Hello! Welcome to Webeo Futures. Bite-sized educational resources at the forefront of Digital Marketing. In this video, we will cover essential KPIs for customer experience.

There are many metrics thrown around for CX but the most globally recognised are:

• Churn Rate
• Retention rate

Let’s go into each of these in more detail.

NPS – Net Promoter Score

About two-thirds of all companies are using NPS to define where they stand in terms of the customer experience. Since 2003, when the metric was first introduced, NPS has been gaining popularity. Now most of Fortune500 companies, incl. Apple, and other global market leaders, incl. Airbnb benefit from the tracking this metric.

NPS is short and simple for the customer to answer and is very easy to track for companies. NPS consists of only two questions, to give you that one customer experience related number your leadership needs for target setting and bonuses. NPS is often used to rate a brand, service or product in general.

How to calculate NPS?

• Calculate the percentage of promoters among your surveyed customers
• Calculate the percentage of detractors
• Subtract the detractor percentage from the promoter percentage

% Promoters – % detractor = NPS score

Why should you use NPS?

• It is fast and simple for both businesses and customers
• Open feedback allows a lot of information to flow back into the business for in-depth analysis
• It is a globally recognised metric
• NPS can help you predict future revenue gains and losses
• It can help you to utilize Word of mouth marketing strategies.


CSAT is another of the most used CX metrics. It has many forms and scales, but the most common is a scale from 1 to 5. Most feedback tools use CSAT ratings in the form of stars.

CSAT is a very good way to measure if a customer is satisfied with a one-time interaction. It is most often used in customer service (or customer support). CSAT can also easily be adapted to meet the particular needs of your organization.

Why use CSAT?

CSAT is another very simple and efficient customer experience metric to implement. It’s typically very simple and fast for the customers to answer too. It is often asked from a customer after a transaction or customer support ticket to evaluate the efficiency of the customer service department. CSAT is a great way to see what your customers think about you right now.


Customer Effort Score is the third most popular customer experience metric that involves customer’s input. CES is a pure transactional metric and it typically assesses the simplicity of a single solution.

CES typically answers “how easy was it to solve your problem with {our company} today?” and has a 5-point or 7-point scale system.

CES is different from NPS or CSAT because, in order to make sense of it, you need to follow both the average score and the distribution of scores. Analyzing distributions could help you in identifying which of your customers experience effortless service and, more importantly, find those that struggle to during the process.

By pro-actively helping and reaching out to those who are struggling, you can effectively decrease churn.

Why use CES?

CES helps you to analyze the complexity of the service. Why is it important? 94% of customers going through an effortless experience are likely to repurchase vs. only 4% of those who went through a high level of effort.

According to the same research, 81% of customers going through a high level of effort are likely to share their bad experience with friends vs. only 1% of those who went through an effortless experience.

An interesting discovery is summed up in HBR article “Stop Trying to Delight Your Customers“- companies create loyal customers not by “wowing“ them, but by providing effortless experience.

CES is a good metric for revealing detraction drivers. With NPS and CSAT you most likely get a more balanced view; not only your weaknesses but also your strengths. Using any one of them is useful to understand the customer experience.


Customer churn rate reflects how many of your customers have stopped using your products or services.

Generally, customer churn rate counts the total number of lost customers or the percentage of lost customers within a defined time period. Sometimes, customer churn rate is calculated as a lost business value.

For example, you have signed 1,000 long-term contracts of a value of €100 at the beginning of the year, but now only 800 of those customers keep using your services. Depending on different ways to count your churn rate, it could be either 20%, 200 customers or €20,000.

Following the customer churn rate is critical because generally, it is much less expensive to retain existing customers than it is to acquire new customers.


Customer retention rate is the measurement of how a business retains customers over a specific period of time.

The metric is highly connected to the churn rate; the higher the retention is, the lower the churn rate would be.

For instance, if your churn rate is 10% over a year, that means that 90% of customers stayed with your company. Thus, the retention rate is 90%.

If that doesn’t make you work on your retention strategy just yet, think about this; loyal customers are 5 x as likely to repurchase, 5 x as likely to forgive, 4 x as likely to refer, and 7 x as likely to try a new offering, according to Temkin Group.

I hope you found this video helpful. Please feel free to comment below the video should you have any questions or requests for future content, and one of the team will get back to you.

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