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NPS + CES: Harness The Power Of Your Customers

QUICK SUMMARY

There’s a new byword in the business world, and that’s customer experience or CX. Now, more than ever before, businesses worldwide are working on delivering the best possible customer experience for their customers. Did you know, for example, that two-thirds of companies now compete based on customer experience? There’s also an 80% increase in revenue […]

TABLE OF CONTENTS What Is Customer Experience? Why Customer Experience Is So Important? how-to-measure-customer-experience What Is NPS (Net Promoter Score)? What Is CES (Customer Effort Score)?

Did you know, for example, that two-thirds of companies now compete based on customer experience? There’s also an 80% increase in revenue when a business focuses on improving customer experience, while 73% of customers agree customer experience helps drive their buying decisions.

As with any business strategy, adopting it is all well and good, but you should also think about how you will measure its effectiveness. You can do this with metrics such as NPS (Net Promoter Score) and CES (Customer Effort Score).

What is Customer Experience?

Customer experience is a term that refers to the impression customers have of a business. To excel, your business has to have a customer-centric mindset, and everyone involved has to be prepared to put in a lot of work.

Every interaction your customers have with your business can impact the customer experience. Visiting your website, talking to your customer support agents, receiving the service or product they’ve purchased, and the after-sales service.

Everything you and your employees do impacts your customers’ perception of your business and affects whether they’ll return for more or spend their money elsewhere.

The key to business success is a great customer experience. According to a report from PWC:

73% of customers say that experience is an essential factor in their purchasing decisions.
42% would happily pay more for a friendly, welcoming experience
65% of customers in the US say a positive experience with a brand has more influence than great advertising.

It’s also worth noting that 54% of US consumers say customer experience at most companies needs improvement.

Why Customer Experience is so Important?

We’ve already touched on some of the reasons why CX is so important for your business, but let’s look at some more data that put this question into perspective.

When a company has a customer experience mindset, it drives revenue 4-5% higher than its competitors.
Companies that lead in customer experience outperform those that don’t by almost 80%.
Out of all the companies that offer an above-average customer experience, 73% perform better financially than their competitors.
When it comes to customer loyalty, 96% of customers say CX is important.
When a company focuses on being customer-centric, it is 60% more profitable than a company that doesn’t focus on its customers.

How to Measure Customer Experience?

As we all know, there’s always room for improvement in the business world, but before you can make any changes, you first have to know where you’re at right now. It’s therefore vital that you measure the customer experience, and there are a few customer service metrics that are essential to success.

What is NPS (Net Promoter Score)?

Net Promoter Score or NPS is a CX metric that surveys customers based on one question:

On a scale of 0 to 10, how likely are you to recommend us to a friend or colleague?

A promoter will give you a score of 9 or 10. A passive will score you 7 or 8, while a detractor will score 6 or below. You then calculate your company net promoter score by subtracting the percentage of detractors from promoters.

NPS is a special tool because it measures the customer experience and customer loyalty. It also goes beyond a single experience. To answer the question, your customers have to consider all their experiences with your company, not just the most recent.

Quite often, you’ll find this question coupled with an open-ended follow-up question, for example: Perhaps you’d like to tell us why? Having a score is one thing, but knowing why you’ve been given that score will help you gain a competitive advantage, according to Shep Hyken, author of The Convenience Revolution.

Here are some NPS statistics and facts you might find interesting:

In 2005, the London School of Economics found that an increase in NPS of 7 points related to 1% of revenue growth.
Research by Temkin in 2017 found that research promoters are 4.2 times more likely to purchase again, 5.6 times more likely to buy even when there’s been a mistake, and 7.2 times more likely to try new offers.
Adobe reports that customer-centric companies grow much faster. Revenue is 1.4 times faster. Customer loyalty also increases by 1.6 times.

What is CES (Customer Effort Score)?

Customer Effort Score, or CES, is a slightly different metric. With CES, you measure the customer’s experience with a service or product regarding how easy or difficult it was for them to complete an action.

Most commonly, CES surveys are sent out after a customer has an interaction with customer service. So the question they have to answer would be:

How easy was it for you to get your issue resolved today?

