As a company, one of the most important benchmark metrics to measure customer service performance is CSAT. CSAT, or Customer SATisfaction score, measures how satisfied a customer is when interacting with your company. Improving customer satisfaction keeps customers around for longer and creates brand advocates who can help you grow your business.
In this guide, we’ve covered everything you need to know about customer satisfaction — right from the definition to tips and tricks that will help you improve your CSAT score. Feel free to continue reading or click on the links below to navigate to the section that interests you the most:
As a company, one of the most important benchmark metrics to measure customer service performance is CSAT. CSAT, or Customer SATisfaction score, measures how satisfied a customer is when interacting with your company. Improving customer satisfaction keeps customers around for longer and creates brand advocates who can help you grow your business.
Customer satisfaction (CSAT), also known as consumer satisfaction or client satisfaction, is a measure of a customer’s happiness and sense of value with your product or service.
Customer satisfaction, like customer experience, allows your company to gauge the sentiment of your entire customer base or a specific set of customers.
Real-time customer satisfaction insights on Freshdesk
Let’s understand the definition of customer satisfaction better with an example.
Let’s say you’re in the business of renting out cars, and you’d like to assess your customers’ satisfaction with important aspects of your service. Once your customers have taken the survey, the insights you derive might include:
Effectively, by analyzing your customer satisfaction surveys, you are now in a position to understand what’s working well (car maintenance and overall customer experience) and identify the things that you can do better (buying process).
You can see in this customer satisfaction example that the insights you get are extremely valuable. And we’re still just scratching the surface of the importance of customer satisfaction. There are huge business benefits to measuring customer satisfaction, including the implications on product and business strategy. We dived into the benefits in the section below.
Tracking customer satisfaction offers instant feedback about the customer experiences you deliver, making it one of the most important metrics for customer support.
Customer satisfaction score is also a primary indicator of the health of important business metrics such as brand loyalty, customer retention, churn, and revenue.
Think about it; satisfied customers are likely to become loyal customers who improve your retention rates. Also, retaining an existing customer by keeping them satisfied is cheaper than acquiring a new one. It’s 5–25 times more expensive to acquire a new customer than to hold on to an existing customer.
On average, loyal customers are worth up to 10X as much as their first purchase. After a satisfactory customer experience, 69 % of people would recommend the business to others, and 50 percent would use the company more frequently.
An engaged customer base can expect about 80% of sales to come from 20% of their customers. Loyal customers can be a very effective form of word-of-mouth marketing.
Focusing on customer satisfaction helps your organization align business goals with customer-centricity. For instance, you can get a list of customer-preferred communication channels using customer surveys, focus groups, and polls.
In addition to the customer support team, all teams in your organization, including product and sales, can refer to CSAT surveys to get a feel of what your customers are thinking and saying and derive insightful customer observations. These insights can be seeded into building a winning product growth and strategy.
For instance, referring to customer satisfaction scores and feedback is one of the quickest ways to catch dissatisfaction with a product change or a potential bug — customers will never miss an opportunity to tell you something you’ve been doing wrong. Ultimately, you can tailor your company’s products or services better by leveraging customer satisfaction.
"Your most unhappy customers are your greatest source of learning." — Bill Gates
Customer satisfaction is a critical element and indicator of customer experience. According to McKinsey research, leaders in customer experience and customer satisfaction achieve 4X growth in value over ten years compared to their contemporaries.
On the contrary, 1 in 3 consumers leave a brand they like after one bad experience, reports PwC. Actively working towards achieving higher customer satisfaction levels improves the overall CX provided by your company and raises your brand value.
Now that you’re all caught up with the definition and importance of customer satisfaction, we’ll move on to find out why businesses invest in measuring customer satisfaction with different types of CSAT surveys or other feedback mechanisms.
Tracking and measuring customer satisfaction on a regular basis, helps:
Customer satisfaction is usually measured as the response to a survey or a question like “How would you rate your overall satisfaction with the [goods/service] you received?”. Your customers can respond positively, negatively, or neutrally based on their experience.
A few types of surveys to measure customer satisfaction include,
Using seven-point scales or visual representations can give you granular customer satisfaction data and more engagement when compared to plain-text pop-ups.
