What Metrics Measure Customer Satisfaction & 5 Strategies To Drive More Satisfied Customers
What types of metrics measure customer satisfaction, and how can they indicate the health of your customers and business?
Customer satisfaction metrics, such as CSAT, CES, and NPS, help you measure customer loyalty and satisfaction. They are also essential for improving user experience and reducing churn, which makes your product more profitable than ever.
If you want to start tracking customer satisfaction and understand your users’ sentiments in-depth, this article is for you.
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- Customer satisfaction measurement helps you quantify how a customer feels about your product and its features.
- You should measure customer satisfaction to better understand customer experience and determine the drivers of customer loyalty. It also allows you to identify dissatisfied customers and solve the root causes of it.
- For SaaS products, six essential metrics that measure customer satisfaction are the Customer Satisfaction Score (CSAT), Customer Effort Score (CES), Net Promoter Score (NPS), Customer Health Score (CHS), Customer Churn Rate (CCR), and Customer Lifetime Value (CLV).
- 5 Actionable strategies to improve customer satisfaction metrics are:
- Using interactive walkthroughs to provide in-app guidance and remove user fatigue
- Building an in-app help center to offer on-demand support and deliver exceptional customer service
- Implementing the Voice of the Customer program to make customers feel heard
- Sending customer satisfaction surveys regularly and asking customers how to improve your product
- Following up with NPS detractors and proactively reaching out to them to avoid churn
- Userpilot is a code-free, easy-to-use product growth tool that helps you create satisfaction surveys to track and analyze all these metrics.
What is customer satisfaction measurement?
Customer satisfaction measurement is a quantitative way to find out how existing customers feel about your product. It helps you understand how well your product meets or exceeds customer expectations.
Why should you measure customer satisfaction?
Here are two reasons why you should start measuring customer satisfaction.
Dive deep into customer experience and determine drivers of customer loyalty
Firstly, when you collect customer satisfaction data across different touchpoints, you can understand the customer journey in-depth and have a full picture of their experience with your product.
As a result, you can determine what factors contribute to high customer loyalty and replicate those to improve your overall customer relationships.
Identify dissatisfied customers and solve the root causes of dissatisfaction
Secondly, it helps you identify dissatisfied customers and why your product isn’t able to meet their satisfaction.
You can then address these friction points to increase the number of loyal customers, improve user experience, and enjoy greater customer satisfaction scores.
What types of metrics measure customer satisfaction?
Here are six of the most important customer satisfaction metrics you can start tracking to understand how satisfied customers are with your product overall.
Customer Satisfaction Score (CSAT)
The Customer Satisfaction Score (CSAT) measures how satisfied users are with certain aspects of your product, for example, customer service satisfaction. This metric helps you understand how satisfied your present customers are, what they expect, and how to better fulfill their demands.
Here’s an example from Hubspot.
You can ask different questions to measure user satisfaction with different aspects of your product, such as:
- How helpful was this answer from the customer service team?
- How satisfied were you with this article?
For best results, you should calculate your CSAT score at different touchpoints in the user journey. This helps you gain a better understanding of the overall customer experience.
According to Fullview, a good CSAT score for the SaaS industry is around 77%.
How to calculate CSAT?
To calculate this metric, you need to conduct a survey using a numeric scale where 1 is “not satisfied at all” and 5 is “highly satisfied”.
The score is calculated by dividing the number of respondents who are highly satisfied by the total number of people who filled out the survey.
Customer Effort Score (CES)
The Customer Effort Score (CES) metric quantifies how much effort users give to interact with your product. CES involves letting customers rate their experience with specific features, customer service interactions, or other aspects of your product.
Measuring the CES score can lead to fewer customer pain points as you can identify specific areas where users need help. In your surveys, you can use different scales, such as numeric scales from 1 to 7, color scales from red to green, or even emojis.
How to calculate CES?
CES can be measured by conducting a survey similar to the example above.
Once you’ve created the survey, divide the number of responses where users “agree” with you by the total number of respondents.
For example, you surveyed 50 users and 30 of them selected 5 and above. So, your CES is = 30/50 * 100 = 60%.
Net Promoter Score (NPS)
The Net Promoter Score (NPS) measures the possibility of your users recommending your product to their friends, family members, or colleagues by asking them just one question: “How likely are you, on a scale of 1 to 10, to recommend us to a friend or colleague?”
Your responders are divided into three categories by NPS:
- Promoters: Users who choose 9 or 10 are your most devoted clients. They are brand evangelists and highly engaged customers.
- Passives: Users who select 7 or 8 are passives. They are neutral customers who pose no threat.
- Detractors: Users who choose 6 or a lower score are detractors. They harm your product’s reputation as they spread negative word-of-mouth.
In general, a positive NPS or any score above 0 is considered “good” and anything above 30% would be considered excellent. According to NICE Satmetrix NPS 2021 benchmarks, a good NPS score for the SaaS industry is around 41%.
How to calculate NPS?
Using your survey and the total number of respondents, you can calculate your score by subtracting the percentage of detractors from the percentage of promoters.
For example, you surveyed 200 users. 100 (50%) of them responded with a 9 or 10 and 60 (30%) of them responded with a 6 or below, and the rest responded with a 7 or 8.
