According to a Helpscout study, 80% of companies say they deliver “superior” customer service. However, only 8 percent of customers agree with that assessment. Here's a look at how to measure customer satisfaction levels, which is undoubtedly a delicate process.
Having unclear understanding on customer lifetime satisfaction means that you'll be unable to get a sense of customer loyalty, which is bad news for any business.
It can be difficult to be objective when evaluating your own customers' happiness. Thankfully, the simple question of how to measure customer satisfaction can be answered with more precision than you might think.
Most important customer satisfaction metrics:
CSAT: measure customer approval after interactions by collecting immediate feedback
NPS: gauge loyalty via product/service recommendation on a 1-10 scale
CES: evaluate loyalty by measuring the effort required to resolve issues, emphasizing time saved
Direct/Indirect Feedback: use surveys and analytics to get comprehensive insights
What Are the Benefits of Monitoring Customer Satisfaction?
For SaaS companies, customer retention is a crucial metric. It's much more expensive and time-consuming to acquire new business than to build on existing relationships. Customer loyalty is paramount to a long and fruitful business relationship.
A major factor in customer loyalty is customer happiness. Given the wealth of options at a dissatisfied customer's disposal, they will have no qualms taking their business elsewhere in the wake of a bad experience. Figuring out how to measure customer satisfaction is necessary since it can be an indicator of both growth and churn risk.
The concept of customer happiness is complex and encompasses many different factors. It's not as straightforward as measuring revenue or growth, though it definitely affects both of those metrics. This article aims to shed some light on how to measure customer satisfaction and on how to use that insight to your business's advantage.
How Customer Satisfaction is Measured
Let’s look at the most used metrics for assessing customer satisfaction.
Customer Satisfaction Score
The customer satisfaction score, or CSAT score, is a time-tested customer KPI that can measure customer happiness through a survey. A typical customer satisfaction survey asks customers the following basic question: “how would you rate your experience interacting with our sales/customer service/support department?”
Customers can rank their experience on a rating scale that typically ranges from 1 to 5: very unsatisfactory / unsatisfactory / neutral / satisfactory / very satisfactory.
The more respondents give a positive answer, the higher your score. Simple.
The CSAT is versatile, since it can relate to any customer interaction with your business. You receive immediate feedback, giving you precise insights into customer experiences. The CSAT is most useful to track short-term changes in customer approval before and after a change or new initiative. If the score shifts notably, you will have an inkling of what did or didn't go over well.
However, the question won't cover a customer's overarching impression of your company over their customer journey. Likewise, its results tend to be biased, since mildly dissatisfied or happy customers will tend to disregard the question entirely. Lastly, it won't be a predictor of customer behavior, nor will it account for your company's potential for growth. Though the CSAT is a key metric, it can by no means provide a complete picture of customer satisfaction on its own.
Net Promoter Score
The Net Promoter Score was introduced to account for the lack of predictive power of the CSAT when it comes to customer loyalty. Customers are generally asked the following question:
“On a scale of 1 to 10, how likely are you to recommend our product/service to a friend?”
The respondents are then organized into three groups:
Calculate your NPS by subtracting the percentage of detractors from that of promoters. The higher your score, the better.
The single question is straightforward and easy to answer. However, unhappy customers tend to respond more often than satisfied customers. While this may seem daunting, it is an opportunity to zero in on areas needing improvement and make a great impression on a dissatisfied customer.
But the NPS score is a one-dimensional measure of customer satisfaction. Moreover, without incentive, there is no reason for promoter customers to actually make the leap and recommend your brand.
Customer Effort Score
The Customer Effort Score takes a different approach to measuring customer satisfaction than the previous two methods. Customers are asked the following question: “how hard did you have to work to get a problem fixed / query answered / service rendered?”
The score generally ranges from 1 to 5, with 1 being very easy and 5 being very difficult. The lower your score, the better.
In a now-famous article, it was demonstrated that going above and beyond in terms of customer satisfaction didn't necessarily result in increased loyalty. A company’s energy would be better spent in attempting to reduce their customers’ effort rather than delighting them. The CES is a good indicator of increasing customers' loyalty by saving them time and effort.
Since the question requires a close-ended response, you could also add an open answer box for the customer to vent. For instance, a response such as “the customer support team was very helpful, but if the FAQs had been easier to navigate, I wouldn't have had to call in the first place” is invaluable. CES allows you to pinpoint areas of your service which need improvement to better satisfy your customers.
Like the other key metrics, using CES on its own is not enough to give you the insights you need to measure customer satisfaction. It takes into account a very important factor for customer loyalty, but still doesn't encompass the whole picture.
