Flevy Management Insights Q&A
What metrics should companies prioritize to measure the success of their VoC programs beyond NPS and customer retention rates?


This article provides a detailed response to: What metrics should companies prioritize to measure the success of their VoC programs beyond NPS and customer retention rates? For a comprehensive understanding of VoC, we also include relevant case studies for further reading and links to VoC best practice resources.

TLDR Companies should prioritize Customer Effort Score (CES), Customer Satisfaction (CSAT), and analyze Customer Churn Rate and reasons for churn to gain a nuanced understanding of customer experiences, improve satisfaction, and drive sustainable growth.

Reading time: 5 minutes

Before we begin, let's review some important management concepts, as they related to this question.

What does Voice of the Customer (VoC) Programs mean?
What does Customer Effort Score (CES) mean?
What does Customer Satisfaction (CSAT) mean?
What does Customer Churn Rate mean?


Voice of the Customer (VoC) programs are essential for understanding and meeting customer expectations. While Net Promoter Score (NPS) and customer retention rates are popular metrics, they only provide a partial view of customer satisfaction and loyalty. To gain a comprehensive understanding, companies should consider additional metrics that offer deeper insights into customer experiences, preferences, and behaviors. These metrics can help businesses refine their customer strategies, improve product and service offerings, and ultimately drive growth.

Customer Effort Score (CES)

The Customer Effort Score (CES) measures the ease with which customers can interact with a company, whether it's buying a product, finding information, or getting customer support. A low effort experience is closely linked to high customer satisfaction and loyalty. According to Gartner, reducing customer effort can lead to a 94% increase in repurchase rates and a 88% increase in spending. CES can be measured through post-interaction surveys by asking customers to rate the ease of their experience on a scale. This metric is actionable and specific, allowing companies to identify friction points in the customer journey and streamline processes for a better customer experience.

For example, a telecommunications company might analyze CES scores related to bill payment processes. If customers report high effort scores, the company could simplify the payment interface or offer more payment options to enhance the customer experience. By focusing on reducing customer effort, companies can not only improve satisfaction but also drive operational excellence by identifying and eliminating inefficiencies.

Moreover, tracking CES over time can help companies understand the impact of changes in their processes or offerings on customer perceptions of effort, enabling continuous improvement and innovation in customer experience management.

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Customer Satisfaction (CSAT)

Customer Satisfaction (CSAT) scores provide immediate feedback on how customers feel about a specific product, service, or interaction. This metric is typically measured using a short survey with a question such as "How satisfied were you with your experience?" Responses are often on a scale, allowing companies to gauge satisfaction levels quickly. Unlike NPS, which asks about a customer's likelihood to recommend a company and is more reflective of overall loyalty, CSAT offers a snapshot of satisfaction at specific touchpoints. This specificity makes CSAT a valuable tool for identifying areas of the customer experience that need improvement.

Accenture's research highlights that customers who are highly satisfied are more likely to remain loyal and make additional purchases. By closely monitoring CSAT scores, companies can identify trends and patterns in customer satisfaction, enabling them to make targeted improvements. For instance, if a retail company notices a drop in CSAT scores related to online shopping, it might investigate issues such as website navigation, product availability, or checkout process efficiency.

Implementing changes based on CSAT feedback can lead to significant improvements in customer satisfaction and business outcomes. Real-world examples include companies that have redesigned their websites for better usability or introduced new product features in response to customer feedback, resulting in higher CSAT scores and increased sales.

Customer Churn Rate and Reasons for Churn

While customer retention rates offer insight into loyalty, analyzing customer churn rate and the reasons behind churn can provide critical feedback for VoC programs. Churn rate measures the percentage of customers who stop doing business with a company over a specific period. More importantly, understanding why customers leave can highlight specific issues with products, services, or customer experiences. This metric requires companies to collect exit feedback through surveys or interviews, which can reveal actionable insights for reducing churn.

For example, a software company might discover through churn analysis that customers are leaving due to a lack of certain features or poor customer support. This insight allows the company to prioritize product development and customer service improvements. According to Bain & Company, a 5% reduction in customer churn can increase profits by 25% to 95%, underscoring the importance of addressing the root causes of churn.

