Our world is based on numbers. Even we, as individuals, are identified by numbers: social security number, ID number, car number. We tend to measure everything, from a cone of ice cream to the number of steps in a day. Numbers give us a sense of control: we know where we are, how much we have left to reach an objective and what to increase or decrease.
However, there has been a tendency to return to relationships, to real connections between people. This phenomenon happens mostly in our private lives, but the need for human interaction has also conquered the business world, as well. Products and services aren’t just “things” that we use. They hide people who create and implement them. As consumers, the moment we buy a product or service, we are connected with those people who shape that business.
Customer Satisfaction measurement and Customer Experience
As in our personal lives, the quality of a relationship is essential if we want to keep it as long as possible in a way that fulfills us. This condition also applies to relationships between businesses and their clients. This is why companies focus so much on the Customer Experience. A way to define it is “the way consumers perceive how your brand interacts and treats them”. A study by Walker on the perspectives of Customer Experience (CX) reveals that by 2020, CX will become the main differentiators for brands among the B2B companies.
By 2020, customer experience will become the main differentiators for brands among the B2B companies.Walker
Needless to say that a good Customer Experience leads to satisfied customers. So, how can you tell if the experience your company offers is good enough to retain customers and gain new ones? With the help of the numbers, of course.
Specialists have come with metrics for customer satisfaction that will draw the picture of how good the relationship between your business and its clients really is. In this article, we’ll analyze the most important customer satisfaction metrics b2b companies (and not only) should pay attention to.
Why should you measure Customer Satisfaction?
Do I need to measure Customer Satisfaction? Aren’t the sales numbers enough to say if the customers are happy or not? Should I focus on making them happy or on delivering great products and services? Isn’t it the same thing?
All of these are legitimate questions. The focus of a business should be on selling its products and services and on delivering the promised quality. True. Still, the better the Customer Experience, the higher the loyalty and the lower the costs caused by losing the clients. A study on 10 000 US companies across 20 industries revealed that:
A very good Customer Experience was related to a high percentage (87%) of clients who were very likely to purchase more from the company.Experience matters
At the same time, 79% of those who had very good CX were very likely to recommend the company. On the other side, 41 % of the clients whose experience was very bad, either stopped buying from that company or spent less.
According to Salesforce research
80% of the customers stated that the experience provided by the company was as important as the products or services it offered. Also, a good experience will be shared with others by 72% of the customers in the study.Salesforce
And if these statistics are still not enough to point out the importance of a good Customer Experience, then consider that attracting a new customer costs 6 to 7 times more than retaining an existing one.
Attracting a new customer costs 6 to 7 times more than retaining an existing one.Huffpost
The arguments to support the importance of having satisfied customers can still take pages. You can discover more in this article.
Now, to build the kind of CX clients come to rate as very good is not as easy as it seems. There is no recipe. The directions come from the customers themselves with the help of key customer satisfaction metrics. They act as the voice of the customer and tell how well people interact with your business. Customer satisfaction metrics will indicate satisfaction levels and how to improve customer satisfaction in a clearer manner.
Best customer satisfaction metrics with advantages and disadvantages
Some managers may feel quite confident about how satisfied their customers are. They might believe that if the team puts a lot of effort and responsibility in their work, the client receives a high-quality product or service, thus the satisfaction. The reality, however, is slightly different.
While 80 % of the companies consider that their customer satisfaction is superior, only 8 % of the customers rate their experience as superior.Feedier
There is a clear discrepancy between what businesses intend to offer and what their clients actually perceive. The only way to have a clear, close to the true picture of how the interactions with your company impact the market, you need to apply customer satisfaction metrics.
Whether we talk about product customer satisfaction metrics or customer satisfaction service metrics, the indicators are the same. You can choose to measure one or more, depending on what you need to find out for the business and which customer satisfaction metrics tools you are likely to use.
Here are the best customer satisfaction metrics, with their advantages and disadvantages.
The Net Promoter Score NPS
It was first introduced in 2003 in an article in the Harvard Business Review by Frederick Reichheld and is largely used by organizations all over the world. It measures how willing customers are to recommend the product or service to others.
The logic behind it is that the more satisfied a person is, the higher the chances to put “at risk” his reputation by associating the personal image with a certain brand. The data to calculate the NPS score is gathered through an NPS survey with the question: “How likely are you to recommend this product/service?” The respondent needs to rate the likeliness on a scale from 1 to 10, from “not at all” to “very likely”.
Following the rating, respondents are divided into three categories: Detractors (from 0 to 6), Passives (from 7 to 8) and Promoters (from 9 to 10). To calculate the NPS score, extract the percentage of Detractors from the percentage of Promoters. Positive, over 50 results in promoter scores show high customer satisfaction. To monitor improvements in the customer journey, the company needs to monitor it constantly and compare results.
For instance, the British Gas Services were losing money due to issues in installing home heating. After having implemented the Net Promoter Score and collected customer feedback, they saw an increase in the NPS values, the complaints reduced with 75 % and the profit increased.
How can the NPS help:
Check internally for warning signals, then decide which aspect of customer satisfaction you want to explore more. Do you rely on customer recommendations? Do you need to see the overall satisfaction? Does the handling time seem too long?
Then check how customers feel about the effort they need to pay in their customer journey. Also, the last but not the least, rely on empathy: put yourself in your customers’ shoes.
