Running a business is more than just Key Performance Indicators, sales figures, tax returns, or product suites. When stripped down to the core, all companies should revolve around one metric: satisfying the customer.
Only when you provide undeniable value will you earn influential customers who stick by your side in times of need. The times we’re living in today.
By extension, the customer experience management teams should be treated with the same consideration as sales or marketing teams. In their hands lie the positive experiences customers are craving.
Fortunately, in this day and age, we’re blessed with multiple tools and metrics to track the performance and the challenges of a flawless digital customer experience.
Today we’ll look at the Customer Satisfaction Scores (CSAT):
- What they mean.
- How they differ from other CX metrics.
- How they contribute to improved Customer Lifetime Value.
What is CSAT (Customer Satisfaction Score)?
The Customer Satisfaction Score (or CSAT) represents the CX metric that helps you identify customer happiness with your product, service, or experience – throughout various stages in the customer lifecycle.
You can use the CSAT score to understand the reasons behind customers’ happiness (or unhappiness) and then take the necessary steps to improve critical areas inside your business.
CX Metrics: CSAT vs. Customer Effort Score vs. Net Promoter Score
With so many customer experience metrics, we believe a comparison is due. This way, you’ll better understand what each metric represents and when to use each to improve customer loyalty.
Customer satisfaction (CSAT) measures customer satisfaction alone; it doesn’t tell you anything about customer loyalty or the effectiveness of your support center.
If you’re wondering about the cons of CSAT scores, know they can sometimes be tricky or misleading.
Respondents usually score in the extremes, so those who are satisfied but hide somewhere in the middle of the scorecard risk falling through the cracks.
Use the CSAT to evaluate how happy you’re making your customers, but don’t stop here.
The Customer Effort Score measures how much effort a customer puts in when interacting with your organization. It’s generally used to evaluate your customer support systems, as it shows how complicated it is for a customer to have an issue solved by your service reps.
Customers don’t always have the patience to go through an intricate call support process or wait more than a few minutes until a representative picks up the phone. It’s in your best interest to follow this metric and understand the convenience levels you provide to your customers.
Last, the Net Promoter Score measures the chance for customer recommendations. In a similar fashion to the CSAT, the NPS is also measured through a survey containing a close-ended question.
The similarities end here since the NPS revolves around word-of-mouth advertising, and there’s no guarantee that a satisfied customer will tell his friends about you.
Should one be more important than the other?
While there’s a difference between the three in popularity, we advise using metrics like a storyboard of your customers’ feelings. Let them tell the story of why your customers love you, how smooth the relationship is, and how likely they are to bring their friends to the party.
Customers’ expectations aren’t necessarily easy to meet:
- your products must bring real progress,
- the price point should be affordable,
- and their issues should be solved fast.
The metrics are your mirror, showing how good of a job you’re doing and highlighting improvement opportunities you might have overlooked.
How Is CSAT Measured?
– CSAT Calculation
As with other customer feedback metrics, to measure customer satisfaction (CSAT), you will need to deploy customer satisfaction surveys in multiple stages of the customer lifecycle.
Your typical customer satisfaction survey consists of a close-ended question:
How would you rate your satisfaction with [your brand/company]?
Customers can then score their satisfaction on a 1-5 scale, and that’s it.
Of course, you want to take full advantage of customer feedback. In that case, your CSAT survey can also contain an open-ended question, asking customers to give the motive behind the scoring.
You could also take it to the next level and complete and add CSAT survey questions that narrow in on specific aspects of the transaction: such as the shopping experience, product quality, the UX of your online store, the shipping process, and so forth.
Now, let’s stick with the original satisfaction question.
After you get the responses, use the following CSAT formula to calculate your average customer satisfaction score:
(Sum of All Scores) ÷ (Sum of the Maximum Possible Scores) × 100
As you can see, the CSAT is calculated as a percentage. Still, you can also see the satisfaction of each individual customer.
As you would do with the NPS, if a high-value customer scores lower, your customer service teams can quickly interfere and do some damage control.
In this case, you’re actively turning your CX department into a profit center vs. a cost center and preventing customer churn rather than merely reacting to it.
