Understanding how to measure customer satisfaction is important for all brands. Companies that launch new products and services waste valuable time if they don’t evaluate how happy their customers are with them.
It may seem difficult to maintain objectivity when measuring whether customers are happy, but assessing customer satisfaction with precision is easy with the right processes and tools in place.
Understanding Customer Satisfaction
Customers are the most important asset of every business. Keeping them happy moves the company forward because it generates repeat business. Knowing how to measure customer satisfaction, understand how clients feel, and see what motivates them is extremely important.
Top-performing enterprises make it a habit to determine customer satisfaction levels and leverage this data to find hidden opportunities to improve. They understand that measuring customer satisfaction helps reduce churn, create a powerful brand image, reduce time and money in customer support, and increase customer loyalty.
But how can companies measure the satisfaction levels of their customers? There are several universal methods, such as the Customer Satisfaction Score, Net Promoter Score, and Customer Effect Score.
What is Customer Satisfaction?
Customer satisfaction refers to how happy—or unhappy—customers are with a particular brand and their products or services and how well companies meet or exceed customer expectations.
Having a large number of satisfied customers means the company is doing well in terms of listening to customer feedback, adjusting its operations, and creating new products that cater to the client’s wants, needs, and expectations. Satisfied customers are more loyal, purchase more products, and will likely recommend the services to other people.
Companies that make an effort to focus on customer satisfaction tend to grow more than companies that don’t—hence the importance of gathering relevant customer data, accurately gauging customer sentiment, and knowing what their experiences are like when interacting with the brand.
Customer satisfaction involves many different concepts, such as perceived quality, perceived value, and customer expectations. These often change over time, which is why companies need to use a variety of specific metrics when determining customer satisfaction levels.
Why Measure Customer Satisfaction?
Knowing how to measure customer satisfaction helps companies improve customer retention, loyalty, and experience. Using the right customer satisfaction metrics informs brands of unhappy clients and gives them the chance to make adjustments according to the client’s needs.
Measuring customer satisfaction offers companies a lot of valuable data, but it’s just as important for clients. Knowing that companies want their opinions makes them feel heard, validated, and valued, which increases brand loyalty. Research shows that customers with positive emotional connections to brands are less price-sensitive, more likely to convert to buyers, and frequently compelled to share their experiences and promote the brand and their products.
Customer satisfaction is a competition differentiator because satisfied customers stick with the businesses they like. Having bad experiences as customers, however, negatively impacts the brand’s image via the spread of negative reviews, low ratings, and poor word of mouth. This quickly tarnishes any brand’s reputation and decreases the chances of getting new customers.
By continuously monitoring the right metrics, it’s easier to identify potential problems early on. Companies can quickly find solutions and improve the user experience, which helps them retain their clients.
3 Key Metrics for Measuring Customer Satisfaction
Companies that know how to measure customer satisfaction understand that it’s better to do so with particular goals in mind. Using key metrics for measuring customer satisfaction allows them to track progress over time and adjust business processes whenever necessary.
#1 Customer Satisfaction Score (CSAT)
The Customer Satisfaction Score (CSAT), also known as Customer Satisfaction Rating, is the most commonly used metric to determine, on average, how well a product, service, or customer success program meets the client’s expectations.
This metric prompts customers to rate their satisfaction on a linear scale of 1-3, 1-5, or 1-10. There’s no universal agreement about which scale is best so companies can choose the ones they prefer.
To calculate the CSAT score, brands add up the sum of all scores and divide that number by the total number of survey responses. Then, they multiply by 100 to get the percentage of satisfied customers.
Sum of all scoresTotal survey responses x 100
In a CSAT survey, companies must ask questions about satisfaction—for example, asking clients if they’re satisfied with the brand’s products or services. The scale provided should have an easily identifiable top-two-box (T2B).
This is a visual representation of the two most positive sentiment scores on the scale that could include, for example, “Extremely Satisfied” and “Very Satisfied.” It’s also a good idea to ask customers open-ended follow-up questions to understand what they mean by their scores. Some examples could include:
- Could you give us a reason for the score you gave us?
- How can we improve your experience with the brand?
- Did you experience any difficulties while shopping with us?
- Would you change anything about our product/service?
By analyzing the CSAT scores as well as the follow-up questions, companies forecast sales and begin making smart business decisions. It’s important to get a CSAT score within 10 to 15 minutes of a client’s interaction. This helps improve aspects such as resolution and mode of delivery.
#2 Net Promoter Score (NPS)
Net Promoter Score (NPS) determines how likely customers are to promote a brand or product to others and is generally a good indicator of customer loyalty and brand devotion. The most common way to measure NPS is to ask clients how likely they would recommend the brand to a friend, colleague, or family member. Depending on what the company’s measuring, the question might change a bit. Examples include:
- How likely are you to recommend our brand based on the customer service support received on a scale from 0 to 10?
- On a scale of 0-10, please rate your likelihood of recommending our brand, based on your experience with our product.
- Could you rate our referral program from 0 to 10, depending on how likely you are to use it to recommend our business to others?
- Following our latest update, how likely are you to recommend our brand on a scale of 0-10?
Companies first determine NPS by using a 10-point scale. Customers that select 9 or 10 are the “promoters” of the brand, those that score 6 or lower are the “detractors”, and clients who answer with a 7 or 8 are neither a promoter nor a detractor, they’re “passive.”
To calculate the NPS brans subtract the percentage of detractors from the percentage of promoters:
% Promoters – % Detractors
For instance, if there are 20% detractors, 10% passives, and 70% promoters, companies must subtract 20% from 70% for a total Net Promoter Score of 50. As long as the number of detractors doesn’t exceed the number of promoters of the brand, companies are doing well. This means that any NPS above 0 is good.
Historically, unsatisfied customers tend to answer NPS questions more than satisfied customers. Companies shouldn’t worry about this, as it poses an opportunity to tackle areas that require improvement and make a good impression on a potentially unhappy client.
It’s also difficult to get customers to actively recommend a brand without a proper reason or incentive. Because of this, the Net Promoter Score is quite one-dimensional, which means companies should assess other metrics to complement their results.
#3 Customer Effort Score (CES)
The Customer Effort Score (CES) measures how easy was a client’s operation or experience and how much effort did the customer exert to accomplish certain tasks throughout the customer journey.
To gauge the ease of the client’s experience, companies assess CES survey data by asking questions such as:
- How easy was it to locate your product?
- Was it hard to check out?
- Did you find it easy to connect with our customer service staff?
- How easy was it to navigate our website?
There’s no benchmark to use for CES, and the scale varies depending on the brand. However, brands usually represent it using a number between 0 and 10. Regardless of the scale, to calculate the CES, companies add all the customer effort scores and divide them by the total number of responses.
Sum of all CES scoresTotal survey responses
Because different brands track CES differently, it can be complicated to establish a good value for the Customer Effort Score. However, many companies consider a CES over 2.0 a good score. Measuring CES over time and comparing new results to historic ones is the best way to obtain a benchmark for this metric.
It’s important to measure CES because the easier it is to interact with the brand, the better the customer experience will be. Low-effort experiences reduce client frustration and increase loyalty to the brand and retention rates. Companies should time their CES surveys right, sending them right after a customer interaction, to better capture the client’s sentiment.
Just like in CSAT, brands can use their CES surveys to add open-answer boxes as a way for customers to elaborate on their experience. This is the only way companies can focus on improving specific pain points for their customers. The utility of measuring the Customer Effort Score on its own remains rather limited. It gives us a measure of customer satisfaction and even loyalty, but it doesn’t show the entire picture when it comes to truly measuring customer satisfaction.
Tools and Techniques for Gathering Customer Satisfaction Data
When determining how to measure customer satisfaction, companies must choose the right tools and techniques to gather their data. Popular tools include customer satisfaction surveys, interviews, focus groups, and social media monitoring.
Surveys
Online surveys offer a quick and easy way to collect customer satisfaction data. Using online survey tools, brands select a target audience, present them with relevant questions, review results in the dashboard, generate reports, and export results.
There are three primary ways to present clients with customer satisfaction surveys:
- In-App or On-Site surveys: Seamlessly inserted into the user interface, these surveys appear to customers while they’re in the process of using the service. These surveys have a potentially high response rate because they prompt immediate reactions. They should be concise and clear so as to not disturb the customers in their journey.
- Post-Service or Post-Purchase surveys: These surveys occur via email or live chat right after a service interaction to better gauge customer sentiment. Gathering feedback shouldn’t be the only subjecting of interaction between the brand and the client. Companies should incentivize a response by following up after solving an issue, presenting a new feature, or offering a discount.
- Email surveys: Email surveys are great for asking more questions about the entire customer experience. They target segmented customers and ask in-depth questions for more detailed feedback. These surveys typically have the lowest response rates because they take the longest to answer.
