Customer satisfaction is defined as a measurement that determines how happy customers are

with a company’s products, services, and capabilities. Customer satisfaction information,

including surveys and ratings, can help a company determine how to best improve or changes
its products and services.

An organization’s main focus must be to satisfy its customers. This applies to industrial
firms, retail and wholesale businesses, government bodies, service companies, non-profit
organizations, and every subgroup within an organization.

Customer satisfaction is a measure of how happy your customers are with your product or
service. And for many businesses, it’s the difference between a success and a failure—no
pressure.
Customer satisfaction (CSAT) is a measure of how well a company’s products, services, and
overall customer experience meet customer expectations. It reflects your business’ health by
showing how well your products or services resonate with buyers.

What does it take to satisfy the customer?

Customers are looking for effective and efficient customer service, but research
shows that there may be a disconnect between what businesses think satisfies a
customer and what actually does.

In our CX Trends Report, 60 percent of companies surveyed gave themselves high

marks for service. But 68 percent of customers said there’s room for improvement,
and 54 percent reported that customer service feels like an afterthought for most of
the businesses they buy from.

A few other notable findings from our report:

 Merely 18 percent of buyers are extremely satisfied with the number of

communication channels businesses offer them.
 Less than 20 percent say resolution speeds are extremely strong.
 Only 21 percent report it’s easy to interact with businesses.

Now is not the time to settle for mediocre—especially when the quality of your
customer service may earn you repeat customers or be the reason you lose out to
competitors. By taking the time needed to understand what great customer service
means to your unique audience, you can make the changes necessary to ensure
that middle-of-the-road experiences don’t hold you back.

The importance of customer satisfaction

Customer satisfaction is important because it illustrates whether your customer base
likes what you’re doing. Research shows that high satisfaction leads to greater
customer retention, higher lifetime value, and a stronger brand reputation.

Low customer satisfaction scores are important, too. They can reveal customer pain
points and provide data-backed insights on how to improve your product, service,
and overall customer experience.

1. It drives customer loyalty

It’s a truth universally acknowledged: an unhappy customer is more likely to tell

others about their negative experience than a happy customer is to share a positive
one.

And considering 79 percent of people in the United States use social media, sharing
is easier than ever before. If a customer has a bad experience with your company,
they can broadcast it to millions of people before they’re even out the door.

Prioritizing customer satisfaction and making changes based on negative feedback

can help your business get better reviews—and, in turn, more customers.

Example: A customer makes a Twitter thread about their poor experience with your
company, leading their followers to also distrust your brand. To help save the
interaction, respond to the customer as quickly as possible. Apologize for the error
and ask them to direct message you so you can get more information and remedy
the situation.

2. It helps reflect team performance

Customer satisfaction benchmarks and metrics don’t just help you gauge how your
audience is feeling—they also tell you how your support team is doing.

The following metrics can be useful in understanding customer satisfaction levels:

 Initial response time: In our CX Trends Report, respondents said that long
wait times were the most frustrating part of bad customer service. This metric
can help you identify pain points in your team’s ability to respond promptly.
 Resolution time: If it’s taking your support agents hours to resolve issues
that could be dealt with swiftly, it might be time to tweak your internal
processes. Don’t just strive to respond quickly—resolve quickly, too.
  Number of transfers: Few things are more frustrating than being transferred
to a new agent and repeating your issue all over again. If transfer occurrence
drops, customer satisfaction should rise.

Considering our report found that fast issue resolution was the No. 1 aspect of good
customer service, your team’s efficiency in those three areas directly impacts
customer satisfaction.

Example: If your negative reviews mainly revolve around agent response time, you
may want to consider training employees on how to deliver quicker support. Use
software with built-in analytics to observe how well your support team serves
customers.

3. It encourages repeat purchases

A satisfied customer is a loyal customer. Our CX Trends Report agrees: 57 percent

of consumers say excellent customer service is a factor in their brand loyalty.

How do you know if your customer service is driving customer loyalty? There are two
primary ways to find out:

 Conduct polls to gauge buyers’ excitement and likeliness to tell others about
your brand.
 Observe customer behavior by tracking repeat purchases, reading reviews,
and looking at how customers were referred to your site.

