These 3 Customer Satisfaction Metrics Will Mean Happier Customers For You
It’s no secret that customers are becoming more sophisticated.
It is increasingly hard to sway them with advertising or many of the tried and true methods of the past. One thing that can still grow a business: happy customers!
Word of mouth is taking on increasing importance in a world full of highly discerning consumers. People believe in recommendations from friends, family, and those they trust. How can you know your business is successfully harnessing this increasingly powerful force?
You can’t use what you can’t see… That’s where customer satisfaction metrics come in! The road to steady business growth is measuring how happy you make your customers.But which measurements are crucial and which are noise? Read on for the metrics that most guarantee success!
Why customer satisfaction metrics matter
First, why should you make the extra effort to measure how well you’re keeping customers satisfied? The simple answer is: so you can know what you need to work on as an organization. Without measurements we rely on anecdotal evidence, and the squeaky wheel gets the oil, so to speak. A comprehensive system for gathering data means you know precisely what the next steps are in customer retention and satisfaction.
You identify opportunities for upselling and cross-selling, and you train your customers to be advocates for your brand.
Which customer satisfaction metrics?
There are many facets of the customer experience that you can measure. Here are a few of the most impactful ones:
#1 Customer Satisfaction Score
This gets to the heart of what you need to know. How satisfied are customers with your product or service? The Customer Satisfaction Score asks customers to rate their satisfaction using a rating scale to pinpoint how happy they are with your product or service.
The score is then reached by dividing the number of satisfied customers by the total number of customers.
This is a key metric for several reasons. Because customers are asked to fill them out directly after interacting with your company in some way, they are reliably filled out and tend to be an accurate snapshot of how customers feel. Customers are likely to be open and honest.
If they’re frustrated, this is where they’ll let you know.
If they’re over the moon, this score will reflect that.
It is an excellent metric of the overall health of your customer interaction plan.
Some common ways of collecting data about your Customer Satisfaction Score are:
- Online surveys
- Live chat
- Email follow-up after purchase
- IVR surveys and conversational IVR
#2 Customer Churn Rate
How long do your customers stick around? What percentage of customers do you lose in any given quarter?
It is a well-known tenet of business that it is much easier to keep a customer than to acquire one. Therefore, one of the most cost-effective methods of marketing may just be working harder to keep existing customers with strategies like customer retention automation. But how do you measure this? That’s where the customer churn rate comes in.
First, you need to determine your baseline. How many customers are you losing? Set a period for which you’ll calculate churn. Start with the number of customers at the start of the year and subtract the number at the end of the year. Divide this result by the number of customers you had when the year began. This is your Customer Churn Rate. Each industry has variable churn rates, of course. If you offer a subscription-style product or service, you can expect customers to stick around.
If your sales model is more “one and done” (goods tend to fall in this category), you may need to use your churn rate to come up with strategies to offer upgrades, upsells, and refills (think ink for printers) so that you can keep your loyal customers coming back for more.
#3 Net Promoter Score
In a consumer landscape increasingly driven by word of mouth, net promoter score is gaining relevance. This customer satisfaction metric measures loyalty by asking customers to self-identify how likely they’d be to recommend your product or service.
It is generally measured on a zero to ten scale in response to the question, “How likely are you to recommend our product or service to a friend?” Zero means “highly unlikely” and ten means, “very likely.” You take this measure as a range.
Detractors. Those who fall below six on the scale are generally considered those who will offer negative reviews of your business. They are labeled “detractors.”
Passives. The seven to eight range of the scale are usually considered “passives.” They won’t speak ill of the business but are unlikely to be the kind of evangelist who will bring new customers in.
Promoters. The customers you want to identify through this Net Promoter Score are those who respond to this question with an eight or nine. They are likely to be “Promoters.” They will refer family and friends, be more likely to post about your business, and otherwise be an asset in building word of mouth.
#4 Customer Service Satisfaction
This is another valuable metric to gather. With a Customer Service Satisfaction survey, you uncover how satisfied your customer is with the process after purchase. Are they happy with how their questions are answered?
Are problems solved quickly and to their satisfaction? Is customer service personnel representing your brand well?
Collect this data after each customer interaction with your Customer Service representatives and measure these numbers over time. Do they remain fairly constant? Do they vary? This can help give you some insight into actions you may need to take to maintain customer satisfaction, including additional training and upgraded procedures.
The health of your business relies on the happiness of your customers.
Collecting information about customer satisfaction keeps you on top of what is working in your business and what needs improvement. Many businesses approach this by turning their customer service team into a blended contact center that can also handle outbound comms like customer surveys. Your customers are the lifeblood of your business. If you pay attention to what they’re telling you, the success of your business is all but assured. Metrics on customer satisfaction will help you build a roadmap to long-term success.