Key CX Metrics and KPIs in the Voice of Customer

Key metrics explained

  • Net Promoter Score (NPS): NPS was first introduced in 2003 and has been used extensively since then. Most Fortune 500 companies, including Apple and Airbnb, benefit from its use.
  • Companies use this classification to formulate a strategy to effectively reach the three groups. This could be by leveraging positive word of mouth in the case of promoters, closing the feedback loop in the case of detractors or designing strategy to convert passives to promoters.
  • NPS ranges from -100 to 100. A high NPS (or, at least, higher than the industry average) shows a healthy relationship between a customer and a company; customers are likely to act as evangelists for the company by spreading positive news about it and its products/services, and generate an incremental growth cycle.
  • It is the most widely used CX metric, as it is easy to understand, calculate and explain; however, there is a continued discussion on the degree of importance and flexibility NPS has to offer in comparison to other KPIs.
  • Customer Satisfaction (CSAT) Score: Typically used in transactional surveys, a CSAT score, also referred to as an overall satisfaction (OSAT) score, measures a customer’s overall experience of interacting with a product or service. The efficiency of a customer service department is usually measured using this parameter after a transaction or customer support ticket. The scale typically ranges from 0 (not at all satisfied) to 10 (very satisfied). The CSAT score is a very meaningful metric, as it is built on a customer’s immediate reaction to a product or service used.
  • Churn Rate and Retention Rate: Customer churn, also known as customer attrition, is when a customer chooses to stop using the brand and/or shifts to some other brand/company.
  • Customer Lifetime Value (CLV): CLV measures how much potential revenue is attributed to a customer and how valuable each loyal customer is and can be to a business. It is calculated as the business value a customer brings over a specific time period or during the entire relationship with the company. The data is determined from the customer’s historical, current and forecast spending trends.
  • Customer Effort Score (CES): The CES measures the ease with which a customer is connected to a service or a business. It is a transactional metric and should be used after product purchase or service interaction.
  • The likelihood of repurchase by a customer is 94% in the event of an effortless experience vs only 4% in the event of a painful one
  • 81% of customers who expended a high level of effort are likely to share their bad experience with friends vs only 1% of those who had an effortless experience
  • Customer Loyalty Index (CLI): The CLI is a traditional measure of a customer’s loyalty towards a brand. Since loyalty cannot be expressed in a single number, the metric takes into account multiple factors such as likelihood to recommend, upsell and repurchase. It is not as widely used as it once was due to the complexity surrounding the need to weigh individual answers and the growing need for shorter surveys.
  • Customer Health Score: This is a value that indicates the long-term prospect of a customer continuing with the company and becoming a high-value account with renewals/cross-selling/upselling opportunities or dropping off completely. The score ranges from 1 to 100. Several parameters are fed into the statistical model to calculate health scores and vary by company. It could become complicated; some companies use more than 25 parameters. Health scores should be built using just a handful of parameters that are most important to customers and the company in terms of providing long-term customer value and experience.

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Acuity Knowledge Partners

Acuity Knowledge Partners

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We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/