These methods allow you to get input directly from your target market while also
seeing how their words compare to their actions.

Example: Customers who repeatedly experience good service in your store are more likely
to come back and also encourage their friends to visit.

4. It increases customer lifetime value

Satisfied customers are not only more likely to remain loyal and stick around but
they’re also more likely to increase your bottom line. According to our CX Trends
Report, more than 90 percent of consumers will spend more with companies that
offer streamlined customer experiences.
Example: Even if a coffee shop around the corner is more convenient, customers
will be more likely to walk to (and spend money at) a shop that gives them better,
more personalized service.

5. It boosts customer acquisition

Great customer service isn’t just important for supporting existing customers; it’s key
to attracting new ones, too. Nowadays, consumers expect premium service to be
built-in throughout the customer journey—from the first sales or marketing interaction
to any support they need down the road.

To position themselves for success, businesses must integrate high-quality customer

service into every interaction point.

Example: If a customer receives top-notch support after experiencing a product

issue months after purchase, they’re likely to recommend your brand to friends and
family.

Why measure customer satisfaction

If you were the captain of a sinking ship, wouldn’t you want to know exactly why you
were taking in water? Measuring customer satisfaction is similar. Keeping tabs on
how buyers are (and aren’t) satisfied allows you to identify pain points and solve any
problems.

Customer satisfaction keeps your business afloat in other ways, too. Improving
satisfaction can help identify, attract, and empower loyal customers. But you won’t
know how to satisfy your audience unless you start measuring CSAT scores.

When you take a data-centric approach to customer satisfaction, you can:

 Save an unhappy customer from leaving your brand for a competitor.

 Discover customer pain points and learn how to improve your product,
service, or overall customer experience.
 Drive repeat purchases by ensuring customer happiness.
 Monitor and improve brand reputation by discovering how likely customers are
to recommend your company to a friend.
 Build customer trust by showing customers that their feedback matters.
How to measure customer satisfaction: 4 key
metrics
Measuring customer satisfaction is critical to growing your business. It enables you
to uncover how well your company’s products and services meet your customers’
expectations. Here’s how to do it.

1. CSAT surveys

CSAT surveys are typically one- to two-question surveys offered at the end of a
business transaction. A classic question is, “How satisfied are you with the product?”
with answers ranging from “very satisfied” to “very unsatisfied.”

2. Net Promoter Score® (NPS) surveys

The goal of a Net Promoter Score® (NPS) survey is to determine whether customers
are promoters, detractors, or passives. To measure this, send a survey asking
customers how likely they are to promote your brand on a 1-to-10 scale.

Customer satisfaction scores and Net Promoter Scores are discussed frequently in
the CX world. Watch the video to understand how they differ.

3. Customer service data

Collect customer service data around specific features on your site, resolution times,
and support requests. If you’re seeing an increase in tickets around a particular task,
for example, that’s a sure sign that something needs fixing. You can also infer
customer satisfaction from your call resolution rates and average issue-handling
time.

4. Quantitative customer satisfaction metrics

To understand customer satisfaction from every angle, perform both qualitative and
quantitative research. One qualitative way to understand buyers’ motives and
behaviors is through a client advisory group, a panel of customers who meet to
discuss your business’ products and services.

How to improve customer satisfaction

The benefits of focusing on customer satisfaction are clear, but truly making
customers happy can take some trial and error. The key is persistence. Always aim
to go above and beyond for customers, and lean on other departments to help boost
your customer experience. Here are a few ways to start improving your customer
satisfaction scores.

1. Become obsessed with customer feedback

Become a student of your customer feedback. Don’t just collect it—analyze it and
apply it to what your customers are saying. Commit to learning about buyers’ pain
points, and then make a plan to alleviate them in ways that set you apart from
competitors.

A CRM is a great way to assess your reviews. But even without one, you can still
keep close tabs on customer feedback. Social media and online review boards are
especially good places to monitor buyer attitudes.

Tip: Use customer feedback software. This tool includes analytics for agent
performance and customer surveys, so you can study complaints and compliments
about your business.

