According to research from the Harvard Business Review, 73% of consumers use more than one channel (omnichannel) when they shop. Thus, we must provide our customers with an exceptional experience across all touchpoints to ensure they remain satisfied. But to do that, we need to measure the success of our customer experience efforts across all channels the customer interacts with, whether online or offline.
But how do you measure the omnichannel customer experience? We need to focus on certain key performance indicators (KPIs) specific to our customer experience. These customer experience KPIs will help us track and measure the success of our customer experience efforts across all channels effectively and efficiently.
What is the Omnichannel Customer Experience?
An omnichannel customer experience is a holistic approach to marketing, sales, and service. It provides customers with a seamless and integrated experience across multiple channels. In an omnichannel approach, each channel is connected to the other, providing a smoother customer experience. An omnichannel strategy aims to create a more consistent, cohesive customer journey that leads to increased satisfaction and loyalty.
For example, let’s say a person wants to buy a new laptop. They start their search by browsing laptops on a company’s website. However, they don’t complete the purchase in this instance. Later that day, they receive an email with a personalized discount code from the company. The customer clicks on the email and purchases the laptop on their mobile device. They then select in-store pickup as the delivery option.
When the customer arrives, a store associate greets them by name and escorts them to the pickup counter, where their laptop is waiting. The associate informs the customer of a special promotion for laptop accessories, which the customer decides to purchase as well.
In this example, the customer had a seamless experience across multiple channels, from browsing the website to receiving a personalized email to picking up the laptop in-store. The company used various touchpoints to engage with the customer and provide a convenient and personalized experience, ultimately leading to a successful purchase.
6 KPIs to Measure Omnichannel Customer Experience
To ensure that our customers are having a positive omnichannel experience, it is important to track and measure key performance indicators (KPIs) related to customer experience. The KPIs are:
Customer Satisfaction Score
Customer Satisfaction Score (CSAT) measures the overall satisfaction level of customers. It is usually calculated based on a survey asking customers to rate their satisfaction regarding their purchase on a scale of, say, 1-5 or 1-10. To calculate the customer satisfaction score, we simply need to divide the number of customers who rated their satisfaction positively by the total number of respondents. Finally, multiply the answer by 100 to get a percentage score.
CSAT is a critical KPI as it provides insights into how customers perceive a business and its products or services. A high CSAT score indicates that customers are happy and satisfied with the offerings, which means customer loyalty and repeat business. Conversely, a low CSAT score suggests areas that need improvement. Businesses need to take action to address customer concerns and issues.
For example, suppose an online retailer surveys 500 customers. They ask them to rate their satisfaction with the website’s user experience. Out of 500 customers, 400 rated the experience positively. In this case, the CSAT score is 80%. This score indicates that most customers are satisfied with the website’s user experience. That being said, there is still room for improvement to address the concerns of the remaining 20%.
Customer Lifetime Value
Customer Lifetime Value (CLV) computes the total revenue a business can expect from a single customer over their relationship with the business (customer lifetime). It is calculated by multiplying the average revenue per purchase by the number of purchases per year and the average number of years a customer stays with the business.
CLV is essential as it helps businesses understand the value of a customer and allocate their resources accordingly. A high CLV score suggests that the business is doing an excellent job of retaining and creating loyal customers, which is crucial for long-term success. Moreover, it can help identify profitable customer segments and adjust our marketing and sales strategies accordingly.
For example, if an e-commerce business has an average revenue per purchase of $50. The customer makes an average of five purchases a year and stays with the business for four years. In this case, the CLV would be $1,000. This means that the business can expect to earn $1,000 in revenue from that customer over four years. If the business can increase the frequency of purchases or the customer’s average order value, the CLV will naturally increase, resulting in more profits.
Net Promoter Score
Net Promoter Score (NPS) helps understand actual customer loyalty and advocacy. It is based on the question, “How likely are you to recommend our product/service to a friend or colleague?” Customers are then asked to rate their likelihood on a scale of 0 to 10. Based on their answers, customers are categorized into three primary groups. They are:
- Promoters (score 9-10)
- Passives (score 7-8)
- Detractors (score 0-6)
The NPS score is calculated by subtracting the detractors’ percentage from the promoters’. This score can range from -100 to 100, with a higher score indicating a higher level of customer loyalty and advocacy.
