A Practical Guide To Customer Satisfaction

Customer Satisfaction

Can you remember the last time you had a smooth, streamlined experience when dealing with a company? Or could not help but share with others the great experience you had that wholly exceeded your expectations?

People often underestimate the impact a satisfied customer can have on their business, big or small. 

What is a satisfied customer? How do you measure customer satisfaction? Once measured, what do you do with this information? How important is it for you that your customer stays loyal to your brand?

Why spend energy on keeping your existing customers, when you can get new ones? Did you know it could cost you up to seven times more to attract a new customer than it does to retain your current customer base? What are you doing to keep your customers coming back and spending more?

Let’s explore these topics. More importantly, let’s look at how you can use this information to set your business apart from the competition and give your profits a boost.

Four Things your Customer Needs

Any business aims to have loyal customers who will continuously spend money. You might think that providing a product or service is all you need to meet your customers’ expectations. You would be wrong. 

Your customer needs:

A Fair Price

All customers like a good deal. You should question your offering if your competitors charge significantly less than you do. 

Charging more is not necessarily a problem. Make up for your higher prices, by providing excellent customer service, to justify the difference. 

Fantastic Customer Service

Having a strong customer support team will increase the trust your customer has in your business. They know their problems are getting attention, and that they can expect a quick response time. 

Excellent service, however, should not be an excuse for higher prices. Even better, provide both affordable products and excellent service.

A Quality Product

Create a product of high quality, and something people want. Why spend thousands on development, when no one buys it?

Be open to feedback and improve your product if you can. Aim to give your customers exactly what they need. 

Meet your Customer’s Expectations

It is critical that your customer feels valued. Don’t forget that without your customers, you have no business. 

Defining Customer Satisfaction

At its most basic, customer satisfaction is about how happy your customer is with the overall experience they have with your company.

Did you effortlessly meet their needs, and in a convenient way? 

Customer satisfaction is a marketing term that measures how your products, and especially the service you provide, not only meet, but exceed your customer’s expectations.

Why a Satisfied Customer is Important

Customer satisfaction is essential because it gives you the metrics you can use to manage and improve your business.

You want to retain your customers and keep them loyal to your brand. What you need is for them to keep coming back, spend their money with you, and not jump ship to your competitor. 

If you want to succeed, your business needs to make customer satisfaction a priority. 

Here are a few more reasons to make customer satisfaction a focus in your business.

It Sets you Apart

When faced with two businesses that offer the same product, what makes you choose one instead of the other? If someone recommended one company over another, would that make a difference in the choice you ultimately make?

A company that offers a fantastic customer experience will create an environment where satisfaction and loyalty are high. Your happy customers will become advocates for your business. 

It is an Indicator of Customer Loyalty

A customer that is satisfied with the level of service they receive is more likely to remain loyal. 

Contrary to popular belief, price is not always a determining factor. It is the service you offer that creates customer loyalty and will likely motivate them to buy from you again.

It Reduces Customer Churn

The main reason for customer churn is the overall poor quality of service your customers receive. You can reduce your churn rate with a focused approach to customer satisfaction. 

When you measure and track customer satisfaction, you can use this valuable information to modify and improve your business practices. Emphasize exceeding customer expectations and “wowing” them, then measure it regularly to track the difference. 

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It Increases the Lifetime Value of your Customers

An InfoQuest study found that “totally satisfied customers” will contribute more than double to your revenue when compared to “somewhat satisfied customers.” 

If you think this figure is compelling, consider the following: According to the study, “totally satisfied customers”  will contribute over ten times more to your revenue than “somewhat dissatisfied customers.”

How much money a customer will spend is directly linked to their level of satisfaction. 

It is Cheaper to Retain than Acquire Customers

Marketing costs thousands of dollars. It can cost up to seven times as much to acquire a new customer as it does to retain the ones you already have.

When you sell to a customer you already have, your success rate is 60-70%, compared to only 5-20% when trying to sell to someone new. 

If these statistics do not strike a chord with you, not much will. Imagine what you could achieve if you allocate a part of your marketing budget towards customer retention. 

How to Measure Customer Satisfaction

Unsatisfied customers can cost your business a lot of money. Poor service can cause up to 80% of your customers to move to your competitor. 

Measuring customer satisfaction does not have to be expensive or complicated. Incorporating customer satisfaction measurements into your company strategy is quite simple.

The best way to gather information about the satisfaction of your customers is by making use of a satisfaction survey. Your first step is to determine the type of metric you want to use. 

Types of Satisfaction Surveys

When it comes to surveys, there are a few options you can opt for. You need to decide what works best for you, as every business is unique.

