"72% of customers will tell six or more people if they have a satisfying experience." - Esteban Kolsky
Every organization wants to keep its customers satisfied. But is it as easy as it sounds?
There was a time when it was easy to measure customer satisfaction. Tracking customer satisfaction was as simple as asking customers to fill out surveys.
It's more complex now in this age of evolving customer trends and advanced insights. Organizations need to consider multiple factors when it comes to customer satisfaction today.
You're at the right place if you want to know the key customer satisfaction metrics you should focus on.
Suggested Read: 10 First Call Resolution Tips For Any Call Center
Before diving into the metrics, let's understand customer satisfaction and its impact.
What is Customer Satisfaction?
Customer satisfaction measures how satisfied customers are with an organization's products, services, and interactions.
One way to directly measure it is by conducting customer satisfaction surveys. This helps understand customer satisfaction levels and their problems while seeking support.
While surveys are the best way to understand a customer's feelings toward a brand, it isn't always possible. Sometimes, organizations need to rely on metrics that are shown to correlate with customer satisfaction.
Let's understand why organizations need to measure how satisfied their customers are.
Why Should Call Centers Track Customer Satisfaction Metrics?
When an organization understands how satisfied its customers are, optimizing and attaining higher customer satisfaction levels becomes easier. Let's understand the importance of measuring customer satisfaction.
1. Understand Customer Happiness
Just like the title suggests, customer satisfaction is a measure of how pleased customers are with the service provided by the organization.
When organizations know how happy their customers are, they can evaluate what is working and what isn't. This knowledge can help in keeping their customers satisfied with every new decision.
2. Evaluate Agent Performance
"31% of consumers consider a knowledgeable agent to be the most crucial factor for a positive customer experience." - Thomasnet
One of the easiest ways to assess agent performance is by understanding how satisfied customers are after the interaction. An agent that can handle customer interactions smoothly can perform consistently.
3. Reduce Customer Churn
"Increasing customer retention rates by just 5% can increase profits by 25% to 95%." - Bain & Company
Organizations with an idea of how satisfied their customers are and strive to keep customers happy find it easier to retain them.
Such organizations find it easier to improve business growth as customers continue to purchase products and avail services.
4. Improve Customer Loyalty
"Nearly three out of five consumers report that good customer service is vital for them to feel loyalty toward a brand." - Zendesk
An organization that prioritizes making every customer interaction as smooth as possible will have loyal customers.
Loyal customers who have always had excellent customer interactions will likely bat an eye when facing poor customer interaction. On the other hand, customers who aren't loyal will drop all ties with the organization immediately.
5. Reduce Customer Acquisition Costs
"68% of consumers say they are willing to pay more for products and services from a brand known to offer good customer service experiences." - Hubspot
Customer acquisition costs refer to the average cost an organization bears to get a customer on board.
Customers who are satisfied with a brand talk about it to their social circle. Such word-of-mouth marketing by promoters (We'll get to that in a minute) helps reduce acquisition costs.
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With customer satisfaction impacting an organization in many ways, it's no surprise that organizations are making it a top priority.
Let's look at the customer satisfaction metrics every organization should be focusing on.
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What Customer Satisfaction Metrics Should You Focus On?
1. Net Promoter Score (NPS)
One of the easiest ways to understand customers' happiness is by conducting NPS surveys. Net Promoter Score (NPS) asks customers how likely they are to recommend the brand to a friend or family member.
The question is asked on a scale of 0-10.
Customers can be divided into three categories based on the Net Promoter Score.
- Promoters: Customers who score 9-10 on the NPS survey. Promoters are customers who will refer your brand to their social circle and have a good opinion about the brand. They also have great brand loyalty and will continue being a customer.
- Passives: Customers who score 7-8 on the NPS survey. Passive customers are satisfied with your brand but aren't as invested as promoters. They are vulnerable to competitor offerings.
- Detractors: Customers who score 0-6 on the NPS survey. Detractors are customers who are unhappy with the experience provided by your brand. They can cause damage to your brand reputation by sharing negative experiences with your brand.
"An NPS Promoter score has a customer lifetime value that's 600%-1,400% higher than a Detractor." - Bain & Company
This shows that organizations should focus on increasing their Net Promoter Score. High NPS scores can lead to increased brand loyalty and better brand reputation.
2. Customer Satisfaction Score (CSAT)
"80% of companies use customer satisfaction scores to analyze customer experience and improve it." - Harvard Business Review
Customer satisfaction is the only metric that directly shows organizations the satisfaction levels of customers.
It is usually measured by asking for customer satisfaction feedback directly after a customer's interaction with the organization. It can be implemented on all parts of the customer journey.
