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Exceedra Byte: Customer Metrics

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On this week’s episode of Exceedra Byte, Richard Burton, Exceedra Global Director Customer Success, breaks down the different types of metrics that industry uses to evaluate how we are performing, and how some of them are calculated.

In a previous episode we got to learn a little about Customer Success and why this area has become a key focal point for service companies over the past 10 years.

For us to be successful with you – the customer – we need to receive feedback.  I am sure you have seen the dramatic increase in this method of gauging customer satisfaction as we have progressed further along technology and services management.  You buy something – the seller wants feedback, you ask for support, you are asked to give feedback, this goes on in so many ways and can certainly get frustrating at times. But how else do we expect things to improve?

The reality is – we all have to take a level of involvement in providing feedback whenever it is asked.  Flip it around – would you prefer not to be asked to give feedback and for the ‘thing’ to also not change, even when we can see things could be better?

Feedback can be provided in several ways – let’s take a quick look at some of the more standard metrics first.

Customer Satisfaction (csat)

Customer Satisfaction (CSAT) is a quick way to gauge a customer’s satisfaction with a particular service provided.  It is often provided with a limited number of options (show faces) that makes it easy for the respondent to provide their feedback. 

When evaluating CSAT across multiple customers the results will generally just be averaged – again making it simple enough to gauge a position from.

Customer Effort Score (CES)

Customer Effort Score (CES) is used to help us measure how easy it is for customers to interact with a business.  This type of metric can often be provided after key milestones in a journey, such as post sale, or post implementation.  The format of the response generally provides more options for the respondent to choose from – we are not quite getting to the point of wanting specifics, but we are trying to get a more accurate picture of their opinion.  CES surveys typically ask the question, “on a scale of ‘very easy’ to ‘very difficult’, how easy was it to interact with us.” The idea is that customers are more loyal to a product or service that is easier to use. 

As a validation of this, 96% of customers with a high-effort service interaction become more disloyal compared to just 9% who have a low-effort experience. Disloyal customers are likely to cost the company more – they spread negative word of mouth and cease future purchases.

customer metrics

Net Promoter Score (NPS)

Net Promoter Score (NPS) is different to the other metrics in a few specific ways. 

Firstly – NPS gives a broader reach of 0 to 10 to allow the person to respond with.  This may not seem very important, however the calculation of a good NPS score depends on this. 

The NPS Score is not calculated as an average, min or max of all the responses you get from your customer base. Instead, responses are first grouped. Scores of 0 – 6 are assigned as “detractors”. Scores of 7 and 8 are assigned as “passives”. Scores of 9 and 10 are assigned as “promoters”.

The percentage of detractors is subtracted from the percentage of promoters to calculate the Net Promoter Score. Anything above zero for a company is good, however anything below zero suggests that improvements need to be made for a better customer experience.

This method of calculation basically removes out the responses that are “in the middle” or sitting on the fence so to speak.  Also, think of it this way – if someone asks you to rate them between 0 and 10, we all know the mean, or average, would be 5.

If we gave someone a 6-7 that is above average, 8 would probably be where we sit if we are happy, but how many of us would say a 9 or 10 – the service we have received has to be absolutely exceptional – perfect so to speak.

This hopefully explains why Net Promoter Score is a little different – you cannot just be good at what you do – you must be truly great.

“Good is not enough. You’ve got to be great.” – Simon Cowell

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Exceedra Byte is a weekly vlog series where we take complex trade and revenue growth management topics and break them down into byte-sized pieces. Stay tuned every Thursday for new episodes.

Watch the previous episode of Exceedra Byte – Technology Platform vs. Software Product

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