What is CSAT?
CSAT is short for customer satisfaction score. It’s a commonly used metric that acts as a key performance indicator for customer service and product quality in all kinds of businesses. While customer satisfaction as an idea is a general one, CSAT is a more defined metric that’s expressed as a percentage. 100% would be fantastic – 0% would be terrible.
How do you measure CSAT?
CSAT is measured through customer feedback. This is gathered via one or more variations of this question:
“How would you rate your overall satisfaction with the [goods/service] you received?”
Respondents use the following 1 to 5 scale:
- Very unsatisfied
- Very satisfied
The results can be averaged out to give a Composite Customer Satisfaction Score, although CSAT scores are more usually expressed as a percentage scale.
The most common way to elicit feedback is through a customer satisfaction survey, be it a traditional questionnaire, an ident, popup or persistent form on a website, inside an app, via SMS or some other method.
To calculate a CSAT score from your survey data, you’ll use the responses of 4 (satisfied) and 5 (very satisfied). It has been shown that using the two highest values on feedback surveys is the most accurate predictor of customer retention.
To do this calculation you’ll also need to know the total number of responses you’ve received. This number is easy to locate if you’re running your customer feedback program through a centralized platform.
Use this formula to arrive at a percentage score:
(Number of satisfied customers (4 and 5) / Number of survey responses) x 100 = % of satisfied customers
When should you measure CSAT?
So when should you ask customers for feedback on their experience? The answer may depend on what kind of product or service you provide. For discrete interactions, such as a phone call to your contact center, it makes sense to ask for feedback immediately afterward so that the conversation is fresh in the person’s mind.
For an experience that’s going to persist over time, such as a subscription or an item for long-term use like a tool or an item of furniture, you may want to give the customer a little time (days or weeks) before asking for their thoughts, so they can appraise the purchase and see how it performs in different use cases.
Primarily though, CSAT is a “right here, right now” metric that relates to a specific experience rather than an ongoing customer relationship.
You might ask a repeat customer for feedback on more than one occasion (although be sure not to overload the customer with feedback requests, as that can create its own problems).
What is a good CSAT score?
So you’ve implemented a CSAT survey and the results are in. But how do you know if your CSAT score is good? How should you set your expectations?
Benchmarking a CSAT score isn’t an exact science, since every business and product is different, but you can get an idea of what’s typical for your industry using resources like the ACSI (American Customer Service Index), which provides benchmark scores for industries, sectors, brands, and companies.
One thing is certain, however – if your score is moving from lower to higher, you’re doing something right. To track your progress, you should measure CSAT on an ongoing basis by making CSAT a routine part of your customer experience program.
What are the pros and cons of CSAT?
Like all metrics, CSAT is just one piece of the puzzle when it comes to measuring business success. Here’s what you need to know about its capabilities.
Pros of CSAT
It’s easy to measure
CSAT data can be captured in just one question with an easy rating scale format, which is quick and simple to administer across a range of channels.
It’s easy on your customers
Because of its brevity and simplicity, the CSAT question is low effort for customers, which reduces the chances of them burning out on it if you ask multiple times.
It produces user-friendly data
CSAT provides numerical data that’s easy to process and analyze using a variety of statistical tests.
It’s widely known
Because CSAT has become a standard measure, it’s possible to benchmark against other businesses or even use your great score in marketing and promotions.
Cons of CSAT
It relies on self-reporting
Self-report data is famously very vulnerable to bias. Even with something as simple as a CSAT questionnaire, you may get skew in responses depending for example on someone’s mood or life events.
It’s limited in depth and detail
CSAT is a blunt measure of positivity or negativity. It doesn’t capture nuance or granularity in experiences.
It’s a one-person response
CSAT works well when someone has had an individual experience. But what about if they’re responding on behalf of a family, a team, or even a whole business who are using the product or service?
It’s subject to response bias
People who respond to a CSAT request are likely to be those who have had a very positive or very negative experience. People who feel neutral may be less motivated to take the survey.
How does CSAT differ from NPS and CES?
CSAT measures customer satisfaction with a product or service, whereas Net Promoter Score (NPS) measures customer loyalty to the organization. CES (Customer Effort Score) meanwhile, measures how easy or difficult a customer has found it to complete their tasks with you.
CSAT targets a “here and now” reaction to a specific interaction, product, or event, but it is limited when it comes to measuring a customer’s ongoing relationship with a company.
CSAT can also be used in multiple contexts to focus on specific parts of the customer experience, e.g., “How would you rate your overall satisfaction with the telephone service you received/helpfulness of assistant/delivery?’”
Conversely, the NPS’s single-question loyalty measure, “How likely is it that you would recommend [Organization X/Product Y/Service Z] to a friend or colleague?” asks customers to take a much wider view of the brand or product, and focuses on their intention, rather than their overall feeling of satisfaction.
CES complements the two, adding an extra dimension to the CSAT experience data and helping to predict the likelihood of future loyalty from customers. Like the others, it’s a single-question metric with a scale of possible responses.
How to use CSAT
CSAT, like NPS, is a measure of customer experience. But knowing the status of your CX performance is just the first step. It’s what you do with the scores to drive and improve that experience that really counts.
CSAT (and CES and NPS) scores should be supplemented with further qualitative research to understand the drivers behind the scores so you can take action to improve customer experience (and as a result, your business outcomes).
Linking CSAT to revenue
When you understand how satisfaction relates to revenue, you can start to make an impact. Tracking overall profitability by customer is called Customer Lifetime Value and it’s the next step in your journey to making customer experience a long-term business success strategy.
Maximizing satisfaction within each customer journey can have the following impact on your business: