The Ultimate Guide to

Measuring Customer
Success
The 13 Most Important Customer Experience KPIs

Written by: Philip Mandelbaum

Are consumers saying bad things about
your customer support? That’s a
Why Customer Reviews
problem in our AI-driven society dictated and Customer Support
by online reviews, user-generated
content, and internet influencers. Matter
Ninety-six percent of consumers will
leave a brand after one bad customer Can we all agree the key to business
service experience, and 92% will also call success is satisfying our customers?
you out for it on social media. Satisfied customers are repeat
customers. And satisfied customers share
Although you could focus all your their positive experiences with friends,
energy and investments into perfecting family and followers, online and off,
your branding or your product, you’d be creating new customers.
better off acknowledging:
But do you know how important
No matter what you (or any other brands) customer experience and customer
do, there will always be customer reviews are? Few do, without this
complaints — and the most effective compelling research:
solution to ensuring customer success
is to measure and optimize the • 96% of consumers will no longer shop a
customer service you provide based on brand after experiencing bad customer
the most effective performance service
measurement metrics, or KPIs. • 68% of consumers are willing to pay

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 more for products and services from a
brand known to offer good customer
service
• 93% of customers are likely to make
repeat purchases with companies that
offer excellent customer service
• 78% of consumers will do business with
a company again after a mistake if the
company’s customer service is excellent
• 83% of consumers feel more loyal to
brands that respond and resolve
complaints
• Investing in new customers is between
500% and 2500% more expensive than
retaining existing ones
And that’s not all. If you prioritize the
customer experience you provide, you’ll
immediately position yourself ahead of
your competitors. According to our own
research at Customer Engagement Insider:
• Only two in 10 consumers (21.65%)
believe companies provide transparent
communication
• Almost half of consumers (40.72%) say
they receive some communication or
empathy — but no “solutions” — when
experiencing product delays
How to Maintain — and
Grow — Your Customer
Relationships
Companies that do CX correctly don’t stop
at call centers and chat bots; they:
• Strategize cross-functionally for
customer success and the highest
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customer lifetime value
• Incorporate UX as well as sales, tech
and customer support into their
360-degree digital marketing strategy
• Demonstrate authenticity,
transparency, consistency and empathy
at every touchpoint
How? By:
• Asking questions and listening
• Conducting customer service surveys
• Measuring customer satisfaction scores
• Developing and utilizing a
voice-of-the-customer program
• Providing easy access to self-service
portals
• Leveraging the information obtained to
improve products, services, marketing
and sales messaging, and the UX and
CX they provide
• Identifying and addressing gaps and
opportunities in processes and
cross-departmental coordination
And, of course, measuring your
performance using the most effective, tried
and true customer success KPIs.
13 Mission-Critical
Customer Experience
Metrics for Optimal
Customer Success
CX metrics track the effectiveness of your
customer experience strategy, tactics,
processes, procedures, and support
agents. Although specific campaigns may
require an enhanced focus on
particular customer service KPIs, the
following should be used for all campaigns
(and your overall CX team reviews).
1. Customer Sentiment
While many organizations strive to
ascertain customer sentiment using
traditional CX KPIs like CSAT and NPS,
customer sentiment encompasses more
than a customer’s level of satisfaction or
likelihood of promoting the brand;
customer sentiment is complicated,
qualitative and ephemeral — measuring
how the customer feels about you.
Customer sentiment analysis refers to
the examination of customer sentiment as
expressed by customers (or users) across
platforms and devices throughout the
customer journey; this can include data
collected via voice-of-the-customer
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programs, self-service portals, customer
surveys, customer reviews and even social
media posts, blog post comments or email
replies.
Customer sentiment score refers to the
value applied to customer sentiment,
expressed numerically in a range typically
between 0 and 5, 0 and 10 or 0 and 100.
To measure customer sentiment at your
company, you could develop your own
manual scoring system; or, you could
invest in AI.
These AI-powered tools employ machine
learning to generate sentiment scores from
algorithms that scan customer interactions,
tracking phrases, words and behaviors
with pre-assigned values, and then
integrating measurements to gauge
whether customers have positive, negative
or neutral views; they also provide
actionable insights based on when, where
and why customer sentiments develop.
2. Customer Satisfaction Score
The customer satisfaction score, or CSAT,
demonstrates each customer’s level of
satisfaction; analyzed in totality, your
customer satisfaction scores can tell you
whether you’re truly offering custom-
er-centric experiences — and, if not, what
needs to be changed. Usually measured
on a five-point scale, from very dissatisfied