NPS provides businesses with insights into customer satisfaction and loyalty and helps identify improvement areas. Promoters are more likely to recommend the business to others, while detractors are likelier to share negative experiences. Therefore, by increasing the number of promoters and reducing the number of detractors, businesses can improve customer retention, increase brand loyalty, and boost revenue.
Customer Loyalty Index
Customer Loyalty Index (CLI) is a measurement of the degree of customer loyalty to a business. CLI is calculated based on a set of metrics that include customer retention rate, purchase frequency, average order value, and customer satisfaction.
CLI helps businesses understand how loyal their customers are and identify areas for improvement. A higher CLI indicates stronger customer loyalty, which leads to increased revenue and profitability for the business.
The calculation of the Customer Loyalty Index (CLI) varies depending on the specific metrics used to measure customer loyalty. Typically, CLI is calculated by taking the average of the different metrics used to measure customer loyalty. For example, if a business is measuring customer loyalty based on three metrics—customer retention rate, purchase frequency, and customer satisfaction—the CLI would be calculated by adding the scores for each metric and dividing by three.
As an example, suppose a business measures customer loyalty based on customer retention rate, purchase frequency, and customer satisfaction, with scores of 80%, three purchases per year, and 8 out of 10 for customer satisfaction, respectively. The CLI would be calculated as follows:
CLI = (80% + 3 + 8) / 3 = 63.33
This score indicates the overall level of customer loyalty for the business and provides a benchmark for monitoring and improving customer loyalty over time.
Conversion Rate
Conversion rate is the percentage of website visitors who take a desired action. Common examples include making a purchase, filling out a form, or subscribing to the newsletter. It is calculated by dividing the number of conversions by the number of total website visitors and multiplying the result by 100.
Conversion rate is an essential metric because it helps businesses understand the effectiveness of their website and marketing strategies. A higher conversion rate indicates that the business is attracting the right audience, engaging them effectively, and convincing them to take action, which leads to increased revenue and profitability.
For example, if a website has 10,000 visitors in a month and 500 of them make a purchase, then the conversion rate would be 5% (500/10,000 x 100). This means that for every 100 visitors to the website, only five of them make a successful purchase.
Shopping Cart Abandonment Rate
This KPI measures the percentage of visitors who add items to their shopping cart but leave without completing the purchase (abandon their carts). This can happen due to various reasons. Some common ones include unexpected shipping costs, a complicated checkout process, or a lack of trust in the website or payment system.
It is calculated by dividing the number of completed purchases by the number of initiated purchases (adding items to the cart), subtracting this from 1, and multiplying by 100.
For example, if a website has 1,000 visitors adding items to their cart, but only 300 of them complete the purchase, the Shopping Cart Abandonment Rate would be 70% (1- (300/1000) x 100).
This KPI is important because it provides businesses with insights into the effectiveness of their website design and checkout process. High abandonment rates can indicate areas for improvement, such as simplifying the checkout process, providing clearer information about shipping costs, or adding trust signals such as secure payment options or customer reviews.
Conclusion
When it comes to managing the customer experience effectively, KPIs are essential. They provide businesses with insights into how customers interact with their brand and allow them to measure and improve their customer experience. Omnichannel customer experience management is especially important as it allows businesses to track and analyze customer interactions across multiple channels, such as websites, mobile apps, email, and social media.
Konnect Insights offers a robust omnichannel customer experience management platform that helps businesses measure their customer experience KPIs. With Konnect Insights, businesses can easily track key performance indicators such as average order value, loyalty program signups, customer satisfaction rates, and more. The platform also provides insights into customer behavior across all channels, allowing businesses to identify trends and optimize customer experiences for maximum impact.
To learn how Konnect Insights can help manage and measure your omnichannel customer experience, contact us today. We’ll be happy to discuss the best solutions for your business and help you create the perfect customer experience.
