How to measure customer satisfaction: Methods and tips
Did you know it’s 5-25 times more expensive to obtain a new customer than it is to keep a current one (1)? Keeping your customers happy is very important. But how to measure customer satisfaction? That depends on your company’s needs. Look over the following options and decide what’s best for your business in terms of customer satisfaction measurement.
Reminder: The importance of measuring customer satisfaction
Customer satisfaction investment continues to rise in companies due to its money-saving benefits. But there’s so much more than that…
Discover satisfaction drivers
When examining your company’s customer satisfaction, you can learn what works well with your product or service. You can then make that a unique selling point for your company. Brand differentiation is huge in terms of competitive advantage.
On the flip side, you can see what consumers don’t like about your product or service. For example, is there a bottleneck somewhere in customer service? Do consumer reviews continually mention the same negatives? Make the needed changes, and improve the customer experience.
According to Lee Resources Inc, 91% of consumers will go to a competitor if they are dissatisfied with a brand purchase. Yikes! When you act on discovered satisfaction drivers and take time for customer satisfaction measurement, you can pinpoint how to reduce churn.
An unhappy customer will tell 9-15 people about their dissatisfaction with a brand (2). (And that’s just in person.) An unhappy customer online can reach so many more potential customers with one scathing online review. Protect your brand reputation by learning what your customers want and expect and then by giving it to them.
Popular customer satisfaction metrics
Let’s look at today’s most widely-used metrics for customer satisfaction measurement. How to measure customer satisfaction KPI for your business? Consider one of the following:
NPS: Net Promoter Score
- Definition: Percentage of customers who are likely to recommend a company, product or service to friends or colleagues.
- Scale: 0 to 10
- Example: “How likely are you to recommend us to your family and friends?”
CSAT: Customer Satisfaction Score
- Definition: Measures the degree to which customers are satisfied with a service, product or experience
- Scale: Usually 1-3, 1-5, or 1-10
- Example: “How would you rate your overall satisfaction with our service today?”
CES: Customer Effort Score
- Definition: The customer effort score is used to measure how difficult an action is to complete.
- Scale: Very Easy to Very Difficult/Strongly Agree to Strongly disagree
- Example: How easy was it to order from our restaurant?
If you’re still wondering, “How can I use the NPS satisfaction scale or what is CSAT exactly?” Our guide on Why customer satisfaction is important goes more in depth on these topic about how to measure customer satisfaction KPI.
How companies measure customer satisfaction
Listening to the Voice of the Customer is crucial if you want to know how to make them happy.
Companies attune to their customers’ needs are those that use not one, but several customer satisfaction measurement tools. They go beyond monitoring techniques for customers’ complaints and are proactive in getting customer feedback. Consider the following:
Whether it’s a phone or video call or in-person, interviews can be a great way to ask clients in-depth about their level of satisfaction with a product or service. The data gleaned here will go beyond a number on your satisfaction scale.
You can get detailed insights about a part of your customer journey, aspects of your product, or the overall feeling about your company. Interview transcripts can also be kept and analysed for sentiment.
Surveys now have myriad forms—chat bot, email, SMS, tablet, QR code…just to name a few. But businesses like to use surveys to ask specific customer satisfaction KPI questions. For example,
- How to measure customer service? CSAT: “How would you rate your overall satisfaction with our service today?”
- How to measure customer satisfaction index for automotives? NPS: “How likely are you to recommend us to your family and friends?”
- How to measure customer satisfaction for an ecommerce site? CES: “How easy was it for you to check out on our website just now?”
But sometimes surveys or questionnaires ask several questions at once to track multiple satisfaction efforts.
For instance, a hotel can ask about the check-in, cleanliness of the room, food and overall experience in one survey. Or, it can also decide to split up these questions into multiple surveys sent along the customer journey.
Types of surveys, number of questions per survey and amount of surveys per customer vary company to company. The most important thing (it sounds basic, we know) is to know what you want to learn from your survey. The rest will follow.
While potential customers like to use consumer reviews as a measurement for how trustworthy your company is, let’s talk about how your business can use reviews as an internal satisfaction scale.
Star ratings are the easiest way consumers rate a company and provides easy scoring for both the business and consumer. However, what about the words within a review? Whether you collect reviews for public display or internal purposes, use a software that offers review analytics.
With the right Voice of the Customer software, you can analyse reviews to:
- Look at customer sentiment
- See whether customers feel positive, negative or neutral about a specific topic
- Discover customer trends and patterns
Going beyond brand image, many companies today use social media as one of their monitoring techniques for customers’ complaints. They improve customer satisfaction by interacting with customers’ questions and complaints directly on their social media platforms like Instagram, Twitter, Facebook, YouTube, TikTok, etc.
Your company can even consider asking its followers on social media about their satisfaction levels with your products, service and overall brand.
When to start measuring customer satisfaction? Yesterday
As more and more of your competitors invest in customer satisfaction measurement, make sure you don’t fall behind. Round up the necessary decision-makers in your company and tell them this convincing stat:
When your company improves customer satisfaction within the customer journey, you can increase revenue by 15% (3)
Then determine your customer satisfaction metrics and methods and whether or not you need any professional help to implement them throughout your customer journey. Good luck and know that Customer Alliance is here for you!
- Bain & Company. Report: Prescription for cutting costs
- White House Office of Consumer Affairs.
- McKinsey: The 3 Cs of customer satisfaction: Consistency, consistency, consistency