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Customer experience

Customer satisfaction: everything you need to know

You can use marketing tricks and tactics to boost sales, but without an equal emphasis on customer satisfaction, you will never grow your business. Customer satisfaction is what encourages a one-time buyer to become a lifelong customer.

When a customer is satisfied and happy with their experience, they are also more likely to recommend your business to their friends and family. Investing in customer satisfaction is one of the most important components to any business.

What is customer satisfaction

Customer satisfaction occurs when you either meet customer expectations or exceed them. By investing in delivering quality customer service across all touch points, customers can fully experience your brand and you can help improve how they feel about your business.

Customer service definition

Customer service is how your customers are treated and the services available to them. If done right, customer service will result in happy customers, and promote customer loyalty and referrals.

What is the main purpose of customer service?

The main purpose of customer service is to create loyal customers and to boost revenue on products and services from repeat business. A loyal customer is worth a lot more to a business than a single sale, and the benefit of maintaining a customer grows over time.

How important is customer satisfaction?

Happy customers leave great reviews, recommend your business via word-of-mouth or on social media, and provide repeat business. Creating a positive experience for customers should be employees’ main priority, and if done right, it can create a lasting legacy for your company.

What is quality customer service?

Quality customer service means meeting or exceeding customer expectations, but also goes further. You need to develop customer relationships so that you become like a trusted old friend. This should also be experienced at every touchpoint across all your channels – from the store clerk to the online experience to the phone call the customer makes.

What is customer delight?

Customer delight happens when you exceed customer expectations, and it’s important to understand which parts of your customer journey have done this. Just as knowing your weaknesses through customer surveys can give you an idea of what to improve, understanding your strengths is how you can better market your business and grow.

The benefits and importance of customer satisfaction

Customer satisfaction is more than just one experience with a company. A satisfied customer is one that provides repeat business and recommends your brand or product to those they know.

Satisfaction measurements vary depending on your goal. You can obtain feedback that helps you understand how loyal your customers are (repeat visits), how likely they are to recommend you to others (referrals), how much they enjoy any interaction they have with you (satisfaction), and more.

Collect and use that feedback to improve your customer service, and you will grow as a business. You can also close the feedback loop and help customers feel like their input is valued by sharing actions you’ve taken to improve.

Measuring & managing customer satisfaction

An improved customer experience can only occur when you first measure customer satisfaction. This can be done through various survey methods, like instant feedback terminals, email surveys, mystery shopping, and more. Two popular survey methods are the Net Promoter Score and the Customer Satisfaction Score.

Net Promoter System of Management (NPS)

Net Promoter Score NPS was created by Fred Reichheld and is a great way to determine how likely customers are to recommend you by word of mouth to friends and family. It also works to measure lifelong loyalty percentages and predicts business growth. It uses a 1 to 10 scale and is often framed around the question: How likely are you to recommend [Your Business] to friends or family?

NPS formula

To calculate your NPS, you need to understand first how responses are weighed. NPS surveys use a 1 to 10 score. Promoters (score 9 to 10), Passives (score 7 – 8 – those who like your brand but are not loyal and might leave for a competitor), and Detractors (score 0 – 6). Detractors are those who are unhappy and might damage your brand through word of mouth.

NPS score ranges from -100 to 100, and anything above 0 is considered a good score as it means more people are likely to recommend you than dissuade their friends and family.

Passives are not included in the NPS formula, or if you want to include them, they are weight as 0.

The NPS formula is therefore as follows: (% of promoters) – (% of detractors) = NPS.

Note: NPS is an absolute number, not a percentage. Results can range from -100 to 100.

Customer Satisfaction Score (CSAT)

CSAT is short for Customer Satisfaction. It is measured with a 1 to 5 scale or equivalent and helps to determine how a customer enjoyed an experience or product. 100% is total customer satisfaction, and 0% is total dissatisfaction.

CSAT formula

To find the CSAT score, you take your satisfied customers and divide that by the total number of responses. Those who respond with a 4 or 5 are typically satisfied. The formula for CSAT is, therefore:

Number of Satisfied Customers (those who responded 4 or 5) ÷ by number of survey responses × 100 = CSAT

Difference between CSAT and NPS

A customer satisfaction survey is different from NPS in that CSAT measures how a customer enjoyed a certain service or product whereas NPS helps you determine the lifetime loyalty of a customer and how likely they are to recommend you to friends or family.

Customer satisfaction is incredibly important to promote, and to promote it, you need first to understand whether your customers are happy or not. While NPS and CSAT methods are common, instant feedback systems are a great way to capture honest, relevant customer experience sentiment at every touchpoint and across all channels in a simple way. It’s also important to remember to close the feedback loop by reporting to customers the changes you have made based on their feedback. This ensures that everyone feels like their opinion was heard and their experience is valued by your business.

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