Check out the four key customer satisfaction metrics that every business must track and measure to delight their customers.
“A satisfied customer is the best business strategy for all”
The popular quote by Michael LeBoeuf speaks about how Customer Satisfaction is necessary for any business to run successfully. But measuring satisfaction is tricky, as for the most part, customers are not going to come and tell you whether they are satisfied with your product, service, or brand as a whole, or not.
Studies suggest that only 1 out of 26 dissatisfied customers complain, the rest all churn.
So the only way to gauge customer feedback and know their level of satisfaction or the reason behind their dissatisfaction is to ask them upfront using customer satisfaction surveys.
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Customer Satisfaction Surveys are the perfect tool for measuring customer experience with the brand. And the best of them are metric surveys that enable you to typically measure Customer Satisfaction in quantitative terms by gathering actionable Customer Feedback.
In this article, we will explore some of the most popular and effective Customer Satisfaction metric surveys that you can use to effectively measure and improve Customer Satisfaction and ultimately grow your business. We will tell you what these metrics are, the surveys sent to measure them, how to calculate them, and when you should use them. Let’s get started!
Table of Content
- Key Customer Satisfaction Metrics You Should Measure
- Best Practices to Measure Customer Satisfaction Metrics
Key Customer Satisfaction Metrics You Should Measure
Customer satisfaction is crucial for the success of any business. It determines whether customers will continue to support your brand and recommend it to others. To measure customer satisfaction, businesses rely on various metrics, including Net Promoter Score (NPS), Customer Satisfaction (CSAT) Score, and Customer Effort Score (CES).
Here are the key customer satisfaction metrics that you can start measuring to gain customer insights.
1. Net Promoter Score
NPS, or Net Promoter Score, is one of the most popular Customer Satisfaction metrics that is used by businesses, both small startups and large companies, around the world to measure Customer Loyalty in terms of customers’ likeliness to recommend a brand to other people.
An NPS Survey is a simple couple-question survey. The main NPS survey question, which is also known as the Ultimate Question, asks the customers about their willingness to recommend a business to their known ones on a scale of 0 to 10. Here is the question:
How likely are you to recommend this business to your friends and colleagues?
The respondents to this question are divided into three categories based on the ratings they share in their responses.
- Promoters (9-10) are considered to be the most satisfied and loyal customers who are likely to not only continue their relationship with your business but also to recommend it to their friends and known ones.
- Passives (7-8) are usually considered to be satisfied customers with a probability of switching to other brands when offered a better deal.
- Detractors (0-6) are considered the most dissatisfied customers who are most likely to switch to another business. They are called NPS detractors because they are likely to even detract or distract other customers by sharing their negative experiences, thus stopping them from becoming your customers.
The Net Promoter Score question is considered to be a one-in-all question to measure Customer Satisfaction and loyalty because it is a fact that customers will only recommend a brand to others if they are themselves satisfied with its products and services.
The question is followed by another open-ended question that further helps you to get rich customer insights by asking the reason from the customers for the way they rated your business. Here is the follow-up question.
Could you please tell us the reason for your rating?
This is an open-ended question of the survey that helps to gauge customer insights in their own words and collect rich feedback data. The answers to this question help you know the strengths and weaknesses of your business.
How to Calculate NPS?
To calculate your Net Promoter Score, you need to find out the percentage of your detractors and promoters and simply subtract the percentage of detractors from that of promoters to get the final score.
Net Promoter Score = %Promoters - %Detractors
For instance, if you survey 250 customers, out of which 200 respond to your survey and share a rating. Among those respondents, 100 are promoters, 50 are passives and 50 are detractors.
So your NPS would be:
Net Promoter Score = %Promoters - %Detractors
= 100/200 x 100 - 50/200 x 100
= 50 - 25
The score can lie from -100 to 100. The more the NPS, the higher the Customer Satisfaction and loyalty.
When to use an NPS Survey?
You can use an NPS Survey at almost any touchpoint to gauge the customers’ experiences and measure NPS or satisfaction with those experiences. However, here are some best use cases of an NPS Survey.
- Onboarding - You can use an NPS Survey just after onboarding to gauge customers’ Onboarding Experiences. However, to gauge the overall experience with your company, the best time is to send an NPS Survey is after a month of onboarding when the customers have an overall idea of your product, processes, and services, based on which they can decide whether they want to recommend your business to their known ones or not.
- Ticket Closure - You can send an NPS Survey after a customer issue has been resolved or the ticket closed. This will help you gauge Customer Satisfaction with respect to their experience of the whole process of raising an issue, seeking support, interacting with your customer success team, and the team resolving their issues.
- Bill Payment - You can send an NPS Survey just after your customers have made a transaction or payment to ensure that your payment process is smooth and the customers don’t face any difficulty while making payment.