In-product customer feedback and satisfaction surveys
Most companies send out customer satisfaction and feedback surveys after a support interaction, such as a chat, email, or phone call. That being said, you can also gain insights by incorporating your survey into your product, especially after the customer has hit a real milestone of finding value or need in your service or product.
Help center satisfaction ratings
Add a survey on your customer self-service portal that allows people to rate whether the content helped them or if they couldn't find what they needed. You can do this by triggering a CSAT survey to appear at the very bottom of a page that a customer has been browsing for a certain amount of time.
Customer satisfaction metrics give a quantitative measure of your customers’ satisfaction by calculating the CSAT score, net promoter score (NPS), and customer effort score (CES). Most customer satisfaction surveys also leave room for a follow-up comment to get some qualitative feedback.
CSAT score is calculated by adding the number of positive responses received from surveys and dividing that by the total number of responses.
CSAT is usually expressed as a percentage ranging from 0 to 100%, with 100% referring to complete customer satisfaction. So, out of 500 survey responses, if 400 of them are positive, then your CSAT score is 80%.
Alternatively, if you’d like to measure the responses to your survey using a Likert Scale, then you can use this formula to calculate your customer satisfaction score:
A new CSAT survey being created on Freshdesk
In this case, your definition of a positive response alone changes. For instance, if your scale ranges from 1-5, with one being low satisfaction and 5 being high, then 4 and 5 count as positive responses.
You can calculate your company’s NPS by subtracting your percentage of detractors from your percentage of promoters. Promoters are the customers who are most likely to recommend your business, while detractors are the ones on the opposite side of the spectrum.
NPS survey responses are calculated on a scale of 1-10, while the metric can lie anywhere from -100 to 100.
Based on answers, the survey respondents are further divided into the following three groups:
Detractors – Customers who answer anywhere from 1- 6
Passive – Customers who answer with 7 or 8 are
Promoters – Customers who answer with 9 or 10
Let’s say you survey 100 customers, out of which 20 rated from 1-6, 15 rated 7 or 8, and the remaining 65 gave you a 9 or 10. Since the sample size here is 100, each group represents a percentage. So, your NPS is 45 (65 - 20).
Customer Effort Score (CES ) is a measure of how effortless your resolutions are. Lower the customer effort involved, higher the customer satisfaction. You can determine CES by asking customers to rate how easy or difficult their business interaction was on a scale of 1 to 5 or 1 to 10.
CES is calculated by finding the average score of all survey answers. You sum up all the responses received and divide that by the total number of respondents — the result is your CES
Using seven-point scales, or visual representations can give you granular customer satisfaction data and more engagement when compared to plain-text pop-ups. You can also include a second step that gives customers the option to write more if they would like to after clicking on the visual representation in your customer satisfaction survey.
Most companies send out customer satisfaction and feedback surveys after a support interaction, such as a chat, email, or phone call. That being said, you can also gain insights by incorporating your survey into your product, especially after the customer has hit a real milestone of finding value or need in your service or product.
Solution articles are essential for improving customer satisfaction — after all, it is the first place customers go when they start having trouble. A help center is also a prime place for a customer satisfaction survey or at least a version of it.
Add a survey on your customer self-service portal that allows people to rate whether the content helped them or if they couldn't find what they needed. You can do this by triggering a CSAT survey to appear at the very bottom of a page that a customer has been browsing for a certain amount of time.
Once you’ve calculated your customer satisfaction scores, you need to look at ways to improve it. Customer satisfaction management is a crucial aspect of business success, so let’s look at how you can improve it.
The first step in any customer satisfaction improvement process is identifying the gaps and spotting pain points across the customer lifecycle. Once you’ve spotted what’s causing the change in your CSAT score, you can do a root cause analysis to identify which of these factors need to be improved.
The next step after conducting a root cause analysis is problem-solving. You need to develop a step-by-step action plan to improve your customer satisfaction and implement it. While you might be trying to fix problems that are unique to your product or pricing, there are other ways in which you can increase customer satisfaction.
