Using Customer Metrics for Business Growth

October 2020

Customer experience is the new battlefield. In 2020, more than two-thirds of companies say they compete primarily on customer experience - a figure that has nearly doubled over the past decade.

The reason for this explosion is clear - organisations with a customer experience mindset drive revenue 4-8% higher than the rest of their industries, and 84% of companies report revenue increases after working to improve their customer experience. 

This is because focusing on customer experience grows your business in two main ways: 

  • It increases customer retention. The cost of retaining customers is significantly less than finding new ones, so your costs decrease whilst revenue steadily increases.
  • It attracts new customers. Customers increasingly choose brands on the basis of customer experience, so if you can develop a reputation in this area you’ll become an increasingly attractive prospect. 

In short, it’s all about the customer experience metrics you track, and what you do with this information once you’ve captured it. Companies who successfully leverage customer experience as a growth are great at identifying the metrics that fit with their goals, implementing changes based on conclusions they suggest and, ultimately, letting the world know how well they’re meeting their customers’ needs. 

The good news is that, with a bit of effort, this could absolutely be you. There’s no real secret to good customer experience - like any successful relationship, it’s about listening, acting and improving. There are, however, ways you can optimise this process for best results. 

That’s why we’ve written this guide. Below, we’ll give you a few useful tips on: 

  • Identifying the customer metrics you need to reach your growth goals
  • Identifying areas for improvement from customer experience metrics
  • Going beyond complaint fixing: other uses for customer metrics
  • Maximising your growth potential with the right tools

Identifying the Customer Metrics You Need to Reach Your Growth Goals

What insights do you hope to gain by tracking key customer metrics? 

How might you use any conclusions drawn to further your long-term strategic goals? 

If we invest time, money and effort into tracking these metrics, are we prepared to invest further to make meaningful changes as a result? 

All of the above are vital questions to ask yourself if you want to use customer metrics to grow your business successfully. 

It’s tempting to see tracking customer metrics as, to some extent, a passive process. You send out some surveys, you look at the results and you see what issues this throws up. This approach isn’t devoid of value - you’ll undoubtedly learn something about how your customers rate your product or service - but you’re leaving it up to luck as to whether these conclusions are strategically useful. 

We encourage you to reverse this thought process. First, identify how you’d like your company to grow. Then, identify the steps you’d need to take to do this. Finally, identify the metrics that will provide you with this information. 

What Customer Metrics are Available, and What do they Measure? 
To be able to make decisions like this, it’s important to understand the different metrics available, the different angles of customer experience they cover and how you can use them effectively.  

Broadly, all customer metrics measure how happy your customers are with whatever product or service you provide. Different customer metrics measure different aspects of this subject.

The following are examples of customer metrics can be calculated from your own numerical data: 

  • Customer Churn Rate: the percentage of customers that stop using your product or service within a given timeframe.
  • Customer Lifetime Value (CLV): how much revenue your customers generate during their entire time as a customer with you.
  • First Contact Resolution Rate: the percentage of customer service queries that are resolved on first contact. 
  • Resolution Rate: the percentage of all customer queries that are resolved, whether on first contact or after subsequent efforts. 

Whilst these are an excellent starting point for establishing trends, they’re of limited use when asking ‘why’. For example, you can establish that your customer churn rate has increased over the past few months, but you’ll need further analysis to establish what has caused this. 

That’s where human-factor data can really help. Consider the following metrics: 

  • Net Promoter Score (NPS): the extent to which customers would recommend your product or service to others, on a scale of one to ten. Read our buyers' guide.
  • Customer Satisfaction Score (CSAT): the extent to which customers are satisfied with your product or service, on a scale of one to ten. 
  • Customer Effort Score (CES): how easy it is for your customers to complete a certain action (for example opening an account on a mobile app) on a scale of one to ten. 

Unlike the numerical data above, these metrics involve actively reaching out to customers to glean some sort of insights about your product or service, with a space to leave further comments on their experience. 

To grow your business effectively, you’ll need to use a mix of numerical and human-factor data to complement each other. If, for example, you notice that your customer churn rate is up, your NPS or CSAT scores - alongside the customer comments that come with these - will offer some insight into the action you can take. 

What Does This Look Like in Real Life?
Your growth area might be the user experience your app offers customers. 

You foresee, as more and more providers start to offer digital methods of accessing their services, that how usable your digital platforms are will be a major selling point in the future, and you want to reduce the percentage of user journeys that are abandoned.  

Start from here, and work backwards. Your thought process might look a little something like this:

  • I want to enhance the UX our digital platforms offer customers
  • To do this, we’ll need to eliminate major user journey pain points, gauge the demand for potential new features and understand whether our current user experience currently trends positive or negative. 
  • This means we’ll need to measure current customer satisfaction through CSAT and CES scores alongside our market research and UX testing efforts and monitor it as we make changes to the app. 

Identifying Areas for Improvement Using Customer Metrics

In the short term, customer experience metrics are great at identifying existing deficiencies with both your customer support offering and your product itself. 

NPS and CSAT scores - both the scores themselves and the comments your customers leave alongside them - are great at picking up negative aspects of your proposition first and foremost because everyone likes to vent. 

