What Customer Satisfaction Score (CSAT) IS and How It Can Help Understand Your Customers

In the age of social media, viral reviews and user-generated content, consumer power is at an all-time high. It’s time for businesses to leverage customer feedback to improve CX, inspire brand loyalty and increase profitability. Who better to provide input on how to improve your CX than people who spend money with your company? Gathering CX metrics like customer satisfaction scores (CSAT) provides decision-makers with quantitative and qualitative actionable data at key interaction points.

You can use customer satisfaction scoring to gauge customer satisfaction at the moment of purchase, during onboarding or after an exchange with support. Information you glean helps you drive improvements in regards to your customer expectations and boost the overall customer experience.

Customer Experience Drives Business

Walker, an Experience Management Firm, reported in their Customers 2020: A Progress Report that customer experience became the key brand differentiator at the end of 2020. CX is defined as how consumers feel about the way your company treats them and interacts with them. Perception of customer experience can influence how likely clients are to recommend your brand or become a loyal customer.

The customer satisfaction score is usually an excellent indicator of customer experience and loyalty. It lets you know how happy customers are with your company, helping you take action to increase retention rates and boost your brand’s reputation.

What Is the Customer Satisfaction Score?

Satisfaction scores are key performance indicators that measure a customer’s satisfaction with a company’s products or services. You can deploy customer surveys at any point along your customer’s journey to gain insight into how happy they are with your brand.

The score is obtained by asking a simple question to measure a client’s satisfaction with a service, product, transaction or interaction. The customer chooses from a range of options, such as:

• A numerical score from one to three, one to five or one to 10
• Verbal indicators such as very unsatisfied, unsatisfied, neutral, satisfied and very satisfied
• International symbols such as smiley faces or stars
• Whether you use numbers, words or symbols, the scoring process is the same.

Related Article: Are Your Customer Experience Metrics Setting You Up For Success?

How to Calculate a Customer Satisfaction Score

CSAT scores are easy to calculate. All you have to do is add the positive responses together, divide them by the total number of responses and times one hundred. The final figure represents the percentage of customers who are satisfied with their brand experience.

Most people agree that four out of five and five out of five stars represents a positive outcome. Say 50 customers rate your company a five and 30 give a rating of four, the total number is 80 positive responses.

If 100 people took the survey, you’d divide the total number of positive responses by the total number of customers surveyed, giving you 0.8.
Multiply this by 100 to get a final percentage of satisfied customers vs unsatisfied customers. In this case it’s 80%, which is a great score.

The Benefits of Measuring Customer Satisfaction

Despite its simplicity, many businesses use the score as a KPI to measure customer success. In fact, according to the CMSWire State of Digital Customer Experience 2021 survey, it’s the second-most used measure of digital CX improvement. The only metrics companies found more useful were bookings, renewals, revenue and/or growth.
The benefits of measuring satisfaction don’t end there. Below are the main advantages of using customer surveys.

Learn About Your Customers

If your business meets customer expectations most of the time, you’re more likely to retain customers. By gathering feedback at key customer touchpoints, you learn how effectively you’re meeting their expectations. Over time, you’ll gather data that highlights any pain points or bottlenecks in the customer journey.

Related Articles: A Look at Customer Effort Score and How It Can Help Build Better CX

Advertise Your CSAT Score

You can use great satisfaction scores to set yourself apart from competitors in your market by publishing them. If you place scores alongside first response times, you’ll assure potential customers that post-purchase customer care is fast and high-quality.

Improve Customer Loyalty and Experience

CSAT scores aren’t there to make you feel bad about your brand or discipline your team. The point of gathering feedback is to make tangible improvements to your business that affect your customers. While your vision drives the company, customers are the only people who can tell you if they’re satisfied with it or not.

It’s easy to get caught up in your own standards and expectations. But ultimately, your customers are the ones spending money and are best placed to see issues you might be blind to. As Nate Masterson, CMO of Maple Holistics says, “Vendors or service providers often have a predetermined definition of what a satisfied customer looks like. The cost of having your own standards can be detrimental to your business because you can’t account for the problems you’re blind to. It’s obviously important to have standards, but you should be more concerned with your customers’ expectations.”

Reduce Customer Churn

When you have hundreds, thousands or millions of customers, it can be hard to determine who’s unhappy and why. Customer surveys help you identify unhappy customers before they churn, at key points of the customer lifecycle. This provides a unique opportunity to make amendments before losing that customer forever.

If you’re able to turn an unhappy customer into a satisfied customer, there’s a good chance they’ll become a loyal brand ambassador.

Related Article: 6 KPIs to Measure the Omnichannel Customer Experience

Inspire Loyalty

Customer loyalty describes when a consumer is inclined to do repeat business with your company based on goodwill. Average order value and customer lifetime value are the metrics you can use to measure levels of customer engagement and retention.

According to Fred Reichheld of Bain and Company and author of Prescription for Cutting Costs, a 5% increase in customer retention produces more than a 25% increase in profit.” As such, it’s easy to see why you’d want to use satisfaction scores to inspire repeated purchasing or booking and reduce churn.

