Introduction
Warren Buffet once said, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."
He isn't wrong, after all.
- About 61 percent of customers say they would switch to a new brand after one bad experience.
- Thirty-three percent of customers would consider switching companies immediately after experiencing poor customer service.
- Roughly three-quarters of consumers who give a company a “very good” CX rating are likely to forgive a company for a bad experience, but only 15 percent of those who gave a company a “very poor” CX rating echo the same sentiments.
- Globally, 96 percent of consumers say customer service is an important variable when determining their loyalty to a brand.
- Unsurprisingly, one in three customers would pay more if they receive a higher level of customer service.
These stats can only mean one truth: customer satisfaction is a game changer for companies looking to develop long-term relationships with their customers. It doesn't end there though — maintaining long-term relationships is a challenging job that keeps you on your toes to be on your customers' pulse.
This involves constantly measuring what’s keeping your customers engaged, and determining what would make them disengage from your brand.
In this article, we'll explore what customer satisfaction is, outline seven important customer satisfaction metrics, offer tips on how to improve customer satisfaction; plus tools that'll help you serve your customers better.
Dive in!
What are customer satisfaction metrics?
Customer satisfaction metrics are variables used to measure an organization's success with its customers. It measures how pleased or dissatisfied customers are with your business.
Analyzing customer satisfaction metrics involves examining agent performance, customer experience metrics and efficiency metrics; including team performance. The information collated from these data can be used to determine your customer satisfaction score and help identify areas of improvement.
Simply, if the goal of customer service is to satisfy customers, customer satisfaction metrics help you measure your progress toward achieving that goal.
Why are customer satisfaction metrics important?
Why is customer satisfaction so important? Not regularly assessing your customer satisfaction metrics could jeopardize your CSAT (customer satisfaction score); which could drastically increase your customer churn rate, reduce employee morale, and dampen your brand reputation.
Here are some of the reasons why measuring customer satisfaction is important.
Firstly, measuring customer satisfaction helps you understand customer needs and expectations. It gives you clarity on "how you perceive your customers’ needs vs. what your customers really need." This will help you focus more on the important areas that should be addressed — and measuring CSAT (customer satisfaction) can help you achieve this.
Secondly, customer satisfaction metrics aids in obtaining both qualitative and quantitative data. You need both of them to identify what makes your customers tick and help you make decisions. This is why having high-scale ratings is not enough. You need to gain deeper insights to know why your customers rated you 7,8,9 and 10 on a scale of 1-10.
Finally, it helps you identify areas of improvement. Once you've collected customer feedback, the next step is analysis. Analyzing your data would help uncover the key areas that put off your customers. That way, you can easily customize your products and services to their needs and consistently keep them happy and engaged.
Happy customers = loyal customers= more revenue.
The 5 Most Important Customer Satisfaction Metrics
According to popular American business strategist, Frederick F. Reichheld in his article for Harvard Business Review, “customer satisfaction surveys are usually long and complicated, yielding low response rates and ambiguous implications that are difficult for operating managers to act on.”
"To make matters worse, customer satisfaction metrics don't usually have much influence on the executive team or company direction because their results don’t correlate tightly with profits or growth,” he adds.
However, when done correctly, measuring customer satisfaction can provide your company with crucial information about how customers perceive your brand. Consequently, using the information obtained can greatly improve your customer experience and positively sway your customers to stay loyal.
Pro Tip: Choosing the right customer satisfaction metrics for your business comes down to what you want to know and what you want to do with the data obtained. There is no ‘one-size-fits-all’ customer satisfaction metric that provides everything everyone needs.
Let's explore the five most important metrics for customer satisfaction.
1. Net promoter score (NPS)
NPS was developed in 2003 by Frederick Reichheld as a method for predicting a customer’s future loyalty. It measures your customers' loyalty by asking about their willingness to recommend your brand to their loved ones, peers, or social circle.
Net Promoter Score surveys ask just one key question:
"On a scale of 0 to 10, where 0 is ‘not likely at all’ and 10 is ‘extremely likely’: How likely would you recommend [brand, product, service] to a friend or colleague?"
Based on the answers, the types of customers are grouped as follows:
Promoters are your most loyal customers. They rated you either 9 or 10 and are very enthusiastic about your brand, product or service. Think of them as your brand ambassadors who will recommend you to just about anyone.
