For every bad customer service experience, there are thousands of great experiences that go unaccounted for. Why is that?
Customers are more likely to take the time to leave a negative company review than a positive one. We see this all the time on online review sites, and it’s reflected in the way we research products before purchasing.
In a world where a few negative reviews can tank a business, the importance of nurturing customers is at an all-time high.
Why measuring customer satisfaction is important
Armed with powerful search engines, customers have more purchasing power than ever. The Internet has given customers more choices, increasing your competition ten fold. For your business to stay alive, prioritizing customer satisfaction is hugely important.
Smart marketers know that it’s easier to retain a customer than it is to attract a new one. In fact, 85% of business owners consider customer satisfaction a crucial part of their business.
Surprisingly, only 15% of those who prioritize customer satisfaction actually keep a regular eye on their exact customer satisfaction metrics. It’s easy to see there’s a big disconnect, so let’s bridge the gap today.
When you put a heavy focus on your customer satisfaction metrics instead of hustling to attract anyone and everyone, you’ll have the opportunity to increase the following business traits.
When you make a lasting impression on your customer, their loyalty usually follows. Loyalty is a virtue that can’t be bought– it has to be earned. When you put the customer first while going above and beyond to give them memorable service, they will often pay you with their loyalty.
Customer loyalty is extremely important in highly competitive niches. Think about how a person buys a new car. They will often choose a model from a manufacturer they already trust. It’s not just about the product itself but a reflection of your customer experience over time.
If you’ve always had a Ford, your family trusts the brand, and you have relationships already built with a neighborhood dealership, chances are you’ll choose a car within this brand. This is customer loyalty in action.
Consider which brands you always buy from. Maybe it’s a clothing brand that gives back to a charity you believe in. Maybe it’s a gym facility that always makes you feel welcome when you walk in the doors.
Make a list of the brands who have earned your loyalty and dig into how they earned it. You can use these same principles within your own customer satisfaction plan.
Low churn rates
When a customer isn’t satisfied with your product, they may discontinue their subscription or service with you. When this happens, it contributes to what’s called a churn rate.
Because it’s typically easier to retain a current customer than it is to acquire a new customer, focusing on providing great customer service helps your bottom line by lowering your churn rate.
Customers who are satisfied with your product can also give you recurring revenue if you build a subscription model. We see this model with membership sites and software providers. With subscription models, you can better anticipate and predict how your revenue will grow over time.
Higher customer loyalty mixed with low churn rates generates a higher profit margin. Since it generally takes less money to keep a customer than to convert a new one, your margins rise.
This gives you more profit to put toward other business projects or put back into your customer service to increase its quality even further.
We think about this often from a product standpoint, but as a freelance copywriter and ghostwriter, I have found the same to be true for service based entrepreneurs.
When I acquire a new client, I spend a lot of time communicating with them over email. This is done to ensure I understand their brand voice, objectives, and how we can blend both in their copy.
Onboarding a new service client takes more time and energy from me than an ongoing client. I’m willing to bet it’s similar for you, too. This is why I only take on two website copywriting projects a month while I do various content creation for several ongoing clients.
Making sure that my long-term clients are happy with my work is one of my biggest priorities because much of the work I produce is pure profit. I already know their brand voice and we have a strong working relationship already in place with lots of trust.
Whether you have a large pool of customers or a small network of clients, you will benefit from prioritizing and measuring customer satisfaction.
Influencer marketing and brand advocacy
When customer satisfaction is your top priority, you have the opportunity to turn customers into brand evangelists. When customers feel taken care of and understood, they’re more likely to advocate for your brand among their friends, family members, and neighbors.
This creates positive word-of-mouth marketing, one of the oldest and most powerful forms of marketing there is. Word-of-mouth marketing spreads without any extra effort or advertising dollars from you and often yields the greatest return. It’s the holy grail of marketing, so to speak.
If customer satisfaction isn’t one of your priorities, you run the risk of increasing the wrong kind of word-of-mouth marketing with negative commentary. It works both ways so focusing on serving your clients to the best of your ability serves your business.
When a customer or client advocates for your brand, it might be done in person at networking events, PTA meetings, or in conversations with neighbors across the street.
Now with digital technology, customers have even more of a voice with what they share on social media and on the Internet. We are all aware that negative Google Reviews can kill a business all on their own. Be mindful of this when you create your customer service plan.
Five metrics to measure customer satisfaction and how to track them
You understand that brand advocacy and customer loyalty are important to your bottom line, but how do you go about measuring your customer happiness? These five customer satisfaction metrics will help you track how well your company is meeting your customer’s expectations.
Customer satisfaction score (CSAT)
Your customer satisfaction score, or CSAT, gives customers a chance to express their satisfaction on a five point ranking system. It’s the most common metric for measuring customer satisfaction because it’s all around us. Google, Facebook, and Yelp all use a form of CSAT with their 5-star review capabilities.
