What is customer satisfaction?

Customer satisfaction is a way by which businesses measure how satisfied their customers are with their products or services. It is often referred to as CSAT (or CSat) in the business lingo as a calculable metric to gauge customers’ overall perception towards a brand. In many ways, customer satisfaction is akin to public opinion polls or approval ratings that are widely used in politics to understand how the people within a particular constituency feel about their local representatives.

Customer satisfaction is often the baseline measurement for businesses to understand customer expectation in order to shape their behavior. Customer satisfaction is a study of how customer expectations stack against their experience with a brand, such as over a live chat session with your customer support team. The higher a brand’s CSAT score, the more likely they are to retain customers in the long run and maintain brand loyalty. A customer’s expectations from a brand can be abstract and perceived, but their CSAT response is often tangible and measurable.

Customer satisfaction is not the same as customer support

Customer satisfaction is very different from customer support, although the quality of support can directly correlate to the CSAT results. Customer support is a standard business function—just like marketing or accounts—that you have to set up in order to help customers when they need it. Businesses often form a dedicated team or department to streamline their customer support offerings. They might use phone, email, or live chat as their everyday tools to cater to the customer needs and enquiries.

 

Customer satisfaction is an idea that may or may not reflect as an outcome of a customer’s experience with the support staff. It could be a good live chat conversation that a customer had with one of your support reps, or a bad payment experience they had during a product checkout. Customer care or customer service is an operational function whereas CSAT is an objective study of customer satisfaction.

Is CSAT same as customer success or customer happiness?

Customer satisfaction can sometimes be a confusing concept to grasp because there are so many other similar concepts that shroud the business world. For instance, there is a lot of debate about whether customer support and customer success are one and the same. Similarly, customer satisfaction sounds a lot like customer success while, in reality, those concepts are distinctly different.

Customer success is primarily an extension of customer support while customer satisfaction and happiness are marketing efforts. Customer support is giving them what they need; customer success is helping them achieve the outcomes they want—their satisfaction being the lowest common denominator in both cases.

Customer satisfaction is a set of—sometimes, standalone—experiences that a buyer has with a brand whereas customer success is often the proactive measures that a business takes to see their customers through their desired goals. E.g., if you are in the business of making invoicing automation software that aims to help growing businesses achieve greater financial control over their business processes, you might define your customer success by the amount of time and money your clients are able to save as a result of using your software. However, it might not reflect customer happiness or customer satisfaction because of a broken experience—such as delay in a live chat query, hidden costs, or a difficult user interface —customers might had with your brand.

In academic analogy, CSAT is like the C or D grade in your GPA that you require in order to pass on to the next semester, but customer success is achieving a distinction or landing your dream job right out of college. You can achieve customer satisfaction by optimizing how you deliver your product and services, while you can gain greater customer success based on what you offer. Delighting your customers by sharing relevant links to their query over a live chat conversation might lead to customer satisfaction; it leads to customer success when they are able to apply that learning and achieve their goals.

Customer satisfaction may or may not encompass customer success, but there is a likely correlation. Customer happiness, on the other hand, has more overlaps with customer satisfaction than any other stage of customer experience. They are often used interchangeably to describe the level of content customers feel about their brand experience.

How to achieve customer satisfaction

Achieving customer satisfaction is easy when you optimize all your business touchpoints to meet customer expectations. Customer satisfaction depends on many factors such as the quality of your product and services, the business location, and convenience if it’s a physical storefront or user-friendliness, pricing, and first response time in live chat support.

But in today’s fast-paced business environment that is rife with high-fidelity in brand loyalty, customer satisfaction can feel like an underwhelming goal to have. What businesses should aim for instead is creating the best customer experience (CX) at every possible opportunity. You should look at customer satisfaction not as a way to get just the right amount of validation from customers, but as a milestone you should overcome to surpass their expectations.

You can do this by offering them awe-inspiring experiences that they will feel compelled to share with their network. The leading businesses across all industries know more than their customers. So they don’t stop at giving what customers generally ask for; they give them that extra value customers need to succeed.

Exceeding customer expectations should not be limited to prospects or first-time customers, but also to returning and existing user base. Treat every customer interaction as the only moment your business has to deliver wow experiences and soon your CSAT metrics will become your social proof to other prospects considering your business.

You can achieve all these by using live chat for customer satisfaction. Live chat is a more responsive, conversational, and convenient way for customers to establish a relationship with your brand. Done well, live chat always exceeds customer expectations and leads them to satisfaction.

