There’s many event metrics that are great to understand in order to increase event operation, professionally and overall customer happiness.
Quite a significant number of online businesses around the globe haven’t yet achieved much in their efforts to enhance customer experience. Keeping customers happy is crucial in business development. Subscription businesses value customer feedback a great deal and it is for a number of reasons.
Customers happy with given goods and services will always recommend them to others and that helps boost sales. Satisfied customers are always paying customers and that is the goal of every business entity. Many at times, unhappy customers spread word around regarding the nature of goods and services provided by businesses in question. It is worth noting that happy customers are the best form of marketing any business can get.
The delivery of remarkable customer services requires that a given business engages in an exercise of measuring customer satisfaction levels from time to time. It is not an easy task winning over their loyalty and increasing their numbers. Business analysts recommend the customer success metrics to businesses worldwide.
Reasons businesses need to consider using customer success metrics
Basically, customer service has several aspects and thus businesses need to organize for proper evaluation. As a matter of fact, it is impossible to come across one metric showing full information regard ding what a successful customer service should look like. But the encouraging thing is that there exist several of them which enable one to see a bigger picture.
The assessment of the associated patterns and trends in the various metrics helps establish what works and what doesn’t. It is also the simplest way to tell the improvements that need to be made as well as what needs to be introduced at a given point.
The following customer success metrics are crucial when it comes to assessing customer satisfaction level and what should be anticipated in terms of the outcome
#1 Customer Satisfaction Score (CSAT)
With this particular metric, it is possible to tell the level of satisfaction of customers with a particular service. It is usually provided in the form of a percentage. The YES/NO question is what is used many at times. It is about getting to an accurate determination of the customer satisfaction level.
There are businesses that prefer a 1-5 scale. The number selected by a given customer usually expresses his take on the service. Below is the scale.
1 = very unsatisfied
2 = unsatisfied
3 = neutral
4 = satisfied
5 = very satisfied
To arrive at the CSAT, we would need to calculate the percentage of those users that go for options 4 & 5.
It is also possible to reduce the whole thing into three distinct levels as shown below
1 = unsatisfied
2 = neutral
3 = satisfied
Asides from establishing the CSAT score, it is also important to go a step further and give respondents an opportunity to express their deep felt concerns and issues. It is possible to forge the way forward for any business after customers indicate that their CSAT level is inadequate.
#2 Net Promoter Score
Frederick Reichheld is the author of the book titled, The Ultimate Question. It is a book that encompasses ways to drive true growth and maximize profits. This author provided a proper definition of Net Promoter Score (NPS).
From his perspective, the customers of any given company can be put into three categories. He sees promoters as loyal enthusiasts that keep making purchases from a particular company and move a step further to encourage their friends to follow suit. On the other hand, passives express their satisfaction with goods and services provided by a given company. However, they can easily be swayed when a stronger competition pops up.
The long and short of it is that NPS serves as a profound indicator of the loyalty of customers to a given business. With it, one can tell whether or not customers would recommend goods and services to friends and closer relations.
It is the kind of metric that will prod customers with specific, scale-based questions. In the case of NPS, calculations are usually made in the form of percentages and the associated scales are of 1-5 or 9-10.
In the first case, he percentage is calculated using those that choose option 5.In the second, it is arrived at using those that go for option 9-10.
It is also important to formulate a follow up question that gives customers room to express their respective sentiments. That can be done using either the single/multiple choice question or through a text. A progressive business is the one that is keen at responding to needs of customers in an efficient way. Such a business will work on areas that need improvements in the delivery of customer services.
The special attribute about the Survicate app lies on how it can be used in conducting NPS surveys for a wide range of platforms. Remarkable platforms are designed in a way to suit the varying needs of users. It is a great idea adding an option that allows a user give reasoning behind assigning a given score.
#3 Customer Effort Score (CES)
This metric comes handy in those instances where there is need to measure the level of friction a customer faces in solving issues on a website or app. Experts have designed a question that is quite effective in the measurement of CES.
A respondent is first and foremost asked to state how much her/she disagrees with a particular statement. For instance, they would be asked to state the role of the company in helping the resolve a given matter.
Respondents are then given seven options to choose from.
“Strongly disagree – Disagree – Somewhat disagree – Neither agree nor disagree – Somewhat agree – Agree – Strongly agree”
It is a simple process that is usually followed by the aggregation of all results. The attainment of a high average scores show that the company in question is delivering remarkable solutions for the customers. Cases where customers struggle a lot to use products of a given business are common.
Such are characterized by low numbers. It is important to scrutinize everything early in advance since customers need to be served with the best experience. Effective customer service should be nothing short of eliminating friction and making everything easy.
#4 Customer Lifetime Value (LTV or CLV)
Customer Lifetime Value (CLV) gives a projection of the profit/loss anticipated from a given customer over time and it is deemed rather useful for any business. From it, we can tell what the customer value is. Experts usually advocate for the optimization of customer service and marketing strategies in a way that is satisfactory to all.