When looking through your comments, look for commonly-cited areas for improvement. These could include: 

  • Long hold times or lengthy waits for customer service
  • Poor resolution of complaints or poor customer service manner
  • Unclear user journeys or difficult-to-use software
  • General product or service deficiencies, such as malfunctions, bugs, glitches or breakages

Whilst there is plenty to be said for keeping overarching, strategic goals in sight at all times, your company can grow significantly simply by fixing issues in its current offering. Did you know, for example, that brands with superior customer experience bring in nearly six times the amount of revenue than those that lag in this area? 

Responding to your customers’ complaints results in higher levels of customer loyalty, a drop in churn and a direct rise in revenues as a result. Don’t overlook the small things - fixing customer service pain points or app malfunctions might not seem glamorous, but they’re a surefire way of increasing revenues and maintaining a solid customer base. 

Going Beyond Complaint Fixing: Other Uses For Customer Metrics

It’s a common misconception that customer experience metrics are only there to tell you what you’re doing wrong. 

Whilst customer experience metrics are central in identifying and fixing problem areas (and by extension reducing customer turnover and increasing revenue), they can do so much more for your business growth when used in the right way. 

Gauging Demand For New Features or Products
One of your customers’ major gripes is that your product’s feature set is limiting in some way. Or perhaps that they’d like a companion product that expands the capabilities of the one you sell already. 

Make a note whenever you encounter a comment along these lines - they could offer valuable insights into how you can expand your product offering to stand out against the market! 

Obviously, you won’t be phoning up your devs for every suggestion you receive from your NPS survey, but identifying key trends in customer demand - and comparing these to the list of products, features or services you’ve mapped out as potential expansion areas is a great way to prioritise developments by customer demand. 

Using Positive Scores as a Marketing Tool
Good customer experience metrics - NPS in particular - are like gold dust to marketers. This is because they tap into something called ‘social proof’. You might know it as the ‘eight out of ten cats’ method of marketing. When done well, it’s a powerful tool.

You’ll see people using these customer metrics on web homepages, billboards, TV ads and more, because they work. People love statistics, and if you can show some sort of objective proof that your products leave the vast majority of your customers satisfied, that’s a major draw for new business. 

For an example of how this works, look at the marketing strategy used by app-based estate agent Purplebricks. Their homepage is plastered with positive online reviews from TrustPilot and Feefo, with banners declaring them the “highest rated estate agent in the UK”. Similarly, challenger bank Atom proudly displays that it is “the UK’s most trusted bank” according to Trustpilot. 

For a customer base that is increasingly drawn in by good customer experience (over 96% of customers say that customer service is a major factor in their choice of brand), these metrics are incredibly useful. By basing your advertising campaigns around customer opinion, you emphasise that you prioritise good service and that keeping customers happy is central to your identity as a brand. 

Maximise Your Growth Potential With the Right Tools

You can track customer experience metrics using a very basic combination of Google Forms and Excel. The trade offs are a poorer response rate (and by extension patchier data) and a significant time cost - someone has to crunch the numbers and compile the comments into useful, actionable research. 

The good news is that for a relatively small upfront investment - or in some cases none at all - you can gain access to tools that will get you better data and save you significant time in processing it. This means that you have a more reliable foundation from which to grow your business, and you can do so more quickly. 

There are three broad software categories that can help you do this: 

  • Customer survey software: customer survey software is specialist software explicitly designed for carrying out customer surveys. Some customer survey software specialises in one specific metric like NPS, whilst others will offer you a range of options. Normally, there are a range of pricing tiers available with some vendors offering basic packages free of charge. 
  • Customer experience software: essentially, this is ‘customer survey software plus.’ You’ll usually have access to customer survey features, with extra customer experience add-ons like extended analytics. You’ll get more functionality than customer survey software, though these come with an enhanced price tag. 
  • General email/survey software: if you’re paying for software like Survey Monkey or MailChimp already, you can use these to track customer metrics. If you have something similar at hand already, this is by far the cheapest option here - although you won’t benefit from the range of features the other two options offer, and may have issues configuring for multichannel use. 

Which Type of Customer Software Suits My Company? 
It all depends on your goals, your budget and what you have in place already. 

That said, there are a few specific features that are useful when tracking customer metrics. At a minimum, you should look for a solution that offers the following: 

  • Multi-channel support: reaching customers on the channel that works best for them will increase your survey rates significantly. Depending on how your business is set up, you could look for email, SMS, events/training, website or in-app options here. 
  • Theme identification: automatically tag comments by theme or general sentiment for easy identification of common issues and trends. 
  • Survey analytics: look for reporting tools that allow you to segment data by theme, product or sentiment so that you can see how your customers’ opinions have changed over time. 
  • CRM integration: integrating data from your CRM (such as order data) can deepen the insights you gain through customer surveys. 

And Finally...Look After Your Online Reviews

Everyone knows that, in general, online reviews skew negative. Nine times out of ten, people are only motivated to review something when they feel they have been wronged. 

You can reduce this risk by reaching out to everyone who buys your products, rather than just waiting for the negative reviews to roll in. All of the major online review sites offer this as a paid-for service, and you can use your own channels to encourage reviews as well (or as a budget option instead of partnering with a review site. 

If you’re serious about using customer experience metrics in your marketing and advertising, it’s really worth investing here. Even if your own NPS or CSAT score consistently remains at a solid 10/10, it will be undermined by negative online reviews - taking a proactive approach to these (which includes replying to reviews and acting on feedback as well as encouraging more customers to review) should be a priority for any growth-focused organisation.