Business leaders today are well aware that the success of a company is heavily dependent on customer experience management. Happier customers improve sales and ensure a stable revenue base for your business. That is why businesses have extensive budgets to improve their CX and create loyal customers.
Investing in customer experience management is a great idea. To implement it well, though, you need to be able to measure returns on your customer experience strategy. Otherwise, your money might be used up in initiatives that don’t improve CX and instead just drain resources. Identifying such potholes is key to a good customer experience.
You might ask – How do you measure returns on customer experience? At first glance, it might seem impossible to measure if specific initiatives are helping make your customers happier. But measuring returns on customer experience is not that difficult. You just need to know where to look. To help you out, we’ve listed out all the ways to measure returns on CX.
What Is Customer Experience Management?
Customer experience (CX) is an umbrella term for how your customer perceives your brand after interacting with it during the customer life cycle. In simple words, it’s what customers think of how you treat them. No wonder it’s an area business often focus on improving.
Customer experience management (CXM) is, by extension, how you manage your customer journey when they interact with your brand. It involves knowing your customers’ needs deeply and designing a customer experience strategy to fit those needs. Understanding what customers want was once a guessing game, but it’s not anymore. With online survey tools like SurveySparrow, you can easily design an effective customer survey to know more about your customers’ preferences.
Knowing your customers is, after all, the first step to an effective customer experience strategy. A well-managed customer experience involves active oversight of all aspects of your customer journey, including ROI. But how do you measure returns on customer experience? Here are a few ways to find out if your CXM initiatives and strategies are working.
How Do You Measure Returns on Customer Experience Management?
Measuring returns on CX initiatives can be tricky, but it’s not as hard as it might seem. There are a few places you can look to find out if your customer experience strategy is working. Here, we will walk through the numerous ways in which you can measure returns on customer experience.
Find Metrics Impacted by Customer Experience Strategy
One of the key methods for finding returns on customer experience is to look at the numbers they affect. Your business has this data already. This step just involves repurposing it to give us new information. Listed below are a few metrics that can help you find out if your customer experience has improved.
This may sound too obvious, but you don’t want to miss the insights that are hidden in plain sight. Improving customer experience has been shown to have a huge impact on top-line revenue. If your revenue has seen an increase with no other factors involved, it’s worth investigating if that was due to better CX.
The link between CX and revenue is well established. A Forrester study recently found that for some industries, improving customer experience by just one point led to a billion dollars in added revenue. An increase in revenue a very strong indicator that your customer experience management is working.
When looking into revenue data, eliminate factors such as reduced costs, and only factor in the revenue generated by sales. Then you know you’re looking at the customer-facing aspect of revenues. An increase in sales is the best case you could make for investing more in customer experience management.
2. Customer Retention Data
Customer retention statistics are heavily impacted by customer experience. Small businesses often take pride in delivering great CX and creating loyal customers. When it comes to ROI on customer experience, your customer retention data can speak volumes.
In a data-driven world, businesses are increasingly able to track their repeat customers. If you’re looking at high customer retention, that’s a strong indicator that customers are actively choosing your brand repeatedly.
An improvement in customer experience can often result in customers being more loyal to your brand. After all, who doesn’t like to be treated well? On the other hand, low customer retention might mean your customer experience strategy needs some changes.
3. Customer Satisfaction Data
A lot of businesses happily function under the myth that customer satisfaction is not quantifiable. But the time to treat customer satisfaction like a magical, unmeasurable entity is behind us. A spike in customer satisfaction is a direct result of good customer experience management.
Measuring customer satisfaction is not very hard. Businesses do it all the time when they ask you to review a product or their service. Some organizations even send Net Promoter Score (NPS) surveys. With a powerful online survey tool like SurveySparrow, you can easily measure customer satisfaction. You could conduct after-sales surveys or even NPS surveys. They will be embedded seamlessly in your customer journey, and you’ll have data on how satisfied your customers are. Here’s a customer satisfaction survey created using SurveySparrow..
To create similar engaging surveys, you can create a FREE account on SurveySparrow
Customer satisfaction is not a magical, unquantifiable thing. Realizing that and collecting customer satisfaction data will help you show the direct returns on your customer experience management efforts.
4. Customer Service Costs
You may think that customer service is a necessary cost that you have to bear, and there’s nothing you can do to change it. Except, there is. Customer service is a result of customers not being satisfied. Businesses that have poor CX have to compensate with more customer service resources.