For the sake of simplicity, let’s look at the three most popular customer satisfaction metrics you can use.  

Customer Satisfaction Survey (CSAT)

CSAT Customer Satisfaction is the most commonly used metric, and measures how happy your customers are with your products and services on average. 

Why Measure with CSAT?

  • Exceed your customers’ expectations: Dissatisfaction often comes down to expectations. A customer satisfaction survey lets you know if you met the customer’s expectations and how you can do better.
  • Improve brand loyalty and customer lifetime value: Identify points of pain at your various touchpoints like sales, customer service, and with your products. Improve customer experience, and those same customers will remain loyal and spend more money with you.  
  • Reduce customer churn: CSAT helps you identify those customers who are likely to move to your competitors, allowing you to solve problems before it is too late. 

How to Measure CSAT

Customers are asked to rate their satisfaction on a numerical scale. You can set your survey scale to your choosing. It could be 1-3, 1-5, or 1-10. No one agrees unanimously about which rating scale is best. Select the one that works best for your business. 

You can measure customer satisfaction by using a variation of the question:

“How satisfied were you with [product/interaction]”

Customers use the following 1 to 5 scale to respond:

  1. Very unsatisfied
  2. Unsatisfied
  3. Neutral
  4. Satisfied
  5. Very Satisfied

You can customize the survey question, depending on the touchpoint that needs feedback.

Remember to include a comment section that will allow your customers to give a reason for their rating. Now you can target the areas that need improvement. 

How to calculate CSAT

Using the two highest values on feedback surveys is the best indicator of customer satisfaction. To calculate your customer satisfaction score, only use responses to 4 “satisfied,” and 5 “very satisfied.” 

Add the number of satisfied customers (4 and 5), divide this by the number of survey responses, and multiply by 100. You now have your percentage of satisfied customers. 

Using CSAT

CSAT helps you to evaluate your customers’ satisfaction by asking them to rate their experience immediately after the interaction. What you do with the scores to drive improvement in your business is what matters. 

Once you know your score, do more research to understand what drives the score and take action to improve problem areas.

Customer Effort Score (CES)

As a customer yourself, you would agree that all you ultimately want is your problems solved quickly and conveniently. The Customer Effort Score (CES) survey asks your customers to indicate how easy they found the experience with your business. 

One of the best ways to reduce your customer’s frustration is by making their experience a low-effort one. When a customer has a positive experience with your brand, they are more likely to remain loyal.

Why measure CES?

Customer Satisfaction
  • Keep your reputation positive: Unhappy customers tell other people about their experience. You not only lose out on a repeat customer, but you also risk having negative reviews posted to social media and the web. Bad reviews can cost your business a lot of money. If you identify issues before they happen, you can proactively manage your reputation. 
  • Improve self-service: Your customers would prefer to solve their problems without contacting you. Evaluate and improve your self-service channels. When a customer can help themselves, you will avoid unnecessary frustration. 
  • Reduce the cost of customer service: CES will reveal the areas you might need to implement more training or can improve on a process. By doing so, you speed up resolution and cut down the cost of repeat transactions.

How to Measure CES

Essentially you still measure customer satisfaction using a survey scale. The difference is that you are looking at how much effort it took on the customer’s part to solve a problem. 

Ask a survey question like:

“How easy was it to solve your problem with [your business] today?”

Customers use the following 1 to 5 scale to respond:

  1. Very difficult
  2. Difficult
  3. Neither
  4. Easy
  5. Very Easy

Avoid using the word ‘effort’ in your actual survey question. It does not translate well internationally and can easily cause misunderstandings.  A more generally understood word like ‘easy’ will work much better in this case. 

Include an open-ended comment section. Here your customer can tell you where they struggled. The feedback is the most important part of this survey because it will show you where to focus your attention to streamline service in your business. 

How to calculate CES

Your Customer Effort Score will range from zero to a hundred. 

Add the number of customers who agree that their interaction with your business was easier than they expected (4 and 5), divide this by the total number of received responses, and multiply this by 100. 

Therefore, if 70 customers out of the 100 you surveyed gave you a rating of 4 or 5, your Customer Effort Score would be 70.

Using CES

By monitoring CES over a period of time, you will be able to see how effective your process changes are. If the score dips drastically, you can use this information to take action before it spirals out of control. 

Your customer took the time to answer the survey. You need to close the feedback loop by resolving any issues the customer might have. Thank them for their feedback so that they know you heard them, and solve the problems you identified. 

Make sure that the team responsible for a low rating, gets the feedback. This way, they can do something to prevent it from happening again. 

