How to Define Customer Satisfaction and Measure it

In this article, we talk about just that: how you can define customer satisfaction and the methods to measure it.

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Sara Staffaroni

October 7, 2021

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Defining customer satisfaction is not easy. On the surface, you think you know what it means to have a satisfied customer. However, if you dig a little deeper, it would be difficult to say, emphatically, what makes them satisfied.  

Think about gyms. They may assume they’re satisfied if someone doesn’t cancel their membership, but we know that’s not the case. An entire episode of Friends is dedicated to that very conundrum⁠—canceling a gym membership is a huge ordeal.

The only way to have an exact answer is to measure Customer Satisfaction Score (CSAT). Before you can do that, it’ll probably serve you well to define the customer satisfaction metric. In this article, we talk about just that: how you can define Customer Satisfaction Score (CSAT) and the methods to measure it.

Definition of customer satisfaction

It should be simple to define customer satisfaction. It reflects how a customer feels about your company, comparing customer expectations and the experience they receive. Is there customer loyalty or not in your customer base?

Customer satisfaction goes hand in hand with excellent customer experience. Satisfaction goes a long way⁠—just a 10% increase in a company’s CSAT score leads to a 12% increase in trust from customers. If your customer satisfaction efforts don't meet customer expectations, you're bound to see a lot of churns. 

However, this metric is influenced by a number of things. If they think your price is fair for the service you offer, they may say they’re satisfied. Or, perhaps they like how they were treated when interacting with an employee of your company, so they’re happy. That’s where it can get tricky when you try to define customer satisfaction. 

What aspect of your business are you referring to when you’re measuring? It’s very possible someone could be satisfied with the product, but not the service. 

Does that automatically mean they’re not satisfied as a whole? It’s tough to say. Defining customer satisfaction for your company can help reduce some of that confusion.

Importance of customer satisfaction 

Why is it important to measure and understand customer satisfaction? Because customer satisfaction is vital to the success of your business in several ways. 

Maximize customer lifetime value

By focusing on customer satisfaction, each customer that you gain will be worth more over their lifetime. This is called Customer Lifetime Value (CLV). The longer your customers stay loyal to your business, and the more repeat purchases they make, the more profit you’ll see. 

Minimize churn 

For subscription-based businesses, especially in the SaaS industry, having high levels of customer churn can cost your business money and hurt your profitability and growth. 

Focusing on customer satisfaction helps reduce churn rates as you reduce the pain points that may trigger current customers to leave your company, such as dramatic increases in pricing or a complicated billing process.  

Increase revenue 

Your business will see increased revenues by improving your CLV and reducing churn rates. And when you have a higher CLV, you can spend more money to acquire customers - bringing in new business and boosting profits further. 

Increase retention 

It’s expensive to acquire new customers - much more costly than retaining your existing ones. It costs 5 to 25 times as much to gain a new customer than to keep one you already have. The more satisfied your customers are, the less likely they will go to a competitor, and your retention rates will increase. 

Increased brand loyalty 

Customers who are satisfied with your service or products are more likely to have high levels of brand loyalty. Just think of the legions of Apple loyalists out there who purchase everything the brand makes.

Key metrics of customer satisfaction 

How can you measure how satisfied your customers are with precision? Measuring customer satisfaction is tricky because it’s such a broad concept. Still, there are a few metrics out there that take the different dimensions of customer satisfaction into account and overall satisfaction.  

Overall satisfaction measure 

This metric measures how satisfied customers are all around. You measure it by asking them one simple question: “Overall, how satisfied are you with [product/service/brand]?” 

This question gives you insight into how your customers perceive the quality of their experiences with your products or your business. 

Loyalty measurement 

Satisfied customers do not necessarily equal loyal ones - they may simply find your products adequate but switch when a viable competitor comes along. Customer loyalty measures how likely customers are to repurchase a product or recommend your business. 

You measure this metric by asking customers: “How likely are you to recommend [product/service/brand] to your friends and colleagues?” 

Since customer loyalty is the number one initiative for CX leaders, according to the GetFeedback 2022 State of CX report, this is a critical metric to measure. 

Attribute satisfaction measurements 

Once a customer has used your products or services, there may be certain aspects of them that they like and dislike. Honing in on what, exactly, they find satisfying can help you improve your products and services to increase satisfaction. 

This metric is measured by asking your customers: “How satisfied are you with the [attribute like price or quality] of our product?” 

Intentions to repurchase measurements 

Another way to measure loyalty and satisfaction is by asking customers if they intend to purchase from your business again. If they’re highly likely to return, then it’s safe to say they’re delighted - and also profitable customers for a long time to come. 

Measuring your Customer Satisfaction Score (CSAT)

Customer Satisfaction Score (CSAT) surveys measure whether you have satisfied customers or not. If you’re not familiar, CSAT is a metric used to measure the degree to which a customer is happy with a product, service, or experience.

It is most effective when gathering information on a specific and very recent interaction or a specific product. 

Advantages of customer satisfaction surveys

CSAT is assessed by asking customers: “How would you rate your overall satisfaction” with your company and its products, services, and interactions. 

They are a way to measure whether you have satisfied customers or not. It’s prevalent because it’s easy to send and interpret the responses since it’s only a one-question survey.

A five-point scale is most commonly used, with options very unsatisfied, neutral, satisfied, and very satisfied. Translate each response into a number from 1 to 5, and your CSAT score can be easily calculated. 

There are two ways companies can calculate CSAT: an average of 1-5 or by focusing in on the 4-5 responses. 

GetFeedback recommends using this formula: (Number of  4 and 5 responses) / (Number of total responses) x 100 = % of satisfied customers. 

