This guide will teach you how to use the Customer Satisfaction Score metric, boost loyalty, and prove the ROI of your efforts.
The Customer Satisfaction Score
Customer Satisfaction Score (CSAT) is a customer loyalty metric used by companies to gauge how satisfied a customer is with a particular interaction or overall experience.
CSAT is one of the three most popular loyalty metrics that contribute to a successful Voice of the Customer (VoC) program—the other two being Net Promoter Score (NPS) and Customer Effort Score (CES).
It’s a necessary tool for delivering great customer experience (CX), however, there is some skepticism around it. This guide is going to set the record straight.
The biggest criticism of CSAT is that happy customers don’t necessarily equate to revenue growth. Meaning, if a company’s sense of security relies heavily on their CSAT score, they’ll be very disappointed—having satisfied customers doesn’t always lead to loyalty and revenue growth.
But, when measured properly, satisfaction is part of a bigger system that leads to long-term customer retention. While satisfaction is only one component of a successful CX program, it’s a very important one.
With the right goals and strategies in mind, CSAT will prove to be an indispensable customer loyalty metric. Let’s get started.
Why CSAT is important
Customer satisfaction goes hand in hand with great customer experience. In fact, satisfaction goes a long way—just a 10% increase in a company’s CSAT score leads to a 12% increase in trust from customers.
Research has shown that maximizing satisfaction across the customer journey has the potential to increase customer satisfaction by 20%, lift revenue by up to 15% and lower the cost of serving customers by as much as 20%.
Also, satisfied customers are more likely to upgrade or add services and are less likely to cancel.
We could keep feeding you more data, but we believe you get the gist. It’s time to dive into the specifics, starting with the correct method to measure CSAT.
How to measure your Customer Satisfaction Score
For instance, customer satisfaction can be assessed by asking customers: “How would you rate your overall satisfaction with [brand]?”
Or, companies could ask: “How satisfied are you with [brand]?”
When it comes down to it, your choice of wording doesn’t matter as long as the question is clear. You can also add an option for the respondent to leave a comment and explain his or her rating. We actually recommend this. More context is always best.
Regardless of your wording, customers should always be asked to respond on a five-point scale with options being: very unsatisfied, unsatisfied, neutral, satisfied, and very satisfied.
Once you’ve collected feedback via your customer satisfaction survey, there are two ways you can calculate your CSAT score.
Some companies simply calculate the average of their 1-5 scores. Others, including GetFeedback’s team, calculate the percentage of those customers who consider themselves satisfied (the 4-5 scores).
We divide the total number of customers who selected very satisfied (5) or satisfied (4) by the total number of responses and times that by 100. See the formula below.
Here’s why we prefer and recommend this calculation: While you can use CSAT as an average, that isn’t as useful as calculating the percentage of those customers who consider themselves satisfied. If you stop and think about it, that makes sense—the metric is looking at the percentage of happy customers specifically.
CSAT industry benchmarks
If you’re new to CSAT and customer satisfaction surveys, a good starting point is seeing how you compare to peers in your industry. To do so, you can rely on the American Customer Satisfaction Index (ACSI).
The ACSI is the only national economic indicator that measures customer satisfaction across the U.S. economy. Their data is used by researchers, organizations, analysts, investors, etc. to get a pulse on CSAT across industries.
According to the ACSI, the 2020 overall U.S. Customer Satisfaction Score is 74.4%. However, when it comes to industry, CSAT varies.
See below for a complete list of the current CSAT benchmarks.
Ambulatory Care: 74%
Athletic Shoes: 79%
Automobiles and Light Vehicles: 78%
Cellular Telephones: 80%
Computer Software: 76%
Consumer Shipping: 77%
Cooperative Energy Utilities: 73%
Credit Unions: 77%
Department and Discount Stores: 76%
Financial Advisors: 77%
Fixed-Line Telephone Service: 70%
Food Manufacturing: 82%
Full-Service Restaurants: 79%
Gasoline Stations: 73%
Health and Personal Care Stores: 76%
Health Insurance: 72%
Household Appliances: 79%
Internet Investment Services: 78%
Internet News and Opinion: 74%
Internet Retail: 81%
Internet Search Engines and Information: 76%
Internet Service Providers: 65%
Internet Social Media: 70%
Internet Travel Services: 77%
Investor-Owned Energy Utilities: 72%
Life Insurance: 78%
Limited-Service Restaurants: 78%
Municipal Energy Utilities: 72%
Personal Care and Cleaning Products: 83%
Personal Computers: 78%
Property and Casualty Insurance: 78%
Soft Drinks: 82%
Specialty Retail Stores: 78%
Subscription Television Service: 64%
Televisions and Media Players: 80%
U.S. Postal Service: 73%
Video Streaming Service: 76%
Video-on-Demand Service: 68%
Wireless Telephone Service: 74%
Click here to download the current industry benchmarks. And if you want to see quarterly benchmark updates, just visit their website.
