What is customer satisfaction score and Why does csat score matter
Farwa Anees
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What is a Customer Satisfaction (CSAT) Score? And Why Does It Matter?

Successful businesses always seek new ways to improve their performance even when they seem to be performing excellently. However, companies might not improve the way they should if they don’t get feedback from their customers. That’s where CSAT score help them.

Fortunately for all businesses, customer satisfaction (CSAT) scores can help them know their customers’ minds. This article will teach you things a business-oriented mind should know about customer satisfaction scores. The items you will find here include the following:

  • What is a Customer Satisfaction (CSAT) Score?
  • What Types of Metrics Measure Customer Satisfaction?
  • How to Calculate CSAT Score
  • Top Tips for Conducting a Customer Satisfaction Survey
  • How to Increase Customer Satisfaction Score?
  • Benchmark for Customer Satisfaction Score
  • What brands can do with Customer Satisfaction Scores
  • Why does CSAT Score Matter?

Let’s start right away:

What is a Customer Satisfaction (CSAT) Score?

Customer satisfaction score is a metric that measures the satisfaction customers derive from services or goods. Businesses use this metric to check whether their goods and services meet customers’ expectations.

As a business owner, you can obtain raw data from simple customer satisfaction surveys. After that, you can calculate the CSAT score from the raw data. Customers often come across surveys after purchasing goods and services, but they come across them a few times before they complete a purchase.

What Types of Metrics Measure Customer Satisfaction?

CSAT score isn’t the only metric that measures customer satisfaction. A few other metrics that measure customer satisfaction include the following:

  • Net Promoter Score (NPS)

NPS measures customer satisfaction as well as their loyalty to a business.

Customer Service Satisfaction (CSS)

Just as the name implies, this metric measures the satisfaction customers derive from services.

  • Customer Health Score (CHS)

This metric measures customer satisfaction and also indicate customers’ willingness to continue patronizing a particular business.

  • Customer reviews

Customers can use reviews to express their satisfaction with a business.

customer reviews

The image above shows an example of a survey for obtaining a customer satisfaction score. Customers can complete this particular survey within a few seconds since they only need to tick on the number of stars representing their level of satisfaction.

How to Calculate CSAT Score

Now that you know what customer satisfaction score is and its importance in increasing business growth and sustainability, you may wonder how businesses derive the score. Let’s show you how to calculate customer satisfaction scores. You should know that companies calculate CSAT scores using the data they obtain from customer satisfaction surveys.

csat score formula

The best time customers should answer CSAT surveys are as follows:

  • After purchasing or testing a product
  • After interacting with customer support
  • After attending a webinar
  • After a business change, one of its major strategies

CSAT surveys usually contain a few rating scale questions. The scale is generally between 1 to 5. Scale 5 and 4 are positive. Scale 3 is neutral. Scale 2 and 1, on the other hand, are negative.

Based on the scale we just mentioned, the CSAT score calculation goes thus:

CSAT score in percentage =  X 100%

The example below illustrates the CSAT calculation.

Company X created a survey containing the following scales for 30 customers.

  • Very satisfied
  • Satisfied
  • Somewhat satisfied
  • Not satisfied
  • Very dissatisfied

If the business delights 20 customers, satisfies 4 customers, but fails to satisfy 6 customers, the CSAT score of company X is as follows:

Company X’s CSAT score = X 100% = 80%

What Is a Good Customer Satisfaction Score?

The average customer satisfaction score and customer satisfaction net promoter score vary across sectors. But does that mean the CSAT score that businesses consider to be good also varies across sectors? A good customer satisfaction score for all sectors is 75% or higher. Any score below 75% is bad.

Top Tips for Conducting Customer Satisfaction Survey

Are you aware that some businesses don’t get responses from many customers when they conduct a survey? If you are aware, do you know that some factors are responsible for the inadequate response? We will tell you some top tips to encourage people to participate in a customer satisfaction survey. Here are those tips:

1.      Keep the survey short and straightforward

Nobody likes answering complex and lengthy surveys. Don’t include unnecessary phrases in your questions. Also, you should avoid asking too many questions. You may seem to have many questions to ask from your customers, but you shouldn’t ask every question that comes to your mind. Instead, it would be best to filter out some questions after coming up with a long list of questions.

2.      Don’t ask too many questions at once

Customers may become confused if you ask too many questions at a time in surveys. For instance, a question which says “will you like to test our product and recommend it to your friend?” isn’t good enough. While the question may appear straightforward, some customers may not be willing to answer with a yes or no.

