Across industries, company leaders and business owners are aware of how consumers have changed their purchasing habits and behavior. The pandemic may have been the catalyst for this change, but in truth, it’s not. It merely accelerated the change.
Because of the change, however, many businesses have undergone a digital transformation in the past two years. More than there were before the pandemic started.
Digital transformation is the first step, especially for small businesses, to reach a wider audience, turn them into leads, and eventually, to paying customers. To accomplish this goal, many businesses today invest in different customer experience (CX) strategies.
The importance of a CX platform can never be underestimated. In fact, according to the leading online publication for customer experience technology news, CX Today, 80% of consumers value experience as much as they do with products and services that businesses provide.
Knowing this, businesses need to improve their CX. The challenge is gauging their current performance to pinpoint deficiencies in their platform. A good answer to measuring CX performance is with the use of key performance indicators (KPIs).
In this article, you’ll learn of three sets of KPIs that are used to measure CX initiatives. First, however, you should understand when to use them.
Should All Metrics Be Measured?
It’s easy to be overwhelmed by the number of KPIs in CX. However, the answer is no. You shouldn’t measure all of them and here’s why.
Most companies that use KPIs only measure two or three. You’re not necessarily adding value just by using more KPIs. You’re just adding more complexity to your CX strategy. In fact, over-measuring is a common problem for first-time KPI users.
In practice, find the KPIs that will help you achieve a specific CX goal. Break down the customer journey and determine which part is applicable to your business. This will facilitate the development of a goal-oriented approach to identifying the right metrics for your business.
For example, if you already have quality leads, you’ll need to engage with them to turn them into paying customers. Your strategy, therefore, is to implement customer engagement and measure its success with any two of its three KPIs — customer acquisition rate, conversion rate, and cart abandonment rate.
Simply put, having few KPIs will help any business to focus on improving and fixing any issues with its CX.
Now that you know when to use KPIs and which of them can be good for your business, you should know what these CX KPIs are. Find out more about them below.
For Attracting Customers
If your goal is to attract customers, which is important for new businesses, you should measure three KPIs: marketing campaign effectiveness, direct traffic, and pages per visit.
Marketing campaign effectiveness reflects your initiative’s return on investment (ROI). Direct traffic meanwhile, is the result of activities stemming from your online channels — website, social media pages, and blog.
Pages per visit, on the other hand, are an indicator of content quality. For example, if you’re targeting business clients to market your modern hollow metal doors, you should showcase your expertise in the
subject through the content that you’ll produce. If your content is appealing and relevant, visitors to your website or blog will check out and read many pages.
For Engaging Customers
If you need to improve your customer engagement, you should measure the customer acquisition rate, conversion rate, and cart abandonment rate KPIs. Customer acquisition rate is the metric used to measure the number of customers you can acquire for a specific campaign or period. The conversion rate, on the other hand, is the number of customers that a campaign can turn into paying clients.
At the other side of the spectrum, the cart abandonment rate is measured to determine if your CX is proving satisfactory or not for your customers. If you have a low cart abandonment rate, you should use strategies to prevent customers from leaving their filled carts. More importantly, you should improve your CX.
For Keeping Customers
If you’re an established business, or if you already have a large brand and following, you should measure these customer retention KPIs: customer churn rate, net promoter score, customer satisfaction, and average resolution time.
Providing a better CX can increase your company’s customer retention. But, that’s not all. It’s also cost-effective. According to Smart Insights, retaining a customer costs five times less than acquiring and converting a new one.
Measure to Grow Your Business
There is no one-step solution to improving the customer experience that you’re providing for your customers. You’ll need a comprehensive approach to enhancing it. If you think two KPIs are not enough, combine metrics that you believe will be useful for your business.
Don’t just use KPIs blindly. Don’t measure KPIs because you simply need to. Measure KPIs because you want and need to grow your business. Use the KPIs above as a starting point.