What Is a Good Score?

Expectations vary across industries, but a good score usually falls between 75% and 85%. A score of 75% represents four in five customers giving you a positive score as opposed to neutral or negative.

Let’s take a look at the expected CSAT scores by industry, using data from the American Customer Satisfaction Index:

• Full service restaurants: 80
• Limited service restaurants: 78
• Personal care and cleaning products: 79
• Apparel: 79
• Computer software: 76
• Internet retail: 78
• Specialty retail stores: 77

When to Deploy Surveys

There are tons of interaction points for customers, and it’s important to measure customer success at the most useful points. Once you’ve established a clear customer lifecycle, these touchpoints are a good place to deploy survey questions.

An alternative method is to capture the entire customer service experience as opposed to single interactions. Joseph Ansanelli, CEO and co-founder of Gladly, highlights the importance of taking a holistic approach to customer experience. With CX involving numerous interactions across multiple channels, he says, “Surveying a customer after one of these can lead to false results. This is especially true if the issue they called about hasn’t yet been resolved. Triggering the survey once the entire conversation has been closed is a much more effective way to gauge true customer sentiment.”

What Can You Measure With Survey Scores?

Surveys offer a simple way to measure customer experience across various service areas. You can ask customers to complete surveys upon the completion of customer support cases, focusing on:

• Knowledge and expertise
• Understanding the issue
• Communication
• Professionalism
• Responsiveness
• Effectiveness of resolution
• Timely resolution

AI, CSAT and Customer Experience

Brian Slepko, executive vice president of global service delivery for Rimini Street, has leveraged Artificial Intelligence to generate CSAT scores. Automated CSAT surveys provide better support to internal teams on the front lines with clients and reduce pressure on the workforce. He says, “With our AI components, each with a specific function as it relates to customer service. We are now able to solve support issues more quickly, which in turn drives customer satisfaction,” Slepko noted.

The use of AI has changed their approach to problem-solving for clients. Now, CX teams can use this information to proactively solve problems, according to Slepko. “We still reach out to every client with a lower than average score to understand what happened and of course correct as needed. But our ideal state is to correct any systematic problems before they actually happen in the first place.”

A Long- and Short-Term Key Performance Indicator

According to Slepko, client satisfaction survey is the “bedrock of how we measure our effectiveness as a support provider.” The score vectors remain consistent, giving employees a cumulative view on service delivery and allowing them to compare and contrast over time.

“If there are changes to our scores, this flags some external factor that needs to be investigated more closely,” Slepko said. “It also keeps us focused on maintaining our very high scores.” Slepko explained that the average score is consistently 4.8–4.9 out of 5.0. points. 5.0 is “Excellent” and is based on approximately 33,000 cases closed a year.

Measure CSAT in Real-Time

CSAT is the ultimate test of performance, according to Ansanelli. Are you delivering a customer experience that keeps buyers coming back? “Positive feedback can be motivating and negative feedback provides an important opportunity to improve,” he added.

When feedback is batched and shared with agents on a weekly basis, its effectiveness is limited. Ansanelli said, “We’re seeing companies integrate feedback into the service experience. This lets advisors see the results of their interaction with a customer in real-time, and use that to inform future conversations,” he said.

He notes that this also helps agents who engage with the same customer in the future to know where they’re starting. Ansanelli continues, “If the last survey yielded a low-star rating, they can start the conversation by acknowledging it.” This proactive, honest approach drives customer loyalty and boosts your brand’s reputation.

CX Metrics: CSAT vs. Customer Effort Score vs. Net Promoter Score

Now you know what the client satisfaction score is, you can compare it against other KPIs. Below are explanations of the other two most popular customer satisfaction metrics used in business.

NPS

NPS is best described as a growth indicator because it measures how likely a customer is to recommend your brand. Like CSAT surveys, they’re short at best deployed at key touchpoints in the customer lifecycle. Scores are usually on a scale on one to 10, with the following points system:

• Zero to six: Detractors: Customers at risk of churning or posting negative reviews
• Seven to eight: Passive: These people like your brand but don’t love it
• Eight to 10: Promoters: These clients adore your brand and are highly likely to recommend it

To work out the score, subtract the percentage of detractors from that of the promoters. You can also deploy NPS software or use an NPS calculator to make it easier.

CES

The CES measures consumer satisfaction levels by quantifying how easy customers find it to interact with your brand. They’re normally deployed directly after an interaction with customer support, immediately after purchase or subscription or at quarterly intervals.

A CES survey asks a single, simple question to measure how easy or hard it was to perform an action. Consumers choose from multiple choice answers, ranging from very difficult to very easy. If there are lots of negative answers, you should focus on making it easier for customers to interact with your company.

Which Customer Satisfaction KPI Is Best?

Of all the customer satisfaction score metrics listed above, which is the best for your business? CSAT offers helpful information about key areas of your business, CES helps you measure ease of use and NPS offers deep insight. To get the best results, experiment with using all three CX metrics and see which deliver the best results across different situations.