Customer Experience KPIs: How To Measure, Improve, and Optimize CX in SaaS?
Are you wondering what customer experience KPIs and metrics you should track?
Choosing the right KPIs can make all the difference when it comes to retaining your customers in the SaaS business.
In this article, you will learn about how to measure customer behavior and expectations, get an overall picture of the customer journey, and provide greater business value to your customers.
Let’s get started!
- Customer experience Key Performance Indicators are the metrics that measure the level of interaction between the company and customers.
- By using these KPIs, you can calculate how quickly you lose customers, their lifetime value, and their overall health scores.
- There are eight key CX KPIs that you need to measure. These are the average resolution time, first response time, customer satisfaction score, customer effort score, net promoter score, customer lifetime value, customer health score, and customer churn rate.
- To improve customer experience, segment your customers using welcome screens, track in-app user behavior, collect customer feedback, build in-app learning centers, and use microsurveys.
- There are lots of tools in the market to measure and improve your customer experience.
- The 3 best tools are Userpilot, Qualtrics, and Mixpanel.
What is customer experience?
Customer experience refers to how your current users interact with your product and how they feel about it across different touchpoints of their customer journey.
Satisfied customers are more likely to have a better experience with your product, while confused customers can indicate a poor experience.
What are customer experience KPIs?
Customer Experience KPIs (key performance indicators) refer to key business metrics that track various aspects of customer experience. They provide insight into whether your customer experience is great, average, or bad.
By tracking such metrics, you can track how quickly your business resolves customer problems, and what percentage of customers are likely to promote your business.
8 Customer experience (CX) KPIs to track
When tracking customer experience KPIs, ensure they align with your business goals. Here are 8 important CX metrics that you should consider for your company.
Average Resolution Time
The average resolution time is the length of time it takes for the customer support team to resolve a complaint.
This can be calculated by dividing the time taken to resolve all tickets by the number of tickets resolved within that same period.
A low average resolution time means your customer support is very responsive, which results in happy customers. A high average resolution time means poor response times, dissatisfied customers, and poor customer experience.
First Response Time
A first response time indicates how quickly your customer service responds to a customer ticket.
It can be calculated by dividing the total time taken to send the first response by the number of tickets responded to in a given period.
Focusing on reducing your first response time can help you retain existing customers.
Customer Satisfaction Score (CSAT)
A customer satisfaction score (CSAT) is a straightforward CX metric that measures customer satisfaction and helps you understand customer expectations.
To calculate this, you need to start with a survey where you can ask how customers feel about a certain product or feature.
Then, the satisfaction score is calculated by dividing the number of customers who are ‘happy’ with the product or feature by the total number of people who answered the survey.
A high satisfaction score indicates that your efforts have surpassed customer expectations. This leads to increased customer loyalty and retention, and, consequently, lower churn rates.
Customer Effort Score (CES)
The Customer Effort Score (CES) is an extremely effective measure of customer sentiment. It measures how much effort a customer needs to put to interact with your business.
The CES is measured using a survey that asks customers any questions about their engagement with the business. The survey can use a numeric rating scale from 1 to 7.
The CES score is the ratio of the number of people who rated very positively (5 or greater) and the total number of survey responses multiplied by 100.
The customer effort score is very versatile, so you can use it to get insights into various aspects of your business. For example, it can be used to understand how smooth a problem-solving experience was, or how user-friendly a new feature is.
It can be used to identify customer pain points and look for ways to fix issues before customers churn.
Net Promoter Score (NPS)
The Net Promoter Score (NPS) measures how likely your users are to promote your product. In an NPS survey, you ask your customers one question: How likely are you to recommend us to a friend or colleague on a scale from 1 to 10?
Users responding with a 9 or 10 are your most loyal customers. Passives are users who vote with a 7 or 8, while detractors are those who respond with a 6 or below. Detractors are dangerous as they can harm your brand image through negative word-of-mouth.
Your NPS is the difference between the percentage of promoters and detractors.
A high NPS shows that your customers are very happy with your product and they are willing to actively advocate for your business.
Customer Lifetime Value (CLV or LTV)
Customer Lifetime Value (CLV or LTV) is the average sum of money your business gets from a customer over the entire duration of their business relationship. It predicts the net profit attributed to the entire future relationship your company has with a customer.
You can calculate CLV by dividing the average revenue generated per account by your present churn rate.
CLV is an important SaaS metric as it directly correlates with customer retention. Moreover, this score is a predictive metric that helps your business make informed financial decisions.
