Victoria Yu is a Business Writer with expertise in Business Organization, Marketing, and Sales, holding a Bachelor’s Degree in Business Administration from the University of California, Irvine’s Paul Merage School of Business.
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Updated on July 12, 2023
How to Measure Customer Satisfaction
What is Customer Satisfaction?
CSAT Metrics to Track
How to Measure Customer Satisfaction
For any company, customer satisfaction is an important indicator of the business’s future survival. It represents how well the company fulfills the promise of its product and value proposition and is a good estimate of if it can drive enough sales to survive going forward.
To that end, any business regardless of industry would be wise to measure customer satisfaction. If your company is looking to track this important metric to improve its operations, you’ve come to the right place, as this guide will walk you through all the details of how to measure customer satisfaction.
Customer satisfaction (CSAT) is a measure of how happy customers are with your brand, products, services, and customer interactions.
Companies should measure customer satisfaction to improve their customer experience, which in turn drives growth and sales.
Five key metrics to measure customer satisfaction are a CSAT score, Net Promoter Score, Customer Effort Score, attribute satisfaction, and repurchase intentions.
What is Customer Satisfaction?
As the name implies, customer satisfaction (CSAT) is a measure of how happy and satisfied customers are with a company’s products, services, customer experience, and brand.
But why should a company care about customer satisfaction? Well, for starters, every 20% increase in customer satisfaction corresponds to a 15% growth in revenue and a 20% reduction in the cost of serving customers, reports survey software provider Qualtrics.
This makes sense when you think about it: customers happy with their purchases and experiences are more likely to become loyal customers and purchase again. With each consecutive purchase, a repeat customer needs less teaching and attention because they’re already familiar with the brand’s purchasing process.
Plus, satisfied customers may also become brand ambassadors for your company and promote your goods to their friends and family, raising your reputation and sales volume further.
With these benefits in mind, companies should be eager to increase customer satisfaction. To that end, the general methodology to do so is to measure your business’s current customer satisfaction as a benchmark, improve your business processes, and then measure CSAT again to prove that a positive change has been achieved.
CSAT Metrics to Track
Before we get started on the how, let’s think about what we should be measuring. As we said earlier, the customer experience is a complex blend of the customer’s emotions, thoughts, actions, and more in regard to the company and product – too complex to be boiled down to a simple “Are you satisfied?”
Instead, truly ambitious companies will track several customer satisfaction metrics, analyzing the unique information offered by each one to paint a comprehensive picture of the company’s overall performance from every dimension.
Here are five main metrics you could track through customer surveys.
1. Customer Satisfaction Rating (CSAT)
The first metric is an overall measure of customer satisfaction, called a CSAT score. Very simply, this can be measured by asking your customers to rate your product, service, or a certain experience and then finding the mathematical average of the responses.
CSAT scores are usually calculated on a scale of one out of three, five, seven, or 10. It’s up to you how fine of a measurement you want to record, but we’d recommend a scale of at least five for some degree of precision.
Rather than simply asking customers to rank their satisfaction with “one being least satisfied” and “five being the most satisfied,” you could also choose to use attitudinal or qualitative words to set your scale – for example, on a five-point CSAT survey, your options could be:
2. Customer Loyalty (NPS)
Developed by customer experience software provider NICE Satmetrix, a Net Promoter Score (NPS) measures how loyal a customer is and how likely they are to recommend you to another consumer. Scores range from -100 to +100.
To calculate your NPS, first ask customers, “How likely are you to recommend this company to a friend or colleague?” on a scale from zero to 10.
Customers who answered nine or 10 are called promoters, and customers who answered six or below are called detractors. Calculate the percentage of promoters and percentage of detractors out of the total number of respondents, and subtract the percentage of detractors from the percentage of promoters to find your NPS.
(People who responded with seven or eight are called passives – customers who are satisfied but unenthusiastic and are likely to be snatched away by competitors unless action is taken to convert them to a nine or 10.)
When a customer considers if they’d recommend a brand or product to someone else, they consider their own experience and overall satisfaction with the brand, making NPS a viable way to measure a customer’s own satisfaction. It also helps crystallize the customer’s own thoughts and feelings, helping them determine if they would repurchase from the company in the future.
3. Customer Effort Score (CES)
Created by research and consulting titan Gartner, a Customer Effort Score (CES) measures how much effort a customer has to exert to complete their purchase and use their product satisfactorily. The logic behind this is that the easier the customer’s experience is, the more satisfied they’ll be.
