the starter plan may find it difficult to perform an action with your product, because the functionality they would like to use is in the PRO plan, but they have not purchased the PRO plan nor received training for that functionality.
In this case, the metric results show that this customer had problems interacting with your business, when in fact, this type of information could be resolved through a chat with the support team.
And finally, you can't prove whether factors like pricing or competitors are influencing customer responses, which somewhat limits the metric's use to only a few moments in the journey.
CSAT – Advantages
The Customer Satisfaction Score 's greatest strength is its flexibility and simplicity of application . You can easily customize the questions to provide a detailed analysis of your brand's strengths and weaknesses.
And because the rating scale is customizable, it allows you to use different indicators (like numeric scales, stars, emojis, yes/no) that appeal to your audience.
Additionally, the CSAT allows you to use different formats, applicability, and frequency of sending. Its ease of understanding yields good response rates and is also very powerful when combined with other customer experience metrics, such as NPS and CES.
CSAT – Disadvantages
Now talking about the limitations of the metric, the first point is that CSAT only reflects short-term customer sentiment , as the results are typically based on how customers are feeling at a given moment/interaction.
There is also the problem of subjectivity, as “satisfied” can mean different things in different contexts.
The issue of cultural bias must also be taken into account, as according to an article in Psychological Science , people from more “individualistic” countries will likely choose the more “extreme” sides (“Very satisfied”, “Very dissatisfied”), while people living in more collectivist countries will use a less extreme score, unless the experience is very unpleasant.
Another factor that must be taken into account is that the CSAT score can be very customer satisfaction or dissatisfaction levels , as the metric often ends up being generic, and depending on the case, with errors in its application.
For example, users who rely on your brand's customer service on a daily basis may not feel comfortable providing honest feedback to the brand, especially if they feel it could affect their relationship with the company.
Finally, the CSAT score has no connection to customer loyalty . As discussed in the previous points, customer satisfaction refers to a specific interaction and does not take into account behavior or future purchase predictions.
For example, having a high score doesn't mean you can predict repeat purchases or referrals. In theory, a high score means they're enjoying your service and are likely to promote your brand.
But to find this out, you need to apply NPS, and cross-reference this information with CSAT, so you can identify the link between customer satisfaction and .
Conclusion
While customer experience metrics have their specific uses , each has strengths and weaknesses, and they also have different ways and contexts for applying them.
Since the standard NPS question isn't related to a specific experience, it's a great starting point if you haven't already conducted surveys, as it gives your customers more freedom to talk about your product or service.
The end result of this is actionable, meaningful feedback so your business can use this data to make real changes, focusing on what customers are saying to increase retention and monthly recurring revenue .
Additionally, NPS has a strong focus on long-term growth , as there is no single element as correlated with long-term sustainable business growth as customer loyalty .
Because NPS asks customers how likely they are to recommend your product/service to others, it provides an accurate view not only of how customers perceive your brand but also of its likelihood to help you grow organically.
Interested in measuring customer experience metrics? Discover Harmo Feedback Intelligence , a platform designed for people who want to learn daily from their customers.
