How to Get the Most From Customer Satisfaction Scores (CSAT)

Discover how to harness the power of customer feedback from simple KPI metrics like the customer satisfaction score (CSAT).

In the age of social media, viral reviews and user-generated content, consumer power is at an all-time high. It’s time for businesses to leverage customer feedback to improve CX, inspire brand loyalty and increase profitability. And who better to provide input on how to improve your CX than the people who spend money with your company?

Gathering CX metrics like CSAT provides decision-makers with quantitative and qualitative actionable data at key interaction points.

What does CSAT stand for? Customer satisfaction score, a rating of how a customer feels about your company at the moment of purchase, during onboarding or after an exchange with support.

The information you glean from CSAT will help you better meet customer expectations and boost the overall customer experience.

Customer Experience Drives Business

As we say goodbye to 2022 and head into the new year, customer experiences — both physical and digital — are everything. People came to depend upon the new digital avenues that popped up during the pandemic. But they also want in-person and hybrid experiences.

CX is defined as how consumers feel about the way your company treats and interacts with them. Perception of customer experience can influence how likely clients are to recommend your brand or become a loyal customer.

According to a Verint survey, great CX is the most important factor in maintaining customer loyalty, outranking both price and product. Plus, 64% of consumers polled said they’ve stopped doing business with a company due to poor customer experience.

The customer satisfaction score is an excellent indicator of customer experience and loyalty. It lets you know how happy customers are with your company, helping you take action to increase retention rates and boost your brand’s reputation.

What Is CSAT?

Satisfaction scores are key performance indicators that measure customer satisfaction with a company’s products or services. You can deploy a customer satisfaction survey at any point along your customer’s journey to gain insight into how happy they are with your brand.

What is the CSAT meaning in terms of numbers? It starts by asking a simple question to measure a client’s satisfaction with a service, product, transaction or interaction. The customer chooses a numerical score from one to three, one to five or one to 10.

If you’re looking for qualitative data rather than quantitative, you can use verbal indicators, such as very unsatisfied, unsatisfied, neutral, satisfied and very satisfied. You can also go with international symbols like smiley faces or stars.

Whether you use numbers, words or symbols, the scoring process is the same.

Related Article: Are You Using the Right Customer Experience Analytics?

How to Calculate a Customer Satisfaction Score

CSAT scores are easy to calculate. All you have to do is add the positive responses together, divide them by the total number of responses and times it by one hundred. The final figure represents the percentage of customers who are satisfied with their brand experience.

Most people agree that four out of five and five out of five stars represent a positive outcome. Say 50 customers rate your company a five and 30 give a rating of four. The total number of positive responses is 80.

If 100 people took the CSAT survey, you’d divide the total number of positive responses by the total number of customers surveyed, giving you 0.8. Multiply this by 100 to get a final percentage of satisfied customers vs. unsatisfied customers. In this case, it’s 80%, which is a great score.

The equation would look like this:

( 80 ➗ 100 ) ✖ 100 = 80%

The Benefits of Measuring Customer Satisfaction

Despite its simplicity, many businesses use the score as a key performance indicator (KPI) to measure customer success.

In fact, according to the CMSWire State of Digital Customer Experience survey, it’s the most-used measure of digital CX, with customer retention rate coming in at second place and net promoter score in third.

Plus, more companies are beginning to use CSAT scores to tune into their customers’ perceptions. The percentage of organizations reporting using CSAT scores has increased by 8% compared to last year.

Let’s dig into the main advantages of using a customer satisfaction survey.

Learn About Your Customers

If your business meets customer expectations most of the time, you’re more likely to retain customers.

By gathering feedback at key customer touchpoints, you learn how effectively you’re meeting their expectations. Over time, you’ll gather data highlighting any pain points or bottlenecks in the customer journey. The insights you gain will also help you understand what your customers want and expect.

You might learn that your customers value:

  • A robust and easy-to-find privacy policy that focuses on transparency
  • Regular communication about product deals and new offerings via email
  • Educational content that focuses on understanding the product or industry space
  • A community forum where they can connect with other customers

Related Article: 4 New Ways to Use Customer Satisfaction Results

Advertise Your CSAT Score

Another benefit to using CSAT scores is that you can publish great results to set yourself apart from competitors in your market. Have a great score that’s higher than the industry average? Have you listened to customer feedback and improved your score over the past year or two? Tell people about it.

If you share scores alongside first response times, you’ll assure potential customers that post-purchase customer care is fast and high-quality.

Improve Customer Loyalty and Experience

A CSAT score isn’t there to make you feel bad about your brand or discipline your team. The point of gathering feedback is to make tangible improvements to your business that affect your customers. While your vision drives the company, customers are the only people who can tell you if they’re satisfied with it or not.

It’s easy to get caught up in your own standards and expectations. But ultimately, your customers are the ones spending money and are best placed to see issues you might be blind to.

As Nate Masterson, CEO of Maple Holistics, said, “Vendors or service providers often have a predetermined definition of what a satisfied customer looks like. The cost of having your own standards can be detrimental to your business because you can’t account for the problems you’re blind to. It’s obviously important to have standards, but you should be more concerned with your customers’ expectations.”

Reduce Customer Churn

It’s a fact you’ve probably heard time and again: acquiring new customers is more expensive than retaining the ones you already have. To be more specific, it’s five to 25 times more expensive to attract new customers than hold onto existing ones, according to Harvard Business Review.

But when you have hundreds, thousands or millions of customers, it can be hard to determine who’s unhappy and why. A customer satisfaction survey helps you identify unhappy customers before they churn, at key points of the customer lifecycle. This provides a unique opportunity to make amendments before losing that customer forever.

If you’re able to turn an unhappy customer into a satisfied customer, there are a lot of benefits involved. Research from Bain & Company shows that increasing retention rates by just 5% can boost profits by 25% to 95%.

Related Article: How to Optimize Customer Acquisition and Retention

Inspire Loyalty

Customer loyalty describes when a consumer is inclined to do repeat business with your company. And one big driver of loyalty? Customer experience. Brands that can deliver exceptional experiences can ensure that customers keep coming back.

The CSAT score will tell you how your brand is faring in terms of delivering these great experiences. Other metrics you can use to measure levels of customer engagement and retention — significant factors in loyalty — are average order value and customer lifetime value.

What Is a Good CSAT Score?

Expectations vary across industries, but a good score usually falls between 75% and 85%. A score of 75% represents four in five customers giving you a positive score as opposed to neutral or negative.

Let’s take a look at the expected CSAT scores by industry, using data from the American Customer Satisfaction Index:

  • Full-service restaurants: 80
  • Fast food restaurants: 76
  • Supermarkets: 76
  • General merchandise retailers: 75
  • Computer software: 78
  • Internet retail: 77
  • Specialty retail stores: 77

When to Deploy Surveys

There are tons of interaction points for customers, and it’s important to measure customer success at the most useful points. Once you’ve established a clear customer lifecycle, these touchpoints are a good place to deploy CSAT survey questions.

An alternative method is to capture the entire customer service experience instead of single interactions. Joseph Ansanelli, co-founder and CEO of Gladly, highlighted the importance of taking a holistic approach to customer experience.

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