Net Promoter Score (NPS)

Net Promoter Score (NPS) measures both customer satisfaction and loyalty. Because NPS is simple, effective, and connected to your revenue growth, it is a popular metric to use. 

Companies often create biased customer surveys. NPS removes this problem by letting the customer tell you exactly what they feel, and not necessarily what you would like to hear. 

The higher your Net Promoter Score, the more likely it is that your community of loyal customers will grow. With the growth in loyalty, you will also see a spike in revenue. 

Why measure NPS?

Customers who are willing to recommend your company to others are more likely to stay with your business. On the other hand, those customers that give you a poor rating will probably spread negative comments and take their business elsewhere. 

NPS will help you to identify both types of customers allowing you to take action.

The survey is easy to understand, will generate actionable insights, and ultimately help you to prevent customer churn. 

How to Measure NPS

The NPS survey is a single question:

“How likely are you to recommend (your business) to a friend?” 

The rating scale is from 1 to 10. With one being ‘not likely’ and ten ‘very likely.’

After your customer gives their rating, allow them to provide you with open-ended feedback. Here they can provide context for their score using their own words. Use this information to drive change in your organization. 

Group the Responses

Before calculating your score, segment the responses you get into three categories: detractors, passives, and promoters.

  • Promoter (Score of 9 or 10): Promoters are your loyal customers and will refer your products and services to others without being prompted to do so. Want to save some money on marketing? These customers will do word-of-mouth marketing for you.
  • Passive (Score of 7 or 8): Passive customers are neither disappointed nor satisfied with your products or services. They might mention your business to others but probably will not vouch for it. 
  • Detractor (Score of 6 and below): Detractors will not miss an opportunity to tell others about the inferior products or services they received. They are not happy and not scared to tell anyone who will listen.

How to calculate NPS

Calculate your Net Promoter Score by subtracting the percentage of detractors from the percentage of promoters. 

For instance, if 75% are promoters, and 16% are detractors, your NPS score is 59%.

Using NPS

Customer Satisfaction

You now have a good indication of how loyal your customers are to your brand, and can align your business around customer experience.

You can drive this information to your various teams, like sales, retention, and product development. They can then use it to make improvements and fine-tune processes. 

Track NPS over time. Your teams can address trends as they emerge, and you can quantify the impact of these changes on your customers’ experience. 

Turn the experience your detractors had around before they leave you for a competitor. 

Make your promoters brand ambassadors. Ask them to give you reviews. Reviews help keep your reputation healthy and promote your brand. 

Achieving Customer Satisfaction

Your business will run for as long as it has customers, and will become fruitful when those customers repeatedly come back. 

Regardless of the product or service you sell, your customer will not remain loyal unless you treat them appropriately before, during, and after the sale. You need to aim for optimum customer satisfaction if you want to ensure a long-term relationship. 

What sets most top brands apart from the mediocre is a fantastic customer service process. Customer satisfaction is the key to your success.

Tips to Improve Customer Satisfaction

Every customer is unique, and it can be quite hard to satisfy all of them. There are activities you can perform that will work for your business. What are they? Read on to find out.

Communicate with your Customer

How do you create a relationship of mutual trust with your customers? Regularly interact with them. Customers want to feel that you are openly communicating with them. 

Have confidence when you approach your customers and find out more about their needs. Be honest about what you can do, as well as what you can’t. Be forthright and solve problematic situations before they happen. 

Train your Customer Support Team 

A customer will be happy when your support team has a ‘can-do attitude. Ensure that your employees are well-trained and competent. They need to be able to solve any problem, even the unexpected, that rears its ugly head. 

Empower your team to make decisions, and to be creative when solving problems. You will win your customers over if they never have to speak to a superior.

Speedy Service

In this rat race called life, nobody has time to waste. What people despise even more is when you waste their time unnecessarily. Customers expect prompt service. If a customer needs to make a second call when they need help, they will be frustrated and probably angry.

Focus on quality service, set deadlines to accomplished tasks in a timely and efficient way. Make sure your employees understand these standards and promote them to your customers. 

Who’s the Boss? 

Typically, a dissatisfied customer will tell up to 10 people about their experience. A satisfied customer will most likely tell nobody. If you resolve a customer’s complaint immediately, 7 out of 10 customers will return. 

Without a customer, your business can close its doors. Respond to customer complaints positively and without delay. 

Have Solutions Not Dead Ends

Offer your customer positive solutions, not more problems. Your customer does not want to hear what you cannot do for them.

If your employees cannot solve a problem, they should know where to direct the customer. 

Listen To Your Customer

Hearing is not enough. Listen to what your customers are telling you. Feedback is not a curse; it is a blessing. 

If you want your business to be successful, listen to your customers, and respond to their needs. Gather customer feedback and implement changes. Doing so will set you on a path to grow, strengthen your company, and increase customer satisfaction.

Encourage complaints

95% of dissatisfied customers won’t complain. Did you breathe a sigh of relief? You shouldn’t because these unhappy customers will probably not do business with you again. 

Sending a regular email, where you ask your customers for feedback, will give them a chance to complain. You now have a golden opportunity to email them back and solve their problems. To use an age-old adage: You just turned their frown upside down. 

Post-Purchase Dissonance

Post-purchase dissonance is when your customer is not satisfied after making a purchase. Next to customer satisfaction, this is the second type of reaction you could have after buying a new product or service.  

Doubts about the product or service do not always cause post-purchase dissonance. Your dissatisfaction could be because you received incorrect or incomplete information before putting down your money. 

How to Reduce Dissonance

There are several ways you can strive to reduce dissonance.

  • Let your customers try the product before they buy it. 
  • Give away free samples.
  • Offer to refund their money is they are unhappy with the product.
  • Give customers the option to return the product without consequences. 
  • Offer them an above-standard warranty.

Statistics to Consider

Brands, products, and prices no longer determine customer loyalty. The service you provide is the driving force behind customer loyalty.  

All forward-thinking companies know this and make customer satisfaction and experience a strategic priority.

Customer Service Stats for 2019

Times are changing fast. What do the top businesses of the world say about customer service, satisfaction, and experience?

Read the statistics gathered by CustomerThermometer, and decide for yourself if customer satisfaction should become a priority for your business. 

Some Statistics include:

  • 54% of consumers have a higher expectation for customer service at present when compared with the previous year. This ratio increases to 66% when discussing customers aged between 18 and 34 years. – Microsoft 
  • In the year 2017, 64% of U.S citizens got in touch with some alteration of customer service. – Statista
  • Internationally, 96% of customers claim customer service is a deciding factor as to whether they should place their loyalty in a brand. – Microsoft 
  • When consumers get asked what influences their level of confidence in a company, offering outstanding customer service comes in as their priority. – Zendesk 
  • 34% of companies making use of “customer journey mapping” as part of their customer service. – Salesforce
  • 90% of consumers are influenced by a positive review of a product when deciding to buy or not. – Zendesk
  • Nearly all Customer Experience Leaders are positive that Customer Experience Supervision leads to a constructive effect on the business. – Lumoa 
  • 84% of organizations that work to improve the customer experience report an increase in revenue. – Dimension Data


Millennials are people born in the ’80s up until the year 2000. These people grew up in the digital age and are the largest consumer demographic. You would be wise to focus on them when planning your strategy. Generation X may be a business’s main target now, but Millennials will be the ones to replace them. Gen Z will be even more tech-savvy, so it may require a completely different approach to achieve customer satisfaction.

Customer Communication

Generally, a millennial is likely to pay more with a business that has proven they can do customer service the right way. On top of that, they are also more likely to tell their friends about a great service experience. However, you may need to change some of your business practices if Millennials are your target audience as they prefer to going online or using social media for customer service interactions, as opposed to over the phone.

As technology has evolved, so too did the way you can get in touch with a company. You can now use email, social media, webpages, live chat, and messaging apps. Using these channels of communication will have a direct impact on customer retention. 

Over half of all customers:

  • Prefer to contact companies via email or social media rather than use call-based customer support. 
  • Are influenced by online customer service reviews when making a purchase decision. 
  • Expect some form of an online presence for customer service. 
  • Complete surveys on their mobile. 

Exceptional Customer Service Should be Your Business Reality

Customer service is not merely a department. It is a philosophy you should embrace at every level of your organization. 

Training all your employees in the art of meeting and exceeding customer expectations should be at the heart of your business strategy. Untrained people often have the most severe impact on your company image. Training should start on the first day. Your employees should not even start working until they receive basic training. 

Measure customer satisfaction, experience, and loyalty regularly. Do not underestimate the benefits you get from the feedback you receive. Look at the statistics to see the excellent impact service has in the digital age. 

Make use of the wealth of information, tools, and software readily available to help you in the task of creating customer happiness. 

Think of the money you can not only save but make. Customer satisfaction directly impacts your bottom line. You are in business to make money. Why would you want to sabotage your profit margins?

When you compare the pros and cons of having a customer-centric organization, the positives far outweigh the negatives. When customer experience becomes your focus, your business will thrive. 

How will you improve customer satisfaction levels in your business? Do you think it is crucial to have loyal customers? What types of surveys or metrics will work best for your business? Please leave a comment; we appreciate your feedback.

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