Published on

April 13, 2024

How to Guides

How to Measure Customer Satisfaction:Ways & Best Practices

Team Richpanel

Marketing

min read

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A business exists to meet the needs of its customers. You can understand the impact of your service or product when you measure Customer Satisfaction. It is a measure of your customer service and product quality. Customer satisfaction defines the customer’s perception of your business by rating the products, processes, and interactions with your business.

Your customer is spoilt for choices. The internet makes it easy for you to reach them without any physical or geographic barriers. But it sure does increase competition. And during these times of economic stress, your relationship with your customer is pivotal in defining your business’ success. Customer and employee satisfaction, customer loyalty, and productivity have become more critical. A study by Mckinsey Survey shows the correlation between revenue and cost.

By improving your customer satisfaction score, you generate more customer loyalty and enjoy recurring revenue from repeat customers, which drives down acquisition costs and positively impacts the bottom line.

Hence, measuring customer satisfaction is a crucial metric in the growth of your business,

Importance of Measuring Customer Satisfaction for Ecommerce:

1. Customer Experience:

Let’s first get the apparent benefit of measuring customer satisfaction out of the way. Business exists for the customers, and CSAT measures how well your business meets customer expectations. It helps you identify problem areas, such as delivery or service, and enables you to improve the overall customer experience.

2. Optimizing Service Cost:

Every business needs to make a trade-off between price and service. Measuring the CSAT helps you identify your customer’s level of service sensitivity. You can use customer satisfaction scores to determine whether your customers are satisfied with your service or if you need to invest in improving your product and functions. Teamed with competitor analysis, this information will help you find the sweet spot between cost and service.

3. Reduces Churn Rate:

Superior service alternatives attract the most profitable customers. A study by Gartner showed that in 2016, 89 percent of businesses competed primarily based on customer experience. Most businesses think that their most profitable or loyal customers are happy customers. While this may indicate that their product or service meets a certain expectation, there’s the highest risk of losing these customers to better service.

High service quality attracts and retains more profitable customers over time. Keeping a close eye on customer satisfaction helps weed out any issues that customers have and provide good service continually, especially for your most loyal customers.

4. Brand Advocates:

Word of mouth is still one of the most effective marketing methods. An angry customer will likely tell their friends and family about a bad experience and drive potential customers away. But with higher customer satisfaction, your customers are likely to become brand advocates themselves and spread the word about the quality of your products and services.

It helps drive business and generate more revenue.

How to Measure Customer Satisfaction:

There is no universal agreement on which metric is the best to measure customer satisfaction since every business differs from the other. The metric you choose also depends on your business goals and offerings.

Take, for example, a budget airline like Southwest Airlines. They would be rated very low if they measure customer satisfaction based on their food service. It happens because they do not pay much attention to the meals served on the plane. If they did, it would also increase their turnaround time and costs, which would eventually be compensated for by their customers, who’d rather travel cheaply than have a good meal on their flight.

So choosing the right customer satisfaction metrics and parameters for measuring the impact of your business is a crucial step in understanding your customers and improving their experience.

Here are some of the customer satisfaction metrics and methods that eCommerce business owners most commonly use:

1. Customer Satisfaction Score (CSAT Score)

It is a straightforward metric that helps determine the impact of a single interaction your customers have with your business. You can ask your customers to rate you on a scale ranging from 1-5, 1-10, or even use emojis.

Whether rating their experience with a product or their conversation with a customer support team member, the customer satisfaction score (CSAT) helps you analyze isolated interactions between your customers and your business.

2. Net Promoter Score (NPS)

The net promoter score, as the name suggests, is a method to measure how likely your customers are to “promote” or refer to your brand. The NPS helps you rate your customer’s interaction with the overall organization and their perception of your brand.

On a scale of 1-10, promoters are customers who rate your business between 9 and 10. The customers who rate you between 6-8 are not unhappy customers but are unlikely to be enthusiastic about it or recommend it to someone. They are termed passive. The customers who rate you between 0-6 are detractors and have a terrible experience with your brand.

The NPS is calculated using the following formula:

NPS = % Promoters – % Detractors

3. Customer Effort Score (CES)

In the age of internet convenience, “ease” is an essential part of the customer experience. The customer effort score measures a customer's effort to use your product or service, find the related information, or get your support team to resolve an issue.

How to Measure Customer Satisfaction through Surveys:

1. Post Purchase Survey through Live Chat:

Post-purchase surveys provide a path of low resistance, allow you to understand the positives and negatives of doing business with you, and get real-time feedback on the customer’s recent experience. It makes the sale less transactional and shows the customer that they are valued and their thoughts matter.

With live chat, the post-purchase surveys can be automated and sent out using specific triggers like when the customer clicks on checkout. It provides real-time feedback and insight into customers' purchase process with minimum effort on the customer and the agents’ side. Learn More on Ecommerce Live Chat Software

2. In-app Survey:

Customer needs and perceptions change with time. In-app purchases allow you to ask highly contextual questions about your app, features, or product. In-app purchases help your customers become owners of your brand. They will actively participate in building your app. It helps you match your efforts to your customer’s expectations.

3. Email:

An asynchronous way to collect feedback is a customer satisfaction survey that are sent out via mail and can help gather feedback from a larger audience in a single go. It is the most cost-effective way to collect feedback and can be set up without technical expertise. The best part about collecting customer feedback through the mail is that customers can respond at their convenience.

4. Social media Mentions & Comments:

Most internet users spend their time on the internet surfing through social media apps. And if that is where your customers are. It is also the place to find customer feedback. Often called social listening, monitoring social media comments and mentions helps provide faster and more efficient solutions to customer problems.

