Customer experience is an important part of a company’s success. By providing good experiences, businesses can expect to see customers who stay longer and spend more. When done correctly, benchmarking can be used by businesses to monitor, track, and improve the customer experience. But it can be a challenge knowing which benchmarks to use and how to prioritise improvements. In this article, we look at some of the key CX metrics and how defining your own custom CX benchmarks can benefit your business.
The importance of feedback and feedback analysis in understanding the customer experience
The first step to successfully using custom cx benchmarks is understanding where the customer experience currently stands. Most companies have an existing system or process that they use to gather customer feedback. This might include surveys, focus groups, and social media monitoring. A robust feedback system can be a useful tool for analysing and understanding customer feedback on a deeper level.
There are several ways that a company can understand and measure their current customer experience:
Customer feedback surveys
By collecting feedback through surveys, phone calls, and other channels, companies can better understand the needs and preferences of their customers and identify areas for improvement.
Customer journey mapping
This process involves identifying key touchpoints in the customer journey and gathering feedback at each stage. This can help businesses understand how customers perceive their brand and identify opportunities for improvement.
By analysing customer data, such as demographics, behavior, and feedback, companies can gain insights into the needs and preferences of different customer segments and tailor their experience accordingly.
Customer service metrics
Metrics such as first contact resolution rate, average resolution time, and customer satisfaction can help businesses understand the effectiveness of their customer service and identify areas for improvement.
Social media monitoring: By monitoring social media platforms and online reviews, companies can stay up-to-date on customer sentiment and identify opportunities to improve the customer experience.
The key customer experience metrics
The next step involves identifying key metrics to measure and analyze the performance of the company’s customer experience. Many factors can influence the customer experience, such as employees, products, services, pricing, and brand reputation. It is important to consider all of these factors when determining the performance metrics that will be used to analyze the customer experience. Some common CX benchmarks include: customer satisfaction (CSAT) scores, net promoter scores (NPS), customer effort scores (CES), and customer lifetime value (CLV).
Customer satisfaction score (CSAT)
CSAT measures how happy and satisfied customers are with a company’s products or services. These scores are typically collected through surveys, which ask customers to rate their level of satisfaction on a scale, such as 1-5 or 1-10. CSAT scores can help businesses identify areas for improvement and track changes in customer satisfaction over time.
Net promoter scores (NPS)
NPS measures customer loyalty and the likelihood of customers recommending a company’s products or services to others. NPS surveys ask customers to rate their likelihood of recommending a company on a scale, such as 0-10. Customers who score 9 or 10 are considered promoters, while those who score 0-6 are considered detractors. The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. Companies with high NPS scores tend to have more loyal customers and may experience higher levels of word-of-mouth marketing.
Customer effort scores (CES)
CES measures the effort required by customers to resolve their issues or needs. These scores are typically collected through surveys, which ask customers to rate the ease of their customer service experience on a scale, such as 1-5 or 1-7. CES scores can help businesses identify pain points in the customer journey and make improvements to reduce customer effort.
Customer lifetime value (CLV)
CLV is a measure of the total value that a customer will bring to a business over their lifetime. It is calculated by multiplying the average purchase value by the number of purchases per year and the average customer lifespan. CLV is an important metric for businesses because it can help them understand the value of their customer relationships and identify opportunities to increase customer loyalty and retention.
Download our full guide to the key CX metrics
Why you should set your own custom CX benchmarks
If you are just beginning to implement a CX program, it’s important to create your own benchmarking system rather than relying on benchmarks from other companies. This is because every business is unique, with its own set of goals, customers, and challenges. By creating your own benchmarking system, you can tailor your metrics to the specific needs and goals of your business, and track progress in a way that’s relevant and meaningful to you.
Additionally, CX benchmarks from one company should not be compared to benchmarks from another company, as there are many variables that can affect CX performance. For example, a company in a different industry, with a different target market, or operating in a different location may have very different CX benchmarks. Comparing CX benchmarks across companies can be misleading and may not provide accurate or actionable insights.
Furthermore, using CX benchmarks that are not tailored to a company’s specific business and customer needs can lead to several negative consequences. For example, if a company uses CX benchmarks that are not relevant to their industry or customer base, they may not accurately reflect the effectiveness of their customer experience programs. This can lead to incorrect assumptions and misguided efforts to improve the customer experience, potentially leading to a waste of resources and missed opportunities to truly satisfy and retain customers. What is more, using the wrong CX benchmarks may lead to a lack of alignment between the goals of the customer experience team and the rest of the organization, leading to confusion and potentially even conflict.
The benefits of custom CX benchmarks
There are several benefits to having a set of personalised customer experience (CX) benchmarks for a company. Firstly, custom CX benchmarks provide a clear target for the company to strive towards, helping to focus efforts and resources on improving the customer experience. They also allow the company to track progress over time, allowing for the identification of trends and areas for improvement. Also, CX benchmarks can help to prioritise efforts and allocate resources more effectively, ensuring that the company is focusing on the most impactful areas.
Another benefit of CX benchmarks is that they can help to align the efforts of different teams and departments within the company, ensuring that everyone is working towards the same goals. This can help to create a cohesive and consistent customer experience across all touchpoints.
Finally, CX benchmarks can help to build trust and credibility with customers, as they demonstrate the company’s commitment to delivering a high-quality experience. This can help to foster loyalty and encourage repeat business.
Enhancing customer satisfaction: The importance of continual improvement in CX
In order to continuously improve the customer experience, it’s important for businesses to regularly collect and analyze data on how customers perceive different aspects of the company. By doing so, they can identify areas of strength and weakness and implement new strategies to address any areas that need improvement. A customer-centric approach is crucial for staying competitive and differentiating a business from its competitors. By prioritizing customer service and satisfaction, companies can not only improve the overall customer experience, but also increase profitability. Consistent data collection and analysis is key to staying ahead in the market and ensuring that a company’s customer experience is continuously improving.