2. Meet customers where they are

If you need Advil in the middle of the night, you’ll be relieved by the glowing neon
sign of a 24-hour drugstore. That’s why customers enjoy places with flexible hours
and at-will availability.

To build the same sense of convenience as a brick-and-mortar store online, you

must have a digital presence on the platforms your customers already use. Make it
easy for buyers to reach out and ask support questions on their channels of choice.

Tip: Offering support via messaging apps (like WhatsApp, Twitter, and Facebook)
helps businesses create that same sense of 24-hour availability. These are the same
channels customers use to interact with friends and family, so it gives you a chance
to meet them where they already are.

3. Deliver fast responses

Our CX Trends Report revealed that 60 percent of buyers have higher customer
service standards now than ever before. In a constantly connected world, customers
don’t want to have to wait a day—or even more than a few hours—for a response.

Here are some ways to provide faster responses:

  Pre-written responses ensure agents don’t have to write common answers
repeatedly.
 Messaging channels enable agents to help more customers at once because
they’re communicating asynchronously. Data backs this up: Support teams
with the fastest resolution times are 42 percent more likely to be messaging
with their customers.
 AI-powered bots can intercept would-be tickets when agents are off the clock.
 Bots can also gather customer details upfront (such as city or account type)
before an agent takes over.

Tip: Communication is key. If a customer sends a request when your team isn’t
available, they should get an auto-reply saying their message was received. It’s also
beneficial to provide an approximate response time, so the customer isn’t left
wondering when someone might get back to them.

4. Make customer satisfaction a company-wide focus

To improve overall customer satisfaction, you have to put time and effort into a
customer-centric business strategy. You can (and should) incorporate customer
satisfaction into your company mission and value proposition. That keeps it top-of-
mind with every employee, regardless of their position.

When employees can see the impact of their work and all stakeholders feel
committed to a goal, they can achieve high customer satisfaction levels.

Tip: A great first step is using a tool like the balanced scorecard. It guides
companies in thinking about their operations from four different perspectives:

 Financial
 Internal business
 Customer
 Innovation and learning

It also helps businesses consider how all their activities are working toward the goal
of high customer satisfaction.

5. Invest in agent training

Supporting customers starts with supporting your people. Customer service agents
are the beating heart of any customer service team, so investing in their professional
knowledge and well-being establishes a crucial foundation on which to build your
customer satisfaction scores.

According to our Trends Report, companies with high customer satisfaction are 6.4x
more likely to have plans to greatly extend education and training opportunities for
their support team. As a result, their agents are over 8x more likely to be extremely
satisfied with the frequency of training.

Tip: Build a mentorship program for new employees, who can then learn from the
best. Reevaluate your customer service training program, too, to see what you can
improve or add.

6. Enable customers to help themselves

Consumers today have adopted a “Google-it” mantra. For basic queries, they prefer
to find answers themselves online.

Our CX Trends Report found that 70 percent of customers expect companies to

have a self-service portal where they can get answers quickly, without having to
interact with an agent.

Tip: You can also use an AI-powered chatbot to point customers to help center or
knowledge base articles. Customers are increasingly willing to turn to chatbots for
simple problems. And more tickets solved by bots mean more time for agents to
focus on complex problems.

7. Lead with empathy

If there’s one thing the COVID-19 pandemic taught us, it’s that empathy is an
essential skill for support professionals—it’s even more valuable than customer
service experience.

Support leaders can provide empathy training, but it’s also a good idea to hire
support reps who already possess this soft skill.

Tip: Businesses might also consider allowing agents to make exceptions to certain
policies in situations that require customer empathy.

8. Personalize the customer experience

In our Trends Report, 90 percent of consumers said they’ll spend more with
companies that personalize the customer service they offer them. Additionally, 68
percent said they expect all experiences to be personalized.

Give agents access to valuable customer information that they can use to improve
experiences. With important customer context—such as the previous issue the
customer reached out about, how long they’ve been a customer, and what products
they’ve purchased—agents can anticipate customer needs and deliver more tailored
support.

Tip: Match repeat customers with a dedicated support agent who can help them
every time they reach out. This will strengthen their connection to your brand.

9. Provide proactive support

Reactive support used to be the standard: You wait for a customer to contact your
business with an inquiry or issue.