Here are a few examples of how customer feedback can be collected:
- When customers interact with the support team on call, an automated survey asks them to rate the support they've received on a scale of 0-5.
- Customers are sent csat surveys via email or message when they make purchases.
- When customers reach out to the support team on other platforms, they're asked to fill out customer feedback before they leave the platform.
3. Customer Effort Score (CES)
Customer Effort Score (CES) measures how much effort customers need to interact with your business. If customers need to put in low effort to make purchases and contact the customer support team, customer satisfaction will increase.
This can be measured by conducting a CES survey after interactions with the brand. Here are a few examples of when to conduct such surveys:
- After purchasing something - This helps to understand whether the purchase was easy to make or required high effort.
- After an interaction with customer support - This helps understand how well-equipped your agents are to handle customer support requests.
- After using the service - This is the right time to check if your service is user-friendly and easy to use.
The customer effort score is measured by finding the ratio of the sum of customer effort ratings to the total number of survey responses.
Confused? Here's a visual to help you out.
Let's look at this with an example. Imagine your CES survey asks each customer to rate the effort on a scale of 1 - 10, with 1 standing for minimal effort and 10 as huge effort.
If 73 customers filled out the CES survey and the total score was 237, your CES score would be 3.24, (237/73). 3.24 would stand for slight effort, which is a good CES score.
4. Abandonment Rate
"Since 77% of consumers consider the difficulty of reaching an agent to be the biggest issue with customer service today, it’s worth investing in resolving it." - Review42
Abandonment rate refers to the number of calls dropped before the customer has talked to an agent. Some reasons for calls being abandoned are high wait times and calls being sent to voicemail instead of connected to an agent.
A call center with a high abandonment rate implies that many customers don't get to talk to customer support, leading to low customer satisfaction scores.
If your call center has abandoned 85 out of 1598 calls in a month, your abandonment rate for that month would be 5.31%, (85/1598) x 100.
5. Customer Churn Rate
Customer churn rate refers to the number of customers your business has lost over time.
Calculating the amount of churn is easy.
If your business had 13,573 customers at the beginning of a quarter and you lost 972 by the end of the quarter, your churn rate for that quarter would be 7.16%, (972/13,573) x 100.
Analyzing and being able to predict customer churn is a huge win for any organization as they can try to retain each customer.
6. First Response Time
"When a customer receives a response within five seconds, the average CSAT is 85%. When it takes more than two minutes for a response, the CSAT drops to 60%." - Hubspot
First response time is the average time it takes for the customer service team to acknowledge a customer query. Organizations that reach out to customers and acknowledge their queries have better customer satisfaction levels.
7. First Contact Resolution (FCR)
"Every 1% increase in FCR increases the brand's customer satisfaction by 1%" - SQM Group
First contact resolution refers to customers having all their concerns resolved in the first contact with customer support.
For example, if 1287 queries were resolved in a month, out of which 384 were resolved in the first contact. In that case, the FCR rate would be 29.83%, (384/1287) x 100.
8. Customer Retention Rate
"Investing in new customers is between 5 and 25 times more expensive than retaining existing ones." - Invesp
Identifying how many customers an organization has retained is an excellent way to evaluate customer satisfaction. A customer who sticks by your brand and continues using products and services implies that they're satisfied with the brand.
Imagine that your organization had 10,572 customers at the beginning of a quarter. You acquired 375 customers in that quarter, and there were 9,764 customers at the end of the quarter.
Your customer retention rate for that quarter would be 88.81%, (9,764-375)/10,572 x 100.
9. Ticket Resolution Time
"90% of consumers worldwide consider issue resolution as their most crucial customer service concern." - KPMG
Ticket resolution time is the average time that it takes for a customer to have their query resolved by customer support. Organizations need to ensure that every customer who reaches out to the customer service team has good customer experiences.
Customer experience can be a dealbreaker for customer satisfaction if not done correctly.
Keep Track of Critical Customer Satisfaction Metrics!
Summing Up
Customer satisfaction isn't as simple as asking a customer to complete a survey from 1-10. There are many customer satisfaction metrics that organizations should keep a close eye on.
Some of those key metrics include customer effort score, net promoter score, and first contact resolution. Get started with Convin!
Frequently Asked Questions
What is Customer Satisfaction?
Customer satisfaction measures how satisfied customers are with the products and services provided by an organization.
Why Should Organizations Track Customer Satisfaction?
Customer satisfaction can help organizations to understand the impact of their products and services on each customer and evaluate agent performance. It can also help organizations reduce customer churn and increase customer loyalty and retention.
What are the Best Metrics to Track Customer Satisfaction?
There are many customer satisfaction metrics, but some critical ones include Net Promoter Score, Customer Churn Rate, and Ticket Resolution Time.