There’s also a second approach to the CSAT questions – while not as nuanced, it can still deliver a general idea of customer happiness and even bypass cultural differences: the happy/unhappy scores.
In this scenario, instead of asking your customers to rate you on a scale, you’d ask them to pick between three options:
With this survey, you can also ask customers to explain their choices in an open-ended question. However, it’s easier and more common to deal with numbers instead of visual elements, so the happy/unhappy scores aren’t used as often as the classic scoring question.
How Does CSAT Work?
The Customer Satisfaction Score works best when it’s used to understand the customer experience received by the customer.
Depending on how you design your satisfaction survey, you can get customer insights into what works well or needs to change.
Moreover, you can use the CSAT to identify how a particular change inside your organization is perceived by your customers. Since the answers are nuanced, you can detect even the most indistinct shift in customers’ satisfaction levels.
At the same time, open-ended questions in your satisfaction surveys can also uncover specific problem areas or friction points you need to address.
Why Do CSAT Scores Matter?
Ultimately, your goal for 2023 and beyond is to monitor and increase the Customer Lifetime Value (CLV) and get more profitable relationships from your already acquired customers.
Yet, your service quality is the only way to achieve a satisfactory CLV.
Over-delivering on your promises should be the new normal nowadays – and CSAT is the one metric that tracks this goal.
CSAT is also a great metric to measure your teams’ effectiveness and performance.
At the same time, CSAT surveys aren’t demanding at all – they’re easy to implement to send out, and the survey questions don’t take up much of your customers’ time.
Of course, customer satisfaction scores also work as bug detectors. Negative responses help uncover friction points, issues, and problems within your organization and prioritize problem-fixing.
One of the best skills a professional can earn is learning how to ask the right questions. An example of such a question would be: “why are customers leaving us”?
The CSAT score answers this question, showing where and why you aren’t meeting the customer’s expectations.
What Is a Good CSAT Score?
To evaluate your CSAT score:
- compare it with similar companies’ scores,
- use external industry benchmarks,
- or look at global customer experience trends.
*Disclaimer: keep in mind that every organization is unique. Companies have different systems in place, product assortments, and types of customers, so view the benchmarks as something other than the absolute standard in your industry.
When looking for benchmarks inside your industry, try comparing and contrasting with companies that share a similar size, product suite, and even customer base to your own.
Besides industry benchmarks, you should also compare your customer satisfaction scores to your team’s historical performance or similar groups in different locations. You should also look at CSAT from a historical POV to track your progress in time.
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Create Your CSAT Survey
When designing your survey, it’s important to note that most follow the same general format. You’d have a scale for customers to choose from and an optional open-ended question for customers to expand more on their choice.
However, the CSAT metric is only valid when you design surveys that customers actually want to respond to. With this in mind, let’s look at the key insights for creating a successful survey.
- Be intentional about the information you need.
A.k.a., pick your objectives right from the start and be sure of the information you want to collect.
To make the most of your surveys, talk with your teams first – anyone who directly interacts with your customers can provide insights into customers’ expectations, possible red flags, or possible areas of dissatisfaction.
For example, suppose customers from a specific location churn rather quickly and only buy once or twice from you. In that case, there might be a particular shipping issue, and the surveys can help uncover it.
You can design your survey questions regarding this assumption or ask customers to rate the delivery process and see if anything has changed for your customers.
To make matters more manageable, you can have a set of questions that can be changed according to certain things you want to uncover.
- Don’t be afraid to go into specifics.
Your CSAT survey can start by inquiring about overall satisfaction, then continue on different paths to discovering all the details of customer experiences.
There’s a strategy behind it. By the end of the survey, customers are usually at the end of their patience and want to get it over with.
In this case, their ratings might not be as sincere as you’d like them.
With this idea in mind, you can view the responses at the beginning of the survey as more valuable because customers are more likely to answer honestly.
- Use clear language.
Use clear, simple, and easy-to-understand words when designing your questions. Make it easy for respondents to read, understand, and answer questions. People might multitask while answering your survey, so you don’t have their full attention.
