Customer Experience KPIs (Key Performance Indicators) are measurable values that indicate how effectively your company is achieving its key business objectives in terms of customer satisfaction, loyalty, and engagement. These KPIs include several metrics that can provide insights into the customers' experiences with your products or services.

So, what are these customer experience KPIs, how do you calculate them, and what can they tell you about your business? 

What Are the 7 Customer Experience KPIs You Need to Track?

Tracking the right customer experience KPIs is essential for understanding how your customers interact with your brand and identifying areas for improvement. Here are the top 7 customer experience KPIs you need to track, along with explanations on how to calculate each one.

1. Net Promoter Score (NPS)

The Net Promoter Score (NPS) is a customer loyalty and satisfaction measurement taken from asking customers a single question: "On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?" 

Based on their responses, customers are categorized into three groups:

  • Promoters (score 9-10): These are loyal enthusiasts who will keep buying and referring others, fueling growth.
  • Passives (score 7-8): Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
  • Detractors (score 0-6): Unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

How to Calculate Net Promoter Score

The NPS is calculated by subtracting the percentage of customers who are Detractors from the percentage who are Promoters. The score can range from -100 (if every customer is a Detractor) to 100 (if every customer is a Promoter). 

It serves as a powerful tool to gauge customer loyalty and predict business growth and customer retention, emphasizing the importance of customer satisfaction and word-of-mouth in driving success.

2. Customer Satisfaction Score (CSAT)

The Customer Satisfaction Score (CSAT) is a key performance indicator that measures a customer's satisfaction with a product, service, or a specific experience provided by a company. 

It is typically gathered through a survey question asking customers to rate their satisfaction on a scale, often from 1 (very dissatisfied) to 5 (very satisfied), although some scales may go from 1 to 10, or use different descriptors.

The question might be phrased like, "How satisfied were you with your experience?" or "How would you rate your satisfaction with the [product/service] you received?"

How to Calculate Customer Satisfaction Score

To calculate the CSAT score, responses of 4 (satisfied) and 5 (very satisfied) are usually counted as positive, and the score is expressed as a percentage of these positive responses out of the total responses. 

The formula to calculate CSAT is:

CSAT = (Number of Satisfied Customers (ratings of 4 and 5)/Total Number of Responses) x 100

CSAT provides immediate feedback about a customer's satisfaction level and can help businesses quickly identify areas of excellence and opportunities for improvement.

3. Customer Effort Score (CES)

The Customer Effort Score (CES) is a metric used to evaluate how much effort a customer has to exert to get an issue resolved, a request fulfilled, a product purchased/used, or a question answered. It gauges the ease of customer interaction and service transactions with a company. 

Typically, CES is measured by asking customers a single question such as, "On a scale from 'Very Easy' to 'Very Difficult,' how easy was it to interact with [your company name]?" or more specifically, "How easy was it to resolve your issue with [your company name]?"

Responses are usually gathered on a numerical scale, where the lower end signifies less effort required (easier) and the higher end signifies more effort required (harder). Some scales might range from 1 (very easy) to 7 (very difficult), but the scale can vary based on the company's preference.

How to Calculate Customer Effort Score

To calculate the Customer Effort Score, you typically average the responses. A lower average indicates that customers find it easy to interact with your company, suggesting that your service processes are efficient from the customer's perspective. 

Conversely, a higher average points to areas where your service may be creating unnecessary obstacles for customers, highlighting opportunities for improvement to enhance the overall customer experience.

4. First Contact Resolution Rate (FCR)

The First Contact Resolution Rate (FCR) is a key performance indicator (KPI) used in customer service to measure the percentage of customer inquiries or problems that are resolved during the first interaction with a company, without the need for any follow-up. 

It is a critical metric because it reflects the efficiency and effectiveness of a company's customer service team in addressing customer needs promptly and satisfactorily.

How to Calculate First Contact Resolution Rate

FCR is calculated by dividing the number of issues resolved on the first contact by the total number of first-contact issues, then multiplying by 100 to express the result as a percentage. 

The formula looks like this:

FCR = (Number of Issues Resolved on First Contact/Total Number of First-Contact Issues) x 100

Improving FCR involves understanding the root causes of repeat contacts, training customer service representatives thoroughly, and equipping them with the necessary tools and information to resolve issues efficiently.

5. Average Resolution Time (ART)

Average Resolution Time (ART) is a customer service metric that measures the average duration taken to resolve customer issues or inquiries from the moment they are reported until a solution is provided and the case is closed. It is a key indicator of the efficiency and effectiveness of a customer support team's response to customer needs.

How to Calculate Average Resolution Time

To calculate ART, you sum the total time spent resolving all issues within a specific period (such as a day, week, or month) and then divide that sum by the total number of issues resolved in that same period. 

The formula looks like this:

ART = Total Time to Resolve Issues/Number of Issues Resolved

The result is typically expressed in hours or days, depending on the average length of resolution times and the context of the service provided. A lower ART usually indicates that customer issues are being resolved quickly, which can significantly increase loyal customers and their satisfaction. 

6. Customer Churn Rate

Customer churn rate, also known as customer attrition rate, is a critical metric that measures the percentage of customers who end their relationship with a company within a given period. It indicates the rate at which a business loses its customers or subscribers to its service.

How to Calculate Customer Churn Rate

To calculate the customer churn rate, divide the number of customers lost during a specific time frame (e.g., a month, quarter, or year) by the total number of customers at the beginning of that period. Multiply the result by 100 to express it as a percentage. 

The formula looks like this:

Customer Churn Rate = (Number of Customers Lost During Period/Total Number of Customers at the Start of the Period) x 100

Reducing customer churn involves understanding why customers leave and addressing those issues directly, whether through improving product quality, customer service, or offering additional value to enhance customer loyalty and satisfaction.

7. Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) is a metric that represents the total amount of money a customer is expected to spend on your products or services throughout their entire relationship with your company. 

CLV is crucial for understanding the long-term value of a customer to your business and helps in making informed decisions about how much money to invest in acquiring new customers and retaining existing ones.

How to Calculate Customer Lifetime Value

The basic formula to calculate CLV involves three key variables: average purchase value, purchase frequency rate, and average customer lifespan. 

The formula is as follows:

CLV = Average Purchase Value x Purchase Frequency Rate x Average Customer Lifespan

Here’s how you can get each variable:

  • Average Purchase Value: Calculate this by dividing your company's total revenue over a certain period by the number of purchases in the same period.
  • Purchase Frequency Rate: This is calculated by dividing the total number of purchases over a certain time period by the number of unique customers who made purchases during that time.
  • Average Customer Lifespan: An estimate of the average number of years a customer continues purchasing from your business.

By focusing on strategies to increase the CLV, businesses can enhance customer satisfaction, encourage repeat business, and ultimately drive revenue growth and profitability over time.

Let A Trusted Partner Track Your Customer Experience KPIs

Tracking, monitoring, and calculating your customer experience KPIs is a lot of work. You have to regularly extract and analyze data, determine pain points, and make necessary actions for improvement. This is not the most practical use of your time as a business owner.

At ManilaPros, we understand your challenges and we’re here to use our customer service expertise in helping you collect customer feedback and monitor KPIs. Not only do we track your metrics, we also offer five-star customer care for retailers with vetted, trained, and certified customer support agents.

Book a call with us today to learn more.