Every business covets customer satisfaction — after all, they want to know their customers are happy with them. But this doesn’t always happen. Some customers swear by your brand, some are indifferent, and others want nothing more than to yell at you (and even spread their disapproval across their network).
These differences of opinion are inevitable. The question is: how many of your customers are happy and how many aren’t? And, most of all, why?
That’s where CSAT comes in.
What is customer satisfaction?
Customer satisfaction (CSAT) is the measurement of how happy your customers are with your brand, product or service.
CSAT scores are popular metrics in customer success. You can administer the so-called CSAT surveys to gauge your customers’ opinions at a number of stages in the customer journey and across a number of topics, including their training and onboarding sessions, their buying process, and their perception of your products or services.
You can also visualize the progress of customers’ CSAT scores across time. For example, imagine 60 percent of your customers give you a positive score right after they purchase, then 80 percent do after implementation, then only 50 percent when they seek out customer support. This helps you understand where and how you need to improve customer experience.
Learn more about prioritizing the right KPIs for customer success in our on demand webinar: https://acquire.io/webinars-events/customer-success-teams/
Why is customer satisfaction important?
CSAT forms a core part of a suite of customer analytics that help you improve and grow your business. Understanding customer satisfaction gives you vital insight into how well you’re meeting your customers’ expectations. And that’s particularly important because the more satisfied customers you have, the more they’ll want to stick around — improving customer retention and benefitting your bottom line.
But it doesn’t end there. Higher levels of satisfaction help to improve customer relationships with your agents, too. When customer satisfaction is high, there are less upset customers around for your staff to deal with. The end result? A better employee experience. And that means happier and more motivated staff.
Learn everything you need to know about customer support in our ultimate guide: https://whitepaper.acquire.io/the-ultimate-guide-to-customer-support
CSAT vs NPS
You’ve probably heard of Net Promoter Score as a proxy for customer satisfaction, too. While CSAT and NPS are based on the same premise and are both popular customer service metrics, they do have differences:
Net promoter score (NPS)
- Is more concerned with customer loyalty (how able your company is to retain customers)
- Administered quarterly or annually
- Asks one standard question (“How likely is it for you to recommend our company?”)
- Is calculated as happy customers (promoters) minus unhappy customers (detractors)
- Scale of 1 to 10 usually
- Can have a negative value
- Average scores are calculated too (e.g. average score of 6 out of 10)
Customer satisfaction (CSAT)
- Is more concerned with customer satisfaction (how happy customers are with their experiences with your brand)
- Administered after specific significant events
- Asks different questions each time depending on what you want to know (“How was your training process?” or “How was your buying experience?”)
- Is calculated as the percentage of happy customers (promoters)
- Scale can be anything, including 1 to 5 or 1 to 7
- Can only have positive value
- Average scores are calculated too (e.g. average score of 6 out of 10)
For example, an NPS score of 50 percent shows the net benefit of promoters, after detractors have been accounted for. A CSAT score of 50 percent means that half of your survey respondents gave you a positive score.
How do you measure customer satisfaction
Measuring customer satisfaction involves a number of steps. First up, you’ll need to collect the data required to calculate your CSAT scores via a customer satisfaction survey.
CSAT is measured on a rating scale by one or more variation of this question that usually appears at the end of a customer feedback survey:
‘How would you rate your overall satisfaction with the [goods/service] you received?’
The respondents will then be given the option to provide an answer on a rating scale (say 1-5, for example).
- Very unsatisfied
- Unsatisfied
- Neutral
- Satisfied
- Very satisfied
Once you’ve gathered this survey data together, you can look to calculate your CSAT score.
CSAT calculation
Calculate your CSAT score by dividing the number of positive responses — in this case ‘4 satisfied’ and ‘5 very satisfied’ (using the two highest values on feedback surveys is the most accurate predictor of customer retention) — by the total number of responses and multiplying by 100.
This gives you a customer satisfaction score which can be expressed as a percentage.
For example, if you have 200 responses total and 150 are positive, your CSAT would be 75 percent.
What is a good CSAT score?
Most likely, when you’re measuring CSAT scores you’re going to want some more context around exactly what they show. In other words, whether they represent a ‘good’ score or not.
To get a better gauge of this, it helps to understand them in the broader context of your industry. Remember though, your company may well still consider a CSAT score ‘good’ if it represents an improvement from the last time you measured it, regardless of how it shapes up to other scores in your industry.
The American Customer Satisfaction Index provides a recurring list of benchmark values for customer satisfaction. Every year, ACSI publishes the average scores by industry. Here are the updated numbers from 2020 (2021 is still being finalized):
IndustryCSAT 2020Soft drinks86Household appliances85Food manufacturing84Personal care and cleaning products84Breweries83Television and media players83Apparel82Property and casualty insurance82Life insurance81Consumer shipping81Cigarettes81Landline phone service81Athletic shoes79Automobiles and light vehicles79
ACSI also regularly updates the benchmarks by sector:
Customer satisfaction survey
Valuable customer feedback won’t just fall into your lap. It requires a well thought-out approach that maximizes response rate. Part of that is down to being strategic in terms of when you use surveys in the customer lifecycle.
CSAT is measured after significant events. Here are some instances where a CSAT survey would make sense:
- After customer support interactions
- After the onboarding process
- After a purchase
- After any events you care about
So, think about what you want to know about your customer satisfaction and build a strategy around this. That’s how you’ll determine when to send CSAT surveys.
CSAT survey question
The customer satisfaction survey questions you use will vary depending on your focus. You could simply ask a customer if they’re satisfied with a process, like below (you can also provide a blank field for them to leave further feedback).
Or, you can ask multiple questions about the process. For example, if it’s a post-purchase survey, you may want to ask about price, site navigation, and delivery time, getting customers to rate each of them on a rating scale.
Here’s an example from Amazon:
Either way, the important thing is that you are gathering data that is meaningful for your business.
Turn CSAT scores into action
The value of measuring CSAT after significant events is that you have direct feedback telling you where the problems are.
For example, if you have a lot of customers giving low CSAT scores after placing an order, you can look to improve the checkout process.
And remember, just like every metric, CSAT shouldn’t be seen in isolation. Combine it with NPS to get a more accurate picture of what your customers think. After all, even if they didn’t enjoy a particular interaction, they may still love you as a brand.