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The Top Customer Experience KPIs that you Should Know

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Found in:    joyX | Consumer Products or Services | Financial Services | Healthcare | Restaurants | Retail/Ecommerce

Key Performance Indicators (KPIs) allow for a company to visualize and track their progress towards key business objectives.  In the customer experience domain, KPIs provide insight based on consumer data.  Collecting tangible consumer statistics aides CX teams in building stronger programs based on customer needs.  Additionally, these metrics let companies track their progress against their competitors’.

So, what are the most popular customer experience KPIs across the board?  According to Lumoa’s “The State of the Customer Experience” survey, these are the top six .

Net Promoter Score® (NPS)

What is it? NPS® is an increasingly popular metric that is used to calculate a customer’s likeliness to recommend a brand to their friends and family.  While the metric is merely a number, it promotes a deeper philosophy surrounding a customer-centric business model.

How to Calculate it: The data that is used to calculate NPS® is derived from customers’ responses to the question: “How likely are you, on a scale from 0-10, to recommend this product to a friend?”.  Those who answer with a 9 or 10 are considered Promoters while those who answer with a 6 or below are called Detractors.  To find your NPS®, you simply subtract the percentage of Detractors from the percentage of Promoters.

Why is it Useful?  NPS® is useful for both internal and external benchmarking.  It is simple and straight forward, which provides a clear and common goal among employees.  Additionally, NPS® provides insight as to where your brand ranks among others in your industry. Furthermore, by observing companies with top scores in your industry, you can gain a better understanding of the specific programs that yield a high NPS®.

Know exactly where to direct your customer experience efforts, in less than 5 minutes.

NPS® can also help to predict future revenue based on customer sentiment. The higher the score, the more growth your business is likely to experience.

Customer Satisfaction (CSAT)

What is it? Customer satisfaction is fairly straight forward. It measures the level of satisfaction that customer’s feel towards your service or product in a given moment.  In the CX sphere, CSAT is used to measure a customer’s level of satisfaction towards your customer service program.

How to Calculate it: Individual CSAT is measured on a five-point scale.  Customers are asked: “How satisfied are you with the service that you received?”, and then provided with choices: (1) Very Unsatisfied, (2) Unsatisfied, (3) Neutral, (4) Satisfied and (5) Very Satisfied.

To calculate the total percentage of satisfied customers, take the number of customers that responded with a 4 or 5 and divide it by the total number of respondents.  To complete the calculation, multiply the result by 100.

Why is it Useful?  Customer satisfaction is a commonly used metric in the CX domain. It helps to depict a more accurate perception of the overarching customer experience, touching on key points of interaction.  Whereas NPS illustrates a customer’s overall loyalty to your brand, CSAT captures a customer’s sentiment towards your service based on a specific interaction.  This can be particularly useful for understanding weak factors of your customer service program that lead to unsatisfied customers.

Customer Effort Score (CES)

What is it?  Customer Effort Score measures the level of complexity of your service.  Your CES score illustrates the accessibility and ease of your customer service program from the consumer perspective.

How to Calculate it: Typically, directly following a B2C interaction, the customer is asked: “How easy was it to solve your problem today?”.  Provided with a scale of either 1-5 or 1-7, customers will rate their overall experience.  To calculate you CES, add the sum of the responses and divide it by the total number of responses.  A lower score indicates a lower effort required by customers.

Why is it Useful? Customer effort is a key contributor to a customer’s overall loyalty and sentiment towards your company.  It can be extremely helpful to measure CES alongside NPS, since CES can highlight a singular negative experience that may drive a customer to respond with a lower NPS score.

With developing technology and the need to stand out among competitors, it may be tempting to create a unique customer experience.  Yet, the most important aspect of CES is simplicity.

Churn Rate

What is it? Churn rate refers to the percentage of customers lost over the course of a specified period of time.  It can be tracked monthly, quarterly or yearly depending on the business model.  Churn rate is especially useful for businesses whose models revolve around customer retention and loyalty, such as those in the telecommunications industry.

How to Calculate it:  You can find your churn rate by taking the number of existing customers at the beginning of the measured period and dividing it by the amount of customers that cut ties by the end of the period.

Why is it Useful? Churn rate is a valuable metric for identifying problematic aspects of your service.  A high churn rate may indicate a failure to meet customer needs, a burdensome effort required by consumers, or a general lack of customer satisfaction.  Digging deeper to understand why people have churned is a crucial step in harnessing the metric’s full potential.

Retention Rate

What is it? Oftentimes thought of as the inverse of churn rate, retention rate measures the percentage of returning customers over the course of a specified period of time.  Like churn rate, it can be tracked over various increments of time such as months, quarters or years.

How to Calculate it: To find your retention rate, all you have to do is slightly tweak the formula used to calculate churn rate.  You take the number of remaining customers at the end of the period and divide it by the number of customers you initially started with.  The final step is to multiply that number by 100.

Why is it Useful? Retention rate is a valuable metric for predicting financial growth and highlighting loyal customers.  As it is often said, it is easier to keep customers than to gain new ones, so evaluating and understanding your retention rate can help decrease costs of customer acquisition (CAC).  Additionally, when measured over smaller increments of time, retention rate can illustrate the effectiveness of new programs or initiatives that your company implemented during a specific period.

Customer Lifetime Value (CLV)

What is it? Customer Lifetime Value is a measure of the predicted revenue earned from a single customer account over the entire duration of their relationship with a company.  Simply put, CLV determines a customer’s overall value to an organization.

How to Calculate it: There are several components involved in the calculation of CLV, such as the average profit margin per customer, average length of customer lifespan, churn rate and retention rate.  When jointly analyzed, each of these metrics act as supporting details of the larger picture that is CLV.

To determine CLV, take the annual revenue earned by the customer and multiply it by the average customer lifespan.  Then, take that number and subtract the cost of acquisition.

Why is it Useful? A key benefit of measuring CLV is the ability to predict future costs and financial growth.  By understanding a customer’s worth to your company, you can effectively allocate your efforts towards profitable objectives while strategically managing your budget between customer retention and acquisition.


Curating the most effective combination of KPI’s will lead your company to better understand its strengths and weaknesses, as well as ways to improve your customer service. Though, measuring these metrics are only half the battle; your team must work to interpret the implications behind the numbers.

Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

 https://lumoa.me/blog/customer-experience-metrics-and-kpis


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