After reading “Forrester 2023 Customer Experience Predictions”, it was surprising to see one of its projections – 20% of customer experience (CX) programs will disappear this year. Forrester explains that companies for which great CX is not part of their brand identity will demand proof that CX spending is necessary. Unfortunately, 54% of CX professionals said their teams can’t prove the return on investment (ROI) of their projects.
Forrester’s disconcerting forecast motivated me to write about how to measure CX to show the value of a company’s customer experience strategy. Although businesses can use a lot of key performance indicators (KPIs) to track their CX, including customer lifetime value, customer churn, marketing campaign performance, average resolution time, cart abandonment rates, customer reviews, and much more. This blog focuses solely on five notable CX scoring methods used to improve customer experience.
If you’re not familiar with CX scoring methods, here’s an opportunity to explore them and to begin experimenting in your organization. Your effort doesn’t need to be perfect or fool-proof. The idea is that your team learns more about customers to provide the best experience and to demonstrate a positive ROI for CX initiatives.
#1. Net Promoter Score (NPS)
First developed in 2003 by Bain and Company, millions of businesses use Net Promoter Scores to measure and track customer loyalty and satisfaction. It gauges customer perception based on a single question:
On a scale of 0-10, how likely would it be for you to recommend [company name] to a friend or colleague?
Respondents give a rating between 0 (not at all likely) and 10 (extremely likely) which places them into one of three categories:
- Promoters with a score of 9 or 10 who are loyal and enthusiastic customers.
- Passives with a score of 7 or 8 are satisfied customers but are not happy enough to be promoters.
- Detractors with a score of 0 to 6 are unhappy customers who are unlikely to buy from you again and may even discourage others from buying from you.
To calculate NPS, subtract the percentage of detractors from the percentage of promoters.
Note: Employee Net Promoter Score (eNPS) measures employee engagement and loyalty towards a business. Since employees are so intricately linked to positive customer engagement, businesses are increasingly using this measure when evaluating CX.
#2. Customer Satisfaction Score (CSAT)
CSAT score, is a metric to improve customer experience that measures happiness with a business, product, or interaction through a customer satisfaction survey that asks some variation of this question:
How satisfied were you with your experience?
Respondents answer using the following scale:
- Very unsatisfied
- Very satisfied
To calculate CSAT, use this formula to arrive at a percentage score: (number of satisfied customers (4 and 5) / number of survey responses) x 100 = % of satisfied customers
#3. Customer Effort Score (CES)
CES measures how much effort your customer needs to use to complete a transaction, resolve a support issue, or interact with your company/product in general – whether online or in person. CES asks respondents to select how much they agree or disagree with statements such as:
The company made it easy for me to [customer interaction].
The respondent can choose a number between 1 -7 where 1 = Strongly Disagree and 7 = Strongly Agree
CES is calculated by finding the average of all responses: (total sum of responses) ÷ (number of responses)
#4. Customer Health Score (CHS)
CHS is a customer retention metric that helps you determine whether a customer is planning to stay with or leave your brand. There’s no straightforward way to determine what to measure or how to calculate CHS – this depends on what’s important to your business and your customers. Here’s an example of an activity that might be useful to assess CHS for a software application:
- Depth of product usage: how many key features customers are using?
- Breadth of product usage: how many users are using the product?
- Frequency of product usage: how often are users coming back to your product? Number and status of support tickets: how many issues have customers logged and submitted and have these been resolved?
- Results of in-app surveys: what is causing customer satisfaction/dissatisfaction?
- Upgrades and renewals: are customers expanding usage?
You calculate CHS by choosing what activity you want to measure, assigning an impact value based on relative importance using a scale of 1 (lowest impact) to 10 (highest impact), and recording frequency for a specified time. Here’s an example:
|Activity||Impact (1 to 10)||Frequency (last 30 days)||Total Value|
|Unresolved Support Tickets||5||4||20|
To calculate your CHS, just add the total value for each activity.
#5. Customer Service Satisfaction (CSS)
CSS helps businesses understand whether their customers are happy with services anytime they interact with you, especially during post-purchase service.
You can measure CSS through surveys anywhere after the service is completed, by e-mail, phone, online, or on social media. Questions typically ask the customer to rate factors related to their overall customer service experience and the customer support agents’ performance,
CSS is calculated as the sum of all ratings/total number of respondents.
You may be wondering which CX metric you should use. One metric isn’t necessarily better than the other, as long as you’re choosing the one that best fits your organization’s strategic priorities. If you discover that your scores are low, the Actian Data Platform, can provide insights that help you improve your customer experience delivery.