All businesses need to have a clear understanding of their customers in order to offer the best possible digital experience. But when you are serving customers digitally, without direct personal interaction or explicit feedback, how do you get to know their true motivations and identify trends?
Today, more often than not, the digital customer experience is key to success in almost any industry. The trick is knowing how to assess and measure your digital customer experience in order to identify pain points and areas of improvement to drive your company’s growth.
Measuring Your Digital Customer Experience
Any type of customer research or data collection is going to take valuable time and resources, so it’s important to invest in the most valuable options. Key performance indicators, or KPIs, must be value-driven according to the needs of your company.
If you want to see the maximum return on your digital experience investments, make sure you are studying the right KPIs. In this way, you will learn how to measure digital customer experience accurately and start to make effective changes.
Let’s explore what these metrics are, why they matter, and how you can improve each of them with customised self-service platforms.
Top 5 KPIs for Business Growth
1. Customer Retention Rate (CRR)
The customer retention rate (CRR) measures the percentage of customers that a company retains over a set period of time.
Why should you measure CRR? Even small advancements in CRR lead to big impacts on revenue and company value. Not only is it simpler and more cost-effective to retain customers than to acquire new ones, repeat customers also often spend more than new customers on average.
By offering self-service support, companies have seen an 85% year-over-year increase in customer retention rates, compared to those without self-service. Customer portals enable businesses to personalise content, simplify complexity, and make it easy for customers to purchase from them. When customers are able to find relevant information quickly and experience streamlined purchasing processes, they are more likely to return.
2. Customer Retention Costs (CRC)
Customer retention cost (CRC) refers to all of a company’s expenses dedicated to maintaining the interest of existing customers. In essence, it’s a tool that helps you understand how cost effective your customer success and loyalty programs are.
Business must keep a close eye on CRC because it provides insight into how effectively you are retaining some of your most valuable customers - the ones you already have. In addition, the probability of selling to an existing customer is 60-70%, compared to 5-20% for a new prospect.
With self-service functionality, those costs can be pushed even lower. By reducing live interactions, you save your company time and resources. A live conversation with an agent could cost between $6-$12, whereas an automated interaction could be as little as 25 cents. Plus, customers appreciate the speed and autonomy of being able to find solutions and manage their interactions with the company in an independent way, enhancing the likelihood of repeat purchases and long-term retention.
3. Customer Lifetime Value (CLV)
Customer lifetime value (CLV) refers to the total revenue that is earned from any given customer over the full course of their interactions with your business. Basically, CLV gives an indication of the amount of overall earnings that this customer will bring to your business from the first to last purchase, whenever that may be.
Overall, CLV is an indication of product-market fit and customer satisfaction. If you find that your CLV is high, this means that your customers are loyal followers of your brand, which contributes to better profit margins and cash flow. If your CLV is low, however, this may mean it’s time to make changes to your business processes and acquisition strategies, such as reallocating the budget to reach target audiences who are more likely to have a higher CLV.
By improving the digital customer experience with self-service options, you are likely to improve your CLV. When customers are able to find what they’re looking for and have helpful experiences, companies are more likely to generate customer loyalty and retain most customers. In fact, according to McKinsey, over 70% of buyers are willing to spend more than $50,000 in a self-service model, so it’s crucial to invest in self-service solutions.
4. Net Promoter Score (NPS)
The net promoter score (NPS) tells us how likely a customer is to recommend your business to others in either professional or personal contexts. This can help to give an indication of repeat purchases and represents customer loyalty.
Whether in B2C or B2B selling, word-of-mouth is one of the most influential factors in decision-making - 92% of consumers believe recommendations from friends and family over all forms of advertising. Nowadays, this process is becoming more and more efficient via online platforms and interactions, especially for millennials, where 85.9% are reported to make purchases online and depend on feedback from other consumers when making purchases decisions. When efforts are made to improve the customer experience, including through self-service technology, the long-term effects are clear. If you’re able to provide good service, customers are 38% more likely to recommend a product or service to their network.
5. Customer Satisfaction Score (CSAT)
Finally, the customer satisfaction score (CSAT) measures how happy your customers are with your products or services. Based on PwC’s survey, the most important elements of a positive customer experience are speed, convenience, knowledgeable help, and friendly service.
Does this mean service has to be in-person? Not at all. In many cases, a digital platform with automatic responses can improve your ability to attend to the customer because responses are immediate and on-demand. This eliminates the need to be on hold during a phone call, waiting for an email response, or being transferred to other departments.
By offering an online knowledge base or chatbot to resolve doubts, companies can streamline the customer experience and make sure they are being attended to every step of the way. Less than one-third of companies offer self-service, live chat, social messaging, in-app messaging, bots, or peer-to-peer communities. With proper implementation, your business can truly stand out amongst the competition and boost customer satisfaction.
There are internal applications of self-service platforms as well. With easy-to-use solutions for employees such as content hubs, your staff will be better equipped with the right answers and resources to provide high-quality responses to customers.
Taking It One Step Further
These metrics and ideal solutions can vary by industry, but there is an endless array of possibilities and benefits depending on your business goals.
By offering a streamlined digital experience for your customers, you are likely to see a notable improvement in your ROI. It’s worth the time and resources necessary to make these impactful changes. Find out more about customer portals to see how you can provide an exceptional experience, while lowering costs and boosting sales.