If your industry didn’t make it into the ACSI list, comparing yourself to the overall US customer satisfaction score of 74.4% is a good starting point.
While it helps to know where you stand relative to your peers, the key to success is to focus on always improving. Your customers’ expectations are not necessarily being set by what your industry does. Trends, competitors, and expectations change.
So, yes, you can continue to monitor that CSAT score, but while you’re doing that, collect feedback, act on it, and implement other strategies that will actually improve the experience, which ultimately leads to a better CSAT score and other desirable business outcomes.
How to use the CSAT metric: an overview
At this point, you should have learned that it’s not the measuring of satisfaction that improves CX, it’s what you do with that insight. And that starts with setting realistic, strategic goals.
First, set goals for your CSAT metric
Below are several goals for your consideration.
Goal 1: Measure a specific experience point.
CSAT can provide a lot of insights around how well your brand met expectations at key parts of the customer journey, such as a purchase, onboarding, transaction, support call, etc.
This type of specific interaction is often measured and included in Customer Experience Management. The CSAT score can be used to both address issues with an individual customer and in the overall Voice of the Customer (VoC) program at your organization.
Goal 2: Coach employees.
Measuring CSAT after a store visit, support call or live chat may provide specific feedback to address with employees. Using this to coach employees and share how to improve their feedback will help improve the experience for future customers.
This can be a powerful way to overcome a common complaint–representatives lacking the knowledge or ability to solve customer issues.
Goal 3: Seek satisfaction feedback, periodically.
Providing a periodic satisfaction survey to customers, in general, can provide them with the opportunity to share immediate concerns and gather feedback not necessarily related to a specific step in the journey.
This can be challenging to determine what to do if the results are not as positive as you’d like them. But if you are just starting to explore customer feedback in general, this is a simple way to get started and then benchmark against in the future.
CSAT as a relationship survey
Relationship surveys are typically conducted at least annually to get an overall assessment of how customers perceive the organization and the products, services, and support delivered. Some companies will survey more often, but they must be careful to not overload current customers with survey requests.
The Customer Satisfaction Score (CSAT), like the Net Promoter Score (NPS), can be used effectively for relationship surveys.
Companies should add diagnostic questions about relevant attributes such as product quality, service responsiveness, etc. These should be developed to assess elements of a company’s “brand promise.”
Also, in addition to the main 1-5 loyalty question, it’s almost always a good idea to ask at least one open-ended question to give customers a chance to explain their ratings, or to share issues not represented in the survey.
CSAT as a touchpoint survey
Touchpoint surveys are used to capture feedback after individual customer interaction with different parts of the company. The goal is to understand how well a brand performed at a particular point in the customer journey.
For this goal, a CSAT survey, as well as a Customer Effort Score (CES) survey, works well. The NPS “would you recommend” question can be confusing for customers because referral behavior is usually based on more than just one recent interaction.
Here’s an example of how you can use CSAT as a touchpoint survey: A pop-up web survey can get feedback as customers or prospects are interacting with a website. Service interactions are another excellent opportunity to ask for feedback, ideally on the same channel that the customer used to get service.
Another example: a journey map may identify customers feel their invoices are too long and hard to understand. That’s a great pain point to measure with a CSAT survey. Start by asking for satisfaction around the clarity of the bill. Use that feedback, along with what they share in the open text field, to create an action plan for improving the clarity of the invoice.
Once those changes are rolled out, measure CSAT around the touchpoint of the invoice again. This approach can be used for any touchpoint you identify as a pain point for your customers.
