How to measure customer satisfaction

Satisfied, happy customers are vital for any business.

Discover the customer satisfaction strategies and techniques you can use to measure customer satisfaction scores.

Learning how to measure customer satisfaction is essential for any new business.

Get it right and happy customers are your biggest advocates - returning to buy from you and sharing their positive experience with friends and family.

And, as it costs far less to keep a customer compared to winning a new one, knowing what your customers think and feel about your start up is important.

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Why measure customer satisfaction?

Knowing how customers feel about your business can help you to identify and improve issues with your products and customer service, boosting customer loyalty and increasing revenue.

Customer satisfaction is the best indicator of how likely it is that a customer will buy again in the future. In short, it pays to know how satisfied and happy your customers are with your business.

There are two ways to measure customer satisfaction: directly by contacting customers using surveys or interviews; or indirectly by looking at how a customer interacts with your business, or what they say on social media or on review websites.

It's important to put together a plan to measure customer satisfaction, and this guide takes you step-by-step through the stages to consider.

How to measure customer satisfaction

There are a few steps you have to take if you'd like to learn how to measure customer satisfaction.

Step 1. Decide what you want to find out

Customer satisfaction can cover a range of different things - from what customers think about your product, service quality or pricing through to the entire buying process.

Be clear what you want to find out.

Maybe you've heard some customers complain or seen some negative reviews online.

Use these to target a specific area you want to learn more about and then make a list of your top questions.

Businesses tend to ask questions across a few areas to build an overall customer satisfaction score.

You might want to ask questions about one area or a few at a time, such as value for money and product quality.

Typical customer satisfaction measures can cover areas such as:

• Quality - How satisfied customers are with the quality of your products or services, and how they met their needs.
• Pricing - Satisfied customers are more likely to think products or services are good value if they're priced fairly, especially against competitor prices.
• Buying experience - How satisfied is the customer with the buying experience? Think of measures such as how quickly their call was answered, or how polite or helpful your staff are.
• Recommendation - How likely is it that the customer will recommend your business to others? Satisfied customers are a useful part of your marketing strategy, as they tell friends and use social media to share their positive experiences.

Step 2. Choose the type of data you want

Once you've decided which areas you want to focus on, think about the type of research data you wish to collect: either qualitative or quantitative data.

• Qualitative data - This is subjective data, namely customers' opinions and attitudes towards your business. For example, you may want to research how easy it is for customer to buy a product from your website. Qualitative data is usually reported as comments such as, "I found it slow to use the web site when placing an order."
• Quantitative data - This is numerical information, from which you can deduce facts such as the web site takes 30 seconds to load the order page, the number of customer complaints in a week, or how often goods are returned. These can be useful for setting targets to improve customer satisfaction, such as ensuring you reduce the number of customer complaints over a set period.

There are pros and cons to using both types of data.

Qualitative research provides useful insight into customer perceptions of your business.

It works best through personal contact with customers such as one-to-one interviews, telephone calls and focus groups.

However, the information may not be specific.

For example: "Your web site is too slow" may be a comment from a dissatisfied customer but as "slow" is a relative term it's hard to know what needs speeding up and by how much.

That's where quantitative research steps in.

It's a good way to survey larger number of customers and provides data that's easy to collate and measure.

For example, you could use it to look at how long your website takes to load, which pages are the worst and how many people rate them slow or fast.

This can then give you an answer as to what part of the website needs fixing and what percentage of customers might benefit.

Different research techniques are needed for each type of data - so consider whether you want to use just one or a combination of the two for the most useful insights.

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Methods for measuring customer satisfaction

When learning how to measure customer satisfaction there are a number of different methods you need to be aware of.

Customer surveys

Anyone interested in how to measure customer satisfaction needs to know about customer satisfaction surveys.

They're one of the easiest and most popular methods businesses use to learn what they're customers think of them.

Surveys can be carried out in numerous ways including online on your business website or social media accounts, by telephone or post, or on in person.

Customer survey example: What do customers think about your prices? Is there something about the customer experience making you lose return sales?

A survey on past customers may reveal why they stop doing business with you and how you can win them back.

One-to-one interviews

Conducted with individual customers over the phone or in person either following a scripted questionnaire or in a free-form conversation that allows for more in-depth feedback.

Can be time-consuming and costly to survey enough people for a decent sized sample.

Interview example: Ask customers to score parts of your business, such as give a rating between 1 and 10 for customer service, value for money or speed of delivery.

Alternatively, you can ask open-ended questions such as how they feel about your business, or about a problem they had as a follow up question to a customer complaint.

Focus groups

Involves moderator-led groups of 5-8 people discussing a chosen subject.

They're a good way to discover people's perceptions of your business, products and services.

Feedback cards

A cheap and easy way to get anonymous feedback from existing customers.

They can be left on counters in-store or given out to customers.

Feedback cards example: Put a feedback card into every package you send to customers, asking them to visit your website and give feedback, or comment on your social network channel.

Use a tool such as SurveyMonkey to set up 2-5 questions online to capture a quick customer satisfaction rating. Offer an incentive - such as monthly prize draw - to encourage customers to give feedback.

Mystery shoppers

Can be done in person in-store, over the phone or online.

A person is paid to shop as customer and document their experience.

Unsolicited feedback

Useful for small business who lack the budget for full-scale customer surveys.

Look for comments on reviews websites and services such as TrustPilot or FreeIndex, as well as customer emails and letters to the business.

Check your business's Twitter and Facebook pages to log complaints or praise.

Feedback example: Topics that appear frequently may indicate a common customer issue and strongly worded complaints are a clear sign that customers are not happy with your business. Measure the number of complaints against the overall number of customers to gather quantitative data to measure customer satisfaction. Contact a customer who complains or leaves a bad review and ask follow-up questions so you can better understand their experience.

Customer satisfaction survey tips

You'll need to decide what questions to ask in your customer survey.

These typically will include overall satisfaction, how likely the customer is to buy from you again, and whether they would recommend your business to others.

You may also have specific questions related to quality, pricing, delivery or ease of transaction.

The top three rules for customer surveys are:

• Be clear - Don't make respondents guess what you mean by being vague or combining several elements into one question. Avoid jargon and technical terms, and keep questions simple and to the point.
• Be specific - Ask straightforward, specific questions, avoiding broad concepts. Only ask questions that fulfil the aim of your survey.
• Keep it short - The ideal number of questions will vary depending on the how a customer survey is being conducted. A phone survey may involve 5 to 10 questions whereas a poll on social media or on your website may have only 3 to 5 questions. Remember that customers are busy people and a lengthy survey may be off-putting.

All surveys are different, but here are some techniques that make it easier to interpret the results.

• Use scales - Number scales, along with definitions, are useful to compare responses. For example, ask a customer to rate how helpful your staff are using a scale of 1 to 10, where 1 is very unhelpful and 10 is extremely helpful.
• Use odd ranges - It's useful to use odd-numbered scales, such as five different responses. The same question above could have five answers: 1. Very helpful; 2. Quite unhelpful; 3. Neither helpful nor unhelpful; 4. Helpful; and 5. Very helpful.
• Include 'Other' - It's useful to include an 'Other' option with the ability to record a customer response.

Customer satisfaction metrics

The three most popular customer satisfaction metrics are:

Customer Satisfaction Score (CSAT)

Uses questions such as "How satisfied are you with...? or "How would you rate...?" to create an overall CSAT score.

This reveals how satisfied your customer is with your business, product, service or experience.

Your CSAT score is the average rating of your customer responses.

Good for short term research, it can be hard to estimate overall satisfaction.