So, your NPS is = 50% – 30% = 20%.
Customer Health Score (CHS)
The Customer Health Score is a metric used to determine whether a customer is likely to grow, remain loyal, or leave.
Keeping an eye on customer health ratings and responding to them enables you to spot problems related to specific individuals or accounts.
How to calculate CHS?
To calculate the CHS, you need to first define what you’re trying to measure and then decide what customer actions influence the score.
For example, if you want to measure customer health in terms of product usage, you’ll need to evaluate:
- the number of paid users
- what key features they are using
- in-app resource center usage
- engagement with in-app surveys
- number of unresolved support tickets
Afterward, you need to assign an impact score on each of the values and sum them up as shown in the formula below.
Customer Churn Rate (CCR)
Customer Churn Rate is the percentage of customers you lost during a specific period.
It is significantly more expensive to acquire new consumers than to keep the ones you already have. Therefore, it’s crucial to keep an eye on your churn to spot churn patterns and fix them before it’s too late.
According to ProfitWell, a good churn rate for the SaaS industry is 3% or less, and the average churn rate for the SaaS industry is around 5%. In reality, the churn rate varies widely across businesses and industries, so there is no “universal average churn rate”.
How to calculate CCR?
To calculate the customer churn rate, you need to first select a timeframe. Then, find out the total number of customers at the beginning of the period and the number of customers lost during that period.
Finally, divide them as shown in the image below.
For example, you began the first quarter of 2022 with 400 users. By the end of it, you had 350 users. So your customer churn rate is 50/400 * 100 = 12.5%.
Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV or LTV) is the amount of money a company makes from a single customer throughout their relationship.
It provides insight into your product’s profitability, helps predict revenue, and enables you to identify and target your most loyal customers.
When customers are satisfied and retained over a long period, their lifetime value increases.
How to calculate CLV?
To calculate the CLV, first, you need to determine the average revenue of the account(s) whose total lifetime value you’re trying to assess. Once you’ve determined this value, simply divide it by your present customer churn rate.
Assume that in a given period, the average revenue of a group of 10 users is equal to $200 and the customer churn rate is 5%. So, your CLV for the 10 users is 4,000.
5 Actionable strategies to improve customer satisfaction metrics
Here are five actionable strategies that can help you deliver greater customer satisfaction.
Use interactive walkthroughs to provide in-app guidance and remove fatigue
One effective way to improve customer success is to replace boring product tours with interactive walkthroughs, such as this one from Kommunicate.
You can start using an interactive walkthrough to help new users discover and interact with one feature at a time rather than making them go through a lengthy and confusing product tour of all your features.
This significantly increases the likelihood of successful product adoption as it is relevant and contextual for the user’s journey stage.
It also boosts customer satisfaction as they won’t have to think about the next steps to take and will receive the most relevant information for their use cases.
Build an in-app help center to offer on-demand support and deliver exceptional customer service
If you want to deliver fast customer service, reduce friction and user frustration, and boost user satisfaction, creating an in-app help center is the way to go.
Look at the resource center below, which consists of all your documentation files, tutorials, and webinars in one place. You can also add a live chat widget.
Enabling self-service support not only helps in customer education but also helps them get answers independently. This eases pressure on your customer support team, which makes them available for more important tasks or problems.
With Userpilot, you can build an in-app help center code-free!
Implement the Voice of the Customer (VoC) program and make customers feel heard
The Voice of the Customer (VoC) program involves directly interviewing customers to gain detailed customer feedback. This helps you uncover the needs of your customers and listen to their complaints directly.
The VoC program can help you get answers to:
- What are users trying to achieve through your product?
- What blocks users from achieving their objectives?
- What do users expect from your product?
- What do users like and dislike about your product?
This program helps your customers respond clearly, thus building stronger relationships with them. You can even incentivize them to increase the number of customers participating.
Send customer satisfaction surveys regularly and ask how to improve your product
CATS are great on their own, but to maximize the benefits of this customer feedback survey, you should conduct them frequently.
Sending customer feedback surveys across different stages of the user journey helps you measure customer satisfaction and monitor how the score can change. This helps you identify friction points and see where an average customer struggles the most.
You can also ask customers directly what improvements are needed and prioritize fixing the most common problems.
Follow up with NPS detractors and proactively reach out to them to avoid churn
Detractors are unhappy customers who can damage your brand’s image but also provide you with an opportunity. You get a chance to identify their issues and solve them to make them happy and achieve a negative churn rate.
You can add a follow-up qualitative question in your NPS survey to provide necessary insights. This also gives users a chance to inform you about unique problems.
Using a product adoption tool like Userpilot, you can observe your NPS scores in depth as shown above. You can then locate the detractors and reach out to them in an attempt to solve their problems.
Customer satisfaction metrics are vital to the success of your organization. Your company is in serious trouble if certain scores fall too low; fixing these can be the difference between success and failure.
To ensure consistent product growth, you must continuously monitor customer satisfaction metrics and take immediate measures to improve them.
Want to build in-app microsurveys to collect customer feedback and measure their satisfaction? Get a Userpilot Demo and see how you can improve user retention and loyalty and reduce churn.