With CLV, any business can easily determine instances where it needs to spend more resources. Major improvements must be made on products to make them align to the needs of customers.
There are a number of ways in which CLV can be calculated. One of them is from the ChartMogul team:
LTV =ARPA x Gross Margin% ÷ Customer Churn Rate
#5 Customer Churn Rate
This metric gives a highlight of the customer retention level. From it, businesses are in a position to tell the percentage of customers that did not renew their subscriptions within a particular timeframe. The non-active customers are tracked and there are possibilities they might be churning out in future.
The CS team is resorts to several metrics in giving its predictions. In an instance where users are unable to log into the app for a couple of weeks via the monthly plan, then there are high chances they would be churning out in a month’s time.
It is important to improve the customer churn rate. But that is not the only thing along this line. It is a fundamental principle that any given business gets to the bottom of the matter in establishing reasons as to why customers are departing.
Customers might be tempted to leave upon being dissatisfied with services of a given provider. That is commonly referred to as the voluntary churn.
The other case is where a customer goes out of business. That particular case is called the involuntary churn. The former needs to be mitigated by all means considering that it arises from inefficiencies of the service provider.
Survicate employs a customer questionnaire characterized with a blank space that lets the respondents give their reasons for churning. The information provided is important when it gets to the point of making major or minor improvements of the stipulated issues.
#6 Customer Health Score (CHS)
This customer success metric has rather close link to the customer churn rate and with it we can tell whether customers will churn or choose to stay. There are a number of scales with which the customer health score can be presented. However, the fundamental attribute is that it pays a huge focus to the various aspects of the information provided by customers.
The level of customer activity is crucial when it gets to calculating CHS. The others are the feedback provided by customers, purchases made and their NPS.A smiley face scale is one of the ways to express the estimates of CHS.
#7 Monthly Recurring Revenue (MRR) and Annual Run Rate (ARR)
The above metrics happen to be closely linked to each other. There is no way ARR can be calculated without MRR.
Basically, MRR (Monthly Recurring Revenue) looks into sections of the subscription business that are predictable. Such keep on recurring as time progresses. One distinguishing attribute about it is how it doesn’t put into consideration one-time and variable fees. It specifically gives reports regarding the normalized monthly revenue.
The plans provided by a company determine exactly how MRR should be calculated. For the case of Survicate, we have monthly plans. MRR can thus be defined as the price that users pay for subscription on a monthly basis. At times, there could be plans for the more extended period. In such a scenario, calculating MRR would be done by dividing the paid amount with the associated months.
Businesses calculate different MRR from renewals, losses, upgrades, sales or the various campaigns. In as much as MRR may strike most of the people as some form of revenue, it is inappropriate to consider it as such. Treating it as some form of revenue could result in a great mix up.MRR calculates the anticipated income from subscriptions and serves as the basis for making further analysis. Meaningful innovations help businesses generate more money since subscriptions are given a major lift.
#8 Annualized Run Rate (ARR)
Calculating this is quite simple:
ARR=MRR x 12
Experts recommend that businesses calculate the general ARR for particular campaigns, losses, VIP users, new users, components per salesperson and per target user group.
Why does any given company need ARR analysis? This sort if analysis gives reports regarding the size of the company in question. It may come out as unrealistic to quite a significant number of people. That is for the obvious reason that it doesn’t take into account plan expansions from the existing customers, possible churn or even the entry of new customers. The great assistance it offers in helping visualize annual growth is rather helpful for businesses.
However, it might at times get rather challenging calculating ARR. That occurs especially in those cases where we are dealing with seasonal businesses as well as in those instances where some months differ from each other profoundly.
#9 First Response Time
It is also referred to as the First Reply Time. That has to do with the time it takes to address an issue. It is the wish of all customers to see their issues attended to as fast as possible.
First Response Time is one of the most remarkable business practices that are helping businesses establish good relations with customers globally. Business need to avoid responding to issues when it is already too late. Doing that leads to a decrease in customer satisfaction levels and that might negatively impact it.
Sometime back there was the misconception that customers appreciated the perfect response much more than a quick one. Customers want the First Reply Time since it assures them that the company is working on their issues.
#10 Customer Engagement
New users will from time to time shop for new apps and when satisfied come back for more. We can calculate the figures as a percentage and the essence it to establish whether users are active or not. The surveys created by users and their response rates are taken into close account in the calculations. The CS team will always want to establish the last time a given user logged onto the system. The team then proceeds to calculate the Customer Health Score and Churn rate.
Why businesses should measure customer success metrics
In calculating customer success, there several metrics that need to be considered. But what counts is what any business is willing to do towards improving customer satisfaction. Observation of Patterns, trends and quick responses to negative feedback are aspects that no business should take for granted.
To determine the above stipulated aspects, analysts should be versed with the right tools. Contact could be established with customers to get their opinion since their satisfaction or dissatisfaction determines whether or not a given business will be successful or not.