Introduction - customer satisfaction is the end goal of companies
For any consumer-centric company, the hard work doesn’t end after offering products and services to its customers. In fact, the real mission lies in satisfying and delighting the customers through their products and services - so that they come back for repeat purchases. Another critical benefit would be spreading positive news about the business to everyone else.
In the case of every consumer-facing organization, it is essential to keep reminding everyone in the company of what they are doing and the reason for the same - providing a top-notch customer experience. Offering a superb customer experience results in customer satisfaction, which spikes positive customer behavior like retention.
What is customer satisfaction?
It is difficult to define customer satisfaction. Although, on the surface, it implies having satisfied customers, it is quite challenging to find out what makes them satisfied.
In simple terms, customer satisfaction can be defined as the overall feeling of a customer about a company and its offerings - products, and services. Customer satisfaction can be found by comparing the customer expectations regarding a company, and the customer experience regarding the same.
Customer satisfaction goes hand in hand with consumer experience. A simple increase in a company's customer satisfaction scores (CSAT scores) results in increased trust from the customer end. On the other hand, if the company’s customer satisfaction efforts are inadequate, there will be a lot of customer churn.
“The basics of business is to stay as close as possible to your customers - understand their behavior, their preferences, their purchasing patterns, etc.” - Indra Nooyi.
According to Nooyi, the former CEO of Pepsi, companies thrive when they forge strong bonds with their customers. If you are unaware of what your customers want from you, the best possible way is to reach out, ask them, and start a proactive conversation. And a company needs to do this regularly to stay ahead of any customer experience trends that could go unnoticed otherwise. Carefully gathering customer sentiment and feedback through a responsive customer satisfaction questionnaire enables a company to meet customer expectations and satisfy customer needs completely.
“We think our job is to take responsibility for the complete user experience. And if it’s not up to par, it’s our fault, plain and simple.” - Steve Jobs.
Although there are several companies that would take the tempting route of blaming their customers for not understanding their business model or their products when they don’t find ideal customer satisfaction. However, as the late co-founder of Apple notes succinctly, the true accountability lies completely with the company.
If customers are unhappy with the overall customer experience or with a definite part of the customer journey, don’t make excuses for it - simply take responsibility. It will enable you to see through your faults and cement them in order to deliver better customer experiences.
Thus, it is absolutely true, that customer satisfaction is vital to the success of your business in several ways. What are those? Let’s find out.
● Maximizing customer lifetime value (CLV)
● Minimizing customer churn
● Improving business revenue
● Improved brand loyalty
● Increasing customer retention.
What are the key metrics for measuring customer satisfaction?
Since customer satisfaction is a broad concept, it is often challenging to measure how satisfied your customers are, with precision. In that case, you need to perform customer satisfaction research and find out the level of customer satisfaction using certain metrics. After much analysis and thorough customer satisfaction research, these metrics were established.
● Net promoter score (NPS)
Net promoter score (NPS) measured the overall loyalty of a customer towards a particular business. According to a report, for most CX leaders, measuring customer loyalty is a critical metric for determining customer satisfaction minutely.
It is because a satisfied customer is not equal to a loyal customer. A customer who is satisfied with a business or its products and services might gravitate toward another business with a more viable product.
A similar instance occurred in the case of GlobalReach, a company promoting immigration for students and workers. Their customer satisfaction surveys always had high marks and they prided themselves on having the most satisfied customers.
However, with time, they found their sales stagnating. Customer churn rates also started to increase. After careful research, they found out that a lot of new customers were just using their services for benchmarking and actually performing business with their competitors. That is when they realized that these new customers didn’t have an emotional connection with their brand, and their customer satisfaction scores were not absolutely reflective of the problem they were facing.
Thus GlobalReach went above and beyond to create customer experiences that were more than just satisfactory - through personalization, creating memorable events, building stronger customer relationships, and fostering them. They also included one important question in their customer satisfaction surveys - how likely are you to recommend our company and its services to others? This is the NPS, which measured the loyalty of a customer to their brand, and with an increased NPS, it implied that they had actually taken care of their dwindling business.
● Customer effort score (CES)
The customer effort score (CES) is a critical metric that finds out how easy it is for a customer to find relevant information regarding a company or complete a particular task. The lower the CES, the more satisfied a customer is with the experience.
A local beverage business from New Zealand called Kiwi wanted to improve its customer experience. They had identified that they needed to make it easier for their customers to buy their products - but were not sure how to do it.
