The ultimate guide to customer experience metrics: CX Mini Masterclass – E85

This CX Mini Masterclass covers a roundup of the key insights on CX metrics from previous episodes. Show host and customer experience expert, Julia Ahlfeldt, covers everything from the basic definitions of the most popular metrics to the strategies for putting these to use, plus a step by step guide on where you can go to learn more. Customer experience metrics have always been a hot topic in the industry, so this episode is for new CXers and seasoned experts alike. If you’re interested in an expert-curated guide to customer experience metrics and their role in CX management, then this episode is for you.

THE hot topic

If you get a group of CX professionals together, at some point the conversation will turn to metrics and measures. It’s inevitable. Largely because metrics and measures are the core of how CX teams validate insights, track their progress, and prove their worth the business. So it should come as no surprise that this is a keen area of interest for continued learning and that conversations on the pros and cons of different metrics have been known to stir up emotions.

Given the importance of CX metrics, the topic has been covered quite extensively on the podcast. At least 7 Mini Masterclass episodes to date have featured topics related to CX metric. It was high time for a round up guide to customer experience metrics, and no better way to mark the milestone of the 85th episode. 

Kicking off the guide to customer experience metrics

In episode 28, guest expert, CX thought leader and former CEO of the CXPA, Diane Magers, outlines the difference between metrics, measure and business value. These are terms that many CX professionals use interchangeably, but it’s important to clarify what these are and how they apply to customer experience management. No guide to customer experience metrics would be complete without baseline definitions of the key terms. Diane broke down her definitions of each:

• Measures– anything you can count (e.g. number of clients that come into your store, call length, frequency of purchase)
• Metrics– outcomes of something that’s happened, including a customer’s perception of those outcomes (e.g. customer satisfaction, customer effort score)
• Value– the financial levers that you can pull in an organization and/or the resulting financial impact (e.g. cost to serve, revenue, expense, profit per customer)

For more on this, be sure to check out episode 28.

Understanding the “Big 3” metrics

Episode 31 explored 3 of the most common CX metrics out there, Customer Satisfaction or CSAT, Net Promoter Score, otherwise known as NPS and a newer kid on the block Customer Effort Score. Each one has a unique methodology and brings as different type of insights to the table. Be sure to listen to episode 31 if you want an overview of the 3 juggernaut metrics of the CX world.

Episode 33 was a special deep dive into the pros and cons of Net Promoter Score, as it is undoubtedly the most controversial metric of the bunch. NPS was developed by Fred Reicheld, a notable thought leader and management consultant. The metric was introduced to the world through a Harvard Business Review article, so it caught the attention of executives and helped shine the spotlight on CX, but many CX professionals now feel increasingly shackled to a metric that doesn’t explain the full picture of customer experience, which by the way – no single metric will ever be able to do in isolation. There are many well documented issues with the way that NPS is measured and used.

My professional opinion is that NPS has its place as a CX metric, but only in the right context. It is better suited as a dipstick on customer perceptions of a brand across their entire journey and not as performance measure for customer-facing teams. That recommendation only stands if the right methodology is used, which it’s often not. Check out episode 33 for more details.

Interpreting metrics

One metric used in isolation won’t provide the full picture of an organization’s performance or progress towards customer-centricity. There isn’t a singular guide to customer experience metrics, but it is widely acknowledged that CX teams should leverage a variety of metrics to create a full picture of CX. Episode 32 explores how different metrics and measures can be used in concert by classifying them as leading or lagging indicators and then bringing them together to establish a holistic understanding.

Leading indicators are measures that precede or feed into a customer experience. These should indicate whether or not an experience will be successful. E.g. wait time, processing time, product availability, system downtime, product quality. These are all components that might contribute to customer experience. Leading indicators help predict the outcomes of experiences and many of them can be measured and monitored before experiences even happen. They can be used to proactively intervene when experiences start going sideways and make for great CX KPIs (see more on that below).

Lagging indicators follow a customer experience. These should indicate whether or not an experience was successful. Customer retention and the “Big 3” metrics covered in episode 31 are all examples of lagging indicators. They help us understand “how we did” and are important for monitoring progress or for tracking the impact of customer experience efforts over time. When teams use leading and lagging indicators together, it empowers them take charge of delivering good experiences and then monitor the outcomes.

Putting CX metrics to work

A guide to customer experience metrics wouldn’t be complete without some ideas on how to put these CX tools to work. Episodes 53 and 73 do just that.

Metrics can be very helpful for driving organizational alignment around customer centric-goals. Episode 53, looked at CX KPIs as an application for CX metrics and measures. The key is to find metrics or measures that connect a team or individual’s day to day responsibilities to customer outcomes. This is generally easier to do for customer-facing teams than those working behind the scenes, but ideally everyone should be accountable to a KPI or two that connects their work back to the customer mandate. For more detail on establishing CX KPIs and potential pitfalls to look out for, be sure to check out episode 53.

CX professionals can get so worked up about metrics, because they’re the way that CX teams prove the worth of their efforts to the business. Episode 73 provides some recommendations on how CX leaders can use those metrics and measures to demonstrate the impact that customer experience is having on the business. Customer experience metrics can be used to highlight efficiency gains, quantify the value of referrals and demonstrate how a better understanding of the customer has led to improved business outcomes. Those are just a few of the recommendations covered in episode 73.

Avoiding the common pitfalls

In episode 63, special guest and CX expert Stephanie Thum shared 4 common mistakes with how teams use metrics and what CX leaders can do to avoid these. If you are in the process of setting up a CX metrics framework or are busy reflecting on how you can improve the one currently in place, be sure to check out episode 63. Stephanie covers everything from how to share metrics that you think might make the situation look bad to establishing the right cadence for measurement. Stephanie has become a special ongoing contributor to the show, and ALL of her episodes are well worth a listen!

When CX metrics aren’t enough

If you’ve reached the end of this guide to customer experience metrics and are thinking “I’m applying all of the CX metrics best practices, but my executive team still isn’t listening”, you might just be speaking the wrong language. CX metrics carry weight with CX professionals because we understand their value (and pitfalls!). If you want to your message to resonate with business leaders, consider framing CX performance in terms of business results, aka the ROI of CX. For more on this, including how you can leverage existing CX metrics to demonstrate business impact, be sure to check out my Ultimate Guide to the ROI of Customer Experience.

Want to keep learning about CX?

If you’d like to checkout more of these CX Mini Masterclasses or listen to my longer format CX expert interviews, check out the full listing of episodes for this CX podcast.

Decoding the Customer is a series of customer experience podcasts created and produced by Julia Ahlfeldt, CCXP. Julia is a customer experience strategist, speaker and business advisor. She is a Certified Customer Experience Professional and one of the top experts in customer experience management. To find out more about how Julia can help your business achieve its CX goals, check out her customer experience advisory consulting services  (including journey mapping, CX strategy development, experience innovation, leadership workshops and CX ROI measurement) or get in touch via email.