Customer experience, also known as CX, is the overall perception customers form of your business as they progress through their customer journey.
CX comprises every single interaction, positive and negative, between your business and your customers, and directly influences the possibility of not just an immediate purchase, but also future purchases from them and people in their network.
For the modern customer, extraordinary brand experiences are now an expectation. In fact, according to an Adobe study, companies that prioritized and effectively managed customer experience were three times more likely than their peers to have significantly exceeded their top business goals in 2019.
What’s more, according to Gartner, CX drives over two-thirds of customer loyalty, outperforming brand and price combined.
Clearly, CX has a significant impact on whether your customers are happy and loyal to your brand, but is tricky to measure with a single key performance indicator (KPI) or a specific number.
Enter CX analytics. Let’s dive into the what, why, and how of CX analytics, covering some important CX metrics to track and analyze.
What Is Customer Experience (CX) Analytics?
Customer experience analytics is the collection and assessment of customer data – such as the reviews customers leave on your social media accounts or frequency of purchases on your website – that enable you to understand them better and consequently make their experience interacting with your brand more delightful.
Customer experience analytics allows you to make data-driven decisions on how to improve your offerings from first contact to customer service, and discover roadblocks your customers are currently experiencing that you may not be aware of.
3 Features Your CX Analytics Tool Needs
CX analytics tools, also known as CX management software, often boast a wide variety of features such as web content and inventory management.
While those features may be useful for some companies, in essence, there are three must-have features your CX analytics tool needs when designed with employees in mind.
Companies that want to leverage CX data across the board to improve their CX program holistically must consider a prospective tool’s reporting capabilities and analytics features, specifically whether departments or admins can set up dashboards or not.
A CX dashboard is a data visualization tool that facilitates the real-time collection and analysis of valuable CX metrics. It summarizes all data and high-level KPIs (such as VOC and NPS, discussed later) in an easy-to-understand way and helps executives make faster decisions.
Simply put, a dashboard provides a constant bird’s-eye view of your CX to the decision-makers, ensuring they always have the big picture in mind.
Using select KPIs, performance analytics essentially evaluates how your staff is performing. Managers can use this data to improve individual performance by incorporating elements of gamification.
For instance, considering customer service reps, performance analytics can help improve their output in a self-service manner, with a review of their verbal cues, tone, speed of conversing, and so on.
Customer Contextual Analytics
B2B or B2C – the modern customer doesn’t just crave but also expects at least some level of personalization from all businesses.
Customer contextual analytics enables you to create contextual engagements with your customers by delivering personalized content and real-time responses (using chatbots that incorporate natural language processing, for example).
“Creating contextual engagements requires that all communications are progressively more anticipated, personal, and relevant,” says Lisa Loftis, principal management consultant at SAS Best Practices.
With customer contextual analytics, you can combine traditional relationship context (product ownership and usage, personal and demographic details, and historical transaction information) with the current situational context to deliver outstanding CX.
Why Use Customer Experience Analytics?
Whether your goal is to reduce customer churn, boost customer engagement, offer more personalized content/product recommendations, or simply create a more consistent customer experience, the only foolproof way to achieve these goals is to leverage data and analytics.
And when you talk about the big picture of your business, here are three key reasons why you must use CX analytics.
Make Informed Decisions with Customer Insights
Companies with a culture of objective decision making are typically more successful than ones that largely rely on gut instincts. CX analytics ties customer behavior with concrete metrics, which you can use to make more informed business decisions.
In order to grow into a brand that truly caters to the needs of each customer, it’s not enough to guess your next move based on a few anecdotal pieces of evidence or an internal company conversation.
CX data serves to inform about what customers actually expect, or what they might like to have recommended to them in order to further their engagement. CX analytics is how you make data-driven business decisions that improve customer experience, and thus, retention.
Discover Customer Roadblocks
No matter how great you think your product or service is, customers will always face obstacles in making the most out of your offering. Using CX analytics metrics, you can discover such roadblocks and work to get rid of them.
For instance, Customer Effort Score (CES) is a metric that shows the amount of effort a customer makes to interact with your product/service and is usually followed by a section where customers can leave a couple of lines of feedback.
Using that score and feedback, you can determine what difficulties your customers face in completing certain tasks while using your product. Consequently, with that CES data, you can improve your product by mitigating components that adversely affect customer experience, such as a lengthy checkout process.
Track Important Metrics
Using a CX analytics tool, you can accurately monitor pivotal business metrics like customer lifetime value (CLTV), customer churn, and brand loyalty. A tool helps you to seamlessly share the data across teams so everyone is on the same page.
With all these metrics conveniently located in one dashboard, you can better guide your immediate and long-term growth strategy.
Who Benefits From Customer Experience Analytics? (Hint: Everyone!)
CX analytics solutions ultimately lead to a more enjoyable experience for your customers. But it’s also useful for boosting the performance of various employees working in your company.
CX metrics such as customer satisfaction and Net Promoter Score (discussed below) paint a pretty accurate picture of a business offering’s plus and minus points.
Some of these metrics can even pinpoint the exact, in-demand features a product is lacking, which can then be added to the product development roadmap. High-level executives can make key strategic decisions on company direction, marketing, sales, and product development using data provided by a CX analytics tool.
Of all the C-suite executives, CMOs, in particular, are best aware of the importance of rendering a top-notch customer experience throughout the buyer’s journey. They know that CX affects every single marketing and business KPI.