Customer Health Score
The Customer Health Score is a measure used to determine if a customer is likely to grow, remain loyal, or churn. By monitoring this, you can discover dangers related to specific users or accounts and take action before it’s too late.
This score reveals customer success and failure trends. It helps in identifying your product’s power users and account expansion opportunities. Calculating this is a lengthy process described here in detail.
First, you need to measure different customer actions that are relevant to your business. For example, you can measure the number of unresolved tickets, how many features customers are using, and how many users your product has.
Then, you can assign a score based on the customer’s actions. Let’s call these action values. Your customer health score is the sum of all the action values.
Customer Churn Rate
Customer churn is perhaps the most critical CX metric. It measures how quickly your customers leave your business.
This is calculated by dividing the number of customers who stopped using your product in a given period by the number of customers you had at the start of the period.
For example, if you had 2,000 customers at the beginning of January and 250 of them left before the end of the month, your customer churn rate for January is: (250/2,000 * 100) = 12.5%
A low churn rate means you can keep your existing users over the long term, which only happens when they find real value in your business.
How to improve CX KPIs and optimize the customer experience in SaaS?
For a SaaS business, designing a good experience is key to business success. Here are some actionable tips on improving customer experience and offering a smooth journey for your customers.
Segment your customers to understand what they need
The welcome screen is the first thing your customers see when they enter your app or website. As the first point of contact, this is a great opportunity to get acquainted with your customers and segment them.
This helps you design personalized onboarding flows. With Userpilot, you can create customized welcome screens and customer segments without coding.
Track in-app user behavior to identify friction points
In tracking in-app user behavior, you can determine what your users are doing within the app, what features they use most frequently, and where they encounter problems.
By monitoring user behavior, you can pinpoint the friction points, i.e., what stops them from moving forward in your app and solve these problems at the earliest.
Userpilot allows you to track feature engagement code-free. You can simply tag any feature using your product’s UI and track feature engagement without setting custom events.
Collect customer feedback across the different stages of the user journey
Microsurveys contain one or a few concise questions to help you get quick user feedback.
You should use different types of microsuveys, such as Customer Satisfaction Score (CSAT), Customer Effort Score (CES), and Net Promoter Score (NPS) across the different stages of the user journey.
In-app microsurveys are an excellent way to collect user feedback. They offer both quantitative and qualitative insights, using which you can:
- Help customer success teams understand customer pain points
- Understand and remove friction points
- Improve your product’s usability
- Provide better customer support
Use an in-app resource center to reduce the average resolution time
Most users prefer to look for solutions and solve app-related problems on their own. A simple FAQ section or a knowledge base are great places to start.
Having an in-app resource center has its own benefits. For starters, it drastically reduces the number of support tickets, allowing customer support to focus on more important problems.
It helps improve the Customer Effort Score, reduces friction, shortens the learning curve, and provides access to immediate help when users need it the most. It reduces the average resolution time, as users can find solutions on their own very fast.
Use NPS surveys to measure customer loyalty and act on
With NPS surveys, you can calculate the Net Promoter Score (NPS), measure customer loyalty, find promoters and detractors, and take action before customers start churning.
Ask follow-up questions to your customers to uncover some essential insights and understand the logic behind the NPS score.
With a tool like Userpilot, NPS feedback analysis is super easy. You can group the responses into separate themes and understand what makes your users loyal.
Best tools to measure and improve the customer experience KPIs
Tools can help you track, and measure the key CX metrics, as well as collect useful insights. Here are the 3 best ones in the market that you should definitely give them a try.
Here we go!
Userpilot is a product growth and adoption tool for SaaS companies. It helps you create:
The best part? It’s completely code-free and you can be up and running in a couple of minutes.
Qualtrics is another easy-to-use and effective tool. It is a dedicated customer experience management software that allows companies to capture customer, product, brand, and employee experience insights in one place to make informed decisions.
Mixpanel focuses more on product analytics that examines how customers utilize your online-based product. It helps you convert, engage, and retain users.
It is intended to increase team productivity by enabling real-time user data analysis to identify and track trends, comprehend user behavior, and make informed product decisions.
To choose the right customer experience metrics, you must first define what it means to you. There can be huge differences between businesses in how they define a smooth customer experience, so no two businesses will follow the same metrics.
Despite that, managing customer experience is crucial to the success of any business. That means that resolving customer issues and creating a superior customer experience should always be your top priority.
Want to improve your customer experience metrics? Get a Userpilot Demo and see how you can increase customer satisfaction, reduce customer churn and boost revenue.