Ask anyone in the world of business what their company’s number one goal is and they’ll most likely say “making sure our customers are satisfied”. Whether or not they actually mean what they say is up for debate, depending on who you ask. But I digress…
The point is, most people will acknowledge that in order for a business to thrive, it must focus heavily on making its existing, paying customers happy.
But of course “satisfaction” is subjectively defined by the individual customer: one customer might be blown away by a certain aspect of your service, while another might be rather indifferent to that very same thing.
Unfortunately, this makes it rather difficult for companies to realistically gauge their ability to satisfy their customers. In fact, 80% of CEOs and managers think they provide superb service to their customers – but only 8% of their customers agree.
So, it’s safe to say that most service providers really don’t know whether or not their customers are truly satisfied. Furthermore, even those that solicit such information from their customers (through surveys, interviews, and other outreach methods) might not know exactly how to assess or utilize the data to increase their customer service initiatives.
We’ve touched on assessing customer satisfaction in our previous post on developing customer service surveys, but we also left a lot unsaid.
In this article I’ll share how you can analyze specific metrics within your company in conjunction with survey responses from customers in order to paint a more complete picture of your company’s ability to satisfy your customers.
Before we dive in, though, let’s look at exactly why it’s so important for your company to focus on improving customer satisfaction.
The Importance Of Customer Satisfaction
There’s no denying that providing amazing service to your customers is important. In fact, it seems like a rather obvious statement to make.
But, to make your efforts to improve customer satisfaction meaningful and worthwhile, it’s essential that you truly understand the impact doing so can have on your company.
According to a 2006 study by professors at Cornell University, an increase in customer satisfaction:
- Is an indication that critical aspects of your service meet and exceed your customer’s expectations
- Positively correlates to an increase in a customer’s intentions to become a brand loyalist
- Leads to positive word-of-mouth and brand evangelism
All of this, in turn, leads to:
- Increased retention rates (and decreased churn rates)
- Increased customer lifetime value
- Decreased customer acquisition cost
As we said earlier, most people wouldn’t argue with the fact that satisfying your customers is good for business. However, knowing why doing so is good for business is even more important, as it allows you to truly see the impact your efforts will have on your business as a whole.
Factors Contributing To Customer Satisfaction
We mentioned in the introduction that customer satisfaction is subjective to the individual consumer.
Though each of your customers will come to you with a variety of needs and expectations, most of these expectations will revolve around the following aspects of your service:
- Quality of Product or Service Being Offered: Obviously, if your main offer doesn’t at least measure up to industry standards, you have little hope of satisfying your customers. However, while providing a quality product/service is essential, doing so does not necessarily guarantee customer satisfaction.
- Commitment to Customer’s Success: The mantra “the customer is always right” really means “the customer’s success always comes first.” In other words, you need to always be looking for ways in which to help your customers reach their goals. By relentlessly striving to help your customers overcome obstacles, you’ll go a long way toward generating a high level of satisfaction within them.
- Accessibility: This refers to both the accessibility of your products or services and your company’s customer-facing services. If your products are difficult to find (in-store or online) or are unable to be delivered, your customer will need to expend extra effort where they shouldn’t need to do so – leading to lower overall satisfaction. Similarly, if they are unable to access a representative of your company when needed, it could make an already difficult situation even worse.
- Pricing: The price of your offering definitely plays into your customer’s overall satisfaction. But that doesn’t mean yours needs to be the lowest among your industry; it just means you need to ensure that the price your customers pay correlates to the quality of the product or service they receive.
- Transparency: Many modern consumers are incredibly conscious of the overall mission of the companies they do business with. Not only do they want a quality product in exchange for their money, but they also want to know their money is going to a trustworthy organization that operates with a conscious. Don’t betray that trust.
- Consistency: Satisfying your customers isn’t a one-time thing – it’s an ongoing process. The one time you slack off and provide a subpar experience to your customer may very well be the last time that individual walks through your doors. So, it’s incredibly important that you strive to go above and beyond your customers’ expectations each and every day.
- Aesthetics: The general “feel” of your store or website, and your overall brand, definitely plays into your customer’s overall satisfaction level. Though not as tangible as most other factors on this list, the aesthetics of your company can affect your customers’ shopping experience – for better or worse – and make them more (or less) likely to return in the future.