to very satisfied, you can use the CSAT to
gather feedback during any stage of the
customer lifecycle. All you have to do is
establish criteria for your scoring, establish
the metric that equates to a positive score,
and include customer survey forms in your
digital marketing and CX communications.
Then, to determine your organization-level
percentage score, multiply your
pre-established positive score by 100. For
instance, if you have 50 positive scores
from a total of 100, your CSAT is 50%
((50/100) x 100 = 50%).
3. Net Promoter Score
Often coupled with the CSAT, the net
promoter score, or NPS, measures the
likelihood a customer will recommend you
to others — and, ideally, become an
influencer for your brand. To determine
your NPS, develop a survey with a single
question or multiple questions geared
toward promoting and sharing, on a scale
from 0 to 10, from “not likely at all” to “very
likely.” Customers who provide (average)
scores between 0 and 6 are considered
detractors; passive customers typically
score between 7 and 8; and your
promoters will give you a 9 or 10. Then,
to calculate your NPS, simply subtract the
percentage of detractors from the
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percentage of promoters. And for more
detailed, nuanced, qualitative feedback,
ask an open-ended question, as well. All of
this information can be automatically
added to your customer profiles in your
CRM or CDP.
4. Earned Growth Rate
The net promoter score was invented by
Fred Reichheld, who introduced “the one
number you need to grow” in Harvard
Business Review in 2003. “Since then,
NPS has spread rapidly around the world”
and is now used by two thirds of the
Fortune 1000. Unfortunately, this has
proved problematic, with “self-reported
scores and misinterpretations of the NPS
framework… sow[ing] confusion and
diminish[ing] its credibility.” So, Reichheld
et al. went back to the proverbial drawing
board to develop a new “complementary
metric that drew on accounting results, not
on surveys.”
Earned growth rate, the researchers
realized, would be “far more resistant to
gaming, coaching, pleading, and the
response biases that plague the results of
non-anonymized surveys.” It would also
“reinforce the effectiveness” of the original
KPI, providing “clear, data-driven”
connections across and among:
• Customer success
• Repeat and expanded purchases
• Word-of-mouth recommendations
• Positive company culture
• Business results
Earned growth rate measures revenue
growth generated by returning customers
and their referrals. The earned growth
ratio, meanwhile, measures the ratio of
earned growth to total growth. This data
forms the basis for your CLV, or customer
lifetime value, which projects “the value
you can expect to gain” based on
“probabilities and higher math.” Earned
growth, on the other hand, quantifies
actual customer value by measuring r
esults — and “can help every team learn
how it is performing.”
As the KPI’s creators explain, earned
growth comprises two elements:
1. NRR, or net revenue retention
2. ENC, or earned new customers
To determine your earned growth rate,
begin by calculating your NRR as follows:
1. Organize your revenue by customer
2. Tally current year revenues from
existing customers (who were also
customers the year before)
3. Divide this amount by the previous
year’s total revenues
4. Express this figure as a percentage
Next, you have to “ascertain why new
customers have come on board,” isolating
your ENC — the percentage of new
customers earned through referrals — from
new customers gained via other meth-
ods. Since “few firms” could quantify their
ENC, Reichheld and team “pioneered a
solution,” simply by adding a “relatively
painless step” to the customer onboarding
process: asking them the “primary reason”
they gave you their business.
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So:
1. Sort your customers into two
categories: “earned,” e.g., from a
referral; and “bought,” e.g., a Super
Bowl ad or sponsored social media post
(most organizations have found earned
new customers “far more profitable”
than bought customers, “many of whom
are revealed to be money losers over
their life cycle”)
2. Use a set of expected customer
responses, along with an open-ended
“other” response, from which you can
gather additional information to help
you finetune the categories and options
over time
Finally, determine your earned growth rate
by:
1. Adding your NRR and ENC together
2. Subtracting 100%
Of course, if you want to compare your
results to those of your competitors, you’ll
need them to follow the same earned
growth rate framework.
5. Customer Lifetime Value
The customer lifetime value, or CLV, is a
forecasting of the net profit an
organization can expect to earn from a
customer over the entire period of their
relationship. When measured and ranked
by customer, the CLV can help you
segment — and better personalize the
experiences for — your highest-value
customers. When combined and
contrasted with total expenditures, you can
determine the overall effectiveness of your
digital marketing, sales and CX efforts.
To determine your average CLV:
1. Calculate your average purchase value
2. Multiply your average purchase value
by how often a purchase is made
3. Multiply this figure by your average
customer lifespan
For example, if your average purchase is
$100, made twice a year for 3 years, your
CLV is $600 ($100 x 3 x 2 = $600).
To use this measurement to improve your
marketing to high-value customers, create
a list of the customers with a CLV
exceeding your average.
6. Customer Health Score
