The Art of Measuring Customer Satisfaction for Business Growth

More than 70% of customers stop doing business with a company if they experience poor customer service. 

This shows that the customer is the king and businesses who take their customer service lightly might be at risk of losing customers which inevitably results in loss of business. Understanding your customer’s qualitative needs and requirements is one thing but making important business decisions based on specific data is the ultimate goal. This will create a significant impact on your customer satisfaction.

What is Customer Satisfaction?

Let’s say you bought sunscreen from a new skincare brand, the product got delayed so you reached out to customer support. They took your complaint seriously and resolved the issue within 2 hours and sent you some additional free samples. The product you received also turned out to be amazing, along with the free samples. 

Now how will you rate your experience with the brand? Positive, right? For the brand, this is called achieving customer satisfaction.

In simple terms, it is all about how happy customers are with your product or service, or the overall experience they had with your company. It measures how well a company meets or exceeds customer expectations and fulfills their needs and desires.

Customer satisfaction is influenced by various factors, including product quality, customer service, pricing, convenience, and the overall experience throughout the customer journey. Customers are satisfied when they feel that their expectations have been met or even surpassed, that is when you and your team reach cloud nine, and you actually deserve it!

Now that we understand what customer satisfaction means, let’s dig a bit deeper into why it is so important.

Why Measure Customer Satisfaction?

Here are some points to help you understand the importance of measuring customer satisfaction for your business.

1. Enhance Customer Experience and Loyalty

Satisfied customers are more likely to stay loyal to a product or service, repurchase it, and make recommendations to others. But why is that an important point for businesses to care about?

According to Saravana Kumar, a former Forbes council member, acquiring a new customer costs 5-7 times more than retaining existing customers.

And how does a business retain customers? Simple, by enhancing the customer experience which is why businesses need to start measuring customer satisfaction and work on their weak areas.

2. Identify Areas for Improvement

The key to running a successful business is to always look for weaknesses and convert them into opportunities. Demand changes, strategies get old, and competitors get more advanced, which is why it is important to know where you are failing and could fail in the future and improve.

But how to do that?

By regularly monitoring customer satisfaction metrics and paying heed to the changing customer feedback trends, businesses can track progress, set improvement targets, and implement changes to enhance overall customer experiences.

3. Gain a Competitive Advantage

No matter which sector your business operates in, competition is inevitable. Therefore, gaining a competitive advantage over your rivals becomes a crucial goal. But how can you achieve this?

By consistently delivering high levels of customer satisfaction, successful businesses differentiate themselves and stay ahead of the curve in the market. 

According to a report on Consumer Intelligence by PwC, 32% of customers would cease doing business with a brand after just one bad experience, highlighting the significance of customer service.

While your competitors are busy acquiring new customers, you already possess a loyal customer base that not just loves your brand but advocates for it.

Measuring customer satisfaction helps identify your best customers cum influencers for your brand, uncover your strengths and more importantly, your weaknesses in comparison to your competitors, empowering businesses to develop strategies that surpass their rivals and attract a larger customer base; in turn, transforming you to have a big-league mentality.

4. Increases Profitability and Business Growth

Good customer experience plays a crucial role in customer loyalty, resulting in low churn and lower retention costs, which ultimately increase the profitability of a business. 

This concept is supported by a report from Bain & Company and Harvard Business School on the Economics of E-loyalty, which states that a mere 5% increase in retention rate can lead to profit growth ranging from 25% to 95%.

Moreover, happy and satisfied customers present an opportunity not only for your CX team to excel but also for your sales team to pursue targeted up-selling and cross-selling strategies. By effectively utilizing customer satisfaction data, you can unlock the potential for boosting sales and driving profitability.

Boost Customer Satisfaction with SurveySensum – Request a Demo

6 Simple Steps for Measuring Customer Satisfaction

Now that we have understood the meaning and importance of measuring customer satisfaction, it is time we learn the 6 basic steps of measuring customer satisfaction.

1. Define Your Objectives and Target Audience

Defining objectives, and target audience is a fundamental step for any business. Without clear goals and a properly identified target audience, businesses cannot effectively operate. This principle also applies to measuring customer satisfaction.

