5 Key Metrics to Measure Customer Experience (CX) in Chain Stores
Understanding Customer Experience (CX) is both an art and science.
An experienced industry guru can walk into a store or restaurant and point out multiple improvements to layout or staff behaviour that will improve the customer journey. That’s the art.
The science element is interpreting what customers say, do and think about your business. But to get scientific you need data, and in a CX context, that will be a combination of customer activity (such as purchases or footfall) and customer feedback. Collecting data and measuring changes on the former is relatively easy. The same cannot be said about customer feedback. Capturing feedback in stores and restaurants is hard, but there are ways to do it (see our blog post on ways to capture feedback in physical locations here).
When you have figured out how you plan to get the data, you then need to consider what questions to ask. This post covers some of the most common metrics used by multi-unit businesses to measure CX, as well as how to calculate and apply them. High performing chains use these metrics to gauge how well they're doing and as levers to drive improvement in experience and loyalty.
Net Promoter Score (NPS)
Net Promoter Score (NPS) is a CX metric that is generated by asking customers a standard question that reads as follows: “How likely is it that you would recommend [insert brand/product/service] to a friend or colleague? Where 0 is not at all likely and 10 is very likely.”
From there, it’s a simple matter of subtracting the % of detractors [those who answer 0-6] from the % of promoters [those who answer 9-10]. Passive customers [those who answer 7 or 8] are omitted from the calculation.
For example, given the following set of results:
68% of customers rank you a 9 or 10 [promoters]
18% of customers rank you at 7 or 8 [passives]
14% of customers give a 6 or less [detractors]
The NPS would be: 68 - 14 = 54
NPS gauges how many of your customers are invested enough in your product or service to act as promoters for it to their friends, family, and colleagues. All else being equal, an improving NPS should be an indicator of future sales growth. In a world where there are digital distractions every way we turn, customer advocacy has become a very important element of the marketing mix and NPS is the best way to measure that.
Many experts would suggest NPS is best used as an overall relationship based metric, but in my experience it works just as well in a transactional context. However, asking the question on a relationship basis and a transactional basis in the same survey can cause confusion and should be avoided.
Customer Satisfaction (CSAT)
A CSAT question - or Customer Satisfaction question - asks customers how satisfied they were with their recent interaction with your business or product. CSAT can be tracked on a numerical scale (e.g. 1-5) or by giving a range of options from “Very Unsatisfied” through to “Very Satisfied”. In the latter, the percentage of customers choosing “Satisfied” or Very Satisfied” is your CSAT metric.
Unlike NPS, which has very strict application rules, CSAT can be asked in a number of different ways, which means it can be customised to fit your specific needs. It can be useful when you want to get more granular, drilling down into specific touchpoints of your customer's journey. For example, in a restaurant context, you might ask consecutive CSAT questions to determine satisfaction with food quality, service and atmosphere. This can help you identify what areas you should focus training on in a specific location.
Customer Effort Score (CES)
Customer Effort Score (CES) questions can be asked in a number of different ways, but the focus is always on how much effort the customer has to put in to get their issue resolved or complete the task they set out to complete.
An example in a retail context might be:
Similar to the NPS calculation, CES = % of "Easy" responses - % of "Difficult" responses
“Effortlessness” is key here, so the higher your CES number the better.
CES can be effective at identifying bottlenecks in the customer journey that are definitely causing frustration and are almost certainly costing you sales.
Before NPS, CSAT and other slightly more complicated metrics were developed, the standard measurement methodology was a rating out of 3, 5 or 7 Probably the most common experience rating methodology on the internet, simple numerical or star ratings are widely used to assess customer satisfaction. Don’t discount these simply because they’re so simple - that simplicity and the ease with which both consumers and employees alike can understand them, makes ratings a highly effective means of gathering quantitative data.
It may be a bit of a stretch to describe a Yes/No split as a metric, but this question can be very useful in certain circumstances. When you want to boil down customer responses into the most simple information possible, Yes/No questions are a great option.
We find them particularly useful for determining staff compliance, as in the below example. When the customer answer is black and white, why confuse them with a more complicated array of possible answers.
Due to the binary simplicity of a Yes/No question, in some cases it may be useful to add a dynamic question, particularly where the answer is "no". The additional qualitative data can shed additional light on why the customer responded negatively.
Tracking metrics like the ones listed above is critical in any multi-unit business. They tell you whether you're improving or getting worse. They indicate where you're strong and where you're weak. They indicate which store managers are competent and who needs more training. All very valuable business information.
However, it can be dangerous to to put too much emphasis on metrics and awarding bonuses based on them is potentially very dangerous. A few employees will always attempt to game such a system in order to achieve the results required for said bonus, rather than focusing on improving the actual experiences of fellow human beings. We've previously written about how "Improving NPS does not (always) equal Improving CX" and this should always be borne in mind when reporting or consuming CX metrics.
Thanks to David Dolan for his assistance in drafting this post.