Key CX Metrics for a SaaS company

Welcome to the world of customer experience (CX). It's a complicated one, but thankfully, there are some simple metrics that can help you understand how your Client Services function is doing. In a nutshell, CX is the sum total of how your customers perceive their interactions with your product or service, and it’s important because it drives loyalty, brand recall, revenue, company valuations, costs, and other business outcomes.

While it might feel that measuring CX is about asking customers what they like and don't like about their current product or service and stuff such as:

• Did the company make it easy for you to use the product or service you bought?

• How long did it take you to complete an action?

• How much effort was involved?

• Did you get what they were sold in the sales cycle?

• Did you have any problems? If so, how many were there, how long did they last, did you feel cared for while the company resolved your problems, etc.?

• Did the service meet your expectations?

Well, there’s a lot more to it. The table below lists a few broad categories of KPIs (key performance indicators) that CX leaders should be measuring:

Here are a few tips that will come in handy as you build and deploy your CX measurement framework:

1. Key Performance Indicators (KPIs): must be specific, measurable, achievable, relevant, and time-bound (SMART) metrics.

2. Identify the business objectives: The first step in implementing KPIs is to clearly define the business objectives that you want to track and measure. These objectives should be aligned with the overall goals of the organization.

3. Select the KPIs: Once you have identified the business objectives, you can select the KPIs that will be used to track and measure progress towards these objectives. It is important to choose KPIs that are relevant to the business objectives and that are easy to measure and track.

4. Set targets: Next, you will need to set targets or benchmarks for each KPI. These targets should be specific, measurable, and achievable, and should be used to track progress over time.

5. Collect and analyze data: In order to track and measure the performance of the KPIs, you will need to collect and analyze data on a regular basis. Show trends.

6. Communicate and report on the KPIs: It is important to regularly communicate and report on the performance of the KPIs to stakeholders, including management, employees, and customers. This can be done through regular meetings, reports, or dashboards.

7. Take action: Finally, once you have collected and analyzed the data on the KPIs, you can use this information to identify areas for improvement and take action to address any issues or challenges.

8. Segment: it’s best to look at trends and performance across different customer segments such as by size (ARR), industry vertical – pharma, Corporate, government, etc.

9. Analyze by Rep: look for performance trends by the service reps. This allows you to reward the best performers and help improve poor performers.

In a nutshell, take baby steps. Start with few most meaningful and impactful KPIs. Try and keep these in single digits. Measure, analyze, and report performance. Show impact and improvement.

Keep reading if you would like more details and definitions of the KPIs discussed and tabulated above.

1. CX Related:

CSAT, NPS, CES, bugs per customer, product uptime, SLAs, abandon rates, support escalation rates, and the average number of days cases are open are all potential CX related KPIs (key performance indicators) for a customer service function of a SaaS (Software as a Service) company. These metrics can provide insights into how well the company is serving its customers and how effective its customer service function is at meeting their needs and expectations.

· Customer Satisfaction (CSAT) scores: These scores are based on a question asking customers to rate their overall satisfaction with the product or service they received on a scale of 1 to 5, with 5 being the highest score. A high CSAT score can indicate that customers are satisfied with the product or service and with the customer service they received.

· Net Promoter Score (NPS): This is a measure of customer loyalty based on a single question: "On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?" Customers who respond with a 9 or 10 are considered "promoters," those who respond with a 7 or 8 are considered "passives," and those who respond with a 0 to 6 are considered "detractors." The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. A high NPS indicates that customers are willing to recommend it to others.

· Customer Effort Score (CES): This score measures the effort required by the customer to interact with the company and receive the desired outcome. It is based on a question asking customers to rate the effort required to resolve their issue or complete their desired task on a scale of 1 to 5, with 5 being the highest score. A low CES indicates that the customer service function is making it easy for customers to interact with the company and receive the desired outcome.

· Bugs per customer: This metric reflects the number of bugs or issues that customers experience with the company's products or services. A low number of bugs per customer indicate that the product or service is reliable.

· Product uptime: This metric reflects the percentage of time that the product or service is available and functioning as intended. Higher uptime is better.

2. Customer Engagement Related:

User Logins, customer referrals, customer reviews, use of knowledge base (KB) content (articles, videos, in-app etc.), client training compliance, Support Cases, In-product time, and community usage are all potential measures of customer engagement.

· Monthly Active Users (MAUs): This metric measures the number of unique users who engage with the product in a given month. It helps companies understand how frequently their customers are using the product.

· Daily Active Users (DAUs): This metric measures the number of unique users who engage with the product on a daily basis. It helps companies understand the level of daily engagement from their customer base.

· Customer Referral: This is a measure of the customers who are willing to make a recommendation to someone else, either personally or through a review or testimonial, to try a product or service offered by a company.

· Customer Reviews: It measures the online reviews and ratings that customers are willing to make for the company's products or services as a results of the customer service reps.

· Knowledge base (KB) content usage: The extent to which customers are using a company's knowledge base or self-help resources is an indicator of their level of engagement with the company and its products or services.

· Client training compliance: The extent to which customers are complying with required training or onboarding processes.

· Community usage: It measures the extent to which customers are participating in online communities or forums related to the company's products or services.

3. Service Related:

SL, abandon rates, FCR, CES, wait time in queue, case closure timelines, TAT, and time to first value are all potential service related KPIs (key performance indicators) for a customer service function. These metrics can provide insights into the effectiveness and efficiency of the customer service function and help the company identify opportunities for improvement.

