Key performance indicators, also known as KPI or Key Success Indicators, help managers and employees gauge the effectiveness of various functions and processes important to achieving organizational goals for digital marketing. If you’re not measuring your customer service, how will you judge the success of your actions? If you’re serious about improving and measuring customer loyalty, you need to track your KPIs. You should track only those KPIs most important for your department.
Here are the five KPIs that should be in every customer loyalty report:
Customer Satisfaction Score (CSAT) – The most popular KPI for measuring customer satisfaction is the CSAT. With it, you directly ask your customers to rate their satisfaction with your business, product, or service. The score is the average of all customer responses. If your customers are satisfied, that’s one good indication they will be loyal to your business.
- Net Promoter Score (NPS) – The NPS measures how likely your customers are to refer you to someone else. Its advantage over the CSAT is that it aims at an intention, not an emotion. As a result, the reply is less influenced by the mood of the moment. This is where you ask your customers how likely they are to recommend you on a scale from 1 to 10.
- First Response Time – Speed is a stable determinant for customer satisfaction. Quickly answering your customers’ requests is very much essential, as your competitor is only a mouse click away. According to a study by Salesforce, customers prefer a response that is quick instead of one that is thorough but delayed. Always try to keep the first response time under 30 seconds. You can make use of this by sending an automated message like “someone’s working on the issue” or “your request is being processed”. This may not technically be an actual response but it could be a trick to make their wait more bearable.
- Customer Retention Rate – Customer retention refers to a business’ ability to keep a paying customer over a set period of time. Acquiring new customers is expensive, costing a business 5 to 25 times more than it takes to retain one. Attracting a lot of visitors to your website and converting them into paying customers is one thing, but retaining them for a long period of time is as equally important. Customer retention rate shows what percentage of customers have stayed with you over a given period of time. Jeff Haden outlines an accurate way of measuring it:
Customer Retention Rate = ((CE – CN) / CS)) x 100
CE = Number of customers at end of period
CN = Number of new customers acquired during period
CS = Number of customers at start of period
- Employee Engagement – While we focus on the KPIs mentioned above, it’s easy to forget a factor which may not be that obvious, but equally important: your team. If your employees aren’t satisfied with their job, your service will eventually suffer. According to HBR, “long-term employment relationships are the key to high performance and enduring levels of employee motivation.” This can be measured by asking your employees direct questions like “How meaningful is your work?” through a survey. Another approach is by analyzing actual engagement through the ff levels: (a) management and time investment, (b) influence from colleagues, (c) relationships, (d) work schedule. Both approaches will provide meaningful information for you.
Now that you’re armed with these customer loyalty KPIs, it’s time to apply them into your digital marketing game! Remember, measuring customer loyalty is more than the numbers, it’s more about giving your customers valuable information and service that will make them ask for more! source