In the same spirit, we must emphasize the importance of shortening your surveys. As they advance in the survey, you already know that people are getting more impatient and don’t give their answers too much thought.
So, it should take them at most a couple of minutes to answer the questions. The longer the survey, the more people will quit before they finish, and the less relevant answers you’ll get.
- Don’t overdo it with open-ended questions.
Respondents have a tendency to say everything on their minds in the first open-ended question. Here’s why too many open-ended questions might lead to blank fields or repetitive answers that only bring a little insight.
As we’re on the subject of questions, we advise you to include only the questions that matter at the time. If the question doesn’t lead to a greater purpose, or you won’t use the answer, you shouldn’t include it.
For example, suppose your purpose is to gauge the sentiment regarding a new product. In that case, you should leave questions about the delivery service and the website’s responsiveness out of the question.
- Use different groups for your survey distribution.
Suppose you use the same group of customers for your surveys every quarter. In this case, you risk having tired and maybe even annoyed customers.
At the same time, the insights you get will be one-sided and won’t provide the holistic view of your organization that you need.
Analyze Your CSAT Feedback
The mere satisfaction score will tell you little and won’t contribute significantly to your customer retention efforts.
To effectively analyze your CSAT surveys, you should go through these two steps:
Number one – split your respondents into satisfaction groups.
Segment the respondents into sub-groups based on their answers. You should have different approaches for “extremely satisfied,” “extremely unsatisfied,” and “neutral” respondents.
The main goal of unsatisfied respondents is preventing churn. Solve their issues or the aspects that disappointed them, and you might convert them into satisfied customers. After all, there’s a thin line between love and hate.
With satisfied customers, you’d want to follow up and identify exactly what they loved about your brand. That’s your strong point, your USP against the competition.
Satisfied customers can be turned into promoters – even if you use the CSAT survey, not the NPS one.
As for neutral customers, you can ask an open-ended question to see what you could’ve done differently to deliver a better experience.
During this step, it’s also essential to see where you are in terms of numbers – do you have more satisfied customers or unsatisfied ones?
Number two – use text analysis to make sense of your data.
Text analysis helps you analyze responses straightforwardly without burning your resources or staffing.
Use text analysis software to extract valuable information from your customers’ answers, then take action on those insights.
We’ve talked a lot about your customers, but let’s shine a light on your customer support teams. CX representatives are usually the most strained inside your company.
Support departments also face the highest turnovers and go through more stress than needed when dealing with customers daily.
Text analytics can help them automate tasks like researching CSAT answers and enhance their problem-solving abilities while also listening to the voice of the customer.
Now, let’s look at some CSAT survey questions to include in your company’s surveys.
(These examples were created for demo purposes, and we had some fun with the design.)
The CSAT is a metric helping with quality management and the overall direction of your business.
If you agree you can’t improve customer retention by bribing customers with crazy discounts, offering unforgettable experiences is the way to go.
Customers are people, not wallets; they’ll let you know as soon as they feel disrespected.
The CSAT reveals how good of a job you’re doing on this front.
Frequently Asked Questions about Customer Satisfaction
To calculate the CSAT, you first need to send out customer surveys, asking your shoppers to rate their satisfaction levels with your brand. After the results come in, you need to divide the sum of all Scores by the sum of the maximum possible scores, them multiply the result by 100. The end results will be your CSAT score.
With the Net Promoter Score (NPS) you identify the likelihood of your customers recommending you. The CSAT shows you how satisfied your customers are with your brand. Both are important CX metrics, but their use is different.
Level one (and the bare minimum )is Meeting the Customers’ expectations. At Level Two you Surpass expectations. Level three – and the most difficult to reach – is Delighting your customers by going above and beyond to deliver a memorable customer experience.
The CSAT helps you track your progress in your attempt to over-deliver and delight your customers. At the same time, CSAT is also a great metric to measure your teams’ effectiveness and performance.
A Customer Survey Score reveals wether or not you meet a certain CX criteria. It’s calculated using the formula for the specific metric you’re tracking (NPS, CSAT, effort score, etc.), using customer surveys.