The ultimate customer satisfaction guide: how to measure & strategies for success

Most CX teams (89%) agree that customer expectations are higher than ever, underscoring the need to prioritize customer success. After all, customers drive business.

Understanding and prioritizing customer satisfaction is crucial for long-term customer loyalty and business success.

This guide defines customer satisfaction, explains how to measure it, and offers eight actionable strategies for improving it to boost business success. Keep reading.

Customer satisfaction refers to how satisfied a customer is with a particular interaction or overall experience. 

Customer Satisfaction Score (CSAT) is among the three most popular loyalty metrics used to measure customer satisfaction. The others are Net Promoter Score (NPS®) and Customer Effort Score (CES).

It’s a necessary tool for delivering an exceptional customer experience and driving business. After all, 91% of customers are likely to recommend a product to a friend or family member after a positive experience.

Customers who are satisfied with their experience are likelier to be brand ambassadors and participate in word-of-mouth marketing.

Customer satisfaction is essential across all industries, as it is a critical indicator of a business's overall performance and health.

Regardless of the type of organization—retail, service, manufacturing, or technology—customer satisfaction directly influences various organizational outcomes.

Businesses that meet and exceed customer expectations have higher customer retention and brand loyalty rates. This loyalty can translate into repeat purchases and positive word-of-mouth recommendations, which are invaluable for attracting new customers.

Moreover, high satisfaction levels significantly boost revenue and profitability, ultimately enhancing a company's competitive edge in the market.

Measuring and tracking customer satisfaction is fundamental for any business aiming for long-term success and sustainability in today's dynamic marketplace. 

Keep reading to learn how to measure customer satisfaction.

Measuring customer satisfaction doesn’t need to be tricky. Businesses can quickly gather and act on customer feedback using a customer satisfaction survey template. Customer satisfaction data allows businesses to understand customer sentiment better and adapt their strategies accordingly.    

There are several types of metrics available to measure customer satisfaction:

Let’s explore how each metric is calculated and used to measure customer satisfaction. We’ll also discuss what questions to include in customer satisfaction surveys and best practices.

Net Promoter Score is a customer experience metric that measures brand perception.

One primary benefit of using Net Promoter Score to measure customer satisfaction is that it is simple. Customers can complete this quick and easy survey in a minute or two.

The Net Promoter Score survey asks, "How likely are you to recommend [product or service] to a friend or colleague?" Respondents answer on a Likert scale of 0 (not at all likely) to 10 (extremely likely). Customer feedback is categorized into three groups.

You are not done at collecting customer feedback. You must analyze data gathered from your customer survey to gain valuable insights into your company's performance and customer satisfaction.

This evaluation should involve comparing these scores against competitors in the same industry and against your organization's previous internal NPS results.

Analyzing these comparisons can help identify trends, strengths, and areas for improvement, ultimately enabling you to enhance customer loyalty and drive business growth.

Related reading: Net Promoter Score (NPS) across the world

Customer Satisfaction Score is a CX metric gauging how happy customers are with an interaction or purchase. 

Businesses should track customer satisfaction data regularly via customer surveys after vital touchpoints, such as interacting with the customer service team or making a purchase.  

Customer satisfaction surveys ask respondents to rate how well an interaction or experience met their expectations on a rating scale of 1 (very unsatisfied) to 5 (very satisfied).

To calculate a Customer Satisfaction Score, find the percentage of customers who respond with 4 (satisfied) or 5 (very satisfied). The higher the percentage, the greater your customer satisfaction.

For example, your customer satisfaction survey may receive 200 responses, with 100 very satisfied and 60 satisfied respondents.

To calculate your Customer Satisfaction Score, divide the total number of satisfied responses (160) by the total number of responses (200). Then multiply by 100 to get a percentage.

(160/200) x 100 = 80%

This Customer Satisfaction Score indicates that most customers are satisfied with your business.

Customer Satisfaction Score is an enduring CX metric that should be used in conjunction with other data points, such as Customer Effort Score.

Related reading: 8 ways to measure customer satisfaction

The Customer Effort Score is a key performance indicator that measures the effort required for customers to complete an action with a brand. The less friction a customer encounters, the less effort is required.

