CX Analytics 101: A Guide to Measuring and Improving Customer Experience


Patty YanEMEA Product Manager for RingCentral Office

Friday, April 29, 2022

Learn how to use CX analytics to take your business to the next level with this in-depth guide.

Article 8 Minutes
CX Analytics 101: A Guide to Measuring and Improving Customer Experience

Customer experience (CX) encompasses every interaction your business has with customers during their consumer journey. A positive customer experience doesn’t just influence the decision to make an individual purchase. It creates a foundation for a lasting relationship and fantastic customer lifetime value (CLV).

Nowadays, customers have higher expectations than ever. Customers want a streamlined experience on multiple channels. They need to be able to receive prompt, friendly and helpful responses whether they’re contacting you online or over the phone.

To stay competitive, you need to provide exceptional CX. But this can be challenging to quantify using just one KPI. That’s where CX analytics comes in.

What is CX analytics?

Customer experience analytics merely means collecting customer data for analysis. Customer data can give you a clearer picture of your typical customer journey.

Data can be collected from various sources, including your ecommerce site, reviews, surveys and other feedback, social media, webchat, etc. Customer experience analytics tools help track and organize your data.

Graph showing the usage of data sources by CX professionals in making decisions

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The more detailed information you can gather, the better. Every stage in the customer journey– from the initial point of contact; to purchase; to providing customer support–should be investigated.

CX analytics gives you a comprehensive picture of your customer journey. It also lets you anticipate their needs for the future.

When should you use CX analytics? Here are some central areas in which tracking metrics can be effective.

Tailoring your services

You can use CX analytics to identify your target customer demographic. Personalization is crucial for your customer service experience, but you can’t skate by on guesswork. Nor should you try to market your brand based on the interests of an imaginary customer or a demographic stereotype.

Gather data about your segment of the market. Who are they? Their age, occupation, geographic location, lifestyle and consumer habits should be taken into account.

After using analytics to understand your target customer, you can adapt your services accordingly.

Reducing churn rate

If you can attract new customers but keep losing the ones you’ve got, something is amiss. Your business needs to see sustainable growth over time. A high rate of customer churn prevents this from happening.

So, investigate. Hoard as much data as you can to discover the friction points on your customer journey. Even an outstanding service is likely to have a few stumbling blocks.

Use analytics to discover which parts of your service the customers find hardest to use so you can smooth their path.

Visual looking at the 4 different types of market segmentation

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Renewal or repurchase

So, you successfully converted a prospective customer. Congratulations! The next phase begins. You need customers to return, renew their subscription or buy more products from your business.

Holding onto old customers is cheaper and easier than obtaining new ones. After investing money and time into your brand, customers will be reluctant to abandon you—unless something has gone badly wrong.

Make increasing renewal or repurchase rates a goal. Use analytics to help garner data on why customers do or don’t choose to return. Prioritizing this will spotlight any glaring issues and vastly enhance your customer service.

After you’ve determined which areas to work on in your own business, the next step is to choose which KPIs to measure.

6 possible metrics to track

1. Call deflection rate

Call deflection means reducing the volume of unnecessary calls instead of diverting customers to digital services, such as messaging.

This isn’t used to avoid interacting with customers, though it can lighten workload. Instead, it’s a cost-effective way to improve customer convenience and empower your customers, allowing them to take control of their experience.

For example, if a customer struggles to log into an app, it’s a waste of time directing them over the phone. Self-service or a chatbot is quicker and reduces frustration and friction. Increasing call deflection is one possible area to track.

2. Customer Effort Score (CES)

Customer Effort Score measures how easy it is for customers to use your product, find the information they need, resolve any issues or seek support.

Although benchmarks will vary based on your industry and the complexity of your service, you should aim for a high CES. Customers who find your product difficult to use and can’t readily seek support report lower overall satisfaction.

Visual showing the formula for customer effort score

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3. Net Promoter Score (NPS)

Net Promoter Score measures customer experience based on the single question: “How likely are you to recommend [product] to a friend or colleague?”

Responders to this survey can then be categorized as Detractors, Passives or Promoters.  Detractors are unhappy customers who are likely to warn others off buying from your business. Passives are reasonably satisfied, but competition could sway them. Promoters are your most loyal customers who will contribute value long-term.

