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Well, customer satisfaction is undoubtedly one of the most significant customer service metrics ever, but how does it work? What does customer satisfaction mean to you when it comes to using it as a customer experience metric? How to make sure that your customers are satisfied? How to measure customer satisfaction rate? Is importance of client satisfaction real or is it another marketing concept? What is a satisfied customer? Finally, how to provide satisfactory customer service?
Let’s answer those questions in the most complete guide regarding customer satisfaction written by Voiptime team.
What is customer satisfaction?
Customer satisfaction is a customer service concept that is used to measure how satisfied customers are with your products or services. For these purposes, there is a customer satisfaction score, or customer satisfaction level - a customer experience metric and also one of the Key Performance Indicators (KPIs). In fact, this is a customer satisfaction definition you will find wherever else in the Internet - still, you have to remember that customer satisfaction is much broader than this definition, as it is a fundamental part of customer experience.
To make it clear, let’s remind you that there are four key components of customer experience - customer effort score (CES) net promoter score (NPS), first call resolution rate (FCR), and surely customer satisfaction (CSAT).
Customer satisfaction (CSAT) is beyond question the most widely used and the most essential among other customer experience components, as it covers much more aspects of customer experience than others of these components.
What do we mean by that? Well, let’s look at how different components of customer experience work in practice. Customer effort score obviously measures customer effort, but even effortless service can be negative or dissatisfactory. First call resolution provides you with a picture of how many customer queries and customer complaints were resolved within the first contact, but still, it doesn’t mean that all those resolved customer inquiries were examples of satisfactory service for customers. Only Net Promoter Score (NPS) provides valuable insight into customer sentiment, as it allows you to presume that loyal customers are also satisfied customers, and such presumption will be 90% accurate regarding customer happiness.
Nonetheless, customer satisfaction is still the most flexible and informing rate among other CX metrics. You can measure customer satisfaction (CSAT) for each one of customer interactions, for each stage of the customer journey, or even for the entire customer lifecycle - and there is a high probability that you will achieve different numbers for each of these calculations.
How to measure customer satisfaction score?
Unlike some other customer service metrics, customer satisfaction level is impossible to measure without direct surveying customers. This is a general characteristic of almost all customer experience metrics, as all of them are focused on measuring customer opinion and sentiment. Thus there is no way to analyze such categories without direct communication with clients - even though some AI platforms already provide a feature of customer sentiment analysis, which we will definitely discuss in one of our following articles.
First of all, to calculate customer satisfaction level, you have to choose which one of customer satisfaction scales you are going to use. There are two main options: 5-point scale and 10-point scale. Let’s discuss 5-point scale as it is easier to understand its mechanic.
On a 5-point scale, 1 stands for “absolutely dissatisfied”, 2 - for “dissatisfied”, 3 - for “neutral”, 4 - for “satisfied” and 5 for “absolutely satisfied”. On a 10-point scale, it would have been working in the following way: 1-2 for “absolutely dissatisfied”, 3-4 for “dissatisfied”, and so on - just tow points for one stage of customer satisfaction instead of one point.
Therefore, we come to the main stage of customer satisfaction score calculation - customer surveys. You have to use one of the following methods of surveying customers:
- Send surveys via email
- Use automated calling via the IVR system
- Using specific forms via Google Forms or your website
- Outbound calling campaign with agents involved
- Messengers
- Chatbots
Some platforms and communication channels can automatically collect customer feedback after every customer interaction - for instance, chatbots can ask customers about how satisfied they are with the service after a chat session, but in most cases, you will measure customer satisfaction proactively.
So, when you are done with surveys, let’s come back to out customer satisfaction formulas.
There are two of them:
Customer satisfaction score (CSAT) = Sum of all scores from the surveys/ Highest score you could get from these surveys * 100
Customer satisfaction level (CSAT) = Number of scores of 4 and 5/ Number of surveys completed * 100
You can use both, and the second one can be adapted to measure only very satisfied customers - if you use only a number of scores of 5 points.
Let’s look at how those formulas work. Imagine that you have surveyed 10 customers, all of them scored you with 3 points. Thus, let’s use first formula for this example of customer satisfaction rate measurement.