- Relationship NPS Survey - You can also share a Relationship NPS Survey, i.e., a periodic NPS Survey, to track the growth of your business and see customers’ loyalty going up or down. You can share monthly, quarterly, or annual surveys to measure Customer Satisfaction and loyalty on a regular basis and prevent the chances of customer churn.
2. Customer Satisfaction (CSAT) Score
CSAT, or Customer Satisfaction Score, is one of the most prominent CX and Customer Satisfaction metrics to measure the level of customer satisfaction in quantitative terms with respect to any aspect of your business or the overall Customer Experience with your brand.
A customer satisfaction survey is a couple-question survey, the main question of which asks the customers to rate their experience with your business or any aspect of it 5-point rating scale, including smiley surveys, 5-star surveys, 1-5 rating scale, and more. Here is the main customer satisfaction survey question asked in a CSAT Survey.
How would you rate your experience with us?
How satisfied are you with your experience with our business?
This question can be modified as per your survey requirements and the aspect for which you want to measure Customer Satisfaction.
Five rating options are given to the customers, which can be displayed in various forms like simple points-rating of 1 to 5, self-explanatory emoticons, star ratings, adjectives from Poor to Excellent, or other forms.
The main closed-ended question is followed by another question asking the reason for the ratings given by the customers. The follow-up question would be like this.
Could you please tell us the primary reason for your rating?
Answers to this question will uncover the customers’ insights about various aspects of your business and will help you know where you are going the right way and where you need to improve.
How to Measure CSAT Score?
To find out the exact Customer Satisfaction (CSAT) score, you simply need to calculate the percentage of the sum of all response scores. Here is the formula for calculating CSAT.
Customer Satisfaction (CSAT) Score = Sum of all Rating Scores/Sum of Maximum Scores x 100
So if you have 15 customers, out of which 10 have responded to your CSAT survey, you will add the rating of all the respondents and divide it by the maximum possible score of 10 respondents and find the percentage of it.
CSAT Score (%) = 5+5+5+4+1+3+2+4+3+3/ 5+5+5+5+5+5+5+5+5+5 x 100
= 35/50 x 100
The Higher your CSAT score, the more satisfied your customers are with your products and services.
When to use a CSAT Score?
A CSAT survey can be used to measure the most important Customer Satisfaction metric at any touchpoint or for any aspect of your business, and also for the overall Customer Experience with your company. You can share a CSAT survey after onboarding, after a free trial, after a purchase, after a bill payment, after an interaction with your support team, after an issue resolution or ticket closure, or when your customers have used your product or service for a certain time like a month.
You can also share CSAT surveys on a relationship basis (regularly), like a monthly, quarterly, or yearly CSAT Survey, to ensure that your customers are happy with the experience you are providing them.
3. Customer Effort Score (CES)
CES, or Customer Effort Score, is another Customer Satisfaction metric that helps to gauge Customer Satisfaction by measuring the customers’ perceived efforts to get work done or the issue resolved.
A CES Survey asks the customers about their agreement on the aspect that the company helped them handle their issues. A seven-rating scale is provided to the customers to choose their responses and provide insight into the customer satisfaction metrics. Let’s explore the CES question.
To what extent do you agree or disagree with the following statement? ‘The company made it easy for me to handle my issues’.
- Strongly Disagree
- Somewhat Disagree
- Somewhat Agree
- Strongly Agree
The options given to the customers are Strongly Disagree, Disagree, Somewhat Disagree, Neutral, Somewhat Agree, Agree, and Strongly Agree. Based on the customers’ responses, CES is calculated.
The main question is followed by a follow-up question to know the reasons for the customers’ ratings.
Could you please tell us the reason for this rating?
The answers to this question will tell you a lot about the issues that customers face (if any) while interacting with your business and customer support teams and getting their jobs done and issues reported and resolved.
How to Calculate CES?
The Customer Effort Score is calculated by simply finding the average of all scores. Here, Strongly Disagree is considered as score 1, and 7 means Strongly Agree, and accordingly, the average of the sum of the total score is found.
Customer Effort Score (CES) = Sum of all scores/No. of Respondents
So let's suppose you have got 10 responses with scores of 7,4,3,2,5,6,4,1,7,6. Your Customer Effort Score will be calculated as follows:
CES = 7+4+3+2+5+6+4+1+7+6/ 10
When to use a CES Survey?
The best use of the Customer Effort Score is to find the customers’ effort to get their issues resolved. So the best time to send a CES survey is just after a customer interaction with the support or service team, an issue resolution, or a ticket closure.
In this way, you can track the performance of your customer success teams and ensure that your customers don’t have to make unnecessary efforts to get their work done or issues resolved.
