9 Customer Success Metrics For E-Commerce You Can’t Ignore In 2022

10 min read
9 Customer Success Metrics For E-Commerce You Can’t Ignore In 2022

In today's competitive and demanding e-commerce environment, putting customers first has become of utmost importance. Consider their feedback when improving your products, offer a seamless shopping experience, provide excellent customer service, and maintain ongoing relationships to keep them loyal.

Or in other words, behind every thriving business, there is a happy customer.

So how do you measure customer success? Yes, guessing is an option, but it is very unlikely that this will bring you the results you’re hoping for.

If you want to know how well you’re really doing, customer success metrics are the way to go.

Continue reading this post to learn which key success metrics to track to evaluate the performance of your e-commerce business and keep growing in 2022 and beyond.

What is customer success?

Two words that can define customer success are the positive result of all your efforts. Customer success is the desired outcome you get for creating products that meet customers' needs, continuously providing proactive support, and doing other things to ensure your customers are satisfied with the services you offer.

Besides obvious benefits for customers, excelling at customer success comes with many benefits for the company itself. This includes more satisfied and motivated employees, reduced customer churn and better retention rates, improved customer experience, which all lead to something every business seeks – higher revenue and growth.



How to measure customer success?

Although customer success as a concept might seem quite abstract to put in numbers, there are plenty of customer success metrics that you can track to follow your progress.

The tricky part here is that there is no easy way to tell what specific metrics you should choose to measure customer success. They may vary from business to business, depending on products and what actually matters to the company.

However, there are several key success metrics that can be adjusted and used for most e-commerce businesses and can’t be overlooked if you care about maintaining your customers (likely, you do…).

Those are:

  1. Net Promoter Score (NPS)
  2. Customer Satisfaction Score (CSS)
  3. Customer Retention Rate (CRR)
  4. Customer Lifetime Value (CLV)
  5. Customer Effort Score (CES)
  6. First Contact Resolution Rate (FCR)
  7. Churn Rate
  8. Number of referrals
  9. Qualitative customer feedback

Let’s analyze them in more detail.

9 key customer success metrics you need to track

1. Net Promoter Score (NPS)

Net Promoter Score is one of the key metrics that can help you evaluate the loyalty of your customers. The number you get can vary between -100 and 100 and indicate whether or not your customers are willing to spread the good word about your brand.

Therefore, when conducting an NPS survey, you should ask customers one simple question: “How likely are you to recommend us to your family or friends?”

Respondents then express their experience by giving a rating between 0 (would not recommend at all) to 10 (extremely likely to recommend).

NPS survey - HelpCenter example

  • HOW TO CALCULATE NET PROMOTER SCORE?

Based on their answers, you can break your customers down into three categories:

🙌🏼 Promoters – those who have responded with a score of 9-10. Promoters are loyal customers that are happy to recommend your business to others.

👍🏼 Passives – those who have responded with a score of 7-8. Passives are customers that are satisfied but not too excited. They are also more likely to switch to your competitors.

🙅🏼 Detractors – anyone who has responded with a score of 0-6. These customers aren't willing to spread the good word and can do some damage with negative comments.

To get your NPS, simply subtract the percentage of detractors from the percentage of promoters.

How to calculate Net Promoter Score - NPS survey formula

The higher is the number you get, the happier your customers are.

2. Customer Satisfaction Score (CSAT)

Customer Satisfaction Score, or CSAT, is quite similar to NPS. The key difference between these two customer success metrics is that while NPS is used to measure long-term customer satisfaction and loyalty to a brand, CSAT is mainly used to evaluate short-term or some specific experiences.

For instance, you can use CSAT to understand how happy your customers are with a particular service provided, be it interaction with your customer service team, a transaction, or a specific product.

  • HOW TO MEASURE CUSTOMER SATISFACTION SCORE?

You can get your CSAT score by dividing the number of satisfied customers by the total number of responses and multiplying it by 100.

How to get Customer Satisfaction Score - CSAT formula

You'll get the number expressed in percentage, and this method works best if you ask a simple Yes/No, True/False question.

If you want your customers to rate their experience from, let’s say, 1 to 10, you should modify the formula a bit. Add up all the response scores given (e. g. 9 + 4 + 6 + 8), divide by the maximum scores possible (10 + 10 + 10 + 10), and multiply by 100.

3. Customer Retention Rate (CRR)

Attracting new customers is important, but witnessing the old ones coming back over and over again is what can make a business thrive. All in all, retaining an existing customer is a few times cheaper than acquiring a new one. Besides, returning customers tend to spend more, which, as a result, increases your profits.

That's why it's crucial to track Customer Retention Rate. Return customers are satisfied with your products and don't mind spending their money on them.

If you start noticing that not that many shoppers ever come back – here’s where you can start investigating what the problem behind this is.

  • HOW TO CALCULATE CUSTOMER RETENTION RATE?

The formula for Customer Retention Rate is pretty simple. CRR is usually calculated for a specific period of time – so first, decide on a period you want to measure (e. g. a quarter, 6 months, a year).

Then, take the number of customers at the end of your chosen period and subtract them from the ones you acquired during that time. Divide the number you get from the number of customers at the start of your selected period and multiply everything by 100.

How to calculate customer retention rate - formula

A good retention rate varies between industries, but the higher you can get, the better.

4. Customer Lifetime Value (CLV)

Customer Lifetime Value lets you calculate the total revenue generated from a single customer over the whole period of your relationship (“customer lifetime”). It is an important success metric as it’s closely related to customer retention, helping a business increase its revenue.

Tracking Customer Lifetime Value can get you a better overview of how well customers are doing with your products or services. It can encourage you to improve your customer experience, start a loyalty program, or streamline your customer service to satisfy the shoppers.

