Customer Satisfaction

Customer Satisfaction

Plan of contents

1. What Is Customer Satisfaction? Customer Satisfaction Definition
2. How to Measure Customer Satisfaction?
3. Why Is Customer Satisfaction Important?
4. How to Improve Customer Satisfaction?
5. Conclusion


What Is Customer Satisfaction? Customer Satisfaction Definition
What if you came to work one day only to find out that half your customer base left you for your competition?
If you’ve just felt cold sweats thinking about revenue drops, acquisition costs, and all this year's KPIs going to hell… Good. Because that’s what you’re risking when you ignore customer satisfaction. 
To say that customer satisfaction is important is an understatement. In 2023, it’s a necessity. According to Gartner, 81% of marketers view customer satisfaction as the main competition area in their industry.
But the competitive edge is not all. According to PwC, 59% of customers will leave a company after several bad experiences, and 17% after one bad customer experience. Yes, this also concerns your previously loyal customers. And yes, they won’t be back.

As you see, you can’t underestimate the importance of customer satisfaction. It’s the best way to secure loyal customers who’ll eventually turn into brand ambassadors. Every company should treat customer satisfaction as an essential business factor and work on improving it.

In this article, you’ll find the answers to the following questions:
What is customer satisfaction and why is it important?
Why is customer satisfaction important?
How to improve customer satisfaction?
In simple words, customer satisfaction is a measurement that determines how well a company’s products or services meet customer expectations. It’s one of the most important indicators of purchase intentions and customer loyalty. As such, it helps predict business growth and revenue.
While the definition above looks pretty straightforward, in reality, it’s not that easy to define what “satisfied customers” really mean for your company.
If you’re tempted to say, I’ve got a lot of purchases and a steady number of recurring customers, so I think I’m good,” think twice. Maybe some of your clients simply forgot to cancel their subscriptions. Maybe they procrastinate switching to your competitors. Or perhaps they’re too shy to complain and seek reimbursement. None of these reasons means they’re satisfied.
This is where specific customer satisfaction metrics, like CSAT (Customer Satisfaction Score), come into play. They let you determine what exactly influences the satisfaction—or lack of it—among your customers. 
And it pays off to keep your customers happy. A high customer satisfaction level guarantees long-term clients and makes you stand out from the competition. It also lets you avoid the dire consequences of bad customer experience: churning customers and negative word of mouth.
The equation here is simple. If you don’t care about your customers, don’t expect them to care about you.
How to Measure Customer Satisfaction?
To track customer satisfaction, you need to set up a CSAT (Customer Satisfaction Score) survey that asks the clients to rate their experiences with your company, usually on a 1-to-5 scale.
You can measure your client’s general satisfaction with your services or monitor specific touchpoints—like making a purchase, contacting customer support, using a particular product feature, etc.

It’s also a good idea to include open-ended customer satisfaction survey questions after your clients rate you. It allows them to explain their choice and gives you concrete feedback.