Touchpoint surveys should be as short as possible to maximize the response rate. Some experimentation may be required to find the best number of questions and avoid survey fatigue. At Sun Basket, for example, post-service surveys are 5-8 questions, sent to 50% of cases mainly by email. Survey requests are limited to one every 45 days.
Take action on CSAT feedback
So you’ve identified the best approach to using CSAT and you’ve sent out a survey. Now the feedback is pouring in, which is great—you’ve met your first goal of collecting fresh and relevant data.
While receiving feedback is good, it can also be overwhelming because it means sorting through all of the feedback to turn it into actionable insight.
Having a process mapped out for you is always helpful. Complete the following steps to transform, consume, and operationalize your survey data.
Step 1: set up service recovery
First up, close the loop on service recovery opportunities. You should set up some alerts so that when feedback comes in above or below a certain threshold a notification is sent to the appropriate team member to follow up with the customer.
To plan, you can ask yourself:
Who will respond to the customer?
Within what time frame?
In what mode (phone, email, in-person)?
What will they say/ask (e.g., apologize, ask for more information to get to the root cause, schedule a follow-up call for more details, etc.)?
How will you empower your staff to handle these calls?
What information do they need to make the call?
What is the intended outcome of the follow-up?
When and how does the service recovery get escalated?
How will you capture the discussion? Will you share best practices with others to learn from?
How will you know if the customer is satisfied with the follow-up?
How will you know if you’ve saved the customer?
This shouldn’t only apply to negative feedback. When customers provide positive feedback or mention specific employees and a job well done, that feedback is routed to the appropriate teams or people.
Step 2: prepare an analysis plan
Before you analyze your feedback, you need to develop your analysis plan, which is a roadmap for how to analyze your data and why you’re analyzing it.
This is an important step because it systematizes how you look at the feedback–and it clearly spells out how the data will be used, linkages, etc.
Here’s what the plan should include:
Include the following background information to help keep the analysis focused on what matters.
Objectives and goals of the survey.
Purpose of the analysis.
What questions you are trying to answer/issues trying to solve.
Who owns each question being analyzed.
Data sources (survey data, customer data).
Population or subsets of the population.
Segments, i.e., how the data will be segmented.
The audience, i.e., who will view and consume the insights.
Think about the types of analysis you’ll need to conduct to tease out the story from the data, how you want to prepare it, and how you want to present it.
Tools to be used for analysis.
How to handle missing values (and other data rules).
Key outcomes (dependent variables).
Inputs (independent variables).
Statistical analysis to be performed, e.g., regression, correlation, chi-squared, factor analysis, cluster analysis, etc.
Predictive and prescriptive analysis.
Outputs and formats, e.g., means, percents, two decimals, etc.
Deliverables, e.g., report, presentation, spreadsheets, etc.
QA requirements (yes, someone needs to QA your analysis!).
Lastly, for each question in the survey, you’ll go back to the original questions you were supposed to ask about each one and note:
Question text and context.
Purpose of the question (the problem it solves).
Owner of the question (who’s going to do something with it).
How you want to analyze it, e.g., crosstab by segments, correlate against dependent variable X, predictive analytics, etc.).
And why? What are you trying to uncover with that particular analysis?
To what outcome is this linked?
Step 3: analyze the data
Break down the customer feedback so that you can better understand it.
The analysis takes many forms because there will be many different types of data to make sense of–not just the survey data but also the customer data that you’ve appended.
Do a crosstab, identify key drivers, and prioritize improvements with survey data; mine and analyze your unstructured data; and conduct linkage analysis to link customer and employee data, customer feedback with operational metrics, and all data to financial measures.
And finally, you must conduct a root cause analysis to understand the why behind it all. I love to use the 5 Whys method for root cause analysis because it’s simple, yet powerful and effective. Ask “Why?” five times to get to the root of the problem.
Step 4: synthesize and contextualize the data
Put all the pieces of the analysis together to tell a story, to put it into context for those who need to act on it–a story that can be easily understood and translated into a better customer experience.
This storytelling skill is not an easy one to find or to learn, but it’s an important part of making sure the data can be acted on.
Step 5: socialize both data and insights
Those insights and their corresponding stories must be shared across the company in such a way that people know what to do with it.