Detractors rated you between 0-6 and would most likely promote negative word of mouth about your brand since they aren't loyal.
Passives score you between 7 to 8. They are usually satisfied customers but aren't particularly enthusiastic or loyal and could be tempted by competitors.
Net Promoter Score is calculated by subtracting the percentage of detractors from the percentage of promoters.
NPS = % Promoters – % Detractors
Pro Tip: Good NPS scores falls between -100 to 100 depending on your customers’ perception of your brand and their level of loyalty. NPS does not provide you with the reason behind your score. It's recommended that you add a few, short questions after the NPS survey to gain more insights.
Potential questions include:
- Why did you give the score that you did?
- What’s one major thing we could do to improve your response by even one point?
- What feedback would you like to give us?
2. Customer satisfaction score (CSAT)
Customer Satisfaction Score helps you know if your customers are happy or not. It measures satisfaction using a rating scale question that asks respondents to rate their satisfaction level with their product or service.
CSAT surveys operate in two ways: providing a real-time alert when a customer is unhappy with their service and providing data that can reveal bigger customer satisfaction trends.
While every business measures CSAT differently, its purpose remains the same: to ask customers if they were happy with their recent experience with your brand.
CSAT is calculated by dividing your number of happy customers by the total number of customers.
CSAT score % = Number of satisfied and unsatisfied responses
Total number of responses X 100
Below are three things to consider when conducting a CSAT survey:
Question: This could either be “How satisfied are you with the help you received?” or “Did you find everything you were looking for?”
There are many different questions to explore, so you might need to experiment with different questions to gauge which ones get you the most helpful responses.
Rating system: The rating scale can be either 1-10, 1-7, or 1-5. You could also use a Good/Bad rating, offer a neutral option or even a 5-7 point scale.
Survey format: Surveys can be delivered via SMS, email, or in-app.
The global average for CSAT scores is 86 percent but can vary by industry. For instance, the benchmark for internet retailers is 81 percent while computer software companies average around 76 percent, according to the American Customer Satisfaction Index (ACSI).
3. Customer effort score (CES)
Customer Effort Score (CES) determines the ease of using your products or services — since some products or services might be difficult to use and require significant effort from the customers.
CES asks customers how much effort they had to put in to resolve their issues. The premise is that the harder customers have to work, the less they want to do business with you.
This is corroborated by research: According to HubSpot, 81 percent of customers who had “high effort” interactions with a brand would speak negatively about it when asked. Additionally, 94 percent of customers who report their interactions as “low effort” will most likely repurchase in the future.
What does this mean in customer service? It means customers have to frantically search for contact information as if their lives depend on it, jump through a series of hoops to get help, tag a brand's social media accounts repeatedly to get their attention or lay their complaints repeatedly to multiple customer service personnel before finally getting the solution needed.
Odds are even if they believe they had a satisfactory experience, chances are they won't hurriedly forget the stress and frustration they endured — and would most likely persuade families and friends not to purchase from your brand to avoid the ordeal they went through.
Unlike NPS or CSAT which involves deducting percentages, customer effort score involves calculating an average score out of 7. This means the higher the score, the easier it is for your customers to get help.
However, the insights you're looking for aren't gained from looking at the average customer effort score. Rather, dig deep by looking at the distribution of scores.
For example, if most of your customers responded with an average score of around 5, that’s a good sign that getting help from you is easier. However, if there are a large number of customers responding with 1s or 7s, you should find out what’s happening.
4. Customer acquisition cost (CAC)
CAC is one of the main KPIs used for A/B tests of acquisition channels and is analyzed when a company is scaling up. This is why it's particularly useful for customer segmentation as it helps you determine the cost to acquire a new customer and helps identify areas where you can save.
To calculate CAC, divide all of the marketing expenses by the number of customers gained in a particular period. So, if your costs are too high, it's time to rethink your marketing strategy and customer satisfaction factors.
For example, you have spent $8,500 for seven months and successfully acquired 295 customers.
Your CAC would be :
CAC = Total cost spent on sales & marketing for a period
Number of customers acquired in that period
i.e. (8500) /295 = $28.8
Therefore, you've spent $28.8 on acquiring one customer during the last seven months.