30/50 * 100 =60% of customer satisfaction level
Now let’s assume you have surveyed 10 clients, 5 of them ranked you at 5, while 3 others ranked you at 4. Here we use the second customer satisfaction formula:
8/10 *100 =80% of customer satisfaction level
What is a customer satisfaction score benchmark?
Even though high customer satisfaction level (CSAT) can vary significantly from industry to industry, there are still some generally accepted industry standards regarding high customer satisfaction level.
To put it simply, let’s say that everything that is above 75% of high customer satisfaction score is good, while the rates above 90% can be categorized as exceptionally high customer satisfaction scores.
Nonetheless, don’t be upset when your customer satisfaction levels are going to decrease to 70% or even 65%. This is just a sign that you should review your customer satisfaction strategy on providing customer service or try to get a deeper understanding of why did some customers get dissatisfied with this exact interaction.
There is also such a term as customer satisfaction index - it is slightly different from customer satisfaction score (CSAT), as it reflects customer satisfaction for all aspects of your business. Let’s consider you have following customer satisfaction rates for key fields of your business:
- Customer service - 80%
- Pricing policy - 65%
- Product quality/usability - 75%
Thus customer satisfaction index (CSI) would be calculated in the following way:
CSI (Customer satisfaction index) = Attribute 1 + Attribute 2 +.../Total number of attributes*
*where an attribute refers to separate aspect of business that has its own customer satisfaction rate measured
So, CSI = 80 + 65 + 75 / 3 = 73,3
There are following customer satisfaction index rates according to data provided by American Customer Satisfaction Index as for 2023:
Shipping and mail - 70
Online retailers - 80
Automobiles - 79
Supermarkets - 76
Banks - 78
Hotels - 73
As you can see, for most industries, the customer satisfaction index is between 70% and 80%, as we have already mentioned above.
Why is customer satisfaction important?
It drives your sales
It isn’t a surprise to say that customer satisfaction importance lies in the simple fact that client satisfaction is related to sales rates. In other words, satisfied customers are more likely to purchase products than non-satisfied clients. Moreover, as customer satisfaction refers mostly to short-term sentiment bounded with certain touchpoint or customer interaction, high customer satisfaction can encourage customer to complete impulsive purchases.
It builds customer loyalty
Customer loyalty and satisfaction are two concepts that can’t exist one without the other. Loyal customers can’t be dissatisfied as dissatisfaction doesn’t create loyalty, and vice versa. By improving customer satisfaction (CSAT), you can impressively improve customer loyalty, which means also higher customer lifetime value, and this means more revenue for company and also stable brand advocacy from the side of your loyal customers, who are your biggest promoters - they can even provide efficiency of some separate marketing campaigns.
It ensures positive customer experience
Customer satisfaction, as we have already mentioned, is the most important component of customer experience, and this is impossible to measure customer experience without measuring customer satisfaction (CSAT). By building moments of customer satisfaction through customer interactions, you provide an excellent customer experience that motivates customers to spend more and stay with your brand.
It helps you learn your customers better
While measuring customer satisfaction, you have to communicate with your clients a lot, and here is another proof of importance of customer satisfaction - it provides you with deep insights into customer behavior and helps to learn your target audience better. If you want to find imperfections in your customer service procedures or products, nothing wil help you more than customer satisfaction rate.
It reduces customer churn
80% of customers will leave your business after second negative experience - and that's how you destroy your customer retention strategy. Customer satisfaction (CSAT) helps you measure what makes customers happy, thus your customer base will be more likely to expand with such data - it will help you improve customer support efforts, ensure customer centricity, answer customers question, and provide excellent customer service with exceptional customer experiences.
How to improve customer satisfaction
Agent training
When it comes to customer service, there is nothing that could improve customer satisfaction more than regular training and some mentorship programs for your employees. Keep in mind that customer satisfaction is a concept that is absolutely new for most of your call center agents as most of them are newbies and have no working experience not only in customer service but anywhere else. You have to teach your customer service representatives how to provide customer service of the highest quality to achieve high customer satisfaction rates. Use some specific training techniques, such as gamification, work in pairs, one-to-one training sessions and always provide agents with constructive feedback so they could manage their progress.
Provide self-service options
Modern customer service can’t exist without involving customer service through self-service channels, such as IVR systems, chatbots, AI-based voice assistants, FAQs, knowledge bases, and so on. More than 60% customers are more willing to try to resolve their customer issues on their own before contacting customer service agents, so what’s the point to stop them from doing it? Your goal is to provide them with relevant self-service tools, which will not only boost their customer satisfaction levels, but also reduce pressure on agents and help them deal with relevant customer problems only.
