What is Customer Satisfaction and Why Should You Measure It?

Creating a remarkable customer experience does not happen by accident- great customer experiences are built intentionally.

What is customer satisfaction?

Customer satisfaction is often defined as an emotional response resulting from an evaluation process in which the consumers’ perceptions of their experiences (throughout the customer journey) are weighed against their preconceived expectations of what the product/service delivery ought to have lived up to. If their experience meets their expectations then we assume the customer is satisfied, if their experience exceeds their expectations then we assume they are delighted with the service, and if their experience falls short of their expectations then they are unsatisfied.

Why should entrepreneurs care?

Satisfied customers are extremely valuable to entrepreneurs for many reasons. Firstly, satisfied customers are more likely to regularly do business with organisations that meet or exceed their expectations. This is because these organisations prove that they can deliver good customer experiences and fulfil their value propositions thus cultivating trust between themselves and their customers. Consistent customer satisfaction can lead to brand ambassadorship: when you consistently exceed customers’ expectations, they are more likely to recommend your brand to their network. This means your business will benefit from word-of-mouth marketing and gain more like-minded customers. Lastly, customer satisfaction affects brand equity. Brand equity the goodwill your brand holds in the hearts and minds of your customers.

How to measure customer satisfaction?

When measuring customer satisfaction, entrepreneurs should consider:

1. The objective: Why do you need to measure customer satisfaction? Have you noticed a dip in sales? Is your business experiencing slower revenue than anticipated? Are you struggling to attract new customers? or are you simply trying to keep track of overall customer satisfaction trends? Your objectives will determine how sophisticated your customer satisfaction measurement tool will be. Therefore, it is important to list the different objectives you have in mind.

2. What aspect of the customer journey is being investigated: Customer satisfaction can be used to measure customers’ satisfaction levels pertaining to different aspects of the customer’s journey. Do you want to measure how helpful your staff was in assisting your customers? Or are you trying to understand how satisfied your customers are with a new product or your website design?

These are a few foundational metrics you can use to measure customer satisfaction:

1. Net Promoter Score (NPS): The NPS is a tried and tested measurement tool used to indicate the likelihood that a customer will recommend your product/service to their network. It asks a customer “How likely are you to recommend [business name] to your family and friends” on a scale of 0 (not at all likely) to 10 (extremely likely). Customers fall into three categories; Promoters (people that respond with a 9 or 10), Passives (scores of 7 or 8) and detractors (scores of 0 to 6). Typically, you want a higher percentage of customers to be promoters, people who are extremely happy with your brand and more likely to be brand ambassadors. You can use this measure on a bi-weekly or monthly basis.

2. Customer Satisfaction Score: This simple measurement tool asks a customer “How satisfied are you with [insert business name] service?” On a scale of 1 [extremely dissatisfied] to 5 [extremely satisfied]. This can be reframed to ask people how satisfied they are with the quality of their clothes, customer service, merchandise availability/variety and so on. You can use this measurement each time a customer uses your service.

3. Customer Effort Score: Customers usually get irritated by customer journeys that are time-consuming or extremely inconvenient. The CES lets you diagnose such situations before they get out of hand. This survey question asks a client “on a scale of ‘extremely difficult’ to ‘extremely easy’ how easy was it to do business with [business name]. A 5 point-scale is appropriate for this measure. It is beneficial to do this on a weekly basis or after each transaction.

These measures are foundational and quick to complete. However, they just give a glimpse of the situation and do not offer a wholistic picture of customer satisfaction and insight into the customer’s experience. To get a more wholistic try our Consumer Insight subscription for free for 60 days and access regular insights and recommendations on how to improve your customer experience. Our Consumer Insight package measures everything from brand equity to brand loyalty to customer value to consumer intent so that you can create innovative solutions to your customers’ problems. You can sign up for a 60-day free trial using the link below.

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