That is when they decided to include a lot of new questions in their customer satisfaction surveys. Almost all of those dealt with how easy it was for their customers to identify their products and purchase them. Or the common problems they faced in their customer journeys that resulted in the maximum friction.
Analyzing these data, Kiwi found out that most of their customers were frustrated with the ordering process and even finding their products. To address these issues, Kiwi streamlined its online ordering process, making it more intuitive, and user-friendly, and offering a new subscription-based model. They improved the search function on their website, making it easier for customers to locate their products.
Kiwi also made changes to its physical store locations by reorganizing store layouts and training staff to be more attentive and caring to help their customer locate their products. Within a couple of months, Kiwi noticed a significant boom of nearly 37% in their customer satisfaction which was driven by a massive drop in their CES. This also reflected positively in their revenue.
● Customer churn rate (CCR)
Customer churn rate is the measure of the percentage of customers who have stopped doing business with a company. It is one of the most critical metrics that define customer satisfaction. Although churn rates vary with industries, a 2-8% churn rate is deemed acceptable for most industries. However, for SaaS industries, an average monthly churn rate is nearly 7.5%.
While customer churn is costly, it also impacts business growth. According to Bain Consulting, acquiring a new customer is 5 to 25 times more costly than retaining an existing one.
When BlueMeadow, a dairy farming company found massive churn rates in their customer data, they deep-dived to gain a better understanding of their target market as well as derive a significant competitive advantage. While trying to understand the ‘why’, BlueMeadow found out that there was a lot of negative campaign regarding the quality of milk that they supplied. Also, their regular customers were asking a lot of questions and looking for resources to answer them.
BlueMeadow started to address the issue with a quality control program that ensured that their milk was always fresh and of the highest quality. They trained their staff and gave them certifications and these staff became responsible for providing proactive support to their customers.
They also communicated their methods proactively and stressed proper audience targeting by creating customer loyalty programs. The company also made changes to its customer service approach, offering more personalized and convenient delivery options. These steps enabled BlueMeadow to stem the tide of customer churn and even reduce its cost of customer acquisition (CAC).
● Customer satisfaction score (CSAT)
Customer satisfaction score (CSAT) is a critical metric in customer satisfaction surveys that measure how satisfied a customer is with a particular product, service, or overall user experience. It is used to measure the degree to which a customer is happy with a business and its offerings. Customer satisfaction scores (CSAT) are the most effective when gathering information on a specific and recent interaction or a particular product.
CSAT is a direct and useful measurement that allows a company to perceive things at a micro and macro level while implementing critical changes along the journey and improving the overall experience.
For example, a SaaS company Darnell employed CSAT surveys at key points in its sales process. After every inbound sales call, prospects could share how satisfied they were with the conversation.
Darnell also introduced online satisfaction surveys to determine whether its digital experience was adequate to meet prospect and customer needs. The company also introduced a process for measuring CSAT feedback after every major milestone in onboarding and deployment. This allowed its customers to feel that they always had an avenue for feedback. Darnell also started follow-up CSAT surveys with the introduction of every new product in the market which helped them understand the product-market fit and prevent long-term issues proactively.
The company used CSAT scores as an efficient tool in its CX toolkit and deployed CSAT at every touchpoint in the customer journey which could develop into a probable pain point. Providing CSAT scores at key moments of a customer journey map enables a brand to paint a more vivid picture of how its customers feel about it. Most brands like Darnell reported that using a customer journey map in accordance with CSAT scores resulted in increased customer satisfaction. It was truly a win-win!
You too can deploy CSAT scores at specific touchpoints of your customer journey using Numr CXM’s journey builder tool. It will definitely be a game-changer for your customer satisfaction results.
The importance of an optimal customer satisfaction survey
Customer satisfaction research develops the metrics for defining customer satisfaction. On the other hand, every company relies on customer satisfaction surveys to collect customer feedback and critical data. Customer satisfaction surveys are also important in deploying these key metrics of customer satisfaction and generating feedback.
While customers need satisfaction surveys to provide quick yet meaningful feedback about their experiences, businesses also need surveys to find out reliable, valid, and useful information that helps them streamline business operations.
Thus, an optimal CSAT survey maximizes its value to both the businesses that use them and the customers who take them.
How to test and optimize your customer satisfaction surveys to ensure their validity and reliability?
Now that you understand the importance of optimal customer satisfaction surveys, how to make sure that they are valid and reliable? The following steps will direct you about ways to test and optimize your customer satisfaction surveys to guarantee the validity and reliability of survey data.
