Capterra Customer Service Software Blog

Increase customer satisfaction rates with the right software

How to Measure Customer Experience

Share This Article

I probably don’t need to tell you why you need to measure customer experience (CX). Obviously, it’s useful to know whether changes you’ve made have improved or worsened the experience your customers have with your brand. You also need to sell CX initiatives to management.

As you well know, folks in the C-suite often have to meet short-term financial goals (often quarterly), which means that’s where their focus often is. So you’ve got to get creative when you’re making a case for CX projects that require multi-stakeholder buy-in and take more than four months to deliver tangible results.

Even if your CX projects are getting results, that’s often not enough to justify further investment in CX. That’s because CX necessarily requires multi-department collaboration. Which means, if you’re not carefully tracking who did what and what happened as a result, it can be easy to attribute success to the sales, marketing, IT, etc. team alone.

You know you need to do it and why you need to do it. But do you know how to do it?

In February 2017, Gartner conducted an online survey of 165 Gartner Research Circle IT and IT/Business Members who were responsible (or were on a team responsible) for CX initiatives and/or were impacted by such initiatives—and were knowledgeable about the specifics of CX activities.

When asked what technology investments made in 2015 turned out to be most crucial for success in 2016, the most popular answer was customer analytics, followed by voice of the customer. Customer analytics is also by-far the most popular choice for CX technology investments, with 41% of respondents saying they planned to spend money on customer analytics technology in 2017. This was the most popular choice for the second year in a row.

More than half (58%) of respondents reported some measurable ROI for 2016 CX projects, and 12% of those had a dollar value for their ROI. Of the remaining 42% who didn’t see measurable ROI in 2016 for their CX projects, most of those said they expect to see measurable ROI in 2017.

A third of respondents plan to implement CX metrics in 2017, and another third plan to analyze customer feedback.

Yet, according to Gartner’s State of Customer Experience Innovation, 2016, only one-tenth of people responsible for customer experience measure the ROI on their customer experience investments with enough granularity to give them a dollar value. Anecdotal evidence is all that three-tenths of customer experience decision makers have to rely on for estimating ROI. Four-tenths don’t measure ROI at all.

Luckily, measuring customer experience isn’t terribly difficult. To get started, narrow down your metrics. Here are some metrics you can use to measure CX:

CSAT

Customer Satisfaction (CSAT) scores are the most commonly used measure of customer experience—with 57% of respondents using them. According to Marketing Metrics: The Definitive Guide to Measuring Marketing Performance, 71% of the nearly 200 senior marketing managers surveyed said they found a customer satisfaction metric very useful in managing and monitoring their businesses.

Customer Satisfaction is a number that represents the percentage of customers who feel you excelled the last time they interacted with you. It shows you whether and to what extent a product or service met, failed to meet, or exceeded a user’s expectations. It’s a way to quantify lots of customers’ answers to the question: “How good did that interaction feel to you?”

(Learn how one auto claims representative for a Fortune 100 insurance company went from having one of the lowest CSAT scores in her office of 150 to consistently having one of the five highest scores in the company.)

CES

While customer experience certainly matters, “Just because a customer is ‘satisfied’ doesn’t mean they’ll keep doing business with you or refer your business to their family and friends,” writes Viktor Magic for the Help Scout blog. Magic described a recent experience with his phone company where getting an erroneous charge removed from his account required too many steps. So while he was satisfied with the agent’s performance, overall he is looking for a phone company that requires less effort to deal with.

Customer Effort Score (CES) is a measurement of how much of a pain in the butt it is to use your product or service.

It comes from a 2010 CEB study of why customers with high CSAT scores still churned. In short, a great conversation with support is still a worse experience than no conversation with support.

“Customers don’t want to contact you at all,” writes Magic, “And if they do, they want a smooth, effortless experience.” According to CEB, “hassle” was the biggest contributor to customer defection. They maintain that high effort levels correlate to churn more tightly than CSAT scores. CEB’s Matthew Dixon created the Customer Effort Score to help measure the hassle companies were creating for their customers through inefficient, cumbersome processes.

NPS

Net Promoter Score was 5th on the list for the Gartner survey respondents, with only 20% of companies saying they used it and large companies making up the majority of those. It measures how likely a customer is to refer you to someone else.

Learn more about your options by reading What Are CES, NPS, and CSAT? Understanding When to Use Which.

Repeat orders

Smaller companies participating in the Gartner survey were more likely than most to say they use repeat orders to measure CX.

Experience Designer Luca Longo was consulting with a hotel chain and noticed that most of its competitors waited until after check-in to engage with guests. Longo decided to test a system for providing guests value before check-in by sending a welcome email with useful information such as an introduction to the hotel, maps and guides for the city, and how to contact customer service, along with a mobile (or WhatsApp) message with their booking confirmation number. As a result, guests started staying longer and cancelling less often.

Gartner looked at the research and concluded that most studies showed a positive relationship between customer experience and repeat business, along with other positive outcomes.

Conclusion

“While expanding penetration is a smart tactic for any marketer, successful brands have always tried to optimize both penetration and loyalty metrics,” writes Chadi Saab, strategy director at Leo Burnett. According to one White House Office of Consumer Affairs study, loyal customers are worth up to ten times as much as their first purchase, on average.

“Loyalty refers to the measurable actions of happy customers: an intention to keep doing business with you, upgrading or purchasing again, and referring your business to their family and friends,” Magic wrote.

One goal of measuring CX must be to figure out what’s important to your customers. Otherwise, you’ll end up spending time, money, and energy fixing problems your customers don’t notice while neglecting your customers’ actual pain points. Then, be patient. According to McKinsey, most CX programs won’t yield measurable ROI for two to four years.

To help you measure CX, check out our 5-step guide to getting actionable customer feedback, our customer experience software directory, and 3 great customer experience software options compared.

Looking for Customer Experience software? Check out Capterra's list of the best Customer Experience software solutions.

Share This Article

About the Author

Cathy Reisenwitz

Cathy Reisenwitz helps B2B software companies with their sales and marketing at Capterra. Her writing has appeared in The Week, Forbes, the Chicago Tribune, The Daily Beast, VICE Motherboard, Reason magazine, Talking Points Memo and other publications. She has been quoted by the New York Times Magazine and has been a columnist at Bitcoin Magazine. Her media appearances include Fox News and Al Jazeera America. If you're a B2B software company looking for more exposure, email Cathy at cathy@capterra.com . To read more of her thoughts, follow her on Twitter.

Comments

No comments yet. Be the first!

Comment on this article:


Your privacy is important to us. Check out our Privacy Policy.