The downfall of these scores is they only measure short-term customer happiness. If a customer has one terrible experience at their nearby grocery shop, they may be tempted to give it a 1-star review on the CSAT scale. Even though the customer visits the grocery store weekly, this one negative experience trumps all of her previous experiences.
To gain more insight into a customer’s long-term happiness with a brand, companies have adopted the net promoter score, which we’ll talk about in the next section.
Net promoter score (NPS)
Net promoter score is just a fancy term that refers to the likelihood of a person recommending a product or service to their friend. With NPS, you have the ability to rank a brand from 1 to 10, 1 being the lowest customer satisfaction and 10 being the highest.
While CSAT measures for short-term customer happiness, NPS is more focused on long-term customer satisfaction, making it more accurate.
There are three types of people within the net promoter score scale: detractors, passives, and promoters. When a customer gives brands a score lower or equal to 6, they are considered detractors. As you can predict, these are the customers who had a poor customer service experience and will likely choose a competitor for their next purchase.
People scoring the brand with a 7 or 8 are considered passives, which means they likely won’t spread negative word-of-mouth about your brand but may refrain from promoting it. If a customer gives a brand a 9 or 10, they were extremely satisfied with their service and will be recommending you to a friend.
One of the best ways to collect data for your NPS is through a digital customer survey. The old school way is through printed comment cards, but digital technology makes the calculation process less manual.
Customer effort score
The customer effort score, or CES, measures a very specific form of customer satisfaction. It focuses on giving customers the opportunity to share how much effort they needed to put into interacting with the company.
There are currently two versions of CES. The first version asks “How much effort did you personally have to put forth to handle your request?” The customer may then respond on a five point scale. This caused some confusion as to what kinds of effort deserved which numbered score, which paved the way for a new, less confusing version.
The second version asks a true or false statement: “The organization made it easy for me to handle my issue”. The statement is clear and has a positive sentiment, which helps in ensuring the customer is put in a welcoming environment when filling out a survey. This CES version is commonly used and recommended among customer service departments.
Repeat purchase intention
As you can probably guess, repeat purchase intention refers to the likelihood that the customer will buy a product or service from you again. This number is extremely important because, again, it’s easier to retain a customer than acquire a new one.
You may be wondering why this metric is important since the NPS already measures the likelihood of the customer recommending your product to a friend. It’s entirely possible that a person may not recommend you to a friend as a “passive”, like we described above, but will buy from you again. This score ensures that you get a full picture of whether or not you can expect a purchase from the customer in the future.
Abandonment rates most commonly refer to the percentage of customer service calls that are abandoned by the customer before speaking to a representative. Depending on the growth rate of your product, it’s important to staff and train customer service representatives who can help customers promptly and effectively.
When a customer starts to fill out a survey but then leaves, this can also contribute to abandonment rates. It could be for a number of reasons like:
- having too many survey questions, making it overwhelming to give their feedback
- adding long survey questions that can’t be skimmed and quickly understood
- too many long form response options since customers like multiple choice or scales
- including questions with obvious bias, losing the customers trust
It may be helpful to view the experiences of customers taking a survey to see how they move through the various prompts. The lower the abandonment rates, the more quality customer feedback you’ll receive.
Start measuring customer satisfaction with these tools
Now that you have a clear idea of which customer satisfaction metrics are important and how to measure them, you can start collecting data with specialized tools. These tools will help you better track your customer service metrics.
Customer satisfaction surveys: Whether you create surveys through email, social media, or in an app, you’ll have a chance to gain real feedback from your current customers. You can get started today with free tools like SurveyMonkey and Typeform.
Interviews: Personal interviews give customers a chance to share their thoughts and concerns with you in a free forum. Interviews are a great choice when you want to make improvements to a product that customers already frequently use.
Usability tests: If you don’t have the time to dedicate to personal interviews when making product improvements, usability tests can help. A usability test gathers real customer data and insights into how users interact with your product.
Feedback form on website: To manually collect customer comments and suggestions on an ongoing basis, you can create a feedback form for your website. Feedback forms are more for recommendations than they are for urgent requests that should be handled personally and promptly.
Google Analytics: We’ve recommended utilizing Google Analytics in just about every article in this Tradecraft issue but it’s for good reason. You can create customized goals within the platform to help you measure each customer satisfaction metric with ease.
What is one step you can take toward bettering your customer happiness today?
What customer satisfaction metric are you focusing on right now. If you’re not sure where to start, here’s a few challenges you can implement on your own:
- Create a customer satisfaction survey and send to your list of current customers (for online entrepreneurs)
- Create a reader satisfaction survey and validate future product ideas (for creators)
- Implement a usability test for a beta version of your product (for software providers and developers)
- Calculate CSAT and NPS scores to see how they compare (for anyone!)