The Most Optimal Key Performance Indicators (KPIs) to Monitor for Improved Business Results
It is always nice to know that you are going in the right direction, no matter the endeavour. For example, seeing the long forgotten path in your backyard while mowing the lawn is a pretty coherent signal that you tend to do the right actions. It indicates the degree of how far you’ve come in the process, and it is always connected with positive feelings, and the sense is motivating.
In some areas, the principal and usual measurement techniques are not that apparent. This applies to the evaluation of customer experience in the company in the fullest sense. However, one should not have the gut feeling about being destined to pursue being oblivious about the achievements your company has made so far and the move forward your business is making in that regard. KPIs, or key performance indicators, act as transparent means to evaluate if your growth is going in the right or wrong direction.
But what are KPIs? How can one understand why the notion of "metrics" differs from the notion of "KPIs"? Which KPIs can be considered to be beneficial and which harmful? We are going to answer these questions with the knowledge provided below, and hopefully, everything falls into place when you reach the bottom of this website page.
KPIs—what are they?
Key performance indicators, or KPIs, are the numeric values of a certain evaluated component that is important to understand the level to which the customers are satisfied with your product. Such numeric values pave the way to exactly understanding the quality of your current performance and the potential areas that might be lacking, and simultaneously reflecting upon your development and exhibiting the necessary performance.
KPIs vs. Metrics—What’s the Difference?
The two are similar, yet one should clearly make a distinction about these two notions. KPI inclines to investigate the statistics around performance and speculate on certain strategic implementations, while metrics merely represent and demonstrate the level of activity within your business.
Factors like the net value of the Promoter Score and the degree of customer's satisfaction, which we’ll get into more depth about later on, might indicate the stage the business currently is in dealing with customers and providing the necessary level of experience as a whole, for instance.
A metric implies the volume of requests from the visitors of your website or the cosumers of your product during a well-defined timeframe represented in an accurate value. This data may show how the clients perceive your enterprise, although this understanding is not equal to the approximate level of the client's satisfaction. It merely provides numerical data about a given activity.
The Importance of KPIs for Customer Experience Measurement
Customer experience KPIs are an invaluable measure for a number of reasons.
Firstly, they offer direction and structure. Establishing exact success measurements lets the employees know what aspects are the most critical. This allows the customer service employees to progress in their work efficiency and allocate more attention to areas that need the necessary reinforcement and thus boost the existing level of clients’ satisfaction.
Secondly, KPIs assist in exploring the options you have. At first, when you get the idea of measuring your performance, the new components of the customer-related issues will pop up in your head, and you will clearly define what components are your initial strengths and what components should you work on. KPIs provide the ways to upscale your business efficiently, which is a cornerstone of further improvement.
Thirdly, KPIs let you look and critically assess your enterprise based on the customer perspective. Yes, the values assessed are primarily linked to the aims one has set for an enterprise, yet they can also paint the picture about a customer getting an understanding of how your business and products work. If the picture looks grim, it is highly logical that the perception of the enterprise has room for making serious progress.
In the words of Lord Kelvin, “Once an individual is capable of measuring what one is speaking about, and expressing it in numbers, you know something about it.” It is a success formula for estimating the volume of client's satisfaction and making inquiries into the customer experience. Having the capacity to understand and having the knowledge, as we all know, is power.
Most Valuable Key Performance Indicators to Evaluate Customer Experience — the List of 9 Indicators
As we were creating this list, we wanted to highlight the most applicable and universal KPIs. However, your particular sector may value other KPIs that are not included here. Nevertheless, we believe that any company would profit from monitoring the KPIs described below.
Analyzing the Level of Customer Satisfaction—CSAT
The customer satisfaction score, or CSAT, is a pretty widespread KPI in customer experience. This numeric estimation comes from the surveys that tend to subjectively grasp the feeling of customer satisfaction and document clients’ evaluation of the services that have been provided and making it possible to deliver further comments.
From another point of view, these polls promote useful insights into the behavior of the collective consumer and staff behavior. It is also used to measure how the individual employees tend to cope with the tasks that have been allocated to them. CSAT is also a good KPI because it shows the real volume and value of the expectations of a consumer and how well they are met by the services the enterprise has to offer.