Why is it important to measure customer satisfaction?

Measuring customer satisfaction gives insights on a range of things such as customers’ expectations, their perception, behavior, experience that might directly impact your revenue stream. CSAT measurement is a direct feedback loop from customers and a peephole into their interests and desires. Quantifying customer satisfaction can help you be aware of the best practices in your offerings and support while identifying the weak areas that you can work on to improve your services.

Customer satisfaction can also be a compass to your business direction—if it’s constantly low you’re aiming for failure and if it’s high you are sailing on the right track to attract more customers to your business. High CSAT also means customers are likely to stick to your brand for the long-term. Loyal customers are also decisive and more predictable in their purchase cycle and they give an outlet for your business to create a buyer persona that you can use to refine your marketing message.

Good customer satisfaction is also a marketing asset for your business; you can use it as a badge of honor to attract more prospects. You can connect with customers who give you glowing CSAT ratings and document their feedback as case studies and sales enablement collaterals. It gives you a competitive advantage over others in your domain and earns the confidence of people who consider you for their business.

But you won’t be able to tap into all these potentials if you don’t measure customer satisfaction for your brand on a routine basis. Measuring customer satisfaction should be a standard part of your marketing process and planning. In plain terms, it’s important to measure customer satisfaction because it helps you achieve business excellence.

 

 

Relation between customer satisfaction and customer value

Customer satisfaction leads to an increase in customer value, which is a measurement of the benefits customers get from purchasing products and services. It’s often stacked against the perceived cost of a good or service that customers pay for versus the perceived benefit that they get out of it. Customer value is high when customers feel that the benefit is higher than the cost that they paid for.

Customer value and satisfaction are both concepts that are rooted in the core idea of customer delight, and hence, they overlap at different stages of a buyer journey. While buyers calculate the customer value before they make a purchase, customer satisfaction happens at a pre-purchase stage. The other nuances that differentiate them are customer expectation and product performance. Here’s how you can express customer value and customer satisfaction in equations:

Customer value = perceived benefits – product cost
Customer satisfaction = product performance ≥ customer expectations

While cost and benefits are two factors that determine customer value, businesses achieve customer satisfaction when a brand matches or exceeds a customer’s expectations. Having said that, both concepts are highly subjective as customer perception varies from one customer to another.


Customer satisfaction versus net promoter score

There are enough similarities between customer satisfaction and net promoter score (NPS) to confuse people into thinking they are interchangeable terms. For example, CSAT is measured on a five-point scale and NPS is calculated based on a 10-point answer. Both tests are designed to gauge customer perception and brand loyalty towards a business. However, CSAT and NPS have different purposes to serve.

CSAT is designed to understand customer expectations so that businesses can tweak their brand offerings to improve customer experience. It’s a more accurate indicator of customer loyalty and its impact on revenue because it’s more binary.

NPS, on the other hand, strives to identify the biggest brand advocates (versus passives or detractors) of a business. Businesses use NPS to identify the dichotomy of favorable and not-so-favorable advocates in the continuum of their customers. Essentially, your NPS is high when your number of promoters are higher than the number of detractors. A better understanding of NPS leads businesses to improve on their weak points and/or spread their brand’s goodwill with the help of their best customers through word-of-mouth advertising.

Customer satisfaction is also often mistaken for another overlapping concept, customer effort score (CES). The latter is, in fact, one of the ways to measure customer satisfaction, but it is more geared towards measuring the quality of customer service. At a micro-level, CES helps a business understand how easy or difficult customers found their experience with a brand on a scale of five or 10 questions. The proponents of CES argue that businesses mostly aim for the high-flying goals of “wowing” and “delighting” customers when in reality, all customers expect is an easy way to solve their problems.

You can use a modern live chat tool like Freshchat to launch a CSAT, NPS, or CES test for customers to offer feedback on how they feel about your brand.
 

Who should drive customer satisfaction

Happy customers account for 14 times more profit to your business than unhappy customers. That’s a big chunk of change in the context of business growth for companies to look at seriously. But the question is, which team in your business should be accountable to keep customers happy? The seemingly obvious answer might be customer support. But if you take a closer look at the business scheme of things, customer support is actually the last leg of a customer journey, by which their perception might already be shaped negatively or positively. Therefore, customer satisfaction and happiness are not solely dependent on customer support, although it’s definitely an enabler in the process.