Let’s consider a scenario where you ask your team to provide you with the analysis of a survey conducted last week on the prototype of your upcoming mobile app, scheduled to be launched next month. 

You want to know how well it was received by people between the ages of 25-35, your key demographic for the app. In this example, you have successfully defined your objective of measuring customer satisfaction and have identified your target audience.

By defining your objectives and target audience, you gain a clear and specific understanding of why you are measuring customer satisfaction. 

It aligns your efforts and resources towards gathering relevant feedback and insights to assess the satisfaction of your intended audience, enabling you to make informed decisions and improvements for the successful launch of your mobile app.

2. Select the Right Metrics for Your Business

Now that you have defined your objectives and target audience properly, it is time to select the right metric for your business. Selecting the right type of metrics depends on your objective. 

Common metrics include Customer Satisfaction Score (CSAT), Net Promoter Score (NPS), and Customer Effort Score (CES). Selecting the right metric that aligns with your goals and is relevant to your industry and customer base is very important. 

Let’s say, you want to improve your customer service experience. And want to analyze how well your customers are responding. So, the right metric would be CSAT and not Relationship NPS. Why? Because relationship NPS helps you gauge the overall relationship between the customer and the brand and not the customer experience of an individual transaction. 

With CSAT you can ask your customers to directly rate your customer support services and based on those ratings you can calculate the CSAT score and evaluate your customer support.

So, taking the time to define the right metric for your objective is very important.

3. Determine the Optimal Frequency for Measuring Satisfaction

After defining your objective and selecting the right metric for your objective, it is now important to determine the frequency for measuring satisfaction. 

The optimal frequency for customer satisfaction surveys is sending the survey immediately after the customer’s interaction, such as a purchase or support interaction, with your brand. This way the interaction is fresh in the mind of the customer and they can give their honest feedback. 

This step is all about finding the right balance between gathering enough relevant data to accurately assess customer satisfaction and avoiding survey fatigue or overwhelming your customers with frequent feedback requests.

4. Use a Combination of Qualitative and Quantitative Methods

Designing your survey is an important part of the customer satisfaction measurement process. By design, we don’t mean picking beautiful formats. It means designing the questions that you want to ask your customers.

This will help you in listing down questions that are important to your objective. 

Asking unnecessary questions that won’t help you with your objective is a waste of your time and might also make your customer feel frustrated. So, ask questions that are in line with your objective.

Let’s say you ask your customers for feedback after the customer service calls. Some relevant questions can be:

• How would you rate the call?
• How would you rate the behavior of our customer service executive?
• Anything else would you like to improve?

These questions are relevant, short, and easy to answer. Customers will not feel overwhelmed and will answer all the questions easily. But if you add questions such as:

• How would you rate our product/service?
• How was your shopping experience with us?
• What more would you like to see on our app/website?

These types of questions have nothing to do with customer service quality and therefore might frustrate your customers and they might leave the survey halfway.

Also, while designing surveys it is important to add both qualitative and quantitative questions. For example, you ask customers about your newly launched mobile app. You can ask questions such as, 

• On a scale of 1-5, how difficult or easy was it to understand the instructions?
• On a scale of 1-5, how difficult or easy was it to navigate through the app?

Now, you have quantitative data with close-ended questions but what about if you want to know why a user chose 1 or 5? 

This is why you need to add open-ended questions asking users why they gave a 1-star or 5-star rating.

5. Analyze and Interpret the Data Effectively

Now that you have defined your objectives, selected metrics, and designed your surveys, it is now time to analyze and interpret the collected data effectively, by using an effective customer satisfaction tool, so that you can plan further actions.

Once the data has been gathered, analyze it to find trends, patterns, and areas that need attention.

How? — With Text Analytics. 

For instance, SurveySensum’s AI-enabled Text Analytics tool analyzes thousands of feedback gathered in just a few minutes and offers you top trends and sentiments. This not only saves hours of effort and time of manual coding but also helps in resolving the issues before they escalate. 

Analyze Customer Feedback with Text Analytics – Request a Demo

6. Take Prompt Action Based on Feedback

Surveys are designed, feedback received analyzed, and interpreted, now one last thing left to do, is take action. Because what is the point of doing this exercise if the customer feedback is simply lying around and you are not leveraging it to improve customer satisfaction?

