Every company wants to grow. The easiest way to grow is to keep your existing customers. To retain customers, you need to make them happy. Happy customers turn into long-term and profitable loyalists. Long-term and profitable loyalists go a long way toward improving your CSAT score.
How do companies actually know how happy their customers are with their products, services, and experiences? They measure their CSAT score – or their rating for Customer Satisfaction.
Throughout the entire customer lifecycle, there are many moments that add up to a person’s relationship with and feelings towards a brand. From in-store and online shopping experiences to customer care interactions and satisfaction with onboarding or learning to use a product itself, every one of these standalone touchpoints is important.
That’s why customer experience and support professionals hyper-focus on customer satisfaction or CSAT. CSAT is a metric that measures how well your company is delivering against your customers’ expectations in these independent moments.
In this post, we will dive into everything you have ever wanted to know about CSAT scores. Jump to specific sections or scroll down to read the entire post.
- What is CSAT?
- Why is CSAT important?
- How do you calculate and measure CSAT?
- How do you use CSAT scores?
- How to improve your CSAT score
- Comparing CSAT to other popular consumer metrics
- Benchmarks for CSAT Scores By Industry
CSAT is the most popular and straightforward way to measure customer satisfaction. It’s a metric that measures sentiment towards your product, service or a specific interaction.
Companies often take a pulse on CSAT after key milestones in the customer lifecycle such as first purchase, prior to the renewal or following customer support interactions.
CSAT differs from Net Promoter Score (NPS), another popular metric. NPS measures loyalty and the probability that someone will buy again and recommend your company to other people.
So what drives satisfaction?
People are satisfied when their expectations are met. Like many things, expectations are fluid and change based on situational context and lifecycle. For example, if you spring for a first-class ticket on a flight, you are going to expect more personal and proactive service from flight attendants. When you purchase a basic economy seat, you expect attendants to simply ask what you need during their food and drink service. In Economy airline travel, there’s no expectation for a glass of champagne before takeoff.
Circumstances change expectations. When measuring CSAT, it’s important to understand the different circumstances of your individual customers to glean actionable insights.
Customer retention is fundamental to a thriving business.
It’s cheaper to keep your current customers than attract new ones. Studies report that 70% of companies say this is true.
CSAT can provide insight into where and when your company is at risk of losing customers and where lie opportunities to optimize experiences to keep customers satisfied. If used regularly, CSAT gives businesses a pulse for how your company is performing. Of course, you need to look at and measure the entire journey, not solely flashpoints along the way. However, CSAT can help you realize where your processes are working and where you need to make changes.
Think about this with customer service. In the last year, 78% of U.S. consumers have stopped doing business with at least 1 company or scrapped a planned purchase based on poor customer service – and 31% reported doing this multiple times. One instance of poor support can lead to immediate customer attrition. Understanding what makes people unsatisfied with customer support can identify where more training needs to be done, where there’s an opportunity to be proactive or where processes need to change.
A person’s short-term happiness or unhappiness with your company following interaction is indicative of future spend and lifetime value.
CSAT is often measured through a brief survey asking people how satisfied they are with a recent experience. This can be an email, chat or phone follow-up question or survey. It typically is done immediately or within a short time after an interaction when it’s top of mind for a person.
The question often looks like the below:
How satisfied are you with your recent purchase/support interaction/service?
- Extremely Satisfied
- Somewhat Satisfied
- Not Satisfied
- Very Dissatisfied
On a scale of 1-5, how satisfied are you with your recent purchase/support interaction/service?
- <Very Unsatisfied> 1 2 3 4 5 <Very Satisfied>
Companies will often leave a place for people to add specifics to why they scored one way or the other. This can provide invaluable insight into things that can be improved or adopted more broadly.
To calculate your CSAT, take the number of positive responses (i.e. Extremely and Somewhat Satisfied) and divide by the total number of responses. Then, multiply by 100.
For example, say you gather data from 200 customers. If 160 customers scored satisfaction a 4 or a 5, here’s what you would do.