When you want to measure CSAT, there are some aspects to remember.
Firstly, increase the overall degree of transparency your customers will have, as they should try to remain objective in order to give a relative but useful estimation of the quality of consumer service the enterprise has delivered. They should not have their mood impact the decision after receiving, or not receiving, the result one would hope to get. People coming to buy your products should understand that some issues are beyond service employees’ area of responsibility and operational capacity to control the flow of a process.
Secondly, the polls sent out to clients should be relevant in every timeframe they have been sent. The longer the timeframe needed to record the customer’s feedback, the less accurate the outcome you will get since the consumers can just forget a feasible portion in the process of dealing with the employee. See the instruments that offer the capacity to optimize your personal storage of the feedback you get, for example, Usedesk.
Having Higher Net Promoter Scores (NPS)
Net Promoter Score helps businesses figure out how the clients really feel. NPS draws upon the client's opinion through the conduct of the survey taken in two stages. It consists of a scale evaluation of the responses (from 0 to 10) about the probability that a certain customer will be telling other individuals to consider the usage of your product. Then comes a question where the client is obliged to reflect on their choice question that has been given before. The people who answer the survey can be easily divided into the categories of a promoter, a passive, a detractor, based on the answers they have given. NPS as a KPI gives you the ability to acquire consumers who are more loyal to your enterprise and are much happier about your products.
Measuring the Clients’ Sentiments (CES)
Like the net promoter score, the customer effort score, or CES for short, reflects and analyzes the way and the degree the clients perceive your enterprise as a single organism, how they evaluate your brand, and not the consumer support team specifically. The CES has an objective to understand how troublesome the process of finishing a certain task would appear for the client. It can range from completing a purchase on an online platform or getting through to the department (usually, a team) responsible for client service.
Similarly to the KPIs discussed above, the clients receive a form one is likely and is able to fill out, where they can evaluate the complexity of the process. CES forms are a perfect option for those willing to make some processes run more smoothly or just make the way customers feel about your brand and products better in general.
Value of Every Customer—CLV or CLTV Indicator
It is pretty self-explanatory, really. The customer lifetime value indicates the average income a client generates for your business over time. Despite the fact that it’s easy to perceive CLTV as purely an income metric, lots of businesses regard the concept as a great way of measuring the degree to which their clients are loyal and satisfied with the products. The overall concept is that pleased clients remain loyal for longer and thus bring in more revenue, which in turn results in increased CLV.
A business’ CLTV calculation method is determined by its model. A lot of SaaS businesses employ the recurring revenue model and would calculate CLV by dividing monthly recurring revenue (MRR) by the total number of clients and then dividing the result by the user churn rate. Companies that specialize in sales would calculate it a bit differently. They would multiply the average order value (AOV) by the average purchase frequency and average duration of people remaining your clients. For instance, if your AOV is $25, the average purchase frequency is four times a month, and people remain customers for two years on average, your CLTV is $2400.
Leaving After the First Purchase: Customer Churn
Churn is the number of clients who leave after making the initial purchase. Retention indicates how well the company can retain clients. Churn, like CLV, is regarded as an indicator, reflecting the exact level of the consumer's satisfaction surrounding your product. The notion revolves around an assumption that the higher the degree of satisfaction for the client is, the longer he will stay and buy your products.
You can employ certain programs that would calculate churn for you. But if you must do it yourself, do so by choosing a specific period of time (month, year, quarter, etc.) and then divide the numeric value of the customers your enterprise has lost by the total numeric value of the customers in the beginning of the chosen time period, then multiplying the result by 100.
Optimal Response Timeframe: First Response Time Indicator
The name of this KPI speaks for itself. First response time, or FRT, is the period in time that it typically makes the client wait in order to receive an answer to the case the client is troubled with. When you have the quest to level up your productivity, don’t overlook this KPI. It simultaneously helps when you have to make a decision whether you should opt for additional staff and new people, integrating them into your team.
Problem Handling: Average Resolution Time Indicator
The term average resolution time, or ART, describes how long it typically takes to completely resolve the client’s issue. It is somewhat a measure of productivity, much like FRT, but may also indicate whether your employees have the resources and the information they require.
