What is Customer Satisfaction Score (CSAT) and How to Improve It?

Customer satisfaction (CX) is an essential part of each business’ marketing strategy. Good CX rate leads towards long-term customer retention, client loyalty, profitability and increased revenue. Based on this, it’s clear that businesses should measure their performance regularly. There are several ways to do so. One of the most popular is CSAT – Customer Satisfaction Score.

CSAT can help you collect valuable feedback for discovering how to boost CX and where to lead your product. According to the 2021 survey, 39 % of industry professionals claimed CSAT is the best way for their organization to measure a digital CX improvement. 

In this blog, you can find what exactly is CSAT, as well as how to measure and improve it. 

What is CSAT and Why to Measure It? 

CSAT is defined as a quantitative loyalty metric that measures customers’ satisfaction with your business. For example, how user-friendly is the product or what is the level of customer support interactions. 

In short, CSAT shows how happy customers are while using your services. 

It’s a quick and simple method of measuring performance, therefore perfect for identifying how satisfaction levels change overtime. You can also get a sense of contextual factors that may be impacting it. Identifying bottlenecks in your business strategy or product consequently allows you to make necessary adjustments and improve your service. 

Here are 3 main reasons why to use CSAT for measuring performance:

#1 It Prevents Customer Churn 

For each one complaint you get from a customer, there are around 26 others who will say nothing. They will just abandon your business without explanation. Low customer satisfaction is still a leading reason for customer churn. Also, it has a negative impact on your brand image. Mainly in the digital age, when any issue may become viral.

#2 It Boosts Profit From Existing Customers

CSAT is a great way to measure overall sentiment in certain periods of time. If the score periodically raises from negative results to positive ones, you know you are on the right track. It’s much more likely that happy customers will purchase your product again. 

#3 It Generates Communities For UX Testing

No one is a better advisor than customers who are loyal to your product. Since they trust the brand, they pose a great source for providing feedback on your UX (user experience) and features. 

Gather their opinions on upcoming product updates. Not only do you assure creating a service tailored for your target group, you will also make clients feel important. Collaborating with a design agency can help you implement the feedback effectively, ensuring that your product evolves in a way that resonates with your customers.

When Should You Measure CSAT

You can use CSAT basically anytime you need to gather measurements on customer satisfaction or sentiment. 

Nevertheless, here are 3 examples when CSAT can be particularly handy.  

#1 Prior to Product Renewal

Ideally 6 month in advance. That provides you with enough time to incorporate feedback before you get into the renewal process of customers’ subscriptions. 

Feel free to make CSAT surveys more than once, on a time-based schedule. This way, you can conduct it on multiple touchpoints. It keeps feedback going on a regular basis, giving you more insight into what customers want. 

#2 After Customer Lifecycle Moments

Tie customer satisfaction surveys to key moments in a customer experience journey. It connects clients’ insights to your business questions. You can measure how effective the key moments, such as the user onboarding, truly are.

In this case, the best time to conduct the customer satisfaction survey is right after a meaningful customer lifecycle is completed. At that point, customers probably already decided on whether your solution helped to solve their issue or not. If not, CSAT will help you understand why.

#3 After Customer Support or Education Interactions

Use the CSAT measuring method right after the customer finished interacting with either your support agents, or with an online knowledge base article. It will help you see where you need to make improvements.

How to Measure CSAT Score?

Measuring CSAT is quite straightforward. Let’s take a look at it from two perspectives – methodological and mathematical.

Methodology

CSAT is performed by asking simple questions, such as:

“How satisfied were you with our services?” 

“How would you rate overall satisfaction with our product?”

You can customize these questions, so they are relevant to specific situations and your brand’s needs. The CSAT survey also isn’t limited to a single question. You can use multiple, close-ended as well as open-ended variants.

Questions should be easy to understand, short and clear. You may, too, add an option to leave a comment or explain the rating. This way, you gain more insights. 

Now, let’s look at metrics. Most often, customers are asked to rate the performance on a scale of 1 to 5. 

These numbers stand for:

1 – Very unsatisfied

2 – Unsatisfied 

3 – Neutral

4 – Satisfied

5 – Very satisfied

You can also use other scales, such as 1 to 10, which gives a more precise overview of customers’ satisfaction.

Calculation

Now, let’s look at some quick math. CSAT is counted as a summary of all positive responses, divided by the total collected responses, multiplied by 100.

 Afterwards, you get an overall percentage of customers who are satisfied with your business.

Let’s see an exemplary equation: 

You have 400 total responses and 300 of them chose a positive rating (4 and 6 on 1 – 5 scale counts as positive). 

That means: 

CSAT = No. of possessive responses / No. of total responses x 100

300 / 200 x 100 = 75 %

This result shows that the majority of respondents are satisfied with your business, but there is a room for improvement. 

There is also another way to calculate CSAT. Some companies use an average of their 1 – 5 score. Yet, this method is not as accurate as calculating only the percentage of satisfied customers.

What Is a Good CSAT Score 

Typically, a good CSAT score moves between 75 % and 85 %. Since it measures only your promoter scores, it’s hard to gain a perfect one. 

Average CSAT scores also vary across different fields of business. 