Thus, CMOs are in the driver’s seat to champion the importance of a holistic, end-to-end customer experience company-wide. And they can only do this effectively with the help of concrete CX data in front of them.
Contact Center Agents
With real-time reporting, sentiment, and predictive analytics that come with a CX analytics tool, customer service call center agents can make on-the-spot decisions, recommendations, and changes to their approach.
CX analytics can use existing data such as demographics, behavioral profiles, and purchase history to predict the next product the customer is most likely to buy. It can then pull up a script that sales agents can use to improve conversion rates for that specific customer.
3 Important CX Metrics to Track and Analyze
As CX analytics can comprise a huge variety of data and metrics, finding the right metrics to track and analyze is important. Only then will you be able to start taking action rather than getting lost in numbers.
So while there are many CX metrics you can consider, here are three key ones you must track and analyze.
Customer Effort Score
Minimizing a customer’s effort in navigation, purchase, and support dramatically improves their overall experience with your business.
Customer Effort Score (CES) is a metric that measures how much effort a customer exerts to purchase your product, use it, get an issue resolved, or have a query answered.
It is typically obtained in the form of a survey in which customers rank their experience on a scale of “Very Difficult” to “Very Easy.” The idea is that customers are more loyal to an effortless brand experience.
To calculate the CES, add the total number of respondents who voted 5 or higher and divide it by the total number of people who participated in this survey. So, if 80 out of a total of 100 respondents rated 5 or above, then 80% of your customers likely feel that your product/service is worth using again.
Customer Satisfaction Score
Customer Satisfaction Score (CSAT) uses a numerical value to measure the level of customer satisfaction with a business, purchase, or interaction. It’s usually fielded by asking a simple question post-purchase or post-customer service interaction, like “How satisfied were you with your experience?”
The simplicity of this score means it’s an easy way to close the loop on customer interaction and assess whether your business was successful in producing customer happiness.
And since CSAT is such a quick survey, you can use it across various touchpoints during a customer’s journey to determine the level of customer satisfaction at each stage.
Net Promoter Score
The Net Promoter Score (NPS) is a metric used to measure a customer’s desire to recommend a product/service or brand. Again, it is measured using a simple question like “On a scale of 1-10, how likely are you to recommend us to your friends and colleagues?”
Source: Net Promoter
Promoters are loyal customers who would love to spread a good word about your brand. Passives are satisfied customers, vulnerable to the marketing influence of competitors. Detractors are unhappy customers who may advise people against doing business with you.
Once you survey your customer base, take the percentage of Promoters, and subtract the percentage of Detractors to reach your NPS. An NPS score can vary from -100 (everyone is a Detractor) to 100 (everyone is a Promoter).
In general, NPS greater than zero is deemed good, while NPS greater than +50 is considered to be excellent. However, the scores vary by industry, so be sure to look at your industry-specific benchmarks.
NPS is a simple yet strong indicator of other crucial business metrics like customer retention rate, average spend, and customer lifetime value, all of which are key to boosting revenue and business growth.
Ready to Get Started With CX Analytics?
The foundation for creating great CX is choosing the right contact center solution. Learn how Lifesize’s cloud call center software helps contact centers streamline communication channels to deliver seamless customer experiences and superior customer support.
The quality of customer service and the overall customer experience, quite inarguably, is the defining factor between run-of-the-mill businesses and a few thriving brands. You may very well have the best product or service in the market, but that alone won’t get you very far.
Ultimately, no matter what your business is about and what industry you’re in, a strong focus on delivering outstanding CX is vital to dominate the market. And the only surefire way to know what’s working and what’s not is analytics, not hunches.
If you haven’t already, it’s about time you start leveraging CX analytics to turn one-time customers into repeat ones, and repeat customers into loyal advocates who readily champion your brand.
CX Analytics FAQs
How Do You Use CX Analytics?
Using the CX metrics outlined above, such as CES, CSAT, and NPS, you can optimize individual stages of the customer’s journey, from top-of-the-funnel blog content to bottom-of-the-funnel customer self-service options.
For example, you can use NPS to reach out to individual Promoters and encourage them to spread positive word of mouth or reach out to Detractors to understand what’s lacking and what you can do to turn them into advocates of your brand.
What Companies Typically Use CX Analytics?
All top-performing companies today are using CX analytics to continually improve their customer experience and stay ahead of the curve. From established enterprises (think Adobe and PayPal) to up-and-coming small brands, nearly every modern company serious about sustainable growth is leveraging CX analytics. For instance, many successful companies set NPS targets and measure their performance by how close they come to meeting those goals.
What Are CX Analytics Use Cases?
For Interactive Voice Response (IVR), CX analytics helps analyze the most common customer requests and move those up in the IVR menu. For agent-assisted contact center services, CX analytics can help analyze how many times a caller is transferred or how the caller’s tone of voice changes throughout the call.
And for text messaging, CX analytics can help analyze how many customers are able to effectively use self-service to solve their problems and how often they need to be transferred to an agent.
So, from reducing the volume of customer calls and average handling time to improving service-to-sales conversions, CX analytics has countless use cases proving its worth.
This guest post was written by Mark Quadros, a SaaS content marketer who helps brands create and distribute rad content. On a similar note, Mark loves content and contributes to several authoritative blogs like HubSpot Sales, CoSchedule, Foundr, etc. Connect with him via LinkedIn.