Some customers might be willing to test the product but feel reluctant to recommend it. Others might even not have a chance to try it but are eager to recommend it to friends. These two different categories of customers can’t simply answer the question with yes or no. You can avoid issues of this kind by asking only one question at a time.

3.      Don’t include leading questions in surveys

Leading questions can influence customers’ decisions while answering a survey. While this fact may seem to help businesses get positive feedbacks, it makes the data obtained from surveys unreliable. The purpose of a customer satisfaction survey is to check whether a business satisfies customers and not make customers declare satisfaction.

Besides, leading questions may appear like pride, making such questions sound irritating to some customers. Kindly check this question to see an example of a leading question. “Our services are greater than your expectations. What can you say about that?” We recommend that you avoid questions like this because it already suggests an opinion to readers.

4.      Reward survey respondents

You may not be able to get many responses if you don’t reward survey respondents. Having many respondents allows you to obtain reliable data because you’ll have lots of answers to analyze. Some of the rewards you can offer include discounts and giveaways.

How to Increase Customer Satisfaction Score?

You shouldn’t feel bad if you own a business and you notice that the CSAT score of your business is meager. Instead, you should work hard and smartly to increase it. After all, the purpose of a CSAT score is to identify areas that need improvement. The things that we recommend doing to improve customer satisfaction scores are:

1.      Work on complaints from customers

There are lots of things you can learn from your customers. If you take your time to examine the things customers complained about and fix the complaints, your business’s CSAT score will increase when you conduct another CSAT survey. Your customers will also be happy when you select things they complain about.

customer satisfaction

 

2.      Work on your customer service

Most customers won’t give negative feedback through a customer satisfaction survey if your business’s customer service is excellent. Good customer service allows you to identify your customers’ problems and solve them as soon as possible.

Besides, some of the negative feedbacks that affect CSAT scores aren’t related to the overall business performance; instead, they relate to a customer service experience. Customer service representatives are like business ambassadors, so customers will likely give negative feedback through the CSAT survey if the representatives don’t satisfy them.

3.      Increase the quality of the things you offer to customers

Low-quality products and services can cause your business’s CSAT score to be meager. As a business owner, you should evaluate your products and services if you notice that your company has a low customer satisfaction score. Even if your customers were once delighted with your business, you still need to seek ways to improve your products and services.

It’s important to note that customers’ expectations change over time. As a result, your business may not satisfy your customers forever if you fail to improve as time goes by.

4.      Build a strong relationship with your customers

There are several reasons businesses should build a relationship with their customers. One of those reasons is to identify what customers desire and grant those desires. Successful companies don’t wait for things to go wrong before interacting with their customers; instead, they interact with them all the time.

Businesses will have the privilege to know exactly what their customers think about their products and services when they maintain a good relationship. Customers are unlikely to show dissatisfaction for a business that maintains a good relationship with them. Some brands even use humor and meme marketing to promote cordial relationships with customers.

Even if a few issues arise, customers are likely to be patient until businesses resolve the problems rather than show dissatisfaction. However, we don’t encourage companies to allow matters to rise and hope for positive attitudes from customers.

5.      Use modern technology

Modern technology can help you satisfy your customers better than ever. For instance, technology can help you track the things your customers want. Also, technology enables you to serve your customers maximally.

Benchmark for Customer Satisfaction Score

As a business owner, you might want to know the ideal CSAT score to target. The CSAT score indeed varies by sector. Check the table below to see the CSAT benchmark for various sectors in the US this year.

Sector Benchmark for CSAT score
Manufacturing sector (non-durable goods) 79.2%
Manufacturing sector (durable goods) 78.3%
Accommodation and Food Services 77.9%
Finance & Insurance 76.0%
Transportation sector 75.6%
Retail Trade 75.5%
Telecommunications and Information 72.2%
Energy Utilities 72.1%
Health Care and Social Assistance 71.7%
Public Administration/Government 63.8%

 

Businesses shouldn’t stop taking actions to improve their customer satisfaction scores even if they are above the benchmark. The benchmark should serve only as a reference and not a limit. There are many companies whose CSAT scores are higher than their sector’s benchmark.

In 2020, For instance, the customer satisfaction score of Amazon.com was 79%, even when the benchmark for retail trade was 75.5%.

What Brands Can Do with Customer Satisfaction Score

Although the customer satisfaction score is primarily for measuring customer satisfaction, brands can use the score for other things. Here are some of the things brands can do with customer satisfaction scores:

1.      For building brand reputation

People love doing business with reputable brands. Fortunately, high CSAT scores can help brands build a strong reputation. For instance, a brand with a CSAT score of 90% will be attractive to everyone.

Even if the public doesn’t believe the message from a brand’s marketing team, a high CSAT score will convince the people to do business with the brand.

customer satisfaction index

The customer who tweeted the message above referred to Amazon’s customer satisfaction score while promoting Amazon on Twitter. This type of massage can help Amazon build a solid reputation.

2.      For developing a new business strategy

Brands can come up with a new strategy after analyzing their CSAT score. Some brands conduct customer satisfaction surveys primarily for this purpose. For instance, a brand that wants to introduce a new feature can ask customers to test the unique quality and rate it. If a brand notices that the new feature has a low CSAT score, it can create a different digital marketing strategy.

3.      For training employees

Customer satisfaction score gives brands the privilege to monitor their overall performance and the performance of employees. For instance, the CSAT surveys customers usually come across after speaking with customer service generally mean to train customer service representatives.

There are lots of things employees can learn from customers. They can learn how to treat customers, relate with them, satisfy them, and lots more. Also, they will understand how their efforts affect customers.

4.      For tracking brand’s progress

Brands can use the CSAT score to track progress, especially when combining the score with other tracking metrics. Their high customer satisfaction score can identify successful businesses. If a brand that once had a high CSAT score suddenly starts noticing a decrease in the score, it means something is wrong somewhere. We recommend that brands compare their current CSAT scores to the past ones to see whether they are progressing or not. Such comparison can motivate brands to improve as time travels.

Why does CSAT Score Matter?

CSAT score isn’t just a metric that has nothing to do with the success of a business. Instead, it helps companies to succeed, mainly when they use it appropriately. Some of the important reasons for customer satisfaction scores are:

1.      It helps businesses monitor their performance

Sales determine the success of businesses, and customers are the ultimate target for selling the goods or services. A good company should perform according to customers’ expectations. Most business owners find it hard to tell whether their business is performing according to customers’ expectations. However, the smart ones use the CSAT score to get performance feedback from their customers. Check the tweet below to see what Walmart intends to do with input from customers.

customer feedback

Walmart uses feedback to monitor and improve its performance.

2.      It helps businesses make the best choice

All kinds of businesses make decisions almost all the time. Sometimes the choices that companies make don’t favor their customers. But how can a company know whether its options incline its customers?

Luckily, it isn’t hard to know since businesses can see their customers’ responses from customer satisfaction surveys. For instance, if a business suddenly introduces a new feature or product, it would be best for such a company to find out whether customers are happy about the newly introduced feature/product.

If the customer satisfaction score reveals that customers are happy about the new feature, the business will know that its decision to introduce a new feature is good. However, if the customer satisfaction score reveals that customers are unhappy about the part or unique quality of the product, it can reverse its decision immediately.

3.      It can serve as motivation

In the current age of technology, feedback is the key player. Positive feedback can motivate a business to perform better. Although one may assume that a low CSAT score kills motivation, it drives companies to improve those areas highlighted by their customers.

4.      It helps businesses determine their success

CSAT scores can influence customers’ decisions. Customers are always willing to patronize businesses that are possible through high customer satisfaction scores. A low customer satisfaction score, on the other hand, repels customers. Of course, businesses need customers to be happy and satisfied.

5.      It can make a business discoverable on the internet

At this modern time, the majority of the individuals buying products or services seek potential sellers on the internet. Search engines never suggest all available sellers to searchers. Instead, they offer just the top sellers to searchers. It might surprise you to realize that customer satisfaction is among the full criteria search engines use for suggesting businesses to people.

Bottom line          

As the name implies, a customer satisfaction score is a metric for determining customers’ satisfaction with a business. Customer satisfaction score isn’t just a metric without real benefits; instead, it’s a metric that comes with lots of benefits. Innovative brands can even use it to market themselves, develop new strategies, and train staff.  If you are a business owner, we recommend taking the customer satisfaction score seriously and enjoying the benefits of a high CSAT score.

About the Author

Farwa is a Digital Marketer who likes to share her insights and experiences via writing. She likes to test and experience new eras in marketing and share them through blog writing.

What is customer satisfaction score and Why does csat score matter

What is a Customer Satisfaction (CSAT) Score? And Why Does It Matter?

Online Branding
Successful businesses always seek new ways to improve their performance even when they seem to be performing excellently. However, companies might not improve the way they shoul...

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