Disruptive Technology: How Businesses Are Adapting to AI, Blockchain, and IoT
This article was contributed by Routee.
In this ever-competitive and global market, it comes as no surprise why companies of all sizes and in all industries are abandoning traditional business-driven and product-driven strategies and embracing customer-centricity approaches. Now, more than ever, businesses must focus on fostering a customer-centric mindset: making the customer central to all their business processes and policies.
Research shows that client-centric companies are 60% more profitable than those who steer clear of customer-centricity. Besides, loyal customers are 5 times as likely to repurchase, 5 times as likely to forgive, 7 times as likely to try a new offering, and 4 times as likely to refer.
This article will help you to understand the concept of customer experience and the key metrics that you should keep in mind when measuring it.
What is Customer Experience (CX)?
CX is the customers' 360 perception of their transactions with a business or brand. Going far beyond customer service, it includes all interactions a customer has with a business, ranging from browsing the brand's website to talking to a customer representative for information, and extends way after the customer's receipt of the brand's products or services.
How do you measure CX?
Here’s a list of the five most important metrics to consider when measuring CX. Combined, they provide data about co-dependent parts of the customer experience, enabling you to get the desirable in-depth insights for optimizing your brand's CX.
1. Net Promoter Score (NPS)
The Net Promoter Score (NPS) measures the loyalty of customers to a business or brand and employs a single-question survey that typically asks "How likely is it that you would recommend Business X/Product Y/Service Z to a friend or colleague on a scale from 0-10?"
Based on their answers, customers are segmented into three groups: the detractors, the passives, and the promoters.
With NPS, a business can easily identify its potential promoters and reach out to them, asking them to refer the brand to friends and social media followers. Studies have shown that higher Net Promoter Scores correlate with higher business revenue.
2. Customer Satisfaction Score (CSAT)
The Customer Satisfaction Score (CSAT) deals with tracking how customers feel about a brand's products and services. CSAT employs a set of questions that can determine a customer’s level of satisfaction at key-interaction times, asking questions such as "How would you rate your overall satisfaction with the Product X/Service Y you just received?"
Customers are requested to select between a range of answers (e.g. very unsatisfied, unsatisfied, neutral, satisfied, very satisfied) for different touchpoints of interaction with the brand, such as the moment of purchase, the onboarding process, a support ticket communication, or a specific communication with the brand's customer service.
With CSAT, a business can easily have a view of how customers perceive the brand through diverse touchpoints. Thus, they can easily identify pain points or particular problem areas within the customer journey and take action.
3. Overall Star Rating
The Overall Star Rating presents the general evaluation of a business/brand and their product(s) or service(s) as reviewed by the customers, usually on a rating scale from one to five stars. For example, Google My Business is a review site that includes a 5-star rating scale for the businesses showcased. Users can log in with their credentials and rate any business or brand they’ve had an experience with.
This CX metric is pretty easy to track and, like the Net Promoter Score, higher star ratings mean more revenue for a business. Research has shown that a one-star increase in overall star rating leads to a 5% to 9% increase in revenue.
4. Customer Effort Score (CES)
The Customer Effort Score (CES) measures the effort customers had to exercise to use a product or service, to find the information they needed, or to get an issue resolved. CES poses statements such as "Company X made it easy for me to handle my Y issue”, in which customers are requested to select between a scale of one to five - one represents a "strongly disagree" statement and five represents a "strongly agree" reply.
All in all, the less effort required by a customer to complete a task or solve an issue with the brand or the brand's product or service, the greater the CES score is, and hence, the higher the customer satisfaction.
5. Customer Churn Rate
The Churn Rate measures the scale at which customers stop doing business with a brand in a certain period. For example, assuming that a brand has 100 customers one year, but only 85 of them continue using its products or services the next year, then the brand's churn rate for the year is 15%.
The churn rate enables a business to identify customers at risk of leaving by studying the characteristics of the customers who have already left the business. This enables businesses to optimize their customer retention methods and, at the same time, have a better grasp of their problem areas and improve them accordingly. For instance, customers may leave due to delayed responses from customer service.
How can your business improve CX?
Improving the customer experience is not an easy ride. According to marketing research, it takes twelve positive experiences to repair the damage caused by a single unresolved negative one. If you’re a business with a vision of providing great CX, plan ahead: send out surveys to better understand your customers.
Additionally, make use of Routee's intuitive omnichannel platform to conduct efficient and instant SMS surveys, build rich forms for capturing customer data, and leverage the power of marketing automation to get the invaluable feedback you need to elevate your customer experience.