CES is measured by first asking customers how easy it is to navigate, shop, or interact with the company on a scale of one to seven. The percentage of those who answer five or above is your CES score, stated simply as the number from 0 to 100.
Rather than asking about the customer’s total effort, businesses can use CES to ask about the ease of specific actions during the customer journey, such as:
How easy was it to navigate the website?
How easy was it to get helpful customer support?
How easy was it to compare product attributes and prices?
How easy was it to check out?
Finding the CES scores for specific topics helps businesses uncover hidden pain points and areas for improvement in the customer experience, raising overall customer satisfaction.
Looking at it from a different angle, you could also say that a company’s CES is a measure of how attentive their customer service reps are to customers’ future needs, since low effort on a customer’s part to get what they want means that service reps need to put more effort and forethought into preemptively ensuring customer success. This means that raising your CES score will require a concerted effort to train your service reps.
4. Attribute Satisfaction
No matter how nice and helpful your customer service reps are or how easy it is to order from your business, customers won’t be satisfied by your company unless your product or service delivers everything it promises and meets their needs.
Thus, companies should take care to measure a customer’s satisfaction with the attributes of the product or service. For essential attributes of the product, companies should ask if the customer:
Liked or disliked it
Found it useful or not
Considered it an important part of the product experience or not
Found it to exceed the requirements of the problem or not
Similar to CES for experiences, attribute satisfaction can help companies identify what specific product or service attributes customers enjoyed in their purchase. For example, if you sell cell phones, you could ask customers to rate separate attributes such as the phone camera, user interface, and call quality.
You could also ask customers to judge the attributes of your company as a whole. In this case, the attributes you inquire about could be the RATER metrics, which stand for their impression of your company:
Reliability – the company’s ability to deliver its promise consistently, accurately, and in a timely manner
Assurance – the knowledge, skills, and credibility of the staff, and their ability to inspire confidence in these traits
Tangibles – the physical proof of your company, such as an office, equipment, employees, and promotional materials
Empathy – the emotional understanding between the employees and customers
Responsiveness – the company’s ability to provide quick and high-quality service
As a reminder, you should only send attribute satisfaction surveys to consumers who have already purchased your product or interacted with customer service and have had some time to digest their experiences.
5. Repurchase Intentions
Our final customer satisfaction metric is repurchase intention, discovered by asking the customer if they intend to make another purchase in the future.
This metric combines the typical customer satisfaction score with an element of future financial forecasting – rather than simply asking if the customer was satisfied, asking about their repurchase intentions gives your company an estimate of future revenue and helps them identify areas to upsell, cross-sell, or otherwise improve customer retention.
Depending on your product, you may also want to be more specific about the time frame of the customer’s repurchase. For example, a fast fashion brand might ask for repurchase intentions within a week or a month, while a furniture store might ask for repurchase intentions within the next year. This could help marketers time their promotional campaigns to match customer need cycles.
Asking customers to consider if they would purchase in the future helps them frame and evaluate their current satisfaction, solidifying their customer experience into a concrete judgment of their current satisfaction. This may give your company top-of-mind anchoring awareness if the customer finds themselves needing to purchase a similar product again, or if they’re asked for a recommendation by a friend.
How to Measure Customer Satisfaction
Now that you have an understanding of the key customer satisfaction metrics you should be tracking, it’s time to learn how to collect your data and put it to good use. Here are six simple steps to use when measuring customer satisfaction.
1. Define Your Goals
Before taking any action, you and your decision-makers should get together to set your research focus and goals. Is there a specific aspect of customer satisfaction you hope to improve? Do you want to drive revenue, or improve ease of use?
Having a clear goal will focus your efforts, preventing you from wasting time and money trying to measure everything or measuring elements that customers are already satisfied with.
2. Formulate A Plan
This next step may sound contradictory to common logic, so pay close attention.
Before you even begin to collect data, you should already have a plan in place for the actions your company will take if the surveys show that customers are satisfied or dissatisfied. Having the plan in place ahead of time will guarantee that your company has the resources needed to act upon the data, ensuring that your customer satisfaction survey doesn’t go to waste.
For example, before you start surveying if customers are satisfied with your website layout, you should see if your company has the budget to contract a website developer to improve the website. Alternatively, you might see if you have the budget to develop a customer referral program if you find that customers are extremely satisfied with your company.