There would be a rating scale going from 1, very difficult, to 7, very easy. There are other occasions when CES surveys work very well. For example, when customers sign up for a free product trial, they’ve concluded a transaction successfully and other similar milestones in their customer journey.

Research conducted by CEB in 2010 determined a strong relationship between the amount of effort required from a customer to resolve a problem and customer loyalty.

Research has also demonstrated that 96% of customers who experience high-effort interactions tend to be more disloyal, compared to only 9% who have an experience that is low effort.

A CEB study found that improving a customer’s CES score from 1 to 5 increased their loyalty by 22%.

How NPS and CES Work Together?

NPS and CES are customer experience metrics that complement each other well.

Depending on the metric you’re using, it’s possible to determine how satisfied customers are throughout various interaction points.

If you want to better understand and improve the customer experience as a whole, there is a need to utilize several CX metrics.

The Net Promoter Score calculates your customers’ willingness to recommend a company’s services or products and can be used to indicate levels of overall satisfaction and loyalty to a brand. You can also use this metric to forecast brand growth and customer churn rate.

Customer Effort Scores measure how easy it is to interact and engage with your brand. It’s not a measure of satisfaction directly. However, it is an excellent indicator of your customers’ experiences when they’re looking for information, asking questions, making purchases, or in need of support. CES is a great way to identify pain points during their customer journey.

The Benefits of Using Multiple Customer Satisfaction Metrics

Customer experience metrics work best when used as layers. NPS and CES work very well together to help you understand what customers say about you and how easy you make things for your customers.

These are essential elements of customer experience, but they’re not the only ones. There are other survey questions and insights from feedback management tools that will complement these metrics. Let’s give you some examples:

CSAT (Customer Satisfaction Score): This metric directly measures customer satisfaction levels. A survey is sent that features a question asking clients how satisfied they are with a particular service, interaction with a brand, or exchange.
Social media monitoring: Track social media experience metric data and you’ll get an insight into when to respond to a customer, plus you’ll better understand what feedback they’re providing.
Customer churn: This customer experience metric can be tricky to measure. You’ll need to look at both operational insights and the customer experience along their journey.
First response time: According to research undertaken by Forrester, 77% of consumers say valuing their time is the most important thing a company can do if it wants to provide the best customer experience. Measuring first response time ensures customer queries are being solved quickly.

How You Can Improve the Customer Experience?

According to Harvard Business Review, investment in CX can reduce operational costs. Temkin Group reports that even a moderate increase in customer experience generates an average revenue increase of £823 million over three years for a company with £1 billion in annual revenue.

If you want to know how to do it, here are a couple of ideas that might help you implement “today’s business benchmark.”

The Number One Way to Improve NPS: Provide Consistent, High-Quality Service

Look for ways to improve the quality of your service. Your customers are more likely to enjoy a positive customer experience which in turn increases the chance they will recommend your service or product to others. Consistency is a powerful force when it comes to generating both loyalty and recommendations from your customers.

The Number One Way to Improve CES: Speed Up Customer Service Interactions

Customers turn to your customer service representatives when they want to ask questions and solve problems. If no one is available to help, it makes things difficult for customers and can drive them away. Improving your customer service experience and making customer service more accessible can quickly improve your Customer Effort Score.

Here are a few ways you can speed up customer service interactions:

Provide a business phone service and knowledgeable staff to answer the calls.
Provide online chat operated by a real person.
Use a chatbot to direct customers to the appropriate FAQ section or answer common questions.
Provide a customer service email address and explain what details are needed to resolve a problem.

Final Words

The estimated cost in the US of customers switching products due to a bad customer experience is $1.6 trillion.

When a brand provides an excellent customer experience, consumers are willing to pay 16% more for services and products.

Rather than anything metrics-based, customers now base 70% of their buying experiences on how they feel they’re being treated.

A healthy relationship with your customers is essential, and taking the time to build on your customer experience is valuable. For example, a loyal customer is five times more likely to repurchase products and forgive a mistake.

Ultimately, research shows there is an 80% increase in revenue when you focus on customer experience. NPS and CES will help you determine whether the changes you’re making are effective.

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