Customer service is where customers register complaints about your service. If you improve your customer experience to cover those bases, they won’t have to complain. A reduction in customer service requests indicates that your customer experience management is on point.
When designing a customer experience strategy, it can also be helpful to talk to your customer service representatives. What are customers’ most frequent complaints? Customer service can give you the entire roadmap to better customer experience management.
When a customer is happy with a brand, they tend to trust it across the board. That’s why brands with high customer loyalty often see the same customers buying multiple products or services from them. It’s an indicator that your customer experience management is on point.
When you focus on improving customer experience, then customers start to rely on you more for their needs. That’s how CXM promotes upsell. Because of this, looking at your upsell data can be useful to find returns on your customer experience.
If your average transactions per customer have gone up, better customer experience management is a very likely cause. On the other hand, if customers are buying less from your brand, you might need to investigate if something is wrong with your customer journey. Either way, upsell is a great indicator of returns on your customer experience strategy.
Conduct Customer Surveys To Measure Returns on CX
Looking at metrics like sales revenue and upsell is one way to go. It uses existing data to create new insights, but that can only go so far. If you want to measure returns on your customer experience with precision, customer surveys are the way to go.
A customer survey is the most direct and reliable way to measure returns on your customer experience initiatives. Regular customer experience surveys can help you find out if your strategies are working. They can also help identify problem areas, helping you design an effective customer experience strategy in the first place. Here are a few different types of customer surveys that could give you valuable insights into your customer experience management.
1. Customer Satisfaction Surveys
As we mentioned above, customer satisfaction data is very useful in measuring returns on your customer experience strategy. To get that data, though, you need to conduct a customer satisfaction survey. Using SurveySparrow’s templates, you can design a professional customer survey in minutes.
A customer satisfaction survey includes different types of questions depending on your needs. What do you like most about our service? What is one feature our product is missing right now? How easy is it to navigate our store? These are valuable questions, and your customers’ responses will be tremendously valuable in framing a customer experience strategy.
When you conduct regular customer satisfaction surveys, the difference in your ratings during different time intervals is valuable. You can analyze them to measure the returns of your customer experience management.
2. Net Promoter Score (NPS) Surveys
Do you recall ever having received an e-mail that included the question: ‘How likely are you to recommend our service to a friend?’ It might ask you for a likelihood between 1 to 10. That’s your Net Promoter Score. It measures how effectively brands are able to facilitate word-of-mouth advertising.
NPS scores, of course, depend to a large extent on your customer experience management. Happy customers tend to share their appreciation of your product with their network. A high NPS score is an indicator that your customer experience strategy is working.
With SurveySparrow, you can make NPS surveys a natural extension of your customer experience, whether on a website or embedded in an email. It doesn’t take customers much time to give a rating, and you get valuable data on your brand’s CX. You can use changes in your NPS score to measure the returns on your customer experience.
3. Customer Effort Score Surveys
Like NPS, Customer Effort Score (CES) is also a rating given by customers based on their experience. While NPS measures if your customer would recommend your product, customer effort scores measure how hard an aspect of your customer experience is.
For example, a business might ask you to rate the truth of the statement that their brand ‘made it easy for you to resolve your issue.’ That’s a CES survey. It asks customers if their experience with your brand was effortless or a hassle. CES is a very important indicator of customer experience.
If you conduct regular CES surveys, you will be able to find areas in your customer experience that customers find the most painful. You can then incorporate those insights to design a better customer experience strategy. Over time, if your CES scores are getting better, you know your customer experience management is working.
Moving Towards Better Customer Experience Management
If all businesses worked on improving their customer experience, imagine how easy your life would become. Our hassles are frequently a result of neglected CX. Working on your customer experience is good for customers, and even better for businesses.
Of course, if you are going to dedicated precious resources to your CX, you need to see returns. No good leader would invest company resources without asking for proof that it works. Well, now you know that measuring returns on customer experience management is easily possible. Like we saw in this article, you could even repurpose already available data to make your case.
We strongly recommend, though, that you conduct regular customer surveys to keep a check on your customer experience. Not only do surveys help you measure returns on CX, but they also indicate when something is going wrong. With SurveySparrow, you can now design beautiful surveys that your customers will love to fill.
If you want to be known for great customer experience management, there is no way around getting to know your customers. Design a customer experience strategy rooted in real insights, and reap the fruits of a great customer journey!