● Define your objectives and metrics
Before designing a customer survey, a business should be clear in defining its objectives and metrics. The objectives and metrics of the survey should be clear, specific, and aligned to the business goals and customer journey.
To define your objectives and metrics, you can ask questions like -
1. What are you trying to learn from your customers?
2. What are the key indicators of customer satisfaction and loyalty?
3. How can you use the data from the customer surveys to make critical decisions and take action?
● Select your survey type and questions
After determining the objectives and metrics for a customer satisfaction survey, you need to zero in on the different types of surveys.
These could be relationship surveys, post-purchase surveys, or post-service surveys. You can use different formats and scales for your surveys like Likert, NPS, CSAT, CX, CES, or even open-ended. The best practice for choosing questions for the customer satisfaction questionnaire is to keep them simple, relevant, and unbiased, without the use of severe jargon, leading, or ambiguous questions that could confuse or influence the customers.
Some of the most common ways to optimize the survey questions are given below.
1. Measuring different types of loyalty like retention loyalty, purchasing loyalty, and advocacy loyalty.
2. Measuring satisfaction with general customer experience (CX) touchpoints.
3. Measuring the relative performance of companies with respect to their competition.
4. Measuring business-specific attributes like customer tenure, reasons behind ratings, decision-making roles, job levels, and percentage improvement in customer problems due to the solutions provided by the business.
● Test your customer surveys internally and externally
Before launching your survey, you need to test it in a foolproof fashion. This involves testing the survey both internally and externally.
Internal testing of a survey refers to checking and analyzing a survey to find out -
● Clarity and
You can use multiple AI tools and specific ones like SurveyMonkey or Google Forms to create and test your surveys online.
External testing of satisfaction surveys refers to receiving feedback from a sample of your target audience.
You can leverage tools like Qualtrics and User Testing to recruit and reward testers who can complete your survey and provide comments. Market research surveys are often loaded with customer satisfaction questionnaires directed to a sample customer pool before launching. This enables a company to optimize its market research surveys.
● Analyze your survey results and validity
After collecting your survey responses, the next step involves analyzing those results and their validity. The analysis of results involves detecting -
● Patterns and
These help companies understand their customers' needs, preferences, and expectations. Using tools like Excel and Tableau enables companies to visualize and interpret the data that surfaces from the customer surveys.
On the other hand, analyzing survey validity implies understanding whether the survey measures the metrics and factors it was intended to measure.
Additionally, it also refers to whether the survey does the same consistently and without errors and biases. Most companies use techniques like reliability analysis, factor analysis, and correlation analysis to measure the validity of survey results.
● Optimize your surveys based on feedback and data
Once you have analyzed the results and validity of customer satisfaction surveys, the next step involves leveraging the analysis data to optimize the survey. This involves making changes to the survey design, questions, or deployment points depending on the feedback learned from survey testing and analysis.
Optimizing satisfaction surveys also involves identifying specific points and taking action on them and communicating them to both customers and stakeholders. You can use tools like HotJar and SurveyGizmo to track and optimize your customer surveys.
● Continuous repetition of the survey process
The final stage is the most critical one. It involves continuous repetition of the surveys to keep the survey data reliable and valid. Customer satisfaction is not a singular event. On the contrary, it is a continuous process that requires constant monitoring and improvement.
If there are any changes to the business environment, customer behavior, or customer expectations, you should constantly review and periodically update your customer survey objectives, metrics, questions, and methods.
These help your satisfaction surveys to remain relevant and produce consistent results that improve your decision-making and operations. You should also collect and measure feedback and analyze data regularly to measure the progress and impact of the surveys.
The final words - leveraging customer satisfaction surveys will drive business growth
Regularly measuring customer satisfaction using a CSAT survey or an NPS will help you identify potential issues and prevent them before they become humongous problems for your business. Thorough customer satisfaction research and developing appropriate customer satisfaction surveys help you in staying connected to your customers, inspire loyalty in your customer base, and retain them over a long period of time.
Therefore, optimizing your customer satisfaction surveys based on customer feedback will ensure that your surveys stay relevant and effective. By tailoring questions to specific customer segments, you can gain more in-depth insights and create more personalized customer experiences that exceed their expectations!
Overall, customer satisfaction surveys, when tested and optimized, drive business growth. Since more than 71% of companies who used customer journey maps in accordance with their CSAT survey noticed increased customer satisfaction, you should also try out Numr CXM’s efficient journey builder tool that helps your business achieve more.
Unhappy with your customer satisfaction and overall customer experience? Let us do the heavy lifting for your company and see amazing results!