measuring customer satisfaction
It all starts with Customer Service
What if we told yuo that it takes 12 positive customer experiences to make up for a single negative one? (Ruby Newell-Legner’s ”Understanding Customers“)
Or that only one in five consumers will forgive a bad experience at a company whose customer service they rate as “very poor.” (Nearly 80% will forgive a bad experience if they rate the service team as “very good.”) (Qualtrics XM Institute)
How about that after more than one bad experience, around 80% of consumers say they would rather do business with a competitor? (Zendesk)
Tough, right? Let’s all then agree that Customer Service, even though isn’t rocket science, can really damage your business if it isn’t done right. Just a little more data for you: according to a 2017 report called Customers 2020 by Walker Information in collaboration with Customer Think and the Chief Customer Officer Council, by 2020 customer experience would overtake price and product as the key brand differentiator. Well, we could debate this statement now at the tail end of 2021 but we must admit that even if it’s not 100% spot on it comes really close to the truth.
The cost of poor Customer Service
The below infographic shows valuable statistics from NewVoiceMedia and ClickFox about poor customer service effects on businesses:
The biggest cost comes with not listening to your customers, with severe and often inevitable consequences:
angry and frustrated customers
loss of loyal customers
hurt to the bottom line
higher employee turnover
damaged reputation
loss of prospects
Another important point of order is how your customers react nowadays as a result of your customer service. The rise of social media, omnichannel, post-pandemic human interactions are only a few of the reasons why you must get customer service right, but customer service alone is not enough.
From Customer Service to CX (Customer Experience)
More and more today we hear about the Customer Journey, one of those fluffy terms that are vague enough to encompass many factors and not very intuitive to grasp. Let’s make some clarity then, shall we?
Customer Service is the well known package comprised of customer support and self-service support (through documentation, knowledge base articles, and how-to videos for example).
Customer Experience, simply put, includes every interaction between the customer and the business. It includes three components:
Customer Service - as explained above
Product - how it works and its touch points
Design - marketing, brand awareness
Because of that, it interacts and overlaps with other areas of the business such as Sales and Marketing or Product Design. Understanding the customer experience can therefore involve analyzing data from non-customer-facing teams who contribute to the overall experience.
Why measure Customer Satisfaction
Measuring customer satisfaction leads to many business benefits – starting with insight. Leaving customer satisfaction entirely to the customer service department is missing key information that marketing, sales, operations, and other departments really need to get a full view of satisfaction - remember the Customer Journey we mentioned earlier? This is it.
A great example is product satisfaction. Satisfaction with a new product line is key information for manufacturing and product quality to know whether it’s worth continuing with or whether previous lines performed better.
Data gathered from customer satisfaction measurement can commonly be used to highlight problem areas in a business, analyse and evaluate customer relationships, or source ideas for new developments.
The Metrics: CSAT, CES, NPS
CSAT - Customer Satisfaction Score
You ideally want to send a CSAT survey to your clients to measure how happy (satisfied) they are after a specific interaction with your business (i.e., after onboarding), or certain aspects of your product or service.
“How would you rate your overall satisfaction with the service you received?”
Where the answer is typically a number between 1 and 5, or 1 and 10 - from ‘Very Satisfied’ to “Very Unsatisfied’ or similar. You can customise the answers to make them more relevant to your brand if you prefer, they’re not set in stone.
The CSAT score is an average based on the survey results. Generally, these scores are expressed in a percentage – from 0% to 100%.
Here’s an easy way to calculate a CSAT score – take the number of “Satisfied” respondents (those who answer in the “Satisfied-Very Satisfied” range, or similar parameters), divide it by the number of received responses, and multiply it by 100.
So, if 100 people respond to your survey, and 80 of them are “Satisfied,” that means you’d have an 80% CSAT score.
CES - Customer Engagement Score
Sometimes referred to as Customer Effort Score too. A good CES measures customer satisfaction levels by focusing on the efforts customers make to interact with your business’ services and products.
“How easy was it to complete your online order?”
People who take the survey will get to choose between multiple answers – normally ranging from “Very Difficult” to “Very Easy.” Of course, the answers can vary – they can also be in the “Strongly Agree – Strongly Disagree” range, and they can be numbered as well.
The idea is for the survey to help you find out if customers have a hard time performing certain actions when interacting with your brand, and take the necessary actions according to the survey data to streamline processes.
CES surveys are usually used:
Right after a client interacted with customer support
Immediately after a customer interacted with a product/service and made a purchase/got a subscription
Whenever a business wants to measure the overall experience consumers have with their products/services
NPS - Net Promoter Score
n easy way to define NPS is to think of it as a growth indicator that helps you find out:
How satisfied consumers are with your products/services
How loyal they are to your brand
How likely customers are to recommend your company to others
NPS surveys can be sent at any stage of the customer journey via various survey channels (i.e., email, text messages, webchat)
At the same time, you can also use this metric to predict your customer churn rate, and find out which clients require an extra boost to become loyal.
“How likely are you to recommend our company to a friend or colleague?”
Answers typically use a 0-10 scale, with 10 being “Very Likely” and 0 being “Very Unlikely.” The 0-10 scale makes it easier for you to segment customers according to their responses:
0-6 – Detractors (clients who are unhappy with your company and are at risk of churning)
7-8 – Passives (customers who like your company but don’t love it yet)
9-10 – Promoters (clients who love your company and will actively promote it)
NPS score results can be somewhere in the -100 and 100 range. Anything under 0 is usually a bad sign, a score between 0 and 30 is normally a good score, a score between 30 and 70 is a great score, and anything over 70 means you have very high loyalty levels.
What happens after measuring customer satisfaction?
As per everything else that is data driven, the real trick isn’t gathering it but what to do with it.
A few examples:
If your results highlight issues with a particular service, you can look at these processes closely and reflect on where you can make changes
If a long term tracking of NPS shows a decline over a specific period, you may look at particular updates or changes that were made during this time that may have affected customer loyalty
Whatever you choose to do with your results, it is important that you take action. Customer expectations are constantly changing and using data to ensure your next steps are deliberate and informed is a great way to meet this demand.