In today's competitive marketplace, consumers have more choices than ever before. With so many options available, it's important for your business to differentiate itself from their competitors. One way to stay ahead of the game is to ensure your product or service meets or exceeds the expectations of your customers.
That's where customer satisfaction metrics come in.
By tracking key performance indicators such as Net Promoter Score and Customer Effort Score, businesses can get a better understanding of what their customers want and need, and make the necessary improvements to keep them coming back for more.
In this post, we'll discuss a bit more why tracking customer satisfaction metrics is important as well as the top metrics you should be looking at. Let's get started on ensuring your customers end up having the ultimate experience!
Why You Should Track Customer Satisfaction
Tracking customer satisfaction metrics is important because it allows business to better understand how their customers feel about the products or services being offered. In turn, this information can be used to make improvements that can enhance customer satisfaction and the overall customer experience leading to improved customer loyalty and sales.
Some useful information that can be gleaned from measuring customer satisfaction metrics include:
1. Identifying Areas for Improvement
By tracking customer satisfaction metrics, businesses can identify areas where they need to improve their products or services. For example, if a business receives a lot of negative feedback about a particular feature of their product, they can use that feedback to make changes and improve the customer experience.
In fact, a large reason for Starbucks' success can be traced to the fact that they track customer satisfaction metrics to identify areas for improvement.
"Having a connection with our customers, whether in our stores or digitally, allows us to anticipate their needs and deliver the products and experiences they are looking for. Our customers have shared with us that they would like more options to pay and earn Stars in the app as a Starbucks Rewards member, in addition to the Starbucks Card," said Brady Brewer, Starbucks chief marketing officer.
2. Increase Customer Loyalty
Satisfied customers are more likely to be loyal customers. By tracking customer satisfaction metrics, businesses can identify and address the needs and concerns of their customers, which can help increase customer loyalty.
Apple is a great example of a company that makes use of customer satisfaction metrics to continuously improve upon its offering which has resulted in a very loyal customer base. This can be seen in their NPS score which has continuously grown; in 2007, they had a NPS of 58 and in 2017 they had an NPS of 72. As of 2016 through 2017, the company had an NPS of 72
3. Reduce Churn
High customer churn rates can be costly for businesses. By tracking customer satisfaction metrics, businesses can identify and address the issues that are causing customers to leave, which can help reduce churn and increase customer retention.
4. Improve Sales and Revenue
Satisfied customers are more likely to purchase from a business again and to recommend the business to others. By tracking customer satisfaction metrics, businesses can identify and address the needs and concerns of their customers, which can help improve sales and revenue.
5. Enhance Brand Reputation:
A strong brand reputation can be a powerful competitive advantage. By tracking customer satisfaction metrics, businesses can identify and address the issues that are damaging their brand reputation, which can help enhance their overall brand reputation.
Quantitative Customer Satisfaction Metrics to Track
The following are quantitative customer satisfaction metrics, which means you can track them with a specific number. These metrics can serve as hard data points that give you a clear picture of your company’s performance without any biases.
1. Net Promoter Score (NPS)
Net promoter score is a widely-used metric that measures how likely customers are to recommend your product to others. It’s measured on a scale from 0-10. Here’s how the scoring bands look:
- Customers who give you a 9 or 10 are called promoters
- Customers who give you a 7 or 8 are called passives
- Customers who give you anything less (0-6) are called detractors
The point of NPS is to get an overall sense of how loyal customers are to your brand itself or a particular product or service. It’s a single question that gives you clear, highly-actionable data.
Many brands will combine their NPS question with other qualitative and quantitative metrics to form a more complete picture of customer satisfaction with their company.
2. Customer Satisfaction Score (CSAT)
CSAT measures how satisfied a customer is with a specific purchase or experience. For example, they’re commonly shown just after you buy something online or sign up for a new service subscription.
There are several ways to get this data. Many companies are starting to show emojis and ask customers to click on the one that best represents their experience. But you can also use standard 1-10 scores if you prefer. Then you calculate the average of those scores to get the complete picture.
The CSAT score can be used to measure customer satisfaction over time, as well as to compare the satisfaction of different groups of customers, such as those who have purchased different products or used different services. By tracking the CSAT score, businesses can identify areas for improvement and make changes to increase customer satisfaction.
3. Customer Effort Score (CES)
Customer effort score is a measurement of how challenging it was for a customer to complete a certain task with your company. It’s calculated by asking the customer how satisfied they feel after a specific action is completed.
For example, after a customer service chat online, you could ask the customer how satisfied they were with the support they received and give them options ranging from highly satisfied to completely unsatisfied.
Customer effort scores give you a good sense of how much friction there is in different processes within your business. This metric can be used to remove friction where you find it to simplify the customer experience as much as possible.
4. Customer Ratings and Reviews
Customer ratings and reviews may be the most widely-used satisfaction metrics. Most businesses measure these both on their own sites and on third-party sites like G2, Capterra, Google Business, and Yelp.
These will help you get a good overall sense of how your business is performing – especially relative to others in your industry. Plus, third-party sites usually calculate the average of different metrics for you, so you don’t have to worry about doing it yourself.
5. Customer Health Score
Customer health scores classify your customers as either weak, at-risk, or healthy. How you classify your customers will depend on the metrics that matter most to your company.
For example, some businesses use factors like total money spent, number of customer support interactions, and subscription length to classify their customers’ health. Those metrics may make sense for your company, or you may need to use others.