Here are CSAT score benchmarks in various industries according to American Customer Satisfaction Index: 

• Apparel: 79 %
• Automobiles and Light Vehicles: 78 %
• Banks: 78 %
• Breweries: 81 %
• Cell Phones: 79 %
• Computer Software: 76 %
• Consumer Shipping: 76 %
• Credit Unions: 77 %
• Financial Advisors: 77 %
• Full-Service Restaurants: 79 %
• Hotels: 73 %
• Internet Retail: 78 %
• Internet Travel Services: 74 %
• Life Insurance: 78 %
• Specialty Retail Stores: 77 %

If your CSAT score isn’t perfect, don’t worry. It allows your business to grow from bad ratings towards good numbers, which gradually improves customer satisfaction. That is a good challenge and motivation. Just a 10% increase in a company’s CSAT score may lead to a 12% increase in trust from customers. 

Growing CSAT score also has the potential to increase customer satisfaction by 20 %, boost revenue by up to 15 % and lower cost of serving your customers by as much as 20 %. 

What Are the Advantages and Disadvantages of CSAT Score 

Now, let’s take a brief look at the advantages and disadvantages of using CSAT for calculating a level of customer satisfaction. 

Advantages 

• It’s simple, fast and intuitive: CSAT method of measuring customer satisfaction is easy to conduct. It doesn’t take a lot of time to prepare, as well as doesn’t take a lot of time for customers to fill out. 
• High response rate: In connection to the previous point – since CSAT is a fast method with fewer questions, it generates higher response rates than other surveys.
• It’s flexible: Your rating score leaves a space for choosing any features you want. Depending on your industry and audience, you can make your 1 to 5 / 1 to 10 rate from stars, emojis or anything else.

Disadvantages 

• Happy customers ≠ revenue growth: If companies highly rely on CSAT scores, they may be disappointed. Happy customers don’t always necessarily equate to revenue growth and loyalty. 
• Cultural differences: Based on Psychological Science publication, there are differences on how people from various cultures and countries perceive evaluation. Those respondents that come from more individualistic states tend to choose extreme sides more often than respondents from collectivistic states. For example, people from the USA are more prone to choose rates 1 or 5, while Japanese customers usually stick to more neutral ones, like 2, 3 or 4. 
• Short-term sentiment: CSAT measures the way customers feel in a given moment, not on a long scale. That drives them more by emotions than rationality. For example, after a one bad encounter with your customer support, clients may choose rating “very unsatisfied”, even though they are generally happy with your product. 
• Subjectivity: Words satisfied and unsatisfied are subjective and may feel different for every person. Also, there’s an ambiguity in what is a bad and good score, since the benchmark data across industries and businesses vary. 
• Emotional impact: The common issue is that people whose experiences are in the middle usually don’t invest time into filling out the survey. That is why you mostly receive scores from people with stronger emotions: either extremely satisfied or extremely unsatisfied. That may lead to inaccurate results. 

How to Improve Customer Satisfaction?

Now, let’s look at quick ideas on how to improve your CSAT score.

#1 Put Customers to the Center 

Show your customers that they’re not just a number in your contact list. Whenever you make decisions, put them at the heart of the process. Managers should pay attention to customer’s feedback, so they understand what clients really need. 

You can use tools like emotion analytics. 

Care and concern can have many forms – you can use the customer’s name while talking to them or congratulate them on their birthday. They will feel more valued and your CSAT scores will increase.

#2 Know Your Customer

There are many useful software features that help you store relevant customer data, including their name, address, history of communication or notes taken by agents during previous interactions. 

Use technology to minimize clients’ need to repeat who they are and what their problem is. Show that you know them. This will boost customer satisfaction and save your time.

#3 Improve Your Response Time

No matter how patient a customer is, the longer they have to wait on hold, the less likely they are to feel satisfied. Having to wait for a response is one of the biggest reasons for customer dissatisfaction. In fact, 75 % of clients are highly annoyed when they have to seek talking to an agent unreasonably long. 

Rather than forcing them to await your attention, your support center should be offering a callback option during periods of long wait times. The option is also incorporating pre-recorded answers to common inquiries into your IVR. 

Advanced call center software, such as CloudTalk, can automate this process for you.

#4 Set Desired Performance

Define what an excellent performance looks like and make sure that your agents know what is expected from them. Illustrate examples of good and bad practices, for example by using actual customer call recordings. 

#5 Provide Omnichannel Support

With so many new communication channels, companies must develop an omnichannel approach to connect with customers right where they prefer. 

No matter whether a client sends you a facebook message, calls you, sends an email or a combination of all of these, your agents should be ready to respond – professionally and quickly. 

#6 Keep Your Agents Happy

When agents are satisfied, they provide better service to your clients. Encourage and appreciate top performers. Challenge them with new tasks and opportunities or provide incentive programs. 

Make moves to boost agent morale and team spirit. Many callers can sense the atmosphere in your call center. If you monitor your call center metrics, you could organize a team building activity as a reward when KPIs are good.

#7 Invest Into an Agent Training 

Well-trained agents provide superior customer service, which creates a high CSAT score. Agent training should focus on the products and services you offer, so that your staff can answer any customer questions. You could also organize workshops on dealing with angry customers or sales techniques.

There’s no magic solution for improving customer satisfaction levels, but the key is to adopt a customer-centric mindset. In our article, we’ve covered seven recommended tactics, but this is just the beginning – the possibilities are endless.