Every business should strive to deliver an excellent customer experience. But how do you know whether you are doing so? CSAT is one common metric for measuring customer satisfaction, and it can give you plenty of important insights.
What Is CSAT?
CSAT stands for customer satisfaction score. This is a very common metric that is used to check the performance of customer service as well as product quality. The metric is expressed as a percentage, with 100% being a perfect score and 0% being an undesirable score.
Are There Other Related Customer Satisfaction Metrics?
You may also come across a few other customer satisfaction metrics worth considering. The Net Promoter Score (NPS) looks at customer loyalty. It is much more specific than the CSAT and typically asks how likely someone is to recommend your company. The Customer Effort Score (CES) measures how hard it is for customers to complete their tasks while working with you. It can provide additional insight into your CSAT data, but it is also a single-question metric. You should also track your customer retention rate (CRR).
Why Your CSAT Score Matters for Your Business
Simply put, your CSAT score lets you gauge whether your customers are satisfied with your products and services as well as your brand as a whole. You can’t make changes if you don’t know something is wrong. And you don’t want to make changes if your customers are happy with the way things are.
You can also use customer satisfaction scores strategically to discover pain points or areas where you excel. For example, you could ask for customer feedback at various parts of the customer journey. If the customer satisfaction score is high until a certain point in the journey, this indicates an issue at that stage of your sales process.
You can also use your CSAT scores to help identify customers that are more likely to churn. Then, you can use this information to address their pain points or focus your advertising efforts on them, reducing churn. Why is that so important? Consider that it can cost 5 to 25 times as much to gain a new customer than it does to retain one.
How to Calculate CSAT
To calculate your customer satisfaction score, you need to survey your customers. You will ask variations of a question, such as “How satisfied are you with the [goods/services] [Company name] provided?” You ask respondents to rate you on a scale of one to five. One is very unsatisfied and five is very satisfied in the CSAT surveys.
Calculating your customer satisfaction score requires you to count how many responses your CSAT survey has in total and how many people rated you at four or five, which are “satisfied” and “very satisfied.”
Take the number of people who rated you at four or five and divide that by the total number of respondents. Multiply it by 100 to get the percentage of satisfied customers.
So, suppose you get 100 responses, including 40 ratings of four and 35 ratings of five. You would divide 75 (40+35) by 100 to get 0.75. Then, you would multiply it by 100 to get 75%. Your CSAT score would be 75%.
What Is a Good CSAT Score?
What qualifies as a good customer satisfaction score varies greatly by industry. You can easily find the average or what’s considered good in your industry online. Overall, a good score will be somewhere between 75% and 85%.
The following are some common goals for various industries:
- Specialty retail stores – 77%
- Internet retail – 77%
- Computer software – 78%
- General merchandise retailers – 75%
- Supermarkets – 76%
- Fast food restaurants – 76%
- Full-service restaurants – 80%
Track Your Score Overtime
While comparing your customer satisfaction score to industry benchmarks can be helpful, it’s better to compare your score with past scores. So, get in the habit of regularly running CSAT surveys.
Pros and Cons of CSAT
Before deciding if you want to use the CSAT, make sure you understand the pros and cons of it.
Pros
One of the biggest advantages of your customer satisfaction score is that it is usually very easy and fast to calculate. This includes ease for your team and for customers. That ease of answering tends to deliver a high response rate.
CSAT scores are also standard measures, making it possible to benchmark your business against others.
If you have a high customer satisfaction score, you can use it in advertising to highlight your customer experience and customer satisfaction.
Cons
There is never a guarantee that your customers will respond to your survey, so you may struggle to calculate an accurate customer satisfaction score. It also relies on self-reporting, which has potential biases.
People who respond to your CSAT survey are more likely to be those who had an extremely positive or extremely negative experience.
Additionally, it is a general rating. As such, you won’t get insight into why your customers were or weren’t satisfied.