Customer Effort Score helps businesses determine customers' satisfaction with their brand experience. Improving your CES helps boost overall customer satisfaction.

Distribute CES surveys at various customer touchpoints to identify areas for improvement.

This customer satisfaction survey asks a core question: "How easy was it to interact with [product or service]?” Respondents answer the question on a rating scale of 1 to 7. Often, an open-ended follow-up question is used to understand the respondents' responses.

To calculate your Customer Effort Score, divide the sum of the responses by the total number of responses. 

A Customer Effort Score of 5 is viewed as good. Scores exceeding 6 are excellent, while those below 4 suggest substantial improvement is needed.

For example, 200 people responded to your CES survey, and the sum of all the responses was 1,000. Your CES score is 5.

Businesses can improve customer satisfaction in several ways. Some methods may work better than others, depending on the brand and customer base. We’ll cover eight strategies to improve customer relationships, exceed customer expectations, and increase customer satisfaction.

Do your customer support efforts align with your customer satisfaction goals? 

Businesses can bolster customer support to improve customer satisfaction. When customers receive helpful service from customer support agents, they will likely leave the chat or phone call feeling satisfied.

To promote better customer support experiences, provide ample training to employees on an ongoing basis and set clear customer support expectations. Employees should have a good understanding of how to work with customers to resolve issues and provide support. 

Additionally, businesses can boost customer support team performance by improving employee engagement. Engaged employees are more likely to provide quality and polite customer support, while disengaged employees may fall short of achieving customer success.

To monitor customer satisfaction levels with the support team, use customer satisfaction surveys after interactions and employee engagement surveys.

Businesses can ensure customers have access to assistance around the clock with AI-powered chatbots or virtual assistants. This is particularly beneficial for global businesses that serve customers in different time zones.

With AI-powered virtual assistants, customers can quickly get answers without picking up the phone. This promotes customer satisfaction in an instant-gratification world. Customers appreciate it when they can resolve issues efficiently. 

Keep in mind that you should also use customer satisfaction surveys to monitor the efficacy of your AI tools to achieve ongoing customer satisfaction.

Customer frustration may feel ambiguous, especially if you don't have data to back it up.

Feedback surveys are a straightforward tactic to collect user feedback about customer satisfaction. You can collect information at all customer touchpoints, but most importantly, after onboarding and in-product milestones. Positive reviews are great; however, negative feedback from dissatisfied customers will guide your product or service's progress.

Product teams can analyze customer feedback patterns to identify areas for improvement. Customers’ needs evolve, and your company's products or services should, too.

Promptly address pain points to prevent dissatisfied customers. Regularly communicate product updates to customers to show your brand’s dedication to meeting and exceeding their needs.

To build long-term relationships and foster brand loyalty, businesses must communicate effectively with customers. Investing time in personalized interactions improves customer satisfaction.

Review your marketing team's communication strategy regularly to ensure it meets customers’ needs.

Keep communication channels open so customers can easily reach out with questions or concerns.

Additionally, interact proactively with customers through various platforms, including social media, email, live chat, and phone support. This approach accommodates different customer communication preferences.

Beyond standard communication, consider sending personalized birthday messages, tailored recommendations based on purchase history, or follow-up thank you emails.

By prioritizing strong communication, brands can build trust and connections with their customers.

Customer experience refers to how customers view your brand through every touchpoint of the customer journey. This includes marketing and advertising, products, customer support interactions, and more. The combination of these touchpoints shapes customers’ perceptions of your business.

To simplify the customer experience, make integral customer touchpoints hassle-free and seamless.

For example, you may focus on your website’s user experience to ensure customers can easily navigate to find what they need. Or provide clear and detailed product information to help them make purchase decisions.

Additionally, assess your checkout process to ensure no bottlenecks or technical issues affect the customer experience.

Improving customer satisfaction starts with empowering your employees. When you give your team the authority and tools they need, they’re more motivated and equipped to create exceptional customer experiences. 