Proactive service, however, is now a crucial type of customer service—it means

anticipating issues and addressing them before your customers do. For example, an
Internet provider may send customers a text about upcoming service disruptions. Or,
a software company might add new resources to its help center before a product
update.

Tip: Collect customers’ phone numbers so you can immediately alert them of
changes or updates.

10. Implement conversational customer service capabilities

Customers hate repeating themselves, and they certainly don’t want to wait on hold
while an agent hunts around for information that should be readily available. This is
why it’s imperative to excel at conversational customer service—the ability to offer
fast, personalized, uninterrupted service across web, mobile, and social apps.

Instead of siloed chats that start and stop each time a customer reaches out (or
switches channels), every interaction becomes part of a larger conversation that
continues over the customer lifecycle. The result is a seamless experience for
buyers and agents alike.

Tip: Teach your agents to use a conversational tone, too. Customers enjoy it when
they feel like they’re connecting with a human—not a robot.
11. Build a customer community

A customer community is an online or physical space where buyers can come

together to have conversations, answer questions, and share ideas and information.
A strong customer community can improve the customer journey and increase trust.

Customers find value in connecting with one another. By doing the work to create a
community, you’ll give buyers more opportunities to be successful using your
product, and you’ll generate the kind of goodwill that builds brand loyalty.

Tip: You can create a thriving customer community with forum software that enables
you to interact with users, facilitate group discussions, and gather valuable
feedback.

Customer satisfaction examples

Looking for inspiration? Read on for examples of businesses that excel at satisfying
their customers.

1. Instacart

Instacart is a same-day grocery delivery service. One way it achieves high customer
satisfaction is by having data visibility and agility. In other words, it can access
customer data, draw insights from it, and act on it.

Being data-centric enables Instacart to:

 Personalize the service experience: With customer data at its fingertips,

Instacart can analyze recent orders to personalize coupons, offers, and future
communications.
 Analyze customer attitudes: Data also allows the Instacart team to see how
customers behave, including what they respond well to and what they don’t
enjoy. They can then make changes to their product from there.

2. Dollar Shave Club

Dollar Shave Club is one of the first direct-to-consumer subscription services,

delivering affordable razors straight to members’ doorsteps every month. The
company knew from day one that the only way to nurture legions of loyal subscribers
was to provide a world-class support experience.
Here’s what helped the company succeed:

 Meeting customers where they are: Dollar Shave Club provides support
over a range of channels—including email, live chat, phone, and Facebook
Messenger—to give customers options when they need help.
 AI-powered self-service: Dollar Shave Club also deployed a chatbot to scale
its self-service and enable customers to find answers on their own instead of
having to contact the support team.

3. Squarespace

Squarespace gives people the tools and templates to build, host, and promote their
brand online. Naturally, Squarespace wants its customers to feel at ease in their
digital home and works hard behind the scenes to create a customer
experience that’s easy and intuitive, turning even the least Internet-savvy among us
into designers of beautiful spaces.

The company does so through:

 Fast, always-on support: Quick, 24/7 support is critical to good customer

service, according to consumers. Squarespace offers round-the-clock support
and strives to reply to customers in a few minutes via chat and within a few
hours on email.
 Coaching and mentorship: Beyond a help center, Squarespace provides
coaching and mentorship to help its customers succeed.

4. Pet Lovers Centre

Pet Lovers Centre helps pet owners in Southeast Asia take better care of their furry
friends. The company knows the bond between owners and their pets is strong, so it
strives to make customers feel comfortable and confident during every step of their
pet journey. The key to doing so? Providing accessible and comprehensive customer
service.

Pet Lovers Centre employs:

 Multiple customer service touchpoints: Pet Lovers Centre adopted an

omnichannel customer service approach that empowers customers to find
answers independently or contact support using their preferred method—
email, phone call, chat, etc.
  Automation and internal collaboration: To keep agents happy and
streamline workflows, Pet Lovers Centre automated some manual processes
and developed more effective internal communication strategies.