The insights need to be shared with those teams or departments with a vested interest in the specific feedback. And it must also find its way into the hands of your executives.
Some of the improvements that need to be made are organization-wide and require C-level involvement to ensure the commitment is there for time, funds, and other resources.
Step 6: strategize a plan for taking action
Before you take action you must plan for it. Ask yourself these questions:
What are some of the common issues, themes, or trends that arise from the data?
How can/will the department respond to these insights?
What will they fix?
What improvements do they need to make to their specific policies and processes?
What additional training does their staff require?
What tools do they need?
What communication is required to ensure the entire team or department is on board with the required changes?
Are there best practices that they can share with other departments?
This is a critical step to turn insights into action. You need to answer what you will do, how it will be done, and who will do it.
Step 7: take action on the feedback
With a plan in place, you’re ready to implement the necessary changes.
For example, if you found out that a product feature is faulty then you’ve got to prototype the fix, test it with customers, and collect feedback again, fast.
If they say that the experience is still problematic, then start over again. Let customers be your guide as to whether something becomes a better experience or not. This is an important step that many companies fail to do.
Once you’ve implemented the new or improved experience, make sure employees are trained on new tools or processes that facilitate the experience.
Finally, close the loop with customers; let them know what you’ve done and how the experience will be different moving forward.
The insight in this chapter was provided by our contributing partner, Annette Franz, founder and chief experience officer of CX Journey Inc.
Improve a poor CSAT score
If you’re not satisfied with your CSAT score don’t get discouraged. There are plenty of ways to tackle the problem and see better results.
Here are some basic, but necessary steps to consider.
Establish strategic goals for your CSAT metric
Since CSAT is a direct and useful measurement, it’s easy to want to use it everywhere. But you should fight that temptation. Instead, take a step back and determine where and how it might be most useful for your company.
A few CSAT goals to consider include: measure a purchase, transaction, support call or another specific experience point; coach employees; and periodic satisfaction check-ins with your customers.
Take immediate action on feedback
According to UX Collective, only 52% of customers are confident that brands take action on their feedback. That’s a really disappointing statistic. The good news is that you have a chance to impress your customers by actually showing them that you are listening.
For positive feedback, a simple personalized thank you note is sufficient. Alternatively, If the comment is particularly negative, the program owner or the correct stakeholder should engage with the customer through follow-up questions or training.
Capture customer feedback at the right time
It’s impossible to improve customer satisfaction without feedback. One way to increase response rates is by sending your CSAT survey at the right time. Although this varies by circumstance, the general best practice is sending a survey within a few days of purchase or deal completion.
This process can be easily automated by integrating your feedback solution (ahem, like GetFeedback) with your CRM solution, like Salesforce.
Audit internal factors for pain points
There are many internal and operational factors that could be leading to your customers’ dissatisfaction. It’s important to take all of them into consideration—this includes everything from website design, customer service, and company culture.
For instance, ensure that your website design is optimized for ease-of-use. The last thing you want is for a potential customer to leave your site due to a poor experience.
Audit external factors for pain points
There are many external factors that influence your CSAT score. Among the many elements to consider, you must make sure there is a consistency in brand quality, ease-of-use, and a truly omnichannel experience.
Modern customers expect the ability to engage with a company across all communication channels, seamlessly. Not only that, but they also expect to be able to share feedback across many channels and be heard.
Fix the pain points in your customer journey
Customer satisfaction can increase up to 20% with an optimize journey map. Mapping the customer journey helps you understand the current customer experience, including pain points and high points.
CSAT surveys are a great tool to identify the key issues you need to fix to optimize satisfaction. Once you’ve made improvements, measure those touchpoints again, and repeat.
Apologize right away
It might seem like a hopeless cause to reach out and apologize to a disgruntled customer, but you’d be surprised how much of a difference that it makes.
Up to 37% of consumers expect an apology when their experience isn’t satisfactory. Often times, a customer simply wants to hear an apology to feel appreciated and understood by your brand.
Coach and empower your employees
The CSAT metric should be used to measure customer satisfaction after specific interactions with a company’s employees, especially support agents.
