What is customer satisfaction?
When we have a great food experience at a new restaurant, we usually want to go back. Positive evaluations result in greater customer satisfaction, which leads to customer loyalty and product repurchase.
That’s a customer satisfaction definition in a nutshell. But on closer inspection, customer satisfaction is more than simply a link in a chain that leads to more sales.
To start with, customer satisfaction needs to be defined on a per-organization basis. What does success look like to you? Do you want to aim for customers who mostly get what they expect and don’t complain? Or do you strive to surpass expectations and give customers more than what they hoped for? Each company must define its own goal, although it’s safe to say that most will want to do as much as possible to excel and exceed, especially given how rapidly customer expectations now grow and change.
Customer satisfaction may be best understood in terms of customer experience. Customer experience (or CX) is the total sum of a customer’s perceptions, interactions and thoughts about your business. If the customer has a generally positive experience, they can be considered satisfied.
So it follows that customer satisfaction is a composite of many different aspects, and it is likely to change over time. Customers may be satisfied on one occasion but not the next, or they may gradually become more satisfied despite an indifferent starting point. For this reason, it’s important to measure customer satisfaction continually, using a range of metrics that capture its different facets.
Why does customer satisfaction matter?
Most of us have an intuitive sense of why customer satisfaction is important based on our own experiences. If we’re unhappy in our dealings with a business we’re likely to stop giving them our trade.
For a company, customer satisfaction has deeper and more far-reaching implications. Over time, customers who have repeated positive experiences are more likely to become loyal to not only our products and premises, but to our brand as a whole. Customers who develop attitudinal brand loyalty – that is, they have a positive emotional connection to a brand – have been shown to be less price sensitive than their less-loyal counterparts. They’re also more likely to convert when they buy from you.
Highly satisfied customers are also likely to tell friends and family about their experiences and to promote your brand. This is one good reason to aim for a level of customer experience that exceeds rather than simply meets expectations. A highly positive experience is much more likely to turn customers into promoters than an interaction that simply gets the job done.
According to Mckinsey, you can see the impact improved satisfaction can make below:
4 key customer satisfaction metrics
So how do we effectively measure customer satisfaction?
Here are 4 key customer satisfaction measurements that are critical to your business success. They take into account the different dimensions of customer satisfaction, such as affective (emotional) and cognitive (rationally judged) reactions to a product or service and behavioral intentions (such as likelihood to recommend or repurchase) as well as taking overall scores of satisfaction as judged by the respondents.
If you’re already set up to get started with measurement, you can skip right to the customer satisfaction survey templates here.
1. Overall Satisfaction Measure (Attitudinal)
Example question: Overall, how satisfied are you with “La Jolla Grove restaurant”?
This question reflects the overall opinion of a consumer’s satisfaction experience with a product he or she has used.
The single greatest predictors of customer satisfaction are the customer experiences that result in attributions of quality.
Perceived quality is often measured in one of three contexts:
- Overall quality
- Perceived reliability
- Extent of customer’s needs fulfilled
It is commonly believed that dissatisfaction is synonymous with purchase regret while satisfaction is linked to positive ideas such as “it was a good choice” or “I am glad that I bought it.”
2. Loyalty Measurement (Affective, Behavioral)
Would you recommend “La Jolla Grove restaurant” to your family and friends?
This single question measure is the core NPS (Net Promoter Score) measure.
Customer loyalty reflects the likelihood of repurchasing products or services. Customer satisfaction is a major predictor of repurchase but is strongly influenced by explicit performance evaluations of product performance, quality, and value.
Loyalty is often measured as a combination of measures including overall satisfaction, likelihood of repurchase, and likelihood of recommending the brand to a friend.
A common measure of loyalty might be the sum of scores for the following three questions:
- Overall, how satisfied are you with [brand]?
- How likely are you to continue to choose/repurchase [brand]?
- How likely are you to recommend [brand] to a friend or family member?
3. A series of Attribute Satisfaction Measurements (Affective and Cognitive)
Example question: How satisfied are you with the “taste” of your entre at La Jolla Grove?
Example question: How important is “taste” in your decision to select La Jolla Grove restaurant?
Affect (liking/disliking) is best measured in the context of product attributes or benefits. Customer satisfaction is influenced by perceived quality of product and service attributes, and is moderated by expectations of the product or service. The researcher must define and develop measures for each attribute that is important for customer satisfaction.
Consumer attitudes toward a product developed as a result of product information or any experience with the product, whether perceived or real.
Again, it may be meaningful to measure attitudes towards a product or service that a consumer has never used, but it is not meaningful to measure satisfaction when a product or service has not been used.
Cognition refers to judgment: the product was useful (or not useful); fit the situation (or did not fit); exceeded the requirements of the problem/situation (or did not exceed); or was an important part of the product experience (or was unimportant).
Judgments are often specific to the intended use application and use occasion for which the product is purchased, regardless if that use is correct or incorrect.
Affect and satisfaction are closely related concepts. The distinction is that satisfaction is “post experience” and represents the emotional effect produced by the product’s quality or value.
4. Intentions to Repurchase Measurements (Behavioral Measures)
Example question: Do you intend to return to the La Jolla Grove restaurant in the next 30 days?
When wording questions about future or hypothetical behavior, consumers often indicate that “purchasing this product would be a good choice” or “I would be glad to purchase this product.” Behavioral measures also reflect the consumer’s past experience with customer service representatives.
Satisfaction can influence other post-purchase/post-experience actions like communicating to others through word of mouth and social networks.
Additional post-experience actions might reflect heightened levels of product involvement that in turn result in increased search for the product or information, reduced trial of alternative products, and even changes in preferences for shopping locations and choice behavior.
Tools to measure customer satisfaction
We know that customer satisfaction is complex and ever-changing, and that as a result it’s important to take frequent measurements across a range of metrics in order to get the most accurate picture possible. But how do you keep track of all those measurements, and how do you analyze them relative to one another to end up with actionable insights?
We recommend taking an ongoing approach to customer satisfaction, along with other metrics, as part of a broader customer experience program. By measuring and analyzing your customer satisfaction metrics within a single platform such as Qualtrics XM, you’ll not only benefit from powerful analytic tools and easy-to-interpret results, you’ll also be able to integrate your findings with other elements of your customer experience data.
How to improve customer satisfaction
If you’re using a range of metrics to track and monitor customer satisfaction, you’re already well on your way to making improvements. Understanding your current status on customer satisfaction means you can:
- Zero in on problem areas
High-quality VOC (Voice of the Customer) feedback gives you a clear roadmap to where problems are most likely to arise within your customer experience. This is where you can make the biggest gains by investigating and improving matters.
- Close the loop with unhappy customers
A dissatisfied customer can become an ardent promoter given the right kind of communication and action. Use the visibility your customer experience program provides and make contact with unhappy customers wherever and whenever they voice their concerns. By listening and setting the issue right, you have the potential to create a positive bond in place of a disappointing memory.
- Identify the key drivers of satisfaction
Plenty of factors go into making up customer satisfaction, but they’re not all created equal. Using a tool like Qualtrics PredictiQ, you can identify which elements matter most in creating customer satisfaction, and weigh your investment and improvements accordingly.
- Focus on employee experience
Your employees are in direct contact with customers and have a huge influence on whether customer experiences are positive or not. There’s a proven link between customer experience and employee experience that bears this out. So if customer satisfaction is the goal, it absolutely makes sense to improve employee experiences and nurture a customer-centric culture within your teams.