How to measure customer satisfaction for ecommerce

Posted by Mikkel Andreassen on 17 Jan, 2022
View comments Marketing
The 5 customer experience metrics you need to track today, to gain more loyal customers tomorrow.

Customer satisfaction metrics.

It’s only relatively recently that companies started prioritizing customer experience (CX). All else being equal, the quality of a company’s customer service can make or break the business. As many as 73% of customers say customer experience is an important factor in deciding whether to make a purchase or not.

And when you consider that research shows 32% of all customers would walk away from a brand they loved after one bad experience, you have a pretty good case for starting to treat customer satisfaction as the one of the primary drivers of ROI.

But how can you elevate your customer experience game if you’re not keeping a close eye on your customer satisfaction metrics? You need to be aware of how your customers interact with your business and where there might be room for improvement. Enter a customer-centric approach which uses surveys and various other types of feedback to develop a bulletproof strategy to ensure your customer satisfaction levels remain high.

Here’s how different teams in a company can benefit from evaluating customer satisfaction indicators:

Customer Support will be in a better position to understand and fix the main issues customers experience when purchasing. Using multiple communication channels can help resolve queries in a timely way.    
Marketing will be able to get up close and personal with customers to discover their needs and wants. Leveraging customer satisfaction metrics to create marketing campaigns that resonate with customers will lead to business growth.
Product Development will gain insights about customers’ experience with the product and be able to tweak elements to perfect the product. Experimenting with product design, features and cost are good ways to improve customer experience with your company.  

As the saying goes, you can’t manage what you can’t measure.

Here are the metrics you should be measuring to get the information you need to be able to provide the best possible customer experience, service and products:

1. Customer Effort Score (CES)

Customers quickly become frustrated if they can’t figure out how to use a product or a service. The same applies to waiting for a customer service representative to resolve a query. So, it’s helpful to track the Customer Effort Score (CES) to work out how much effort it requires from the customer to fix an issue.

You can gauge a lot of valuable information about your customers by asking them a simple question like: "How easy (or difficult) was it for you to solve this problem?".

When you send out a survey, include a couple of answers to make it easy to give feedback. Alternatively you can rate responses by number on a scale ranging from very difficult to very easy.

Rate service.

How to improve your CES

If you have a low CES score, take a look at the processes a customer has to go through to raise or resolve an issue. Is it easy to contact you? Can they get through to a person or are they stuck on a chatbot providing irrelevant responses?

Provide optional space for users to give more detail about why they gave you the score they did - whether high or low. This will give you concrete actionable information you can use to improve your processes.

2. Customer Satisfaction Score (CSAT)

The most straightforward metric to adopt is the one that measures how satisfied your customers are with the provided service - the Customer Satisfaction Score (CSAT). It’s the easiest way to find out what your customers think of your company and whether your service is up to scratch or in need of urgent improvement.

The answers to “How satisfied are you with our services?” typically range from ‘very unsatisfied’ to ‘very satisfied’.

Satisfaction.
Image Source: ProProfs

How to improve your CSAT

The best time to send this survey is right after your customer interacts with your product or service so their experience is still fresh and front of mind. An effective way to improve a poor CSAT score is to implement live chat, or a chatbot which provides instant support. This can help provide clarity and reassurance and, if it's set up intelligently, can also resolve many easy-to-fix issues for the customer.

3. Customer Churn Rate

This metrics lets you know the exact percentage of customers who no longer use your product or service, and is something all businesses should be measuring as a priority.

Use the following formula to calculate your churn rate: (Lost Customers/Total Customers at the start of the time period)*100.

For example, If you had 300 customers at the beginning of the second quarter and are now down to 200, your churn rate is 33.3%.

How to improve your churn rate

If analysis shows you have a high churn rate, you will need to develop some effective customer retention strategies to reverse this undesirable trend. Adding a comprehensive FAQ section to your website, providing multi-channel support, and training your customer support team are just some of the solutions that can help lower your Customer Churn Rate.   

4. Net Promoter Score (NPS)

One of the most widely used customer satisfaction metrics across companies is the Net Promoter Score (NPS). It asks the question “Having purchased from X in the past, how likely are you to recommend X to your friends and family?”. The answers offer companies a valuable insight into how the customer feels about them and whether they will be a brand ambassador.

Recommendation.
Image Source: SurveyMonkey

How to improve your NPS

To get the most out of this metric, schedule surveys through different stages of the customer journey. This will provide you with a more accurate overview of the customer’s real-time perception of your company and help you identify areas for improvement much more efficiently.

If your score is on the lower end of the spectrum, it’s a good move to include a follow-up question on why the low score was chosen. This will provide concrete information on where your service is lacking, making it easier for you to come up with a plan of action to improve your customer experience.

5. Customer Lifetime Value (CLV)

This metric measures the total revenue you might expect to make from the average customer over the lifetime of their relationship with your business. The information you glean from your CLV will inform strategic business decisions in areas such as growth, spend, which customers to prioritize and how to shape your strategies to maximise profits. It also allows you to track whether your marketing ROI justifies the expense.

There are many different ways of varying complexity to calculate CLV, but a simple formula is: Average Order Total*Average Number of Purchases*Average Retention Time.

How to improve your CLV

If you find that you’re spending more than your customers are bringing in, you should take steps to improve your customer retention. Strategies to consider include investment in customer onboarding, freebies, discounts and offers.  Upselling and cross-selling your products and services is also an effective way of increasing your CLV.

Wrapping up

Once you’ve established which ecommerce customer satisfaction metrics you’re going to track, you can adjust your customer service strategies to attract more loyal clients. Before you make any changes, give your customer support team at least half a year to track the metrics to get a reliable representation of customer satisfaction.

Look at all the metrics you’re measuring to get a rounded picture of where you can make improvements. Make sure you take a customer-centric approach - this will keep your customers happy and loyal, and ensure growth for your business.

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