what is customer satisfaction and why is it important

Yes, product quality matters. Yes, a competitive price will get you far. But, the data has spoken. Data shows that 66% of consumers care more about the experience than price. It, therefore, stands to reason that the success of your business depends on the overall experience and customer satisfaction you deliver.

While customer expectations are continually increasing, businesses shift their focus on the experience. Ultimately, consumers are drawn to brands that make good on their promises and provide exceptional experiences across the customer journey. In this brand-new world, businesses that prioritize the experience see higher brand awareness, increased retention rates, and higher order values.

So, are your customers happy? Will they buy again? Or recommend your business to a friend or family member? In other words, how are you performing in the customer satisfaction department? These questions are so important for the longevity of your business that you cannot just go ahead and answer them based on your gut feeling especially because acquiring a new customer is 5 times more expensive than retaining an existing one.

What is Customer Satisfaction?

Customer satisfaction (CSAT) is a measurement used to quantify how customers feel about their interaction with your brand, and it reflects the degree to which you have managed to provide a customer experience that meets expectations.

Why Does Customer Satisfaction Matter?

Many argue that satisfaction is simply the lack of, well, dissatisfaction. The logic here is that instead of aiming for satisfaction, companies should strive to delight the customer with the experience they provide. Still, focusing on customer satisfaction is the first step towards an elevated customer experience that promotes loyalty.

So, let’s drill down on this a bit more.

Either way, you look at it, satisfied customers are good news. And this is why:

Reduced churn

The only way to identify frustrated customers is by measuring satisfaction. If you can’t identify unsatisfied customers, you can’t foresee or prevent churn. It goes without saying that losing existing customers is bad for business.

Customer success

Research shows that growing companies are more likely to prioritise customer success. On that note, measuring satisfaction will not only help you identify frustrated customers but also those customers that find success when using your products. Prioritising customer success and tracking down how you are performing while doing so is a no-brainer if your goal is to grow your business.

Loyalty

Repeat customers spend 67% more than new customers. On top of that, consumers trust recommendations from friends or family when considering the purchase of a product. In other words, customer loyalty boosts revenue streams and brings new business solely by word-of-mouth. That means you can save your advertising money and put it to a different use. In the greater scheme of things, you can’t have loyal customers unless you keep them satisfied. And even though customer satisfaction does not guarantee loyalty, it sure is a good place to start.

Determining ROI

Increased customer satisfaction is an indication that the money you invest in improving the customer experience is money well spent. You can use CSAT scores to benchmark your performance and figure out if your CX strategy is panning out the way you hoped it would or whether you need to revise it. As a result, customer satisfaction is a fundamental customer experience KPI to track.

So here we are. Customer satisfaction matters because it helps you identify pain points, increase customer retention and improve the customer experience. It might be worth your time to start measuring it.

How to measure customer satisfaction?

Customer satisfaction surveys are such a powerful tool to help you crunch the numbers and tell you where you stand with your customers and the experience you provide them with. As a general rule, businesses use surveys to measure satisfaction and track whether customers perceive their experience with the brand in a positive or negative manner.

The responses to a customer satisfaction survey, such as Net Promoter Score ® (NPS) or the five-point Likert scale give you a number that points to the average level of customer satisfaction topped with an idea of customer loyalty.

2 Types of Customer Satisfaction Surveys

While measuring customer satisfaction is important for reasons such as higher retention rates, improved customer experience, and loyalty, it is easy to feel overwhelmed and struggle to decide which questions to ask and which metrics to track. Before deciding what to ask in your customer satisfaction survey, you should be familiar with the different types of CSAT surveys.

In general, customer satisfaction surveys can be divided into two major categories:

Transactional CSAT surveys

These surveys are designed to measure the level of customer satisfaction after a direct interaction at any point along the customer journey. For example, companies send transactional CSAT surveys post-purchase or after a customer has contacted support to resolve an issue. The purpose of these surveys is to understand how the customer feels about that particular interaction.

Overall CSAT surveys

This type of survey has a more general scope and is concerned with how customers feel about your business in general. This includes the sum totality of all individual experiences and other factors that may affect customer perception in a positive or negative manner. Overall, CSAT surveys are not usually sent after direct interactions and can be lengthier and more detailed in nature.

Customer Satisfaction Survey Questions

When thinking of which questions to include in your CSAT survey, consider

  • the type of survey you are sending: transactional or overall CSAT, and
  • what is it you are trying to achieve by measuring customer satisfaction

Questions for transactional CSAT surveys

When conducting transactional CSAT surveys, make sure you are focusing the questions around the actual transaction. Ask your customers to answer the survey questions solely based on their latest interaction with your company. Here are some example questions:

  • How easy was it to find what you were looking for on our website?
  • Please rate our online purchase process.
  • How would you rate the agent that provided you support yesterday?
  • How satisfied are you with the customer service experience in-store?

Transactional CSAT surveys will help you examine in detail one aspect of your business. Try to stick to one topic and deliver the question in a concise and easily understood manner.

Questions for overall CSAT surveys

Overall, CSAT surveys will provide you with general insights into how your customers view your business. You can use the same survey to get answers to questions that cover several topics such as product/service quality, customer experience, etc.

  • Overall, how easy is it to contact us?
  • Based on your experience with our product/service, how likely are you to buy again?
  • How would you rate the following aspects of our software?
    • Ease of use
    • Features
    • Speed
  • What would you change in our product/service?

Popular customer satisfaction metrics

Metrics such as the Net Promoter Score or the Customer Effort Score are often used when measuring the customer experience as they provide quick and benchmarkable insights on the health of your company and are good indicators of elevated customer satisfaction. Let’s take a closer look.

Net Promoter® Score

The Net Promoter® Score (NPS) measures the customer’s willingness to recommend the company to others by asking the following question:

Considering your overall experience with our company how likely are you to recommend us to a friend or family member?

The NPS is used to quantify the customers’ overall satisfaction with the company and their loyalty to the brand.

Customer Effort Score

The Customer Effort Score (CES) is geared towards measuring customer service satisfaction and as such, is more appropriate for support environments. To measure the CES, ask a variation of the following question:

How easy was it to solve your issue with us today?

The CES has gained popularity over the last years, and businesses prefer it over other metrics as it allows to quantify how successful the customer is when using their product or service.

The bottom line is that the questions you ask in your CSAT survey should stem from the information you want to get and the goals you aim to achieve. The most important thing to remember is that tracking metrics will not get you very far unless you analyze them and use the insights to improve your business.

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