It is only logical that clients are more satisfied when their issues are handled quicker. Usedesk has no trouble tracking ART; however, it may vary depending on the particular program.
Chat Optimization—Duration/Chat Wait Time
Chat is becoming an increasingly important aspect of many clients’ experiences since it continues to gain popularity. This KPI itself is crystal clear. It tracks the time that a representative takes to respond to a chat request and the average duration of communication through chat.
An AI chatbot might be a good idea for increasing productivity and response speed, but faster does not always mean better.
Knowledge Bases—Articles Viewed per Visit Indicator
Through many studies, it became apparent that people always incline towards dealing with their problems when they are given an opportunity to do so. In a knowledge base, the articles viewed per visit KPI helps you compare and contrast how competent the ways to utilize the self-service in your company are and the degree how easily the readers can locate the required data and knowledge.
This particular way to interpret and measure the performance in a numeric value is pivotal if your company perceives the aim to reduce the overall level of customer support requests, since if clients can help themselves through your well-constructed knowledge base, they most likely will. If you use Usedesk, this KPI is being automatically measured for you. This can happen not to be your case, and if this is really so, opt for the possibility to utilize tools such as Google Analytics or any other alternative.
Making a Decision What KPIs Experience for the Customers Should be Pursued Primarily
Agreeing on team KPIs is incredibly hard to define. Therefore, when choosing the exact KPIs, one should mind several pieces of advice to adhere to.
Analyze the Goals of Your Business to Have Guidance
One major difference between a KPI and a metric is in the fact that the former helps to push towards a defined business goal. Always be ready to ask if the KPIs you set match the overall strategic goal of your company and its general approach to business. If you happen to struggle with answering the question you have set, try focusing on something else—perhaps it’s not just the case.
Always Track Where the Company Currently Is
Selection of KPIs depends on the way your business develops and the current stage of this development. When you have a growing startup, you might at first try and focus on the things that will prove your business worthy. When you own a large organization or a sustainable business with a clear vision of the future, utilize KPIs to boost business processes, promote optimization, and improve basic strategy. When managing remote teams, it’s also important to focus on maintaining productivity without burnout. Read more on avoiding burnout when working remotely.
Everything is Good in Moderation
It is always so mysterious and exciting to try to simultaneously make progress in multiple areas. However, overdoing would necessarily result in you being less focused and less successful as a result. Try focusing on some areas and delve deeper into this secured and accurate development. Only when you build a strong basis for your business to develop should you try to upscale your efforts cautiously.
How To Evaluate and Track Down the KPIs Necessary for Customer Experience
When you fully understand the idea why customer experience KPIs are of utmost importance to your business, move on to track down all of them. Here is how you can do it: collecting all the data and feedback necessary for improvement.
Help Desks
No one can exist without a properly organized help desk when it comes to teamwork in customer support. As communication usually takes place within the framework of a help desk, it is necessary that the staff understands its function and uses information given in the help desk properly. This would significantly reduce the time to collect and process data and to write a natural, well-written, considerate response to the customer.
If you happen to search for the perfect help desk, consider using this: Use Desk.
A Program to Monitor Customer Success
Evaluating customer behavior and doing research on the topic is a complicated task to do manually; therefore, customer success software is a feasible alternative. This software offers a detailed overview of a customer’s behavior and helps to track such important indicators as CLV and churn, as well as the level of turnover and the overall dissatisfaction and non-acceptance of your services by the consumer. Such peculiarities of selling like prospective upselling strategies and turnover risk prediction are a part of customer success software.
Looking for the best customer success software? Try using ChurnZero.
Instruments to Do Surveys
Surveys play a pivotal role in providing data about customer experience, being one of the frequently utilized methods. Some help desks, like Use Desk, allow you to execute microsurveys and manage them properly. Data collection is a focal point of leaving you with an ability to analyze such indicators as CES, CSAT, and NPS heavily rely on your capacity to manage microsurveys, although it is not always so. If you do not have a tool to organize and manage surveys, you should opt to integrate one into your business toolbox.
Choose Typeform to have the best survey tool pick by your side!
How to Move On
Feeling positive about making progress is always rewarding, and a better understanding of customer experience is no exception. Setting accurate KPIs will make you and your employees capable of getting the necessary insights about your performance and guidance about a future strategy.