Invest in customer service personalization
Personalized and tailored customer experiences are one of the most popular and relevant customer expectations by far. Customers don’t want “regular” service anymore, they want regular service to become personalized and tailored to their individual needs and requirements. This doesn’t end on a point where you greet customers by their names, no - it is going beyond and above that. You have to understand what are the customer preferences to provide special offers, personalized servicing, flexible loyalty programs and many more - even follow-ups should be customized, and don’t forget to take into account the preferences of each single customer differ - and matter.
Implement customer opinions
Customer feedback is the best way to learn how to improve your products or services without even involving third-party auditors or experts. Your customers can easily replace them, as they are the ones who consume your goods and services and they have a fair right to ask you about improvements to these offers - especially if they have relevant ideas about how these goods could serve them better. The fact is that more than half of all clients believe that customer feedback isn’t coming to anyone who could have acted on it - try to change this belief.
Be proactive
Nothing shows customer care better than proactivity - and importance of customer satisfaction made many businesses act proactively even though they never used this tactic before. Proactive service doesn’t mean only resolving customer issues when they haven’t yet affected customers - it is also about starting communication with customers not only when they need it, but also when you want to discuss something important with them or just show your care and show their importance to you. The more proactive you are, the more satisfied your customers will be.
Offer omnichannel support
One of the most indispensable customer demands when it comes to customer service is omnichannel support. Customers don’t want to contact your customer service teams by phone only, they want more digital channels in a digital era - and that’s logical. An omnichannel communication platform has to support the following channels at least: emails, live chats, chatbots, social media, messengers, and phone calls. This is what you have to offer, all other communication channels are optional - research your audience or ask them directly to get a precise picture of what they expect from you.
Provide customer centricity
Nothing makes customer love you more than customer care provided in every customer service interaction. There is no numerical score to measure importance of customer centricity, but we all know how it works - it means that all company's efforts are focused on satisfying customer needs. You received negative customer feedback? You have to resolve it in minutes. Potential customers have doubts? Provide them with such a level of care and make your marketing team do all to resolve their doubts. Poor customer service case occured? Apologize and offer compensation. Focus on customer success, and you will receive tangible benefits instead.
Learn customer journey
Happy customers are more likely to share their positive experience, as well as unhappy customers are also likley to share their bad experience. Nonetheless, when it comes to neutral clients, they have neither negative review nor positive review, so they are more likely to ignore your customer satisfaction surveys. The same it works with customer journey - on stages where customers don't become either satisfied or dissatisfied customers, they don't provide you with insights. Thus, try to take a deeper look at all stages of customer journey to find out where you can perform better.
Pros and cons of customer satisfaction
Customer satisfaction is such a popular customer experience metric that it should have had many pros and a few cons. Is this statement true? Let’s check it out.
Pros:
Usability - it is quite easy to measure customer satisfaction, it doesn’t require any special tools
High response rates - the survey is short, so more people will answer it
Flexibility - you can measure customer satisfaction for each single business process or touchpoint
Simplicity - you can easily compare your customer satisfaction rates to benchmarks or to other businesses
Cons:
Cultural issues - some nations can’t just answers that service is horrible, even if it is
Depth issue - customer satisfaction doesn’t provide any depth analysis or detail
One-person issue - it is especially difficult to measure customer satisfaction when it comes to B2B, where are many users, but only a few can be surveyed
Conclusion
Customer service satisfaction is one of the most important concepts in customer service industry as it is one of the most widely used metrics to measure customer experience and sentiment. There are different formulas and customer satisfaction metrics to measure user satisfaction, and there are plenty of ways to improve customer satisfaction. Customer service and customer satisfaction are two concepts that can’t exist without each other, which means if you want to provide seamless customer service, you have to focus on customer satisfaction improvement to make customer satisfied enough to stay with your brand or purchase from you - for the first time or as extra purchase. You have to also align your customer satisfaction goals to reach industry benchmarks.
To ensure customer satisfaction, you have to use some specific customer satisfaction tools, such as call center software - remember what we said about omnichannel support, personalized service and self-service options? Without contact center software it is impossible to implement it all.