Furthermore, analyzing churn can help companies segment their customer base and identify at-risk customers before they leave. Predictive analytics can be used to analyze customer behavior and feedback, enabling companies to proactively engage with these customers through personalized offers or targeted support, potentially reversing the decision to churn.

In conclusion, while NPS and customer retention rates are valuable metrics, expanding the focus to include CES, CSAT, and churn analysis can provide a more nuanced and actionable understanding of customer experiences. By leveraging these metrics, companies can identify specific areas for improvement, enhance customer satisfaction and loyalty, and drive sustainable business growth.

Best Practices in VoC

Here are best practices relevant to VoC from the Flevy Marketplace. View all our VoC materials here.

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Explore all of our best practices in: VoC

VoC Case Studies

For a practical understanding of VoC, take a look at these case studies.

Customer Experience Transformation in Telecom

Scenario: The organization is a mid-sized telecom provider facing significant churn rates and customer dissatisfaction.

Read Full Case Study

Customer Insight Strategy for Agritech Firm in Precision Agriculture

Scenario: The organization is a leader in precision agriculture technology, providing innovative solutions to enhance crop yield and farm efficiency.

Read Full Case Study

Customer Experience Enhancement in Esports

Scenario: The organization is an established esports company facing challenges in understanding and integrating its viewers' feedback into actionable strategies.

Read Full Case Study

Customer Experience Refinement for Automotive Retailer in Competitive Market

Scenario: The organization is a prominent automotive retailer in a highly competitive North American market, struggling to align its Voice of the Customer (VoC) program with evolving consumer expectations.

Read Full Case Study

Voice of the Customer Optimization for a Growing Tech Firm

Scenario: A rapidly expanding technology firm is grappling with challenges tied to its Voice of the Customer (VoC) program.

Read Full Case Study

Customer Insight Analytics for Hospitality Industry Leader

Scenario: The organization, a prominent hotel chain in the competitive hospitality industry, is facing declining guest satisfaction scores and a drop in repeat bookings.

Read Full Case Study

Explore all Flevy Management Case Studies

Related Questions

Here are our additional questions you may be interested in.

How can VoC programs be integrated with other data-driven decision-making processes within an organization?
Integrating Voice of the Customer (VoC) programs with data-driven processes enhances Strategic Planning, Innovation, and Customer Experience, driven by technological integration, organizational alignment, and a culture of data-driven decision-making. [Read full explanation]
What are the key performance indicators (KPIs) to measure the effectiveness of a VoC program?
Effective VoC programs are measured through customer-centric metrics like NPS, CSAT, and CLV, operational efficiency metrics such as Time to Resolution and FCR, and financial performance metrics including revenue growth and ROI. [Read full explanation]
What role does artificial intelligence play in enhancing the analysis of VoC data for predictive insights?
Artificial Intelligence revolutionizes the analysis of Voice of the Customer data, enabling predictive insights that improve Customer Experience, drive Product Development, and inform Strategic Planning and Risk Management. [Read full explanation]
How are companies leveraging IoT (Internet of Things) to enhance VoC data collection and analysis?
Companies are using IoT to gather real-time, actionable VoC insights for improved customer service, product development, and market strategy, leading to enhanced personalization, customer engagement, and strategic decision-making. [Read full explanation]
What is the role of VoC in identifying and eliminating waste in operational processes following Lean methodologies?
VoC in Lean methodologies is crucial for understanding customer needs to identify and eliminate operational waste, thereby improving efficiency and customer satisfaction. [Read full explanation]
Can VoC programs help in identifying and mitigating potential customer churn before it happens, and if so, how?
VoC programs are crucial for Strategic Planning, enabling businesses to proactively identify and mitigate potential customer churn through comprehensive feedback analysis, predictive analytics, and targeted interventions, enhancing customer satisfaction and loyalty. [Read full explanation]

Source: Executive Q&A: VoC Questions, Flevy Management Insights, 2024


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