August 27, 2021 | Written by Sarah Kordyban

How to Measure Customer Satisfaction KPI’s

Most businesses do not assess and measure the customer journey as a whole. However, with six key performance indicators, your team will be well-positioned to transform your organization's results.  

You might've heard experts say, "creating a great customer experience is simple; all you need to do is prove you genuinely care about your customer." However, while many businesses believe they are caring about their customer, brands continue to fail. 80% of companies currently believe that they deliver superior customer service. In comparison, only 8% of people believe that they do, according to Lee Resources. Why is this the case?   

Most businesses do not assess and measure the customer journey as a whole. However, with six key performance indicators, your team will be well-positioned to transform your organization's results.   

1. Total Advertising Reach

Reach is a KPI used to measure the total number of potential and current customers that have seen your businesses offering over a specific period. With this metric, your team will determine how much promotional activity your brand is doing. You can also break down your numbers by promotional channel to determine which avenues are working and abandoned.   

To measure reach (without an advanced marketing tech stack), most businesses will use an Excel spreadsheet that lists all their current marketing channels. You will also want to include the cost per advertising method and the number of people you reach in the sheet. On digital mediums, most platforms will give you an "Insights" overview. And traditional media will typically provide you with the numbers (I.e. print ads will normally be distributed on a per-issue basis).

2. Conversion Rate   

The conversion rate is a ratio used to determine the number of leads received per marketing channel used. This metric will help your team determine which channels have resulted in the most sales and can help you work backwards to determine how big of a net you should cast. For example, if you wanted to make five sales, you could work backwards to determine how many people you would need to reach by email.   

To measure your conversion rate, take the number of leads for your marketing medium and divide it by the total number of visitors in the same period (many marketers choose to measure this metric over a monthly period).   

3. Lead Count  

When we break it down, the purpose of marketing is to create new sales opportunities or leads. Therefore, with this KPI, you will be able to tell the total number of leads coming into your organization and understand the breadth of your new business potential. You can also determine how much each lead costs when comparing it to marketing dollars. As a marketer, this can help you determine where you should direct future marketing spend.   

Measuring this KPI is a little more complex and may require tracking software for calling, a redeemable offer such as a coupon or a customer relationship management system. You may even get your sales team to ask the prospect what brought them to this call in the first place. The total number of leads gathered per method will create the lead count KPI.    

4. Close Rate

Simply defined, the close rate is the percentage of leads that become commercial transactions. With the close rate, your organization will tell how much additional opportunity exists for your sales team. For example, if 75% of your leads aren't being closed, your team has a 75% growth opportunity.   

To accurately track this metric, your team will need to first figure out which method to track all incoming leads and, secondly, consider what a lead is. For example, a customer relationship management system like HubSpot may offer sales features that track your customer from a prospect through to close. All your team will be required to do is define what a lead is in the system.  

5. Revenue

What you might not know is that revenue is more than a number. It is a breakdown of new customers, existing customers, average transaction size, average gross margin, and orders for new and existing customers. Looking at all this data can tell you the direction your business is going. For example, consider if you're trying to expand your business and the number of new customers largely outweighs your existing customers. This would indicate your business is moving in the right direction.   

6. Net Promotor Score

The net promoter score is a reputation management KPI to determine the overall sentiment a customer has towards your business. Today, 93% of all consumers state that reviews impact their purchase decision. This means encouraging and managing online reviews should be a focus, not an afterthought. With consumer input, your team can identify areas where you can quickly exceed customer expectations. We can calculate the net promoter score (NPS) by taking the promoters' percentage and subtracting detractors. The higher the value, the more likely you will receive repeat customers and referrals.   

You can collect this data in a few ways, such as an online survey sent out by email.   

Carefully considering each of these key performance indicators can help your team determine how you can continue to meet and exceed your customer's experiences. 

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