Now, not all of these factors come into play all the time. And, from customer to customer, the intensity with which each of these factors come into play varies heavily.
Think of Starbucks, for example. While a person that’s simply looking for a plain ol’ cup of coffee on their way to work might think the company sets its prices too high, a person who works remotely sees nothing wrong with the $4-per-cup price tag, as their payment also allows them to hunker down in a cozy chair and get some work done.
Another example is TOMS Shoes, who famously donates a pair of shoes for every pair a customer purchases. Again, the price of these shoes might be a little higher than what many consumers would expect for a simple walking shoe, but the understanding is that the extra dollars paid go towards helping a child or family in need.
The point is you probably aren’t going to be able to please every person that engages with your company – at least not by following a specific template, or trying to hit every point on this list.
Instead, you need to determine which of these factors are most important to your customers – and work tirelessly to ensure that you’re meeting their expectations in these areas.
Indicators Of Customer Satisfaction
In a moment, we’ll discuss the types of surveys and survey questions that are most effective in determining your customers’ overall satisfaction levels.
But first, let’s quickly touch on the actual metrics the results of these surveys unveil – as well as the metrics you can glean without conducting a survey – and how these metrics relate back to customer satisfaction overall.
Metrics Gathered Through Surveys
For our purposes, we’ll focus on the following customer satisfaction metrics that can be determined by conducting surveys:
- CSAT (Customer Satisfaction Score): CSAT is determined by asking customers questions that directly relate to their overall satisfaction with your company. While the score itself is rather straightforward, it shouldn’t just be taken at face value; many factors (such as cultural differences and subjectivity) can complicate the “on-paper” results of a CSAT survey.
- CES (Customer Effort Score): CES determines how much effort a customer felt the had to expend when engaging with your company in order to reach their goals. It can be used to gauge their overall satisfaction with your brand, or to pinpoint their level of satisfaction with a specific aspect of your service.
- NPS (Net Promoter Score): NPS showcases your customers’ propensity to recommend your brand to others within their network. As it’s rather safe to assume that those who would recommend your services are, indeed, satisfied with said services, determining your company’s NPS can certainly help define your customers’ satisfaction levels.
As we noted above, there’s more to these metrics than a simple “score.” For this reason, surveys focused on these metrics should include follow-up questions that serve to clarify the quantitative responses your customers provide. We’ll get more into this shortly.
Metrics Gathered Through Internal Data
There are also certain customer satisfaction-related metrics that can be gathered simply by assessing your company’s performance in a variety of areas, such as:
- Customer Complaint Ratio: Calculated by dividing the total number of transactions by the amount of complaints received, your company’s complaint ratio tells you what percentage of your customer base is so dissatisfied that they feel the need to open up a complaint ticket. Note, however, that the vast majority of dissatisfied customers won’t actually take the time to complain; they’ll simply stop doing business with you.
- Churn Rate: Churn rate is calculated by subtracting the number of customers at the end of a specific period (e.g., month, quarter, or year) from the number of customers at the beginning of that period, then dividing by the number of customers at the beginning of the period. While other reasons for churn do exist (e.g., relocation, no need for continuing service), it’s a safe bet that a high churn rate means you’re not doing much to satisfy your customers.
In both of these cases, you can compare your current results against two benchmarks: your company’s past performance and current industry standards. Of course, you ideally want to get both of these numbers as close to zero as possible – but it’s much more realistic to think in terms of steadily decreasing each over time.
Focus Of Surveys & Questions To Ask
As we said earlier, you can determine your customer’s satisfaction levels by asking questions that specifically address satisfaction, or by asking questions that relate in some way to a certain aspect of satisfaction.
In this section, we’ll discuss the types of surveys to distribute, as well as the questions these surveys should include, in order to assess customer satisfaction.
Customer Satisfaction Survey
Really, there’s no more simple way to determine a customer’s level of satisfaction with your company than to just ask them about it.
Customer satisfaction surveys revolve around a single statement:
“Overall, I am satisfied with my experience with (Company).”
Respondents will then be asked to choose a single answer on a Likert scale, ranging from “Strongly Agree” to “Strongly Disagree.”
Customer satisfaction surveys can also focus on various aspects of your company’s services, asking customers to respond to statements such as:
- “I am very satisfied with the level of service (Company’s) representatives provide.”
