October 29, 2016 | By

How to Measure Customer Satisfaction

Why data, not intuition, is the key to measuring customer satisfaction

It’s not likely to come as earth-shattering news to any marketer, but there’s a straight line between customer satisfaction and customer retention. But knowing it and acting on that knowledge to improve customer satisfaction (CSAT) can be two very different things, because measuring customer satisfaction has traditionally been a particularly elusive metric.

How do you pin down a purely qualitative experience – how happy a customer is after buying your product or service – and translate it into actionable, quantitative insights? How do you attach a score to an emotion? For many companies the answers to those questions have remained frustratingly out of reach, even in a time when new data-based solutions and analytics have emerged to put them at hand. Unlike a straightforward metric such as Net Promoter Score (NPS), with a single, uncomplicated query that’s easy to reduce to a score and easy to interpret, CSAT is the sum of numerous emotional reactions that, taken together, have everything to do with whether a customer is coming back or not.

That’s not to say that NPS is not a customer satisfaction KPI that any business wants to overlook. But NPS alone can’t tell the story that can lead to significant – and ultimately profitable – improvements in overall customer satisfaction.

Look to the big picture to measure customer satisfaction

While different businesses will settle on measuring different customer satisfaction KPIs, in every case the need to collect data and information is only the first step in arriving at actionable insights. The greater challenge comes in assembling the information in an accessible format that provides an integrated, real-time, and readily monitored visualization that turns every customer interaction into an opportunity to optimize the customer experience.

Important KPIs for measuring customer satisfaction:

  • When it comes to measuring customer satisfaction, the obvious starting point, of course, is the CSAT itself, although it’s important to remember that, like the Net Promoter Score, it has its limitations. Also like the NPS, CSAT is most often derived from a single question – something along the lines of “How would you rate your overall satisfaction with the service you received?” scored on a simple numeric scale. One caveat is that many customers, especially those who felt the experience was unexceptional, may simply pass over the survey. It can also have the effect of glossing over the more nuanced emotional aspects of the customer’s experience that can be key in retaining them and building on the relationship.
  • Measuring Expectations vs. Results helps dig a little deeper, and again with only a simple question at the end of each transaction or engagement. Typically, it’s enough to ask customers to agree or disagree (with room for gradients) with a statement such as “The service lived up to my expectations.”
  • In the same way, Net Promoter Score, as mentioned above, only requires a single question–“How likely are you to recommend . . . “ – to yield a world of information about both an individual transaction and, when aggregated, how well a business is doing in meeting the goal of turning customers into brand ambassadors.
  • In addition to questions about the customer’s feelings, it is also important to track harder data to gain specific, concrete information about the customer experience. One very important customer satisfaction KPI is Response Time, a common source of frustration and dissatisfaction for customers when they perceive they are being kept on hold too long, or emails and chat requests aren’t answered promptly. Tracking this metric not only serves as a further gauge of customer satisfaction, but also can alert businesses to potentially damaging delays.
  • Closely related, first contact resolution time will reveal important metrics about how effectively and efficiently customer queries and issues are being resolved, another factor that can spell the difference between long-term satisfaction and a lost customer.
  • Average handle time is yet another metric that provides a picture of how efficiently the customer is being served, and shines a light on opportunities for improvement, as can tracking the number of repeat contacts needed to close a case to the customer’s satisfaction.

Bring all the data together to truly measure customer satisfaction

Whatever KPIs and metrics are used to measure customer satisfaction in a comprehensive manner, in the final analysis the data has to be brought together in one place where it can be integrated so it paints the big picture. Only then can it yield a full, data-based understanding of how well a company is meeting its customers’ expectations, and what the implications of that are for the company’s long-term success.

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