10 Ways to Measure Customer Satisfaction

By Derek Gallimore,
business.com writer
|
Jul 13, 2020
Image Credit: Prostock-Studio / Getty Images

Companies lose billions annually to bad customer service, so focusing on customer satisfaction is a great way to go. But how do you determine and measure their satisfaction?

One of your business goals should be keeping your customers happy and satisfied with your products and services. A single bad review might push them away from being loyal. They might even spread it to other potential and existing customers, causing you to lose their trust in the long run.

Customer satisfaction is an important business metric that determines how happy a customer is with a brand. It does not just come from excellent products, promotional offers or low prices. In 2020, it is also measured through customer experience, or how an overall transaction goes from the customer's point of view. 

Studies show that the more customers have great experiences with a business, the greater the chance of retention. In short, if you prioritize giving your customers the best, the payback will be great (and the reverse is also true).

Customer satisfaction can be measured in different ways, depending on how your business handles it. Here are some of the top ways to measure customer satisfaction.

1. Customer satisfaction survey

A satisfaction survey is one of the most common ways to collect data on customer happiness. It contains questions on how satisfied they are with  the physical and digital structure, order processing, payment and delivery, and other aspects of the business. 

Satisfaction surveys may take these forms:

  • In-app surveys: Customer surveys are found on your website while the customer is engaging with it. In-app surveys measure metrics such as your Net Promoter Score and Customer Effort Score.

  • Live chat surveys: Live chat surveys are initiated through a live chat popup before or after a transaction. It only contains one or two questions regarding the experience of the customer in their overall transaction.

  • Email surveys: Emails are still the best way to reach out to a customer for feedback. A link to a survey form goes to the customer's email address after a transaction, usually after an email confirming the delivery of their products.

2. Feedback form

Like satisfaction surveys, feedback forms can help you gather data on customer happiness. The difference is that feedback forms delve deeper into the feelings and reactions of the customer. 

The most common feedback forms require a customer's insights on how a transaction went, what they can say about their experience, and how you could improve your services. 

3. Cold calling

Aside from lead generation, your outsourced call centers can also do cold calling for gathering customer satisfaction data. Cold calling involves direct communication with customers by calling them to ask for their reviews or feedback, and it can be a great way to increase human interaction with your customers. With this method, you can directly hear feedback and comments from your customers without limitations in character count or range of answers. Cold calls are also recorded to ensure quality and the precision of each answer.

4. CSAT score

Derived from your customer surveys, your CSAT score shows how many customers are satisfied with your business over your total number of customers. Business process outsourcing (BPO) companies use this to determine the quality of service they provide in every call. As always, you should aim to get the highest satisfaction score possible from your existing customers to gain trust and a good reputation for your potential ones.

For you to get this score, respondents rate your services from 1 to 5. In calculating your score, you should then use the Top 2 Box method, where you will get those who gave 4 or 5 in ratings over the total number of respondents (100). The two highest values in ratings are the most accurate factors in predicting retention.

5. Net Promoter Score

Your Net Promoter Score (NPS), along with your CSAT score and Customer Effort Score, is a crucial metric of customer satisfaction. This indicates how likely your customers are to recommend your business or products to other people.

Here, respondents give ratings on a scale of 1 to 10. From this, you can classify your customers in three different categories:

  • Promoters: These are customers who give a score of 9 or 10 to your business. Usually, customers who give these ratings are the ones highly satisfied with your products and services.

  • Passives: Passives give you ratings of 7 or 8. They may be satisfied with your service, but not enough to recommend you to their peers. You can improve your scores from these customers by listening to their comments and suggestions and keeping up with their demands.

  • Detractors: These customers give the lowest possible ratings to your business. As a result of their dissatisfaction, they might discourage other customers from availing your services. You can avoid this by continuously improving your offerings and learning from your past mistakes in serving your customers.

6. Customer Effort Score

Customer satisfaction is a two-way effort. You exert work in providing the best service to your customers as much as they learn and adjust to the experience you give. This is reflected in the Customer Effort Score (CES).

The CES determines how much effort your customers give to reach out to your business. This metric has been around since the 1940s, but it gained traction with a Harvard Business Review article published in 2010

Studies show how customer effort correlates with customer loyalty. The higher level of effort a customer gives, the less likely they are to remain loyal to your business. This is why improving customer experience is also important.

7. Social mentions

In the age of social media, customers are likely to connect with businesses through platforms such as Facebook, Instagram and Twitter. As a business, you can also leverage this to measure their satisfaction.

Each mention from a customer, whether an individual or another business, counts as a social mention. This is common especially when you have any sort of online presence, whether through your company website, your social media page or a review site. Social mentions help you determine the sentiment of comments, reactions and recommendations concerning your business. 

There are many social media tools that can help you track these mentions, whether they are through public posts, comments or generated hashtags. Social media can make or break your reputation as a business, so it's important to track all your brand's mentions and reviews on it.

8. Review sites

Review sites are one of the most reliable forms of customer feedback. They act as third-party determiners of how happy your customers are with your service. Good reviews are proof of your quality service. Potential customers turn to reliable sites such as Yelp to check reviews from your customers and learn what they should expect from your service.

9. Churn rate

Your churn rate, meanwhile, is the rate of customers and employees leaving your business in a certain period. They say that happy employees make happy customers, so you should learn how to take care of your employees and retain them as possible. An increase in churn rate means something is wrong with your management or the service you give. 

10. Things gone wrong

There is always a root cause of every bad review from your customers. You can determine this with the Things Gone Wrong method. Derived from the Lean Six Sigma approach, this determines the rate of complaints for every given number of reviews (e.g., every 100 reviews).

You can also use a different set of metrics to determine this. For instance, if you get at least one complaint for every single item you offer, it's time to optimize your products and services.

Continuous improvement of your services is the key to improving customer satisfaction. Remember that the customer is king, so you need to keep them happy with your business.

Derek’s blend of extensive international business and travel experience means that outsourcing came relatively naturally to him. Derek has been in business over 20 years, outsourcing for over seven years, and has lived in Manila, Philippines – the world’s outsourcing capital – for over three years. He has worked and lived in five countries and worked and traveled through dozens more. Having been in various businesses since 17 years old, Derek is a fully committed entrepreneur. He has founded and bootstrapped two 8-figure businesses, enjoyed fantastic successes, as well as his fair share of challenges. After more than 20 years in business, Derek has now set his sights on disrupting the outsourcing sector. Outsourcing is one of the biggest game-changing opportunities presenting both business, and the world today! Derek is passionate about spreading this message, and encourages as many people to properly investigate the possibilities. Derek firmly believes that outsourcing is a positive force for all. There is some bad press and fear surrounding outsourcing, and Derek would like to confront his head-on. Outsourcing not only democratises opportunity, but it also generates and produces more opportunity. And everyone benefits from this opportunity.
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