In this example, the company’s CSAT score is 80%.
For customers who reported being unsatisfied or dissatisfied, carefully review their entire interaction. Identify what happened, where your company could have been proactive, and what information could have provided a more pleasant experience. For example, did someone reach out with questions while setting up your product? Is there additional information or tips you could have preemptively provided to ensure a smooth, successful set-up?
For dissatisfied customers, identify ways to court them to try and maintain a positive relationship with them. Can you offer free shipping on their next order if this one was delivered late?
You’ll also want to learn from your satisfied customers. What are the key components that led to expectations being met? Did you offer the right tools at the right time? Did you quickly resolve an issue within 2 minutes on social media?
Don’t just look at your CSAT percentage. Dissect the outliers to learn how to exceed customer expectations in the future.
Customer service is one of the micro-moments that dictate loyalty and future spend. As mentioned earlier, one instance of poor service is enough to deter a major portion of your customers to move their business elsewhere. As customer service continues to establish its foothold as a business driver, companies need to meet expectations for customer support. Satisfaction, as you may remember, comes from expectations being met.
So what do people expect today? Simply, quick, convenient resolutions on their channels of choice. In our recent study, we found that:
- Nearly Half: Expect not to wait for a resolution
- 47%: Expect convenience
- 61%: Expect quick resolution
While that may sound simple, companies are finding it harder to meet these quick-rising demands and scale personal interactions across email support systems, chat, social and voice channels. In fact, more than 50% of U.S. consumers have not seen any improvement in customer service over the last 12 months.
Improve CSAT Score with AI
Bringing AI customer service into the workforce enables companies to automatically resolve over 50% of incoming tickets immediately, within seconds, according to our customers. These repeatable, everyday tickets are not routed to human agents. Instead, agents focus exclusively on more complex and subjective issues. All tickets – the simple and complex – are resolved faster. Logically, bringing speed to support will increase CSAT.
One of our clients, the Canadian airline WestJet, has seen CSAT increase 24% with its virtual agent Juliet resolving issues immediately on Facebook Messenger. Juliet is helping people understand how they can fly with skis, how much it costs for a checked bag and flight status within seconds. Customers, all-too-often packing last-minute or stuck in traffic to the airport, are thrilled to get their pressing questions answered without a long hold time or desperate website search.
CSAT differs from other popular customer service metrics that are used by companies. When companies use all of these metrics together, they will have a very rich understanding of how your customer support organization is functioning and delivering against customer expectations.
Like CSAT, Net Promoter Score, or NPS, is used as a way to capture customer feedback. It measures loyalty and the probability that someone will recommend your company to other people.
NPS looks at overall, long-term brand perception, whereas CSAT measures short-term happiness with a specific incident. NPS can be an indicator of growth potential for a company because peer recommendations carry so much weight in our society that is social media-obsessed. Nielsen actually found that “more than eight-in-10 global respondents (83%) say they completely or somewhat trust the recommendations of friends and family.1”
To capture NPS, customers are asked a simple question: On a scale of 1-10, how likely are you to recommend [company] to a friend/colleague? Your customers will fall into one of these categories:
- Promoters are defined as people who rate your company with a score of 9 or 10. Promoters are your enthusiasts and loyalists.
- Advice for how to treat promoters: Keep these customers happy as they are the ones that will be recommending your brand to their friends and family. Give them referral codes or links that they can send to their friends to let them earn points or discounts for the new business that they bring in. If it makes sense, involve promoters in product research and selection, for instance, a meal kit company could ask them which recipes they’d like to see on the menu.
- Passive customers are people who rate your company a 7 or 8.
- Advice for how to treat passive customers: Push passive customers to promoter status by asking for feedback on what could be improved and acting on what they tell you. Like promoters, companies can also provide passive customers incentives in the form of referral codes or links that they can send to their friends and family to encourage recommendations and endorsements.
- Detractors are customers who rate your company with a score of 0-6.