Some other examples of actions you could take to improve customer satisfaction are to create an FAQ section or live chat for your website, provide more training for your customer support reps, or redesign your product entirely. These actions vary greatly in the amount of effort required to implement, so it’s best to consider ahead of time if your company has the resources to take such actions before even beginning to consider them.
3. Choose Your CSAT Survey Metric
Once you’ve got a goal and plan in mind, choose which of the five customer satisfaction survey metrics you’ll use to measure your desired aspect of CSAT. As a reminder, your options are:
Customer Satisfaction (CSAT) Score
Customer Loyalty/Net Promoter Score
Customer Effort Score (CES)
We recommend that you pick one satisfaction metric to start with, rather than trying to cram all five into one survey. If your survey is a hundred questions long, no consumer would ever complete it, and your data analysts wouldn’t know where to start to tabulate the results!
Instead, choose the survey metric that best suits your goal from the first step.
4. Design Your Survey
Now that you know what you want your survey to measure, put some thought into the phrasing of your questions and the logical flow of your survey. Try to keep it short and sweet – the easier it is for customers to read and think about your survey, the more completed responses you’ll get.
Beyond the questions, determine how you’ll deliver the survey: email, text message, live chat, social media, or phone call. If your survey is fewer than three questions, you could simply embed it into your customer communication channel, such as with a pop-up window on the checkout screen. But for longer surveys, it’d be best to send your customer a link to a separate webpage with the survey.
Another pro tip for longer surveys is to ask the most important questions first, leaving demographic questions (age, ethnicity, education, etc) for the very end of the survey. Customers will get tired as they go through the survey – you want them to be at their freshest for the most important questions, leaving the simple questions as a cool-down.
5. Determine Your Survey Trigger
For the most accurate data, you’ll want to ensure your surveys are going to the right people at the right time.
First, go back to your goals and determine who you want to collect data from: potential customers, people in the middle of their customer journey, or past customers? Set up your survey to only appear to the relevant customer segment, or else you risk skewing the data and annoying your other customers.
You can send a survey at any time of the sales process, but it’s best to send it immediately after relevant moments in your customer journey related to your goal, such as after purchasing, a free trial, or a customer support call.
Additionally, be sure not to send surveys too often, or you’ll risk annoying or overwhelming the customer.
6. Collect and Review Data
Once you’ve collected your survey responses, look for trends in the data to draw conclusions about your customer satisfaction, such as customer segments who are disproportionately dissatisfied or a part of the customer journey that’s universally disliked. Most survey software tools can provide dashboards and simple analytics to help you understand your survey results.
Now that you’ve gathered your data, go back to your original goals and implement your action plans to improve or capitalize on your customer satisfaction survey results.
As your business grows, it’s important to continually measure customer satisfaction to ensure that your customer service is scaling with your operations. Consider repeating studies on a rolling basis or following up with loyal customers for a longitudinal study to mark your company’s growth over time.
Measuring customer satisfaction may seem easy at first, but a lot of careful consideration goes into making sure surveys accurately measure customer’s thoughts and behaviors and creating actionable plans to work with that data.
By following these steps to properly measure your customer satisfaction, your company will have the detailed information it needs to continuously improve its customer journey, driving more sales, improving your brand reputation, and creating more happy customers.
What other metrics should I use to measure customer satisfaction?
The metrics we mentioned in this article are collected first-hand from customer satisfaction surveys. However, there are other metrics that can be calculated from internal data, such as customer churn rate, customer retention, and customer lifetime value.
To get a holistic sense of your customer satisfaction, it’d be wise to calculate all three of these KPIs and to match them with your customer survey data to look for trends.
How can I improve customer satisfaction?
Once you receive customer feedback, the fastest way to improve customer satisfaction is to act upon the exact suggestions and data received.
Beyond that, some general ways to improve customer satisfaction are to be transparent about your company’s product and pricing, offer helpful customer support across all channels, improve your user experience, and build a community forum of supportive customers.
What software tools can I use to help measure customer satisfaction?
Some common survey tools are Qualtrics, SurveyMonkey, and Qualaroo. For companies with a tight budget, Google Forms provides survey creation and basic insights for free.
If you plan on using emails to send surveys, it may also be useful to invest in email marketing automation software, which will schedule and send out emails automatically to help you track customer satisfaction over time. An example of an email automation software vendor is Mailchimp.