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Why customer satisfaction is important
A company’s bottom line is directly impacted by customer satisfaction. It sheds light on the likelihood of customer loyalty, customer referrals, and churn. It also outlines areas of opportunity for brands to immediately address or improve.
How to measure customer satisfaction
Customer satisfaction surveys are a trusted tool for measuring customer satisfaction. They can vary widely in design, sample, timing and data analysis; but their purpose is the same: to gather supporting data around customer sentiment.
Conducting a customer satisfaction survey (or requesting completion of a customer service evaluation form) is an age-old method of measuring customer satisfaction that is as effective today as it’s always been. But not all surveys are created equal. They vary widely in terms of design, sample, timing and data analysis.
Below, Gladly shares six key steps for any customer service team to create, launch, and learn from a customer satisfaction survey.
1. State Your Intentions for Your Customer Satisfaction Survey
Intentions are important, so your company should start its customer satisfaction enquiry by asking two foundational questions – firstly, “Why are we doing this?” and, secondly, “If our customers are dissatisfied, what will we do about it?”
Hilton follows up with its customers after each survey. Through the Hilton Hotel Customer Service Program, it’s not unusual for customers to get an email from the general manager of the hotel the day after they complete a survey about their stay at the hotel. Hilton considers the content of each survey and updates live data on a nightly basis.
Carrying out surveys takes time and effort so, if your company is unable to put the survey information to good use (that is, by making the necessary changes), it’s probably not worth gathering data at all.
2. Make a Plan of Action for Your Customer Satisfaction Survey
The late French writer, Antoine de Saint-Exupéry, once said, “A goal without a plan is just a wish.”
Before rushing headlong into collecting masses of customer data, your company should document the actions it intends to take once customer feedback has been gathered and analyzed. Examples include:
- Reducing user experience bottlenecks that contribute to substandard customer experience;
- Expediting customer support communications with the most dissatisfied customers; and
- Providing proactive customer support, such as a knowledge base. [Learn More: FAQ Template]
3. Decide How You Will Measure Customer Satisfaction
Customer satisfaction can be measured in different ways. Popular methods include:
The Customer Satisfaction Score
The Customer Satisfaction Score (CSAT) is the most commonly used survey. It measures how satisfied customers are with your company’s products or services.
The survey asks customers to rate their satisfaction level from 1 to 3, 1 to 5, 1 to 7 or 1 to 10 (there’s no ‘best’ scale to use). The CSAT is calculated by adding up the satisfaction ratings and dividing the sum of the ratings by the number of survey respondents.
The Customer Effort Score
The Customer Effort Score (CES) measures customer satisfaction by gauging the ease of the customer experience.
The Net Promoter Score
The Net Promoter Score (NPS) measures customer satisfaction alongside its bedfellow – customer loyalty. It asks customers, “How likely are you to recommend this company to a friend, colleague or family member?”
Although the NPS is an aggregate score, the survey responses can also be divided into three categories: ‘detractors,’ ‘passives’ and ‘promoters.’ The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters.
It’s perfectly plausible to simultaneously use more than one method of measuring customer satisfaction. In fact, consumer purists might argue that it’s nigh on impossible to measure customer service success by using a singular metric – mainly, because they all measure something uniquely different. It would be tantamount to flying a plane by concentrating on flight speed alone without taking altitude into consideration!
By combining different scores, your company will form a more accurate picture of customer satisfaction. One score won’t reveal why customers are detractors or promoters or why your company has a CSAT that is lower than expected. But the CSAT and the NPS combined provides a more precise indication of a customer advocate or a customer at risk of churn.
For instance, a customer who registers negative CSAT scores three times in succession and is classified as a detractor on the NPS would be deemed an immediate at-risk customer. On the other hand, a customer with a positive CSAT and who is considered a promoter on the NPS may be among the best sources of customer advocates to cross-sell and up-sell. This is because they’ve already witnessed the value of their interactions with the product and the process.
Once all the scores are in, a Customer Satisfaction Index combines customer satisfaction survey scores from different business characteristics (such as customer help desk responsiveness, customer service quality, etc) to form a single index that gives an indication of overall customer satisfaction.
4. Choose a Format for Your Customer Satisfaction Survey
The three main formats for administering customer satisfaction surveys are in-app or on-site surveys, post-purchase or post-service surveys and long email surveys.
Regardless of the survey format you choose, it’s always good practice to include at least one open-ended question. Otherwise, your company runs the very real risk of never knowing why customers are dissatisfied.
5. Conduct Your Customer Satisfaction Survey
There’s a certain science to carrying out your customer satisfaction survey – it should never be done on a whim.
Here are a couple of best practices for triggering the survey:
- Customer memories fade so, the closer the survey is to an important moment in the customer journey, the more accurate the results. For example, immediately following their stay at one of its properties, Airbnb asks its customers for feedback on their rental experience and leaves it entirely up to them if they want to share it. Incidentally, Airbnb has recorded a 25% increase in bookings through its customer referral program alone.
- A survey should be done more than once to see how things change over time. This is especially so if you run a SaaS company or subscription service where surveys can help analyze trends (both at the aggregate and individual level).
6. Analyze (And Apply) Your Customer Satisfaction Survey Data
Once you’ve analyzed your customer satisfaction survey data, you’ll need to circle back to the starting point and answer the initial question: “If your customers are dissatisfied, what will your company do about it?”
Customer satisfaction is crucial to the growth and sustainability of your business – not least because, according to the Harvard Business Review, the cost of attracting new customers is anywhere from five to 25 times more than the cost of maintaining a relationship with existing customers.
Gladly empowers your company to gain valuable insights into the performance of your customer service team at a glance. By accessing real-time dashboards, you can report on over 200 metrics across your contact center. This way, you’ll know what your customers are talking about, so you can work smarter, not harder. If your company is keen to discover the transformative power of a customer scorecard, watch our demo today.