Customer satisfaction happens right after a customer comes into contact with your brand for the first time—so you can say customer satisfaction starts with marketing. In theory, customer satisfaction is a metric that marketing owns because they can leverage the high CSAT score to run ads, increase referrals, and improve branding.

However, customer satisfaction can be a set of interactions a customer has with your brand, or it can be a one-off unique experience. In that sense, every business touchpoint such as sales, marketing, and support can directly impact customer satisfaction as it is a common factor across the board. If you have a live chat sales or support team, make sure they have an understanding of what consequences each conversation can lead to so that they can deliver an excellent service with live chat for customer satisfaction.
 

How to measure customer satisfaction

The best way to measure and monitor customer satisfaction is by setting up a mechanism to hear customer feedback. Make it a routine process in your business to regularly interact with customers and understand how they feel about your brand. Run surveys and opinion polls, get on the phone, or automate feedback forms on your website pages to encourage your customers to share their experience with your brand.

Don’t limit your feedback mechanism to your most obvious customers—talk to customers who churned out, talk to prospects who are contemplating your service, talk to customers who hold a grudge against you, and also talk to your best customers. Make a list of concerns they have with your brand—what is good and what are some not-so-great things—to aggregate the data and draw a pattern on how happy your average customers are.

The most tangible ways to measure customer satisfaction is by running direct response surveys among a sample of your customer base. There are many easy-to-use tools that can help you design and distribute these surveys such as TypeForm, Google Form, Survey Money, among many others.

You can also code interactive forms and pop-ups in your product page or website to coax visitors to rate the level of satisfaction they get as a result of using your service. You can use these feedback channels to quantify customer feedback or gather subjective, specific opinions on how your customers look at your business.

Again, a modern live chat tool can help you accomplish all of these things because it allows you to establish a direct feedback loop with your customers, talk to customers empathetically, run short surveys, and encourage them to rate their experience with your brand in real-time. Freshchat gives you insights that lets you measure CSAT ratings and make adjustments to improve your score.

Ways to improve customer satisfaction

The best way to improve customer satisfaction is to take customer feedback and apply the best practices in your business. Here are a few actionable ways you can apply to your business to improve customer satisfaction:

 

1. Train your customer support team

Conduct regular workshops for your support staff on etiquettes, effective communication, using empathy, and conflict resolution in their daily interactions with customers. Train them to be proficient at using the tools in your tech stack, understanding your products in and out, and understanding your service domain. Customers expect support reps to know all the answers to their problems, which is why training your staff to have an in-depth product knowledge is extremely crucial.

 

2. Shorten your first response time

Customers want speed in communication and not necessarily the perfect answers to their problems. They want to be assured that their issues are being taken care of. Therefore, it’s great to acknowledge their concerns and reassure them of a solution in order to shorten your first response time (FRT). Take stock of the average first response time in your support team. If it is taking longer than what you had expected, set a higher benchmark and shoot for a quicker response time.

 

3. Offer the self-service portal

Businesses with good self-service programs have an 85% more year-over-year uptick in customer retention rates as against companies that didn’t offer self-service. Optimize your customer-facing interfaces to cater to the most recurring queries. Load up your Knowledge Base with FAQs, help guides, and video tutorials to make sure your customers can find answers to their questions in a quick and convenient way. Freshchat is great at doing this because it offers you the luxury of embedding FAQs inside your chat widget.

 

4. Create support forums

Many successful businesses these days don’t even have an official customer support team, and yet, their customer satisfaction is well above the average. That’s because they are able to build support communities around their product and services who look out for each other as a self-sufficient support platform. You don’t necessarily have to eliminate your support team to replicate this format. Create a product forum either in your website or on a social media platform where your users can start sharing useful content, moderate discussion threads, and announce bug fixes and product updates to the community first so that there is a sense of belonging among your users. Building a close-knit support community will help your CSAT improve organically.

 

5. Provide omnichannel support

Don’t limit your customer service to traditional support channels like emails and phone calls. Create a responsive, always-on, interactive, and cross-platform support system that can break the wall between your business and your customers. For example, Freshchat enables you to engage with customers and support them through live chat conversations on desktop, in-app, from mobile, within your product, and even on social media platforms so that no customer questions go unanswered.

 

6. Document best practices

A good way to maintain a consistently good customer satisfaction rating is to replicate the techniques that have worked great for your business in the past and improve on them for better results. For instance, if mobile users form the biggest chunk of your customer base and they love your page-based FAQs on mobile chat, think of new ways to refine your mobile UI to make your customer experience better than focusing on reactive support via the traditional means.

