How to measure and improve customer satisfaction

Measuring customer satisfaction helps companies align their operations with customer expectations. This key metric affects everything from customer loyalty to profit margins. 

Calculating your customer satisfaction score using a CSAT survey is a good starting point, but it's essential to understand the impact that customer satisfaction has on your broader customer experience. We’ll share the strategies, tools and best practices you'll need to continuously monitor and improve customer satisfaction. 

Customer satisfaction gauges how well a company's products, services and brand meet customer expectations. It helps CX teams to improve the customer experience and foster customer loyalty. 

Measuring satisfaction provides insights into how effectively businesses deliver value to their customers, identifying areas of strength and opportunities for improvement. This understanding can drive strategic decisions across the organisation, from refining product offerings to enhancing customer service.

Customer satisfaction KPIs typically yield scores to reveal how well a company meets customer expectations. Companies can track multiple KPIs simultaneously for a holistic view of customer satisfaction across various dimensions.

Here are three key performance indicators to track:

A customer satisfaction (CSAT) score measures immediate customer satisfaction with a product, service or experience. Typically, businesses send a CSAT survey asking customers to rate their satisfaction on a scale from 1 (very unsatisfied) to 5 (very satisfied). The company then calculates the percentage of responses that are 4 (satisfied) or 5 (very satisfied) to get their CSAT score.

For example, let's suppose you receive 100 responses to a CSAT survey. The survey reveals that 50 people are satisfied (a 4 rating) and 30 are very satisfied (a 5 rating). Divide the total number of positive ratings (80) by 100 to calculate your CSAT score: (80/100) x 100 = 80%. This CSAT score indicates that 80% of your customers were satisfied or very satisfied with their experience.

The Net Promoter Score (NPS) assesses customer loyalty and the likelihood of recommending a company's products or services. The process involves sending an NPS survey with one fundamental question: "How likely are you to recommend our company/product/service to a friend or colleague?" 

The NPS formula uses a scale of 0–10 to classify customers as detractors, passives or promoters. Subtract the percentage of detractors from the percentage of promoters and you get an NPS score.

For example, if out of 100 survey responses, 70 are promoters (9 or 10 rating), 20 are passives (7 or 8 rating) and 10 are detractors (0 to 6 rating), you calculate the NPS as follows: (70% Promoters - 10% Detractors) = 60%.

Calculate your NPS score

A customer effort score (CES) evaluates how much effort a customer must expend to get an issue resolved, a request fulfilled or a product used. CES surveys ask customers to rate the ease of their experience by using a numerical scale. The score is calculated by averaging out these ratings, helping companies identify how to make customer interactions smoother and more satisfying.

For example, 100 customers rate the ease of their experience on a scale from 1 (very difficult) to 5 (very easy). The average of all one hundred responses is 4.2, indicating that customers found it easy to interact with your service or product, which can indicate efficient customer support and processes.

Related: Measuring customer satisfaction: What types of metrics measure customer satisfaction?

Regular customer feedback surveys help organisations monitor how perceptions of their brand evolve. These surveys do not typically generate a specific 'score', but the feedback gathered reveals customer sentiments, highlights experience gaps and pinpoints areas for improvement.

Here are five customer feedback surveys that businesses commonly use to learn about their customers:

Online review monitoring is a straightforward method of tracking customer satisfaction and sentiment over time. People often post reviews when they’re very satisfied or dissatisfied, making reviews a valuable source of unfiltered feedback.

Here are some ways in which you can use reviews to measure customer satisfaction:

Reviews can be challenging to track across multiple channels, including social media. Companies often use listening tools to efficiently monitor review platforms and social media channels. These tools allow businesses to set up alerts for specific keywords or phrases, ensuring that they stay informed about real-time customer feedback and sentiment. 

Customer complaints are a critical resource for rapid improvement. They highlight urgent issues and provide direct insights into what needs fixing. Here are three steps for managing complaints effectively to enhance customer satisfaction:

By actively addressing complaints and implementing solutions, organisations can improve their products and services, thereby enhancing overall customer satisfaction.

Measuring customer satisfaction is vital for any business to thrive in today's competitive market. It provides actionable insights, helps allocate resources effectively and has a direct impact on your bottom line. Having an understanding of customer satisfaction can transform your service, product development and marketing approach.

Measuring customer satisfaction sheds light on what your customers truly value and the challenges they face with your products or services. This understanding enables you to tailor your offerings to meet their needs more effectively and resolve pain points, resulting in a better customer experience.

Satisfied customers are more likely to stay loyal to your brand. By measuring satisfaction, you can identify the key factors needed for customer retention. This insight helps you strengthen those factors and ensure a high retention rate.

Understanding dissatisfaction through measurement allows you to address issues before customers leave. Reducing churn not only retains valuable customers but also cuts the high costs of acquiring new ones.

"The Effortless Experience" by Matthew Dixon, Nick Toman and Rick DeLisi explores how reducing customer effort – when measured with a CES survey – can increase customer loyalty and reduce churn.

Positive customer feedback and satisfaction are powerful tools for attracting new customers. High satisfaction scores and glowing reviews can persuade potential customers to choose your brand over competitors.

A high level of customer satisfaction enhances your brand's image and reputation. Satisfied customers often share their positive experiences, advocating for your brand. This word-of-mouth promotion is invaluable and can significantly elevate your market standing.

Measuring satisfaction helps pinpoint weaknesses in your customer experience. These insights allow you to close gaps and create a seamless experience from initial contact right through to post-purchase support.

By regularly measuring customer satisfaction, your attention will be drawn to the most pressing issues and where you should allocate resources for maximum impact. Companies can use this feedback to prioritise and allocate resources to address these concerns in the most effective way possible. 

Finally, satisfied customers are more likely to make repeat purchases and try new offerings. You can drive sales, increase revenue and foster sustainable growth by continually measuring and responding to customer satisfaction.

Companies can enhance customer satisfaction and loyalty by implementing targeted strategies across every aspect of the customer experience, from initial feedback to personalised interactions.

Frequent collection and analysis of customer feedback allow businesses to stay aligned with customer needs and expectations. Quick responses to this feedback can significantly enhance the customer experience. By reducing response times, companies show they value customer input, leading to increased satisfaction and loyalty.

Continuously assess and refine your customer journey to identify stages where customers face difficulties and implement changes to smooth these points. Integrating feedback automation can help streamline processes, reduce friction and enhance satisfaction.

Regular training programmes equip staff with the necessary skills to meet and exceed customer expectations. Empowered employees contribute to better service quality and higher customer satisfaction levels.

Culture is closely linked to training. A strong culture improves employee morale and service quality. Happy and engaged employees deliver better customer service, boosting satisfaction and fostering brand loyalty.

Companies can use customer data to personalise experiences to individual preferences. This personal approach makes customers feel valued and can significantly enhance their perception of the brand. 

For example, a brand using browsing history and purchase data can recommend products tailored to individual customers, thus enhancing their shopping experience by making it more relevant and enjoyable. 

Effective complaint management can transform dissatisfied customers into loyal ones. Companies that excel in handling complaints see enhanced customer loyalty and improved brand perception.

Measuring and improving customer satisfaction are essential practices that enable businesses to align closely with customer expectations, enhance service quality and, ultimately, drive brand loyalty and growth.

Learn more about how SurveyMonkey can help to improve your customer satisfaction today.

NPS, Net Promoter and Net Promoter Score are registered trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld.