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Your ultimate guide to customer satisfaction

20 min read
How can you deliver meaningful experiences that your customers expect if you don’t know whether you’re satisfying their needs? Understand what customer satisfaction is, why it matters and how measuring it can help you improve the overall experience.


Knowing, and understanding how satisfied your customers are with your brand is essential to business success. It will determine their likelihood to return, spend and recommend to others – improving it will result in a higher customer return rate, increased customer loyalty and make them more likely to spend more. With this in mind, it should be in every business’ interest to create meaningful experiences for their customers.

What is customer satisfaction?

In order to improve customer satisfaction (CSAT), it’s important to know what it is first. Customer satisfaction is the extent to which a customer’s sense of ‘completion’ has been met. Customer satisfaction is broader than pleasure, and it is more than enjoyment.

In order for a customer to feel satisfactorily ‘completed,’ you must meet their needs – and you can’t do that unless you know what customers expect from your brand. Understanding the experience that customers expect from you will help you to satisfy that expectation.

Who are your “customers”?

To ensure you can satisfy your customers you should unpick what we mean by “customer.”

There are two distinctions to be made:

  1. The first distinction is using the term “customer” to describe the economic buyer. This is the person who has made the purchase but may not be the person singularly using it – or at all.
  2. The second distinction is using the term “customer” to describe the service user. The service user is not necessarily the economic buyer, but their experience as a service user may contribute to the economic buyer’s opinion.

Take a household Netflix account as an example. Whilst a parent may be responsible for purchasing the monthly subscription, the cumulative experience of the family as service users may influence the decision to renew or cancel the subscription. The parents may not use it much, but the children can’t imagine a world without it. Therefore the opinion of the service user matters.

When we measure satisfaction, these two levels are at play, but it’s important to know who we are measuring and make that distinction, because there are some situations where one is more important than the other.

For example, when measuring the relationship between customer satisfaction and basket size, service users are less influential because typically the economic buyer holds the purchasing power.

Why measure customer satisfaction? What are the benefits of it?

The best experience brands gather insight they can take action on. Customer satisfaction is no different, because when looked at in context, it can tell you a huge amount about how you can improve your business.

Whereas a net-promoter score can look at underlying sentiment in the long term, customer satisfaction is a relationship measure that can also be deployed in transactional moments — for example in-store, after a call, or when you receive a product.

It’s more actionable because you are asking about specific moments, with valuable insight into how these perform.

See the whole picture

By asking about specific moments, you can test touchpoints in the journey against each other, but there is even greater flexibility here to go deeper. Whilst you can test different touchpoints entirely — for example a customer care vs a purchase interaction — you can also test different channels of the same touchpoint, for example, comparing customer satisfaction of purchases made in-store, by telephone and online.

By doing this, you can begin to evaluate precise moments in the customer journey and see what works, what doesn’t and what you can improve.

Then, with this information you can start digging to understand the why. By understanding why customers feel the way you do, and why satisfaction is lower (or higher!) than what you’d expect, you can start to identify the actions you need to take to improve their experiences and better satisfy their needs.

No more guesswork

Identifying and taking action on key areas will have an economic impact and tangible benefits for your business too, because satisfied customers are more likely to return, spend and recommend to others.

By linking your experience data (in this case what your customers are saying about satisfaction) to your operational data (eg how much they spend, whether they become repeat customers etc.) you can de-risk important decisions. You can see how improving the customer experience — making sure their needs are met and they are satisfied — at specific points in the customer journey boosts metrics such as loyalty, basket size and ultimately the bottom line.

That way, making operational decisions becomes less risky because you already have information on what the outcome will look like, making it less guesswork and more of an informed decision — that said, we’d always recommend going through a testing phase with any changes to your operations!

How to measure customer satisfaction

So you know the benefits that measuring customer satisfaction can add to your business, but how do you do it? And where do you start? We’ve got a step-by-step guide for you to follow, with a few essential tips to get you up and running quickly.

Measuring customer satisfaction:

1. Map out the steps in the customer journey – think about the different touchpoints your customers will interact with throughout their journey.

2. Identify the moments of the greatest emotional load – the points in the experience that can make or break it for the customer. These are the moments that matter as they are what the customer will remember at the end of the experience.

Did you know?

To understand the importance and value of the moments that matter in the customer journey, we can refer to the psychological theory called the “Peak-end rule.”

This argues that people (or customers in our case) are most likely to judge an experience by what they felt at its peak (the most intense point) and at the end. Therefore, there’s a huge benefit to be had by understanding how customers feel at the moment of greatest emotional load in your customer journey.

 

3. Think about how you’re going to trigger feedback. If you’re collecting feedback, where will this data sit so that you can begin to analyze it? A centralized dashboard is vital too, so you can begin to listen, understand and act to improve the experiences along your customer journey – all in one place.

4. Design your feedback mechanism – how are you going to collect this feedback from customers? You can collect feedback from a whole host of different channels – in fact CustomerXM gives you a total of 27 channels and 128 different data sources from which to listen to your customers! Here’s a few things to consider as you design your customer feedback mechanism:

  • Make sure you put the customer satisfaction (CSAT) question at the top.
  • Below this, ask a series of driver questions (no more than 5) to allow you to dig deeper into the score that was given and understand what factors influenced it.
  • Below this, you can add a section for comments, but avoid making this mandatory.
TIP: Make sure you are sampling your customers. That way you are not sending one person multiple surveys over the whole process, but instead gather data from a representative sample of all of your customers.

 

5. Take action. Once you’ve created your feedback mechanism and you begin to record customer satisfaction levels across your specified touchpoints, it’s time to identify action areas where you can improve satisfaction. You can do this by identifying the drivers that are influencing your customer satisfaction. Sometimes there may be an obvious outlier impacting your customer satisfaction scores, but there will also be times where determining what improvements can and should be made is a little less obvious.

This is where customer experience software plays a key role. A system of action that collects feedback, automatically analyzes it and recommends actions to take to improve satisfaction can remove a lot of the legwork. Powerful statistical analysis will surface key insights and uncover gaps that otherwise could have gone unnoticed, so you’ll know exactly what actions to take to improve the experience.

6. Track your improvements. Look for changes in customer satisfaction over time – is there an area that’s decreasing that you need to take action on to improve? Is there a driver that’s causing this? You can do this with a rolling customer satisfaction (CSAT) survey, gathering feedback periodically. That way you can assess different factors such as how seasonality affects the experience you provide customers and their satisfaction, how experiences in different markets or territories compare, or how improvements to things like your employee or product experiences are contributing to increased customer satisfaction. This approach helps you to use the average scores to gauge how customers are feeling on an ongoing basis.

7. Bring your X and O data together. Humans have told stories since the dawn of time. But in today’s society, stories are not enough for us to make decisions as a business. We need data too because without it, all we have is a story. And without a story, all we have is data. We need both, so link the results of your CSAT survey to operational data. By combining Experience data (X data) and Operational data (O data) you can see the economic impact of improving the experience for the customer will have on the business. Does it result in more renewals? More spend? Increased profitability? That way, you can start to see how, when you dial up the emotional connection you create with customers, it can have a considerable impact on your key business metrics.

How to maximize feedback responses

In order to validate your research, the more responses you can get the better. Understanding why people don’t fill out feedback responses is an important first step to maximizing your own. This is because you can take steps to making sure you don’t fall into the same trap as everyone else.

Common reasons for not filling in feedback responses include:

  • Involves too much effort
  • Previous feedback they submitted wasn’t acknowledged, with little idea as to whether it was listened to
  • The survey is impersonal and lacked a human touch
  • Questions may be too sensitive – these may include topics such as politics, religion, crimes and sexual orientation.

So what should you do?

  • Create a buzz
  • Make it personal – in regard to communications, not your questions
  • Let them know how long the survey is at the start
  • Write an irresistible subject line – this can help you make it personal too
  • Tell people their feedback will make a difference
  • Use your own panel

Make sure you get the technicalities right too:

  • Be aware that verbatim question choices can damage your survey by increasing survey dropout, so don’t make these mandatory.
  • Make your survey no longer than 5 minutes. As a rule of thumb, every extra minute it takes to fill in a survey, causes a 50% response rate dropout. A 3-minute survey vs a 2-minute survey will have half the response rates.
  • Keep the scale between 0-5 on your CSAT survey. The reason for this is because it works well on mobile, and it’s familiar for customers. If your survey is 0-10, the more points on the scale the more noisy it becomes.
  • Avoid deploying a forced-choice method in your survey so your customers can express a neutral opinion. This is the anchor point and gives customers space to say, “actually, it was ok. No more, no less”.

An example of what a CSAT scoring system looks like:

CSAT Score 2x

Read more on increasing your survey responses here.

How to improve customer satisfaction

Understanding what drives customer satisfaction scores is essential if you want to successfully improve it.

