Customer experience is becoming one of the most important brand differentiators. In fact, recent data published by Forbes reported that 86% of customers are prepared to pay more if they know they will get a superior Customer Experience (CX). As a result, businesses are increasing their investment in CX, hoping to attract and engage them more effectively and, ultimately, boost customer retention. With large portions of their budgets allocated to improving customer experience, companies need metrics to track how effective their efforts are.
When it comes to customer experience, it can be overwhelming to see how many KPIs there are. With the importance of CX for business success, you may benefit from breaking the overall experience down into smaller insights. These can be based on the unique goals of your company. This way, your approach becomes more goal-oriented and you can determine the most relevant KPIs for measuring your own performance.
10 Important Customer Experience (CX) KPIs
1. Conversion Rate
Conversion Rate is calculated by dividing the number of purchases made over a specific time period by the total number of customers that visited your website or store during the same time period.
The buying process relies on several things, one of which is customer experience. As the potential buyer progresses through their journey, an optimal experience can boost the conversion rate at every touchpoint. If prospects feel incentivised by their customer experience as they progress along the buyer funnel, you will likely see conversion rate improve and even average order value increase.
2. Cart Abandonment Rate
This is measured by calculating what percentage of customers who add items to their baskets go on to leave them there without converting. Statistics from Baynard Institute which looked at 48 individual studies indicate that average cart abandonment as of 2023 is 69.99%. Cart abandonment happens for many reasons, some of which can be avoided by redesigning the experience. If you have lower cart abandonment rates, it suggests you have a well-thought-out user experience. In turn, this can lead to customer retention and an increase in sales.
3. Net Promoter Score
Net Promoter Score (NPS) is a customer satisfaction metric calculated by asking your existing customers how likely they would be to recommend your services or products to others. If your NPS is low, it means you need to work harder to inspire a favourable opinion of your organisation.
A good place to start is implementing customer survey programs. You can even incentivise these to encourage more customers to take the time to complete it. This will incorporate customer feedback into your products and services. It’s a good way to learn where improvements are needed and work on boosting Net Promoter Scores.
4. Customer Churn Rate
Churn refers to the rate at which customers are ending their subscriptions to your service over a specific period of time. When you want to increase revenue streams and expand your client base, the first step is to reduce churn rates. When your churn rate is low, it implies good customer satisfaction with the service you provide. In turn, this indicates a good customer experience, inspiring loyalty. New customer acquisition is great, but it has to go hand in hand with reducing customer churn rate in order to grow,
5. Customer Satisfaction Levels
By measuring interaction types, we can calculate Customer Satisfaction Scores (CSAT). They tend to be calculated by asking customers if they were satisfied with their experience after they have made a purchase. When these scores are high, it demonstrates a strong customer-centric culture. Moreover, it indicates that the experience you are focusing on has either met or exceeded your customers’ expectations.
6. Average Time To Resolution
The average time to resolution is all about how long it takes your customer care agents to resolve issues when customers raise them. Customer satisfaction will increase or decrease significantly based on this metric – in fact according to recent statistics published by Baymard Institute, 96% of customers said that customer service is vital to their choice of loyalty to a brand. It is a reflection of your team’s efficiency. Time to resolution is extremely important because many customers will choose to purchase from a competitor simply because they have a reputation for superior customer service.
7. Customer Acquisition Rate
Your customer acquisition rate is the total cost of a particular marketing activity divided by the number of customers it generates. If you can keep your acquisition rates low, you are more likely to make a good return on the investment you put into marketing and sales. You need to provide a high-quality experience throughout the buyer journey. This will enable you to engage prospects and manoeuvre them towards making a purchase.
8. Average Pages Per Visit
This refers to how many pages customers browse on average on your website during one visit. If visitors are spending a lot of time on your website and browsing multiple pages, it indicates they find your website relevant and appealing. One of the best ways to retain the interest of visitors to your website is to enhance the customer experience. The longer they stay, the more they will learn about your brand and what you have to offer. Simple ways to do include things like blogs, which are also great to help your business rank organically in search engines. Some businesses invest in this more heavily, offering advanced customer experiences like interactive product demonstrations and even virtual reality.
9. Direct Traffic
Direct traffic is the footfall generated (either online or in person) from a particular company activity that was designed to drive increased traffic. It goes hand-in-hand with brand awareness and it creates opportunities for you to grow. Businesses should try to make this activity interesting, engaging and with customer experience always at the forefront. Traditional traffic drivers like pay-per-click and display advertising still work, but they should be supplemented with more CX focused activities.
10. Marketing Campaign Results
This is, essentially, the ROI for your marketing campaigns. It can help evaluate the total growth rate of the company. Marketing is about more than just advertising; it is about echoing the voice of your audience throughout the business and meeting their needs. More effective marketing campaigns represent a better customer experience.
Implementing New Software To Improve CX
Whenever you implement new software into your operations, like ERP or CRM systems, customer experience KPIs should be at the front of your mind. The new software is an investment and, with the importance of customer experience, your investments should be helping improve things for your customers.
When you plan your software implementation, consider the impact each application or module might have on the KPIs listed above. Similarly, if you have identified other CX KPIs relevant to your company, be sure that the new software will be helpful for them. According to research by Epsilon, if you can offer more personalised experiences, then 80% of customers are more likely to make a purchase. It’s prudent to remember this when implementing anything designed to improve customer experience.
Final Thoughts
There is no one-size-fits-all solution to measuring the work you do to optimise the customer experience, but taking a holistic approach and combining different metrics makes the most sense. Try looking at metrics through the lens of your company’s goals. The fundamental KPIs you identify are a great starting point for gaining a better understanding of your offerings.
It’s also important not to overcomplicate things. Just because there are endless options out there that claim to improve customer experience, it doesn’t mean they will or that you need them. In a study by Siegel+Gale of 14,000 respondents over nine countries, 64% said they would be willing to pay more for simpler experiences.
Why choose Eventura for your digital transformation journey?
Eventura have been helping businesses in their digital transformation journey for two decades. From the implementation of industry-leading ERP solutions such as Sage 200 and NetSuite, to helping them move their entire operations to the cloud and away from costly and restrictive on-premise solutions.
As well as being NetSuite Solution Providers, Sage 200 Partners and Microsoft Gold Partners, we also offer a wide range of managed IT services, meaning we can take your business as a whole and help it achieve digital transformation.
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