Measuring Important Metrics for B2B Customer Experience In SaaS
As per a B2B Marketing survey (smartkarrotdotcom), making CX a priority should be the focus for two-thirds of marketers. Customer experience is the most influential factor in customers’ minds in the decade. It is all set to be the differentiating factor in customer relations. Many B2B companies make their CX strategy effective to improve growth and report high returns on investment.
An improved focus on customer experience is good for business and customers. It creates a competitive advantage for businesses that will drive revenue expansion, customer retention, and increase customer lifetime value.
If you have a B2B SaaS company, it is important to focus on measuring performance through some KPIs. Many times KPIs focus on acquisition costs, growth, or revenue. Customer experience has become important for customers as they filter through various choices in the market.
Metrics for B2B SaaS Customer Experience
B2B SaaS companies have data to use for marketing automation, support cases, learning management systems and more. To measure and track customer experience in B2B SaaS companies, there are some metrics.
Customer Engagement metrics
These metrics measure buyer engagement that leads to growth, retention, and loyalty. Aspects like customer community engagement, product adoption, business reviews, and survey response rates.
Customer health, outcomes, and loyalty
These metrics gauge customer outcomes, success stories, NPS, net retention rate, customer health score, customer churn, and referrals.
CSAT, onboarding time to value, upsell, and renewal bookings are some of the metrics under the transactional results.
Feature utilization and resolution time are part of the maintenance and delivery-oriented actions.
The major metrics that can be gauged with metrics
Net Promoter Score — NPS
NPS is a famous customer experience metric that applies globally. The metric was introduced in 2003 and is gaining popularity. NPS is simply a way for companies to understand how customers feel about their experience. Whether or not it gives them the factor they signed up for, and they would recommend it to friends and family. NPS is
- Easy, simple, and fast for companies and customers
- Feedback driven, so the big picture is available
- A widely recognized industry standard metric or benchmark
- Useful in predicting future revenue loss or gain
- Great for marketing strategies and social media
Customer Satisfaction- CSAT
CSAT is another important CX metric. It is commonly measured on a scale of one to 5. CSAT is a great tool to measure one-time interactions.
They can be customized as per the needs of the organization. CSAT is a simple and efficient customer experience metric. It is like a quick survey that gives you an on-point answer to what customers think of your company.
It is a transactional way to measure customer satisfaction. These CSAT results also affects employees. Employee morale increases when they see that their work or products are being liked by customers.
Customers need to rate their satisfaction from very satisfied to not at all. They are helpful in measuring the effectiveness of campaigns at the moment. It is a great way for marketing teams to understand how their campaigns work.
Customer Effort Score (CES)
Customer effort score is a customer experience metric that drives itself on the input of customers. It is purely a transactional metric that bases itself on a single question.
How easy was it to solve your problem with our solutions?
Typically, it is collected on a 5 or 7 point-based scale system. To make sense of CES, it is important to note both the average scores and also the distribution of scores.
If customers are facing difficulties in using the product, they can be contacted. This will improve their experience and, in turn, boost customer retention and loyalty. These individual processes help decrease churn effectively.
As per a discovery by HBR in the article – Stop trying to delight your customers-, companies need to create an effortless experience to create loyal customers. CES is what drives the loyalty of businesses.
CES is also a good metric to understand the product experience journey of customers. You get a thorough view of customer experience from the CES metrics.
Customer Retention Rate
Customer retention rate is a measure of how a business keeps its customers over a period of time. It is connected to the churn rate heavily. It can be considered to have an inverse relationship with it.
If your churn rate is 15 % in a certain year, your customer retention rate is 75 percent. A customer retaining with the firm is heavily based on their experience with the firm. It is beneficial for customers to improve customer retention. The importance of customer retention rate is not new.
A mere 5 percent increase in customer retention can increase company revenue by nearly 95 percent.
Customer Churn Rate
Customer churn rate is a measure of how many customers have skipped or left using your products and services. The customer churn rate is the total number of customers within a given time period. It means the lost value of the business.
When your customers leave, it means you have lost business permanently. It becomes tough to acquire new customers always. It means the customer has either canceled business or chosen not to renew with the company.
Churn is something companies need to look out for. If churn increases, the growth rate decreases.
The number of customers lost — divided by the number of total customers, in the beginning, is the churn rate. Churn rate measurement is important to understand the progress of the business.
Customer lifetime value
Customer lifetime value is a figure of prediction of the net profit that can be calculated for the entire relationship with a customer. It is the business value of the customer throughout their stint with the company.
It is defined over a period of time. Customer lifetime value is a key stat in measuring the value a customer is to the company with a time span. CLV is equal to customer revenue minus the costs of serving and acquiring the customer.
Business KPIs that influence customer experience
While understanding customer feedback is important for any business, it is also important to look at some operational KPIs.
- Average resolution time or time to resolution
- Marketing campaign effectiveness
- Conversion rates
- Customer acquisition rate
- Direct traffic
- Cart abandonment rate
Bottom Line: No single measure is a great measure
There is no single measure that will prove perfect to measure the customer experience for B2B SaaS companies. There are no out-of-the-box solutions. Instead, it is the average time taken to solve an issue.
If customers get a good experience, they will refer to others. This will improve the net promoter score. If they are happy, they will be retained- improving the customer retention rate.
Time to resolution is important as it is a great metric to optimize the customer experience. Using the basics of the voice of customer and product engagement, it is possible to improve customer lifetime value.
An effective customer experience measurement program plays an important role in customer retention, reducing churn, and growth.
Without tracking the right metrics, companies will not have the right picture of how the customer experience strategy works. With these metrics, it is possible to understand their investment into customer experience and customer satisfaction.
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