Increasing CLV means you’re doing something right as people are willing to pay more over time.

  • HOW TO CALCULATE CUSTOMER LIFETIME VALUE?

To find out what your CLV is, take the Average Order Value (you can get it by dividing total revenue by the number of orders over the specific period of time), multiply it by the average purchase frequency rate and then multiply the number you get by your customer lifespan.

Calculating customer lifetime value - CLV formula

For instance, if a customer spends 150$ a month on your products, buys two times per month for three years, your CLV would be (150 x 2) x 36 = $10,800.

5. Customer Effort Score (CES)

Customer Effort Score aims to determine how much effort a customer has to put into performing or completing a specific action, like setting up your product or getting help from customer support.

The idea behind tracking this metric is to evaluate the possible issues to improve your processes. Because the easier it is for your customers to get something done, the better the chances are that they're going to stay.

Example of Customer Effort Score survey

  • HOW TO MEASURE CUSTOMER EFFORT SCORE?

At a glance, calculating CES is very similar to measuring NPS or CSAT, just focused on different results. To get your CES, you can also ask your customers a single question. For example, “To what extent do you agree with the following statement: it was easy to resolve my issue?" and provide them with a scale of numbers. It can range from 1 (strongly disagree) to 7 (strongly agree). Then, divide the sum of all customer effort scores by the total number of respondents.

How to measure Customer Effort Score - CES formula

The closer your number is to, in this case, 7, which is strongly agree, the easier it is for your customers to resolve their issues.

6. First Contact Resolution Rate (FCR)

First contact resolution rate is an important customer success metric that helps get an idea about the performance of your support team. By calculating FCR, you can learn how many customers resolved their problems during the first interaction with your support agent, no matter the channel (live chat, call, email, etc.)

Since customer service overall has the power to either lift your business to new heights or leave many customers disappointed, tracking FCR becomes important to spot possible pain points within your team. Experience, product knowledge, teamwork, the right tools, and other factors all play a role here; thus, when FCR appears to be low, your support team might lack efficiency.

  • HOW TO CALCULATE THE FIRST CONTACT RESOLUTION RATE?

You can calculate your First Contact Resolution Rate by dividing the number of issues resolved on the first contact by the total number of issues and multiplying by 100.

Tracking first contact resolution rate - formula

For example, if your customer service team resolved 200 issues during the last month, and 120 of them were dealt with on the first contact, your FCR calculations would look like this:

(120/200) x 100 = 60%.

7. Churn Rate

A churn rate can help you measure how many customers you lose in a specific period of time. This metric is better suited for subscription-based e-commerce businesses since they then can identify the number of customers who have been using the product/services for a while and then just stopped.

Put simply, the churn rate shows whether your product or services satisfy your customers’ needs.

  • HOW TO TRACK CHURN RATE?

To find out your customer churn rate, you'll have to use two other metrics.

Let's say you want to calculate the churn rate of the past month. Take the number of your clients at the end of the month and divide them by the total number of customers you had at the beginning of the month.

Churn rate formula

It means that if you had 5000 subscribers/customers at the beginning of the period you chose and you lost 500 of them by the end of it, your churn rate would be:

500/5000 = 0.1. In percentage, it would make 10%.

A good churn rate for e-commerce businesses can range depending on what you do. Yet on average, it was 22% for online retailers in the US in 2020, according to Statista.

8. Number of referrals

Tracking customer referrals is another important e-commerce success metric that can help you identify how many of your customers are actually recommending your business to others rather than are just willing to do it (the result that you get measuring NPS only).

Don’t get this wrong – NPS is a valuable customer success metric, but it’s kind of abstract compared to an actual number of referrals. Tracking the latter, you get to know the number of customers who were not only interested enough to purchase, but also were so happy with your product that it encouraged them to spread the good word.

High referral numbers mean you have a solid customer base that acts as advocates for your business.

  • HOW TO TRACK CUSTOMER REFERRALS?

Now, obviously, there is no formula to calculate the number of referrals you get, but there are different ways you can track them.

Depending on your needs and resources, it can vary from a simple pen and paper (although very ineffective) to spreadsheets to referral program software that allows you to generate referral codes, create referral emails, and more.

This way, you can not only see how many of your customers are actually recommending your business to their friends but also identify the most loyal ones and use this data for further nurturing of such relationships.

9. Qualitative customer feedback

Last but not least of the customer success metrics in this list is qualitative customer feedback. Numbers are great and can tell you a lot; yet what else can help you better understand how your customers actually feel than asking them directly?

Besides, offering shoppers a chance to talk about their experiences with your product/services can make them feel heard, valued, and involved in your decisions and further improvements.

  • HOW TO GET QUALITATIVE CUSTOMER FEEDBACK?

Qualitative customer feedback sure will take more time to comprehend, but it will also give you a better understanding of not only what customers like or dislike but also why.

There are many different ways you can collect customer feedback, such as sending surveys via email or SMS/instant messengers, making phone calls, or conducting interviews.

Even if the feedback you get is negative, that’s still a great source of information that can help you learn and move further.

Focus your efforts on customer success for business growth

Thinking of how the decisions you make every day will affect your customers is one of the key steps towards business success. All in all, these are the people who decided to spend their money with you, and also trust you while doing so. Therefore, keeping them happy means increased chances of seeing them coming back, thus leading to higher profits.

That's why it's essential to not only trust your gut while running a business but actually track and measure the performance of your company. Using customer success metrics above can help you evaluate the satisfaction of your customers and identify the pain points that they’re facing when shopping at your store.

Having all the necessary data at your fingertips will help you improve not only while interacting with customers but also planning to refine your processes, boost teamwork, finally resulting in growth.

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