Best Practices on How to Measure Customer Satisfaction:

Conducting customer surveys is integral to your business growth, but it is no easy task. It is a significant investment and undertaking. Each business has its own set of parameters and objectives. Hence the metrics, sample size, and survey frequency are different for different eCommerce brands. However, each business should follow the best practices to measure customer satisfaction to derive the most from their investment:

1. Prepare the customer service satisfaction survey questionnaire

CSAT, NPS, and CES are great and simplistic metrics to measure customer satisfaction. But if you wish to gather more detailed feedback and insights from your customers, you will need to prepare service satisfaction survey questionnaires that help you meet your specific goal. It is essential to make sure that your questionnaire is-

Short and straightforward: it is crucial to connect your questionnaire to your goals and ask the most relevant questions. It saves your customers time and reduces their resistance to answering them. On the other hand, it helps you collect precise information and enables you to save time as well.
Open-ended questions: If you are looking for more detailed customer feedback than metrics like NPS can provide, you should append your customer survey with open-ended questions. It will help the customer provide a more detailed response and help you understand their perspective.

2. Select the Proper Communication Channels

There are three ways to measure customer satisfaction through surveys- post-purchase surveys, in-app surveys, and email surveys. Post-purchase surveys help collect customer feedback concerning a specific event or interaction, In-app surveys provide more contextual feedback, and email responses are great for larger audiences.

Each of these may require different tools or software to manage. Hence, select the medium of your surveys based on your goals and set up your processes accordingly.

3. Determine your Survey's Trigger

Depending on your goals, you also need to determine the right time to send out your surveys. It is as strategic as deciding the questionnaire or the channel you will send it through.

Suppose you want to determine the ease of onboarding; you should ideally trigger the survey sometime after they complete their signup.

To improve your customer support service, you should send surveys when customers interact with your support agents.

It will help you get contextual information and provide the specific answers you are looking for.

Hence, configuring the right triggers based on your business model, best practices, and industry standards will help you get the most appropriate responses for your surveys.

To illustrate, Richpanel allows you to trigger surveys based on the tags assigned to every conversation. It even ensures that customer queries are resolved before the surveys are sent out to ensure the best customer experience.

4. Customize Survey Triggers Accordingly

Customizing your survey triggers can help you establish the right opportunity, frequency, and time to send your customer satisfaction survey. There are several ways to define your trigger points according to your business model. However, these practices tend to benefit businesses:

Send out surveys as soon as possible. As more time passes, the customers tend to forget about their experience.
You should send multiple surveys to see how the customer perception has changed over time or due to updates. However, it is also essential to provide sufficient intervals not to bombard customers with feedback surveys.
You can customize your surveys to send out additional questions upon receiving an extraordinarily high or low score. It will help you determine where you are going wrong and what you are doing right.

5. Analyze the Survey Data

You can get customer feedback about any process, product, or service. However, the data needs to be analyzed meticulously to ensure you make the most of your investment. Use the data collected from the surveys to make changes and tweaks in your business and improve the customer experience.

How to Track and Improve Customer Satisfaction:

Based on the data and insights gathered, every business can identify critical areas for improvement. You can aim to make improvements based on customer feedback and common queries and complaints to reach the ideal satisfaction score. However, these are some of the most common factors that help improve the customer experience:

1.Make Pricing Open and Honest:

Pricing is a significant factor in determining customers’ purchase decisions. Customers feel cheated and irritated when they need to go snooping to find out how much your product or service will cost them. Open pricing helps the customers make quick decisions and helps them trust your brand more. It also increases the customer satisfaction score.

2.Offer 24/7 Customer Support Across a Variety of Channels:

Your customer’s service sensitivity is not defined by your direct competitors but by big players like Amazon and Doordash, which provide interactive user interfaces and round-the-clock service. Ecommerce businesses that want to compete with these customer satisfaction scores need to provide 24*7 service to improve their customer satisfaction scores.

You can employ a support team to work round the clock, but that will only drive up your costs. The most cost-effective way to provide this service is to leverage self-service flows that help your customers find solutions to their problems without contacting support agents. Automated responses also go a long way in helping this cause.

Self-service Scenarios - Richpanel

3.Make it Easy to Change or Cancel Contracts/Subscriptions:

Another typical issue customer face is being able to opt out of subscriptions or contracts. Customers should be able to cancel their subscriptions with utmost ease, so they do not feel that their attempts are being thwarted or cheated. It immensely impacts customer satisfaction scores.

There are several returns extensions that can help you add that level of transparency to your eCommerce store. They allow your customers to track their shipments, initiate exchanges, or even get store credit for returns. Helpdesks like Richapanel have deep integrations with these apps and hence help to improve customer satisfaction. Discover more on Best Shopify Apps to Improve Customer Satisfaction

Self-service widget powered by Richpanel

4.Monitor Customer Complaints:

The best way to get detailed feedback is to monitor all communication channels for customer complaints. One of the best ways to stay on top of customer complaints and feedback is to invest in a good ticketing system that not only helps you streamline your CS across all your channels but also helps you gain valuable insights into the problems your customers commonly face.

5.Engage Customers:

Customers who feel brand loyalty or awareness tend to have better customer satisfaction levels. Customer engagement is pivotal in nurturing that brand loyalty and building a more lasting relationship with your customers. There are several ways to build this relationship. Offering pre-purchase support through live chat, offering loyalty programs, and rewards, and enabling customer feedback is the best way to increase customer engagement.

It promotes brand loyalty and Engaging customers is a sure-shot way of improving customer satisfaction.

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A customer satisfaction survey can help you bridge the gap between your intention and customer expectations. Since service is the central differentiating point between competing businesses, customer satisfaction is a critical metric to measure the success of your business and strategize its growth.

Make sure you understand how to measure customer satisfaction and implement best practices and see the difference for yourself!

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