How to Measure and Improve CSAT
Customer satisfaction, often referred to as CSAT, is an important metric for every business. Learn how to measure CSAT, what creates it, and how to choose the right technology to support it.Read the E-Book
How to Measure and Improve CSAT
Across industries and around the world, businesses know that happy customers come back for more. A study published in the Harvard Business Review found that customers who gave their experiences the highest ratings spent 140% more than customers who gave their experiences the lowest ratings. For subscription-based companies, the study predicted that customers with the best experiences were likely to maintain their memberships for another six years, compared to the customers with the worst experiences, who would likely cancel their memberships within 18 months.
It’s easy to see why customer satisfaction, often referred to as CSAT, is an important metric for every business. Satisfied customers buy more, stay longer, and share their positive experiences. In fact, after a positive communications experience, 7 out of 10 consumers will recommend the business to their friends or purchase more products or services.
When you’re doing business face-to-face, customer satisfaction comes across in a smile, a generous tip, or of course, repeat business. But when your customers are mostly interacting with your business online, it can be harder to gauge how happy they are. If you want to estimate whether they’ll be back for more, you often need to ask them with a customer satisfaction survey.
How to Measure CSAT
Ultimately, customer satisfaction is a measurement of customer perception and expectations. When an interaction exceeds customer expectations, the experience is positive. When an interaction fails to meet customer expectations, the experience is negative. Customer satisfaction surveys help you begin to understand your customer experience. You can learn how your customers really feel about the service they’ve just experienced by conducting post-contact surveys via channels like SMS, email, IVR, or a star rating after a web chat.
Customer satisfaction surveys help you collect metrics such as:
Customer satisfaction score (CSAT)—the percentage of customers who are satisfied with the service they receive.
Customer effort score—a customer’s perception of how easy it was to get their issue resolved.
Net promoter score (NPS)—a customer’s willingness to recommend a company to others.
However, it’s up to the customer if they want to communicate their satisfaction level—and this is beyond the company’s control. Research shows that on average, only 33% of customers respond to company surveys. When you can’t secure a survey result, you can look at other sources of information to help you determine how satisfied your customers are:
Reflection—after a customer is served by a representative, such as a contact center agent, the representative predicts how the customer would rate the experience.
Customer engagement score—a custom metric for each business that may include customer contact frequency and contact types, customer inquiries, social media activities, website activities, user community participation, rate of repeat transactions, new products or services purchased, and channel utilization.
Customer churn rate—the percentage of customers who don’t come back to do business with the company again.
What Creates CSAT
Now that you understand why customer satisfaction is important and know a number of ways to measure it, you may be wondering how to actually create it. Having excellent products and services that are priced appropriately is important, but your business communications are a critical part of the equation, making a strong impression that has lasting effects. Regardless of your business or industry, customers like to do business with people they know and trust.
Twilio’s Customer Communications Report found that after a poor communication experience, 38% of customers will switch to a competitor or cancel orders or services, 66% will tell a friend about their experience, and 41% will stop doing business with a company altogether. And 91% of those dissatisfied customers will give the company zero warning before they take their business elsewhere.
Most of the time, businesses overestimate how effective they are at delivering a positive communication experience. In fact, 70% of businesses think they’re effectively communicating with their customers, but only 2 out of 10 customers agree. These stats go to show that to truly understand how satisfied your customers are, you need to ask them. When you gather customer feedback, you can look at the metrics that make sense for your company and change what isn’t working. The only way to provide ongoing customer satisfaction is to stay informed about your customers’ expectations and perceptions.
Customer Service in Action: CarFinance247
CarFinance247, the UK’s leading car finance broker, was losing around 100 potential new customers who dropped out of call queues every day because their requests were not being routed quickly enough to the correct agent. The team previously used an on-premise VOIP solution: every agent had a soft phone installed on the desktop, along with a headset. However, their system made it difficult to filter calls by context and customer.
To solve their contact center woes, CarFinance247 built an IVR using Twilio, which enabled them to iterate and test user flows rapidly, ensuring that customers were being routed to the correct agent. The impact was almost immediate. All contacts are now integrated with their CRM data, meaning that each communication can be tagged to a customer profile. By providing context from IVR to agents, the company experienced an increase in approval-to-deal conversion by 12%. They also stopped losing incoming callers immediately.
The company also gathered customer data to determine how customers would prefer to communicate with them and the time of day that works best. They found that nearly half of their customers prefer chat or SMS, options that weren’t previously available. Switching to Twilio gave CarFinance247 the ability to let customers choose their preferred channel. In addition, once company agents knew the best time to reach out, the company experienced an 85% reduction in time from the customer sending an application through to being able to make initial contact.
Choosing the Right Technology for CSAT
Customer expectations for how businesses communicate are changing rapidly, and customers want a personalized and low-effort experience. The key to creating high customer satisfaction is having the right technology in place to support your customers at every point along their journey with your business. You need a platform that allows for interactions across all channels and locations to be universally managed and prioritized.
Armed with the power to communicate with customers on their preferred channels, the ability to add custom channels as needed, and the visibility into your entire customer journey, you’ll be staying ahead of communication trends instead of struggling to catch up. With the right analytics, KPIs, and informed interpretation, you can identify any problems and take swift action to fix them. Ultimately, tracking the unique metrics that apply to your business will help you increase customer satisfaction and accelerate your growth.
To learn more about nurturing satisfied customers, download Your Complete Customer Engagement Handbook.