Satisfied customers are good for business.
Does that feel like common sense to you? It might. Study after study has shown the massive benefits of measuring customer satisfaction and customer experience. And while it might feel like a basic fact, it’s important to call attention to it, because while 80% of companies think they deliver a “superior experience”, only 8% of their customers agree.
An intro to customer satisfaction
It’s astonishingly easy to think you’re doing well, only to find out later that you’re missing the mark. If you want your customers’ perspective on your business to be different, an effective way to make that happen is to learn how to measure and increase customer satisfaction.
Customer satisfaction, commonly known as CSAT, is an incredibly popular metric used by marketing and customer service teams across many industries.
As you might guess, CSAT attempts to directly measure your customers’ satisfaction with a specific aspect of your business. It’s a fairly versatile metric, meaning you can use it to measure satisfaction across many different parts of the customer journey, whether products or services. For example, you could use customer satisfaction surveys for collecting customer opinions about your customer support team, your booking service, your self-service portal, and so on.
This versatility is a great strength of CSAT because measuring customer satisfaction at different points can help you prioritize areas that need improvement.
Measuring CSAT is a straightforward task since it only requires asking one simple question in a customer survey: “How would you rate your overall satisfaction with [fill in the blank]?”
Customers typically respond by selecting one of five options on a Likert scale. While wording might change from company to company, you’ll generally see options ranging from very dissatisfied to very satisfied.
While you can (and should) look at CSAT responses from individual customers so that you can intervene and turn around negative experiences, your overall CSAT score is based upon aggregated responses from across your customer base. The calculation is simple: Add up the number of customers who are “Somewhat Satisfied” or “Very Satisfied”, then divide that number by the total number of responses and multiply by 100 to get a percentage.
Here’s the formula:
(Number of somewhat satisfied + very satisfied customers) / (Number of total survey responses) x 100 = % of satisfied customers
While you only need this one question to calculate your CSAT score, you’ll often see this question followed up by additional questions attempting to gain more context around each customer’s experience. Feel free to do so if you’d like, but keep in mind that increasing the length of your survey too much can negatively impact your survey completion rate.
Best practices for measuring CSAT
One of the benefits of using a popular metric like customer satisfaction is that researchers and other organizations have already identified a number of survey best practices. While you’ll need to tailor the following to your specific needs, consider these best practices when beginning your CSAT program:
- Survey promptly – CSAT is meant to measure a customer’s satisfaction with a specific interaction. If you want the most accurate data, you’ll need to survey your customers while their experience is fresh in their mind. To that end, a common best practice is automating your CSAT surveys to trigger immediately after a conversation ends or a support ticket is closed.
- Meet your customers where they are – Every customer has a preferred channel for interacting with your business, and you’ll increase your survey response rates if you use their preferred channel. In practice, this means if a customer contacts you via live chat, you should probably ask them for feedback via chat. If they email you, send them a CSAT survey via email as soon as the ticket closes.
- Intervene in negative experiences – When a customer reports that they were dissatisfied with their experience, you have a narrow window during which you can try to turn that experience around. A common practice is to have negative CSAT results trigger a real-time notification to appropriate people – management, team leads, etc. – so that they can immediately dig into the details and follow up with the customer.
- Take action on results – Gathering data won’t give you a competitive edge. It’s a necessary step, but the real win comes from taking action on your customer feedback to build a better product or experience. Negative CSAT results are often due to people or process issues. When you’re analyzing your survey responses, use that data to coach your employees or to evolve your processes to create better future experiences.
Why you should measure CSAT
You’re probably getting the feeling that while measuring customer satisfaction is relatively straightforward, it’s not easy. Spinning up a CSAT program in a way that effectively drives organizational change is definitely not a quick undertaking.
If you’re going to succeed over the long haul, it’s critical to keep your eyes fixed on the prize. You need a clear understanding of why CSAT results matter and the benefits your hard work can bring to your organization. Here are a few great reasons:
- Customer satisfaction impacts customer retention – According to Neil Patel, satisfied customers lead to lower churn and higher retention rates. When a 5% increase in customer retention can drive increased profitability of more than 25%, why wouldn’t you want to focus on creating happy, satisfied customers?
- Satisfied customers lead to a better reputation – 60% of dissatisfied customers share their bad experiences with friends and family, and they’re often far more vocal than satisfied customers. If your organization isn’t creating satisfied customers, you’re actually making it harder for your organization to grow.
- Measuring yourself against your competition – CSAT has been a popular metric for a long time, meaning there is a lot of historical CSAT data out there that you can use to benchmark yourself against. While it’s easy enough to measure your own CSAT and track increases and decreases over time, those numbers become a lot more meaningful when compared to competitors in your industry.
- It’s cheaper to keep your current customers than it is to attract new ones – Did you know that it can be 5-7x more expensive to attract a new customer than it is to retain an existing customer? Your marketing dollars are an investment, and not focusing on satisfying customers is a sure way to put those dollars to waste.
The above list isn’t exhaustive, but it’s a good reminder of why measuring customer satisfaction is a worthy endeavor.
Customer satisfaction drives customer loyalty
When it comes down to it, things are pretty simple: If you can’t keep your customers happy and satisfied, your business is doomed.
Sometimes it can be easy to forget that in the midst of the chaos that is business today, but creating a great customer experience is why companies like Amazon and Apple have grown to dominate their markets.
If you’d like to do the same, then it’s time to start maintaining a laser-like focus on satisfying your customers.
Author: Larry Barker is a Senior Manager of Operations at Cars.com and a writer for Supported Content. When he’s not working to solve the latest problem in CX or Support, you’ll find him wrestling with his young kids or reading fantasy or sci-fi at a local coffee shop. You can find him on Medium or on LinkedIn.