But CSAT is not the only customer experience metric out there. There are others that will help gauge your customers’ loyalty and happiness with your company. 
One of them is the popular NPS (Net Promoter Score) that monitors how likely your customers are to recommend you to their friends and colleagues. Measuring and analyzing customer satisfaction should become a permanent addition to your business—not just something you do from time to time or to deal with a reputation crisis. As McKinsey & Company put it, the three C’s of customer satisfaction are consistency, consistency, and consistency.
Customer survey software can help you set up recurring surveys, collect your answers, and analyze them in one place. This will let you create a sustainable customer satisfaction measurement process.
Why Is Customer Satisfaction Important?
What is the purpose of customer satisfaction? Here’s a short answer: if you want to run a customer-centric business, you need to care about customer success.
But there are more tangible benefits of customer satisfaction. Let’s go through a few of them.
And for a quick visual summary, check out our infographic on the importance of customer satisfaction. Just click the preview below:
1. Satisfied & loyal customers are a major growth lever
Research shows again and again that it’s five to 25 times more valuable to keep your customers than acquire new ones. According to Bain & Co, the creators of NPS, “5% increase in customer retention produces more than a 25% increase in profit.”
And you can’t have loyal customers if they’re not satisfied!
Have you ever wondered why banks or mobile providers are always ready to go the extra mile just to keep you around? It’s because they know the actual cost of doing otherwise.
Always try to keep your clients satisfied to prevent them from churning. Meet their needs, solve their problems, and nurture them. This doesn’t only concern your customer service: your clients need positive interactions with your product, website, store, and anything else you provide.
One of the brands that heavily invest in keeping their customers extra happy is Tesla. They pride themselves on effortless car services. So effortless, in fact, that they’re ready to come to your house to fix your car.
Tesla is a luxury, and they’re always ready to do something extra for their customers to keep up their image. An outside-of-workshop service cannot be cheap—but it must pay off in the long run!
2. Dissatisfied customers churn in a heartbeat
Unhappy customers won’t hesitate to leave you for your competition.
There are many reasons for brand switching. The main culprit is usually the prize—but poor customer experience is climbing up the rankings. In 2018, Microsoft reported 61% of their respondents have switched brands due to poor customer service, and the trend continues.
‍It takes up to 12 positive experiences to make up for a negative one, and some clients will not stick around for that long.
Customers value ease above everything else. This is why avoiding frictions is more important than going out of your way to delight your audience.
And when mistakes (inevitably) happen, you have to make up for them.
Take a look at an email from a local vintage shop that didn’t take down a sold-out product from their store on time. Even a small business with limited capacity understands it’s better to smooth things out with a customer than lose them.
3. Customer satisfaction drives business and product decisions
If you prioritize customer success, you’ll have an easier time sorting out your tasks and goals.
Whether it’s product development, marketing campaigns, customer service improvements, or any other area of business—before you chase market trends or introduce novelties, you should make sure your actions resonate with your customers. 
For example, if your customers keep complaining about a certain flaw in your product, it’s better to fix it before you start expanding your offer to catch new customers. Chances are, your old clients will get annoyed and leave, and the new ones will find the very same feature annoying.
Plus, through feedback, loyal customers can help you come up with new ideas for products and services.
At Survicate, every time we run customer surveys, we pepper in an open-ended question that asks customers for their next big idea.
4. It helps you stand out of the crowd
Let’s face it: it’s unlikely your product is one of a kind. And even if it is right now, you’re bound to have a few imitators soon.
The only thing you can do to differentiate yourself is delivering exceptional customer service and satisfying your clients.
According to PwC, “73% of all people point to customer experience as an important factor in their purchasing decisions.” And this number will grow.
Consider the example of a Polish online store with specialty coffee, CoffeeDesk. It’s locally famous for its exceptional customer experience. One of their signature moves is sticking funny drawings to their packages, usually a very characteristic cat. Unless you ask for something else—they will draw whatever you want!
5. Satisfied customers attract new customers
Loyal customers don’t only contribute to high CLV (Customer Lifetime Value). They are also your company’s biggest promoters that draw new customers in with recommendations.
And to recommend a company, you first have to be satisfied with its services.
How to Improve Customer Satisfaction?
Every brand should keep working to improve its customer satisfaction levels. But it’s not always that easy. It requires steady processes, defined company goals, and, most importantly, a continuous effort from every team member.
So: how do you achieve customer satisfaction? 
Let’s go through a few surefire ways to direct your customer experience program in the right direction and score some quick wins. And if you want to dig deeper on the topic, make sure to check out our guide on how to improve customer satisfaction in eight steps.
1. Collect customer feedback & always be available
Your customers need a place to voice their opinions—both positive and negative.
Positive customer feedback will ensure that your product roadmap and customer support efforts are heading in the right direction. Happy clients might also share their ideas on improving your product and services, which will help you build a truly customer-centric business.
And an outlet for customers’ negative opinions lets them voice their frustration before turning to online communities.
Your customers should always be able to find a place where they can talk to you. To achieve it, combine the power of easily accessible customer service with the power of surveys. 
2. Stay proactive and react in real-time
Okay, so you brought suggestion number one to life, and your customers can always reach you.
Now, you have to make sure their feedback doesn’t disappear in a black hole—especially when it’s negative.
Ignoring customer complaints might have some severe side effects:
You create an army of dissatisfied clients who are likely to churn, and that’s not the kind of audience you want.
Dissatisfied customers are much more likely to share their opinions than happy ones, and a bunch of negative online reviews can seriously stain your reputation.
Modern customers expect effortless interactions, so you don’t want to be recognized as a company that keeps inconveniencing its clients.
Whenever possible, address negative customer feedback in real-time—or at least as soon as possible. Try to make things up for your unhappy customers, either by compensating them or bringing their suggestions to life. You might avoid negative word-of-mouth and get valuable ideas on how to improve your business.
Reacting in real-time doesn’t only concern live chats or phone calls but also surveys. With survey tools like Survicate, you can set up email or Slack notifications and get heads up whenever someone shares their feedback.
‍3. Keep things personal
Personalization became the norm. So much that 61% of consumers expect brands to tailor experiences to their needs.
Business results confirm these claims. According to Google’s research, “90% of leading marketers say personalization significantly contributes to business profitability.” 
It’s hardly surprising that personalization works so well since it makes the customers feel important and “at home.” After all, we’re all happy when we receive that free Starbucks coffee on our birthday, aren’t we? 
From the company’s point of view, personalized targeting allows to tailor content, services, and offers to the customers expectations. And a customer who gets exactly what they want is much more likely to feel satisfied—as opposed to a customer who gets spammed with irrelevant emails and still hasn’t understood how your product can help them.
A perfect example of effective personalization is the meditation app, Headspace. During signup, it asks the users a few simple questions about their preferences, such as experience level, the main reason for using the app, or their preferred meditation time. 
‍4. Measure customer satisfaction regularly
You can’t improve customer satisfaction if you don’t know what you’re improving.
Measuring customer satisfaction with surveys will let you obtain concrete numerical scores and turn them into KPIs. You’ll also be able to look for patterns in open-ended questions and fix the most pressing problems.
5. Communicate across departments
Imagine you’re a marketer who’s just run a customer satisfaction survey.
You got a pretty decent Customer Satisfaction Score, but you’ve received a few complaints from your least happy customers. You notice that most of them concern a particular bug in your app.
How do you think this situation should play out?
The feedback stays in the marketing team and continues to create friction until the dev team notices the bug and fixes it one day;
The feedback is shared with the dev team, who takes it seriously and fixes it at the earliest opportunity.
Final Thoughts
Customer centricity is an indispensable element of every successful business. This is why all companies should focus on continuously improving customer satisfaction.
High customer satisfaction levels help with:
Keeping existing customers around;
Attracting new ones;
Increasing customer loyalty;
Standing out from the crowd of competitions;
Making smart product decisions.
Measuring customer satisfaction is essential for monitoring the state of your customer success and customer experience programs. It’s best to do it with the help of customer satisfaction surveys, like CSAT (Customer Satisfaction Score), NPS (Net Promoter Score), or CES (Customer Effort Score) surveys.
With customer satisfaction software like Survicate, you’ll have your customer satisfaction surveys up and running in just a few clicks (with zero coding). Just choose one of our free customer satisfaction survey templates, customize it if you’d like, and watch the responses flow. You can monitor the customer satisfaction data in real-time.