Tracking the right customer satisfaction metrics will help you better understand how to retain your current customers — as well as attract new ones.
In an increasingly crowded marketplace, merely being able to sell your product or service doesn’t always guarantee business growth. You also have to make customer satisfaction a top priority. It’s a key competitive differentiator that will increase your customer lifetime value, strengthen your brand reputation, and positively impact your bottom line performance.
Customer Satisfaction Metrics: What For?
By tracking customer satisfaction metrics, you can collect relevant data and use it for actionable insights that will improve your customer experience.
You’ll also be able to predict future behavior and more accurately anticipate the needs and wants of your customers — well before they need and want it.
Of course, consistently and effectively measuring customer satisfaction will also help your company turn happy customers into loyal ones.
So, how do you measure customer satisfaction?
Enter “customer satisfaction metrics.” Let’s define this as numerical scores or data points that summarize how happy or satisfied your customers are with their experiences with your brand, product, or service. Simply put: customer satisfaction metrics are indicators of the health of your relationship with the customer.
5 Customer Satisfaction Metrics You Need to Track
Net Promoter Score
First introduced by Frederick Reichheld in his 2003 Harvard Business Review article, the Net Promoter Score (NPS) survey methodology is one that countless organizations are using in order to measure customer satisfaction. Specifically, it is used to gauge the loyalty of a customer to a business.
Using NPS means asking the customer feedback question, “On a scale of 0 to 10, how likely is it that you would recommend our company, product, or service to a friend or colleague?”
Based on their response to the question, you’ll quickly be able to categorize your customers into Promoters, Passives, and Detractors.
- Promoters (score 9-10) are loyal enthusiasts and very satisfied customers who will help fuel your business growth by buying and referring other customers to your business.
- Passives (score 7-8) are also satisfied customers, but their lack of enthusiasm may render them vulnerable to offerings from the competition.
- Detractors (score 0-6) are dissatisfied, unhappy customers who may impede your growth and spread negative word of mouth about your business.
To calculate your Net Promoter Score and use it as one of your customer satisfaction metrics, all you have to do is subtract the percentage of Detractors from the percentage of Promoters.
Customer Satisfaction Score
Customer Satisfaction Score (CSAT) is another widely used metric for measuring satisfaction.
With CSAT, customers are asked how satisfied they are with a product, service, or interaction on a scale of 1 to a predetermined number (typically 3, 5, or 10), or on a scale of 0 to 100 percent. The standard CSAT survey question is “How would you rate your overall satisfaction with (the company or business)?” Sometimes, instead of numerical scales, emojis (smileys, frowns) are used to overcome any language barrier.
A quick tip on using scales: make sure they’re oriented in the same direction. If “5” means “satisfied” in one question, it can’t mean “dissatisfied” in the next. Also: use a neutral answer option in your rating scales, and/or a “Not applicable” answer option.
Even though approaches vary, the standard way to measure CSAT is to express customers’ responses as a percentage between 0 to 100 percent, with higher percentage scores corresponding to higher customer satisfaction levels.
The key difference between CSAT and NPS is that the former is more focused on the respondent’s feeling or emotion (“I am satisfied” / “I am not satisfied”) while the latter focuses on intention (“I will recommend” / “I will not recommend”).
Customer Effort Score
Customer Effort Score (CES) is used to measure how much effort customers have put into their experiences or interactions with your company.
Questions designed to measure CES usually are phrased like this: “Did the company make it easy for you to handle your issue?”, or “How much effort did you have to make for your request to be handled?”
Customers may then respond on a 5- or 7-point scale, and scores are calculated simply by getting the average of all the collected responses.
Reducing customer effort can be a valuable marketing investment that will make your brand stand out in a sea of unaccommodating, not-very-helpful competitors.
As Forbes’ Blake Morgan wrote, “Today’s customers are busy and don’t want to have to jump through hoops to get the help they need, especially if a product breaks or they have issues with a service. Reducing customer effort makes life easier for customers and improves their impression of the brand and their overall customer experience.”
Customer churn or attrition is defined as the loss of clients or customers, and also one of the first and most obvious indicators of customer dissatisfaction.
This makes churn rate one of your most important customer satisfaction metrics; it is especially critical if your business model is subscription-based (example: software companies and membership-based services).
Remember: it’s easier (and less expensive) to retain customers than acquire new customers.
Tracking this satisfaction metric will allow you to see and apply new ways to handle the challenging situation of customers cancelling their plans or subscriptions, as well as to overcome other roadblocks to fostering customer loyalty.
Businesses that consistently keep an eye on this metric are also better at predicting if and when a customer is at risk of churning, so that they can take the next step and close the loop with at-risk customers.
Online Reviews and Ratings
One of the best ways to achieve an accurate understanding of how satisfied your customers are is to track your business’ online reviews and ratings, such as those posted on sites like Yelp, Google, Facebook, and TripAdvisor.
The rating systems of online review sites vary, so numbers and scores aren’t readily or immediately benchmarkable. But reviews are a powerful way to tap into the voice of the customer and collect actionable information about the customer experience.
An increasing number of data-driven companies are also embracing text analytics and sentiment analysis tools and techniques in order to look beyond star ratings and get more out of unstructured data found in online reviews. That way, they can measure sentiment, and understand the underlying reasons why a customer might be dissatisfied, or why a customer would choose not to recommend the company.
Are you delivering experiences that satisfy your customers? How seamless and effective are the interactions customers have with you, across various platforms and throughout the stages of their journey? Is your customer service doing justice to your brand, or harming it?
The key to finding the answers to these types of questions lies in your ability to track customer satisfaction metrics. Utilized appropriately, along with your organization’s commitment to putting customers first, these metrics will give you the leverage you need to deliver customer experiences that satisfy and delight.