Invest in quality training for new hires and current employees to ensure they feel prepared for their roles. Equip employees with the tools and resources to effectively address customer needs. You should focus on fostering a supportive work environment where employees feel valued.

Employee engagement can directly impact your brand reputation and customer experience. Take the time to thoroughly train employees and build a supportive work community where they can thrive.

Customer communities foster a sense of belonging among customers.

Online forums or social media groups are fun ways for customers to interact with each other. Another option is an exclusive membership program that offers incentives and offers. That said, collect customer feedback to ensure that your community reflects your audience's interests and needs.

In all of these communities, customers can share tips, reviews, and experiences with your brand. Businesses can encourage participation in these types of communities by sharing engaging content and hosting interactive events.

These communities can also serve as market research respondent pools for focus groups and customer interviews. Existing customers can provide invaluable feedback on products in development and marketing messaging, leading to further increased customer satisfaction.

Businesses can elevate customer loyalty and cultivate lasting relationships by offering an engaging loyalty program. Loyalty programs are designed to reward customers for their continued patronage by offering a variety of attractive incentives.

These may include significant discounts on future purchases, allowing members to save money while enjoying their favorite products. Some programs also feature the opportunity to earn free products after accumulating points through purchases.

Additionally, loyalty program members often receive early access to product launches, giving them a first look at new items before they become available to the general public. This exclusivity can create a sense of belonging and appreciation among customers.

Overall, these incentives not only foster customer loyalty but also enhance the overall shopping experience.

Businesses can reap several benefits by prioritizing customer satisfaction in all its aspects, including an enhanced brand reputation and a competitive advantage in the market. Keep reading to learn more about how customer satisfaction impacts a business.     

Improving customer retention is the priority for CX teams. Research shows that acquiring a new customer costs five times more than retaining a current customer. Retaining customers and decreasing churn 

Customer satisfaction is crucial in ensuring customer retention. When customers feel valued and acknowledged by a brand, their loyalty increases, prompting them to return for additional transactions.

This cycle of satisfaction and loyalty fosters repeat business and cultivates a positive brand reputation, leading to increased word-of-mouth referrals that can attract new customers.

In today’s competitive market, measuring and improving customer satisfaction is vital for businesses to maintain a loyal customer base and stimulate long-term growth.

People are creatures of habit. After three purchases, one-third of customers become loyal to a brand. If a customer is pleased with your brand’s products and the customer experience, they’re more likely to make additional purchases.

Brand loyalty is crucial in influencing customer behavior when competitors introduce similar products in terms of quality, features, and price. This loyalty motivates customers to consistently choose their preferred brand over others, as they feel connected to its values, quality, or overall experience.

As a result, even when faced with alternative options that may be equally appealing, these loyal customers remain steadfast in their purchasing decisions, demonstrating an attachment that goes beyond mere product satisfaction.

If there was one deciding factor to measure customer satisfaction and implement customer success initiatives, this would be it.

According to BIA Advisory, returning customers spend, on average, 67% more than first-time customers. This impressive statistic underscores the importance of customer satisfaction for revenue.

When customers appreciate a brand’s products or services and expect high quality, they don’t have to deliberate as much when making a purchase. Customer satisfaction, paired with brand loyalty, drives increased revenue and profit margins. 

Satisfied customers become repeat customers. Brands can build loyalty by providing positive customer experiences and high-quality products.

Businesses can foster long-term relationships with customers for years by maintaining the quality of their offerings. This relationship-building can be accomplished through personalized customer experiences, which create a deeper emotional connection to the brand—a connection that goes beyond just convenience or competitive prices. 

When employees are engaged, customer satisfaction is likely to be higher. This is because engaged employees perform better and provide better customer experiences. Interacting with an engaged employee is much different from working with a disengaged employee. Customers receive better service when employees feel valued by their employers. Employee engagement helps promote customer retention and loyalty. 

Businesses can improve their brand reputation and build trust by providing stellar customer experiences.

Brand reputation is extremely important to a business’s overall success. Research shows that 90% of consumers say they won’t frequent a business with a bad reputation. By building trust and enhancing brand reputation, businesses can increase sales.