The feedback will allow you to coach your teams so they’re better prepared to meet expectations and overcome common complaints, like representatives lacking the knowledge or ability to solve customer issues.
Open up more support channels
Open up new channels for your customers, like SMS or Live Chat, to serve them as quickly as possible. This is key given that 75% of customers expect to receive help as quickly as five minutes.
If you feel like you’re trying to do too much and your CSAT score is sinking because of it, then fix your current support channels first.
Make your CSAT rating even better.
Even if you have a good CSAT score—one that is equal to or above the industry average—there is always room for improvement.
Given your doing well, it’s safe to assume that you’re already taking the basic steps of strategically collecting and responding to CSAT surveys. So, we’ll skip over those recommendations and provide some additional ways to improve your Customer Satisfaction Score (CSAT).
Here’s what we suggest.
Design a customer-centric culture
Do your core values speak to putting people first? Has it been deliberately designed to be customer-centric? Being customer-centric means that the customer is at the heart of everything you do.
Before every decision you make, every product or process you design, everything you do, you pause to ask: “How will this impact the customer?” and “How will this make her feel?”
Focus on the employee experience
A natural follow-on from culture is to consider the employee experience. Without employees, you have no customer experience. You must ensure that you listen to employees and improve their experience, as well.
As a matter of fact, you’ve got to put employees first. And you’ve got to ask: “Do they have the tools, resources, and processes they need in order to serve the customer the way the customer deserves or desires?” If you’ve not asked this of them before, you’ll be shocked by the answers.
Your ongoing customer experience transformation work will not be successful if you have not properly engaged employees in it.
First and foremost, they must understand what it is, what it means, why it’s happening, how they can be involved, and more.
Involve them and teach them what they need to know about your customers, the customer experience, customer expectations, and their impact on CX.
Review and refresh your Voice of the Customer (VoC) program
As all of the changes noted earlier happen, the surveys must also evolve to capture feedback about all of the new things going on in your business or industry.
Also, data collection methods have changed. Respondent preferences for completing surveys and when and where to provide feedback have changed. The Voice of the Customer (VoC) has changed and includes more than just surveys.
There are a lot of things that change over time, but if your approach to your VoC program—not just the way you capture feedback but also the way you distribute, analyze, act on it, and communicate improvements—has remained stagnant, you’re not only wasting money, you’re doing your customers and your business a huge disservice.
Don’t just ask, listen
Today, VoC isn’t just about the surveys you put out there for your customers, asking them about the things you want to know; make sure that you’re giving them plenty of options to provide feedback about the things that they think you should know.
VoC is also about listening to your customers, wherever they want to provide feedback. Be sure to include online reviews, social media, Voice of the Customer through the Employee or through customer service interactions, and other listening posts in your VoC program data feeds.
And, finally, customers leave crumbs of data with every interaction and transaction with your company; use that data to better understand your customers, as well.
Go beyond basic analytics
Take a look at your analysis toolbox and go beyond simple descriptive analytics and quadrant charts.
Use predictive and prescriptive analytics in order to identify the next best action to take to ensure the customer achieves her desired outcome, how much effort to put forth, and what the impact is on the customer and the business.
Don’t forget the partner experience
Partners, vendors, or third parties could be partially responsible for delivering the customer experience. Take a look at vendors, franchisees, licensees, and other partners who impact satisfaction with your brand.
Create a service blueprint
You can’t fix what’s happening on the outside if you don’t fix what’s happening on the inside. Any improvements you’ve made to customer-facing or customer-touching parts of the experience must be backed up with changes to the people, tools, systems, and processes that support or facilitate it.
If you don’t do that, then the improvements are purely cosmetic, and the issues will continue to happen. Service blueprints are maps that outline the people, tools, systems, and processes that facilitate the experience that you’ve mapped in your journey maps.
Root cause analysis
If you don’t get to the heart of the matter, it will continue to happen. You’ve got to conduct a root cause analysis on any issues or pain points that your customers experience.
Again, if you just make improvements in a tactical or cosmetic way, that’s very temporary. You’ve got to get to the root cause of the issue, fix that, and design a better experience for customers.
Respond to disgruntled customers on social media
When faced with poor customer service, 20% of consumers will complain publicly via social media. If you choose to ignore those complaints, you’re bound to see your CSAT score decrease.