 

7. Understand your customers’ psychology

If you have established a good support culture but you fail to see it reflected in your customer satisfaction results, you should take a step back and retrospect. One great idea to feel the pulse of your customers is to set up focus groups and conduct an objective discussion on identifying the traps and pitfalls that you might be overlooking. If you have an online storefront that suffers from poor customer feedback, hire experts to be mystery shoppers to create a feedback loop on what areas you can improve to earn better customer satisfaction ratings.

 

8. Fish for good online reviews

A good customer support is a very powerful thing; its news travels far and wide through word-of-mouth referrals and makes more prospects gravitate to your business. But you also have to work hard to garner that kind of attention in the public sphere where you might be talked about, such as in third-party software review sites. If you have glowing reviews, you should thank your customers to show that you are alert at all times. If you find unhappy customers making negative comments about your product, you should engage with them, try to appease with good reasoning, and try to turn their stance.

 

9. Cut down redundancy

A lot of times, businesses create great product website and match it with equally great customer support offerings. But their customer satisfaction still falls flat because of the amount of effort that customers have to put into their experience. A lot of times, it’s not the UI but the UX that fails businesses. A lot of businesses overdo their product pages and along the way compromise their customer experience. Take an objective audit of the wastage of bureaucracy that might be present in your product offering to better your customer satisfaction.

 

10. Keep improving

Look at your CSAT and NPS results as signposts and redirect your efforts to reach the goal you have set for your business. Always keep on improving your first response time, self-service content, and the quality of training to your support staff to create a world-class customer support. The ROI of improving your customer support is directly evident in the better CSAT results that your business earns once you make customer support your priority.

Customer satisfaction leads to increased customer retention

Consistency in positive customer experience leads to happy, repeat customers. For a majority of business, this retention of their best customers is what matters most to their bottomline. Increased customer satisfaction leads to improved customer loyalty which is an important metric to achieve; it’s 6-7 times more expensive to acquire new customers than it is to retain existing users. Similarly, long-time loyal buyers are worth up to 10 times more than their first purchase.

Happy, satisfied customers volunteer as marketing advocates for your brand, bring in more customers through word-of-mouth referrals, and bring down your marketing and acquisition costs. It’s a loyalty program that you don’t have to invest heavily on and has recurring benefits over a sustained period of time.

SaaS businesses know the importance of customer lifetime value (CLV or LTV) more than any other industry. SaaS startups realize that the more their customers interact with their brand, the more likely they are to buy their products and stay for the long-term. It’s the must-have anti-churn goal that they all vie for.

Most businesses that fail to create a sticky brand experience because they don’t pass the bare minimum benchmark of scoring a good CSAT—their products or services are not useful, likable, and sustainable. Customer satisfaction is often the binding agent that makes customers stick around with a brand.
 

How live chat can help you increase customer satisfaction

Live chat can help you increase customer satisfaction by allowing your business to be more proactive in interactions with your customers and more efficient in being conversational with them. Live chat makes your business more likable to customers because it’s convenient and accessible. If you choose the right live chat tool and apply it in the right ways, it will help you surpass customer expectations and lead them to a higher level of satisfaction.

Let’s take a closer look at how Freshchat embodies these qualities. Freshchat’s modern live chat experience helps you cut down your average first response time, engage with customers on a personal level, and offer a consistent chat experience across all platforms. Freshchat also allows you to embed all your self-service content and knowledge base such as FAQs, tutorials, video guides, help articles, and so on.

On a tactical level, Freshchat helps you measure customer satisfaction in quantifiable numbers through its insights. One of the ways for you to do this is by using Freshchat to configure upvotes and downvotes at the end of your self-service content and gather that data to aggregate the average satisfaction level of your customers. You can also set up similar feedback process for your real-time chat conversations so that website visitors can rate the quality of support.

If, for example, customers give negative ratings to a chat conversation, you can use that feedback to connect back with the customer and resolve their queries on time. You can view the metric of overall CSAT ratings given by a wider base of customers and take a closer look at particular conversations to investigate deeply. You can map these ratings back to corresponding groups and team members and use the customer feedback to improve their experience in the future.

Other Freshchat insights, along with Customer Satisfaction Ratings, can also help you feel a customer’s pulse and ensure a satisfactory experience for them. For instance, you can use Response Speeds to identify the average time your teams take to reply to and resolve customer conversations. Or you can plan your response time better by identifying high traffic hours for your website and assigning enough chat agents during that period of time.