The key thing to note is that customer health score applies to individual customers. Over time, you may begin noticing trends in the types of customers that you face the highest risk of losing by using this metric.
6. Customer Churn Rate
Customer churn rate is a measurement of how many customers you lose over a set period of time. It’s useful as an indicator of how valuable your products are and how easy it is to do business with your company over a sustained period of time.
Here’s how to calculate your churn rate:
Define the period that you want to look at (such as annually or bi-annually)
Subtract your total customers at the end of the period from the total customers at the beginning of it
Divide the result of step two by the number of customers you had at the beginning of the period
7. Customer Referral Rate
Customer referral rate refers to the percentage of customers that refer you to others. It’s distinguishable from Net Promoter Score in that your NPS measures the customers that would theoretically refer your brand, and referral rate measures those that actually do it.
You can measure this by using tracking features in your customer referral links. That way, you know how often they’re shared by current customers, clicked on by leads, and, ultimately, end in conversion.
8. Repeat Business Rate
Your repeat business rate is the percentage of customers that buy from your brand more than once. To calculate it, you divide the number of return customers you get by your total customers. Then you can multiply that by 100 to get a percentage.
This metric helps you figure out whether you’re doing enough to earn customer loyalty from people who have already used your brand.
Qualitative Methods of Tracking Customer Satisfaction
Qualitative metrics examine data that goes beyond clear-cut numbers. With these metrics, you’re not just looking for percentages or 1-10 scores; you’re looking at the kind of language customers use to describe their experiences with your brand.
Here are three qualitative metrics worth taking a look at.
9. Customer Feedback
Customer feedback is something that most businesses already take into account. It’s the language customers use to describe your products, company, and employees. You can get customer feedback by talking to customers, sending customer feedback surveys, and reading the reviews they leave on third party review sites.
One thing to keep in mind about this kind of informal customer feedback is that 9/10 customers say they’re more likely to leave negative reviews than positive ones. So this is information you’ll want to take with a grain of salt.
Customer interviews may offer a more complete look at how customers feel about your brand and products. These involve talking with past customers directly and asking them a series of pointed questions about their experience with your company.
Customer interviews can provide you with more pointed and actionable information than general informal feedback because you control the conversation. Just make sure that you interview a cross-section of customers to get a true sense of your company’s performance.
For example, you wouldn’t only want to interview customers that left 10/10 reviews for your company online. Because those interviews may not discover some of the hidden problems with your brand that other customers who left poor reviews may have experienced.
11. Customer Sentiment Analysis
Customer sentiment analysis uses AI and algorithms to track the emotion behind how customers are talking about your brand online. It helps you get a good understanding of how people feel about your business, its marketing campaigns, and its products at different times.
For example, you might run a sentiment analysis on Twitter, Facebook, and Instagram after launching a new ad campaign. This will tell you how people are responding to the campaign and let you know whether it should be continued or not.
Best Practices for Tracking Customer Satisfaction Metrics
There are many different qualitative and quantitative metrics for tracking customer satisfaction. But if you want to get as much value out of those metrics as possible, you need to make sure you’re using the best practices. Here are three to keep in mind as you gather data.
1. Establish Clear Goals and Objectives
You’ll want to begin with a clear understanding of what you hope to accomplish from your customer satisfaction analysis. Is it more repeat business? Better online reviews? A clearer understanding of how your products compare to the competition?
Your goals and objectives tell you which metrics you need to pay the most attention to while conducting your analysis. If you don’t begin with clear goals, you could waste a ton of time and energy tracking metrics that don’t end up being relevant to what you want to accomplish.
2.Collect and Analyze Data
Collecting and analyzing data is another very important part of customer satisfaction tracking. You want to make sure the data you have is as clean as possible – free of all interference. That way, your analysis won’t be swayed by data trends that aren’t actually based in fact.
3.Review and Report on Progress
Once your data analysis is complete, it’s time to review the information you have and identify what it has to tell you. You may discover that you have extremely loyalty customers who love your brand or low levels of customer loyalty with certain demographics.
The key here is to be open to whatever the data tells you – even if it’s not favorable. The only way to improve is to accept where you’re at right now.
The Value of a Knowledge Base for Customer Satisfaction
Knowledge base software can be a useful tool for any company looking to improve on customer satisfaction metrics like Net Promoter Score, Customer Effort Score, and Customer Satisfaction Score in several ways:
- Reducing the number of customer inquiries: A well-organized and easily accessible knowledge base can provide customers with the information they need to solve their own problems or answer their own questions. This can reduce the number of customer inquiries, which can lead to higher customer satisfaction scores.
- Improving the accuracy and speed of customer service: A knowledge base can provide customer service staff with the information they need to quickly and accurately answer customer inquiries. This can improve the speed and accuracy of customer service, which can also lead to higher customer satisfaction scores.
- Providing a convenient self-service option: A knowledge base can provide customers with a convenient self-service option, allowing them to find the information they need on their own time. This can improve the overall customer experience, which can contribute to higher customer satisfaction scores.
The Bottom Line on Customer Satisfaction Metrics
Tracking and analyzing key customer satisfaction metrics can help your company thrive. Doing so is one of the most effective ways to identify opportunities for improvement, discover what you’re doing well, and separate yourself from the competition.
You don’t necessarily have to use all of the customer satisfaction metrics we’ve included to accomplish your goals. Find the ones that are most relevant to your objectives and start there. Let the data guide where you go next, and you should begin making noticeable improvement in no time.