On the other hand, customers who have a positive social media customer care experience are almost three times more likely to recommend a brand.
Provide short tutorials for your customers
Oftentimes, customers are unsatisfied with a product or feature because it’s not as user-friendly as they’d like it to be. In addition to using this feedback to optimize your product and/or feature, establish a tutorial plan for your customers. This can include anything from short video tutorials to employees setting up one-on-one meetings with customers.
Prove the ROI of customer satisfaction
The process for proving the return on investment on CSAT is not very cut and dry.
You have to determine what a one-point increase in your Customer Satisfaction Score (CSAT) is worth in terms of revenue impact.
Meaning, for example, how does a one-point increase in satisfaction influence your customer retention or your upselling?
There isn’t one exact science to this, unfortunately. However, below is an excerpt from our guide on how to calculate the ROI of CX that demonstrates one way to quantify the value of CSAT.
Let’s say that our made-up pet store called BarkTalk sends out a case-closed CSAT survey to 10,000 customers and receives 1,000 responses. Of those responses, 600 customers scored their experience a 4 or 5. As for the rest, 200 customers scored them a 3 and the remaining 200 scored them a 1 or 2.
The first step for BarkTalk is to calculate their CSAT score.
The formula is: (Total 4-5 responses) / (Total responses) x 100 = CSAT score
So, for this case, the math would be: 600 / 1,000 x 100 = 60%
Next, BarkTalk needs to estimate the potential revenue that could be saved if they implement new CX initiatives and improve their CSAT score by just one point. For the sake of this example, let’s assume the average spend per customer is $500 (if you’re a B2B business, this is the equivalent to your average deal size).
The calculation below is based on the average churn rate we’ve derived via research.
200 customers who rated 1-2 (92% will churn)
184 customers will churn
200 customers who rated 3 (80% will churn)
160 will churn
Total revenue lost ($500 x 184 + 160)
The math above reveals that BarkTalk lost 344 customers. That’s 344 customers who could have returned and, in total, would have spent $170,000 per year.
But let’s say that there is a trend with the customers who rated BarkTalk a 1 or 2: the majority noted in the survey that the wait on customer service live chat was too long.
So BarkTalk takes the necessary measures to optimize their live chat services. Enough so that when they send out their new batch of the case closed CSAT survey, they see their 1-2 rating decreased, while their 4-5 increased.
Here are the new scores:
Total responses: 1,000
Customers rating 4-5: 700
Customers rating 3: 200
Customers rating 1-2: 100
Their CSAT score has increased to 70%.
Let’s apply the same calculation above to the new data to see the impact of a 10% increase in their CSAT score.
100 customers who rated 1-2 (92% will churn)
92 customers will churn
200 customers who rated 3 (80% will churn)
160 will churn
Total revenue lost ($500 x 160 + 92)
Total revenue that is saved by 10% increase
By increasing their CSAT score by just 10%, BarkTalk could have saved $44,000 per year.
Free CSAT survey template
Measuring customer satisfaction starts with sending the right CSAT survey. Here’s a free CSAT survey template to help you get started.
The platform is pretty intuitive, but just in case, we’ve written an article on how to get started with our survey templates.
Free interactive CSAT calculator
Use our free interactive CSAT calculator to measure your Customer Satisfaction Score (CSAT) and its impact on revenue. You’ll get custom recommendations based on your score.
Here’s an overview of our CSAT calculator:
It’s free and easy to access—just enter an email address to sign up.
It’ll show you how to measure your Customer Satisfaction Score and its impact on your revenue via revenue at risk.
Based on your score, you’ll get custom recommendations on how to improve satisfaction.
It’s interactive: every data you enter or action you select will impact results.
You’ll see how your score compares to peers in your industry.
Free CSAT video tutorial
We recently partnered with TEDx Speaker and CX expert Jeannie Walters to discuss how leading brands are measuring CSAT and using these insights to improve the customer experience.
The webinar covered:
How to measure your CSAT score.
Ways to use CSAT to improve customer experience.
How B Cellars Vineyards & Winery uses insights from CSAT surveys to increase retention and drive revenue.
How to quickly and easily setup CSAT surveys using GetFeedback.
Click here to access the full webinar recording.