The right customer satisfaction software is of great use here. 

For instance, ‘detractor alert’, a SurveySensum feature notifies you as soon as someone gives you negative feedback. With this real-time notification, you can resolve the issue in time or inform the relevant team, so that they can take action.

By taking prompt action on customer feedback, you can close the feedback loop right away and inform the customer about it – leading to the conversion of the detractors to promoters and boosting customer satisfaction.

So, now we have learned an effective process to measure customer satisfaction but what about the pitfalls? 

Well, let’s find out.

Challenges and Pitfalls to Avoid While Measuring Customer Satisfaction

Before incorporating any new strategy or planning, it is very important to know the challenges that come with it and how to overcome them.

So, here are the five challenges and pitfalls that companies need to be careful of while measuring customer satisfaction.

1. Biased or Unrepresentative Samples

One of the biggest issues faced during surveys is biased feedback. This happens when customers provide feedback that is influenced by their own preferences or personal experiences which may lead to inaccurate representation of customer experience.

To avoid this, 

• Ensure that your survey questions are clear and unbiased.
• Use random sampling techniques to identify and reduce any potential bias.
• Randomize the order of questions to minimize order bias.
• Use both qualitative and quantitative questions for comprehensive understanding.

2. Incomplete or Inaccurate Data Collection

Error in collecting data or incomplete responses can significantly impact the quality and accuracy of surveys hence making it difficult to get accurate results.

To avoid this error, 

• Ensure that your survey questions are clear and easy to understand. Use simple language and avoid jargon.
• Ensure that the survey software or data collection system that you are using has validation mechanisms in place to prevent invalid or incomplete responses. 
• Clearly communicate the purpose of the survey and provide clear instructions on how to complete the survey.
• Continuously monitor the data collection process to identify and correct any issues promptly.

3. Overlooking Qualitative Feedback

As we discussed above, an important step in measuring customer satisfaction is including both quantitative and qualitative questions to get accurate results. While quantitative metrics provide numerical scores, qualitative feedback can provide valuable context and insights. 

By solely focusing on the numbers, you might end up losing important information about what’s driving customer satisfaction levels. Qualitative feedback gives you the context and insights that can help you truly understand your customers’ experiences and make meaningful improvements.

4. Failure to Act on Customer Feedback

So, you’ve gone through the trouble of collecting feedback from various channels and doing a thorough analysis. But here’s the thing, if you don’t actually do anything with that valuable information, then it’s all just a big waste of time, effort, and resources, right?

Measuring customer satisfaction is just the beginning. It’s what you do with those findings that truly matters. If you ignore the feedback and fail to take action, not only will you be wasting all that hard work, but you’ll also risk leaving your customers feeling unsatisfied and disappointed.

To avoid this, it is crucial to put your insights into action. Set up a system for regular review, track your progress, and take the necessary steps to improve based on what your customers are telling you. And don’t forget to let your customers know about the actions you’ve taken. Show them that their feedback is not only appreciated but also used to make positive changes.

5. Lack of Integration Across Departments

In any business, you often find different departments doing their own thing when it comes to collecting customer feedback. This can lead to fragmented information and make it tough to get a clear picture of customer satisfaction throughout their journey with your company.

For example, if your product team is not made aware of the complaints of customers received by the marketing team through omnichannel feedback then they won’t be able to act on those complaints and fix the issue. 

This lack of proper communication and disconnect between teams will automatically lead to lower customer satisfaction as the customer’s problems are not solved.

The key to avoiding this issue is good old cross-departmental collaboration. By getting everyone on the same page and establishing proper communication channels, you can ensure that customer feedback is shared and analyzed in a more integrated way. 

To Sum Up!

In conclusion, measuring customer satisfaction is a vital practice for businesses seeking to understand and meet customer expectations as it offers valuable insights into the overall customer experience, identifies areas for improvement, and helps build long-term customer loyalty.

Whether you choose NPS, CSAT, or CES survey, it should match your objective for measuring customer satisfaction. Although gathering feedback and analyzing it is the first step, the important step is to take action and improve your customer satisfaction.