Customer satisfaction: A complete guide 

What is customer satisfaction, and why is it important? 

Customer satisfaction (CSAT), also known as consumer satisfaction or client satisfaction, is a metric used to measure 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 even a specific set of customers.

 

 

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 are as follows:
- 80% of customers are satisfied with the cleanliness of the cars.
- 35% of customers are dissatisfied with the buying process.
- 72% of your customers would recommend your business to others.

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 on the importance of measuring customer satisfaction. There are huge business benefits of measuring customer satisfaction, including the implications on product and business strategy. We’ve dived deep into the benefits in the section below.

Why measure customer satisfaction?

Customer satisfaction offers instant feedback about the customer experiences you deliver, making it one of the single most important metrics for customer support. 

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. 
 

"Your most unhappy customers are your greatest source of learning." — Bill Gates
 

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. Gartner’s research has found that 80% of your revenue comes from 20% of your customers. So it pays to make sure that your existing customers are happy with your products and services before you spend time and effort on acquiring new customers. 

Now that you’re all caught up with the basics, we’ll move on to find out how customer satisfaction is calculated and cover different types of CSAT surveys. 

How to measure customer satisfaction

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. 

You can get 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.

Here’s an example of a customer satisfaction survey created on Freshdesk:
 

How to calculate different customer satisfaction metrics

1. CSAT score

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:

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.

2. NPS

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).

3. CES

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

 

Different types of surveys for customer satisfaction measurement

Visual and interactive surveys

Using seven-point scales, or visual representations can give you granular 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.  

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

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 Given that, also a prime place for a customer satisfaction survey, or at least a variant of it. 

Have a survey on your help documentation that allows people to say whether the content helps them or if they couldn't find what they needed. You can do this by targeting 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. 

How to improve customer satisfaction

Customer satisfaction is highly correlated with customer loyalty and brand power; it’s in every company’s best interest to want to improve it.
 

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. 

Is your average handle time growing?
Is your first contact resolution rate going through the roof?
Is your ticket quality during peer review dropping?
Have you recently onboarded many new employees?

Recent research conducted by Freshworks also revealed that various aspects of customer service highly influence your customers’ satisfaction. Here are a few game-changing data points from the What Your Customers Really Want Report.

The first step in any customer satisfaction improvement process is identifying the gaps and spotting customer pain points. You can do this by: 

1. Listening to customers

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. 

2. Evaluating changes using a customer satisfaction model

As soon as you start to notice declines in your customer satisfaction rating, sit down and take a look 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.

3. Analyzing your customer service metrics

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. 

Is your average handle time growing?
Is your first contact resolution rate going through the roof?
Is your ticket quality during peer review dropping?
Have you recently onboarded many new employees?

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.

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. For instance, if you're looking at ten people saying some variation of "I hate your billing page, " you can do a root cause analysis to figure out what, specifically, is causing the most pain on the billing page. Maybe it is hard to discover where to change the billing contact, or there isn't a place to upload credit card details easily.

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.

4 tips to increase your customers’ satisfaction

Here are four practical tips to create positive customer service experiences and enhance customer satisfaction.
 

#1 Offer omnichannel customer engagement

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.
 

#2 Empower customers with self-service

When customers run into trouble, they usually just want to get the answer to their question 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. 

You can strengthen your self-service strategy with AI-enabled chatbots that deliver instant, automated resolutions around the clock. While a knowledge base is useful for finding quick answers, customers can’t solve problems that they encounter.

For instance, if your customer wants to reset their password, they can only read about the instructions to do it on their own. However, a chatbot can take them through a guided workflow, at the end of which the customer would have successfully changed their password.

Self-service also allows you to deflect some of your tickets, thus dropping down the volume and allowing your customer support representatives to give even more focus and attention to the more demanding tickets. This is a great way to boost positive responses to your customer satisfaction surveys.

#3 Improve the speed of service

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.

#4 Revisit agent training

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.