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KPI

How do you choose the right KPI to measure customer experience?

Today, companies have to compete with each other for a good customer experience in order to stand out from the crowd and survive as a business. It is necessary to develop and measure the customer experience because competition is increasing, and customers are at risk of leaving a company if they do not get a good experience. As a company, it can be difficult to know exactly how to measure the customer experience. A positive customer experience should promote customer satisfaction and loyalty, and for that reason, measuring customer experience is very essential, as companies can improve operations and get more satisfied customers.

Why and how is customer experience measured?

Customer experience is measured to get an overall picture of how customers have experienced a purchase or a service from a company, as well as what has been good and bad according to the customer. There are several touchpoints that influence the perception of a company and by measuring the customer experience with customer surveys (CX), a company receives feedback on how the customer has experienced the entire relationship with the company, from start to finish.

There are two different types of customer surveys: relationship surveys (NPS) and transactional surveys (CSAT, CES). It is important to choose the right customer survey to get a sufficient overall result that can be used to improve the customer experience. A relationship survey is used to get an idea of the overall picture of the customer experience, such as the customer's thoughts, opinions and general feelings about the company or its products. A transaction survey measures the customer's experience around a particular transaction or interaction and is used to make tactical decisions by getting feedback from customers.

Read our blog post - 5 tips to create a better customer experience

What are Key Performance Indicators (KPI)?

Key Performance Indicators are numbers that give a clear picture of how well or poorly a company is doing in achieving its goals and visions. Depending on how the KPI figure changes, it gives an idea of how close a company is to achieving the goals. KPIs can be goals such as operational goals, impact goals, and UX goals. Within KPI, a customer experience can be measured with different measures: Net Promoter Score (NPS), Customer Satisfaction Score (CSAT)/Satisfied Customer Index (NKI) or Customer Effort Score (CES).

There are also other important KPIs that a company can measure with: Retention loyalty, Purchase loyalty and Meeting expectation. Retention loyalty is about how likely it is that the customer will stay with a company, Purchase loyalty is about how likely it is that the customer will continue to shop with a company and Meeting expectations is about how much better or worse the customer's experience was compared to the customer's expectations at a company. These three KPI questions can be included in customer surveys to measure the customer experience and how it affects a company.

Choose the right metric to measure the customer experience

Net Promoter Score (NPS)

The Net Promoter Score is a metric that measures customers' long-term satisfaction and loyalty to a company, to understand what customers think of the business. NPS thus measures how likely it is that customers will recommend the company to, among other things, family, friends and colleagues. It also helps the company to identify what they need to fix in order to get as many customers to have a positive attitude towards the company as possible.

On an eleven-point scale (0–10), customers can choose which number best represents their opinion: 0–6 are called Detractors, 7–8 are called Passives, and 9–10 are called Ambassadors (Promoters). . An NPS consists solely of a question that can be formulated as "How likely is it that you would recommend X to a friend or a colleague?". The question can be sent out individually or in a combined customer experience survey with more questions.

Customer Satisfaction Score (CSAT)

Customer Satisfaction Score is a measure to measure how satisfied a customer is at specific touch points or with the company as a whole. It is based on just one question that is used to gain an insight into how a company has achieved specific expectations that the customer has/had. The CSAT question can be included in a large measurement but also in an individual survey to elicit customer satisfaction. It is structured on a five-point scale where 1 is very displeased and 5 is very pleased, so that the customer can choose which rating they want to give the company based on a certain meeting.

The measure Satisfied Customer Index (NKI) similar to a CSAT but where the difference is that in an NKI there are three questions instead of just one question. An NKI also measures the customer's experience and satisfaction and, like a CSAT, has a scale of 1-5 with answer options from very displeased to very pleased. With CSAT/NKI, a company gets the opportunity to identify what needs to be done to improve the customer experience overall or regarding a certain meeting and measures a specific and short-term customer experience.

Customer Effort Score (CES)

Customer Effort Score is a measure to examine how much effort a customer has had to undergo to interact with a company. The easier it is for customers to connect with a company, the more favorable it is for the company, because it is important that customers are satisfied with the communication. CES differs from NPS and CSAT in that a CES measures a specific transaction instead of the general relationship between the customer and the company.

The questions in a CES are usually formulated as a statement that customers answer about how easy it was to interact with the company. CES is measured by a scale of 1–5 with response options from 1, strongly agree, to 5, disagree. There can also be answer options in the form of the words easy, difficult and neither or. A CES should be conducted quickly after the customer's interaction with the company, as this is when the customer has the experience fresh in their mind, for example the experience of how easy it was to complete a purchase or how easy, efficient and helpful the customer service was.

It should be easy to choose measurements

As a summary, the choice of KPIs can be tricky and knowing which of all measures fits best can be difficult. KPIs are numbers that tell a company how well or poorly they are doing in achieving their goals. There are two customer surveys that are used to produce different results and there are different metrics that can measure the customer experience. A relationship survey (NPS) is used to get an overall picture of customers' thoughts, feelings and opinions and a transactional survey (CSAT, CES) is used to make tactical decisions and measures a certain interaction or transaction.

The various metrics for measuring the customer experience include:

  • Net Promoter Score (NPS) measures willingness to recommend a company to others.
  • Customer Satisfaction Score (CSAT) or Satisfied Customer Index (NKI) measures the customer's satisfaction with a company as a whole or at a certain point of contact.
  • Customer Effort Score (CES) measures the customer's effort on how easy or difficult it was to interact with a company.

With the help of this guide that describes what KPIs are and what different metrics for measuring customer experience mean, we hope it has become clearer for everyone to choose which metric fits best for your particular company.

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