By Shaun Sheikh | CEO, Jump 450
If you’re struggling to make ad campaigns on Facebook or Google profitable, you’re not alone.
According to Wordstream, an average Facebook ad click now costs $1.86, while Google Adwords sits at a whopping $2.69.
With a constrained supply of inventory and ever-expanding advertiser demand, ad auctions are achieving greater market efficiency and becoming more expensive than ever before. The sharp rise in click costs means that, for many advertisers, breaking even on the first sale is now deemed a success.
This dynamic also illuminates why many advertisers burn through their budgets without realizing any semblance of a return.
As competition increases and demand continues this upward trend, the most successful companies will be those who know how to generate long-tail revenue from their customers—affording them the ability to break even at a two, four or even six-month period from the moment acquire a customer.
The only way to do that is to evolve beyond “conversions” and “click-throughs” and to embrace “customer experience” metrics that turn a one-time customer into a blossoming long-term relationship and extends customer lifetime value (LTV).
3 Customer Experience (CX) Metrics To Track
Here are 3 customer experience (CX) metrics to add to your spreadsheets and dashboards for tracking long-term customer behavior and its impact on profitability:
1) Net Promoter Score (NPS)
We’re in the midst of the “word by mouse” era. Customers are constantly sharing their buying experiences and appearances online and the Net Promoter Score (NPS) this generates has a direct impact on your reputation and sales.
Surveying your customers is the best way to gauge NPS. The key question to ask is how likely they are to recommend you. Those scoring a 9 or 10 are considered ‘brand promoters,’ while those who score between a 0-6 are considered ‘brand detractors.’ The delta between these two metrics is what delineates your NPS.
It’s a prudent strategy to give your ‘brand promoters,’ customers who are your biggest fans, special attention, while soliciting critical feedback from your ‘brand detractors’ to see where you can make improvements.
Try social listening tools to track your customers’ social shares and comments to see if they mention your brand. For those that don’t, consider an ethical way of approaching them and ask if they can recommend your products to their followers.
2) Net Customer Value Growth (NCVG)
With customer acquisition costs rising in a demand-increasing environment, it’s critical to measure customer value beyond the first sale with Net Customer Value Growth (NCVG).
NCVG is the evolution of ‘customer churn.’ This metric tells you whether the total value of customers gained in a period exceeds those that are lost and how successful your marketing, customer service, and retention are all operating when clubbed together.
The formula for NCVG is:
Net Customer Value Growth = New Customer Total Value – Lost Customer Total Value
3) Customer Experience (CX)
The** Customer Experience (CX**) metric tracks the overall relationship with your customers. CX tells you if this relationship is getting stronger or weaker. If it’s too low, then you know you need to turn up your marketing activity or improve the brand-customer experience.
Some of the ways to track CX are to measure the # of:
- Customers upgrading to higher priced versions of your product or service
- Customers not renewing or unsubscribing
- Customers closing accounts in response to a widespread product issue or complaint
- Content pieces viewed by customers before purchase pointIt’s Not Just What To Track, But How You Do It
Knowing what to track is only half the battle. Having a quick and easy way to do it can be a bigger challenge.
A simple Excel spreadsheet may be enough to get started, but it can get overwhelming fast. Extracting actionable data can be prove to be a brain-straining puzzle of macros and formulas.
When your Excel spreadsheets start to buckle, it’s time to upgrade to a ‘big data’ analytics package. They can pull all your CRM data, chats and third-party data into a single dashboard. Some of the best analytics dashboards include Domo, Cyfe, GoodData, and Sisense.
CX Is The Key To Long-Term Planning and Profitability
As digital advertising becomes more competitive, projecting and enhancing a customer’s value six months down the line will be the only way to compete. To that end, a clear and reliable understanding of your brand’s CX metrics and a relentless commitment to optimize them will be requisite for long-term success.
CX is where the true value of your business lies: your ability to attract, satisfy and retain customers over the long haul. With a host of different CX data points at your fingertips, you can improve each stage of the brand-customer relationship to drive higher lifetime value and greater profitability.