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.

Some organizations use a seven-point scale for more precision, while others prefer a three-point scale for simplicity to help improve response rates. 

The final score is typically represented as a percentage of the maximum. With a five-point scale, for example, a CSAT rating of 80% means that the majority of customers are giving a satisfied rating (4 out of 5).

Best practices

Along with CSAT surveys, you can also use a few other types of customer loyalty surveys to measure customer sentiment. Besides CSAT, the two most common surveys are NPS (Net Promoter Score) and CES (Customer Effort Score). 

For more on these surveys, see our free customer loyalty metrics guide.

Each survey has its uses and places it performs the best. That said, only a CSAT is explicitly interested in measuring satisfaction. With that in mind, it’s probably the best option to use.  

Example questions 

Looking for more ways to word your customer satisfaction survey? That’s a good plan. You should customize them to be most effective for your business and your customers. You can review these customer satisfaction survey question examples for guidelines and inspiration. 

Distributing customer satisfaction surveys

So, now that you’re aware of the different options you can use to measure customer satisfaction, you may be interested in some strategies for distributing your CSAT survey. After all, a survey is only helpful if it gets responses. 

1. Follow up quickly

Have you noticed that when you talk to a representative on the phone, they want you to take a survey right away? That’s because it’s when the interaction will be freshest in your memory. However, if it’s for a product or service, it would be wise to wait a bit so the customer can get some experience using the product. 

2. Be specific

If you've ever worked in support, you’re no stranger to seeing a negative score on a CSAT response and feeling your heart drop when you see it’s related to you. You hesitantly look at the response only to find that their issue was with a missing feature and not the service you provided. 

You need to be explicit when asking for feedback for data to be useful. Make sure the language of the survey isn’t ambiguous, so you know the score is relevant. You need specifics if you’re going to improve your CSAT score.

3. Implement the feedback

The best currency you have with customers is to prove their voice matters. We all get a ton of surveys, and it’s pretty common not to answer because we don’t think the company cares about our opinion. 

There are a few ways to show that’s not the case, but the best solution is to make changes based on your feedback. Once customers realize their voices are being heard, they’ll be more likely to share.

Just like defining customer satisfaction, measuring it also has its nuances. Practice and iterating on the process will help you improve and optimize for the future. 

So, if it doesn’t go as planned right away, don’t be discouraged. There’s always room for improvement

Where to deploy a customer satisfaction survey in the customer journey 

The Customer Satisfaction Score (CSAT) customer loyalty metric is a relationship and touchpoint metric.

It’s a relationship metric because the customer satisfaction survey can be used to evaluate the overall customer relationship/customer satisfaction and end-to-end experience.

And as a touchpoint metric, it can be used to capture feedback after individual customer interaction with different customer journey points.

For instance, you should use a customer satisfaction survey to measure the experience during the beginning of the customer journey, including the discovery and exploration stage. Here your customer is deep into the research phase, trying to learn about your brand and comparing it with others like it. So, for example, you could ask how satisfied they were with the ability to find answers to their questions on your product page. 

The customer satisfaction survey is also great for evaluating the overall experience during the purchasing stage, especially for B2B companies.

And it’s suitable for measuring the performance and quality of a product or service and the satisfaction of a complex support need.

How to use customer satisfaction survey data

How can you use your customer satisfaction survey data to improve your customer satisfaction rates once you’ve collected your customer satisfaction data? 

First, you need to analyze the data you’ve received. Are there trends or patterns around specific touchpoints in customer journeys, segments, or products? This will tell you where to begin. 

You may need to do some further digging to figure out why that experience or product is dissatisfying customers to make the right changes to fix it. 

If your first change doesn’t shift satisfaction rates, test another change and evaluate your data until you see success. Improvements don’t typically happen overnight, and you may need to experiment quite a bit. 

But your survey data doesn’t need to be used only to find flaws - you can also uncover the biggest fans of your company and products. These loyal customers can offer insights into what your company is doing right so you can use their points in your next marketing campaign or develop advocacy programs to increase the value this group offers. 

Positive and negative customer feedback offers a lot of value for your business. Just be sure to act on the feedback you receive as often as possible - if customers are taking time to fill out surveys and still seeing the same old problems, your feedback program can actually decrease their loyalty levels. 

Conclusion

Defining customer satisfaction may seem like it’s pretty straightforward. It’s just how satisfied customers are with you, right? Well, yes, kind of.

There are many different aspects of your business strategy, so your customer could be satisfied with one part and not another. Figuring out those other areas will help you build a better all-around customer experience, satisfy existing customers, and establish more loyal customers that will praise your brand via word of mouth.  

Once you know the areas you want to get feedback on, you’ll need to create a way to measure that sentiment. There are a few different types of surveys you could consider. Net Promoter Score (NPS), Customer Effort Score (CES), and Customer Satisfaction Score (CSAT) are the most common three. 

Though, if you’re measuring satisfaction, we think CSAT is the best option as it gets right to the point and is the goal of the whole survey. 

Remember, a customer satisfaction survey is only helpful if you can get responses from your existing customers. First, when collecting customer data, send out the CSAT survey quickly after the interaction. Next, be explicit about your customer satisfaction measurement so the respondent knows and the data is useable. Ambiguous data isn’t very helpful. Last, implement the customer feedback you’re given. When customers know their voices matter, they’ll be more willing to share. 

When you learn more about your customers, you learn more about your business. So, take the time to get to know your customers deeper. When you do, you’ll be able to serve them better and create a more straightforward path to success.

Learn how GetFeedback can help you exceed customers’ expectations and increase their satisfaction by enabling you to understand and act on their feedback.

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