Customer satisfaction gives you the headline so you can identify areas or touchpoints that need work, then driver questions can help you to see what is working for certain touchpoints and what is not.

What is a driver question?

Driver questions look to dig deeper into the key factors (referred to as key drivers) that influence a customer’s perception of the experience.

The drivers will be different for every customer journey, and customers may place greater importance on some drivers than others, depending on what their values and needs are. Only by measuring their satisfaction can we begin to understand what customers expect and which drivers have the biggest influence on that.

Driver questions help you to collect the data you need to analyze the different touchpoints along a customer journey. You may want to establish how customers feel about the store, or go deeper and measure elements within the store – the range of products, the level of service provided, the layout of the store, etc.

These customer satisfaction scores also allow you to make comparisons of different channels too. Driver questions will let you see now only how live chat performs compared to phone support for example, but why one is outperforming the other. Perhaps live chat is clearer because the customer has a transcript to refer back to? Or maybe phone support has a bigger impact on CSAT because people prefer a human interaction when solving complex problems? Only by asking driver questions will you be able to get to this level of granularity and be able to take the right actions to improve the experience.

Examples of driver questions: Buying a car

So what driver questions would you use if you’re assessing the customer journey when buying a car?

  • Did you feel welcome when you walked in the dealership?
  • How satisfied were you with the length of time to drive the vehicle?
  • How satisfied were you with payment plans offered to you?
  • How satisfied were you with the friendliness of staff?
  • How satisfied were you with the knowledge of staff?
  • How satisfied were you with their listening skills?

The best driver questions can be used to improve employee performance and coaching too. By asking questions about their demeanor (how friendly were they?) how knowledgeable and whether they were a good listener, customer satisfaction can be tied back to employee performance. In that instance, you can then look to the employee experience, and what actions you can take to improve employee performance in order to have the biggest impact on both customer satisfaction and your business metrics.

But take care too when using driver questions to assess employee performance. You might want to ask the question: How satisfied were you with the wait time?

This is a fair question on the face of it, because wait time can impact the experience. However, the agent or employee on the frontline shouldn’t be evaluated on it because the wait time may be beyond their control – fewer staff than usual, customer issues that had a long resolution time or it might have been a peak time during the day.

This information is useful to make operational adjustments though – perhaps you need more staff available for the whole day or just at peak times to reduce the wait times. This is where the data comes in really useful because you can see how making these adjustments to improve customer satisfaction can have an economic impact on the business too.

If wait times are reduced and customer satisfaction goes up, how does this impact revenue? If revenue goes up as a result, you can be confident that the cost of putting on more staff is worth it because you know that revenue will increase by X%, giving you a quantifiable return on investment.

What happens if your customer satisfaction plateaus?

There is no hard and fast rule to follow if your customer satisfaction levels plateau. This is because your approach should be tailored to your situation in the marketplace.

Are you the market leader or a challenger brand? Do you want to look at improving CSAT with internal improvements, or use external ideas? This will be different for every market. Just because you are a challenger brand, this doesn’t necessarily mean you need to replicate the market leader. In some cases, such as banking – the very fact that challenger brands are differentiating themselves by innovating and having a different approach to legacy banks, consumers are satisfied because they’re having their needs met in new ways. It comes back to understanding what the customer wants from your brand, and making decisions accordingly.

The question you need to ask yourself as a business is: How do we differentiate ourselves? The experience you provide customers are key to unlocking that question. The better you meet your customers’ needs, the better you’ll set yourself apart from the competition.

What tools can I use to help improve customer satisfaction?

Tools such as Qualtrics CustomerXM can help you to measure, analyze and act on your customer satisfaction scores.

By implementing a system of action you can find the story behind the data, and use it to improve the key moments of the customer experience – and subsequently improve CSAT scores. Your CSAT scores are a benchmark to help you track how well you are delivering the experiences your customers expect.

Customer satisfaction measures should be used to track overall satisfaction of the entire journey (especially when something is quick and transactional) and in the key moments. With integrations to the tools your teams are already using, Qualtrics platform can help you to combine this with your operational data to drive actions and power your business decision making.

By constantly analyzing customer responses, the Qualtrics platform will surface key insights and potential issues, and then recommend decisive actions you should take as a business to improve certain touchpoints in the customer journey – and you can access all of this in one platform. That way your customers are satisfied, and your business will reap the benefits.

Improve your customer satisfaction with the powerful Qualtrics Experience Management platform