The 5 Types of Customer Satisfaction Metrics [+How to Measure Them]
Customer satisfaction is the ultimate measure of business success. Zero negative experiences and a set of positive customer satisfaction metrics throughout the customer’s journey are the Holy Grail for any company. This is particularly true in a day and age when there are always competitors around the corner to take your customers.
This calls for ensuring that your customers are very satisfied with your brand. But, how do you measure customer satisfaction?
How do you know what your customers actually think of you while interacting with your product or service?
Let’s dive right in and find out.
Customer Satisfaction Metrics
Throughout their journey with your product, your customers will come across a number of instances and elements that will decide whether they adopt your product, or abandon it.
These instances define several customer satisfaction metrics that can be measured to determine how well your brand is performing in the market.
You can find out how satisfied your customers are in a number of ways, however, there are 5 distinct metrics that sum up your customers’ opinion of your brand.
These metrics measure the following customer-specific elements how:
- Easily customers find your product after initial search.
- Much effort customers put into accessing your product.
- Easy your product is to use.
- Customers feel after initial and/or prolonged us of your products.
- How likely is it for your customers to recommend your brand to others.
Let’s see how each customer satisfaction metric works, and how to measure it.
1) Customer Satisfaction Score
The Customer Satisfaction Score (CSAT) measures to what extent your product/service meets clients’ expectations. The score is usually measured via a 5-point scale, from ‘Highly Unsatisfied’ to ‘Highly Satisfied’. It’s a more product or service-focused metric since it measures the relationship between the user and the product, and not what the customer does prior to or after the experience.
How to Measure It
Ask the customer, “How would you rate your experience with the product/service (or a particular aspect of the service)?” Then, measure the number of ‘Highly Satisfied’ experiences against the ‘Highly Unsatisfied’ ones.
The score is the difference between the two, with a bigger difference in favor of satisfied responses defining a happier customer base.
The versatility of CSAT allows you to ask a number of questions to measure it. However, the majority of the focus for this metric is on one company-to-customer interaction i.e. you asking the customer about the quality of the delivery, the availability and quality of customer support teams, and the service experience overall.
Once you have this score, you look at and improve the following areas:
- Time to delivery: Reducing the time to delivery will present a competitive advantage for the client in B2B, and increased support (from the customer) for the product in B2C businesses.
- Customer Support: Fine-tuning the support delivery rate will ensure you proactively reach the customer for feedback before they have to reach you.
- Product/Service Quality: Specific feedback from the customer(s) will result in you being able to spot/fix areas in the product that may need improvement.
- UX and UI: The overall customer experience will help you find ways to improve how the product looks and functions for the end-user.
In addition to certain areas of improvement, this metric will help you determine which areas of the product/service need immediate attention, and which you can improve over time, as you get additional customer feedback over an extended period of time.
It’s also necessary for companies and service providers to factor in the customer satisfaction score when projecting sales. This will ensure that all the support and feedback outreach is timely, and personalized to each customer group.
2) Net Promoter Score
The Net Promoter Score (NPS), one of the most popular customer satisfaction metrics, helps measure overall satisfaction. Basically, it determines how lucky your customers are to refer your brand to someone (through word-of-mouth and social media).
NPS is often measured on a 10-point scale, but the index can go from -100 to 100 in a dedicated NPS survey for giant corporations with a bigger customer base.
How Do You Measure It?
Ask the customer, “How likely are you to recommend our brand to a friend or family member?” Then, measure the average rating unit. If it is closer to 10, then your customers are more likely to become promoters of your brand.
This measurement also helps you place customers into three distinct categories:
- Detractors: These are customers who rate their likelihood of recommending at 6 or lower. They are either not interested in spreading the word about your brand, or their experience wasn’t outstanding enough for them to recommend.
- Passives: These are customers who rated at 7 or 8. They are willing to recommend your brand to others, however, if they find a better product, they wouldn’t mind being vocal about their change of choice either.
- Promoters: Customers who rate their willingness to recommend at a 9 or 10 are known as promoters – they are happy with your brand and will always suggest your product or brand whenever the opportunity presents itself.
NPS provides companies with qualitative and quantitative insights into the customers’ direct experience with your brand. Getting both data types from one measurement helps companies identify and categorize certain trends from their customer reviews.
Furthermore, the Net Promoter Score highlights what improvements companies could make to their products to increase the likelihood of customers recommending them to others.
You can get a lead on those improvements by asking customers for a brief explanation of their rating.
3) Customer Abandonment (Churn) Rate
The customer abandonment rate, also referred to as ‘churn’ rate, is the percentage or number of customers who did not complete the product transaction with your brand. This can mean both customers who left during the initial lead phase and those who left in the middle of their subscription (before they could receive the full product or service).
This helps companies figure out how to deal with lost customers, as well as, what happened that led to customers leaving.