· Service level: Service level is a metric that is used to measure the performance of a contact center in terms of the quality and timeliness of the customer service it provides. It is typically expressed as a percentage and is calculated by dividing the total number of calls (chats) that are answered within a specific time frame (e.g. 20 seconds) by the total number of calls (chats) received during that same time frame. For example, if a call center receives 100 calls in each day and answers 95 of them within 20 seconds, its service level would be 95%.

· Abandon rates: Another contact center metric. This reflects the percentage of customer interactions that are terminated before they are completed. A low abandon rate is better. More broadly, abandon rate refers to the percentage of visitors to a website or users of a product or service who leave before completing a desired action or task. In the context of a website, the desired action might be making a purchase, filling out a form, or signing up for a newsletter. In the context of a product or service, the desired action might be completing a transaction or using the product or service as intended.

· Support escalation rates: This metric reflects the percentage of customer interactions that require escalation to a higher level of support. Lower is better.

· Average number of days cases are open: This metric reflects the average amount of time it takes for the customer service function to resolve an issue or complete a task. A low average number of days cases is better.

· First Contact Resolution (FCR): This metric reflects the percentage of customer interactions that are resolved on the first contact. A high FCR can indicate that the customer service function is effective at resolving issues and meeting customer needs.

· Wait time in queue: This metric reflects the amount of time that customers have to wait before their call or request is answered. A low wait time in queue means that the customer service function is equipped to handle the volume of interactions in a timely manner.

· Case closure timelines: This metric reflects the amount of time it takes for the customer service function to resolve an issue or complete a task. A short case closure timeline is better.

· TAT (turnaround time): This metric reflects the amount of time it takes for the customer service function to complete a task or request. A short TAT means that the customer service function is able to complete tasks quickly.

· Time to first value: This metric reflects the amount of time it takes for the customer to receive the first value or benefit from using the company's product or service.

4. Cost Related:

Cost of servicing as a percentage of revenue, professional services profitability, and the ratio of assisted to self-service are all potential cost KPIs (key performance indicators) for a customer service function. These metrics can provide insights into the efficiency and effectiveness of the customer service function and help the company identify opportunities for cost savings or optimization.

· Cost of servicing as a percentage of revenue: This metric reflects the amount of money that a company spends on customer service as a percentage of its overall revenue. A high cost of servicing as a percentage of revenue means that the company is spending a significant portion of its revenue on customer service, which may not be sustainable in the long term.

· Professional services profitability: This metric reflects the profitability of the professional services that a company provides to its customers, such as consulting or training. A high professional services profitability can indicate that the company is effectively leveraging its expertise to generate profit.

· Assisted vs. self-service: This metric reflects the ratio of customer interactions that are handled by customer service representatives (assisted service) versus those that are handled through self-service channels, such as online knowledge bases or FAQs. A high ratio of self-service to assisted service can indicate that the company's self-service resources are effective and that customers are able to resolve their issues or complete their tasks without the need for assistance.

5. Adoption and Usage Related:

Feature utilization, product/service usage, consumption, adoption, and time to first value (TTV) are all potential adoption & usage related KPIs for the customer service function of a SaaS (Software as a Service) company. These metrics can provide insights into how well the company is helping its customers to adopt and use its products or services.

· Feature utilization: This metric reflects the extent to which customers are using the various features of the company's products or services. A high feature utilization means that customers are getting value from the product or service.

· Usage & Consumption: This metric is the measure of using what has been purchased by the customers. E.g. having used an X number of professional services hours of the Y hours purchased.

· Time to first value (TTV): This metric reflects the amount of time it takes for the customer to receive the first value or benefit from using the company's product or service. A short TTV means that the customer is able to get value from the product or service quickly.

· Adoption: This metric reflects the percentage of customers who are using the company's products or services.

6. Revenue Related:

NRR, ARR, referral dollar, leads generated, professional services revenue, and services revenue are all potential measures of revenue growth that can be influenced by customer experience (CX). These measures can provide insights into how well a company is leveraging its customer relationships to drive revenue growth.

· Net Revenue Retention (NRR): This measure reflects the percentage of revenue that a company retains from its existing customers over a given time period. A high NRR indicates that the company is effectively retaining its existing customer base and generating additional revenue from those customers.

· Annual Recurring Revenue (ARR): This measure reflects the predictable and recurring revenue that a company generates from its customer base over a given time period. A high ARR indicates that the company has a strong and stable customer base that is generating predictable and recurring revenue.

· Referral Dollars: This measure reflects the amount of revenue that a company generates from customers who were referred to the company by existing customers. A high referral dollar indicates that the company's customers are satisfied and willing to recommend the company to others, which can drive additional revenue.

· Leads generated: This measure reflects the number of potential customers who have expressed interest in the company's products or services as a result of the efforts of the customer service representative.

· Professional services revenue: This measure reflects the revenue that a company generates from providing professional services, such as consulting or training, to its customers.

· Services revenue: This measure reflects the revenue that a company generates from providing services, such as maintenance, support, or success, to its customers.

7. VOC (Voice of the Customer) Related:

It refers to the collection and analysis of customer feedback and insights, typically through surveys, focus groups, and other methods.

· The goal of VOC is to understand the needs, preferences, and experiences of a company's customers, and to use this information to improve products, services, and the overall customer experience.

· By collecting and analyzing VOC data, companies can identify opportunities for improvement, address customer complaints and concerns, and develop strategies to better meet the needs of their customers.

· Deploying a Customer Listening System (CLS) to capture, report, and close loop the VOC is a best practice worth deploying. It is an important part of customer relationship management (CRM) and can help companies to build products as desired by the customer and in turn build strong, lasting relationships with their customers.

By tracking KPIs, companies can get a better understanding of how their customers feel about their products and services and identify areas for improvement.

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