Be careful about:
- It doesn’t draw the whole picture. It doesn’t speak about the improvements your customer expects and the reasons why he is not likely to further recommend your business.
- Cultural differences may bias the interpretation of the rating system. For some cultures 10 may be associated with perfection (teachers’ grade), never to be granted.
Customer Satisfaction Score CSAT
The Customer Satisfaction Score measures the overall level of satisfaction via a rating scale (from 1 to 5 or 10). The lower levels indicate low satisfaction. Some choose to use smiley faces in the CSAT survey, to make it more familiar and friendly and increase the response rates. The satisfaction score is calculated as the average of the scores received. The higher the number, the higher the satisfaction.
How can the CSAT help:
You can easily implement it. You just apply a question and a scale, use an attractive design and make it available online. It speaks more about satisfaction than the NPS score. You can compare the values and see the evolution in time or benchmark with industry numbers.
Be careful about:
- It measures short term satisfaction. To answer such a question, people usually bring back to their memories the last experience with your product or service.
- It relies a lot on the customer’s memory. Because it refers to a past event, it is recommended to measure CSAT right after purchase or interaction.
- It is rather general. The word “satisfaction” can mean different things from specific customer to another.
The Customer Effort Score CES
The Customer Effort Score shows how easy or difficult is for a customer to get his problem solved by your product or service. At a first glance, it may not seem that important, but a Harvard Business Review also pointed out that increased customer loyalty was related to a reduced effort to have the problem solved.
To measure CES, customers are asked to rate how much they agree with a statement saying it was easy for them to handle their issue. The latest form of CES measurement uses a scale from 1 to 7 with 1 – strongly disagree and 7 – strongly agree. To reflect reality as accurately as possible, the survey should be applied right after the customer experiences that require a certain customer effort.
How can the CES help:
It shows the customer journey quality and pain points. By rating the effort for specific interactions, it shows where exactly people face difficulties.It has a stronger connection to loyalty levels. Research shows that low effort interactions translate into the intention to re-purchase (94% of respondents), compared to those who paid more effort (only 4% intended to purchase again from the same company).
Be careful about:
- Biases in rating the affirmation. People tend to agree more than they tend to disagree. It is our inner difficulty to say No, derived from the need to be liked and accepted.
- Also, there is what is called the “central tendency bias” that makes us choose the midpoints rather than the extremities, to appear balanced and objective.
The Customer Happiness Index CHI
The Customer Happiness Index speaks about happy customers as a consequence of the manner in which your product or service helped them become successful. It is calculated based on three indicators: product use frequency, the extension of product use, and the preferred features. CHI was created by HubSpot and is a good predictor of customer churn rate.
How can CHI help:
It indicates what works with more precision, so you can keep doing. It helps to increase retention rates. By learning how the products or service is used and how it contributes to the success of a customer, you can improve customer experience and customer satisfaction levels.
Be careful about:
- Measuring all dimensions. It cannot be calculated from only one question like NPS, CSAT, and CES. You need to explore more about the product or service use.
- More time needed to answer. The accuracy depends on how willing is the customer to check all three dimensions of this indicator.
Internal customer satisfaction metrics
Before stepping into the measurement of the Net Promoter Score, Customer Satisfaction Score or Customer Effort Score, you need to decide what and why you need to measure.
To do that, you can rely on the sources at hand – the internal customer satisfaction metrics: Churn Rate, First Time Response or Average Handling Time. They’ll tell you if you have a problem with retaining customers or how fast you answer to your clients’ needs. Then, you can check how your internal findings correlate to your clients’ perception of the company.
Churn Rate
The Churn Rate is the first indicator showing customer dissatisfaction. It indicates the percentage of clients canceling the subscription or quitting your company. Once you decide you have a problem with the retention rates, you can use the other customer satisfaction metrics to explore if their quitting has something to do with the level of satisfaction.
The startup Groove managed to reduce their churn rate by 71% after having analyzed the reasons why people were canceling subscriptions, by using the data to implement specific retention methods.
First Response Time
The First Time Response shows how fast you answer your clients’ requirements. This is strongly related to the effort customers put in to have their problems solved, translated into the level of satisfaction.
A long waiting time means an extra effort for the client, who feels less satisfied, even frustrated. Some companies strive to answer inquiries in less than 20 seconds.
Average Handling Time
While the First Response Time refers to the first interaction with the customer once he made an inquiry (as simple as a “We’ll get back to you as soon as possible”), the Average Handling Time takes into account the entire amount of time needed to solve the client’s problem or request.
It can apply to the process of making the first subscription or even to cancel a subscription. Both time-related indicators are very important as they are a measure of how much effort the customer needs to pay to interact with your products or services. The longer he has to wait or the more steps a process requires, the more dissatisfied the client will be.
In conclusion
You can always go for all these customer satisfaction metrics, to have a complete view of the customer satisfaction levels and customer experience pain points. Still, it is always better to target specific issues, so you can better handle them.
Check internally for warning signals, then decide which aspect of customer satisfaction you want to explore more. Do you rely on customer recommendations? Do you need to see the overall satisfaction? Does the handling time seem too long?
Then check how customers feel about the effort they need to pay in their customer journey. Also, the last but not the least, rely on empathy: put yourself in your customers’ shoes.
Customer feedback made easy
Customer feedback tagged automatically
Real-time customer sentiment scores
Pain-points evolution over time