How to Measure It
There are actually several ways to measure the Customer Abandonment rate, seeing as customers can abandon your brand at any point. When and during which stage of the customer journey they left will define how you measure churn.
Here are the most common methods of measuring the churn rate:
- By the Number of Customers: How many customers left and/or how many accounts closed up over a set time period (weekly, monthly, quarterly, or annual). Gives you a general idea of how many customers are leaving, and at what point in the customers journey.
- By Lost Revenue: How many customers left before the company could completely deliver the service to them. This shows which service delivery points to improve, and how to strategically prepare operations for the loss of revenue. Such a measurement method is better for companies with a subscription-based model.
- By Product Changes: How many customers left because there were changes to the product. It shows you which features of the product were important for the customer, and which areas to improve upon for the future.
This metric gives companies an idea of how customers are interacting with their brand, regardless of which service or product they’re using.
A brand has several components that a customer interacts with and measuring which component is causing the most abandonment will help you refine it. This will also enable you, as a business, to provide an excellent omni-channel experience to your customers.
In case your abandonment rates are higher than expected, you can discover exactly where the roadblocks are, and increase customer retention across various channels.
The Customer Abandonment rate is very important for companies that offer SaaS and long-term service delivery. While e-commerce and FMCG companies can also benefit from this, the precise nature of the customer churn rate score makes them more suited to brands that customers subscribe to over an extended period of time.
4) Customer Effort Score
Next up on our list of customer satisfaction metrics is the the Customer Effort Score (CES). The CES determines how much effort a new customer has to put into their interaction with a product. This can be both, effort put into accessing the product, and getting the desired result from the product.
The metric is usually measured through a point scale of 1 to 5, with 5 being ‘Very Easy’ and 1 being ‘Very Difficult’. It could also be a yes-or-no question, depending on the nature of the product.
How Do You Measure It?
There are two aspects of the Customer Effort Score, namely, the effort that went into product access and product usage itself.
Let’s look at both separately.
- Product Access: As soon as the customer has performed an action (clicked on product description, purchased a product, etc.), ask them how difficult it was for them to reach the product page, or how much time they spent before they made the purchase.
- Product Function: After the customer has purchased the product, ask them how difficult it was for them to use.
The CES is a very important metric for companies today, seeing as a streamlined customer journey and product experience are at the top of customer priorities. It is one of the key metrics for discovering the number of satisfied customers.
A successful CES survey will provide you with instant feedback on how usable your product or service is, and how many steps the customer has to go through to actually purchase it.
This also helps to improve the Customer Abandonment rate since a CES survey will allow companies to proactively discover customer pain points before they have a chance to abandon the product.
5) Customer Health Score
The Customer Health Score (CHS) is an overall summary of how satisfied a brand’s customers are with the product. It’s a combination of all the data collected from the Customer Effort Score, Customer Satisfaction Score, and the Customer Abandonment rate, to determine exactly what a customer feels about a business.
It is different from the various other metrics because it measures the customers’ thoughts and feelings about a brand, instead of their experience with a singular product.
The metric is displayed on a color scale, from red to green, with green meaning happy customers, yellow meaning uncertain customers, and red meaning customers who are about to abandon the product.
How to Measure It
Unlike the rest of the metrics, the CHS is measured using data from other metrics, backed by direct feedback from the customer-facing employees (marketing and sales teams, customer support department, etc.).
You can measure CHS by:
- Calculating the number of positive/median/negative scores, and assigning a color based on the scores. This means that if the previous metrics mostly (or all) yielded median scores, then you’ll have a Customer Health Score in the yellow zone.
- Deciding which other metrics are more important, and basing the final health score on what the score for those metrics was.
- Conducting a broad survey to determine the overall CHS, instead of adding up historic data.
The Customer Health Score presents a unique opportunity to companies, in that they highlight areas which can be leveraged financially. For example, customers with a yellow health score expect some added value to the product. This is a chance to deliver either additional features for their purchased product – or a better product altogether.
The marketing and sales teams can then create target marketing and sales campaigns for this specific demographic, and potentially turn them into loyal customers.
The CHS also highlights ways to improve on other metrics. For example, it shows which customers are most likely to become advocates for the brand, and bring in further leads.
All of these customer satisfaction metrics can play a role in creating effective customer lifecycle marketing strategies, and positively impacting the brand’s bottom line in the long and short term.
Final Word
With customers having as much influence over a brand’s decisions (and their bottom lines) as they do, it makes sense to put as much effort into customer satisfaction as companies do into making a quality product.
According to one report, 88% of customer service representatives agree that customers have higher expectations from brands today. The same report also highlights how customers are more likely to share their positive and negative experiences with brands on public platforms.
This calls for involving all the in-house product stakeholders into the task of satisfying potential customers, while retaining the more loyal followers of the brand.
Ultimately, by understanding the wants and needs of customers, providing real value, and using customer satisfaction metrics, as well as, SaaS metrics to measure performance, you can set yourself up for sustainable growth and long-term success.
