This blog was originally posted on Qualtrics.com.
Customer satisfaction goes beyond minimizing complaints. Below is an introduction to customer satisfaction, along with the four key customer satisfaction measurements that are crucial for business success.
Here is what you will learn in this article:
- What is customer satisfaction and why should you measure it?
- What are the four key customer satisfaction metrics?
- How to measure customer satisfaction through KPIs?
What is customer satisfaction and why should you measure it?
Customer satisfaction is a common method used to determine how well you meet or exceed customer expectations. It is used as a key performance indicator of customer service and product quality.
Customer satisfaction may be best understood in terms of customer experience. Customer experience (or CX) is the total sum of a customer’s perceptions, interactions, and thoughts about your business.
Customer satisfaction is a composite of many different aspects, and it is likely to change over time. Customers who develop attitudinal brand loyalty (that is, they have a positive emotional connection to a brand), have been shown to be less price sensitive than their less-loyal counterparts. They are also more likely to convert when they buy from you. Highly satisfied customers are also likely to tell friends and family about their experiences and to promote your brand.
These are good reasons to aim for a level of customer experience that exceeds rather than simply meets expectations. However, accurately knowing that you provide great customer service can be difficult without measuring customer satisfaction.
According to Mckinsey, you can see the impact improved satisfaction can make below:
What are the four key customer satisfaction metrics?
So how do we effectively measure customer satisfaction?
Here are four key customer satisfaction measurements that are critical to your business success. They take into account the different dimensions of customer satisfaction, such as affective (emotional) and cognitive (rationally judged) reactions to a product or service and behavioral intentions (such as likelihood to recommend or repurchase) as well as taking overall scores of satisfaction as judged by the respondents.
If you are ready to start measuring customer satisfaction, head to our customer satisfaction survey templates here.
1. Overall satisfaction measure (attitudinal)
Example question: 'Overall, how satisfied are you with “La Jolla Grove restaurant”?'
This question reflects the overall opinion of a consumer’s satisfaction experience with a product he or she has used.
The single greatest predictors of customer satisfaction are the customer experiences that result in attributions of quality.
Perceived quality is often measured in one of three contexts:
- Overall quality
- Perceived reliability
- Extent of customer’s needs fulfilled
It is commonly believed that dissatisfaction is synonymous with purchase regret while satisfaction is linked to positive ideas such as “it was a good choice” or “I am glad that I bought it.”
By using perception of quality and product satisfaction as a guide, we can better measure customer satisfaction as a whole.
2. Loyalty measurement (affective, behavioral)
Example question: 'Would you recommend “La Jolla Grove restaurant” to your family and friends?'
This single question measure is the core NPS (Net Promoter Score) measure.
Customer loyalty reflects the likelihood of repurchasing products or services. Customer satisfaction is a major predictor of repurchase but is strongly influenced by explicit performance evaluations of product performance, quality, and value.
Loyalty is often measured as a combination of measures including overall satisfaction, the likelihood of repurchase, and the likelihood of recommending the brand to a friend.
A common measure of loyalty might be the sum of scores for the following three questions:
- Overall, how satisfied are you with [brand]?
- How likely are you to continue to choose/repurchase [brand]?
- How likely are you to recommend [brand] to a friend or family member?
Understanding customer loyalty in this form of metric helps you to measure customer satisfaction from the angle of future behavior. It can be helpful not only for understanding customer satisfaction now but also for developing future purchase predictions.
3. A series of attribute satisfaction measurements (affective and cognitive)
Example question: 'How satisfied are you with the “taste” of your entre at La Jolla Grove?'
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Example question: 'How important is “taste” in your decision to select La Jolla Grove restaurant?'
Affect (liking/disliking) is best measured in the context of product attributes or benefits. Customer satisfaction is influenced by the perceived quality of product and service attributes, and is moderated by expectations of the product or service. The researcher must define and develop measures for each attribute that is important for customer satisfaction.
Consumer attitudes toward a product developed as a result of product information or any experience with the product, whether perceived or real.
Again, it may be meaningful to measure attitudes towards a product or service that a consumer has never used, but it is not meaningful to measure satisfaction when a product or service has not been used.
Cognition refers to judgment: the product was useful (or not useful); fit the situation (or did not fit); exceeded the requirements of the problem/situation (or did not exceed); or was an important part of the product experience (or was unimportant).
Judgments are often specific to the intended use application and use occasion for which the product is purchased, regardless if that use is correct or incorrect.
Affect and satisfaction are closely related concepts. The distinction is that satisfaction is “post-experience” and represents the emotional effect produced by the product’s quality or value.
Using this metric to measure customer satisfaction helps you to narrow down the causes of customer satisfaction levels. Unhappy customers may have a particular emotive response to products or services, rather than quality being the issue, for example.
4. Intentions to repurchase measurements (behavioral measures)
Example question: 'Do you intend to return to the La Jolla Grove restaurant in the next 30 days?'
When wording questions about future or hypothetical behavior, consumers often indicate that “purchasing this product would be a good choice” or “I would be glad to purchase this product.” Behavioral measures also reflect the consumer’s past experience with customer service representatives.
Satisfaction can influence other post-purchase/post-experience actions like communicating to others through word of mouth and social networks.
Additional post-experience actions might reflect heightened levels of product involvement that in turn result in increased search for the product or information, reduced trial of alternative products, and even changes in preferences for shopping locations and choice behavior.
How to measure customer satisfaction through KPIs?
Measuring customer satisfaction to gather your customer feedback, illuminate risk of customer churn, and discern loyal customers is useful, particularly over time.
However, it is better to measure customer satisfaction with particular goals in mind. By having scores you are aiming to meet, whether that is an internal or industry benchmark, you are able to track your progress over time and react to how you are doing. If your actions are not improving your CSAT score, you might need to re-evaluate where you are going wrong.
Learn how Qualtrics helps businesses measure, analyze and improve their customer satisfaction KPIs.