4. Customer Lifetime Value (CLV)
Customer Lifetime Value, or CLV, is another metric that businesses use to gauge Customer Satisfaction by calculating the predictive total value or revenue generated via particular customers for your business throughout the entire lifetime of their relationship with your company.
The metric can be used as a Customer Satisfaction metric because the amount of money spent by your customers demonstrates how satisfied they are with their experience with your products, services and the company.
How to Calculate CLV?
Customer Lifetime Value (CLV) can be calculated by multiplying the average purchase value of the customers by the number of purchases per year and the average lifetime of the customer relationship.
Customer Lifetime Value = Average Purchase Value x No. of Purchases per year x Span of Customer Relationship
For instance, if a customer makes purchases of $200 on average every month, and you expect the customer to continue this relationship for 5 years, the CLV that you get will be as follows.
CLV = 200 x 12 x 5
When to Use CLV?
You can measure CLV when you want to ascertain the overall financial value a particular customer can bring into your business and estimate how valuable that customer is for your business. Using this metric, you can show your employees how every customer is valuable to your business and motivate them to provide great Customer Satisfaction, consider Customer Feedback seriously, take action on it, and close the feedback loop effectively to improve Customer Lifetime Value and avoid losing the value that the customer can bring in.
Let’s learn some best practices you should practice while using Customer Satisfaction Metrics.
Best Practices to Measure Customer Satisfaction & Loyalty
Let’s learn how you can follow these tips and leverage Customer Satisfaction metrics to enhance Customer Satisfaction and grow your business.
1. Define your objective
When you decide to use the Customer Satisfaction metric, first of all, you must have clear objectives in mind. It helps you in choosing to measure the right Customer Satisfaction metrics for your business. Ask yourself as to why you want to use a CX metric.
- Do you want to measure how loyal your customers are? In that case, NPS would be best for you.
- Do you want to measure the level of overall satisfaction of the customers with your company, products, and services? In that case, CSAT would be the right choice for you.
- Do you want to know how successful your newly launched product is? You can use both CSAT or NPS in that case.
- Do you want to track the performance of your customer service team? CES will best serve the purpose in this case.
- Do you want to estimate the revenue or profit generated through a particular group of customers? CLV can help you out with this.
Based on your objective, you should decide on which metric would be the best for your purpose.
2. Use an effective Customer Satisfaction Software
Always use a powerful Customer Satisfaction Software or app to create and share metric surveys with your customers and collect their valuable responses. Make sure the Survey Software you choose has the right features like Skip Logic and Question Branching to make your surveys dynamic and sound logical for your respondents.
The tool should not only help you with collecting feedback and measuring Customer Satisfaction metrics but must also enable you to take instant action on negative feedback and close the feedback loop effectively to avoid churn before it's too late.
3. Make your Surveys Dynamic
Use features like Skip Logic, Hide Logic and Question Branching to make your surveys sound logical and dynamic for the customers. For instance, you can modify your follow up question and trigger different questions for your satisfied customers, dissatisfied customers and customers with neutral feedback.
- For Satisfied Customers - We are delighted to know that you like our product! We would love to know what you liked the most about our product.
- For Neutral Customers - Thank you for sharing your feedback! Is there anything we can do to make your experience better?
- For Dissatisfied Customers - We apologize for your bad experience, could you please let us know what you disliked the most about our product so that we can fix things up?
3. Analyze the Survey Results
When you have received all responses, analyze them to know more about customers’ choices and preferences and find ways to serve them better. Calculate your Customer Experience metric and compare with the industry standards as well as your own metric scores of last time, to get a clear picture of whether your business is improving or not.
4. Measure CX metrics regularly
Customer Satisfaction metrics are not only a one-time game. You should measure them regularly to track changes in your metric scores, foster continuous improvement, and ensure to provide a great Customer Experience and satisfaction to your customers.
Customer Satisfaction Metrics are a perfect way to measure the levels of satisfaction your business is able to provide to your customers. You should decide which metric you want to measure based on your business requirements, the aspect you want to collect feedback for, and the business objectives you want to achieve.
Always use good Customer Satisfaction Software to survey your customers and follow the tips stated above to leverage CX metrics and make the best use of them to enhance Customer Satisfaction and, thus, grow your business.
Zonka Feedback is an effective Customer Satisfaction Software that can serve the purpose. This tool not only helps you create surveys and calculate your metric scores but also enables you to get notified in real-time about any feedback or the feedback that falls in the criteria set by you through its powerful feature of real-time feedback alerts and notifications. This helps you take instant action on customers’ responses and close the feedback loop effectively to enhance Customer Satisfaction and foster business growth.
It also offers a free trial. Try it for free for 7 days and see how it works for your business to enhance customer loyalty and satisfaction.