- “I am very satisfied with the professional nature of (Company’s) team members.”
- “I am very satisfied with (Company’s) level of dedication to me as an individual.”
- “I am very happy I bought (product/service).”
- “I enjoy using (product/service).”
- “Purchasing from (Company) was the right decision.”
Again, such survey questions are straightforward, as will your respondents’ answers be. However, you can still benefit from asking open-ended follow-up questions in order to clarify responses that seem like outliers (or just to get a better understanding of the reason behind certain responses).
Once more, though: customer satisfaction is entirely subjective to each individual consumer. To get a better idea of what “satisfaction” means to your customers – as well as which aspects of your service they deem most important – consider conducting a semantic differential scale survey before distributing a customer satisfaction survey.
Retention & Loyalty Focused Surveys
A customer that actively reports their intention to remain loyal to your brand is, in essence, telling you that they’re incredibly satisfied with the service you provide them.
That being said, you can gauge your customers’ levels of satisfaction by asking them to address their willingness to continue doing business with your company in the future (as opposed to directly asking them questions regarding satisfaction, as mentioned above).
For surveys focused on loyalty, you might ask customers to respond to statements such as:
- “I will purchase from (Company) again within the next year.”
- “(X aspect of service) makes me want to purchase from (Company) again.”
- “Improving (x aspect of service) would make me want to purchase from (Company) again.”
- “I want to join (Company’s) loyalty program.”
Each of these questions focuses on a different areas of customer loyalty:
- Overall propensity to become loyal
- Aspects of your service that drive loyalty
- Aspects of your service that could drive loyalty if improved
By addressing these issues and analyzing them in conjunction with one another, you’ll gain even more insight into how satisfied your customers are – and what brings them to this level of satisfaction.
Evangelism Focused Surveys
Going a step past retention, a customer who reports a willingness to recommend your brand to others within their network is, without a doubt, completely satisfied with the services you provide.
We’ve discussed Net Promoter Score at length in a previous article, but let’s quickly go through the basics.
An NPS survey consists of a single, central question:
On a scale of 0-10, how likely are you to recommend our products/service to a friend, family member, or colleague?
Note: The above article explains the process of calculating NPS in greater detail. For the purpose of this article, let’s focus on the actual responses you get.
While the purpose of distributing an NPS survey is, of course, to determine your company’s NPS, this requires you melt each of your responses down to a single score. But there’s also a lot to get out of each individual response, as well.
First of all, calculating NPS requires that you ignore an entire group of respondents (those who responded with a score of 7 or 8 out of 10). These individuals are labeled “Passive” customers: those who aren’t exactly rabid fans of your company, but aren’t necessarily unhappy with your service, either.
Second of all, customers who respond with a score of 6 are placed in the same category as those who respond with a score of 0 – even though the latter is clearly much less satisfied than the former. Again, this isn’t taken into consideration when calculating NPS.
As we suggested for the other surveys, it’s beneficial to include follow-up questions within your NPS survey, such as:
- “What aspects of (Company’s) service would you mention when recommending (Company)?”
- “What improvements would make you more likely to recommend (Company) to your network?”
- “What areas of (Company’s) service make you unlikely to recommend (Company) to your network?”
Obviously, each of these follow-up questions is tailored to a specific response category (Promoter, Passive, and Detractor respectfully). If you send the survey in physical form, make sure respondents know which question pertains to them; if sent electronically, you can use skip logic to ensure respondents are provided with the correct follow-up question.
At any rate, an NPS survey can not only determine your customer’s willingness to recommend your brand to others, but can also help you pinpoint exactly why they are (or are not) willing to do so.
There’s no doubt that creating various surveys for your customers to respond to can help you gain insight into what they want from your company, as well as your ability to satisfy their needs.
But you can get much more out of these survey responses by analyzing them through a “real-world” lens (as opposed to analyzing the “on-paper” results).
In other words, what your customers say with regard to their satisfaction is only half of the story. How they act (e.g., actually returning for subsequent purchases, or actually referring your brand to a friend) tells the other.
By taking both sides of your customers’ “stories” into consideration, you’ll get a much better idea of how satisfied they are with your service.
Get started by creating a customer feedback survey using one of our pre-built templates. You can add your logo and colors and start collecting feedback in less than 5 minutes from now.