Insights and Resources

Measuring customer satisfaction

ARTICLE | March 26, 2023

Measuring customer satisfaction provides a business with critical feedback, but unfortunately, many companies fail to survey their customers regularly. Customer satisfaction scores can help companies determine if they're meeting customer expectations, identify customers at risk of leaving, and identify evangelists for their products and services. The results can also help a company better define its ideal custom personas, which enables marketing and sales to focus on prospects who are most likely to buy. 

What is customer satisfaction, and how can it affect your business? 

Customer satisfaction is best understood in terms of customer experience, which is the total sum of a customer's interactions with, and thoughts about, your business. By measuring satisfaction, you can determine how well you meet or exceed your customers' expectations. 

Measuring customer satisfaction can affect your business in several ways. First, customer satisfaction directly impacts your bottom line. Customers tend to stick around and spend more money with your business when they are happy.

Second, customer satisfaction metrics can help you identify which of your customers are most satisfied and why - information that's valuable for any business. For instance, highly satisfied customers are most likely to refer new business to you - a form of word-of-mouth marketing that can lower your customer acquisition costs. Additionally, by identifying which customers are most satisfied, you can refine your ideal client persona to ensure you're appealing to the prospects who are most likely to purchase and be happy with your offerings. 

Third, it can help you identify dissatisfied customers and issues potentially costing you business. Unhappy customers not only stop purchasing your products and services, but they tend to tell others about their dissatisfaction. Addressing dissatisfaction and retaining customers is much less expensive than attracting and acquiring new customers. For example, studies have shown that it costs up to five times more to acquire a new customer than to keep an existing one. In other words, retaining just a few extra customers can significantly impact your profits (and prevent losses). 

What metrics should you measure?

Three common metrics to track are customer satisfaction, customer effort, and net promoter scores.  

Customer satisfaction scores

The customer satisfaction score measures a customer's specific experience with your products and services. Customers are typically surveyed immediately after interacting with your business when their experience is fresh in their minds. This score can be tied to specific products and services, setup, training, and customer support. 

Customer effort scores

The customer effort score gauges how easy it is for a customer to purchase your products and services. Many businesses survey customer effort simultaneously as customer satisfaction because the questions are about the customer's recent experience. This score aims to identify ways to improve the customer's buying experience and reduce any friction during the process. 

Net promoter scores

The net promoter score (NPS) determines how likely a customer is to recommend your company to others. NPS can be measured at any point in the customer life cycle and is often measured periodically throughout the year. One strategy is to survey a portion of your customers each month or quarter to monitor trends in the NPS. For example, survey 1/4 of customers each quarter to calculate NPS score trends throughout the year.  

For all customer satisfaction metrics, it's helpful to analyze scores by customer segments, such as demographics or other attributes. This can help a company identify customer segments with strong customer-product fit versus selling to detractors. Companies often focus on detractors because they're loud when perhaps a better strategy is doubling down on efforts with promoters and avoiding sales to detractors.

Steps for measuring customer satisfaction.

#1 Assess goals and create a plan

When measuring customer satisfaction, it is essential first to determine your goals for conducting the survey. What key areas do you want to measure? For example, you may ask questions about the buying experience, implementation, or follow-up support to see if there are any issues in that specific process.

It's also important to designate someone to champion the survey. This person should be involved with every step of the design process, implementing the surveys and analyzing results. 

By taking the time to consider your goals and plan of action thoughtfully, you can ensure that your customer satisfaction survey is effective in helping you achieve your desired results. 

#2 Design the survey

Your survey's goals should determine the metrics you want to measure. Once you've identified your goals, you can customize your survey's questions and layout. It's important to keep your survey as concise as possible because shorter surveys tend to have better completion rates. Do not ask questions if you aren't going to do anything with the information - keep your survey to the point. 

#3 Determine who and when to survey

What actions or events will trigger your survey? Will customers be asked to complete a survey after making a purchase? Will you survey customers after they take delivery or begin using a product? What about after an interaction with customer support? You may even want to have different actions trigger different types of surveys. For example, you may want to survey customers who haven't purchased within the past six months to determine if anything is wrong.  

#4 Analyze your data and make improvements

The final and arguably most crucial step in measuring customer satisfaction is to analyze the data you've obtained. For NPS, segment responses into dissatisfied customers, passive customers, and promoters because you'll likely have different responses for each group. You can reach out to promoters and offer special perks and incentives for referrals or online reviews. Dissatisfied customers should receive customer support right away. And you can work to turn passive customers into raving fans. 

This article is intended to provide a brief overview of measuring your customers' satisfaction. We provide this information as a tool for business owners to grow and improve their businesses. It is not a substitute for speaking with one of our expert advisors for personalized advice and recommendations. If you'd like to learn more about growing and protecting your business, please contact our office. 

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