Pro Tip: Improving the website conversion, implementing buyer personas, using marketing automation, investing in customer retention, and reducing customer churn — are popular strategies for reducing your customer acquisition costs.
5. Customer reviews
Word of mouth has been the holy grail of many businesses for as long as anyone can remember. Research has shown that receiving recommendations from other customers hugely impacts whether a potential customer decides to buy or not. This is why, according to Nielsen’s Global Trust in Advertising Survey, 88 percent of global consumers trust word-of-mouth recommendations from friends and family above all other forms of advertising.
Today, we have a new type of word-of-mouth marketing: online customer reviews as well as social media posts.
Customer reviews are crucial for increasing profits and creating a loyal customer base. It's no wonder that 66 percent of loyal customers would write a positive online review after having a great customer experience.
Peek some reviews from Scribe users culled from G2:
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Reviews (whether good or bad) help businesses analyze and understand their customer’s perceptions after using their products or services. And there's research to back this up: Having online reviews can help increase business conversion rates by 270 percent.
Not only do customer reviews highlight brand trustworthiness and transparency, but it also identifies areas of improvement, and helps in increasing brand awareness and reach.
How do you collect more customer (online) reviews?
These days, customers are more likely to read online reviews before making a purchase decision. In fact, 93 percent of users have made buying decisions based on an online review. This is why you should encourage your customers to give online feedback in order to encourage and persuade potential customers to buy from you as well.
Here's a template for collecting feedback from your customers:
Hi {customer name},
We are happy to see that you're having a great experience with our {insert product/service/software/solution}. A lot of online users look forward to genuine online reviews to guide them in the right direction and make the best buying decision.
Please share your experiences with using our {insert product/service/software/solution} for potential customers by leaving your review for us on {mention review site}.
If you have any questions, please do not hesitate to contact me at any time. Thanks so much!
{insert signature}
Top 5 ways to improve customer satisfaction
In a customer-oriented world, improving customer satisfaction isn't achieved singularly. It's a series of actions implemented to yield worthwhile results. Here are some tips to follow:
1. Collect customer feedback: Listening to your customers is the only guaranteed way to understand your customers' needs and wants. Online surveys are a great tool for listening to your customers. Using surveys allows you to measure customer satisfaction and identify what product improvements your customers request for.
2. Convert the collected feedback into action: Once you've identified your customers' requests, the next step is to collate all the feedback gotten and start implementing. For example, if some of your customers complain about the loading time for your website, start working with your website development team on how to improve that.
3. Constantly improve your products and services: Strive to constantly improve your offer. Teach your employees how to form good conclusions from every customer opinion received. In the long term, it would help you to maintain a high level of customer satisfaction.
4. Maintain continuous contact with customers: Some businesses get feedback from customers and close the loop immediately once their goals are achieved. Don't be one of them. Rather, share information about changes made, thanks to their feedback. This not only maintains awareness and contact with the brand but also shows your customers that you appreciate their opinions.
5. Build a knowledge base and strong FAQs: By providing a single place to get answers to commonly asked questions, you're giving new and returning visitors a go-to place for information/complaint resolution when they could have picked up their phones to call you (or worse, given up and abandoned your site entirely).
Additionally, building a knowledge base keeps your customers happy. These days, customers don’t like to call for support. They'd rather take self-service over human interaction. Building a knowledge base is no longer a nice-to-have. It's what your customers expect –as it gives them a chance of solving their problems without your help.
Thankfully, Scribe allows you to seamlessly train your customers (either via FAQs or a knowledge base).
With Scribe, you can easily onboard and enable customers throughout their journey and save you from repetitive, tiring customer training. Scribe allows your customer-facing teams to:
- Make simple and beautiful step-by-step guides — in seconds! So, when a customer needs information on a particular issue, you send a Scribe instead.
- Deliver more consistent customer support; thanks to the 24/7 availability of your resources. Your customers can access information when they need it from any device and don’t have to wait until the next day to call for support to solve a problem they could have fixed easily.
- Provide all customers (including international audiences) with consistent help at any time of day or night.
- Manage your customers’ problems proactively. Your clients can interactively learn new features by watching videos or following step-by-step guides. Better still, they can do everything by themselves.
