All You Need to Know About CSAT To Drive A Better Customer Experience

CSAT

There’s more than one reason for customer dissatisfaction – but basically, it boils down to understanding and meeting customer expectations. Definitely something companies strive to avoid. Customer satisfaction is the great differentiator, and organizations have to constantly target the areas for improvement and monitor for response to changes. It’s a straightforward concept that gets the spotlight in all service-oriented industries – but what’s important is not just the theory, it’s the practice – and the outcome. Here’s what you need to know about customer satisfaction score and what it means for customer experience.

What is Customer Satisfaction Score (CSAT)?

Customer satisfaction is a key performance indicator (KPI) that measures how well an organization meets customer expectations by rating the level of satisfaction with services or products. Organizations use customer feedback surveys to improve customer experience (CX) and increase customer loyalty. The CSAT score is a commonly used metric that provides valuable insights and actionable data on how happy customers are in their interactions with a company.

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Why Measure CSAT?

What’s important for the customer is even more important for the organization. Evaluating customer satisfaction allows you to learn what areas need improvement and what strategies and efforts are having an impact. Ultimately, measuring CSAT leads to better customer experience, improves retention and customer loyalty, increases productivity, and boosts revenue.

CSAT is measured by asking a basic question on a customer feedback survey. The more customers participate, the better picture you get of how satisfied they are. A typical CSAT question is a variation on: How satisfied were you with your experience today? Responses take the form of a scale from 1 to 5, with 5 being very satisfied.

How to Calculate CSAT

CSAT calculates the percentage of customers with the highest rates of satisfaction (customers who gave a rating of 4 and 5 on the scale) from the total number of customer responses to a feedback survey. For example, if 75 out of 100 responses have a rating of 4 or 5, the CSAT score would be 75%.

CSAT Formula

CSAT vs Other Customer Service Metrics

There are several ways to measure customer service using simple feedback surveys – from specific touchpoint to a general indicator of overall customer experience and loyalty. Although they ask different questions from different points of view and experience, they are often used together to measure customer engagement and loyalty and help decision-makers develop strategic action plans.

CSAT

CSAT measures customer satisfaction and focuses on different aspects of the customer experience at key points along the customer journey. For example, you can measure customer satisfaction after a specific interaction with a live agent. Customer survey feedback to determine CSAT score helps to keep a finger on the pulse of your company and the service you provide but is less focused on customer loyalty or overall feeling regarding a company.

FCR

First Contact Resolution (FCR) measures the percentage of customer issues that are successfully resolved on the initial contact. Good customer service is strongly correlated with FCR, an indication of effective performance and quality of agent support.

Customer Referral Rate

Customer Referral Rate shows how many customers promote your company by referrals to friends or colleagues. Unlike net promoter score (NPR), which measures the likelihood of customer recommendation, this metric indicates that your customers have had a positive experience in their interactions with your company and have actively recommended you.

NPS

Net promoter score (NPS) takes a wider view and offers deeper insight into overall customer loyalty to the organization rather than as an indication of satisfaction with specific touchpoints or problem areas. Typically, the NPS measures how likely the customer is to recommend the organization’s service to a friend or colleague and is less valuable for areas to target for improvement.

Customer Retention Rate

Customer Retention Rate measures how many existing customers stay with a company over a given period. This metric helps companies understand what keeps customers loyal and identify ways to improve customer service and reduce churn.

CES

Customer effort score (CES) measures ease of experience, the amount of effort a customer needs to exert when they interact with a company. The CES survey typically asks the customer a single question – to rate how much effort was required to resolve a specific issue or request. A CES score is not black and white. It does not necessarily indicate bad feelings about the company or a measure of loyalty as a whole; it relates to a specific, single interaction or experience.

Understanding When to Use CSAT

CSAT is the measure of customer experience at critical points in the customer journey. It’s what you do with the scores, understanding where and how to take action and optimize, that really matters. Determine the customer experience you want feedback on and customize the question to receive a targeted and focused response.

A customer satisfaction survey provides more than a qualitative metric based on an interaction at a specific point in time. Responses also provide qualitative feedback on whether you have met customer expectations, why they are not satisfied, and what you need to improve.

Key performance questions relate to satisfaction with support, engagement, and processes, so it’s important to ask for feedback in real time or as close as possible to the interaction, for more reliable results. Analyzing customer metrics over time helps companies to address friction and inefficiency more effectively along the customer journey.

What Benefits Can You Reap from a Good CSAT Score

A good CSAT score can make the difference to your business, in the short and long term, and can be a key differentiator – constantly improving the customer experience to help meet, maintain, and exceed customer expectations and business goals.

Reduce Customer Churn

Customer surveys help identify customers likely to churn and enable proactive response to resolve issues. Delivering a consistently good customer experience in all interactions keeps customers happy and keeps them coming back.

Improve Conversion Rates

Happy customers promote your business, sharing their positive experiences with word-of-mouth marketing. New customers improve profitability and boost revenue.

Improve Performance

A measure of customer satisfaction is also a measure of performance, and whether your company is meeting its own goals. Positive feedback is a great motivator, while negative feedback is a foundation for improvement for employees and for business strategies.

Measure Success of a Specific Service

A CSAT can help determine the success of a new feature or applications. Deploy a feedback survey after customers engage with a new feature or service to help evaluate its success.

CSAT industry benchmarks – What Should Your CSAT Score Be?

According to the American Customer Satisfaction Index (ACSI), a good CSAT score typically falls somewhere between 75% to 85%. One of the many reasons to calculate the CSAT score is to compare performance to competitors within the industry, and to help understand what strategies work best. Here are some industry standards:

IndustryAverage CSAT (%)
Computer Software76
Internet Retail78
Wireless Phone Service74
Energy Utilities73
Appliances and Electronics78

How to interpret and what to do with your CSAT score?

Monitoring and analyzing CSAT is a benchmark to gauge progress in resolving problems or dissatisfaction in customer service. Often, customers can see things that an organization doesn’t. You can learn a great deal about your customers and the services you provide by their feedback and use that valuable information to drive better CX, optimize your operations, and improve retention, conversion, and performance.

Proving that you meet customer expectations ensures potential customers that you provide great service.

Prioritize Areas to Improve

Identify pain points based on customer feedback, gain insights and isolate new issues that require analysis and action.

Improve Customer and Employee Experience

Increase customer loyalty and lifetime value, and improve internal processes and employee engagement.

Decrease Time to Satisfy Customer Requirements

In-the-moment feedback enables focused attention to the customer experience in specific areas, identifying underlying factors for complaints and taking immediate action.

Act on Insights to Drive Better Customer Experience

Customer satisfaction surveys are a quick and easy way to gather immediate feedback on what works best for customers. Not just a measure of improvement, they can help identify trends and address pain points, to drive better customer experience and for a positive impact on a company’s revenue and success.

Ari Rosenstein, VP Marketing
Ari Rosenstein is a tech-savvy marketing and sales leader and served as Consultant to help several start-ups such as AppsFlyer, Similarweb, Adquant and Kenshoo expand globally before joining TechSee as VP of Marketing. Ari has an MBA from the Interdisciplinary Center, and dual majors from the University of Wisconsin - Madison.

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