Benefits of Customer Satisfaction

1. Customer satisfaction helps you understand where you excel.
By tracking and measuring customer satisfaction, you can understand what your
business does well, and thus continue doing it. But you can’t find out unless you
carry out customer satisfaction surveys.
Growing companies prioritize customer success, and an essential way to identify
satisfied customers is through customer feedback.

Results will let you know who these customers are and what you’re doing that’s
leaving them satisfied with their experiences with your brand. When you have this
information, you can continue doing the things they like in the hopes of inspiring
customer retention, and you’ll reap the following benefits:

 It’s cheaper to retain an existing customer than it is to acquire a new one.

 Repeat, loyal customers spend more.
 Satisfied customers engage in word-of-mouth marketing, helping you with free
acquisition.

2. Customer satisfaction helps you understand where you can improve.

Where do you fall short? The gaps in customer satisfaction can help you find out
where you can improve in your customer service strategy.

If you don’t understand why your customers are unhappy, you can’t make changes
to your product or services that make them happy and align with the experiences
they desire.

Ensure you’re sending out customer satisfaction surveys, analyzing the results, and
acting on negative customer feedback. This is especially important if the feedback is
tough to hear, as it will help you ensure that you take steps to prevent customer
churn, negative reviews on your product pages or social media, or negative word-of-
mouth reviews to family and friends.

3. Customer satisfaction leads to higher customer loyalty and advocacy.

If your business has positive customer satisfaction, then you have customers who
are loyal to your brand. These customers will refer new leads to your company and
generate more testimonials for your marketing team. You can create customer
advocacy programs for these users and encourage them to advertise on your
business’s behalf.

Customer advocacy programs reward customers for referring your business to

potential leads. Customers are given incentives to join the program, then receive
gifts or offers in exchange for reviews and testimonials. This creates a mutually
beneficial relationship that rewards your best customers and keeps them loyal.
4. Customer satisfaction increases customer retention and reduces churn.
It should be no surprise that the happier your customers are, the better your
customer retention will be. After all, happy customers won't have much reason to
turn to competitors, so long as you keep them satisfied. On the other hand, unhappy
customers will have plenty of reasons to churn, and it'll be up to your team to
convince them otherwise.

By measuring CSAT, you can look at individual customer needs and create
personalized offers for users who are likely to churn. Since 32% of customers would
stop doing business with a brand they loved after one bad experience, you may only
get one opportunity to stop someone from churning. Customer satisfaction optimizes
your chances by providing you with relevant information about the customer's
experience with your brand.
5. Customer satisfaction leads to a longer customer lifetime value.
Customer lifetime value (CLTV) refers to the expected profit you can make from a
single customer for as long as they stay with your business.

If a customer is unhappy with your products and services, they’ll likely never return to
your business after that initial purchase. That customer’s lifetime value is low, so
you’d miss potential revenue opportunities.

If your customers are satisfied, however, they’ll likely stay with your business for a
longer time, making repeat purchases and leading to a boost in profits.

It’s clear that customer satisfaction is important for improving service metrics and
ensuring your company is delivering the best experience possible. But how does it
impact other teams?

Let’s take a look.

Customer Satisfaction in Marketing & Sales

How does customer satisfaction impact other teams in your business, such as
marketing, sales, and product development? There are plenty of reasons customer
satisfaction is important for marketing and other teams.

1. Customer satisfaction helps you forecast and work proactively.

Without CSAT and similar customer success metrics, it’s hard for customer success
teams to plan and inform other teams of the state of their customer base.

These metrics are helpful for other departments at your business. You can give sales
teams the information they need to improve customer experiences, work with
product to incorporate customer feedback and make improvements, and marketing
can improve the end-to-end customer experience.

Leaders need data and trends to forecast team performance over the next month,
quarter, and year to adapt strategy, if needed.
2. Customer satisfaction drives your inbound methodology.
Customer satisfaction does more than just measure your customer service it
optimizes other departments’ performance by providing them with helpful customer
insights. This information is used to improve the customer experience, which leads to a
cyclical increase in customer satisfaction. You can visualize the process using the
flywheel model below:

Reference

By Alaina Franklin, Director, Customer Success

Last updated September 6, 2023, Marta Szyndlar
Senior Content Manager
Sophia Bernazzani v2022