Designing good surveys is crucial to increasing response rates and improving completion rates. Survey best practices include avoiding long and monotonous surveys, keeping them simple, asking only for necessary data, and respecting the customer’s time.
Companies should remain unbiased and avoid using leading questions because they make the business seem untrustworthy. Surveying customers too frequently could also result in lower response rates. Another good practice to follow when designing a survey includes keeping the rating scales consistent and clear. Brands should stick to a single type of sentiment representation and avoid mixing emojis with numbers or letter grades.
Interviews and Focus Groups
Interviews and focus groups also provide in-depth insights into customer satisfaction. They allow companies to collect nuanced data from a group of selected customers by having detailed conversations with them, individually or in small groups.
In this scenario, business representatives ask the clients open-ended questions about their experiences and preferences regarding the products or services. They’re able to assess the clients’ opinions, emotions, reactions, and body language. These are important features that companies can’t gauge via an online survey. Through interactive conversations with focus groups, businesses gather feedback firsthand from individuals who represent specific demographics or reflect the diversity of the customer base.
Interviews make it easier to identify areas that need improvement and pinpoint customer needs and expectations in a way that wouldn’t be possible using other customer satisfaction measuring techniques. However, there are a few disadvantages associated with using interviews and focus groups. These methods are time-consuming and require money and preparation to be successful. Certain customers might feel uncomfortable speaking in front of a group and might have their opinions swayed by more outspoken clients.
Social Media Monitoring
Social media is a valuable source of customer satisfaction data. The way customers share posts about a brand and speak about it indicates how they truly feel about the brand’s products, services, and overall content.
The best way to collect customer satisfaction data from social media is to assess customer feedback comments on a brand’s social posts. This sort of feedback is instantaneous, candid, honest, and hard to replicate via online surveys or phone calls.
It’s an easy and affordable way to gather customer sentiment because customers usually tend to use social media after purchasing a product or service to share their experiences. This is why companies should monitor brand posts and tags to see if customers like or dislike products, if they complain about any features, or if they’re happy with the service they received.
This sort of social media monitoring is passive in nature. However, companies should take advantage of voting or polling features on Instagram or Twitter to reach their audience and ask for feedback to measure customer satisfaction.
How to Analyze and Act on Customer Satisfaction Data
Brands that know how to measure customer satisfaction understand that they must have good techniques to analyze the collected customer satisfaction data. However, processing and interpreting customer data isn’t enough to improve customer satisfaction. Companies also need to know how to act on their results.
Data Analysis Techniques
Throughout the process of measuring customer satisfaction, businesses gather a large collection of quantitative and qualitative data and insights. They must then choose the best ways to analyze these types of data.
Analyzing Quantitative Data
Quantitative data collection involves processing the answers to structured questions or surveys. There are many different techniques to analyze it. Some of the most popular examples include:
- Identifying preferences through comparison: Surveys that include multiple-choice questions enable identifying specific customer preferences. Companies can add the total number of responses for each option, organize the total numbers or percentages for each answer, and create a chart to simplify the visualization of the comparative data.
- Comparing different audience segments: If a survey allows brands to categorize respondents—for instance by age group, location, race, or income—companies can take the opportunity to see how different audience segments answer the same question. They can use cross-tabulation charts and graphs to compare the results.
- Analyzing means and modes: For surveys that require selecting from a scale, companies can measure how strongly customers feel about their services, products, or other topics. Calculating the mean allows brands to determine the typical response while the mode represents the most common answer in the set of data. This data is great to compare how customer sentiment changes over time.
- Benchmarking: Analyzing quantitative data for the first time is hard because there’s no internal data to compare it to. Benchmarking allows companies to compare their data with industry averages. A 12% conversion might seem low, but if the average conversion rate in the industry is 8%, the scenario is now different—and very positive.
Analyzing Qualitative Insights
Qualitative data collection requires gathering detailed feedback through open-ended questions or discussions. There are also a few methods to analyze this type of insight, helping companies make sense of their results.
Brands may take advantage of product insights tools to create visual representations of survey data. Through this method, companies generate word clouds from terms that often show up in customer answers. While these don’t provide definitive answers, they’re great to gauge overall sentiment and begin a discussion.
Reading individual responses might seem overwhelming, but it’s a great way to uncover hidden insights, spot trends, and figure out the motivations, objections, and desires of the audience. These insights give companies a deeper understanding that allows them to shape their products and services in a way that better caters to their customers.