- Reduce your phone calls. Thanks to your knowledge base and FAQs, customers can easily find all their answers online. In turn, you get fewer calls, which means fewer tickets — and can cut down your costs without compromising the quality of your customer support.
- Keep all your useful information in one place. Training new employees become easier, faster and cheaper as all they need to access the information is a single login. Additionally, your current employees can refer to guides and tutorials when needed to solve tickets or deal with bugs in the system. In short, not only does building your knowledge base with Scribe give everyone easy access to information, but it also saves resources and increases productivity at work.
5 Tools that support customer satisfaction
The customer service industry still can’t nail customer satisfaction. It's explainable: You have to constantly come up with new ways to delight customers — as customer happiness can change in a twinkle. As customers' needs evolve and their attention decreases, their expectations grow. So, how do you keep up and improve customer satisfaction?
Change your perception of customer happiness. Constantly sending out surveys to your customers isn't the problem. It's a symptom of a larger problem. While you're busy brainstorming on new features to add to your offering in an "attempt to boost customer satisfaction", your competitors are working to unravel why customers are unhappy in the first place.
And if we're being honest, the root cause of customer dissatisfaction lies in your customer support team. The experience they offer to your customers suffers if they don't have the right tools needed to carry out their jobs. Empower your customer support team with these top five tools to deliver better customer service.
And yes, Scribe is included in this list, because we are confident that our software can satisfy your customer support team's needs. Don’t take our word for it; try us!😁
1. Scribe
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Scribe is a customer satisfaction tool that eliminates the hours you spend answering customer questions; thanks to its automatic guide creation and library.
Scribe reduces the amount of time spent training customers by sending step-by-step guides that can be accessed whenever and helps even your least tech-savvy clients master your products with its easy-to-follow format of screenshots and text.
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Rachael Schroder, Manager, Customer Service Team at Crexi, faced a huge challenge: Crexi released new product features every two weeks, and both internal and external help documentation grew stale almost immediately. Crexi’s Customer Success Managers (CSMs) were always creating videos to answer client questions, which took too much time to update and send out. As a result, internal process documentation became outdated quickly, and keeping Sharepoint became a herculean task.
Rachael was tasked with overhauling her team’s training resources. She found Scribe during this period. Thanks to Scribe, Crexi’s CSM team reduced the time spent answering ad hoc client questions by 70 percent, which gives them time back to provide exceptional service to their clients.
Internally, Rachael now uses Scribe to keep Crexi’s Sharepoint updated with the latest and greatest process and product documentation, despite Crexi rolling out new product updates every two weeks. Scribe has decreased the time it takes Rachael to create documentation by 90 percent. Learn more about Crexi's story here.
The best parts? Scribe is totally free! Create your first Scribe in seconds. It also integrates with your favorite tools.
You can embed Scribes in 100s of tools you and your customers already use — Notion, ClickUp, HubSpot, Confluence, SharePoint, Milo, Lessonly, Skilljar, etc.
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2. Feedbackly
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Additionally, for online sellers, Feedbackly can help you identify problem areas in your users' product experience. For example, during the consideration stage of the customer journey, Feedbackly pinpoints where customer emotions drop to a rate that correlates with abandoning the customer journey—therefore, helping you make changes to improve it.
3. VideoAsk
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It lets you create a chain of questions in a single VideoAsk, so that after a customer answers your first question, your next video appears, showing a follow-up query.
VideoAsk also tracks visits, clicks, answers, and completions in your dashboard. This helps you see when users drop off during a VideoAsk funnel — and allows you to engage with them to reach the end of the sales funnel.
4. Survicate
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Its intuitive and code-free survey creator allows you to quickly set up your NPS survey without hassle. Survicate has a library of NPS templates you can customize to your needs and allows you to automate your NPS survey and have any other recurring surveys based on triggers and user behavior.
5. Zoho CRM Plus
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Zoho CRM Plus helps businesses improve CSAT by engaging customers across multiple channels. Its AI assistant predicts business trends, suggests the best time to contact a customer, finds email and ticket sentiments and provides intelligent business dashboards.
Additionally, Zoho CRM Plus promotes cross-team collaboration with a single platform for viewing leads and support tickets and has an interactive dashboard that provides an in-depth impact analysis of every potential business decision.