Additionally, brand reputation plays a role in attracting new customers, reducing price sensitivity, and building business partnerships. Brand reputation even affects employee morale and retention. 

A strong brand reputation makes acquiring new customers easier. With the support of loyal customers, brands can position themselves attractively in the market. Customer reviews significantly influence potential new customers and their buying decisions. According to research, 95% of consumers read reviews before making a purchase. If brands prioritize customer satisfaction, they can promote more positive online reviews.

Customer lifetime value (CLV) refers to the total estimated revenue a business can expect from a customer throughout the relationship.

For example, if a customer has bought a dozen donuts for $10 once a year for the past five years, the historic customer lifetime value is $50. The predictive customer lifetime value is calculated using historical data to give an estimated value. 

Satisfied customers are more likely to remain loyal to a business and make repeat purchases, increasing their customer lifetime value. If customers are unsatisfied, they may not make any other purchases from a specific brand.

In fact, the majority of customers (67%) switch brands after just one negative experience with a company. This showcases the importance of taking a customer-centric approach to business. 

Word-of-mouth marketing isn’t dead. Referrals are powerful tools for a business to get new customers. When a customer has positive interactions with a brand, they may recommend it to their friends or family. Ninety-two percent of consumers trust recommendations from family or friends more than other forms of marketing.

This means satisfied customers are an extremely influential form of marketing. Utilize customer testimonials on your website to build trust and promote more sales. Positive word-of-mouth spreads faster than you may think, especially for small local businesses. Businesses can visibly see the impact customer satisfaction has through referrals.   

Customer churn rates measure the percentage of customers a brand loses during a set period of time. High customer churn indicates low customer satisfaction and loyalty. When a business frequently loses customers, it must try to replace them.

The high cost of customer churn is one reason customer satisfaction matters so much. The cost of losing a customer varies from industry to industry, but it isn’t cheap in general. 

Businesses seeking to reduce customer churn rates should prioritize customer satisfaction. They should also regularly measure CSAT with customer satisfaction surveys to gauge satisfaction levels and monitor improvement. Reducing customer churn and improving retention rates leads to higher profits. 

Brands can also gain a competitive advantage in the market by focusing on improving customer satisfaction.

Happy customers indicate that a business is providing quality products or services. This affects brand reputation and word-of-mouth marketing, leading to a competitive advantage. Brands with a loyal customer base that sings its praises remain competitive in the market. 

When consumers decide which brand to purchase from, they almost always look for reviews. A brand with many glowing reviews from satisfied customers is more competitive than one without. This competitive advantage helps businesses scale and expand their offerings over time. 

Another huge benefit of high customer satisfaction is increased revenue. Businesses with a loyal customer base can grow faster. If businesses take care of their customers and ensure they remain happy, they can see growth over time.

Satisfied customers will likely make repeat purchases, share the brand with their friends, and leave online reviews, which leads to an increase in revenue. On the other hand, dissatisfied customers are likely to warn friends and family against your brand.

Grow your business by improving customer satisfaction and building a solid brand reputation. CSAT contributes to business growth by getting loyal customers to spend more each time they shop. Businesses can encourage sales by offering upgrades or pairing complementary products to upsell. Additionally, building trust with customers promotes higher spending.  

A customer feedback loop is a helpful mechanism for soliciting ongoing insights.

This process is essential because it enables customer support agents, product development teams, and customer experience professionals to understand and analyze customer needs and preferences proactively.

By continuously collecting and assessing feedback, these teams can identify trends and potential issues before they escalate into significant problems. This allows for timely improvements and enhancements to the overall customer experience.

Ultimately, a robust feedback loop fosters customer satisfaction and drives product innovation and service excellence, ensuring a more loyal customer base and a competitive edge in the market.

Customer satisfaction drives better business results. Businesses can keep customers happy by being customer-centric and continuously seeking feedback. This not only promotes positive word-of-mouth but increases revenue and boosts brand reputation.

With SurveyMonkey, brands can easily create and send NPS, CSAT, CES, and other surveys to monitor and improve customer satisfaction. Prioritize customer satisfaction for sustainable business success. Sign up for a free SurveyMonkey account today!