Customer satisfaction improvement process
As soon as you start to notice a decline in your customer satisfaction rating, take a look at where you're falling short of meeting your customers' expectations. According to Zeithaml and Bitner’s customer satisfaction model, there are five factors that influence CSAT:
Product quality
Service quality
Price
Situational factors
Personal factors
From the above list, product and service quality, and price are factors that you control. So, examine if there have been any major product changes, shifts in pricing, or ways your team provides support. If there has been, that’s likely the reason for your shift in CSAT ratings, but you should dig into any comments that you received from customers to confirm.
Customer feedback is a goldmine of insights that’ll help you identify the problem areas to solve for and improve customer satisfaction. The voice of the customer is loud and clear across various digital channels, and taking the effort to track and aggregate the feedback voiced is incredibly valuable for your overall brand experience.
You can tap into customer feedback in several ways. Conduct surveys, polls, and interviews with focus groups. Go through third-party review sites and practice social media listening to catch the word-of-mouth opinions that are crucial but easy to miss.
If listening to customers or looking into key factors does not lead you to any further identification, the next place to look is your customer service metrics.
Recent research conducted by Freshworks also revealed that various aspects of customer service highly influence your customers’ satisfaction. Here are a few game-changing customer satisfaction statistics from the What Your Customers Really Want Report.
Customer satisfaction statistics
Customers today look for easy options to contact a brand, and this might include more than one preferred channel.
However, as a customer, while having many options to reach out to a brand feels great, it is frustrating when you have to start afresh and repeat information on each channel.
Here’s where omnichannel customer service comes in. Omnichannel customer service refers to delivering a seamless experience across multiple touchpoints between you and the customer.
For example, if a customer calls in for support and follows up on email, your company should continue the conversation without asking for the same information again. The customer should never hear, "Oh, you just need to give me your details so I can check ..." and, if they do, you can likely expect to get a negative CSAT rating from them.
Investing in an omnichannel customer service software gives an automatic boost to your CSAT because it streamlines customer interactions from all channels into one place. So when customers switch between channels, you can continue to deliver friction-free experiences by accessing unified customer records, including past conversations. It is one of the best things that you can do to improve customer satisfaction.
A unified view of customer conversations across channels on Freshdesk
When customers run into trouble, they usually just want to get the answer to their questions as fast as they can. They don’t want to have to wait for a response from someone, and they don’t want to have to talk to someone and explain their problem. Because of this, self-service and documentation is the preferred method of support for many customers.
Owning a knowledge base is useful for finding answers to common questions that reduces wait times for customers and deflects tickets for your support team. You can further strengthen your self-service strategy by deploying AI-enabled chatbots that deliver instant, automated resolutions around the clock.
For instance, if your customer wants to reset their password, a chatbot can take them through a guided workflow, at the end of which the customer would have successfully changed their password.
Instant answers provided by a Freddy AI-powered chatbot
If there’s one thing that customers hate, it’s long waiting hours. We analyzed over 107 million customer service interactions and found that speed is the most critical factor in achieving high customer satisfaction.
A good customer service software will offer you tools such as saved replies or automated workflows that help your team automate some of the things that might be taking up their time.
Much like providing self-service and allowing for ticket deflection, for every bit of time that your representatives can save by using a workflow or a canned response, they can use more time to focus on crafting excellent responses or making progress on projects to push forward your support team’s goals.
Automating away things that don’t have to be done by a human is an excellent way to create more space for productivity on your team without hiring more people.
Configuring workflow automation rules on Freshdesk
Suppose the issues in customer satisfaction are related to customer support quality or high ticket volumes rather than a change in your product. It could be valuable to take a look at which specific metrics are causing problems in that case.
If the issue is with your average handle time, then you can likely solve the problem by scaling your support team or providing better training.
Conducting ongoing communication and soft-skills training can also help your team be more empathetic and offer genuine assistance.
Beyond training and teaching, though, for things like response quality, it can be a good idea to implement a process around peer review or QA to improve customer satisfaction. As you are implementing new processes, ensure that they are scalable and that you will be able to maintain them as your company continues to grow.
Once you’ve implemented the steps to improve customer satisfaction, you need to track progress. If your course correction plan is working, then you’ll see an improvement across all your customer satisfaction metrics.
Lastly, but most importantly, make sure you close the loop with your customers. Especially when you’ve corrected something that your customers were unhappy about, dropping them an email shows that you care.
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