Many brands use key performance indicators (KPIs) to understand if their sales, marketing and advertising campaigns have been effective. There are also many KPIs that can be used to measure the effectiveness of a brand’s customer experience initiative through all of its channels. This article will discuss 6 KPIs that can be used to clearly determine whether a brand is providing an exceptional omnichannel customer experience.
KPIs and Metrics Explained
Many (but not all) of the KPIs that are commonly used in measuring the effectiveness of a customer experience initiative are also used as part of a Redpoint Global, explained that brands need to think of their customers holistically, and base their strategy around being customer-centric across all channels. He said that they can then measure their strategy and execution against that overall customer-centric strategy. “We have found that most companies have a gap between their customer strategy and their ability to execute it, and that gap needs to be understood and measured,” he explained. “There is an obvious disconnect in the market, in that ‘exceptional omnichannel customer experiences’ are not being delivered. That is partially caused by a gap in measurements — a failure to measure customer-level execution and instead measure channel- or program-level execution.” In other words, while brands need to measure KPIs across all channels, they need to make adjustments and changes at the customer-level in order to obtain measurable results. “KPI measurement should be broad and enterprise-wide, since those that are overly channel-specific can break and ultimately cause more damage to the business model,” said Nash.
When creating or determining the specific KPIs a brand will be focusing on, the brand needs to ask itself some key questions, including:
- What is the result that you are after?
- How will that result be beneficial?
- How will you measure progress for that result?
- What will you do to see progress for that goal?
- What will determine if you have reached that goal?
- How often will you measure the success (or failure) of that goal?
- Who will be responsible for the information that is obtained?
Ruchika Sharma, customer marketing manager for Clever Tap, spoke with CMSWire about the use of VoC metrics for improving the customer experience. Sharma said that brands have to put the knowledge gained from KPIs and other metrics into action, and use them to identify and respond to the feedback they have obtained to improve customer satisfaction and loyalty. She said that the real challenge is turning negative feedback into positive results. “I believe the most important aspect starts after analyzing all the VoC metrics to identify those unhappy customers and coming up with a plan of action to cater to their challenges.”
Related Article: American Customer Satisfaction Index (ACSI) revealed that customer satisfaction has been substantially affected by the pandemic and its associated chaos. David VanAmburg, managing director at the ACSI, said that from the beginning of the pandemic, consumer expectations of retailers have plummeted. “Customers braced for delayed packages, empty grocery store shelves, and hard-to-find name brands. Of course, just because they expected this, doesn’t mean they were thrilled about it. As customer satisfaction slips, retailers must adapt to the new market. It’s clear they have their work cut out for them,” explained VanAmburg.
Sharma said that by actively using the data derived from metrics such as the CSAT, she was much better equipped to retain customers and increase customer satisfaction. “The approach that worked for us was—once we identified a set of our ‘satisfied’ customers, we made sure they are constantly engaged with additional discounts or offers that were apt for them. Providing them recognition on events, hosting informal mixers or getting further in-depth feedback from them were a few other things that we tried. The bottom line is to be highly customer-centric to engage and retain your existing customers.”
KPI #2: The Net Promoter Score (NPS)
The Net Promoter Score (NPS) informs a brand if its customers are brand advocates. The type of customer that would actively promote a brand to their friends and family is a VIP, and is much more valuable to a brand than a one-time purchaser. The NPS metric is often expressed like this:
“Based on your experience with us, how likely are you to recommend us to a friend or colleague, on a scale of 1 to 6?”
A 6 rating is indicative that the customer is very likely to leave positive reviews or feedback about the brand on social media. A 1 rating tells the brand that they have some serious work to do to improve the customer experience.
Sharma told CMSWire that she has always focused on retaining happy customers, and turning them into brand advocates. “After all, it takes fewer resources compared to what is required to turn unhappy customers (who might churn soon) into happy customers.”
KPI #3: Customer Loyalty Index (CLI)
The Customer Loyalty Index (CLI) is an indicator of customer loyalty toward a brand and tells a brand if a customer is likely to do business with the brand again. The CLI metric typically includes several questions, one of which is the NPS question mentioned above (“how likely are you to recommend…”) along with two other questions that are usually phrased like this:
“How likely are you to buy from us again?”
“How likely are you to try our other products or services?”
The CLI is created by adding up the values from the NLP and the other two questions. Other factors, such as participation in a loyalty program, website visit frequency, and purchase history, can be used along with the CLI metrics, to more effectively determine customer loyalty.
KPI #4: The Customer Effort Score (CES)
The Customer Effort Score (CES) is extremely important in regards to customer experience, as it is an indicator of how much effort a customer has to exert in order to utilize the various channels of a brand. The less effort a customer has to exert, the better, because ease of use is one of the chief points that determine whether a customer will do business with a brand, and more importantly, if they will continue to do business with a brand.
The CES question is typically phrased like this:
“To what extent do you agree with the following: [brand name] made it easy for me to purchase [what I wanted].”
Although the CES question can be altered, the sentence structure is important and should typically be as presented above.
By combining website analytics with session replay and matching them to the specific customers that indicated that the brand’s website was difficult to navigate and use, pain points can be identified and eliminated, which will have the effect of improving the experience for other customers as well.
KPI #5: Would You Miss Us? (WYMU)
The Would You Miss Us (WYMU) metric is connected to both customer satisfaction and customer loyalty, and refers to asking the customer if they would miss the brand if it suddenly went away. WYMU also speaks miles about a brand’s competitors, because if they are okay with switching to the competitor without feeling a loss of satisfaction, they are not satisfied with the brand to begin with.
The WYMU metric is typically phrased like this:
“If [brand name] suddenly disappeared, how much would you miss us on a scale of 1-5?”
The WYMU metric tells a brand how valuable it is to its customers, or conversely, that the brand is not valuable to its customers, and if its customers would have no qualms about switching brands.
KPI #6: Shopping Cart Abandonment Rate
A report from the Baymard Institute revealed that e-commerce shopping carts are abandoned 69.57% of the time. Shopping cart abandonment can be avoided through usability studies, redesigns, and customer-centric e-commerce design. The shopping cart abandonment rate is specifically connected to customer conversion rates, and is a good indicator of pain points in the checkout process.
Calculating the cart abandonment rate is accomplished by dividing the total number of completed purchases by the number of carts that have been created; subtract the result from 1, then multiply by 100. The resulting number is the cart abandonment rate (percentage).
[1 - [completed purchases / number of carts]] * 100
For example, if a brand has 200 completed transactions, and 600 total shopping carts were created, then 200 is divided by 600, which equals 0.333333333. Subtracted from 1, you get .66666667, which is then multiplied by 100, and that equates to 66.666667, or a 67% shopping cart abandonment rate.
[1 - [200/600]] * 100 = 66.666667 = 67%
It must be remembered that shopping cart abandonment does not definitively mean that there is an inherent flaw or problem with a brand’s e-commerce presence. Customers use shopping carts to create wish lists, to compare prices with other brands, and often they never intended to actually make a purchase at all. That said, anything a brand can do to incentivize and simplify the shopping experience can benefit the brand and enhance the customer journey.
KPIs enable a brand to gain a better understanding of the success or failure of specific goals within its customer experience initiative. By effectively collaborating and communicating between departments across the entire omnichannel customer experience, and selecting specific KPIs for specific goals, a brand can effectively measure its successes while working to resolve its failures.