Another way to analyze qualitative insights is to transform them into quantitative data. Companies that have enough qualitative survey data can look for ways to sort individual responses into categories. After organizing the survey data by those categories, brands can represent it visually using graphs, tables, and charts.
Analyzing Survey Results From Scratch
Ultimately, any good survey will allow companies to gather both qualitative and quantitative and qualitative data. To properly analyze them and make use of their insights, brands need to follow a few steps:
- Establishing the analysis goals: The first step is to decide which key questions the company wants to answer with the survey data.
- Removing incomplete and unreliable data: Incomplete data may skew results, especially when comparing answers to multiple-option questions. For a more accurate analysis, brands should remove incomplete or unreliable data.
- Searching for trends in the quantitative data: Through a process of elimination, companies begin looking at quantitative data that closely relates to the analysis goals, trying to find patterns in responses that might reveal issues or opportunities.
- Checking for statistical significance: There’s no value in analyzing data if the number of respondents is too low. Companies must ensure a big enough data pool to trust the insights and not jump to any conclusions. Data can present “noise” content because people make mistakes when entering answers.
- Comparing quantitative data with benchmarks: Benchmarks are frames of reference for interpreting data. After identifying any trends, companies can try comparing them to historical data to see if they can make sense of them.
- Supporting quantitative findings with qualitative data: Putting qualitative and quantitative data together helps paint a complete picture of what customers really think of the brand and their products. While quantitative data reveals the audience’s preferences, qualitative data explains the “why” behind them.
- Presenting the results: At this point, all the company has is raw numbers. Not everyone can digest them quickly so, it’s important to present findings to colleagues and stakeholders using clear and concise charts, graphs, or infographics.
Using Customer Satisfaction Data to Drive Improvements
Measuring customer satisfaction doesn’t mean much if companies don’t use their findings to drive improvements. Customer satisfaction data helps uncover issues with pricing, customer support, or overall service. Immediately addressing these concerns helps ensure a great customer experience.
Companies should regularly analyze customer satisfaction data and reflect on their findings. If an entire audience segment feels dissatisfied with a particular experience in their customer journey, it’s important to investigate what’s causing the issue and fix it.
Gathering this type of data will also reveal potential opportunities. Companies can invest more in developing products they know work. Identifying the most loyal customers also allows brands to plan custom advocacy programs that bring value to this group.
Understanding that a certain demographic is unhappy with certain aspects of the brand is also a good opportunity to act on it. For instance, if the majority of detractors include younger customers, companies can work on a marketing campaign that might appeal to them through social media, brand collaboration, or influencer marketing.
The most important thing is that companies constantly work on their data by implementing achievable and relevant improvements based on their findings. Doing so will help them increase customer satisfaction, loyalty, and retention.
Conclusion
There are several metrics for measuring customer satisfaction, including the Customer Satisfaction Score (CSAT), Net Promoter Score, and Customer Effect Score. To gather this type of data, companies use surveys, interviews, social media, and customer support interactions. By closely monitoring these channels, brands can track customer satisfaction more efficiently. For more accurate insights, companies should not only focus on analyzing quantitative metrics but also on qualitative data, which often provides deeper insights into the customer lifetime value.
Understanding how to measure customer satisfaction is important to innovate and grow a business. Implementing effective strategies to gather customer data, analyze it, and use relevant information to drive improvement will allow brands to increase customer satisfaction, retention levels, and loyalty.
FAQ
How often should you measure customer satisfaction?
The frequency of measuring customer satisfaction depends on the industry, the products and services provided, and the type of research and surveys used. Online shops, for example, can implement a customer feedback system that pops up after each purchase. However, interactions that take months to complete, such as customer support interactions, should occur far less frequently.
What is a good customer satisfaction score?
The definition of a good customer satisfaction score varies significantly depending on the type of industry. CSAT scores vary on a scale from 0 to 10, and therefore, a CSAT score of 100% is always the ultimate goal that ensures top customer satisfaction levels.
Any scores between 65% and 80% are usually dominant across industries. A score of 75% means that for every four customers, three gave the brand a positive score over a neutral or negative one. According to the American Customer Satisfaction Index, the industry benchmark CSAT score for computer software development companies is 76%.
Can small businesses also measure customer satisfaction?
Small businesses should measure customer satisfaction. If they wish to grow and understand the customer lifetime value of their clientele, they must listen to their feedback. Affordable methods that small companies can use to collect valuable customer feedback include leveraging tools like Google Forms, Trustpilot, Google My Business, and HubSpot.
