Customer satisfaction can shape a company’s future. A glowing reputation and plenty of 5-star reviews will attract customers on autopilot. A poor reputation, on the other hand, can deter prospects from reaching out.
Keeping track of customer satisfaction levels is essential for building and maintaining a good reputation for your business. So, how do you do it?
This article covers why and how to measure customer satisfaction levels using seven popular methods:
- Direct feedback
- Customer satisfaction score (CSAT)
- Net promoter score (NPS)
- Customer effort score (CES)
- Online customer reviews
- Social media monitoring
- Customer retention rate
Let’s dive in.
What is customer satisfaction?
Customer satisfaction refers to how happy your customers are with your product, service, and overall experience. With consumer expectations higher than ever, companies must do everything they can to meet and surpass their customers’ needs.
When it comes to customer satisfaction, don’t underestimate the importance of your daily operations. Did you know more than half of customers will switch to a competitor after just one bad experience? How well you manage key service components—like response time, empathy levels, quality, and convenience—can be the difference between a happy customer and a frustrated one.
Regularly tracking your customer satisfaction levels will also help you pinpoint areas of strength and improvement within your business.
Why measuring customer satisfaction matters
Business owners trying to generate sales leads typically check metrics such as revenue growth, churn rate, and customer acquisition cost. They’re all important, of course, and yet many people overlook the influence that customer satisfaction has on these metrics.
According to a Gartner survey, businesses that show how customer satisfaction is associated with growth, margin, and profitability are more likely to report customer experience (CX) success. In other words, customer satisfaction can directly affect the fundamental metrics that fuel business development.
Satisfied customers can lead to:
- Improved product/service development. Paying close attention to customer satisfaction scores helps you avoid building products/services that customers don’t want. You’ll gain valuable feedback that helps shape your products and services to your customers’ needs.
- Identify problem areas. Many businesses make similar customer service mistakes, but recognizing company-specific issues can be trickier. Customer feedback is fantastic for shining a light on your blind spots. For example, while most customers may be satisfied with your mobile app, feedback might tell you that people with certain smartphone models are experiencing issues with the software.
- Improved customer retention and lifetime value. The easiest way to secure new business is to provide an excellent service. Customers say good customer service makes them more likely to purchase again.
- Business growth. Satisfied customers help you grow. Through repeat business, word-of-mouth referrals, and feedback, happy customers can help you to refine your products or services.
7 ways to measure customer satisfaction
1. Direct feedback
The simplest way to get customer feedback? Ask for it.
When tracking customer satisfaction levels for the first time, you might be surprised to find that most customers don’t leave feedback. Happy customers tend to return, while upset customers don’t always voice their frustration.
Send out customer surveys or feedback forms to encourage feedback and learn about the customer’s experience. Popular tools for customer feedback include SurveyMonkey, Google Forms, and Typeform.
While receiving a mix of positive and negative feedback can be intimidating, remember that all feedback is valuable in seeing your business through the customers’ eyes.
2. Customer satisfaction score (CSAT)
A CSAT score is a straightforward way of measuring customer satisfaction for products, services, or customer experience. CSAT measures this by asking customers, “How satisfied were you with your experience?” and rating it from 1 to 10.
The simplicity of CSAT scores makes them ideal to send out immediately after interactions, as they only take seconds to complete.
3. Net promoter score (NPS)
A NPS score surveys customers and places them into three categories: promoters (9-10), passives (7-8), and detractors (0-6). It’s a simple way to see which customers will likely help you build revenue and grow. You can also identify who could potentially cause harm to your growth and reputation.
NPS scores are usually sent out at key customer journey points, such as post-purchase, after onboarding, or based on a specific action.
4. Customer effort score (CES)
A CES measures how much effort it takes for a customer to use your product/service, contact customer service, resolve a problem, and generally get what they need from your business.
This is a fantastic tool for seeing how easy it is for customers to interact with your company. The smoother it is, the less friction you cause your customers.
A CES can also help you notice bottlenecks in your products/services. After all, a product/service “working” is the bare minimum; it must be efficient, amongst other things.
5. Online company reviews
Customer review sites—like Trustpilot and Yelp—are hugely influential as this will be the first place many customers will discover your company. And the businesses with the best reviews stand out as the obvious ones to contact first.
Ask customers to leave online reviews via email and your social media accounts. Offering discounts, contests, and giveaways to encourage reviews can work if you don’t receive many responses.
6. Social media monitoring
There are tools you can use to scan your social media accounts and pick up on the overall sentiments of your social media audience. The benefits of tools like Hootsuite, Sprout Social, and Brandwatch go beyond just collecting relevant data. They automate the process of gathering information to save you from doing it manually.
7. Customer retention rate (CRR)
CRR measures the percentage of customers your company retains over a specific period. Retaining customers is often more cost-effective than acquiring new customers, so CRR is critical to track.
Most Customer Relationship Management (CRM) tools can track your CRR for you.
Analyzing feedback and improving satisfaction
Reviewing customer feedback can stir up the same feelings as finances—you only want to look when it’s positive! However, analyzing feedback should be embraced. It shines a light on what you’re doing right and where to improve.
Some popular ways to analyze customer feedback and improve customer satisfaction are:
- Create a feedback system. Pick the processes you’ll use to track customer service and how often you’ll check them.
- Gather a wide range of feedback. Use different methods to get a holistic view of how customers rate your service.
- Thank customers for feedback. Always thank customers for taking the time to give you their feedback, even if it wasn’t as positive as you would’ve liked.
- Look for patterns. Identify common problem areas to determine what can be fixed and what was just an unfortunate error.
- Set SMART goals to “Wow!” customers. Set Specific, Measurable, Achievable, Relevant, Time-bound (SMART) goals to try and turn problem areas into areas that leave a positive impression.
- Track results. Make monitoring customer satisfaction levels a regular commitment to keep delighting customers.
Conclusion
Regularly checking customer satisfaction levels does wonders for your business. You will identify problem areas and insights that help you delight customers with better products and services. Embedding regular customer feedback and actioning it into your customer service philosophy will help you retain customers and grow your business.