Learn more: What's Your Customer Effort Score (CES)?
Direct Feedback and Customer Satisfaction
The most straightforward way of giving your customer base the support they want is by asking them directly through customer satisfaction surveys. Surveys are a useful tool for collecting data pertaining to the customer satisfaction level metrics listed above. The various types of surveys target different customer demographics, and will yield different results.
In-app customer surveys
These are presented to the customer while they are in the process of using your service. This means an immediate reaction and a potentially high response rate.
Nevertheless, in-app surveys must be seamlessly integrated into the user interface, so as not to pester customers or detract from the user experience. Adding a subtle feedback bar at the top of your interface means only having room for a clickable pictogram, or one of two questions, at most. Therefore, make them concise and to-the-point.
Post-service customer surveys
These types of surveys approach the customer immediately following a service interaction, either via email, live chat, or over the phone. It's essential to not make gathering feedback the only object of the call or message, with no added value to the customer. Instead, ask for feedback right after solving a customer issue, or while presenting a new feature. Post-service surveys may take a little longer than in-app surveys, but the key is to avoid costing your customers too much additional time.
Email customer surveys
If you're looking to ask broader questions about the entire customer experience, then email is the way to go. You can also target segmented customers to ask in-depth questions about their situation.
While these surveys have the lowest response rates, they allow customers who wish to do so to answer in greater detail and really give you constructive feedback. You can use this in-depth feedback to increase levels of customer satisfaction across a wider spectrum.
Asking for customer feedback in a survey is one thing, but it's also important to offer a way for customers to speak up of their own volition.
Dedicating a feedback box or an email address to customer satisfaction is a great move. However, customers often won't bother to leave feedback because they think the company will not either care or take it into account. You need to incentivize honest customer involvement, because your business cannot afford to ignore it.
Explicitly promise speedy follow-up actions, and deliver on them. Providing a non-automated response to submitted feedback is polite and constructive. The result is beneficial to all parties. Customers will get what they want, and you can use examples of successfully acting on customer feedback as a success story on your website.
Survey best practices
We've seen how surveys can provide valuable insight and involve customers in a direct process. However, they can be tricky to get right. Here are ways to pull off effective, non-invasive survey campaigns:
Never presume that your customer's time is more valuable than yours.
Keep your questions relevant to your overarching goal of customer loyalty.
Craft precise questions. Keep them short, unless the format of your survey allows for more open-ended questions.
Ask clever questions. Don't insult the intelligence of the customer taking the survey. Besides, asking vague or irrelevant questions won't serve your own purposes.
Remain unbiased. Avoid leading questions. It will make your business seem untrustworthy and false the results of your examination.
Keep your rating scales clear and consistent. Don't mix stars and smiley faces, or switch between lettered or numbered scales.
There are a number of great tools at your disposal for building professional and effective surveys.
Indirect Feedback and Customer Satisfaction
We've covered ways to gauge your customers’ satisfaction levels by reaching out to them directly. However, there are also ways to do so without directly involving your customers. Leveraging customer attention and goodwill to gather feedback is necessary, but it's handy to know about alternative, less intrusive tactics.
You can use your website traffic and content to measure customer satisfaction. Not only will the publication of content drive your activity, but you can use it to gain insight into your customers' habits. These basic analytics keep track of shares of your content, of the time spent on your website (especially pages like your roadmap, which will tell you about the interest in your upcoming features), and the bounce rate of your newsletters.
Collecting all this data will be moot if you don’t know what to do with it. Make sure to always align the concrete data with the vision you have for your customer service.
Covering every channel
There are multiple channels to take into account when measuring customer satisfaction. Every means the customer has of getting in touch with your company is an opportunity to gather feedback.
We've seen you can conduct surveys by email, on your website, over the phone, etc. But diversifying the channels on which you measure customer satisfaction is a no-brainer. For example, given the growing importance of mobile phones in the field of customer support, it's important not to neglect that channel.
Social media is also a valuable channel to monitor customer happiness. Its immediacy and personable touch can allow for customer interaction in an informal and proximate way. Customers can contact your business easily and spontaneously, and you can provide them with timely support. Keeping track of the fluctuation in followers, shares and likes on every platform you use will give you a good idea of loyal customers and overall satisfaction.
As we've established, measuring customer satisfaction means taking multiple factors into account. You'll need to be creative to stay relevant and unobtrusive, and draw pertinent conclusions from the bulk of information you collect. No customer satisfaction metric is perfect on its own, and you'll need to leverage the data collected to get an accurate measurement of customer satisfaction.
Published on January 2, 2024.