Any customer service representative can relate to the jittery feeling an awful interaction with a customer brings. But a few times, your warm and optimistic greeting is retaliated with a hostile and immediate response. Have you ever thought about what caused that frustration? More or less, their previous app interactions might be the probable reason.
About 96% of customers agree that customer experience underlines a brand’s loyalty. But why does customer experience matter? Many define customer experience as the benchmark for businesses at present. As more alternatives are handy and firms compete for public attention, CX presents a way to put your brand and product at the top. Companies with customer experience as their priority generate approximately 4-8% higher revenue than the rest. That is why companies struggle day and night to enhance customer experience and make their brand stand out.
This article will help you understand different metrics you can consider to improve customer experience in your company!
Metrics To Consider To Optimize Customer Experience
Here are some important metrics you can consider and elevate your business by retaining customers:
1) Simple App Navigation
A user forms an opinion about your brand in only 50 milliseconds after visiting your website or application. Consequently, you have a short window to captivate and make them stay. No element influences customer experience as much as navigation.
However, a mobile app offers fewer interactions than a desktop, even if the company and services are the same. 94% of users claim easy navigation to be the most practical feature. If users find it confusing to proceed to the steps on your app, they will move on to find a more interactive and easy-to-use platform. Interactive designing and incorporating general features like a search box can significantly improve mobile engagement and prevent impaired navigation issues.
2) Customer Churn Rate
Customer churn rate refers to the number of customers who stopped using your services during a particular time frame. It also represents the customers or subscribers who do not renew or cancel their subscriptions or don’t take a repeat loan. You can view it as a quantifiable rate of change that occurs over a specific time.
Churn rate = (Lost Customers / Total customers at the start of the time frame) X 100
About 56% of customers uninstall an app within 7 days. Uninstallation of apps directly affects the churn rate. There are multiple reasons why users uninstall an app. The primary causes per a survey are: customers no longer use the app, there is limited storage capacity on the device, and lots of unwanted push notifications and advertisement by the platform.
About 47% of customers say they will stop buying from a company if they have an inefficient experience. You are in trouble if your customers do not stick around for long enough to recoup your customer acquisition cost (CAS), i.e., expenses incurred to acquire a new customer. A higher churn rate can add unwieldy extra costs to your budget. Therefore, it is essential to maintain an acceptable churn rate. The lesser it is, the better!
3) Net Promoter Score
Net Promoter Score (NPS) measures customers’ loyalty, satisfaction, and enthusiasm for a particular company. It examines the possibility of recommendations and word-of-mouth marketing. It acts as a predictor to gauge your growth.
There are three groups of customers in the Net Promoter System based on their answers to the question, “how likely are you to recommend us?”-
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- Promoters: Loyal and enthusiastic customers with a score of 9 and 10
- Detractors: Customers are unlikely to make repeated purchases or recommend your brand and can discourage potential buyers with a score between 0 to 6.
- Passives: Non-active customers who neither recommend nor damage your brand with negative reviews and give a score of 7 or 8.
Calculating NPS is relatively easy. You have to subtract the percentage of promoters from detractors.
Net Promoter Score = % Promoters – % Detractors
It can be any absolute number between -100 to 100. However, a positive and high NPS implies a healthy relationship with your customers, who will not hesitate to recommend you to a bigger audience. A study reveals that NPS directly influences revenue generation. An increase in NPS by 7 points equals 1% of revenue growth.
4) Average Resolution Time
Average Resolution Time (ART), also known as Time to Resolution, is a standard customer service experience metric. It indicates the average time an agent takes to resolve a query or an inbound sales conversation via call or live chat.
You can easily calculate the average resolution time by summing the total duration of all resolved conversations and dividing it by the total number of settled calls. This way,
Average Time to Resolution = Sum of all times to resolutions / Total number of resolved cases
Although 8.30 minutes is the average resolution time for all industries, it varies depending on the sector and vertical. For example, it is optimal to resolve customers’ queries within 6 minutes in retail and eCommerce, while shipping and logistics should be under 4 minutes. The clock begins ticking the moment your customer calls or leaves a query. And it does not stop until they get a response that they think is complete. The faster you resolve the issue, the happier and more satisfied a customer becomes. Around 12% of customers rate lack of speed as their top frustration when buying online. Hence, it is crucial to determine your current ART and enhance it if it falls short of the ideal range.
5) Cart Abandonment Rate
Cart abandonment is similar to being ghosted. A customer eyes your product, adds it to their cart, and begins the checkout process, only to disappear halfway through it!
The average cart abandonment rate is about 69.57% across all industries. In simple words, seven in ten customers leave their carts without making purchases. Further, online brands lose sales revenue equivalent to $18 billion yearly due to the same.
You can calculate your cart abandonment rate by dividing the total transactions by the number of initiated sales. Then subtract the result from one and multiply it by 100. In short,
Cart Abandonment Rate = 1 – (Total number of transactions / Total number of “adds to basket”) X 100
It may be a simple case of wistful shopping occasionally. However, some cases occur when customers confront fiction in their online shopping experience. It could be a confusing website interface, mandatory account creation, too many checkout steps, no discount or promo codes, or unexpected shipping costs.
6) API Health
First, let’s comprehend the first term, API. Application Program Interface (API) defines how different programs and applications communicate in the ecosystem. APIs facilitate information exchange between devices, systems, and users without risking data security and integrity. They are the primary blocks that open the door to creating new experiences for employees and customers by powering web apps, mobile apps, and IoT devices.
Now, API health means the availability, performance, and functionality of your API endpoints. It gives you an insight into how the APIs behave in production and pre-production environments and helps you understand where degradation enters the process.
Customers look for experiences over the prices, and APIs will assist you in furnishing precisely that. Tools like customer journey maps can reduce your service cost by 15-20%. You can monitor your API health regularly by checking database connection, memory consumption, in-flight messages, downstream operation status, and database response time.
The TakeAway
Putting your customers first is the key to a successful business. As they say, it takes 12 positive customer experiences to make up for a single negative one. Although it is not easy to see the value of customer experience compared to ROIs in other investments, it is critically valuable. You can boost your customer experience strategy using the mentioned metrics to evaluate and rear up your performance.
For example, while taking an NPS survey, you can ask customers to leave feedback and mention the areas of improvement. Then as you work on the feedback and address the gap in the customer experience, you will be unlocking the door to more customers. Similarly, you can enhance your application working by initiating several measures, like transparent customer policies and the availability of various payment channels, topped with a seamless flow.