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We’re continuing our Definition Series of re-introducing and explaining industry terms in <400 words with explaining how to measure customer experience. Customer Experience is all about expectation management. A great customer experience happens when you exceed your customer’s expectations in a real way. That means you’re working with sales and marketing to set the right expectations, and you’re coaching your agents to remain transparent and aligned.

How to Measure Customer Experience?

More than 5,000 companies across the globe employ a dedicated customer experience leader and, according to Gartner research, more than 40 percent of them report directly to the CEO. “This increasing level of CEO oversight shows the importance of CX to the bottom line, hence the need for measurement,” said Ed Thompson, vice president and distinguished analyst at Gartner.

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Most large organizations have more than 50 customer experience metrics – some as many as 200. But, most of the metrics fit into one of five categories.

1. Net Promoter Score

NPS is the percentage of your customers who would, or wouldn’t, recommend your company to their friends, family, or colleagues. It’s usually measured using customer surveys that ask how likely they are to recommend this company to a friend.

Measure customer experience

2. Customer Satisfaction (CSAT)

CSAT is the average satisfaction score that customers give to a specific experience they had with your organization. It’s measured by sending an automated survey asking them to rate their level of satisfaction with the interaction they just had on a 1-10 scale of “Not satisfied” to “Very Satisfied.”

3. Customer Churn Rate:

Calculate your customer churn rate by dividing the total number of lost customers by the total number of active customers for a period of time, like a quarter. Churn rate has traditionally been used by subscription-based models, but non-recurring revenue models are adopting the metric, looking at repeat purchasing behaviors.

Measure churn rate

4. First Call Resolution

Simply put, first call resolution is when your customer’s inquiry is resolved in a single interaction. Formulas may differ between companies depending on what success looks like through your customers’ eyes. But here’s a basic framework:

FCR Calculation

5. Agent Experience/Employee Engagement

If your agents hate their job, they’re not going to give your customers a great experience. A Gartner survey found 86 percent of companies rank employee engagement as having equal or greater impact than any other customer experience challenge. For a holistic measurement, consider your individual agent’s efficiency, effectiveness, and empowerment.

Defining Agent Experience