The new year is filled with a rush of excitement, as companies set new targets and plan the path ahead. But even as the wheels begin turning, there’s one more thing still to be done.
While the last thing on your mind right now might be the ambitions you had last January, it’s important to take a look back.
Answer honestly: Did you set any customer experience goals last year? If you were making a conscious effort to improve the lives of your customers, do you have any idea how successful you were?
A lot of companies and publishers are sharing trends and key metrics for 2024—but it’s even more important to review the previous 12 months. How well did you meet your own expectations?
And if you weren’t specifically working on CX last year, you can use this post as a blueprint for what to think about in the year ahead!
Key metrics to measure customer experience
Custom satisfaction (CSAT)
CSAT is a number which tells you, on average, how happy your customers are after a specific interaction with your business—usually a purchase or support query. Since these are two of the main pillars of CX—with support increasingly seen as a major source of revenue—it’s useful to gauge the success of these efforts.
After any purchase or interaction, you send an email asking for a rating on their recent experience. The average rating is your CSAT for that time period. A good score typically falls in the 75% to 85% region, and anything at or below 50% should raise serious red flags.
Net promoter score (NPS)
NPS is the metric that most directly measures how well liked a brand is. It generally reveals the percentage of customers that love, hate, or are indifferent to your brand.
The most common format is to ask, on a scale of 0 to 10, how likely customers are to recommend your brand to a friend or colleague.
It’s called the net promoter score because the highest rating group (9 to 10) are inferred to love the brand so much that they will recommend—or promote—the brand organically. The bottom group (0 to 6) are considered “detractors,” because they might actively advise friends and family to stay away from your brand. The rest are “neutrals,” and your goal is to convert them into promoters.
As audiences become increasingly focused on the holistic customer experience, companies with successful CX efforts should see a corresponding increase in NPS.
Customer effort score (CES)
The final metric you should consider is CES—customer effort score.
Looking back on 2023, one of the absolute killers of CX for eCommerce was complexity. Extra steps, slow loading, vague answers, hidden charges—today’s customers value simplicity more than ever, and they expect everything to just work while they browse, buy, and use products and services.
CES measures how hard your products (everything from website pages to physical goods) are to use. While a simple metric, it can paint an illustrative picture and is the most likely metric to throw curve balls. You thought your website was performing brilliantly, but actually 30% of customers found navigating your checkout to be “hard” or “really hard.” This might be an easy fix, but you have to identify the problem to change it!
Assuming you have the data, try to assess how these metrics have evolved over time. Were customers more satisfied last year than in the previous year? Can you account for any changes?
Empirical measures to estimate customer experience
If your company runs proactive referrals programs, how are the numbers looking compared to last year? While it’s not always the flashiest figure, referrals are an extremely strong indicator of good customer experience. More than just filling in a survey and hoping to win $50, they require customers to put their reputations on the line to say: you should buy from this brand.
You can also consider the level of incentive required to generate referrals. Brands with extremely loyal customers can create a flow of referrals without any financial incentive—which is the dream scenario, since the cost is extremely low. If you need to offer a 20% discount for every referral, this could indicate there’s work to be done.
We can’t talk about evaluating customer experience without exploring retention. More than anything else, keeping your customers is the gold-standard of CX. While the number of customers retained is valuable, the effect of that retention on revenue is even more crucial.
In the former case, we can calculate the Customer Retention Rate. This is simply the percentage of existing customers who remain customers after a given period. A closely related metric—the Gross Revenue Retention (GRR)—tells us what percentage of revenue was generated from existing customers.
If part of your CX initiative was to create higher AOVs, for example, it would be more prudent to focus on GRR than CRR—the actual revenue generated being more important than increasing the sheer number of customers.
Put last year’s numbers to the test
Ideally, this isn’t your first time thinking about customer experience. If you’ve been monitoring and strategically improving CX for a few years, you know it’s essential to compare your current metrics to last year’s results and this year’s goals.
If you’re scoring higher than last year, that’s a good start. But you might still be underperforming your targets—for example, if you’ve launched comprehensive CX improvement campaigns and fallen short of an ambitious goal.
If you haven’t been in the data tracking game for long, make sure to set this year’s numbers as a benchmark. Then start planning—you’ve only got 12 months until your next review!
Improving customer satisfaction and loyalty is at the heart of Sogolytics. Our intelligent CX platform lets you monitor customer experience at every touchpoint and make crucial, high-impact improvements all year round. Ready to get started? Let’s get in touch, and we’ll give you a free product walkthrough!