- Advice for how to treat detractors: Analyze your interactions with detractors to see if you can identify why they are unsatisfied. Are there any trends that you can identify? If there are particular instances that occurred throughout someone’s life cycle, say consistently late deliveries, technical issues or wrong items delivered? If so, address the issues, apologize and communicate how the company is making changes so issues don’t happen again. It’s important to remember that you’re not going to have a fan in every customer, so you also need to realize when you’re not going to change someone’s mind and walk away.
Customer Effort Score, or CES, measures how much effort a customer had to put into completing a task, including getting a support ticket resolved, making a return, etc. Like CSAT, CES measures a specific instance.
Measuring CES is important because customers expect effortless, convenient experiences. Customers are more likely to churn if the experience is difficult. In fact, research has shown that “96% of customers with a high-effort service interaction become more disloyal compared to just 9% who have a low-effort experience.2”
Reducing effort can be done in a variety of ways, including minimizing time spent to get a resolution, the number of times a person has to reach out or total back-and-forth interactions.
To determine CES, you’ll ask your customers, On a scale from “Very Easy” to “Very Difficult”, how was your experience? If you find that you have a low CES score, identify how to remove obstacles and friction from the interaction.
Customer dissatisfaction (DSAT) is the exact opposite of CSAT, and measures how dissatisfied customers are with the experience. Companies often don’t think about DSAT, but it’s important. This is because the damage a dissatisfied customer could have goes well beyond the individual not ever purchasing from you again. People talk to their friends and post on their social media channels about poor experiences. In fact, Americans are telling an average of 15 people about poor service3.
To track DSAT, you’ll analyze the data from the same question measuring CSAT in which you ask how satisfied a person is with experience. If you used a scale from 1-10, your dissatisfied customers are the ones who responded 1-5. When you identify which customers were dissatisfied, you can analyze their entire experience to identify what went wrong and address the issues.
Don’t waste your resources by giving detractors referral codes or links. At this point in time, they are not going to recommend your business.
As companies put more focus on the customer experience, benchmarking CSAT scores against industry averages is a good way to see if your efforts are enough. So how do you know what a good CSAT score is?
CSAT benchmarks depend on many factors, primarily your industry. Some industries have notoriously low scores due to the nature of their business. For instance, airlines have a lot of aspects of their service outside of their control, such as weather events and other delays. Even longer lines at TSA security checks can negatively impact a person’s perception of flight experience, even though the airline had nothing to do with it. The same holds true for your home internet and cable provider. Service might become interrupted by things outside of the company’s control (i.e. weather or downed utility lines). Customers don’t always look at the full picture, but rather zero in on the company that they are paying.
The American Customer Satisfaction Index has outlined CSAT score benchmarks by industry, and how they change year-over-year. According to the organization, breweries have the highest at 84%, while internet service providers and subscription television services have the lowest at 62%.
A few other industry CSAT score benchmarks include:
- Personal care and cleaning products: 83%
- eCommerce: 81%
- Banks: 80%
- Internet Travel Services: 79%
- Supermarkets: 78%
- Apparel: 77%
- Hotels: 75%
- Airlines: 74%
In conclusion, keeping track of how your CSAT is performing against industry benchmarks is something you should be closely tracking.
CSAT is not the only way to measure your customer service performance, but it does offer valuable insight into an important dimension of your customer support. Before you can improve your support organization, you need to know your baseline and set a goal for the next 3 months, 6 months, etc. Create an actionable plan on how you’re going to reach these goals and improve CSAT, such as reducing resolution time, implementing more self-service options, offering proactive support and being available on more channels.
CSAT is a valuable tool. And we can boost it an average of 20% in 6 months. Interested? Let’s chat.
- Neilsen: https://www.nielsen.com/wp-content/uploads/sites/3/2019/04/global-trust-in-advertising-report-sept-2015-1.pdf
- Qualtrics.com: https://www.qualtrics.com/experience-management/customer/customer-effort-score/
- American Express: https://about.americanexpress.com/press-release/wellactually-americans-say-customer-service-better-ever