Users who experience bumps on their customer journey will likely have low NPS scores. It’s helpful to track the percentages of your customer base who belong to each group. Increasing the number of Promoters and reducing Detractors is an objective to work towards over time.

4. Churn rate vs. customer retention

Churn rate is the rate at which customers quit doing business with your company. Tracking churn rate gives you a sense of your ability to retain customers.

Note: Encouraging customers to give feedback is one way to keep long-term customers engaged while also adding value to your business by generating data for CX analytics. Customer engagement improves retention. Thus, CX analytics can work to enhance the business-to-consumer relationship on multiple levels.

5. Average Handle Time (AHT)

Average handle time is the duration of a customer call transaction. Although the amount of time a customer needs to spend on the phone will vary depending on your business, you don’t want to waste a customer’s time.

A high AHT due to long, complicated transactions suggests high CES, which could mean lower overall customer satisfaction. Here, real time analytics can be used to improve the quality of calls.

Visual for the Average Handle Time formula and how to calculate

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6. Revenue growth

Revenue growth is one of the most crucial KPIs. After the first flush of success, you need to be able to see whether your revenue is growing month after month. Retaining customers for the long-term at the same time as you attract newcomers will allow your business and revenue to grow.

So, how can you use software to leverage CX analytics? CX management tools usually offer various features, including affiliate program management, workflow optimization, web content management, etc.

Important features of CX management software

  • Integrations: Your new software needs to be intuitive, easy to use and capable of integrating with your existing systems. Some software will have built-in connectors, while others will require APIs.
  • Executive dashboards: A CX dashboard is a valuable tool for data visualization. It provides an insightful summary of the most significant KPIs so that managers can make decisions at a glance.
  • Performance analytics: Performance analytics demonstrate how individual employees are performing according to select KPIs. Significant points for review could include talking speed and tone on calls.
  • Customer contextual data: Modern customers require their CX to be personalized. Customer contextual analytics help you deliver individualized content.

Contextual data is information that shows how different pieces of data connect. You can tailor your services to deliver outstanding CX using contextual data such as the customer’s product usage and personal details.

The features you select will depend on your particular product and industry, but take an additional note of data security. DTLS protocol. As the software is handling lots of sensitive data, security is crucial.

4 stats shwoing the importance of customer experience

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Finally, you have incorporated CX software into your systems. What do you do with all that information?
Recording a chaotic jumble of numbers will make it difficult for your colleagues to track your progress. Instead, you should organize your data. You can do this using a spreadsheet, graphs, a slideshow or any format which works for your company.

How to structure a CX report

Your CX report should include the following elements.

  • Title: Explain the subject of the report. What do your KPIs show?
  • Insights: List the metrics you have been tracking, with context about priority levels and the teams to which they are relevant.
  • Customer comments: Include any free-text feedback from customers. Present alongside insights as supporting evidence.
  • Background and analysis: This is where you tell the story behind the data. Present any theories for your insights and suggestions for actions to take. Include anecdotes and quotes. This will help make it more accessible and interesting to read.
  • Celebrate success: Highlight any positive takeaways from the data. Motivate your colleagues by giving them credit for their hard work and the improvements they have already made.

No matter what form your CX report takes, encourage all employees to have a read. Everyone in your workplace should feel like they’re on the same team. All colleagues should be familiar with the needs of your typical customer and be aware of your current CX goals.

Pie chart showing the benefits of CX and why businesses should improve theirs

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Summing up

Customer experience management is valuable no matter your industry, business or goals. CX data can take your marketing and customer service to the next level. But crucially, it can also enhance your customer retention and boost your overall growth.

The right software should have excellent integration, the ability to collect analytics from multiple channels, and data visualization that conveys crucial information at a glance. Software also offers workflow optimization and different types of web services testing to check your online analytics.

With CX analytics, you’ll never let customers down again.

Patty Yan

Patty is the EMEA Product Marketing Manager for RingCentral Office, the leader in cloud communications solutions with robust features of business phone system. Patty is passionate about creating value and differentiation, ensuring a better experience for customers and partners. She gained a wealth of international product marketing, product management, GTM and market development experience, across a range of high-tech SaaS in a fast-paced, hyper-growth environment that assumes both strategic and tactical execution. She is not new to UC, starting in Tandberg, then Cisco, driving the launch of video collaboration and services, and Enghouse with global responsibilities for hosted CCaaS. Patty has also written for sites such as MyCorporation and Lucky Orange.


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