The customer health score is used to
determine whether or not a customer will
remain loyal over time. In contrast to most
other customer experience metrics, the
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customer health score requires strategic
legwork and is developed from a
collection of the other CX KPIs most
important to your unique business. Among
the most commonly included metrics are:
• Product/Service usage period
• Product type (free/paid, license level,
etc.)
• Number of interactions with the support
team
• Money spent with your brand
• Social media posts about your brand
• Referrals to your brand
• Willingness to answer customer
experience surveys
Based on the metrics that make the most
sense for you, develop a grading system
for your customers; then, for easier
segmentation and personalization, divide
them into four categories:
4. High-value
5. Healthy
6. Unhealthy
7. At-risk
7. Customer Effort Score
As it sounds, the customer effort score, or
CES, measures the amount of effort your
customers have to expend to execute
specific actions, like completing an online
form, finding a product or resolving a
technical issue. To determine your average
customer effort score, you’ll again need
to create a survey; this time it should ask
customers to rate the level of effort
required to complete an activity or series
of activities. The results will tell you
whether you really designed for UX, and
what you should change to improve the
user experience.
8. Customer Service Satisfaction Score
The customer service satisfaction score
measures customer satisfaction specifically
with your post-sales customer service. As
is customary in CX best practices, ask your
customers for feedback after every
interaction, using a standardized rating
system and consistent questioning so you
can identify trends over time.
9. Customer Retention Cost
Investing in new customers is between
500% and 2500% more expensive than
retaining existing ones. Of course,
retaining customers costs money too. And
to ensure your marketing and CX
strategies are producing positive ROI, you
need to measure the cost of your customer 2. Subtract the number of customers you
retention efforts. To calculate your
customer retention cost, or CRC, add all of
the expenses incurred in keeping (and
obtaining!) customers and divide that
figure by the number of customers in your
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database. If your CRC is higher than your
MRR, or monthly recurring revenue, it’s
time to make some changes.
10. Monthly Recurring Revenue and
Expansion MRR
Also a sales metric and ideal for SaaS and
subscription-based businesses, your MRR
tells you how much your customers are
spending with you each and every month.
Expansion MRR identifies how much your
customers are spending outside of
recurring subscriptions or payments. To
measure your total monthly recurring
revenue, multiply your number of monthly
customers by their average monthly spend;
for expansion MRR, add all additional
revenue and multiply that figure by your
total number of customers.
11. Churn Rate and MRR Churn
The churn rate is the rate at which your
customers stop subscribing or shopping
with your brand over a specific time peri-
od. Low churn rate, obviously, reveals cus-
tomer satisfaction; high churn rates mean
there’s something wrong with the product
or service, your marketing of that product
or service, or the amount of effort required
to subscribe to or purchase that product or
service. To calculate your churn rate:
1. Set your analysis period (e.g., a month,
a quarter, six months, or a year)
had at the beginning of the time period
from the number you had at the end
3. Divide this figure by the number of
customers you had at the beginning
For instance, if you had 100 customers on
day one and 75 on day 30, your churn rate
OK, Now What?
is -25% ((75/100) x 100 = -.25 = -25%).
Now that you know the CX KPIs you should
use to track your performance, you need
Your MRR churn, meanwhile, tells you
to establish how you are going to perform
the amount of monthly recurring revenue
the ongoing monitoring and
gained or lost as a result of your customer
analysis.
churn.
Fortunately, there are a number of tools
12. Average Resolution Time
designed to automate, streamline and
enhance the customer experience and
For years CX ‘experts’ almost exclusively
customer support you provide.
advised companies to find resolution as
fast as possible. Today, we know speed
The Top Nine Customer Support
isn’t everything — and CX professionals
Platforms
should be granted the time and resources
necessary to truly resolve the issue and
1. Freshdesk
meet or exceed the customer or prospect’s
2. Help Scout
expectations. Nevertheless, average res-
3. HubSpot Service Hub
olution time remains one of the more im-
4. Intercom
portant customer service KPIs, as it informs
5. Jira Service Desk
business leaders how effective their CX
6. LiveAgent
team and CX reps are in resolving issues
7. Salesforce Service Cloud
quickly.
8. ZenDesk Support Suite
9. Zoho Desk
13. First Contact Resolution Rate

Even more important than the average

resolution time is the first contact
resolution rate, or the rate at which your
CX professionals are able to resolve an
issue during the first interaction. The more
often this is achieved, the less overworked
your team will be — and the more satisfied
your customers will be as well. To measure
your first contact resolution rate, divide the
number of tickets closed after one
interaction by the entire number of tickets
received.

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