Every company wants to grow. The easiest way to do that is to keep your existing customers. To retain customers, you need to make them happy. Happy customers turn into long-term and profitable loyalists. And in short, 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 customer satisfaction 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. This includes in-store and online shopping experiences, customer care interactions and learning to use a product itself. Without a doubt, every one of these standalone touchpoints are important.
That’s why customer experience and support professionals hyper-focus on customer satisfaction or CSAT. CSAT 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?
- CSAT Scores: How do you use them?
- 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. For example, after a first purchase, prior to the renewal or following customer support interactions.
It’s important to realize that CSAT differs from Net Promoter Score (NPS), another popular metric. NPS measures loyalty, the probability that someone will buy again and recommend your company to other people.
So what exactly drives satisfaction?
In short, 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. On the other hand, 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.
This is because 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. In the same vein, it can uncover opportunities to optimize experiences. 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. Moreover, 31% reported doing this multiple times. That is to say, only one instance of poor support can lead to immediate customer attrition. And so, understanding what makes people unsatisfied with customer support can identify a few things. Firstly, where more training needs to be done. Secondly, where there’s an opportunity to be proactive. And lastly, where processes need to change.
In essence, 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’s typically immediately following an interaction when the experience is top-of-mind.
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>
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 score for their CSAT is 80%.
Additionally, companies will often leave a place for people to add specifics as to why they scored the way they did. This unconstrained feedback in particular can provide invaluable insight into things that can be improved.
For customers who reported being unsatisfied or dissatisfied, carefully review their entire interaction. You’ll first want to identify what happened. Next, see if there was an opportunity where your company could have been proactive. Finally, determine what information could have provided a more pleasant experience. For example, did someone reach out with questions while setting up your product? Or, is there additional information 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?
Equally important, 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?
In summary, don’t just look at your CSAT percentage. Make sure you 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? In short, quick, convenient resolutions on their channels of choice. For example, 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 even more, 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 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.
- Advice for how to treat promoters:
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.
- Advice for how to treat passive customers:
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.
- Advice for how to treat detractors:
Customer Effort Score, or CES, measures how much effort a customer puts into completing a task, including resolving a support ticket, 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”
You can reduce effort in a variety of ways. Such as 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.
The exact opposite of CSAT is Customer dissatisfaction (DSAT). DSAT measures whether your customers are dissatisfied with an 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. On a scale from 1-10, your dissatisfied customers are the ones who responded 1-5. Once you identify your dissatisfied customers, 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. Because at this point in time, they are not going to recommend your business.
Companies are putting more focus on the customer experience. Benchmarking CSAT scores against industry averages is a good way to see if your efforts are enough. But how do you know what a good 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. The airline, though, had nothing to do with security delays.
The same holds true for your home internet and cable provider. Service might become interrupted by things outside of the company’s control (for instance weather or downed utility lines). In short, 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 benchmarks by industry. It also looks at how they change year-over-year. According to the organization, breweries have the highest CSAT at 84%. On the other hand, 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%
To summarize, keeping track of how your CSAT is performing against industry benchmarks is something you should be closely tracking.
While CSAT is not the only way to measure your customer service performance, it does offer valuable insight into an important dimension of your customer support. Before you can improve your support organization, however, 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